Deputy Director Vs Piramal Capital and Housing Finance Ltd. (Delhi High Court)
Summary : The Delhi High Court, in Deputy Director, Directorate of Enforcement Vs Piramal Capital and Housing Finance Ltd., held that the Appellate Tribunal under SAFEMA had erred in setting aside a provisional attachment merely because one of the FIRs relating to the predicate offences had been quashed, without examining another FIR that independently formed part of the basis for the attachment. The Division Bench of Justice Navin Chawla and Justice Arun Bhardwaj allowed the Enforcement Directorate’s appeal under Section 42 of the Prevention of Money Laundering Act, 2002 (PMLA), set aside the Tribunal’s order dated 16 April 2026, and remanded the matter for fresh consideration. The Court emphasised that the consequences of quashing a predicate-offence FIR must be independently examined rather than treating such quashing as automatically determinative of the validity of the attachment.
The dispute originated from Provisional Attachment Order No. 03/2024 dated 23 February 2024, which covered, among other assets, property belonging to Piramal Capital and Housing Finance Ltd. The Adjudicating Authority confirmed the attachment through its order dated 31 July 2024 in Original Complaint No. 2216/2024. However, the Appellate Tribunal, while deciding FPA-PMLA-1760/DLI/2024, set aside the confirmation solely because FIR No. RC2172018A0004 dated 5 May 2018 had been quashed by the Delhi High Court on 14 October 2025 in CRL. MC 7294/2025. The Supreme Court subsequently dismissed the CBI’s Special Leave Petition challenging that order on 9 March 2026.
The Enforcement Directorate argued that the Tribunal had overlooked another FIR, RC 2172018A0003 dated 1 May 2018, registered under Sections 420 and 120-B of the Indian Penal Code, 1860, and Sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988. This FIR also formed the basis of the provisional attachment. A charge sheet had already been filed in connection with that FIR, and a prosecution complaint bearing ECIR/03/HIU/2018 had also been instituted under Section 45 of the PMLA. The Directorate further pointed out that, in connected appeals involving Upendra Rai and Narendra Rai, the High Court had already set aside the Tribunal’s order insofar as it concerned those respondents and remanded their matters through a consent order dated 25 August 2026. Piramal Capital, however, maintained that the Tribunal’s decision was justified because the FIR concerning the predicate offence had been quashed.
After considering the rival submissions, the High Court found that the Tribunal had proceeded exclusively on the quashing of FIR No. RC2172018A0004 and failed to consider the other FIR dated 1 May 2018, which was also relevant to the attachment proceedings. Referring to the Supreme Court’s decision in Directorate of Enforcement v. Bhupesh Arora, SLP (Crl.) No. 13532/2026, order dated 29 September 2026, the Court observed that quashing a predicate-offence FIR on the basis of a compromise does not, by itself, obliterate the existence of proceeds of crime. Accordingly, the Tribunal was required to independently assess the implications of the quashing order in the circumstances of the case.
The High Court consequently restored FPA-PMLA-1760/DLI/2024 to the Appellate Tribunal for fresh adjudication, leaving all contentions of both parties open and directing that the matter be considered without being influenced by the Tribunal’s earlier observations. It requested the Tribunal to endeavour to dispose of the appeal within two months from its first listing and directed that the matter be listed alongside the connected appeals on 18 November 2026. The judgment is significant for its insistence that an attachment involving multiple alleged predicate offences cannot be invalidated solely by reference to the quashing of one FIR without examining the remaining factual and legal foundation. Importantly, the High Court did not finally determine the validity of the attachment; that question was left for reconsideration by the Tribunal.
Cases Discussed
1. Directorate of Enforcement v. Bhupesh Arora (Supreme Court); SLP (Crl.) No. 13532/2026; 29/09/2026
2. Deputy Director, Directorate of Enforcement v. Shri Upendra Rai (Delhi High Court); MISC. APPEAL (PMLA) 116/2026; 25/08/2026
3. Deputy Director, Directorate of Enforcement v. Shri Narendra Rai (Delhi High Court); MISC. APPEAL (PMLA) 118/2026; 25/08/2026
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. By way of this application, the appellant prays for condonation of delay of 57 days in filing this appeal.
2. Having considered the grounds set out in the application, we find sufficient reasons for condoning the delay. Accordingly, the delay is condoned. The application is disposed of.
MISC. APPEAL(PMLA) 117/2026 & CM APPL. 55082/2026
3. This appeal has been filed by the appellant under Section 42 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as ‘PMLA’), challenging the order dated 16.04.2026 passed by the learned Appellate Tribunal under SAFEMA in appeal bearing no. FPA-PMLA-1760/DLI/2024, by way of which, the learned Appellate Tribunal has allowed the appeal filed by the respondent herein and has set aside the order dated 31.07.2024 passed by the Adjudicating Authority confirming the Attachment.
4. The Adjudicating Authority, by its order dated 31.07.2024 passed in Original Complaint (OC) No. 2216/2024, had confirmed the Provisional Attachment Order No. 03/2024 dated 23.02.2024 passed by the appellant inter alia on the property of the respondent.
5. By the impugned order, the learned Appellate Tribunal has set aside the order passed by the learned Adjudicating Authority, only on the ground that FIR No. RC2172018A0004 dated 05.05.2018 had been quashed by this Court vide an order dated 14.10.2025 passed in CRL. MC 7294/2025 and thereafter, the Special Leave Petition filed against the same by the Central Bureau of Investigation had also been dismissed by the Supreme Court vide order dated 09.03.2026.
6. The learned counsel for the appellant submits that the learned Appellate Tribunal failed to appreciate that apart from the above FIR, another FIR, that is, FIR No. RC 2172018A0003 dated 01.05.2018 had been registered under Section 420 read with 120-B of the Indian Penal Code, 1860 and Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988, and was also the basis of the passing of the Provisional Attachment Order dated 23.02.2024. In the above FIR dated 01.05.2018, a charge sheet already stands filed and a Prosecution Complaint bearing Case No. ECIR/03/HIU/2018 under Section 45 of the PMLA also stands filed by the appellant herein. He submits that the impugned order has been passed without considering the above FIR and the Complaint.
7. He further submits that the impugned order was also challenged by the appellant in MISC. APPEAL(PMLA) 116/2026 titled as Deputy Director, Directorate of Enforcement v. Shri Upendra Rai and MISC. APPEAL(PMLA) 118/2026 titled as Deputy Director, Directorate of Enforcement v. Shri Narendra Rai, and by a consent order dated 25.08.2026, the impugned order has been set aside in those appeals qua the respondents therein and the matter was remanded back to the learned Appellate Tribunal to decide the appeals afresh.
8. The learned counsel for the respondent, on the other hand, submits that no fault can be found in the impugned order in as much as the FIR for the predicate offence stands quashed by this Court by way of the above referred order passed in CRL. MC 7294/2025.
9. We have considered the submissions made by the learned counsels for the parties.
10. We find that the learned Appellate Tribunal has based its impugned order only on the fact of quashing of FIR No. RC2172018A0004, without considering the other FIR dated 01.05.2018, which was also the subject matter of the provisional attachment order confirmed by the Adjudicating Authority.
11. The effect of quashing of the FIR No. RC2172018A0004 on the Provisional Attachment Order, should also have been independently considered by the learned Appellate Tribunal, as has been held by the Supreme Court in Directorate of Enforcement v. Bhupesh Arora (Order dated 29.09.2026 in SLP (Crl.) No. 13532/2026), wherein the Supreme Court had observed that when an FIR of a predicate offence has been quashed on a compromise, the same does not obliterate the existence of the proceeds of crime.
12. Keeping in view the above, the present appeal is allowed and the impugned order dated 16.04.2026 is set aside. The appeal, that is, FPA-PMLA-1760/DLI/2024, is restored and remanded back to the learned Appellate Tribunal for considering the same afresh, remaining uninfluenced by any observations made in the impugned order. All contentions of the parties shall remain open to be adjudicated afresh before the learned Appellate Tribunal.
13. In our order dated 25.08.2026, referred hereinabove, we had requested the learned Appellate Tribunal to try and dispose of the appeals therein within a period of two months from the date of first listing. We reiterate the same request in the present appeal as well.
14. We are informed that the other connected appeals are listed before the learned Appellate Tribunal on 18.11.2026. In view of the same, let the appeal bearing no. FPA-PMLA-1760/DLI/2024 be also listed before the learned Appellate Tribunal on the same date, that is, 18.11.2026.
15. The present appeal is disposed of in the above terms.
