#Money Laundering

The Bombay High Court quashed a ₹25 crore SAFEMA attachment, holding that the Enforcement Directorate failed to establish any nexus between the appellants' legitimate pre-existing business transactions and the alleged YES Bank-DHFL proceeds of crime. The ruling clarifies that lawful business dealings routed through banking channels cannot be presumed as proceeds of crime under PMLA without a direct link to the scheduled offence, protecting genuine commercial transactions from overbroad attachment.

Allahabad HC quashes PMLA proceedings against a real estate developer, ruling that loan defaults arising from delayed project delivery do not constitute money laundering. The court held that property acquired before the alleged offence cannot be attached as proceeds of crime, reinforcing that civil disputes cannot be criminalized under PMLA.

Gauhati High Court rules that provisional attachment orders under PMLA Section 5 must explicitly disclose the 'reason to believe' to comply with natural justice. The court also clarifies that properties representing proceeds of crime can be attached even if acquired before the scheduled offence, reinforcing ED's attachment powers.

Jharkhand High Court rules that backdated invoices, sham entity transactions, and unexplained cash flows suffice to frame PMLA charges, rejecting the accused's loan defense. The ruling reinforces that legitimate business claims cannot override prima facie evidence of laundering under Sections 3 and 4 of the PMLA.

The Gauhati High Court has ruled that under the PMLA, property acquired prior to a scheduled offense cannot be classified as proceeds of crime merely based on its value or timing of acquisition. The ED must establish a direct nexus between the property and the offense, reinforcing that mere possession or unexplained wealth is insufficient for attachment - a critical safeguard for law-abiding property owners caught in enforcement dragnets.

Madras High Court rules that property restoration under PMLA Section 8(8) is conditional on charge framing under Section 4 and exhaustion of appellate remedies. The court held that restoration during pending adjudication violates procedural fairness, impacting accused and financial institutions in money laundering cases.

The Bombay High Court has ruled that an arrest under PMLA is valid if the Enforcement Directorate establishes a credible link between unaccounted assets and a scheduled offence by the time of arrest, even if the FIR is registered after the ECIR but before detention. This clarifies that post-facto linkage of proceeds suffices for subjective satisfaction under Section 19, significantly expanding investigative flexibility without requiring prior criminal charges.

The Madras High Court has mandated that when a Special Court is designated under both the Prevention of Corruption Act and the Prevention of Money Laundering Act, money laundering cases must be tried alongside the predicate offence to ensure judicial efficiency and avoid evidentiary fragmentation. This ruling reinforces the procedural requirement under Section 44(1)(c) of the PMLA, impacting parallel prosecutions involving scheduled offences and money laundering charges.

The Madras High Court ruled that property acquired before a predicate offence can still be classified as 'proceeds of crime' under the Prevention of Money Laundering Act (PMLA) if it is subsequently used to launder illicit gains through lease renewals or operational reinvestment. This decision reinforces the Enforcement Directorate's power to attach assets linked to money laundering, even if the property predates the criminal activity.

Rajasthan High Court holds that provisional attachment under PMLA cannot persist when the factual basis for it is withdrawn, reinforcing proportionality and due process.

Bombay High Court quashes PMLA proceedings against accused where property acquisition predates scheduled offence, clarifying that proceeds of crime must originate before laundering activity.

Madras High Court holds that PMLA proceedings cannot survive when the underlying predicate offence is quashed, establishing a critical link between predicate and money laundering charges.

Madhya Pradesh High Court holds that Section 17 PMLA searches require credible material establishing proceeds of crime; mere suspicion or scheduled offence insufficient.