[Cites 5, Cited by 0]
Delhi High Court
The Deputy Director, Directorate Of ... vs Jm Financial Asset Reconstruction Co on 9 February, 2026
Author: Navin Chawla
Bench: Navin Chawla
$~12
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 09.02.2026
+ MISC. APPEAL(PMLA) 3/2021 & CRL.M.A. 2742/2020
THE DEPUTY DIRECTOR, DIRECTORATE OF
ENFORCEMENT .....Appellant
Through: Mr.Zoheb Hossain, Spl.
Counsel for ED with Mr.Vivek
Gurnani, Panel Counsel &
Mr.Kartik Sabharwal, Advs.
versus
JM FINANCIAL ASSET RECONSTRUCTION CO.
.....Respondent
Through: Ms.Priyal Sarawagi &
Mr.Vansh Dhall, Advs.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
NAVIN CHAWLA, J. (ORAL)
1. This appeal has been filed under Section 42 of the Prevention of
Money Laundering Act, 2002 (hereinafter referred to as, the 'PMLA'),
challenging the order dated 30.08.2019 passed by the learned
Appellate Tribunal (PMLA) in FPA-PMLA-2751/DLI/2018, titled JM
Financial Asset Reconstruction Company Limited v. The Deputy
Director, Directorate of Enforcement, Delhi, allowing the appeal
filed by the respondent herein, with the following observations and
directions:-
"51. This order is being passed in relation to
mortgage properties in favour of banks which
are not purchased from proceeds of crime. The
same were purchased and mortgage with the
banks prior to the of crime period. ED is not
precluded to attach other private properties
and all other assets of the alleged accused.
52. It is clarified that this order shall have
no bearing in any proceedings initiated
against the alleged accused including
extradition proceedings pending or proposed
to be initiated in any part of the world. Those
are to be considered as per law and without
any influence of this order which is being
passed in the interest of public as bank money
is a public money. Most of the banks are
public sector banks. Their valid and legal
recovery cannot be blocked for years without
valid reasons. Therefore, the issue in hand is
being decided only for limited purposes
53. In light of the above, the impugned order is
set aside with regards to the attachment of
properties which are mortgages with the
appellant or its assignor. The appeal is
allowed. The provisional attachment order
dated 14.06.2018 is quashed with regard to
the appellant."
2. We are informed that during the pendency of the present appeal,
several mortgaged properties were brought under the rigours of
Insolvency and Bankruptcy Code (IBC) as mentioned below:-
i) Sterling Biotech Limited:- Vide order dated 11.11.2022,
Sterling Biotech has been sold by the liquidator as a
going concern as per the Code and IB Board of India
(Liquidation Process) Regulations, 2016.
ii) Sterling International Enterprises Limited:- Vide order
dated 18.10.2021, the National Company Law Tribunal
(NCLT) Mumbai had ordered liquidation of the said
company.
iii) Sterling SEZ and Infrastructure Limited:- Vide Order
dated 18.10.2021, NCLT Mumbai had ordered
liquidation of the said company.
iv) PMT Machines Private Limited: Vide order dated
03.06.2022, NCLT Mumbai has approved the resolution
plan filed in relation to the CIRP of the said company.
3. Subsequently, the Supreme Court, vide order dated 19.11.2025
passed in W.P.(Crl.) No. 37/2020 and W.P.(Crl.) No. 48/2020, titled,
Hemant S. Hathi v. Central Bureau of Investigation & Ors. and
Chetan Jayantilal & Ors. v. Central Bureau of Investigation & Ors.
has been pleased to quash the criminal proceedings initiated by the
petitioners therein, in view of a full and final settlement with the
lender banks and the investigating agencies.
4. Placing reliance on the order dated 11.12.2024 passed by the
Supreme Court in SLP(C) Nos. 29327-29328/2019, titled Committee
of Creditors v. Directorate of Enforcement & Ors., and other similar
orders, the learned counsel for the appellant submits that, without
prejudice to the rights and contentions of the respective parties, the
subject properties be deemed to have been released to the successful
Resolution Applicant in terms of Section 8(8) of the PMLA read with
Rule 3A of the Prevention of Money Laundering (Restoration of
Property) Rules, 2016.
5. Though the learned counsel for the respondent submits that in
view of the order passed by the learned Appellate Tribunal impugned
in the present appeal, the attachment of the properties in question has
itself been held to be without jurisdiction, we are of the opinion that,
in view of the subsequent developments, the present appeal has, in
fact, been rendered academic in nature.
6. Accordingly, leaving the question of law open, we direct that,
without prejudice to the rights and contentions of either of the parties,
the subject properties be treated to have been restored under Section
8(8) of the PMLA and the possession handed over to the respondent
herein, JM Financial Asset Reconstruction Company Limited.
7. With the above directions, the appeal, along with the pending
applications, is disposed of.
NAVIN CHAWLA, J
RAVINDER DUDEJA, J
FEBRUARY 9, 2026/rv/pb
