COVID Extension Orders Don’t Override PMLA's Strict 180-Day Limit: Bombay High Court Declares ED's Attachment Order Lapsed

“Orders in Suo Motu Writ Petition were not intended to relax statutory deadlines for executive actions like Provisional Attachments under PMLA” –  In a significant verdict reaffirming the sanctity of procedural safeguards in fiscal statutes, the Bombay High Court ruled that a Provisional Attachment Order (PAO) under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA) lapses after 180 days, and that the COVID-related extension of limitation granted by the Supreme Court in Suo Motu Writ Petition (C) No. 3 of 2020 does not apply to such executive actions.

The bench comprising Justice M.S. Sonak and Justice Advait M. Sethna firmly rejected the Enforcement Directorate's (ED) contention that the Supreme Court’s orders extending limitation due to the pandemic extended the statutory 180-day shelf-life of a PAO. The Court ruled that the impugned PAO dated 27 November 2020 had lapsed on 26 May 2021, thereby restraining the ED from continuing any restraint on the petitioners’ attached properties.

“Vital safeguard against arbitrary attachments cannot be diluted by pandemic-related extensions intended for litigants”

The Court opened the judgment with a reminder that “one of the most critical safeguards under PMLA is that provisional attachments under Section 5(1) cannot extend beyond 180 days unless confirmed by adjudicating authority”. This temporal limitation, according to the Court, is an express statutory mandate reaffirmed by the Supreme Court in Vijay Madanlal Chaudhary v. Union of India [(2022) 10 SCC 1], which upheld the constitutional validity of PMLA only because such protections were embedded in its framework.

“The Legislature, being aware of the need to balance investigative powers with individual rights, has clearly stipulated that provisional attachment shall ‘cease to have effect’ after 180 days, unless confirmed,” the Court observed. It added that attempting to bypass this statutory expiry through executive interpretation or judicial orders not specifically applicable would violate both the legislative scheme and constitutional protections under Articles 21 and 300A.

Challenge to Attachment of Properties under PMLA

The petitioners, led by businessman Naresh T. Jain, challenged the PAO issued by the ED on 27 November 2020. They contended that since no confirmation was issued by the adjudicating authority within the stipulated 180-day period, the PAO lapsed by operation of Section 5(3) of the PMLA on 26 May 2021.

The ED argued otherwise, relying on the Supreme Court’s orders in the SMWP, particularly the order dated 10 January 2022, which excluded the period from 15 March 2020 to 28 February 2022 from computation of limitation for judicial or quasi-judicial proceedings due to the COVID-19 pandemic. The ED also leaned on a contrary ruling of the Delhi High Court in Directorate of Enforcement v. Vikas WSP Ltd. (2025 SCC OnLine Del 6163), which had accepted this interpretation.

However, the Bombay High Court firmly aligned with the Calcutta High Court’s ruling in Directorate of Enforcement v. Union of India [2022 SCC OnLine Cal 3959], holding that the Supreme Court’s COVID-related limitation orders had no bearing on statutory deadlines for administrative actions like PAOs under PMLA.

Court Rejects ED's Arguments on Multiple Grounds

The Court examined the text of the SMWP orders, observing that they were meant to protect litigants from limitation bars in filing proceedings—not to empower authorities like the ED to extend provisional attachments beyond their statutory lifespan.

“The Suo Motu orders were intended to ease the procedural burden on litigants during the pandemic—not to provide a carte blanche extension to executive authorities,” the Court stated.

Critically, the Court noted that the ED had in fact filed an interim application before the Supreme Court (IA No. 91204/2020) in the SMWP proceedings seeking specific clarification or relief for PMLA timelines—but the same was not allowed.

“The fact that the ED’s application was not acted upon amounts to a deemed rejection under Explanation V to Section 11 of the CPC. It cannot now achieve indirectly through High Courts what it failed to obtain directly from the Supreme Court,” the Court held.

Further, relying on S. Kasi v. State [2021 (12) SCC 1], the Court held that SMWP orders do not override legislatively prescribed deadlines, even in criminal statutes like Section 167(2) CrPC, let alone fiscal laws like PMLA.

The Court remarked that:

“To suggest otherwise would mean the ED could bypass crucial procedural safeguards built into the statute, which were integral to the Supreme Court upholding its constitutional validity in Vijay Madanlal Chaudhary.”

Right to Property Cannot Be Curtailed Without Due Process

Taking a constitutional rights-based approach, the Court strongly reiterated that the right to property, protected under Article 300A and recognised as a human right under Indian jurisprudence, cannot be restricted through lapsed executive orders. Citing State of Haryana v. Mukesh Kumar [(2011) 10 SCC 404] and Harikrishna Mandir Trust v. State of Maharashtra [(2020) 9 SCC 356], the Court held:

“The power to deprive a person of property must be expressly provided for and cannot be implied or assumed, especially when the statute itself mandates cessation after a specific period.”

Adjudication Proceedings Can Continue Unaffected: Supreme Court's Kaushalya Infrastructure Ruling Applied

Despite lifting the attachment, the Court clarified that adjudication proceedings under Section 8 of the PMLA can proceed independently. It cited the Supreme Court’s decision in Kaushalya Infrastructure Development Corp. Ltd. v. Union of India [(2023) 8 SCC 1], which held that lapsing of a PAO does not nullify the adjudication proceedings, as both operate under distinct procedural triggers.

Thus, the stay on adjudication proceedings was vacated, and the parties were directed to proceed on merits.

ED’s Overreach Checked, Rule of Law Upheld

The Bombay High Court’s verdict decisively reaffirms the primacy of statutory safeguards and the need for strict compliance with procedural timelines under PMLA. The ruling sends a strong message that pandemic-era relaxations cannot be used as a backdoor to override individual rights or expand executive powers.

The judgment balances two core legal interests: while it insulates the petitioners’ property rights from an expired attachment, it simultaneously preserves the ED’s adjudication powers and reattachment rights under Section 17 of PMLA, if justified.

Date of Decision: 24 November 2025