Mortgaged Properties Can’t Be Attached Under PMLA Without Proven Link to Crime: Karnataka High Court

The Karnataka High Court has ruled that properties mortgaged to banks can be attached under the Prevention of Money Laundering Act (PMLA) only if they are directly connected to the proceeds of crime.

The Court clarified that simply mortgaging a property does not make it subject to attachment unless the transaction itself involves laundered money.

The Court emphasised that funds advanced by banks constitute public money lent in good faith and could not be regarded as tainted assets, thereby safeguarding legitimate financial transactions from the arbitrary application of the PMLA.

[Deputy Director v Asadullah Khan]