The Delhi High Court has held that ancestral property can be attached under the PMLA if it represents the value of proceeds of crime. The Court clarified that inherited assets do not get automatic immunity in money laundering cases.
New Delhi: The Delhi High Court has ruled that even ancestral or inherited property can be attached under the Prevention of Money Laundering Act (PMLA) if it represents the value of proceeds of crime. In a significant judgment delivered on February 16, a Bench of Justices Navin Chawla and Ravinder Dudeja made it clear that the law does not provide any special protection to inherited properties in money laundering proceedings.
The case, titled Arun Suri Vs. Directorate Of Enforcement, arose from a challenge to a 2025 order of the Appellate Tribunal under the PMLA. The Tribunal had confirmed a Provisional Attachment Order issued by the Enforcement Directorate (ED) in 2017 concerning a residential property located at 255, Sainik Vihar, Pitam Pura, Delhi.
The appellant approached the High Court under Section 42 of the PMLA. He argued that the property was ancestral in nature and had been purchased in 1991 by his father from lawful income, long before any alleged scheduled offence took place.
According to him, he had not contributed financially towards the purchase of the property. Therefore, he contended that the house could not be treated as “proceeds of crime” under Section 2(1)(u) of the Act.
The central legal issue before the Court was whether an inherited or old property could be attached as “equivalent value” when the actual alleged proceeds of crime were not available or traceable.
The appellant relied on earlier judicial precedents, including the Supreme Court’s ruling in Vijay Madanlal Choudhary v. Union of India and other High Court decisions.
He submitted that only properties directly derived from criminal activity can be attached under the PMLA and that attaching a decades-old family home would stretch the definition of “proceeds of crime” beyond its legal limits.
On the other hand, the Enforcement Directorate argued that the alleged tainted funds, which were in the form of foreign exchange, had already been remitted abroad and were no longer available in India.
In such a situation, the ED contended that the PMLA permits attachment of property of equivalent value within the country, as provided under Section 5 read with Section 2(1)(u) of the Act.
After examining the statutory framework and the Supreme Court’s interpretation of the PMLA, the Bench rejected the appellant’s arguments. The Court referred to the definition of “proceeds of crime” under the Act and reiterated that it includes not only property directly derived from criminal activity but also
“the value of any such property.”
The Court further noted that when the tainted property cannot be traced, the authorities are legally empowered to proceed against property
“equivalent in value held within the country or abroad.”
Importantly, the Bench clarified that merely calling a property “ancestral” does not automatically shield it from attachment. The Court categorically observed,
“The plea of the property being ancestral does not ipso facto grant immunity from attachment under the PMLA.”
It further described the contrary argument as
“misconceived and contrary to the scheme of PMLA.”
The High Court found no legal error or perversity in the findings of the Adjudicating Authority or the Appellate Tribunal. It held that the PMLA does not create any exception for inherited or family-owned assets if they are found to represent the equivalent value of proceeds of crime.
Accordingly, the appeal was dismissed along with all pending applications.
The judgment strengthens the enforcement framework under the PMLA and makes it clear that ancestral or inherited property cannot claim automatic protection if it falls within the scope of “proceeds of crime” as defined by law.
For individuals facing money laundering investigations, this ruling sends a strong message that the source and value of property will be examined strictly under the statutory scheme, regardless of whether the asset was acquired through inheritance or family ownership.
Case Title:
Arun Suri Vs. Directorate Of Enforcement
Misc. Appeal (Pmla) 13/2026
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