SAFEMA Tribunal allows PMLA attachment to remain effective without ED taking physical possession, preserving rights until trial concludes.
In a precedent-setting order concerning asset management during PMLA proceedings, the SAFEMA Tribunal upheld the continued attachment of Sajab Infratech’s properties despite the Enforcement Directorate not having taken physical possession. The Tribunal ruled that attachment under Section 5(1) of PMLA crystallizes a deemed seizure of property, enforceable without physical control.
Protection of Possession During Litigation
The Tribunal permitted existing tenants to continue occupancy and directed that rental income be deposited into a fixed deposit in the name of the property, jointly operated by the ED and the original owner. Transfers, leasing beyond one year, or encumbrances were barred. The arrangement maintains asset value while respecting procedural fairness.
Physical possession is not a condition precedent to a valid attachment. The statutory mechanism under PMLA is constructive and operates the moment the Order of Provisional Attachment is issued.
Management of Attached Assets
The order clarifies that ED may choose to take over assets based on risk assessment but is not obligated to do so. Lawyers should counsel clients on interim management protocols and explore conditional access applications where properties generate essential revenue. The ruling may influence future ED strategy in complex corporate attachments involving operational assets.
Citations
- PMLA, 2002, Section 5(1)
- Vijay Madanlal Choudhary v. Union of India (2022) 2 SCC 1
