Bombay High Court Directs ED To Return Chellaram Mills Director's Seized Assets After 180-Day Limit

The Bombay High Court on 14 October directed the Enforcement Directorate (ED) to return documents and digital devices seized from Mukesh Talreja, Director of Chellaram Mills, and unfreeze his locker after the 180-day retention period under the Prevention of Money Laundering Act (PMLA) expired.

A Bench of Justices Bharati Dangre and Ashish S Chavan allowed Talreja's writ petition challenging the seizure of documents and digital devices and the freezing of his locker. They observed:

“…we find substance in the argument of the learned counsel for the Petitioner that by operation of law and efflux of time, the ED has lost the authority to continue to retain the articles or permit the continuation of the freezing of the locker. In such circumstances, the prayer of the Petitioner deserves to be answered in the affirmative.”

The ED had seized the articles and frozen the locker in connection with an ECIR registered on the basis of an FIR naming Talreja as an accused. The Bombay High Court subsequently quashed the predicate-offence FIR, while the Delhi High Court quashed the ECIR, holding that PMLA proceedings could not continue without a predicate offence. The related proceedings eventually reached the Supreme Court.

Talreja sought the return of the seized articles, arguing that the 180-day retention period under Section 20 of the PMLA had expired without the Adjudicating Authority permitting further retention or freezing.

The Court noted that the ED did not dispute the expiry of the 180-day period and that the Adjudicating Authority had not authorised the continued retention of the seized articles or freezing of the locker.

Referring to Sections 17 and 20 of the PMLA, the Bench observed that property seized under Section 17 could remain in the ED's custody or frozen for 180 days unless the Adjudicating Authority permitted further retention or freezing.

Accordingly, the High Court allowed the writ petition and directed the ED to return the seized articles to Talreja and release the locker and hand over its possession to him.

For Petitioner: Advocates Ashutosh Singh and Maesh Reddy

For Respondent: Advocate Manisha Jagtap