The Supreme Court of India has held that under the Prevention of Money Laundering Act (PMLA), a person need not be specifically named as an accused in the complaint for the retention of their seized property under Section 8(3) to continue. This clarification came in the case of Union of India v. J.P. Singh (Criminal Appeal No. 1102 of 2025), where the Court analyzed the applicability of Section 8(3) of PMLA and its amendments over time.
Background of the Case
The case arose from an ECIR (Enforcement Case Information Report) registered by the Enforcement Directorate (ED) on March 17, 2017, against the respondent, J.P. Singh, and others. During a search operation conducted on October 13, 2017, various electronic devices, documents, and cash were seized.
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Subsequently, on April 4, 2018, the Adjudicating Authority passed an order under Section 8(3) of PMLA, confirming the retention of the seized items. A complaint was then filed on February 8, 2018, under Section 44 of PMLA, and cognizance was taken by the Special Court on February 19, 2018.
J.P. Singh challenged the retention of his property, arguing that since he was not named as an accused in the complaint, the property should not be retained beyond 90 days. The Appellate Authority and the High Court ruled in his favor, stating that as per the amended Section 8(3)(a) (effective from April 19, 2018), the retention period would lapse after 90 days if proceedings were not pending against the accused.
The Supreme Court overturned the High Court’s decision, holding that the order under Section 8(3) was legally valid and should continue. The Court emphasized:
"Clause (a) will apply during the continuation of the proceedings relating to an offence under PMLA in a Court... For attracting clause (a), it is enough if a complaint alleging commission of offence under Section 3 of PMLA is pending. It is not necessary that the person affected by the order under Section 8(3) must be shown as an accused in the complaint."
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The Court clarified that the complaint under Section 44 of PMLA is always linked to an offense under Section 3, which is punishable under Section 4. Therefore, the order of cognizance pertains to the offense itself, not merely to the individual accused.
Applicability of Section 8(3) Before Amendment: The Court held that the provision applicable from May 14, 2015, to April 18, 2018, did not impose a time limit on retention. Hence, the retention order continued as long as the case was pending before the court.
Effect of Amended Section 8(3) (April 19, 2018, Onwards): Even if the amended provision were to apply, the Court noted that retention would continue beyond 90 days if the proceedings under PMLA were still pending.
No Need to Be Named as an Accused for Retention: The Court ruled that retention under Section 8(3)(a) is linked to the pendency of proceedings, not necessarily to whether the affected person is named in the complaint.
The Supreme Court set aside the High Court and Appellate Authority's orders, restoring the Adjudicating Authority’s order of April 4, 2018. The ruling reaffirmed that the retention order shall remain in force till the disposal of the complaint.
Additionally, the Court directed that:
"Upon a formal application being made by the respondent, compliance with Section 21(2) of PMLA shall be ensured within three weeks."
This ensures that the respondent can obtain copies of the records retained under Section 17(4) of PMLA.
Case Title: Union of India v. J.P. Singh, CRIMINAL APPEAL No.1102 of 2025
