Bank Accounts Frozen under PMLA: What You Can (and Can’t) Do
In a recent case, the Delhi High Court rejected a plea to de-freeze ₹5 crore, pointing out that the petitioner had access to other unfrozen funds and failed to prove urgency. The case highlights a growing trend of bank account attachments under the Prevention of Money Laundering Act (PMLA), 2002—and the narrow path to legal relief.
Why Bank Accounts Are Frozen Under PMLA
The Enforcement Directorate (ED) is empowered under Section 5(1) of the PMLA to attach property (including bank accounts) if it believes they are “proceeds of crime”.
Freezing typically happens when:
- A predicate offence (scheduled offence under PMLA) is registered
- ED finds a money trail linked to tainted funds
Important: Even personal savings can be frozen if the ED suspects laundering links.
Case Update: Delhi HC Dismisses De-freezing Plea
Citation: 2025 TAXSCAN (HC) 1312
In this case, the petitioner sought de-freezing of a ₹5 crore bank account. But the Delhi High Court denied relief, stating:
- The petitioner did not establish urgency
- He had access to other unfrozen funds
- The court would not interfere during ongoing adjudication under Section 8 of PMLA
Legal Tip
Courts rarely entertain premature de-freezing pleas unless there’s:
- Genuine urgency (e.g., medical expenses, statutory dues)
- No alternative funds available
- Delay or inaction by the Adjudicating Authority
Legal Remedies If Your Bank Account Is Frozen
You have the right to challenge the ED’s attachment. Here’s how:
Step 1: File Objection with PMLA Adjudicating Authority
- Time Limit: Within 30 days of attachment order
- Authority: PMLA Adjudicating Authority (New Delhi)
- Basis: Disprove linkage to proceeds of crime
Step 2: Appeal to Appellate Tribunal (PMLA)
- Time Limit: Within 45 days from AA order
- Relief: Full or partial de-freezing
Step 3: Writ Petition before High Court
- Applicable if rights violated or delay in hearing
- Court will check for urgency and alternative remedies
What Courts Consider Before De-Freezing
| Criteria | What Courts Look For |
|---|---|
| Urgency | Proof of immediate financial hardship |
| Alternate Funds | Availability of other unfrozen assets |
| Pending Trial | Whether the criminal case is at trial or conviction stage |
| Delay by Authorities | Inaction by ED or Adjudicating Authority |
| Nature of Funds | Legitimate source and documents provided |
Expert View: Act Early, But Act Smart
CA & Legal Consultant Tip:
File detailed objections and prepare strong documentation to disprove the link to proceeds of crime.
Related Update
Read our blog on PMLA & ED Summons: What Businesses Should Know
FAQs
Q1. Can I access my salary account if frozen under PMLA?
Not unless the ED allows limited withdrawals or the Adjudicating Authority grants relief. You must apply formally.
Q2. How long does an ED attachment last?
Initial attachment is for 180 days but can be confirmed by Adjudicating Authority for longer during the trial.
Q3. What is the time limit for adjudication under Section 8?
The Adjudicating Authority must decide within 180 days from the date of provisional attachment.
Summary
Bank account frozen under PMLA? Courts won’t de-freeze it unless you prove urgency and lack of other funds. File objections before the Adjudicating Authority and follow legal process before rushing to High Court.
Final Word
Understand the legal process, gather financial documents, and file a well-argued objection before the Adjudicating Authority.
Need help drafting your reply or filing objections under PMLA?
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