ORDER:

This Criminal Petition is filed under Section 482 of Code of Criminal Procedure, 1973 (for short ‘Cr.P.C’) to quash the proceedings against the petitioners/accused in ECIR/HYZO/04/2021 dated 18.01.2021.

2. The brief facts of the case are that the above said ECIR was registered in connection with alleged offences under the Prevention of Money Laundering Act, 2002 (for short ‘PMLA’) based on 43 FIRs filed across various Police Stations and cybercrime divisions in Telangana under Sections 417, 419, and 420 of the Indian Penal Code, 1860 which are scheduled offences under the PMLA. The Directorate of Enforcement contends that instant loan applications operated by various entities, including the Petitioners, were charging exorbitant interest rates and high processing fees without proper authorization. Further, it is alleged that these apps were involved in unauthorized lending activities and resorted to harassment for loan recovery by misusing personal data of the borrowers. It is further stated that the Enforcement Directorate has proceeded against them based on conjectures and assumptions, without specific allegations or legal basis, thereby mischaracterizing their legitimate business activities as criminal conduct.

3. Challenging the said proceedings the present criminal petition is filed stating that the Petitioners include petitioner No.1, an RBI-registered NBFC engaged in lawful lending activities, and petitioners No.2 and 3, which provide technology support to petitioner No.1 through online platforms such as KreditBee and Kreditzy. The ECIR is registered based on 43 FIRs, but only four of them pertain to Petitioners No.2 and 3. Investigations into these four FIRs have concluded, and the respective law enforcement agencies have filed charge sheets, categorically stating that the Petitioners were not complicit in any scheduled offence. Despite this, the Enforcement Directorate continues to pursue proceedings under PMLA against the Petitioners, alleging that they engaged in money laundering through moveable properties in their bank accounts and Merchant IDs with banks/payment gateways. The Petitioners assert that since there is no scheduled offence alleged against them, the proceedings under PMLA lack legal basis and must be quashed.

4. Further, that the petitioners have fully cooperating with investigations, providing all necessary documents and information. They highlight that the four FIRs in question involve vague and unfounded allegations, with complainants making generalized claims about harassment and unauthorized lending. In some cases, loans were never availed, while in others, the complainants had already repaid their loans before filing FIRs. Additionally, the Enforcement Directorate has referred to FIR No.1134/2020, which does not concern the petitioners and has already been settled before the Lok Adalat.

5. That the allegations against the petitioners arise from vague and broad statements in four FIRs, which do not contain specific accusations against them. While the FIRs mention phone numbers of alleged harassers, there is no evidence linking these numbers to loans availed from the petitioners. Furthermore, the investigation by law enforcement agencies has not led to any findings against the petitioners, and they have not been named as accused in any charge sheet. However, in the PMLA proceedings, respondent No. 1 has erroneously proceeded on the assumption that the Petitioners committed an offence under Section 420 IPC, a scheduled offence under PMLA, despite the lack of specific allegations or substantive material in the FIRs. Respondent No.1, without applying its mind, has merely clubbed the petitioners into the broader investigation on the ground of their involvement in providing loans through mobile applications. Respondent No.1 has relied solely on the registration of the FIRs to conclude that a prima facie case under Section 3 of PMLA is made out, despite the absence of cogent evidence indicating gener