34 September 27 2025

SUPREME COURT’S COVID-19 LIMITATION EXTENSIONS APPLY TO PMLA PROCEEDINGS, RULES HIGH COURT

Facts of the Case
The Directorate of Enforcement (ED) filed a Letters Patent Appeal challenging the judgment of a Single Judge dated 18 November 2020, which had set aside summons issued by the Adjudicating Authority on the ground that the 180-day period under Section 5(3) of the Prevention of Money Laundering Act, 2002 (PMLA) had lapsed. Parallelly, a writ petition was filed by private parties challenging Provisional Attachment Order (PAO) No. 6/2021 dated 1 December 2021 passed by the ED. Both cases revolved around whether the Supreme Court’s suo motu orders extending limitation during COVID-19 applied to proceedings under the PMLA.

Issue Before the Court
The central issue was whether the time-bound procedure prescribed under Section 5(3) of the PMLA, which requires confirmation of provisional attachment within 180 days by the Adjudicating Authority under Section 8(3), was subject to extension by the Supreme Court’s orders in In Re: Cognizance for Extension of Limitation issued during the COVID-19 pandemic.

Explanation of Complex Terms
A Provisional Attachment Order (PAO) is an interim measure under Section 5 of the PMLA to prevent disposal of property suspected to be involved in money laundering. The Adjudicating Authority is a statutory quasi-judicial body empowered to confirm or release attachments after hearing parties. Quasi-judicial proceedings are those where authorities, though not courts, must act judicially, follow principles of natural justice, and decide disputes affecting rights.

Petitioners’ Contentions
The private parties argued that the PAOs automatically lapsed after 180 days as mandated by Section 5(3) of the PMLA, since the Adjudicating Authority failed to confirm them in time. They contended that the Supreme Court’s suo motu extensions were meant for filing suits, appeals, or petitions—not for statutory deadlines under PMLA. Hence, the attachments ceased to have legal effect.

Respondents’ Contentions
The Enforcement Directorate countered that the Supreme Court’s blanket extension orders explicitly applied to all judicial and quasi-judicial proceedings under both general and special laws, including PMLA. They argued that various High Courts had recognized that such extensions covered adjudicatory timelines under the Act.

Relevant Case Law & Law Discussion
The Court examined a series of Supreme Court orders in In Re: Cognizance for Extension of Limitation (2020–2022), where limitation periods were suspended to mitigate hardships during COVID-19. It emphasized that these directions applied broadly to “all general and special laws” and covered judicial and quasi-judicial proceedings. The Court also discussed precedents on the nature of quasi-judicial authorities, affirming that the Adjudicating Authority under PMLA functions in such a capacity.

Court Observations
The Bench observed that the pandemic was an extraordinary situation where statutory authorities could not effectively perform adjudicatory functions. It noted that provisional and confirmatory attachment are part of a continuous two-step process under the PMLA, and excluding the period lost due to COVID-19 was essential to preserve the legislative intent. The Court rejected a narrow interpretation of the Supreme Court’s limitation orders, holding that they were meant to safeguard rights comprehensively.

Court Directions / Judgment
The Division Bench held that the Supreme Court’s extension of limitation squarely applied to proceedings under PMLA. Consequently, the Single Judge’s ruling was set aside. The Letters Patent Appeal was allowed, and the writ petition was dismissed as being without merit. Both matters, along with pending applications, were disposed of, with no order as to costs.

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DATE OF DECISION:24.09.2025
CASE NUMBER:LPA 362/2020,W.P.(CRL) 86/2022

Author

avatar
Adv. ALOK KUMAR
Advocate Serving Delhi NCR
Delhi High Court & District Courts
LL.B.▪︎Faculty of Law▪︎Delhi University


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