PMLA Tribunal Partly Allows Appeal of Dalmia Cement on Attachment of Equivalent Value Properties

A cement company challenged an order passed by the Directorate of Enforcement under the Prevention of Money Laundering Act, 2002, which confirmed the provisional attachment of several of its properties. The action stemmed from an investigation into alleged illegal benefits linked to the grant of limestone mining leases.

The company argued that the attached properties were not direct “proceeds of crime” but only assets of equivalent value. It therefore requested that the attached immovable properties be replaced with alternate security such as fixed deposits or bank guarantees so that normal business operations would not be disrupted.

Issue Before Court: Whether the appellate tribunal under the Prevention of Money Laundering Act, 2002 has the authority to permit substitution of attached properties with other assets of equivalent value, and whether such properties can be released upon furnishing adequate security.

Tribunal Held: The Appellate Tribunal under SAFEMA partly allowed the appeal. It observed that the tribunal itself does not have explicit statutory power to order substitution of attached assets once a provisional attachment has been confirmed.

However, the tribunal clarified that since the properties in question were only of equivalent value and not the direct proceeds of crime, the Directorate of Enforcement may, at its discretion, consider releasing them if adequate alternate security such as fixed deposits or bank guarantees is provided. The order further stated that nothing in the tribunal’s ruling would prevent the authority from accepting such security while ensuring that the value of the attachment remains protected.

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