Supreme Court Clarifies Applicability of Section 8(3)(a) of PMLA in Retention of Seized Items

The Supreme Court recently dealt with a challenge to the retention of an accused's electronic items, documents, and other assets seized under the Prevention of Money Laundering Act (PMLA). The challenge centered on the interpretation of Section 8(3)(a) of the PMLA, which deals with the continuation of retention orders for seized items during the pendency of proceedings. The Court ruled on the question of whether it is necessary for a person to be named as an accused in the complaint for the retention of such items to continue under this provision.

Court's Observation on Section 8(3)(a) of PMLA
The bench comprising Justices Abhay S. Oka and N. Kotiswar Singh clarified that it is not mandatory for a person to be named as an accused in the complaint for Section 8(3)(a) of the PMLA to apply. The Court emphasized that it suffices if a complaint alleging the commission of an offense under Section 3 of the PMLA is pending. According to the Court, the applicability of clause (a) under Section 8(3) is not dependent on the person being formally named as an accused but rather on the pendency of the proceedings before a court.

Facts of the Case
An Enforcement Case Information Report (ECIR) was filed against the respondent and others in 2017. During a search, the Enforcement Directorate (ED) seized various electronic items, documents, and cash. The ED then passed an order under Section 17(4) of the PMLA for the retention of these seized items. Subsequently, an order under Section 8(3) was confirmed on 04.04.2018, continuing the retention. The complaint under Section 44 of the PMLA was filed, and the Special Court took cognizance of the offense under Section 3 of the PMLA on 19.02.2018.

Dispute Over Retention of Seized Items
The respondent challenged the retention of the seized items, arguing that since he was not named as an accused in the ED's complaint under Section 44 PMLA, there was no pending complaint, and thus the retention of the items was unjust. The respondent also claimed that the items were not being relied upon in the case and continued retention was unnecessary.

Appellate Authority and High Court's Ruling
The Appellate Authority and the High Court had held that under the amended Section 8(3)(a), the order of retention would cease after the completion of 90 days, citing a time-limit for retention. The appellant-authority challenged this view in the Supreme Court, arguing that the provision as it stood before the amendment applied in this case, which did not have a time-limit.

Supreme Court's Decision
The Supreme Court clarified that the applicable provision of Section 8(3)(a) of the PMLA, in force from 14.05.2015 to 18.04.2018, did not impose any time-limit on the retention of seized items. The Court also stated that it was irrelevant whether the respondent was named as an accused in the complaint, as the critical factor was the pendency of the proceedings in the Special Court. Since the complaint was pending and cognizance had been taken under Section 3 of the PMLA, the retention order was valid.

Further, the Court held that even if the amended Section 8(3)(a) (effective from 19.04.2018) applied, the retention could continue beyond the 90-day period as long as the complaint remained pending.

Conclusion and Ruling
The Supreme Court set aside the High Court and Appellate Authority's orders, restoring the order dated 04.04.2018 passed by the Adjudicating Authority. The Court clarified that the retention order would remain in force until the disposal of the complaint.

Case Title: Union of India v. J.P. Singh, CRIMINAL APPEAL No.1102 of 2025