Delhi HC Allows Realtor To Substitute Remaining PMLA-Attached Gurgaon Land With ₹1,062.89-Crore Alternate Assets, Subject To Safeguards

The Directorate of Enforcement (ED), acting on an ECIR arising from a CBI case concerning alleged irregularities in land transactions in Gurgaon, provisionally attached properties under PAO No. 12/2024 after quantifying the alleged proceeds of crime at ₹1,813,74,06,526.

The Adjudicating Authority confirmed attachment of 52.7609 acres, valued at ₹1,759,84,11,795.

Following a reconciliation directed by the Appellate Tribunal, the ED revised the proceeds-of-crime figure to ₹1,017,19,03,577.

The ED recorded that the petitioner’s proposed substitute assets had an aggregate value of approximately ₹1,062.89 crore.

The petitioner sought release of land in light of the revised figure and substitution of the balance attached land with the alternate assets.

The ED had no serious objection to substitution, subject to safeguards.

The Court considered the attachment and substitution in the context of the Prevention of Money Laundering Act, 2002 (PMLA), including the provisional attachment made under PAO No. 12/2024 and its partial confirmation by the Adjudicating Authority.

It did not cite or apply any specific statutory provision, precedent, or independent test for substitution.

The operative principle applied was that substitution could be permitted in the circumstances of this case, given the ED’s position, provided safeguards were imposed to protect the substituted assets and the Government’s interests.

The Court noted that the quantified proceeds of crime had been reduced to ₹1,017,19,03,577, while the verified value available for substitution was approximately ₹1,062.89 crore.

It also took account of the ED’s lack of serious objection, provided adequate safeguards were imposed.

In those circumstances, the Court found no impediment to substitution, but conditioned it on, among other things, proof of clear and marketable title, absence of encumbrances, non-alienation during proceedings, deposit of original title documents, an indemnity, protection of bona fide third-party rights, provision for possession, a demarcated site plan, disclosure of the source of funds, and cooperation with the investigation.

The substitution was declared without prejudice to the ED’s rights and was not to be treated as an acknowledgment of the legality of the source or legitimacy of the attached properties, or as affecting the merits of the ongoing trial.

The pending application was also disposed of.