Judges of the Gauhati High Court have expressed differing views on whether the 'reason to believe' for property attachment under the PMLA is confidential. The ruling may affect the transparency of provisional attachment orders made by enforcement agencies.
Gauhati HC Differs on Confidentiality of ED’s Property Attachment Reasons
A single-judge bench of the Gauhati High Court has recently diverged from a co-ordinate bench's previous stance regarding the confidentiality of the 'reason to believe' necessary for property attachment under Section 5 of the Prevention of Money Laundering Act (PMLA). Justice Manish Choudhury affirmed that there is no legal restriction on the requirement for these reasons to be documented in the Provisional Attachment Order (PAO).
This significant ruling establishes that affected persons are entitled to know the rationale behind property attachments executed by the Enforcement Directorate (ED). By doing so, it upholds the principles of fairness and transparency in the legal framework governing financial regulatory actions.
Legal practitioners in matters related to the PMLA should note this development as it presents an avenue for challenging improper or opaque enforcement actions, thereby strengthening the rights of the accused or affected persons in financial crimes. Future proceedings may involve stronger demands for disclosure of evidence supporting such attachments.
Citations
- Gauhati High Court Case (2026) Court Order
