Madras High Court Upholds ED's Authority to Attach Domestic Assets for Overseas Crimes

The Madras High Court has ruled that the Enforcement Directorate (ED) can attach domestic assets of equivalent value to those created abroad through criminal activities as part of a money laundering investigation. The court rejected petitions from three companies claiming they were not liable for crimes committed by their associates and upheld the provision of attaching assets to protect the economic interest of the country.

The Madras High Court has affirmed the right of the Enforcement Directorate (ED) to attach legitimate domestic assets equivalent in value to those overseas, stemming from criminal activities, in the interest of the nation's economy. This ruling came during the hearing of a petition by three Chennai-based companies.

The petitioners argued that they should not be held vicariously liable for offenses committed by individuals and shareholders associated with them. However, the court clarified under Section 2(1)(u) of the Prevention of Money Laundering Act (PMLA) that any property derived from criminal activities, whether within the country or abroad, is considered 'proceeds of crime'.

The court's 14-page order emphasized that properties held domestically can be attached even if the criminal activity occurred abroad. The object of this provision is to safeguard India's economic interests. With this decision, the companies must now present their defense before the Appellate Tribunal of PMLA, as their petition was dismissed, ensuring the ongoing trial remains uninfluenced by this judgment.

(With inputs from agencies.)