FINAL ORDER

27.10.2025

The present appeal arises from the order dated 26.03.2025 passed by the learned Adjudicating Authority (“AA”) under section 8(3) of the Prevention of Money Laundering Act, 2002 (PMLA) confirming the freezing the appellant‟s bank accounts and seizing cash and movable assets/digital devices belonging to the appellant company under sections 17(1) and 17(1)(a).

Facts in Brief

2. The relevant facts briefly are that various FIRs were registered against one Moosa Haji Charaparambil (Moosa Haji) and others under sections 406 and 420 of IPC for having collected large sums of money from the public promising to pay 15% returns on the investment. However, they did not fulfil the promise as a result of which the investors filed FIRs against them in various Police Stations.

3. Since the FIRs mentioned above disclosed offences comprising „scheduled offences‟ under the PMLA, the Enforcement Directorate (ED) registered an ECIR bearing number ECIR/KCZO/19/2024 and initiated investigations against the said Moosa Haji and others under the PMLA.

4. During the course of Investigation, search operations were conducted on 07.10.2024 under section 17(1) of the PMLA 2002 at various business and residential premises pertaining to the accused. During the search operation, the following properties/ records relating to the present appellant were also seized/frozen:

5. In addition to the above seizure, a freezing order was issued during the course of search under section 17(1) of PMLA, 2002, on 17.10.2024 at Hotel Dimora, Thiruvananthapuram, wherein the credit balance in the following bank accounts in the name M/s Trivandrum Apollo Towers Pvt. Ltd. were frozen:

6. Consequent to the seizures and freezing of accounts, an Original Application (OA) under section 17(4) was filed before the Adjudicating Authority as per the requirement of law. The Ld. AA initiated adjudication proceedings thereupon and vide the impugned order dated 26.03.2025, allowed the OA filed by the respondent directorate and thereby allowed retention/continued freezing of the cash, digital devices and documents and records seized and the bank accounts frozen during the searches conducted by ED.

7. Aggrieved by the said order, the appellants have filed the present appeal on various factual and legal grounds.

Arguments on behalf of the appellant

8. Detailed arguments were made by the ld. counsel for the appellant in support of the appellant‟s case. The case was argued on two main grounds. Firstly, it was contended that contrary to what has been alleged in the impugned order, the accused, Moosa Haji, did not have a substantial share-holding or other funds invested in the appellant company at time of seizure and, therefore, the funds of the company could not have been seized as proceeds of crime infused into the appellant company by him. Secondly, it was contended that the relevant relied-upon documents (RUDs), though specifically requested, were never provided to the appellant. Thus, rendering the impugned order illegal. These contentions are discussed in greater detail below. Certain other issues have also been raised including the validity of the grounds for formation of the „reason to believe‟.

9. With regard to the first of the above-mentioned grounds, it is contended that the Respondent has not demonstrated a clear nexus between the funds of the Appellant company and the proceeds of crime purportedly derived by Moosa Haji or the scheduled offence allegedly committed by him. It is submitted that the offences under Section 420 and 406 of IPC alleged against Moosa Haji are entirely extraneous to the legitimate business operations of the Appellant. There is no allegation that the business operations of the Appellant are linked to the scheduled offences committed by Moosa Haji, or that they were carried out using the proceeds of crime generated by Moosa Haji. As such, there is no link connecting the legitimate funds of the Appellant and the scheduled offence or the proceeds of crime