Tribunal cannot deny release of excess seized assets solely because respondent’s cross-appeal is pending.

In brief

The question

Whether the Appellate Tribunal was justified in refusing the release of excess seized funds solely on the ground that a cross-appeal by the Respondent was pending.

The court held

The High Court set aside the Tribunal’s order and directed the Respondent to release Rs. 1,54,15,300/- to the Appellant, subject to the Appellant furnishing a bank guarantee of an equivalent amount.

It also directed

The Court directed that the remaining Rs. 3,08,30,600/- (the adjudicated proceeds of crime) be kept in a fixed deposit pending the outcome of the appeals.

The appeal was disposed of with a clarification that the High Court expressed no opinion on the ultimate merits of the underlying appeals.

01Facts

The Appellant challenged an order dated 11.03.2025 by the Adjudicating Authority which quantified "proceeds of crime" attributable to the Appellant at Rs. 3,08,30,600/-.

pp. 1-2

Previously, the Respondent (ED) had recovered a larger sum of Rs. 4,62,45,900/- from the Appellant’s bank account.

p. 2

Following the reduction in the quantified amount, the Appellant moved an application (MP-PMLA-1715/DLI/2025) before the Appellate Tribunal seeking the release of the excess amount of Rs. 1,54,15,300/-.

p. 2

The Appellate Tribunal dismissed this application on 02.12.2025, reasoning that since the ED had also filed a cross-appeal against the quantification order, releasing the funds would render the ED's appeal infructuous.

p. 2 · ¶ 4

The Appellant subsequently approached the High Court under Section 42 of the PMLA.

p. 1 · ¶ 1

02Issues

i.Whether the Appellate Tribunal was justified in refusing the release of excess seized funds solely on the ground that a cross-appeal by the Respondent was pending.

p. 2 · ¶ 5

03Law Applied

Section 42 of the Prevention of Money Laundering Act, 2002 (PMLA), which provides for appeals to the High Court.

p. 1

General principles of restitution and interim relief, holding that a party who partially succeeds before an Adjudicating Authority is entitled to consequential relief (release of excess funds) unless a specific stay is granted or the prima facie merits of a cross-appeal warrant otherwise.

pp. 2-3 · ¶ 6-7

Provisions in the judgment · 1 · Linked ones open on LawLens

Prevention of Money-Laundering Act, 2002 Section 42

04Reasoning

The Court rejected the Tribunal’s reasoning, noting that the Tribunal failed to consider the prima facie merits of the Respondent's cross-appeal before denying the Appellant’s request for the release of funds.

p. 2 · ¶ 5

The Court observed that the Appellant had already secured a favorable order from the Adjudicating Authority reducing the quantified proceeds of crime; thus, the Appellant was entitled to the release of the surplus amount as a matter of course.

p. 2 · ¶ 6

The Court noted that the Tribunal had not even adjudicated upon any stay application filed by the Respondent at the time of the impugned order.

p. 3 · ¶ 8

To balance the equities and secure the Respondent's interests pending final adjudication, the Court accepted the Appellant’s offer to furnish a bank guarantee for the differential amount.

p. 3 · ¶ 9-10

05Holding

p. 3 · ¶ 10

The Court directed that the remaining Rs. 3,08,30,600/- (the adjudicated proceeds of crime) be kept in a fixed deposit pending the outcome of the appeals.

p. 3 · ¶ 11

The appeal was disposed of with a clarification that the High Court expressed no opinion on the ultimate merits of the underlying appeals.

p. 4 · ¶ 12-13

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