Delhi HC Allows Sale Of Sukesh Chandrasekar’s 26 Luxury Cars, Says Vehicles Subject To Decay

The Delhi High Court on Wednesday permitted the sale of 26 luxury cars belonging to Sukesh Chandrasekar, citing that these vehicles are prone to natural decay and depreciation.

These cars were previously seized and held by the Directorate of Enforcement (ED) in connection with a Rs 200 crore extortion and money laundering case.

Court’s Observation

Justice Swarana Kanta Sharma dismissed the petition by Leena Maria Paulose, Sukesh’s wife, which challenged the sale order of these cars. The High Court directed that the entire amount from the car sales be placed in an interest-bearing fixed deposit.

Justice Swarna Kanta Sharma stated, “Vehicles are inherently subject to natural decay and depreciation over time, affecting their value and functionality. With time, vehicles undergo wear and tear.” She noted that prolonged storage, especially in container warehouses, exacerbates decay, causing issues such as rust and corrosion.

“Rust, in particular, can severely damage a vehicle’s structure and components,” Justice Sharma highlighted. She added that maintaining the mechanical components of high-end luxury cars like Rolls Royce, Ferrari, and Range Rover is costly and frequent maintenance is needed to keep them operational. Environmental factors also contribute to their decay, which cannot be effectively mitigated in container warehouses.

The bench further explained that vehicle depreciation is a well-recognized phenomenon. From the moment a car is driven out of the showroom, its value starts to decrease, accelerating with each passing year and significantly dropping the resale value. Eventually, most vehicles lose a substantial part of their original value, making them less viable to maintain or sell.

The High Court found no merit in the argument that selling the seized vehicles violated Section 8(6) of the Prevention of Money Laundering Act (PMLA). As per Section 8(6), if the accused are found not guilty of money laundering, they are entitled to receive the amount generated from the sale, which the ED must keep deposited in a Government Treasury or a nationalized bank in a fixed deposit.

Leena Maria Paulose had petitioned to quash the trial court orders from December 20, 2022, and February 15, 2023. The 26 seized luxury cars were allegedly purchased with “proceeds of crime” from Sukesh Chandrasekar’s criminal activities.

The respondent argued that the luxury cars were subject to rapid decay and that their maintenance costs would soon surpass their value, placing an unnecessary burden on the exchequer. They sought permission under Rule 4(2) of the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by Adjudicatory Authority) Rules 2013 to sell the vehicles, which the trial court allowed on December 20, 2022.

The High Court noted that the respondent’s case was justified, as the luxury cars were indeed subject to natural decay and the costs of their upkeep were likely to exceed their value. No arguments were presented by the petitioner to refute this claim.

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