The Punjab & Haryana High Court has reaffirmed that judicial orders directing the release of attached properties must be implemented without delay, even when parallel criminal proceedings are pending. This judgment clarifies that administrative inertia by enforcement agencies cannot override clear directions from superior courts, reinforcing the primacy of judicial authority in property rights matters.
Background & Facts
The Dispute
The petitioners, home buyers who had purchased residential units from a real estate developer, saw their properties attached by the Directorate of Enforcement (ED) under the Prevention of Money Laundering Act, 2002. The attachment was based on allegations that the developer had laundered proceeds from fraudulent real estate transactions. The petitioners, who had paid full consideration in good faith and were not implicated in any criminal wrongdoing, sought release of their properties.
Procedural History
- August 2021: ED issued an order attaching properties of various purchasers, including the petitioners.
- October 2023 & October 2023: The Punjab & Haryana High Court, in separate writ petitions (CWP-22178-2023 and CWP-21478-2022), directed the release of properties belonging to bona fide home buyers.
- March & April 2022: The Supreme Court, in Gulshan Arora v. M/s SRS Real Estate Limited, held that properties of innocent home buyers cannot be retained under PMLA merely because the developer is under investigation.
- January 2024: The ED’s adjudicating authority, in its order (Annexure P-12), acknowledged these judicial directives and directed the release of properties listed in Annexures 1, 2, and 3.
- Despite the January 2024 order, the ED failed to physically release the properties.
Relief Sought
The petitioners sought immediate physical release of their properties and direction to the ED to comply with the adjudicating authority’s order and the prior High Court and Supreme Court directives.
The Legal Issue
The central question was whether the Enforcement Directorate is bound to implement a judicially endorsed order releasing properties, even when a criminal trial arising from the same facts remains pending before a Special Court.
Arguments Presented
For the Petitioner
The petitioners relied on Gulshan Arora v. M/s SRS Real Estate Limited and the High Court’s own orders dated 04.10.2023 and 18.10.2023, arguing that the ED’s continued retention of properties violated the principle of legitimate expectation and due process under Article 21. They emphasized that the adjudicating authority had already confirmed the release, making further delay unlawful and arbitrary.
For the Respondent
The ED contended that since criminal proceedings were ongoing and charges had been framed in the Special Court at Gurugram, it could not unilaterally release the properties without seeking permission from that court. It submitted that an application (CRM-755-2025) had been filed before the Special Court for release, and the matter was sub judice.
The Court's Analysis
The Court rejected the ED’s argument that pending criminal proceedings automatically override judicial orders. It held that the adjudicating authority’s order dated 02.01.2024 was not a mere administrative note but a reasoned, binding determination based on binding precedents from this Court and the Supreme Court. The Court observed that the ED’s reliance on the pendency of a criminal trial was misplaced, as the rights of innocent third parties - here, home buyers - must be protected irrespective of the status of proceedings against the accused developer.
"The adjudicating authority has already taken a decision to release the properties... it would be appropriate for the Special Court, Gurugram, to take a call latest by 21.02.2026."
The Court emphasized that procedural compliance is not optional when judicial directions are clear. The ED’s failure to act on the January 2024 order constituted a violation of the rule of law and amounted to undue delay that prejudiced the petitioners’ fundamental rights. The Court further noted that the Special Court’s pending application could not serve as a shield for inaction, especially when the legal position had been settled by higher courts.
The Verdict
The petitioners succeeded. The Court held that the Enforcement Directorate is bound to implement judicially endorsed orders releasing properties of innocent home buyers, even if parallel criminal proceedings are pending. The ED was directed to ensure physical release of the properties by 21.02.2026, failing which the petitioners may approach the Tehsildar for execution of sale deeds.
What This Means For Similar Cases
Judicial Orders Bind Enforcement Agencies
- Practitioners can now cite this judgment to compel ED or other agencies to comply with court orders releasing properties, even during ongoing PMLA trials.
- The mere pendency of a criminal case does not suspend the obligation to implement prior judicial directions.
Innocent Third Parties Are Protected Under Article 21
- Home buyers who paid full consideration in good faith cannot be treated as "proceeds of crime" merely because the developer is under investigation.
- Courts will prioritize substantive justice over procedural technicalities when fundamental rights are at stake.
Delay in Implementation Is a Violation
- Administrative delay in executing court orders constitutes a violation of Article 21 and may attract contempt proceedings.
- Petitioners should immediately move for execution or compliance petitions if orders are not implemented within a reasonable time.
