Delhi HC allows bank guarantee substitution for attached properties in money laundering case involving equivalent value assets

Delhi HC allowed substitution of attached properties with bank guarantee in money laundering case. Court distinguished between proceeds of crime and equivalent value properties, noting ED had attached equivalent value properties rather than actual proceeds of crime. Following precedent, HC permitted release of attached properties upon furnishing FDR equivalent to property value, with ED retaining lien rights and encashment liberty if appeal succeeds.

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Issues involved: Application u/s 482 of Cr. PC for vacating order maintaining status quo regarding release of attached property.

Summary:
1. The application was filed under Section 482 of Cr. PC by two construction companies seeking to vacate an order maintaining status quo on the release of attached property.
2. The original order dated 21.03.2018 required responses to be filed within specific timelines and maintained status quo on the release of attached property.
3. Subsequent applications were made by the respondents, leading to a court order stating that fresh applications for property release could be filed if there was a delay in the main appeal's disposal.
4. The petitioner requested the release of attached properties, offering to provide a bank guarantee.
5. The Special counsel for E.D. opposed the release, citing lack of change in circumstances and legal provisions under the Prevention of Money Laundering Act (PMLA) rules.
6. The E.D. argued that the properties were solely owned by the company, making them ineligible for release under PMLA rules.
7. The E.D. emphasized that statutory procedures must be followed and delay in the case was due to the applicants' actions.
8. The court noted the pending nature of the case and related appeals, and the properties in question were land and buildings with unpaid charges.
9. The court considered the offer of a bank guarantee as a substitute for the attached properties, noting that they were not proven proceeds of crime.
10. A distinction was made between "proceeds of crime" and "amount equivalent to proceeds of crime" regarding property attachment.
11. The court ordered the release of the properties upon the furnishing of a Fixed Deposit Receipt (FDR) equivalent to the property value, with specific conditions and undertakings.
12. The FDRs were to be deposited with the Enforcement Directorate, and the court directed the renewal of FDRs as per the law, without expressing any opinion on the case's merits.
13. The application was disposed of with the mentioned directions, and the related appeal was listed for a future date.

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