Mr.Vaibhav Dubey, Ad v. DIRECTORATE OF ENFORCEMENT

Mr.Vaibhav Dubey, Advs. versus DIRECTORATE OF ENFORCEMENT .....Respondent Through: Mr.Rahul Tyagi, SC for ED with Ms.Priya Rai, Mr.Jatin, ASPP & Mr.Amit Rohil, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA HON’BLE MR. JUSTICE RAVINDER DUDEJA NAVIN CHAWLA, J. (ORAL)

This appeal has been filed under Section 42 of the Prevention of Money Laundering Act, 2002 (“PMLA”), challenging the order dated

02.12.2025 passed by the learned Appellate Tribunal under SAFEMA in MP-PMLA-1715/DLI/2025 (Direction) FPA-PMLA- 722/DLI/2025.

The said appeal in turn has been filed by the appellant challenging the order dated 11.03.2025 passed by the Adjudicating Authority in OC No. 993/2018, titled ED v. M/s RK Associates & Hoteliers Pvt. Ltd., inter alia, quantifying the proceeds of crime qua the appellant as Rs.3,08,30,600/-. Prior thereto, an amount of Signature Not Verified MISC. APPEAL(PMLA) 14/2026 Digitally Signed By:REYMON VASHIST Signing Date:18.05.2026 11:27:59 Rs.4,62,45,900/- had been recovered from the bank account of the appellant as proceeds of crime pursuant to the order dated 03.12.2018 passed by the learned Adjudicating Authority in the above OC.

The appellant, while challenging the order dated 11.03.2025 before the learned Appellate Tribunal, also prayed, by way of the above-mentioned application, that the excess amount recovered from the appellant, that is, of Rs.1,54,15,300/-, be directed to be released by the respondent to the appellant. The impugned order has been passed on the said application.

The learned Tribunal has disallowed the above prayer of the appellant, only on the ground that the respondent has also challenged the order dated 11.03.2025 passed by the learned Adjudicating Authority by way of a separate appeal before the learned Tribunal, and that granting relief to the appellant would render the appeal filed by the respondent infructuous.

We cannot accept the above reasoning of the learned Tribunal. The merits of the appeal filed by the respondent, even prima facie, have not been considered in the impugned order. In fact, the same could not be adjudicated in the appeal filed by the appellant herein, and has not been adjudicated at all in the impugned order, which has been passed on an application and on an appeal filed by the appellant.

The appellant had partly succeeded before the Adjudicating Authority in the form of a reduction of the alleged proceeds of crime. The appellant was, therefore, entitled to the consequential relief of release of the amount, subject to any order to the contrary being passed in the appeal/application filed by the respondent. Such is not Signature Not Verified MISC. APPEAL(PMLA) 14/2026 Digitally Signed By:REYMON VASHIST Signing Date:18.05.2026 11:27:59 the case here.

Whether the appeal filed by the respondent challenging the reduction in the quantification of proceeds of crime by Adjudicating Authority was prima facie meritorious or not has to be determined in the appeal filed by the respondent qua the reduced amount.

In the impugned order, we do not find any consideration of the prima facie merits of the respondent’s appeal. In fact, that appeal or any application therein for the said relief, was not even before the learned Tribunal when the impugned order was passed. The impugned order, therefore, cannot be sustained and is liable to be set aside.

In fairness, the learned counsel for the appellant submits that the appellant is willing to secure the interest of the respondent for the differential amount of Rs.1,54,15,300/- by way of a bank guarantee till such time as the application filed by the respondent in its appeal is not considered by the learned Tribunal.

Accordingly, we direct the respondent to release the amount of Rs.1,54,15,300/- to the appellant, subject to the appellant furnishing a bank guarantee of an equivalent amount to the respondent, which shall be subject to the outcome of the application/appeal filed by the respondent and pending adjudication before the learned Tribunal.

As far as the remaining amount of Rs.3,08,30,600/-, which has been adjudicated by the Adjudicating Authority as proceeds of crime, is concerned, the same shall be kept in a fixed deposit and shall remain subject to the outcome of the appeals filed by the parties herein. Signature Not Verified MISC. APPEAL(PMLA) 14/2026 Digitally Signed By:REYMON VASHIST Signing Date:18.05.2026 11:27:59

We clarify that we have not expressed any opinion on the merits of the appeal filed by either of the parties or the application for interim stay filed therein.