1. Statutory framework

The relevant provisions are principally Sections 5, 6, 8, 11, 20, 25–26, 42, 58B and 60 of the PMLA.

A. Provisional attachment — Section 5

Where the statutory conditions are satisfied, the Director or an authorised officer may provisionally attach property believed to constitute proceeds of crime.

The provisional attachment is not the final determination of the property's status. The matter must proceed to the Adjudicating Authority.

B. Complaint before the Adjudicating Authority — Section 5(5)

After passing the provisional attachment order, the authorised officer is required to forward the order and material to the AA and file a complaint within the statutory period.

C. Show-cause notice — Section 8(1)

The AA examines the complaint and, if the statutory requirements are met, issues notice to the concerned person.

The notice essentially calls upon the person to explain:

1. the source of the income/assets;
2. the manner in which the property was acquired;
3. why the property should not be declared property involved in money-laundering; and
4. why it should not ultimately be confiscated.

D. Adjudication — Section 8(2)

This is the crucial stage for a release order.

The AA must consider:

• the reply to the notice;
• the material produced by the Enforcement Directorate;
• the submissions of the aggrieved person;
• the submissions of the officer who made the provisional attachment; and
• all relevant material placed before it.

The AA must then record a finding as to whether the property is involved in money-laundering.

2. What happens if the AA finds that the property is NOT involved in money-laundering?

This is the principal situation in which a release/non-confirmation order arises at the adjudication stage.

If, after hearing the parties and considering the material, the AA concludes that the property is not involved in money-laundering, the provisional attachment cannot properly be confirmed in respect of that property.

The consequence is that the property should be released from the attachment, subject to the precise statutory circumstances applicable to the case.

This is important because the AA is not merely a rubber stamp for the Enforcement Directorate. It has an independent adjudicatory function.

The Calcutta High Court in Fairdeal Supplies Ltd. v. Union of India emphasised that the AA has to independently determine whether the property referred to in the notice is involved in money-laundering. It can either hold that the property is involved and confirm the attachment or conclude that it is not so involved.

3. Very important distinction: “release by AA” vs “release by Special Court”

This distinction is frequently misunderstood.

AA's function

The AA determines whether the provisional attachment should be confirmed under Section 8(2)/(3).

Special Court's function

After the criminal proceedings conclude, the Special Court determines whether the property should be confiscated or released.

Under Section 8(5), if the Special Court concludes that money-laundering has been committed and the property is involved in money-laundering, it can order confiscation.

Conversely, Section 8(6) provides for release where the Special Court finds that the offence of money-laundering has not taken place or that the property is not involved in money-laundering.

Thus:

AA → confirmation/non-confirmation of attachment

Special Court → ultimate confiscation/release

The Supreme Court has recently reiterated this statutory architecture.

4. Can the AA release property during the pendency of the criminal case?

The answer requires care.

Once the AA has confirmed the attachment under Section 8(3), the attachment ordinarily continues during the pendency of the criminal proceedings.

The Supreme Court has explained that confirmation by the AA is not itself equivalent to final confiscation. The attachment continues until the Special Court passes the appropriate order under the PMLA.

Therefore, a person cannot ordinarily argue:

“The AA has confirmed the attachment, therefore the property has been confiscated.”

That is incorrect.

Likewise, the mere fact that attachment has been confirmed does not mean that the person has permanently lost title to the property. The statutory scheme contemplates continuation of attachment pending the criminal proceedings and eventual confiscation or release.

5. Section 8(8): release of attached property to a legitimate claimant

A particularly important provision is Section 8(8).

The PMLA recognises circumstances in which a person having a legitimate interest in property may seek restoration/release.

The statutory scheme allows the Special Court, after the relevant conditions are satisfied, to direct restoration of confiscated property to a claimant who has suffered a quantifiable loss and satisfies the statutory requirements.

The Supreme Court's recent exposition of the PMLA scheme also recognises the distinction between confiscation and restoration/release to persons having legitimate interests.

This becomes particularly significant in cases involving:

• banks;
• secured creditors;
• innocent purchasers;
• mortgagees;
• employees/workmen;
• third-party owners; and
• persons who themselves were not involved in money-laundering.

6. Case law: Supreme Court

A. Recent Supreme Court decision — 2026

A particularly important recent authority is the Supreme Court judgment in Gautam Dhandhania & Anr. v. Union of India & Ors. (2026).

The Court explained the statutory sequence:

Section 5 provisional attachment → Section 8 adjudication → confirmation → continuation during criminal proceedings → Special Court's ultimate confiscation/release.

The Court specifically noted that the AA's order is appealable to the Appellate Tribunal under Section 26 and, therefore, the AA is not the final authority regarding attachment of proceeds of crime.

This is extremely useful when arguing that an AA order is not the end of the litigation.

Practical proposition

If the AA confirms attachment:

The aggrieved person has a statutory appellate remedy under Section 26.

The appeal must ordinarily be filed within 45 days from receipt of the order, subject to the statutory power to entertain an appeal beyond that period in appropriate circumstances.

B. Adjudicating Authority (PMLA) v. Ajay Kumar Gupta

In Adjudicating Authority (PMLA) v. Ajay Kumar Gupta, the Supreme Court dealt with a situation where the proceedings relating to attachment could not survive after acquittal in the predicate offence.

The Supreme Court recorded that, since there was an acquittal in respect of the predicate offence, the proceedings arising from the attachment would not survive.

Importance

This illustrates the fundamental principle that the PMLA proceeding cannot be divorced from the statutory concept of scheduled offence → proceeds of crime → money-laundering.

If the foundational predicate offence disappears in circumstances that eliminate the existence of proceeds of crime, the attachment proceedings may consequently fail.

7. Case law: Fairdeal Supplies Ltd. v. Union of India

The Calcutta High Court's decision in Fairdeal Supplies Limited & Anr. v. Union of India & Ors. is particularly useful for understanding the jurisdiction of the AA.

The Court held, in substance, that the AA's adjudication is an independent exercise in which it must determine whether the property is involved in money-laundering.

The AA is required to:

1. consider the noticee's response;
2. hear the concerned parties;
3. consider relevant material; and
4. arrive at a finding regarding the property.

It is therefore not sufficient simply to reproduce the ED's allegations and mechanically confirm the attachment.

Principle for a release application

A strong submission would therefore be:

“The Adjudicating Authority is required to independently determine whether the property is involved in money-laundering. In the absence of material establishing the statutory nexus between the property and the proceeds of crime, confirmation of attachment cannot be sustained.”

8. J. Sekar v. Union of India

The Delhi High Court in J. Sekar v. Union of India explained the statutory scheme concerning provisional attachment.

The provisional attachment under Section 5 has a limited statutory life and the legislation requires the matter to be placed before the AA for adjudication.

The case is frequently relied upon for the proposition that the statutory requirements surrounding provisional attachment and subsequent adjudication must be strictly followed. A 2026 Delhi High Court judgment has again referred to the principles in J. Sekar while examining the Section 5/Section 8 scheme.

9. Can a bank seek release of attached property?

Yes, and this is an important area of litigation.

A recent 2026 decision concerning a property mortgaged to Punjab National Bank is particularly instructive.

The Court held that the bank could pursue release under the mechanism available under Section 8(8) and specifically recognised that the Special Court has jurisdiction to consider release of the attached property even during the pendency of trial in the circumstances contemplated by the statute.

Practical implication

Suppose:

• Property A is mortgaged to a bank.
• The borrower subsequently becomes involved in a PMLA case.
• ED attaches Property A alleging that it represents proceeds of crime.
• The bank argues that it is an innocent secured creditor.

The bank should not assume that the AA's confirmation automatically ends the matter.

Depending upon the facts and stage of proceedings, remedies may include:

AA → Appellate Tribunal → High Court

and, where the statutory conditions are satisfied,

Special Court → application for release/restoration under Section 8(8).

10. What grounds can support release/non-confirmation?

A release application or defence before the AA should ordinarily be structured around the statutory ingredients rather than merely asserting ownership.

Ground 1 — Property is not “proceeds of crime”

The applicant should establish the legitimate source and acquisition of the property.

For example:

• bank statements;
• income-tax returns;
• sale deeds;
• loan documents;
• audited accounts;
• invoices;
• financial statements;
• payment trails;
• gift documents where legally valid;
• inheritance documents.

The objective is to demonstrate that the property does not represent the proceeds of the scheduled offence.

Ground 2 — No nexus between scheduled offence and property

This can be one of the strongest arguments.

The ED must establish a rational evidentiary connection between:

scheduled offence → proceeds of crime → property sought to be attached.

A mere allegation that the person is accused of a scheduled offence is not necessarily enough to establish that every property owned by that person is liable to attachment.

Ground 3 — Property acquired before the alleged offence

Timing can be highly significant.

For example:

Property purchased: 2008

Scheduled offence alleged: 2018

PMLA case: 2022

The applicant can argue that the property was acquired from independent legitimate funds long before the alleged generation of proceeds of crime.

But chronology by itself is not always conclusive; the entire money trail must be examined.

Ground 4 — Property belongs to a third party

Where the property belongs to a person who:

• was not involved in the scheduled offence;
• was not involved in money-laundering; and
• acquired the property through legitimate consideration,

the third-party status becomes highly relevant.

The applicant should establish independent title + legitimate source + absence of knowledge/participation + absence of proceeds-of-crime nexus.

Ground 5 — Proportionality / attachment beyond proceeds of crime

Where the ED attaches multiple properties, an important issue can arise as to whether the attachment actually corresponds to the proceeds of crime legally attributable to the case.

The Supreme Court has stressed the statutory requirement that the AA must determine whether the property is actually involved in money-laundering.

11. The AA must pass a reasoned order

The AA performs an adjudicatory function and cannot dispose of the matter through a mechanical order.

The Bombay High Court has emphasised that the AA is required to:

• issue notice;
• provide an opportunity of hearing;
• consider the material; and
• pass a reasoned order.

Its orders are appealable under Section 26.

Consequently, an order which merely reproduces the ED's allegations without dealing with the applicant's documents and submissions can potentially be challenged for non-application of mind, violation of natural justice and failure to give reasons.

12. Appeal against an AA order

If the AA passes an adverse order confirming attachment, the primary statutory remedy is Section 26 appeal before the Appellate Tribunal.

The structure is:

Adjudicating Authority

↓ Section 26

Appellate Tribunal

↓ Section 42

High Court

The 2026 Supreme Court exposition expressly confirms this appellate hierarchy.

The Appellate Tribunal can, after hearing the parties, confirm, modify or set aside the order appealed against.

13. A useful distinction for pleadings

When preparing an application, avoid using “release order” loosely.

There are at least four different situations:

This distinction can be decisive because an application filed before the wrong forum can fail despite having a legitimate claim.

14. Recent 2026 position

The recent Supreme Court and High Court decisions reinforce several propositions:

1. AA is not the final authority on attachment.
2. Confirmation under Section 8(3) is different from final confiscation.
3. Attachment ordinarily continues during the criminal proceedings after confirmation.
4. Ultimate confiscation/release is ordinarily determined by the Special Court.
5. Section 26 provides an appellate remedy against the AA.
6. The Special Court can deal with release/restoration in circumstances contemplated by Section 8(8).
7. The AA must independently assess whether the property is involved in money-laundering. 

15. Key authorities to cite

For a detailed written submission, I would particularly keep these authorities ready:

• Gautam Dhandhania & Anr. v. Union of India & Ors. (Supreme Court, 2026) — statutory scheme of Sections 5 and 8; role of AA; continuation of attachment; confiscation/release; appellate remedy. 
• Adjudicating Authority (PMLA) v. Ajay Kumar Gupta (Supreme Court, 2022) — effect of acquittal in predicate offence on attachment proceedings. 
• Fairdeal Supplies Ltd. v. Union of India (Calcutta High Court, 2021) — independent adjudicatory function of AA and requirement to determine whether property is involved in money-laundering. 
• J. Sekar v. Union of India (Delhi High Court) — statutory scheme governing provisional attachment and adjudication. 
• Shiv Charan v. Adjudicating Authority (Bombay High Court, 2024) — natural justice, reasoned adjudication and appellate remedy. 
• The Joint Director, Enforcement Directorate v. Branch Manager, Punjab National Bank (2026) — mortgagee/bank's remedy and Section 8(8) release mechanism. 

Bottom line

An Adjudicating Authority release order under PMLA is fundamentally a determination that the statutory basis for continuing attachment has not been established in respect of the property. If the AA confirms attachment, the remedy ordinarily shifts to the Appellate Tribunal under Section 26, whereas ultimate release following the criminal proceedings is governed principally by the Special Court under Section 8(6). In appropriate third-party/legitimate-interest cases, Section 8(8) becomes particularly important.