Supreme Court Grants 2 Weeks to File Additional Documents in SLP regarding Proceedings under PMLA [Read Judgement]

The Supreme Court of India granted two weeks time to file additional documents regarding a Special Leave Petition(SLP) which arises from the order passed on October 9, 2023, by the Karnataka High Court. The High Court order was regarding the proceedings under the Prevention of Money Laundering Act (PMLA).

A two-judge bench of Justice M.M. Sundresh and Justice Satish Chandra Sharma were considering the case which involves the Directorate of Enforcement as petitioner and Sushil Pandurang Mantri and others as respondents. The court granted the respondent’s counsel a two-week period to file additional documents and scheduled the matter to be listed again on November 26, 2025.

The High Court of Karnataka, quashed the criminal FIR (Crime No.163/2020) and proceedings, ruling that they were unsustainable and amounted to abuse of process. The fact of the case before the High Court was that the petitioners claim to be Directors of M/s.Mantri Developers Pvt. Ltd., a builder and a land development Company. It is the averment in the petition that the petitioners have delivered scores of projects all over the country.

The 2nd respondent is the complainant. The 2nd respondent and few other members investment based purchasers approached the petitioners/Company seeking purchase of flats in the project “Mantri Serenity” and accordingly applied for allotment of flats.

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Pursuant to the offer, the complainant and other members execute certain agreements for sale of undivided share of land and construction agreement inter alia. The project does not get completed in time, there is delay. Due to the said delay, the complainant flags certain dishonest intentions and the averment in the petition is that he began to register threats and several complaints before various fora. It is the claim in the petition that due to intervening circumstances of recessions, complaints to the Karnataka State Pollution Control Board and other irregularities had resulted in delay of the project.

The project gets completed and occupancy certificate is also received by the Authorities. The complainant moves the Real Estate Regulatory Authority (‘RERA’) on several grievances and seeks to register a complaint before the jurisdictional police for the afore-quoted offences.

The complaint was that they are the unfortunate homebuyers in ‘Mantri Serenity’ promoted by Mantri Castles Pvt. Ltd., an associate and subsidiary of Mantri Developers Pvt. Ltd., The complaint narrates that he has paid more than Rs.69 lakhs as per construction link plan and other homebuyers have paid Rs.6070 lakhs on an average or higher.

The complaint alleges misrepresentation, money laundering and fraud against the homebuyers on the ground that the homes have not been given at the appropriate time and the funds collected from all the homebuyers have been utilized, diverted or misutilised for several other purposes.

It further claims that the property that the homebuyers should get have already been mortgaged to several Banks for the purpose of securing loan and the loan secured have been invested to some other purpose.

The High Court held that since the predicate offence was invalid, proceedings under the Prevention of Money Laundering Act (PMLA), which depend on the underlying criminal offence, would also collapse. Consequently, the court allowed both writ petitions and disposed of all pending applications, effectively stopping further criminal and PMLA investigations related to these cases.

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