ED Seizes AJL Properties Under PMLA: What It Means Legally
In a decisive step under the Prevention of Money Laundering Act (PMLA), 2002, the Enforcement Directorate (ED) initiated possession proceedings against properties linked to Associated Journals Limited (AJL). This move marks a critical enforcement milestone in the ongoing AJL case PMLA investigation.
🧾 Why This Action Was Taken?
The action stems from Section 8 of the PMLA and Rule 5(1) of the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013. These provisions empower the ED to take physical possession of properties confirmed as tainted by the Adjudicating Authority.
On April 11, 2025, the ED served notices to property registrars in Delhi, Mumbai, and Lucknow, where AJL owns real estate assets.
🏢 Who Was Served?
| Party Notified | Location | Legal Reference |
|---|---|---|
| Property Registrars | Delhi, Mumbai, Lucknow | Rule 5(1), PMLA Rules 2013 |
| M/s Jindal South West Projects Ltd. | Herald House, Bandra (E), Mumbai | Rule 5(3), PMLA Rules 2013 |
M/s Jindal South West Projects Ltd., the current occupant of the 7th, 8th, and 9th floors of Herald House, has been directed to transfer monthly rent/lease amounts directly to the Directorate of Enforcement.
🧠 Legal Insight: Rule 5 Breakdown
| Rule | Purpose |
|---|---|
| Rule 5(1) | Allows ED to notify local authorities and proceed with possession of confirmed properties. |
| Rule 5(3) | Directs occupants/tenants to divert lease proceeds to ED once attachment is confirmed. |
These rules ensure that even if the property isn’t physically taken over immediately, any economic benefit from it is redirected to the authorities.
⚖️ Related Case Law & Precedents
- K.K. Ahuja v. ED (Delhi HC, 2021): Affirmed ED’s right to take symbolic and actual possession of attached assets post-adjudication.
- M/s Bhushan Steel Ltd. Case (NCLT): Clarified how lease income from attached properties can be recovered pending full asset disposal.
📌 What Happens Next?
- Tenants failing to comply may face eviction orders.
- If challenged, courts typically prioritize public interest in asset recovery.
- The property may be auctioned post-trial or retained by the government depending on court outcomes.
🔍 Key Takeaways for Taxpayers & Businesses
- Compliance with ED notices is legally binding once an adjudicating authority confirms attachment.
- Lease holders should verify asset status before entering agreements to avoid liability.
- Legal occupants may be required to redirect income to the government under PMLA rules.