M/s Nav Nirman Builders & Developers Pvt. Ltd. v. Union of India (ED)
Criminal Appeal arising out of SLP (Crl.) No. 9216 of 2023
Judgment dated 06 February 2026
Statutory Framework Involve
Prevention of Money Laundering Act (PMLA)2002
Sections 26, 2(1)(u) , 5, 8(3) , 8(7) , 8(8) , 9 ,
Prevention of Money-laundering (Restoration of Confiscated Property) Rules, 2016
Brief Fact
The appellant company originated from a partnership firm that executed a government road construction contract in Jharkhand. Allegations arose that forged invoices were used to fraudulently obtain payments, forming the basis of predicate offences under IPC and the Prevention of Corruption Act. Subsequently, proceedings under PMLA were initiated.
Although the appellant company was not originally an accused, properties purchased in its name were provisionally attached in 2017 as “value equivalent” to alleged proceeds of crime. The Adjudicating Authority confirmed the attachment under Section 8(3) PMLA. The appellant challenged this confirmation before the Appellate Tribunal under Section 26 PMLA, where the appeal remained pending due to lack of quorum.
Meanwhile, upon the death of the main accused, the Enforcement Directorate moved an application under Section 8(7) seeking confiscation. The appellant filed an application under Section 8(8) claiming ownership. The Special Court allowed confiscation under Section 8(7) and rejected restoration. The High Court affirmed this decision.
Key Legal Issues
Whether the Special Court could invoke Section 8(7) PMLA while an appeal against confirmation under Section 8(3) was pending.
Scope of the phrase “material before it” under Section 8(7).
Maintainability of restoration under Section 8(8) by a party already aggrieved under Section 8(3).
Applicability of the doctrine of merger under PMLA proceedings.
Court’s Analysis & Findings
The Court held that Section 8(7) and 8(8) are independent but conditional provisions.
Section 8(7) can be exercised only after the attachment order under Section 8(3) attains finality.
Once an appeal under Section 26 PMLA is filed, a deemed embargo operates on proceedings under Section 8(7) due to the doctrine of merger.
The Special Court cannot override or render infructuous a statutory appeal by deciding confiscation on merits.
The expression “material before it” in Section 8(7) has a limited scope, confined to showing contingency (death, absconding, etc.) and entitlement—not re-adjudication.
Restoration under Section 8(8) is available only to a bona fide third-party claimant who has suffered quantifiable loss and is not involved in money laundering. The appellant failed to meet this threshold.
Final Decision
Orders of the Special Court and High Court allowing confiscation under Section 8(7) were set aside.
Dismissal of the appellant’s appeal by the Appellate Tribunal as infructuous was also quashed.
The appeal under Section 26 PMLA was restored and directed to be decided on merits within four weeks.
Section 8(7) application to remain pending till final adjudication of the confirmation order.
Legal Significance
This judgment is a landmark clarification on procedural discipline under PMLA, reinforcing:
supremacy of the appellate mechanism,
limits on Special Court jurisdiction,
strict sequencing of attachment → confirmation → final confiscation,
and protection against premature deprivation of property.
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