2026 (2) TMI 130 - HC - Money Laundering

Restoration of property under PMLA declared effective after quashing of predicate offences; possession directed to resolution applicant.

Restoration of property under PMLA was directed as operative where earlier attachment was held to lack jurisdiction; the court treated the properties as ... Restoration of property - provisional attachment under PMLA - effect of quashing of predicate offences on PMLA proceedings - Restoration of property - HELD THAT:- Respondent submits that in view of the order passed by the learned Appellate Tribunal impugned in the present appeal, the attachment of the properties in question has itself been held to be without jurisdiction, we are of the opinion that, in view of the subsequent developments, the present appeal has, in fact, been rendered academic in nature. Accordingly, leaving the question of law open, we direct that, without prejudice to the rights and contentions of either of the parties, the subject properties be treated to have been restored under Section 8(8) of the PMLA and the possession handed over to the Resolution Applicant. Appeal, alongwith the pending applications, is disposed of. Issues: Whether, in view of subsequent developments including approval of a resolution plan and quashing of predicate criminal proceedings, the subject properties should be treated as restored and possession handed over to the Resolution Applicant under Section 8(8) of the PMLA and the Prevention of Money Laundering (Restoration of Property) Rules, 2016.Analysis: The matter before the Court concerns the effect of later events on earlier attachment proceedings. The relevant legal framework comprises Section 8(8) of the PMLA and Rule 3A of the Prevention of Money Laundering (Restoration of Property) Rules, 2016, which govern restoration and restitution of property subject to attachment. The court considered the factual developments that the National Company Law Tribunal approved a resolution plan and that criminal proceedings constituting predicate offences were quashed, and noted authorities permitting restitution where such developments have occurred. The court treated the present appeal as rendered academic by these developments and proceeded to direct restoration without adjudicating the substantive question of law.Conclusion: The subject properties are to be treated as restored under Section 8(8) of the PMLA and possession handed over to the Resolution Applicant, namely, Mrs. Monica Shah.Ratio Decidendi: Where a resolution plan has been approved and the predicate criminal proceedings underlying attachment have been quashed, the court may direct restoration of attached properties to the successful resolution applicant under Section 8(8) of the PMLA and the Restoration Rules.