Tulsiani Construction And Dev. Ltd. Thru Its Director Anil Kumar Tulsiani And 2 Others vs State Of U.P. Thru. Addl. Chief Secy. Home Deptt. U.P. Lko. And Another
- Court
- Allahabad High Court
HIGH COURT OF JUDICATURE AT ALLAHABAD
LUCKNOW
APPLICATION U/s 482 No. - 3198 of 2026
Tulsiani Construction and Dev. Ltd. Thru its Director Anil Kumar
Tulsiani and 2 others
…..Applicant(s)
Versus
State of U.P. Thru. Addl. Chief Secy. Home Deptt. U.P. Lko. and another
…..Opposite Party(s)
Counsel for Applicant(s) : Abhinav Mishra,
Counsel for Opposite Party(s) : G.A., Rohit Tripathi
A.F.R.
Judgment Reserved on: 13.05.2026
Judgment Delivered on: 02.07.2026
Court No. - 14
HON'BLE SUBHASH VIDYARTHI, J.
1. Heard Sri Vaibhav Kalia Senior Advocate assisted by Sri Abhinav
Mishra Advocate, the learned counsel for the applicant, Sri. Ganesh Dutt
Bhatt, the learned A.G.A. - I representing the State of U.P., Shri Rohit
Tripathi, the learned counsel for the Enforcement Directorate and Sri.
Anuuj Tandon, the learned counsel for the intervener Sri. Sanjeev Agarwal.
2. By means of the instant application filed under Section 482
Cr.P.C., the applicant- Tulsiani Constructions and Developers Ltd. and its
Directors Mahesh Kumar Tulsiani and Anil Kumar Tulsiani have
challenged the validity of an order dated 30.01.2026 passed by the learned
Special Judge, Anti-Corruption, CBI West/E.D., Lucknow in Criminal
Misc. Case No.4851 of 2025 arising out of ECIR No.ECIR/LKZO/43/2023
whereby the trial Court has taken cognizance of the offence under Section
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3/4 of the Prevention of Money Laundering Act, 2002 (hereinafter
referred to as PMLA) and has summoned the applicants to face the trial.
The applicants have also challenged the validity of the entire
proceedings of the case.
3. Briefly stated, facts of the case are that the applicant No.1 is a
Company carrying on the business of real estate and is engaged in
construction of various housing and commercial projects. On
24.09.2022, Punjab National Bank filed FIR No.336 of 2022 under
Sections 409 and 420 IPC in Police Station- Hazratganj, District
Lucknow against the applicants stating that it had sanctioned home loans
to four buyers for purchasing residential flats in a project of the
applicants in Sushant Golf City, Lucknow. The project was not
completed within the stipulated time and the flats were not delivered to
the borrowers who in turn did not repay the loan amount to the Punjab
National Bank.
4. The applicant No.-3 Anil Kumar Tulsiani had filed Criminal
Bail Application No.1993 of 2023 before this Court seeking his release
on bail in FIR No.336 of 2022. A Co-ordinate Bench of this Court
rejected the bail application by means of an order dated 03.03.2023
wherein this Court recorded that: -
“10. It is evident from the record that a tripartite agreement was
executed in between the Company and the borrowers, and
Rs.4,63,10,000/- was transferred in the account of the Company. It is
further evident that the applicant is the Director of the Company,
managing all its affairs and as per tripartite and quadripartite
agreements dated 27.10.2015 and 31.12.2015 respectively, it was
obligatory that the sale deed was to be executed in favour of the
borrowers and the same was to be handed over to the Bank within 30
days. It is admitted by the learned counsel for the applicant that the
property was to be handed over in the year 2016, but till today,
neither the property has been shown to the Bank officials nor the
sale deed has been executed and handed over to the Bank. Coupled
with the aforesaid facts, the applicant is also having criminal
antecedents of so many cases, which are mentioned in paragraphs 46
and 47 of the bail application.
11. In view of above, the application stands rejected.
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12. Now-a-days, it has become a trend that the money of the public
financial institution is being taken away by committing fraud or
breach of trust, as a result of which, the Banks are suffering loss, and
beyond doubt, such type of loss is a National loss.
Evidently, several F.I.R.s were lodged against the applicant with the
incidental allegations and in the present case, Rs.4,63,10,000/- was
transferred in the account of the Company, in which, the applicant is
a Director and as per the tripartite and quadripartite agreements, it
was obligatory that the sale deed was to be executed within 30 days,
but even after 7 years, neither the property was provided to the Bank
to inspect nor the sale deed was executed as well as provided to the
Bank.
In view of above facts and circumstances, I find it a fit case to be
examined by the Enforcement Directorate. Hence, the Joint Director,
Enforcement Directorate, Lucknow is directed to look into the facts
of the case and take appropriate action, considering the aspect of
money laundering with the intention to syphon the money of the
public financial institution/Bank and submit an affidavit before this
Court by 15th May, 2023.
Shri Rao Narendra Singh, learned A.G.A. is directed to communicate
this order to the Joint Director, Enforcement Directorate, Lucknow
for necessary compliance, forthwith.
A copy of this order be also sent to Director, Enforcement
Directorate, Lucknow for necessary compliance.
Bench Secretary is directed return the photocopy of the case diary to
the learned A.G.A.”
5. The applicant No. 3 challenged the aforesaid order by filing SLP
(Crl.) No.4117 of 2023 which was disposed of by the following order
passed on 29.03.2023: -
“Heard learned senior counsel for the petitioner.
This Court is of the opinion that the impugned order does not call for
interference. The special leave petition is accordingly dismissed.
It is open to the petitioner to seek relief after charges are framed.
The Enforcement Directorate pursuant to the impugned order shall
examine the materials before it on their merits uninfluenced by the
observations of the Hig h Court.”
6. It is in furtherance of the aforesaid direction that the Directorate
of Enforcement registered the aforesaid ECIR and has filed the aforesaid
complaint. It is stated in the complaint that based on the complaint of
Punjab National Bank, the Police registered FIR No.336 of 2022, dated
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24.09.2022, at Police Station Hazratganj, District Lucknow, alleging that
the applicants have defrauded the bank. They got home loans sanctioned
in the names of their clients/buyers and later the clients failed to repay
the outstanding home loan amount to the bank. Further, they did not
deposit the sale deeds of the immovable properties against which the
home loans had been sanctioned by the bank, thereby causing a financial
loss of Rs.4.63/- Crores to the bank. Punjab National Bank had
sanctioned the following home loans: -
S.No. Name of Borrower Amount Borrowed
from Bank
1 Mr. Narendra Singh Verma with Smt. Shashi
Verma
Rs.2,80,00,000/-
2 Baldeep Arora with Smt. Jaya Arora Rs.90,50,000/-
3 Hemant Tulsiani with Manohar Kumar Tulsiani Rs.75,00,000/-
4 Tarun Shekhar Singh with Smt. Sarika Singh Rs.40,00,000/-
Total Amount Rs.4,63,10,000/-
7. Four flats booked by the aforesaid buyers were mortgaged with
the bank on the basis of tripartite agreements. The Applicant No.1 did
not execute the sale deeds in favour of the buyers.
8. The FIR alleges that the applicants siphoned off the loan amount
for their personal gains with the intention of defrauding the bank. It is
alleged that the fraudulent act of the applicants caused a loss of public
money to the extent of Rs.463 lakhs.
9. The complaint further states that the Tulsiani Constructions, M/s
Ansal Properties and Infrastructure Ltd. and Punjab National Bank had
entered into tripartite and quadri-partite agreements with the customers
on 28.02.2014, 15.12.2015, 29.12.2015 and 31.10.2015. The conditions
of the agreements inter alia provided that: -
(a) In the event of default by the Borrowers in repayment of the Bank’s
dues, the bank will be entitled to sell the flats.
(b) The society shall not transfer the dwelling unit/flat of the borrower to
another member of the society without prior written consent of the bank.
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(c) The Builder and FSI purchaser shall not hand over the actual physical
possession of the Property to the Borrower before execution and
registration of the said sale deed and the Builder and FSI purchaser shall
submit the original registered deed to PNB, and PNB shall keep the same
as security for repayment of their loan, interest and other incidental
charges towards perfection of its security interest for the said loan.
(d) The property shall form a part of security for the housing loan
granted by PNB in the hands of the Builder and the purchasers till such
sale deed is executed in favour of the borrowers.
10. The possession of the flats was to be offered within 30 months
from sanction of the building plan, subject to force majeure clause and
on receipt of complete sale consideration and other charges.
11. After investigation, a charge-sheet dated 30.01.2023 and
supplementary charge-sheets dated 27.04.2024 and 22.07.2024 have
been filed in furtherance of FIR No.336 of 2022 against the applicant
Nos.2 and 3, who are the Directors of Tulsiani Constructions.
12. The complaint filed by the Enforcement Directorate states that
multiple FIRs have been registered against M/s Tulsiani Constructions
and its Directors by various flat buyers alleging that the flats were not
transferred to them in violation of the agreements.
13. The complaint states that certain immovable properties worth
Rs.3,06,95,700/- belonging to M/s Tulsiani Constructions have been
attached as property obtained indirectly/equivalent to the proceeds of
crime vide provisional attachment order dated 07.06.2024 and another
provisional attachment order dated 28.11.2024 was passed attaching
immovable property worth Rs.1.5 Crores belonging to the applicant
No.3- Anil Kumar Tulsiani. The provisional attachment orders have been
confirmed.
14. The complaint further alleges that the amounts paid by the three
prospective flat buyers to M/s Tulsiani Constructions have been
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A482 No. - 3198 of 2026
transferred to other banks to meet the liabilities of M/s Tulsiani
Constructions, which shows that the amounts taken from buyers for
completing the project were utilized either for investment in other
projects run by the sister concerns of M/s Tulsiani Constructions or for
paying loans taken from SIDBI.
15. The complaint refers to the statement of the applicant
No.2Mahesh Kumar Tulsiani recorded under Section 50 of PMLA
wherein he stated that multiple bank accounts of M/s Tulsiani
Constructions turned irregular/became NPA due to increase in financial
liabilities of the company because of litigation, COVID-19 and delay in
execution and delivery of the projects. As many as 9 FIRs were lodged
against the Company for its inability to handover the projects. In several
matters, the parties have arrived at settlements and the proceedings of
criminal cases against the applicants stands quashed. Out of the four loan
accounts mentioned in the FIR No.336 of 2022, there is no irregularity in
one account and in two accounts one time settlements have been entered
into.
16. The applicant No.3 Anil Kumar Tulsiani stated that 20 FIRs of
similar nature had been lodged against him out of which 10 FIRs have
been quashed and in two matters, the dispute has been referred to the
Mediation and Conciliation Center of this Court. The applicant No.3
further stated that numerous sale deeds have been executed in favour of
the buyers who had taken loans from Punjab National Bank, the
particulars whereof are mentioned in the complaint itself.
17. The complaint summarizes the result of investigation by stating
that various FIRs have been lodged against M/s Tulsiani Constructions
and its Directors alleging embezzlement of funds of banks and
investors/buyers for their personal gains, which are as follows: -
Sr. No. FIR No. & Date Amount involved and
laundered in Rs.(Crores)
1 336/2022 dated 24.09.2022 at Hazratganj PS,
Lucknow
4.63
2 0595 dated 08.11.2021, 0457 dated 1.93
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18/07/2019, 834 dated 26.12.2018, 0527
dated 09.08.2019, 0434 dated 27.08.2021,
655 dated 10.10.2022 at Vibhuti Khand PS,
Lucknow
3 0.24
4 0.554
5 1.534
6 0.01
7 1.05
Total Amount 9.948
18. The complaint alleges that the applicants have siphoned off the
proceeds of crime amounting to Rs.9.948 Crores for their personal gains
by investing/diverting the amount in their other real estate projects
without completing the other projects for which the money was acquired.
19. Upon the complaint having been filed, the learned Special Judge
issued notices to the applicants for pre-cognizance hearing. The
applicants filed written submissions stating that vide order dated
30.01.2023 passed in Bail Application No.1993 of 2023, this Court had
directed the Enforcement Directorate to conduct investigation after
looking into the “facts of the case” which arose out of FIR No.336/2022
under Section 409, 420 IPC registered at Police Station Hazratganj,
District Lucknow only. The Hon’ble Supreme Court clarified in the
order dated 29.03.2023 that the Enforcement Directorate should examine
the material before it on their merits, uninfluenced by the observations of
the High Court. The Enforcement Directorate has illegally merged FIR
No.595 of 2021 under Sections 409/420/504/506/467/468/471/120-B
IPC, Police Station Vibhuti Khand, District Lucknow lodged by the
intervener Mr. Sanjeev Agarwal illegally, with a mala fide intention.
20. The applicants further stated that FIR No.336/2022 had been
lodged alleging that four loan accounts had turned NPA. The applicants
stated that accounts of borrowers turning NPA is purely a civil dispute.
Moreover, one of the four loan accounts had not been declared NPA and
it is a regular account, two loan accounts already stand settled on
23.04.2024 and 09.08.2024 and negotiations for settlement of the fourth
loan account were going on. The Enforcement Directorate has illegally
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A482 No. - 3198 of 2026
calculated the proceeds of crime by including the loan accounts which
already stands settled/closed.
21. The Enforcement Directorate has filed a short counter affidavit
stating that investigation under PMLA was initiated on the basis of
multiple FIRs lodged against the applicant for having defrauded Punjab
National Bank and the home buyers and utilizing the proceeds of crime
for its own purposes. The counter affidavit states that in many cases, the
applicant has not cleared the payment liability even after entering into
one-time settlements with the concerned bank. The predicate cases are
still alive and therefore, proceedings under PMLA cannot be quashed.
22. The learned counsel for the applicant submitted that the entire
dispute between the applicant and its flat buyers is a civil dispute
regarding which litigation are pending in various fora. The monetary
transactions do not fall within the scope and ambit of Section 2(u) r/w
Section 2(1)(y) of PMLA to be termed as proceeds of crime, the
complaint itself alleges that the money received in lieu of sale
consideration was used by the applicant No.1 in repaying the loan
amount of SIDBI which loan was taken for construction of the
project/flats and, therefore, it does not attract Section 2(1)(u) r/w Section
2(1)(y) of PMLA.
23. The learned Special Judge took cognizance of the offences by
means of the impugned order 30.01.2026. A perusal of the impugned
order indicates that although the trial Court has briefly mentioned the
objections of the applicants against the proposed cognizance order, the
same have not been dealt with by the trial Court. The trial Court has
merely narrated the case set-up by the Enforcement Directorate and has
stated that the objections of the applicants are not maintainable.
24. Assailing validity of the aforesaid order, the learned Counsel for
the applicants has submitted that an order passed without dealing with
the objections of the applicants suffers from the vice of unreasonableness
and non-application of mind. He has submitted that out of the four loans
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disbursed by the Punjab National Bank, only three had become NPA and
out of those three two had already been settled prior to passing of the
impugned summoning order. Regarding the only remaining loan account
also, the Bank has entered into a one time settlement and has received
the first installment amount as per the OTS.
25. The learned Counsel for the applicants has further submitted that
this court has observed in its order dated 23.08.2023 passed in Crl. Misc.
Bail Application No.14783 of 2022 that the dispute between the parties
is essentially of civil nature. He has also submitted that the offence under
Section 420 alleged in the scheduled offence, is not made out as the
allegation in the FIR is regarding a delay in delivery of the project,
which was for the reasons mentioned in the statement of Mahesh Kumar
Tulsiani recorded under Section 50 of PMLA that the bank accounts
have turned irregular/NPA due to increase financial liability incurred due
to litigation, COVID-19 and delay in execution of the projects.
26. The learned counsel for the applicants has placed reliance upon
the decisions in the cases of Seema Garg v. Deputy Director,
Directorate of Enforcement : 2020 SCC OnLine Punjab & Haryana
738, HDFC Bank Ltd. v. Government of India ; 2021 SCC OnLine
Patna 4222, Kumar Pappu Singh v. Union of India; 2021 SCC OnLine
AP 983 , Deputy Director, Directorate of Enforcement v. Seema
Garg; SLP (civil) No.14713-14715/2020 decided on 30.04.2021 ,
Sarabjeet Kaur v. State of Punjab; (2023) 5 SCC 360, Pavana
Dibbur v. Directorate of Enforcement ; (2023) 15 SCC 91, Indian Oil
Corporation v. NEPC India Ltd. ; (2006) 6 SCC 736, Shyam Sundar
Agarwala v. State of Odisha 2025 SCC OnLine Odisha 566, Vijay
Madanlal Choudhary & Ors. v. Union of India & Ors. ; (2023) 12
SCC 1 and Inox Air Products Ltd. v. State of Andra Pradesh; 2025
SCC OnLine SC 209 and Satish Motilal Bidri v. Union of India and
Others ; 2024 SCC OnLine Ker 3410.
27. Per contra Shri Rohit Tripathi, the learned counsel for the
Enforcement of Directorate has submitted that it is established that the
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A482 No. - 3198 of 2026
applicants have transferred the amount taken from the borrowers of
Punjab National Bank to SIDBI and there is no averment that the
applicants had taken the loans from SIDBI for this project. He has placed
reliance on the following observations made by the Hon’ble Supreme
Court in the cases of Vijay Madanlal Choudhary & Ors. v. Union of
India & Ors. ; (2023) 12 SCC 1 . Shri Tripathi has also placed reliance
on a decision of the Madras High Court in the case of Vijayraj Surana
v. Assistant Director, ED; 2024 MHC 3345.
28. Shri Anuuj Tandon, the learned counsel for the intervener
Sanjeev Agarwal has also opposed the application and he submitted that
the intervener is a bona fide claimant whose interest is recognized by
Section 8 of PMLA. As Section 8(8) of the Act empowers the Special
Court to restore the confiscated property to a person who has a
legitimate interest and has suffered a quantifiable loss as result of
offence of money laundering.
29. In Indian Oil Corpn. v. NEPC India Ltd. : (2006) 6 SCC 736,
the Hon’ble Supreme Court held that:-
“13. While on this issue, it is necessary to take notice of a growing
tendency in business circles to convert purely civil disputes into
criminal cases. This is obviously on account of a prevalent
impression that civil law remedies are time consuming and do not
adequately protect the interests of lenders/creditors . Such a tendency
is seen in several family disputes also, leading to irretrievable
breakdown of marriages/families. There is also an impression that if a
person could somehow be entangled in a criminal prosecution, there
is a likelihood of imminent settlement. Any effort to settle civil
disputes and claims, which do not involve any criminal offence, by
applying pressure through criminal prosecution should be deprecated
and discouraged . In G. Sagar Suri v. State of U.P. (2000) 2 SCC 636
this Court observed:
“It is to be seen if a matter, which is essentially of a civil nature, has
been given a cloak of criminal offence. Criminal proceedings are not
a short cut of other remedies available in law. Before issuing
process a criminal court has to exercise a great deal of caution. For
the accused it is a serious matter . This Court has laid certain
principles on the basis of which the High Court is to exercise its
jurisdiction under Section 482 of the Code. Jurisdiction under this
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section has to be exercised to prevent abuse of the process of any
court or otherwise to secure the ends of justice.”
14. While no one with a legitimate cause or grievance should be
prevented from seeking remedies available in criminal law, a
complainant who initiates or persists with a prosecution, being fully
aware that the criminal proceedings are unwarranted and his remedy
lies only in civil law, should himself be made accountable, at the end
of such misconceived criminal proceedings, in accordance with law.
One positive step that can be taken by the courts, to curb unnecessary
prosecutions and harassment of innocent parties, is to exercise their
power under Section 250 CrPC more frequently, where they discern
malice or frivolousness or ulterior motives on the part of the
complainant. Be that as it may.”
30. The learned counsel for the applicant has next placed reliance on
Sarabjeet Kaur v. State of Punjab & Another ( 2023) 5 SCC 360,
wherein it was held that: -
“13. A breach of contract does not give rise to criminal prosecution for
cheating unless fraudulent or dishonest intention is shown right at the
beginning of the transaction. Merely on the allegation of failure to
keep up promise will not be enough to initiate criminal proceedings .
From the facts available on record, it is evident that Respondent 2 had
improved his case ever since the first complaint was filed in which there
were no allegations against the appellant rather it was only against the
property dealers which was in subsequent complaints that the name of
the appellant was mentioned. On the first complaint, the only request
was for return of the amount paid by Respondent 2. When the offence
was made out on the basis of the first complaint, the second complaint
was filed with improved version making allegations against the
appellant as well which was not there in the earlier complaint. The
entire idea seems to be to convert a civil dispute into criminal and put
pressure on the appellant for return of the amount allegedly paid. The
criminal courts are not meant to be used for settling scores or
pressurise parties to settle civil disputes. Wherever ingredients of
criminal offences are made out, criminal courts have to take
cognizance. The complaint in question on the basis of which FIR was
registered was filed nearly three years after the last date fixed for
registration of the sale deed. Allowing the proceedings to continue
would be an abuse of process of the court .”
31. In Dilip Singh v. State of M.P. : (2021) 2 SCC 779, the Hon’ble
Supreme Court held that it is well settled by a plethora of decisions of
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the Supreme Court that criminal proceedings are not for realisation of
disputed dues.
32. The Enforcement Directorate has stated in the complaint that
FIR No.336 of 2022, dated 24.09.2022 was lodged on the complaint of
Punjab National Bank, alleging that the applicants got the following four
home loans sanctioned in the names of their clients/buyers, and later the
clients failed to repay the outstanding home loan amount to the bank: -
S.No. Name of Borrower Amount Borrowed
from Bank
1 Mr. Narendra Singh Verma with Smt. Shashi
Verma
Rs.2,80,00,000/-
2 Baldeep Arora with Smt. Jaya Arora Rs.90,50,000/-
3 Hemant Tulsiani with Manohar Kumar Tulsiani Rs.75,00,000/-
4 Tarun Shekhar Singh with Smt. Sarika Singh Rs.40,00,000/-
Total Amount Rs.4,63,10,000/-
33. In the rejoinder affidavit, the applicants have stated that Punjab
National Bank has approved a One Time Settlement dated 20.03.2026
proposal in respect of the loan amount in the name of Narendra Singh
Verma and Shashi Verma and a part of payment in furtherance of the
One Time Settlement has already been made. The Bank has issued a No
Dues Certificate dated 09.08.2024 in respect of the housing loan facility
of Rs.90,50,000/- sanctioned on 29.10.2015 in favour of Baldeep Arora.
Another No Dues Certificate dated 23.04.2024 has been issued by
Punjab National Bank in respect of the loan facility of Rs.75,00,000/-
sanctioned on 18.12.2015 in favour of Hemant Tulsiani. The loan
account of Tarun Shekhar Singh and Smt. Sarika Singh was a regular
account and it had not been declared NPA. These facts establish that the
dispute pertained to settlement of financial liabilities and the same have
already been settled. Delay in repayment of loan or even non-payment of
loan gives rise to a dispute which is essentially of civil/commercial in
nature and the same has wrongly been given a colour of criminality.
34. Regarding FIR No.595 of 2021 lodged by the intervener Mr.
Sanjeev Agarwal, it is to be noted that the applicant No.3 Anil Kumar
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Tulsiani had filed Criminal Misc. Bail Application No.14783 of 2022 for
his release on bail in the aforesaid case. The bail application was allowed
by means of an order dated 03.08.2023 passed by this Court in Anil
Kumar Tulsiani v. State of U.P. : 2023 SCC OnLine All 733, wherein it
has been observed that: -
“3. The aforesaid case has been registered on the basis of an F.I.R.
lodged on 08.11.2021 against the applicant and his brother Mahesh
Tulsiyani, alleging that the complainant had booked three flats in the
name of his company in Golf View Apartment Scheme in the year
2012. The flats were not constructed within the stipulated period and
the flats had not been finished properly. No penalty was paid for the
delay in handing over the flats. The complainant had sold away one
flat in the year 2015. The FIR categorically states that some
consideration remains to be paid by the complainant. It is further
alleged that the entire building had been mortgaged by the accused
persons with a bank and the loan account was declared N.P.A. and
the bank took over possession of the flats.
*
11. What prima facie appears from the averments made in the FIR is
that the complainant's company had entered into an agreement to
purchase three flats in Golf View Apartment Scheme launched by
Tulsiani Construction and Developers Private Limited, of which the
applicant is a director. The complaint has not disclosed the name of
the company which had booked the flats, although the allottee
company would be a separate juristic person. From the material
available before the Court at this stage prima facie it appears that
no registered agreement had been executed between the parties
regarding purchase of flats where any agreement for purchase of
immovable property of value exceeding Rs. 100/- can only be made
through a registered agreement, after payment of the prescribed
stamp duty and registration fee.
12. The corporate entity which had entered into agreement for
purchasing three flats and evaded payment of stamp duty and
registration fee payable in respect of the agreement for purchase of
the flats, and which has kept itself veiled, has committed an offence
of evasion of stamp duty payable to the public exchequer, thereby
illegally depriving the public at large of the benefits of that amount,
which affects every single citizen of the country.
13. Although the amount of stamp duty and registration fee payable
in respect of three agreements may prima facie appear to be small,
the Court cannot restrain itself from observing that now-a-days a
trend is developing very fast that persons acquire interest in
immovable properties evade payment of stamp duty and registration
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fee and the cumulative effect thereof causes a significant loss to the
public exchequer. Thereafter when some disputes occur, the
purchasers initiate criminal prosecution for putting pressure on the
seller to transfer the property or to repay their amount, because they
cannot invoke the civil remedies for the reason that the unregistered
agreement is inadmissible in evidence and no rights can be claimed
in respect thereof in civil proceedings.
16. This tendency of misusing the criminal proceedings for claiming
enforcement of civil rights by indirect methods and evading payment
of stamp duty, registration fee and court fee cannot be appreciated
by the Courts and it should not be encouraged. It is nothing but
cheating committed against the public exchequer and the persons
who would stand benefited thereby.
17. Although the acts alleged in the F.I.R. may make out commission
of some offence punishable under criminal law, the dispute between
the parties predominantly appears to be of the civil nature. The law
provides civil remedies for redressal of grievances alleged in the FIR
that the possession of the flats was not delivered within the stipulated
period and that the flats were not finished in a proper manner. It is
not that the complainant has initiated the criminal proceedings for
merely punishment of the accused persons and he has initiated civil
proceedings separately for enforcement of his rights, the
complainant has initiated criminal proceedings only which prima
facie indicates that the criminal proceedings have been initiated with
an oblique motive to coerce the accused persons to redress the civil
grievances of the veiled commercial corporate entity being
represented by the complainant.”
35. After this Court passed the order in Anil Kumar Tulsiani v.
State of U.P. : 2023 SCC OnLine All 733, the provisional attachment
order dated 28.11.2024 was issued attaching a flat which had been
purchased by means of the registered sale deed dated 02.03.2012 i.e.
almost 10 years before the Punjab National Bank had lodged the FIR
No.336 of 2022.
36. The applicants have submitted that by no stretch of imagination
the sale consideration paid for purchasing a flat in the year 2012 can be
termed as proceeds of crime as defined under Section 2(u) of PMLA
because the transactions relating to FIR No.336/2022 took place much
later.
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37. The learned counsel for the opposite parties have submitted that
Section 2(u) of PMLA also includes “value of any such property”. They
have submitted that during investigation, the proceeds of crime have
been assessed to the tune of Rs.9.5 Crores which has been diverted either
in other projects or for personal gains of the accused persons. They have
further submitted that Section 23 of PMLA established a legal
presumption regarding interconnected transactions. If one transaction in
a series is proved to involve money laundering, the adjudicating
authority or the Special Court can presume that other connected
transactions are part of the same money laundering activity.
38. The offence of money laundering is defined in Section 3 of
PMLA as follows: -
3. Offence of money-laundering .—Whosoever directly or indirectly
attempts to indulge or knowingly assists or knowingly is a party or is
actually involved in any process or activity connected with
the proceeds of crime including its concealment, possession,
acquisition or use and projecting or claiming] it as untainted
property shall be guilty of offence of money-laundering.
Explanation.—For the removal of doubts, it is hereby clarified that,
—
(i) a person shall be guilty of offence of money-laundering if such
person is found to have directly or indirectly attempted to indulge or
knowingly assisted or knowingly is a party or is actually involved in
one or more of the following processes or activities connected with
proceeds of crime, namely—
(a) concealment; or
(b) possession; or
(c) acquisition; or
(d) use; or
(e) projecting as untainted property; or
(f) claiming as untainted property,
in any manner whatsoever;
(ii) the process or activity connected with proceeds of crime is a
continuing activity and continues till such time a person is directly or
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indirectly enjoying the proceeds of crime by its concealment or
possession or acquisition or use or projecting it as untainted
property or claiming it as untainted property in any manner
whatsoever.
39. “Proceeds of crime” is defined in Section 2(u) of PMLA as
follows: -
“2 (u) “proceeds of crime” means any property derived or obtained,
directly or indirectly, by any person as a result of criminal activity
relating to a scheduled offence or the value of any such property or
where such property is taken or held outside the country, then the
property equivalent in value held within the country or abroad;
Explanation.—For the removal of doubts, it is hereby clarified that
“proceeds of crime” include property not only derived or obtained
from the scheduled offence but also any property which may directly
or indirectly be derived or obtained as a result of any criminal
activity relatable to the scheduled offence”
40. Property is defined in Section 2(v) of PMLA as follows: -
(v) “property” means any property or assets of every description,
whether corporeal or incorporeal, movable or immovable, tangible
or intangible and includes deeds and instruments evidencing title to,
or interest in, such property or assets, wherever located;
Explanation.—For the removal of doubts, it is hereby clarified that
the term “property” includes property of any kind used in the
commission of an offence under this Act or any of the scheduled
offences;
41. ‘Value’ is defined in Section 2(zb) of PMLA as follows: -
“(zb) “value” means the fair market value of any property on the
date of its acquisition by any person, or if such date cannot be
determined, the date on which such property is possessed by such
person.”
42. In Vijay Madanlal Choudhary v. Union of India : (2023) 12
SCC 1, the Hon’ble Supreme Court held that: -
“ 109. Tersely put, it is only such property which is derived or
obtained, directly or indirectly, as a result of criminal activity
relating to a scheduled offence that can be regarded as proceeds
of crime . The authorities under the 2002 Act cannot resort to action
against any person for money laundering on an assumption that the
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A482 No. - 3198 of 2026
property recovered by them must be proceeds of crime and that a
scheduled offence has been committed, unless the same is registered
with the jurisdictional police or pending inquiry by way of
complaint before the competent forum. For, the expression “derived
or obtained” is indicative of criminal activity relating to a
scheduled offence already accomplished . Similarly, in the event the
person named in the criminal activity relating to a scheduled
offence is finally absolved by a court of competent jurisdiction
owing to an order of discharge, acquittal or because of quashing of
the criminal case (scheduled offence) against him/her, there can be
no action for money laundering against such a person or person
claiming through him in relation to the property linked to the stated
scheduled offence. This interpretation alone can be countenanced
on the basis of the provisions of the 2002 Act, in particular Section
2(1)(u) read with Section 3. Taking any other view would be
rewriting of these provisions and disregarding the express language
of the definition clause “proceeds of crime”, as it obtains as of
now.”
(emphasis added)
43. Sri. Rohit Tripathi has placed reliance on the following passage
from the judgment in the case of Vijay Madanlal Choudhary (supra): -
“162. As a matter of fact, prior to the amendment of 2015, the first
proviso acted as an impediment for taking such urgent measure even
by the authorised officer, who is no less than the rank of Deputy
Director. We must hasten to add that the nuanced distinction must be
kept in mind that to initiate “prosecution” for offence under Section
3 PMLA registration of scheduled offence is a prerequisite, but for
initiating action of “provisional attachment” under Section 5 there
need not be a pre-registered criminal case in connection with
scheduled offence. This is because the machinery provisions cannot
be construed in a manner which would eventually frustrate the
proceedings under the 2002 Act. Such dispensation alone can secure
the proceeds of crime including to prevent and regulate the
commission of offence of money laundering. The authorised officer
would, thus, be expected to and, also in a given case, justified in
acting with utmost speed to ensure that the proceeds of
crime/property is available for being proceeded with appropriately
under the 2002 Act so as not to frustrate any proceedings envisaged
by the 2002 Act.
163. In case the scheduled offence is not already registered by the
jurisdictional police or complaint filed before the Magistrate, it is
open to the authorised officer to still proceed under Section 5 of the
2002 Act whilst contemporaneously sending information to the
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jurisdictional police under Section 66(2) of the 2002 Act for
registering FIR in respect of cognizable offence or report regarding
non-cognizable offence and if the jurisdictional police fails to
respond appropriately to such information, the authorised officer
under the 2002 Act can take recourse to appropriate remedy, as may
be permissible in law to ensure that the culprits do not go
unpunished and the proceeds of crime are secured and dealt with as
per the dispensation provided for in the 2002 Act. Suffice it to
observe that the amendment effected in 2015 in the second proviso
has reasonable nexus with the object sought to be achieved by the
2002 Act.
*
169. As aforesaid, in this backdrop Amendment Act 2 of 2013 came
into being. Considering the purport of the amended provisions and
the experience of implementing/enforcement agencies, further
changes became necessary to strengthen the mechanism regarding
prevention of money laundering. It is not right in assuming that the
attachment of property (provisional) under the second proviso, as
amended, has no link with the scheduled offence. Inasmuch as
Section 5(1) envisages that such an action can be initiated only on
the basis of material in possession of the authorised officer
indicative of any person being in possession of proceeds of crime.
The precondition for being proceeds of crime is that the property
has been derived or obtained, directly or indirectly, by any person
as a result of criminal activity relating to a scheduled offence. The
sweep of Section 5(1) is not limited to the accused named in the
criminal activity relating to a scheduled offence. It would apply to
any person (not necessarily being accused in the scheduled offence),
if he is involved in any process or activity connected with the
proceeds of crime. Such a person besides facing the consequence of
provisional attachment order, may end up in being named as accused
in the complaint to be filed by the authorised officer concerning
offence under Section 3 of the 2002 Act.”
(emphasis added)
44. Following the aforesaid law laid down in Vijay Madanlal
Choudhary (supra), in Pavana Dibbur v. Directorate of Enforcement :
(2023) 15 SCC 91, the Hon’ble Supreme Court has held that a property
which was acquired before the acts constituting the scheduled offence
were committed, cannot be said to have any connection with the
proceeds of the crime.
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45. The learned counsel for the applicant has placed reliance on the
following passages of Seema Garg v. Deputy Director, Directorate of
Enforcement 2020 SCC OnLine P&H 738: -
“35. In our considered opinion, to understand true meaning of second
limb of definition of ‘proceeds of crime’, it must be read in
conjunction with Section 3 and 8 of the PMLA. If all these sections
are read together, phrase ‘value of such property’ does not mean and
include any property which has no link direct or indirect with the
property derived or obtained from commission of scheduled offence
i.e. the alleged criminal activity. ‘Value of such property’ means
property which has been converted into another property or has
been obtained on the basis of property derived from commission of
scheduled offence e.g. cash is received as bribe and invested in
purchase of some house. House is value of property derived from
scheduled offence. Cash in the hands of an accused of offence under
Prevention of Corruption Act, 1988 is property directly derived from
scheduled offence, however if some movable or immovable property
is purchased against said cash, the movable or immovable property
would be ‘value of property’ derived from commission of scheduled
offence. If a person gets some land or building by committing
cheating (Section 420 of IPC) which is a scheduled offence and said
building or land is sold prior to registration of FIR or ECIR, the
property derived from scheduled offence would not be available,
however money generated from sale or transfer of said property in
the form of cash or any other form of property may be available. The
cash or any other form of property movable or immovable, tangible
or intangible would be ‘value of property’ derived from commission of
scheduled offence.
36. Andhara Pradesh High Court in the case of Satyam Computer
Services (Supra) has expressed view similar to our above expressed
view, however Delhi High Court in the case of Axis Bank (Supra) has
expressed contrary view which we do not subscribe because Delhi
High Court has declared/treated words ‘value of such property’ and
‘property equivalent in value held within country’ at par which cannot
be countenanced in view of scheme and object of the Act.
37. There may be a case where a person accused of commission of
scheduled offence, on account of destruction or disposal of property, is
having no property. Non-availability of property derived from
scheduled offence does not immune an accused from offence of money
laundering committed under Section 3 of the PMLA. As per scheme of
the Act, there is criminal liability of an accused apart from civil
liability of attachment of property, thus object of the Act is not
defeated merely on the ground that property derived from crime is not
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available for attachment. The property derived from legitimate source
cannot be attached on the ground that property derived from
scheduled offence is not available. There are so many scheduled
offences where property may or may not be involved because every
scheduled offence is not committed for the sake of property e.g. offence
relating to wild animals, waging war against Government of India,
murder, attempt to murder, offences under Arms Act. There is a long
list of offences under different enactments where property is normally
not involved still these are scheduled offences and punishable under
Section 3 & 4 of PMLA.
38. Accordingly, we find and hold that phrase ‘value of such
property’ does not mean and include any property which has no link
direct or indirect with the property derived or obtained from
commission of scheduled offence i.e. the alleged criminal activity .”
(emphasis added)
46. The judgment of Punjab and Haryana High Court in the case of
Seema Garg v. Deputy Director, Directorate of Enforcement 2020
SCC OnLine P&H 738 has been followed by the Patna High Court in
HDFC Bank v. Govt. of India & Others 2021 SCC OnLine Pat 4222.
The Andhra Pradesh High Court has also followed it in the case of
Kumar Pappu Singh v. Union of India (2021) 1 HCC (AP) 556 .
47. In view of the law laid down by the Hon’ble Supreme Court in
the cases of Vijay Madanlal Choudhary and Pavna Dibbur (supra)
and by the Punjab and Haryana High Court in Seema Garg v. Deputy
Director, Directorate of Enforcement (supra) , which has been
followed by Patna and Andhra Pradesh High Courts, I am of the
considered view that attachment of the flat acquired as early as in 2012
i.e. almost a decade before the commission of the alleged offence was
wholly improper and unsustainable in view of law.
48. The applicants had filed objections against the proposed
summoning order but the trial Court has taken cognizance without
dealing with the objections and without assigning any reason for
discarding the applicants’ objections. It is settled law that the reasons are
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the soul of any judicial order and a judicial order passed without
recording reasons is unsustainable in law.
49. In S.N. Mukherjee v. Union of India : (1990) 4 SCC 594 , the
Hon'ble Supreme Court held that:—
“ 39. The object underlying the rules of natural justice “is to prevent
miscarriage of justice” and secure “fair play in action”. As pointed
out earlier the requirement about recording of reasons for its
decision by an administrative authority exercising quasi-judicial
functions achieves this object by excluding chances of arbitrariness
and ensuring a degree of fairness in the process of decision-
making. Keeping in view the expanding horizon of the principles of
natural justice, we are of the opinion, that the requirement to
record reason can be regarded as one of the principles of natural
justice which govern exercise of power by administrative
authorities…. ”
(emphasis added)
50. In Kranti Associates (P) Ltd. v. Masood Ahmed Khan : (2010)
9 SCC 496, the Hon'ble Supreme Court examined various precedents on
the point and summarised the law as follows:—
“ 47. Summarising the above discussion, this Court holds:
(a) In India the judicial trend has always been to record reasons,
even in administrative decisions, if such decisions affect anyone
prejudicially.
(b) A quasi-judicial authority must record reasons in support of its
conclusions.
(c) Insistence on recording of reasons is meant to serve the wider
principle of justice that justice must not only be done it must also
appear to be done as well.
(d) Recording of reasons also operates as a valid restraint on any
possible arbitrary exercise of judicial and quasi-judicial or even
administrative power.
(e) Reasons reassure that discretion has been exercised by the
decision-maker on relevant grounds and by disregarding extraneous
considerations.
(f) Reasons have virtually become as indispensable a component
of a decision-making process as observing principles of natural
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justice by judicial, quasi-judicial and even by administrative
bodies .
(g) Reasons facilitate the process of judicial review by superior
courts.
(h) The ongoing judicial trend in all countries committed to rule of
law and constitutional governance is in favour of reasoned
decisions based on relevant facts. This is virtually the lifeblood of
judicial decision-making justifying the principle that reason is the
soul of justice.
(i) Judicial or even quasi-judicial opinions these days can be as
different as the judges and authorities who deliver them. All these
decisions serve one common purpose which is to demonstrate by
reason that the relevant factors have been objectively considered.
This is important for sustaining the litigants' faith in the justice
delivery system.
(j) Insistence on reason is a requirement for both judicial
accountability and transparency .
(k) If a judge or a quasi-judicial authority is not candid enough
about his/her decision-making process then it is impossible to
know whether the person deciding is faithful to the doctrine of
precedent or to principles of incrementalism .
(l) Reasons in support of decisions must be cogent, clear and
succinct. A pretence of reasons or “rubber-stamp reasons” is not
to be equated with a valid decision-making process .
(m) It cannot be doubted that transparency is the sine qua non of
restraint on abuse of judicial powers. Transparency in decision-
making not only makes the judges and decision-makers less prone to
errors but also makes them subject to broader scrutiny. (See David
Shapiro in Defence of Judicial Candor [(1987) 100 Harvard Law
Review 731-37].)
(n) Since the requirement to record reasons emanates from the
broad doctrine of fairness in decision-making, the said
requirement is now virtually a component of human rights and
was considered part of Strasbourg Jurisprudence. See Ruiz
Torija v. Spain [(1994) 19 EHRR 553] EHRR, at 562 para 29
and Anya v. University of Oxford [2001 EWCA Civ 405 (CA)],
wherein the Court referred to Article 6 of the European Convention
of Human Rights which requires, “ adequate and intelligent reasons
must be given for judicial decisions ”.
(o) In all common law jurisdictions judgments play a vital role in
setting up precedents for the future. Therefore, for development of
law, requirement of giving reasons for the decision is of the
essence and is virtually a part of “due process” .”
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(Emphasis added)
51. It is not that the principles of natural justice apply only where an
order having adverse civil consequence is proposed to be passed. The
requirement of observing the principles of natural justice is even higher
in criminal proceedings, where the Fundamental Right to personal
liberty is at stake.
52. In Inox Air Products Ltd. v. State of Andra Pradesh; 2025
SCC OnLine SC 209 the Hon’ble Supreme Court held that: -
“33. It could be seen from the aforesaid order that except recording the
submissions of the complainant, no reasons are recorded for issuing the
process against the accused persons.
34. In this respect, it will be relevant to refer to the following
observations of this Court in the case of Pepsi Foods Ltd. (supra):
“28. Summoning of an accused in a criminal case is a serious
matter. Criminal law cannot be set into motion as a matter of
course ….”
53. Therefore, I am of the considered view that the impugned order
passed by the learned trial Court rejecting the applicants’ objections
against taking cognizance of the offences without assigning any reason,
is unsustainable in law for this reason alone. Normally the impugned
order would be quashed on this limited ground and the matter would be
remanded for being decided afresh after assigning reasons. However, as
this Court has already examined the merits of the case and has come to a
conclusion that no case is made out for taking cognizance of the
offences, there is no need to remand the matter to the trial Court for
being decided afresh.
54. The scope of interference in a petition under Section 482 Cr.P.C.
was explained by the Hon’ble Supreme Court in State of Haryana v.
Bhajan Lal : 1992 Supp (1) SCC 335, in the following passage: -
“102. In the backdrop of the interpretation of the various relevant
provisions of the Code under Chapter XIV and of the principles of
law enunciated by this Court in a series of decisions relating to the
exercise of the extraordinary power under Article 226 or the inherent
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A482 No. - 3198 of 2026
powers under Section 482 of the Code which we have extracted and
reproduced above, we have given the following categories of cases
by way of illustration wherein such power could be exercised either
to prevent abuse of the process of any court or otherwise to secure
the ends of justice, though it may not be possible to lay down any
precise, clearly defined and sufficiently channelised and inflexible
guidelines or rigid formulae and to give an exhaustive list of myriad
kinds of cases wherein such power should be exercised.
(1) Where the allegations made in the first information report or the
complaint, even if they are taken at their face value and accepted in
their entirety do not prima facie constitute any offence or make out a
case against the accused.
(2) Where the allegations in the first information report and other
materials, if any, accompanying the FIR do not disclose a cognizable
offence, justifying an investigation by police officers under Section
156(1) of the Code except under an order of a Magistrate within the
purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or
complaint and the evidence collected in support of the same do not
disclose the commission of any offence and make out a case against
the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable
offence but constitute only a non-cognizable offence, no investigation
is permitted by a police officer without an order of a Magistrate as
contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so
absurd and inherently improbable on the basis of which no prudent
person can ever reach a just conclusion that there is sufficient
ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the
provisions of the Code or the concerned Act (under which a criminal
proceeding is instituted) to the institution and continuance of the
proceedings and/or where there is a specific provision in the Code or
the concerned Act, providing efficacious redress for the grievance of
the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala
fide and/or where the proceeding is maliciously instituted with an
ulterior motive for wreaking vengeance on the accused and with a
view to spite him due to private and personal grudge .”
(emphasis added)
55. In Sajjan Kumar v. CBI : (2010) 9 SCC 368, the Hon’ble
Supreme Court laid down the following principles regarding scope of
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A482 No. - 3198 of 2026
inquiry at the time of framing charges and while considering a request
for discharge: -
“21. On consideration of the authorities about the scope of Sections
227 and 228 of the Code, the following principles emerge:
(i) The Judge while considering the question of framing the charges
under Section 227 CrPC has the undoubted power to sift and weigh
the evidence for the limited purpose of finding out whether or not a
prima facie case against the accused has been made out. The test to
determine prima facie case would depend upon the facts of each
case.
(ii) Where the materials placed before the court disclose grave
suspicion against the accused which has not been properly
explained, the court will be fully justified in framing a charge and
proceeding with the trial.
(iii) The court cannot act merely as a post office or a mouthpiece of
the prosecution but has to consider the broad probabilities of the
case, the total effect of the evidence and the documents produced
before the court, any basic infirmities, etc. However, at this stage,
there cannot be a roving inquiry into the pros and cons of the matter
and weigh the evidence as if he was conducting a trial.
(iv) If on the basis of the material on record, the court could form an
opinion that the accused might have committed offence, it can frame
the charge, though for conviction the conclusion is required to be
proved beyond reasonable doubt that the accused has committed the
offence.
(v) At the time of framing of the charges, the probative value of the
material on record cannot be gone into but before framing a charge
the court must apply its judicial mind on the material placed on
record and must be satisfied that the commission of offence by the
accused was possible.
(vi) At the stage of Sections 227 and 228, the court is required to
evaluate the material and documents on record with a view to find
out if the facts emerging therefrom taken at their face value disclose
the existence of all the ingredients constituting the alleged offence.
For this limited purpose, sift the evidence as it cannot be expected
even at that initial stage to accept all that the prosecution states as
gospel truth even if it is opposed to common sense or the broad
probabilities of the case.
(vii) If two views are possible and one of them gives rise to suspicion
only, as distinguished from grave suspicion, the trial Judge will be
empowered to discharge the accused and at this stage, he is not to
see whether the trial will end in conviction or acquittal.”
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56. The aforesaid principles laid down by the Hon’ble Supreme
Court in the case of Sajjan Kumar (supra) regarding scope of scrutiny
by the trial Court at the time of considering an application for discharge
or framing charges, can also be taken as guiding principles for the High
Court while considering a request for quashing of the charge-sheet and
the proceedings based thereon. Therefore, this Court can sift and weigh
the prosecution evidence, without conducting a roving inquiry into the
pros and cons of the matter by assessing the probative value of the
evidence on record, for the limited purpose of finding out whether or not
the uncontroverted allegations levelled in the complaint and the evidence
collected in support of the same disclose the commission of any offence
and make out a case against the applicant. This Court can certainly
evaluate the material and documents on record with a view to find out if
the facts emerging therefrom taken at their face value disclose the
existence of all the ingredients constituting the alleged offence, as it
cannot be expected even at this stage to accept all that the prosecution
states as gospel truth even if it is opposed to common sense or the broad
probabilities of the case.
57. Thus this Court has already held that the dispute arising out of
failure of the applicants to complete the project, hand over possession of
the flats and execute its transfer deeds or their failure to refund the
consideration amount to the flat buyers, predominantly appears to be of
the civil nature. The law provides civil remedies for redressal of
grievances alleged in the FIR. The complainant has initiated the criminal
proceedings with an oblique motive to coerce the accused persons to
redress the civil grievances of the veiled commercial corporate entity
being represented by the intervener Sanjeev Kumar Agarwal.
58. The proceedings under PMLA have been instituted on the basis
of the applicants’ involvement in a criminal case instituted by Punjab
National Bank regarding four loan accounts having turned NPA, when in
fact one of the four accounts was regular and it had not been declared
NPA, the Bank has already issued No Dues Certificates in respect of two
27
A482 No. - 3198 of 2026
loan accounts and has entered into a One Time Settlement in respect of
the fourth loan account and has received the first installment of the OTS
amount, indicates that there was merely a commercial dispute between
the Bank and the applicants which already stands settled. Regarding the
FIR lodged by the intervener Sanjeev Kumar Agarwal, this Court has
already held that the same has been instituted with an oblique motive to
coerce the accused persons to redress the civil grievances of the veiled
commercial corporate entity being represented by the intervener Sanjeev
Kumar Agarwal. The other FIRs of the scheduled offences are also of
similar nature. Therefore, all the alleged scheduled offences are in fact
merely commercial disputes which have been given a color of
criminality to coerce the applicants to redress the grievances of the
complainants without them taking recourse to the remedies available
under the civil law and are bad in view of the law laid down by the
Hon’ble Supreme Court in Indian Oil Corpn. v. NEPC India Ltd. :
(2006) 6 SCC 736 and Sarabjeet Kaur v. State of Punjab & Another
( 2023) 5 SCC 360 and the observations made by this Court in Anil
Kumar Tulsiani v. State of U.P. : 2023 SCC OnLine All 733.
59. Institution of proceedings under PMLA on the basis of the
applicants’ involvement in the alleged scheduled offences which are in
fact merely commercial disputes which have been given a color of
criminality to coerce the applicants to redress the grievances of the
complainants without them taking recourse to the remedies available
under the civil law, is a gross abuse of the process of law in view of the
law laid down by the Hon’ble Supreme Court in the aforesaid cases. The
the object and purpose underlying the PMLA is not extraneous
resolution of civil disputes. the present case is a clear case of the abuse
of the PMLA.
60. The phrase ‘or the value of such property’ used in Section 2(u)
of the PMLA does not include the value of the Flat which had been
acquired in the year 2012, long before the Punjab National Bank lodged
the FIR in the year 2022 alleging commission of the scheduled offence
28
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and which has not been acquired from the proceeds of crime. The
Enforcement Directorate had no authority to attach the Flat that had been
acquired in the year 2012, much before the commission of the alleged
scheduled offences and which had not been acquired from any proceeds
of crime and the attachment of the Flat purchased in the year 2012 is
absolutely illegal and without jurisdiction.
61. Moreover, the Enforcement Directorate falsely projected that the
quantum of the alleged proceeds of crime is Rs. 9,94,80,000/- by
including the amount of Rs.4.64 Crores, which already stands settled by
the complainant Punjab National Bank. The ED has wrongly included
the amount which was the subject matter of 9 out of 20 cases, which
have already been quashed.
62. Additionally, there can be no settlement of a crime especially
when the offence alleged is that of economic nature. The fact that the
complainants have entered into settlements resolving their monetary
disputes makes it manifest that the disputes in fact were essentially of
civil nature and the criminal law is merely being weaponised by the
complainants in their favour to make it easier for them to achieve their
ends.
63. In view of the foregoing discussion, I am of the considered view
that the proceedings under PMLA is maliciously instituted with an
ulterior motive for wreaking vengeance on the applicants and thereby
coercing them to redress the grievances of the Flat buyers to transfer in
their favour the flats and / or refund their money, without their resorting
to the remedies available under the laws and the same are liable to be
quashed.
64. Accordingly, the application under Section 482 Cr.P.C. is
allowed . The order dated 30.01.2026 passed by the learned Special
Judge, Anti-Corruption, CBI West/E.D., Lucknow in Criminal Misc.
Case No.4851 of 2025 arising out of ECIR No.ECIR/LKZO/43/2023
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taking cognizance of the offence under Section 3/4 of the Prevention of
Money Laundering Act, 2002 (hereinafter referred to as PMLA) and has
summoned the applicants to face the trial and the entire proceedings of
the aforesaid case are quashed . All necessary consequences shall follow.
(Subhash Vidyarthi,J.)
July 02, 2026
Pradeep/-
Whether the judgment is speaking – Yes/No
Whether the judgment is reportable -Yes / No
Digitally signed by :-
PRADEEP SINGH
High Court of Judicature at Allahabad,
Lucknow Bench