A company’s PMLA liability requires a specific link between its conduct and the alleged laundering activity.

The petitioner-company challenged an order dated 10 September 2026 directing that charges be framed against it under Sections 4 read with 3 of the Prevention of Money Laundering Act, 2002 (PMLA).

The prosecution case concerned IRCTC contracts awarded to the company to operate BNR Hotels at Ranchi and Puri, and an alleged tender manipulation and undervalued transfer of land to M/s DMCPL.

The relevant sale deeds were executed by individuals who were directors of the petitioner, but the company was not a party to those deeds; the hotel contracts were awarded later.

The petitioner contended that the Trial Court had not identified material specifically linking the company to the alleged laundering activity or explaining why the directors’ personal land transactions were attributable to it.

1. Whether the directors’ personal acts concerning the land transaction could be attributed to the petitioner-company, absent identified material connecting the company itself to an activity within Section 3 of the PMLA.

2. Whether operation of the order directing framing of charges, and further proceedings against the petitioner, should be stayed pending consideration of that issue.

Sections 3 and 4 of the PMLA were the provisions under which the Trial Court directed charges to be framed against the petitioner.

Section 70(1) addresses a contravention by a company and the liability of persons in charge of, and responsible for, its business; Section 70(2) concerns a company contravention committed with the consent, connivance, or neglect of its directors or other officers; and Explanation (2) permits prosecution of the company independently of the prosecution or conviction of an individual.

The Court did not finally determine the governing attribution test; it treated the need for material connecting the company to the alleged Section 3 activity, beyond the directors’ status or personal conduct, as an issue requiring further consideration.

The Court noted that the sale deeds were executed by individuals who were directors of the petitioner, while the company itself was not a party to them.

The Trial Court had generally concluded that the company assisted in the acquisition, use, or projection of the land, but the petitioner disputed that any specific material connected it to the alleged activity or justified attributing the directors’ personal transactions to it.

The Court considered that issue to require further examination and directed the respondents’ reply to identify the precise material supporting the company’s involvement in an activity within Section 3.

Pending that hearing, the Court stayed operation of the impugned order and further proceedings in Ct. Case No. 22/2019 insofar as they concerned the petitioner.

The matter was listed for 3 December 2026.

The Court made no final determination on the petitioner’s liability or the attribution issue.