PMLA Offences High Court Rulings: Complete Case Digest

The Prevention of Money Laundering Act ( PMLA ), 2002, was enacted in India to combat money laundering and to regulate the process of confiscating the proceeds of crime. Its primary objective is to prevent money laundering activities by criminalizing the act of disguising illicitly gained funds as legitimate earnings. The law is grounded in India’s commitment to international conventions and agreements, particularly those related to combating money laundering and the financing of terrorism. Under PMLA, money laundering refers to the process of converting illegally obtained wealth into a legitimate form, making it difficult to trace the origins of the funds. The Enforcement Directorate ( ED ) is the principal agency tasked with enforcing the provisions of PMLA, including the investigation, attachment, and confiscation of proceeds of crime. The Act applies to a wide range of offenses, including corruption, drug trafficking, tax evasion, and terrorism financing, among others. The PMLA incorporates a robust framework, requiring financial institutions to report suspicious transactions and empowering authorities with extensive powers of investigation. The cases involving violations of PMLA often come before the High Courts, where legal questions surrounding the interpretation and enforcement of provisions, such as the burden of proof and the applicability of the Act to specific offenses, are addressed. Fit Case for Exemplary Costs on Complainant and ED”: Bombay HC in Cooked up Case against Developer Rakesh Brijlal Jain and Ors. vs State of Maharashtra and Ors. CITATION: 2025 TAXSCAN (HC) 170 In a recent decision, the Bombay High Court, presided over by Justice Milind N. Jadhav quashed criminal proceedings against the developers Rakesh Brijlal Jain and others, initiated under the Prevention of Money Laundering Act (PMLA) and Indian Penal Code (IPC). Imposing exemplary costs, the court directed the complainant and the ED to pay. ₹1,00,000 each to designated law libraries as a warning against misuse of judicial resources. However, the order was stayed, after the judgment was pronounced in Court, Mr. Shirsat, learned Advocate for Respondent No. 3 – ED prayed for stay of judgment to challenge the same before superior Court. His request for stay was allowed for a limited period of time. Duping People by Impersonating as Person Close to PM Modi: Allahabad HC denies Bail for Offence under PMLA Mohammad Kashif vs Directorate Enforcement Special Task Force Government Of India Pravartan Bhawan Dr. APJ Abdul Kalam CITATION: 2024 TAXSCAN (HC) 2526 The Allahabad High Court on Tuesday denied based wil to the accused had committed an offence booked under the Prevention of Money Laundering Act ( PMLA ),2016 on the allegations that he duped people financially by flaunting on social media morphed images with ministers and impersonating himself as person close to Prime Minister Narendra Modi. The Court perused his Facebook and Instagram Accounts, which revealed postings of the morphed photographs along with other documents (invitation card in his name for the Oath Taking Ceremony of the Prime Minister of India, invitation card in his name for lunch with the Prime Minister of India, etc.), which gave a false belief that he was a person well known to them and thus succeeded in extorting them. Arrest by ED in Absence of Well Documented ‘Reason To Believe’ u/s 19 PMLA is Invalid: Punjab & Haryana HC Neeraj Saluja vs Union of India and another CITATION: 2024 TAXSCAN (HC) 2123 The Punjab & Haryana High Court dismissed the plea challenging ED arrest, observing that the arrest was made in well documented reason to believe under section 19 of Prevention of Money Laundering Act, 2002 ( PMLA ) .It was found that the Arresting Officer had conveyed his intention, reasons, grounds and belief to arrest the petitioner. Perusing the arrest memo, the Court said that the safeguards under Section 19 were adhered to, validating the arrest, and there is no failure to entitle the petitioner to be released by exercising the extraordinary powers of the High Court under S. 482 CrPC, 1973. Misappropriation of Scholarship Funds of SC/ST/OBC Students: Himachal Pradesh HC dismisses Bail Application on Lack of Satisfaction u/s 45 of PMLA Rajdeep Singh vs Directorate of Enforcement CITATION: 2024 TAXSCAN (HC) 1257 The Himachal Pradesh High Court dismissed the bail application in a case involving the misappropriation of scholarship funds meant for SC, ST, and OBC students, citing a lack of satisfaction under Section 45 of the Prevention of Money Laundering Act ( PMLA ). The bench observed that if the facts and circumstances of the present case are seen in the light of the decision of the Supreme Court in Ram Kishor Arora versus Directorate of Enforcement, neither the violation of Article 22(1) of the Constitution of India is prima facie proved nor the provisions of Section 19 of the PMLA are found to have been violated. Rs 7.68 Crores Fraud against Home Buyers and Investors: Allahabad HC rejects Bail on Lack of Satisfaction u/s 45 of PMLA Udhaw Singh vs - Enforcement Directorate CITATION: 2024 TAXSCAN (HC) 1243 The Allahabad High Court rejected bail on the lack of satisfaction under Section 45 of the Prevention of Money Laundering, 2002 ( PMLA ) in the matter relating to Rupees 7.68 crores fraud against home buyers and investors. The counsel for the applicant has submitted that the applicant is neither named nor he has any role in so far as the numerous FIRs lodged against M/s Shine City and its director and office bearers is concerned. Thus, the applicant is not named nor charged with any offence in the FIRs lodged relating to the predicate offence hence, he has been wrongly and falsely implication in the ECIR. Application for Interim Bail Extension for Accused with Chronic Illness in PMLA Case: Delhi HC lists Matter to Document Submission HARI OM RAI vs DIRECTORATE OF ENFORCEMENT CITATION: 2024 TAXSCAN (HC) 1143 The Delhi High Court listed the matter to 16.05.2024 for submission of medical records for the extension of interim bail extension to the accused under the Prevention of Money Laundering Act, 2002( PMLA ) offence considering chronic illness of accused. Though the Directorate of Enforcement stated that they have verified the documents and the report of the concerned doctor from AIIMS and the verification report has been filed along with the reply, the report reveals that the petitioner had to be examined again by the concerned doctor at AIIMS on 13.05.2024. No Travel Restrictions for Wife of PMLA accused as she is not Named in FIR: Delhi HC grants Bail HENNA ALAGH vs UNION OF INDIA CITATION: 2024 TAXSCAN (HC) 1146 The Delhi High Court granted bail to the wife of the accused arrested under the Prevention of Money Laundering Act, 2002 ( PMLA ) as her name was not mentioned in the FIR. The Court held that there is no restriction to travel abroad as her name is not on the accused list. It was further stated in the reply that the Petitioner herself has given a statement under Section 17 of the PMLA that her present residential apartment at Gurugram, has been purchased from the payment source of Mr. Amit Katyal and a sum of Rs.2.25 crores were received into her bank account from group company M/s Heaven Tradelink Pvt. Ltd. which was further transferred by the Petitioner to the account of M/s Jasmine Buildmart Private Limited. PILs cannot Serve Private Causes: Delhi High Court dismisses PIL on PMLA Section 66 Interpretation, Directs Parties to Pursue Proper Legal Channels ASHOK KUMAR SINGH AND ORS vs UNION OF INDIA AND ANR CITATION: 2024 TAXSCAN (HC) 1024 The Delhi High Court has held that Public Interest Litigations ( PILs ) cannot be used for private causes, confirming the limitations of PILs and affirming the need for parties to pursue proper legal avenues in matters concerning statutory interpretations. The respondent revenue, the Union of India and Another, represented by Mr. Anurag Ahluwalia, Mr. Shivam Sachdeva, Mr. Zoheb Hossain, Mr.Vivek Gurnani and Mr.Kartik Sabharwal, contested the maintainability of the PIL. They argued that the issues raised in the petition pertained to private causes and were no longer res integra, citing a precedent judgment of the Supreme Court in Vijay Madan Lal Choudhary vs. UOI & Ors. No Proceedings under PMLA Sustains after Acquittal in Predicate Offence: Delhi High Court upholds Release of Attached Properties DIRECTORATE OF ENFORCEMENT vs AKHILESH SINGH & ORS CITATION: 2024 TAXSCAN (HC) 961 The Delhi High Court has ruled that proceedings or prosecution under the Prevention of Money Laundering Act ( PMLA ) cannot be sustained if the accused has been acquitted in the predicate offence. The court also directed the release of attached properties on the observation that the offence of money laundering is dependent on the proceeds of crime generated from a scheduled offence. The court emphasised the importance of upholding the principles of natural justice and fundamental rights. The bench stated, “It is a well-established legal principle that once an individual has been acquitted in a predicate offence, he cannot be subjected to further legal proceedings based on the same set of facts. To allow such proceedings would not only be unjust but also unconstitutional”. No application of S. 45 PMLA to S. 205 CrPC Application: Orissa HC allows resubmission of appearance exemption application in PMLA Case with alleged Proceeds less than 1 Cr Lalita Mohan Das vs Assistant Director, E.D CITATION: 2024 TAXSCAN (HC) 879 The Orissa High Court recently ruled that, there is no applicability for Section 45 of Prevention of Money Laundering Act ( PMLA ) where alleged crime proceeds are under Rs. 1 Crore, while considering an application for exemption from appearance under Section 205 of the Criminal Procedure Code ( CrPC ). Ultimately,after thorough deliberation, the Orissa High Court set aside the impugned order and remanded the matter back to the Sessions Judge-cum-Special Judge, Khurda at Bhubaneswar, for fresh consideration in light of the observations and directions provided in the judgment. PMLA Offence, Rs.1 Crore Duped to Getting Approval /Clearance from Govt Agencies: Orissa HC Release Accused under Stringent Condition Surjit Kumar Dhal VS State Of Odisha (EOW) CITATION: 2024 TAXSCAN (HC) 867 The Orissa High Court released the accused of the Prevention of Money Laundering Act ( PMLA ) Offence under stringent conditions as he cooperated with the investigations. The allegation against the accused was that Rs.1 crore was duped into getting approval/ clearance from govt authorities. It was viewed that the allegation is by a specific individual alleging a specific sum of money paid to the Petitioner for a particular purpose and therefore, there is no possibility of any enhancement of the cheated amount. Counsel for the Petitioner submitted that the Petitioner has been languishing in jail custody since 06.01.2024 and that the investigation in this case has progressed substantially and the final charge sheet is likely to be filed very soon. It was also contended that the custodial interrogation of the Petitioner has already been concluded. Therefore, further detention of the Petitioner in judicial custody would not improve the case of the prosecution and the same will not be helpful for the prosecution in any manner. Karnataka HC quashes PMLA Case against Razorpay on Commission earned from Illegal Business RAZORPAY SOFTWARE PRIVATE LIMITED vs UNION OF INDIA CITATION: 2024 TAXSCAN (HC) 671 The Karnataka High Court quashed the Prevention of Money Laundering Act, 2002 (PMLA) case against Razorpay on commission earned from illegal business. A Single Bench of Justice Hemand Chandangoudar observed that “There is no evidence to suggest that the petitioner, who is a payment gateway, had knowledge that the funds transferred to the merchant IDs of accused No.5 were derived from criminal activity related to a scheduled offence, nor did they knowingly assist accused No.5 in concealing or transferring illicit proceeds as clean money. Even if we accept the statements from the Director of accused No.5 and the employee of accused No.7, at most, it indicates that accused No.7 was negligent in setting up the merchant IDs in the name of accused No.5.” PMLA Appellate Tribunal Failed to Consider Issues on Confirmation of Provisional Attachment Order: Delhi HC sets aside Order VIJAY CHOUDHARY vs DIRECTORATE OF ENFORCEMENT & ANR CITATION: 2024 TAXSCAN (HC) 638 The Delhi High Court set aside the order passed by the Appellate tribunal under the Prevention of Money Laundering Act,( PMLA ), 2002 since it failed to consider issues on confirmation of provisional attachment order. The court set aside the order and the application of the appellant for supply of documents is restored to its original number on the records of the Appellate Tribunal. A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja viewed that the Tribunal has erred in not noticing that the appellant has not only impugned the order of confirmation of provisional attachment, but also the order whereby the application of the appellant seeking copies of the Relied Upon Documents was rejected. Bail against PMLA offence cannot be claimed as a matter of Right for Treatment only at a Specialised hospital: Delhi HC RAMESH CHANDRA vs THE DIRECTORATE OF ENFORCEMENT CITATION: 2024 TAXSCAN (HC) 626 The Delhi High Court held that bail against the Prevention of Money Laundering Act ( PMLA ) offence cannot be claimed as a matter of right for treatment only at a specialised hospital. The Court directed the petitioner to surrender before the Superintendent Jail on 16.03.2024 and interim bail is extended till then on the same terms and conditions The Court directed the petitioner to surrender before the Superintendent Jail on 16.03.2024 and interim bail is extended till then on the same terms and conditions. Superintendent Jail is further directed to ensure that in case of any aggravation of the medical condition of the petitioner or if the circumstances so warrant, the petitioner shall be immediately referred to G.B. Pant Hospital or any other specialized government hospital for necessary treatment, ensuring the provision of necessary medical facilities as per jail rules. Delicate Balance between Life and Death in Cardiac Emergencies Underscores Importance for Prioritization: Delhi HC grants Interim Bail to Lava MD in PMLA case HARI OM RA vs DIRECTORATE OF ENFORCEMENT CITATION: 2024 TAXSCAN (HC) 410 The Delhi High Court granted interim bail to Lava Managing Director in the Prevention of Money Laundering Act, 2002 ( PMLA ) and commented that the delicate balance between life and death in cardiac emergencies underscores importance for prioritization. A Single Bench of Justice Swarna Kanta Sharma observed that “The delicate balance between life and death in cardiac emergencies underscores the importance for prioritization and specialized care required in such cases, for mitigating the profound risks posed by these medical conditions. Each passing moment in the face of cardiac distress is fraught with the peril of irreversible harm, and in case of any eventuality that may occur in applicant not getting proper and specialised treatment, this Court will have to bear the weight of regret.” Failure to Satisfy Condition mentioned u/s 45 of PMLA: Delhi HC dismisses Bail Application DALIP JINDAL vs DIRECTORATE OF ENFORCEMENT CITATION: 2024 TAXSCAN (HC) 368 In a recent case, the Delhi High Court dismissed a bail application for failure to satisfy the condition mentioned under Section 45 of the Prevention of Money Laundering Act ( PMLA ). After analyzing the facts and arguments of both parties, a single bench of Justice Swarana Kanta Sharma opinion that twin conditions under Section 45 of PMLA are not satisfied since the material on record at this stage points out that the applicant herein was involved in the process of acquisition, possession, concealment of proceeds of crime obtained by way of cheating and forgery and projecting the same as untainted, thereby committing an offence of money-laundering under Section 3 of PMLA. Delhi HC grants Bail in Extortion Case, says No Bar to Bail Grant u/s 45 of PMLA AVTAR SINGH KOCCHAR @ DOLLY vs ENFORCEMENT DIRECTORATE CITATION: 2023 TAXSCAN (HC) 1909 The Delhi High court has approved the bail application of petitioners in extortion case. The court held that Section 45 of Prevention of Money Laundering Act (PMLA) doesn’t hinder bail. Examining the evidentiary value of post-arrest statements in light of Section 25 of the Evidence Act. Despite assertions by the prosecution/ED labeling the petitioner as a known Hawala Operator, the court underscored the need to evaluate the petitioner’s role solely in the specific case at hand. While acknowledging that the state could take action against the petitioner if proven to be a Hawala Operator, the court stressed the requirement to assess the petitioner‘s role in the present case for custody decisions. No Eviction of Co-Owner of Joint Property under Rule 5(5) of PMLA when Appeal is Pending: Delhi HC SANJAY JAIN vs DIRECTORATE OF ENFORCEMENT CITATION: 2023 TAXSCAN (HC) 176 The Delhi High Court has quashed the eviction order of the co-owner of the joint property as the appeal was pending and the order was contrary to the rule 5(5) of the Prevention of Money Laundering rules 2013 (PMLA rules). The Delhi Bench of justice Prabhitha Singh held that the notice served to petitioner was contrary to Rule 5(3) and Rule 5 (5) of the Prevention of Money Laundering Rules 2013 Rules (‘PMLA rules’) and Petitioner’s family and occupants of the premises could not be dispossessed or evicted until the Appellate Tribunal had heard and passed the orders in respect of the impugned notices or the appeal filed by Pankaj Jain. Public Prosecutor not to be heard before grant of Bail, If Court has reason to believe person was not Guilty under PMLA: Punjab & Haryana HC Parkash Gurbaxani vs The Directorate of Enforcement CITATION: 2021 TAXSCAN (HC) 361 The Punjab & Haryana High Court ruled that the Public Prosecutor should not be heard before granting of bail, if the court has reason to believe the person was not guilty under the Prevention of Money Laundering Act, 2002. The Additional Solicitor General of India sought dismissal of the present petitions and submitted that since he was opposing the grant of bail to the petitioners, in terms of the twin conditions prescribed in Section 45 of the PMLA, this Court could grant bail to the petitioners only after recording a satisfaction that there were reasonable grounds for believing that the petitioners were not guilty of the alleged offences and that while on bail they were not likely to commit any offence. Handbook For Insolvency Professional Examination (Set of 2 Vols ) : BUY NOW Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

PMLA Offences High Court Rulings: Complete Case Digest

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PMLA Offences High Court Rulings: Complete Case Digest

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