Section 17 PMLA Does Not Demand Complaint Against Same Person Whose Premises Are Searched: Delhi High Court Sets Aside Appellate Tribunal’s Order, Remands Matter to Decide Legality of ED’s Seizure

“It was never the requirement of law that a complaint under Section 157 CrPC should be against the same very person whose premises are searched under Section 17”— Delhi High Court in a significant ruling concerning the scope of search and seizure under the Prevention of Money Laundering Act, 2002 (PMLA), set aside the order of the Appellate Tribunal (PMLA) which had invalidated a search conducted by the Enforcement Directorate (ED) merely on the ground that no complaint had been filed against the person whose premises were searched.

Division Bench of Justice Vivek Chaudhary and Justice Manoj Jain held that Section 17 of PMLA allows searches at premises of any person based on "reason to believe", provided a prior complaint under Section 157 CrPC exists—it need not be against the same person.

The Court remanded the matter to the Tribunal for fresh adjudication, allowing both sides to present their contentions on the validity of seizure, nexus with proceeds of crime, and legitimacy of possession of ₹26.30 lakhs and digital devices recovered during the 2016 search.

Tribunal’s Reasoning Based on Non-Existent Plea—Fundamental Procedural Flaw: High Court

Opening its analysis with strong procedural censure, the High Court observed that the Appellate Tribunal allowed the respondent’s appeal on a ground never raised before it—i.e., that the search and seizure were invalid because no prosecution complaint had been filed against the respondent.

This was found to be a misdirection of law and fact, as the real challenge before the Tribunal was whether there was any nexus between the seized assets and proceeds of crime, and whether the respondent’s explanation of legitimate income was satisfactorily rebutted.

“The learned Appellate Tribunal, ostensibly, got swayed away by the fact that there was no ‘prosecution complaint’ against respondent Mr. Amlendu Pandey. This was despite the fact that no such argument was even raised by the respondent in his appeal filed before the learned Appellate Tribunal,” the High Court noted.

Search Need Not Target Named Accused—Section 17 Permits Broader Investigative Action

The core legal issue examined by the High Court was whether a search under Section 17 of PMLA is vitiated merely because the searched person was not named in a prosecution complaint. Interpreting the section, the Court held:

“It was never the requirement of law that any such ‘report’ or ‘complaint’ should also be against the same very person.”

The Bench clarified that while Section 5 of PMLA (pertaining to attachment) requires a report under Section 173 CrPC or complaint to be filed, Section 17 requires only a report under Section 157 CrPC to exist.

“Section 17 of PMLA does not lay down that the search can be carried out in the premises of that person alone qua whom a complaint has been filed or report had been forwarded to the concerned Magisterial Court.”

Importantly, the Court noted that the search dated 09.02.2016 was based on the 2011 prosecution complaint already filed against the main accused, Hassan Ali Khan, and the ED had “reason to believe” that the respondent was linked to the alleged money laundering network.

The Court reiterated:

“A person may be in possession of proceeds of crime but still may not be accused of any scheduled offence or offence of money laundering. In a given situation, a person can be recipient of proceeds of crime, without having any criminal intent.”

“Procedural Justice Demands Fair Hearing”: Remand Ordered to Appellate Tribunal

Acknowledging the death of Amlendu Pandey during pendency of the proceedings and the limited arguments advanced by his legal heir, the Court exercised caution and fairness by remanding the matter to the Appellate Tribunal, noting that the actual issues raised by the respondent were never adjudicated.

The respondent had asserted that:

• The ₹26.30 lakh cash seized was proceeds of a real estate transaction and agricultural income;
• The electronic devices contained no incriminating material;
• There was no live link between the seized assets and any proceeds of crime.

The Court observed that these claims deserve to be adjudicated on their merits and that the Appellate Tribunal had failed to do so, having decided the matter on an unargued and erroneous legal ground.

Death of Respondent Does Not Invalidate Search Conducted During His Lifetime

The Court also addressed the contention regarding the supplementary complaint filed by ED after the death of the respondent, stating unequivocally:

“Such subsequent filing of supplementary complaint has no relevance in the present context and would not, therefore, cause any adverse impact upon the search proceedings.”

The Court thus clarified that a valid search conducted in accordance with Section 17 of PMLA during the respondent’s lifetime does not become illegal due to the subsequent death of the respondent.

A Guiding Precedent on ED’s Investigative Powers and Procedural Due Process

For advocates practicing in economic offences, PMLA adjudication, and constitutional safeguards during investigative processes, this judgment offers critical clarification on:

• The legitimacy of search under Section 17 PMLA, even in absence of a complaint against the person searched;
• The difference between Section 5 (attachment) and Section 17 (search and seizure);
• The need for appellate bodies to decide appeals only on the grounds urged by the parties;
• The continued validity of search proceedings even if the accused passes away during adjudication.

The ruling underscores that while ED’s powers are wide, they must still be tested against procedural fairness, and that erroneous or premature conclusions by quasi-judicial bodies must be corrected by higher courts.

Date of Decision: 21.11.2025