Companies can be held liable under the Prevention of Money Laundering Act for facilitating actions that constitute proceeds of crime, irrespective of whether they are named as accused.

ORDER

05.01.2026

The batch of appeals have been filed under Section 26 of the Prevention of Money Laundering Act, 2002 (‘the Act of 2002’) challenging the order dated 27.01.2023 passed by the Adjudicating authority confirming the provisional attachment order. The impugned order was passed against defendants before the Adjudicating Authority however the appeal has been filed by the appellants companies before us and accordingly, we would be dealing with the issues raised by it.

Brief facts of the case:

2. It is a case where 43 FIRs have been registered for the offences under the Indian Penal Code,1860 and Information Technology Act, 2000 (in short, the ‘the Act of 2000’). The Cybercrime PS, Rachakonda had registered 5 FIRs for offence under section 417, 419, 420 of the Indian Penal Code, 1860 (in short, ‘ IPC ’) and section 66-C, 66-D of the Act of 2000. It is on the complaints that the appellants are charging exorbitant interest along with high processing fee and GST charges on the loans availed by the complainants. One Jiya Liang Infotech Pvt. Ltd. made agreements with companies namely Bienance Infrastructure Technology, Ajaya Solutions Private Limited and Taelde Technology Private Limited providing tele-caller services for recovery of loan dues. Those companies were doing online instant loan lending business. It sanctioned personal unsecured loans to the borrowers through digital apps and provided customer data to M/s Jiya Lian Infotech Pvt. Ltd. The said company was calling the borrowers and threatening them to repay the loan on higher rate of interest. Laptops, desktops and network routers were procured from China to establish call centres and the employees were provided user-id, passwords and phone numbers to harass the borrowers.

3. Another letter dated 30.12.2020 was received from Cyber Crime, Cyberabad wherein it was informed that Cybercrime PS, Gachibowli has registered 10 FIRs for the offences under IPC and the Act of 2000. In the search, it was found that Zixia Zhang, Director of Skyline Innovation technology India Pvt. Ltd and Mr. Arjun, Managing Director of Baryonyx Technologies Pvt. Ltd. were the mastermind of the offences. It was further informed that Cyber Crime, Hyderabad has registered 28 FIRs for the offence under the and the Act of 2000 based on the similar complaints.

4. An ECIR was then recorded finding a case of money laundering. The proceeds of crime were generated out of scheduled offences.

5. Investigation was conducted and it was found that the applications through which loans were taken by the complainants were associated with NBFCs (Non- Banking Finance Companies). The NBFCs were approached by fintech companies (service providers) and offered to do lending business through mobile apps. As a result, NBFCs entered into service agreement with the service providers to enable them into lending business in exchange of marginal profits. The personal data of the borrower was misused by the service providers who threatened and harassed the borrowers.

6. The mobile applications were used to lend and recover the loans through merchant IDs with the payment gateways such as Paytm, Cashfree and Razorpay all pay-in and pay-out. The fintech companies/service providers misused the license issued to NBFCs by the RBI and acted as de-facto NBFCs. For each loan, 15-20% of the sanctioned amount to the borrower was deducted in the guise of processing charges. The complaints were lured into availing unsecured loans at high interest rates and processing charges. The NBFCs was used for lending over and above 5 times to limit of t