The Supreme Court has agreed to consider the legal issue as to whether the Enforcement Directorate can confiscate the ancestral property of an accused person under the Prevention of Money Laundering Act (PMLA) by treating them as profit derived from the crime. The matter came up for consideration of the Supreme Court through an appeal in which the Enforcement Directorate (ED) has challenged an order of the Karnataka High Court.
The High Court has said in this order that action cannot be taken under PMLA in respect of ancestral property. The High Court also quashed the proceedings against the two accused in the case. A bench of Supreme Court Justice AM Khanwilkar and Justice CT Ravikumar issued notices to the accused in its October 8 order on an appeal by the Enforcement Directorate and directed them to respond to it within four weeks.
Additional Solicitor General SV Raju, appearing for the ED, submitted that the High Court has clearly erred in saying that the ancestral property of the writ petitioner cannot be dealt with under PMLA.
He said the observation of the High Court is contrary to the interpretation given in Section 2(1)(u) of the 2002 PMLA Act relating to profits derived from offences.