Calcutta HC Finds Prima Facie PMLA Violations, allows ED to Attach and Freeze Assets, Directs Committee to Share Property List [Read Order]

The Calcutta High Court, in a recent ruling, has passed an order in proceedings relating to the Prayag Group of Companies, finding prima facie violations under the Prevention of Money Laundering Act, 2002 (PMLA).

The Court granted leave to the EnforcementDirectorate (ED) to proceed with attachment, seizure, freezing, or other appropriate action against properties of the Prayag Group and its directors, in line with Sections 5 and 17 of the Act.

The matter arose from a long‑running writ petition and connected applications concerning fraudulent activities of the Prayag Group in mobilising repayable deposits in contravention of the Banking Regulation Act, 1949 and other laws.

The Central Bureau of Investigation (CBI) had registered FIRs and filed charge‑sheets against key directors under provisions of the Indian Penal Code, including cheating, criminal breach of trust, and conspiracy. These scheduled offences under PMLA led to the ED registering an ECIR and initiating money laundering investigations.

During hearings, the ED highlighted continued unauthorized control and misuse of company properties by directors, despite judicial oversight through a One‑Man Committee headed by retired Justice S.P. Talukder.

Evidence revealed mismanagement, destruction of records, and diversion of unlawful profits. The ED stressed the urgent need for provisional attachment and freezing of assets to prevent further dissipation and safeguard depositors’ interests.

The One‑Man Committee submitted a list of 507 property deeds of the Prayag Group and its sister concerns, including Prayag Infotech Hi‑Rise Ltd., Prayag Infra Realtors Ltd., Prayag Infotech Network Pvt. Ltd., Prayag Fisheries (I) Ltd., Prayag Film & Television Industries Pvt. Ltd., Prayag Organic Pvt. Ltd., Prayag Hotel & Resort Pvt. Ltd., and others.

The Committee noted delays in e‑auction processes due to the non‑availability of original deeds and legal hurdles affecting certain assets, such as Prayag Film City.

The Court observed that Section 5 of PMLA empowers the ED to provisionally attach properties suspected to be proceeds of crime, subject to confirmation by the Adjudicating Authority under Section 8.

It further noted that seizure and freezing powers under Section 17 operate in consonance with attachment provisions, ensuring preservation of both movable and immovable assets.

The Division Bench of the Calcutta High Court, comprising Justice Uday Kumar and Justice Rajarshi Bharadwaj, highlighted that such measures are preventive and remedial, permitting action even where possession lies with another agency, provided due process is followed.

Finding a prima facie case, the Court allowed the ED to proceed with attachment and freezing of Prayag Group properties, including those listed in the sealed cover.

It directed the One‑Man Committee to immediately share the complete and detailed list of all properties with the ED to facilitate investigation. All concerned authorities were instructed to extend full cooperation to the ED and comply with applicable provisions of PMLA.

The Court also recorded submissions that ₹16 crore is currently with the CBI, and if handed over to the Committee, could be used to refund depositors.

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