THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON’BLE SMT.JUSTICE TIRUMALA DEVI EADA CRIMINAL PETITION No.188 of 2021 Date:23.02.2026 Between:

M/s. Shriram City Union Finance Ltd., Rep. by its Authorized Signatory Sri V. Prasad and another. …Petitioners And The Deputy Director, Directorate of Enforcement, Ministry of Finance, Hyderabad and another.

… Respondents

ORDER:

This Criminal Petition is filed seeking to quash the provisional attachment order No.1 of 2020 dated 15.10.2020 passed by the respondent No.1 in File No.ECIR/HYUZO/02/2015 and the consequential complaint made by the respondent No.1 to the respondent No.2.

2. Heard Sri C. Raghu, learned counsel for the petitioners and Sri V.T. Kalyan, learned Standing Counsel appearing for the respondents.

3. The brief facts of the case are that M/s. Deccan Chronicle Holdings Ltd. borrowed an amount of Rs.30.00 crores from the petitioner No.1 on 11.05.2012 for business purposes by mortgaging certain immovable properties situated at Road No.12, Banjara Hills, Hyderabad as collateral security. Subsequently, the said loan was assigned to the petitioner No.2. Upon default in repayment of the loan, the petitioner No.2 has initiated arbitration proceedings and obtained an award, and thereafter filed execution proceedings for recovery of the amount. During the pendency of such recovery proceedings, the Enforcement Directorate issued the impugned provisional attachment order attaching the mortgaged properties treating them as “proceeds of crime.” Aggrieved by the said attachment and the complaint filed before the Adjudicating Authority, the petitioners have approached this Court seeking to quash the same.

4. Learned counsel for the petitioners has submitted that the properties of the petitioner No.1 were provisionally attached stating that they are the proceeds of crime. However, the properties so attached were acquired by the petitioner No.1 in the year 1985 and 1988, while his business is subsequently initiated. He further has submitted that if the definition of ‘proceeds of crime’ is perused’ the authorities have committed a grave error in attaching his properties, the acquisition of which is much prior to the inception of business itself. The properties were purchased by the petitioner No.1, twenty years prior to the inception of his business and therefore, the same cannot be termed under the ‘proceeds of crime’. He relied upon the judgment of the High Court of Andhra Pradesh in Kumar Pappu Singh v. Union of India and others¹

5. Learned Standing Counsel for the Enforcement Directorate has submitted that the Enforcement Directorate has not disputed the acquisition of properties to be in the year 1985 or 1988, but the proceeds of crime as defined under Section 2(1)(u) of the Prevention of Money-Laundering Act, 2002 (for short ‘PMLA’) aims at preventing the money laundering. He has argued that the proceeds of crime is wide enough and that it not only refers to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also the value of any such property of the accused and that the act of attachment of properties is aimed at effective prevention of money laundering. He further submitted that the accused are acting in collusion with the bank authorities and the bank authorities have not initiated the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security W.P. No.9338 of 2020 & Batch, dated 20.03.2021 Interest Act, 2002, (for short ‘SARFAESI Act’) till date. If the properties equivalent to the value are not attached, then the very purpose of the enactment would get defeated and that the ground raised by the petitioners that the properties were acquired prior to the inception of the business, cannot be considered. He therefore, prayed to dismiss the petition.

6. Perused the record.

7. The case of the petitioners is that M/s. Deccan Chronicle Holdings Ltd., borrowed an amount of Rs.30.00 crores