Case Law On High-Profile Laundering Prosecutions
⚖️ Overview
Money laundering involves concealing the origin of illegally obtained money and integrating it into the legal economy. In India, it is primarily governed by:
Prevention of Money Laundering Act, 2002 (PMLA)
Sections 3 & 4: Offence and punishment for money laundering
Section 5: Confiscation of property
Enforcement Directorate (ED) investigates cases.
Indian Penal Code (IPC) / Criminal Law
Sections related to criminal conspiracy, cheating, and fraud may also apply.
High-profile prosecutions usually involve political figures, corporate executives, or major financial scams.
📚 Key Case Laws
1. Enforcement Directorate v. Vijay Mallya (Kingfisher Airlines Case)
Facts:
Vijay Mallya, promoter of Kingfisher Airlines, defaulted on loans worth over ₹9,000 crore.
Allegations: Loans were diverted, money was siphoned off, and assets were moved abroad.
Legal Proceedings:
ED attached properties under PMLA.
Mallya challenged attachment of assets in the High Court.
Held:
Delhi High Court ruled that ED has power to provisionally attach properties under PMLA.
Later, the Supreme Court refused to grant relief from asset attachment.
Mallya became a high-profile fugitive, with extradition proceedings ongoing in the UK.
Significance:
Reinforced the powers of ED to freeze assets and investigate financial crimes.
Showed that even high-profile business tycoons are subject to PMLA.
2. Enforcement Directorate v. Nirav Modi (Punjab National Bank Scam)
Facts:
Nirav Modi and Mehul Choksi allegedly defrauded PNB of ₹14,000 crore using fraudulent Letters of Undertaking.
Funds were laundered through shell companies and foreign accounts.
Legal Proceedings:
ED initiated PMLA proceedings and attached properties in India.
Interpol red corner notice issued; extradition request filed with UK authorities.
Held:
Delhi High Court upheld ED’s attachment of assets.
Supreme Court supported ED’s authority to attach, seize, and prosecute for laundering proceeds of fraud.
Significance:
Showed linkage between bank fraud and money laundering prosecution.
PMLA can trace proceeds of financial crimes, even across borders.
3. Enforcement Directorate v. Lalit Modi (IPL Scam)
Facts:
Lalit Modi, former IPL chairman, allegedly diverted IPL funds for personal benefit.
Alleged laundering of proceeds through foreign accounts and real estate investments.
Legal Proceedings:
ED issued summons and attached assets.
Modi challenged jurisdiction and asset attachment in Delhi High Court.
Held:
High Court confirmed ED’s powers to investigate money laundering even for high-profile, politically sensitive individuals.
Significance:
Reinforced principle that position or influence does not shield individuals from PMLA prosecution.
4. Enforcement Directorate v. Moin Qureshi & Others (Saradha Scam, West Bengal)
Facts:
Saradha Chit Fund Scam (2013) defrauded thousands of investors.
Allegations: Promoters and politicians laundered funds through shell companies and real estate.
Legal Proceedings:
ED filed charges under PMLA; large-scale property attachment and arrests followed.
Case involved tracing complex shell structures to hide proceeds.
Held:
High Court emphasized that PMLA allows tracing, attachment, and prosecution even for layered or indirect ownership of laundered funds.
Significance:
Demonstrated ED’s ability to tackle multi-layered corporate laundering schemes.
Highlighted collaboration between courts and enforcement agencies.
5. Enforcement Directorate v. Mehul Choksi (PNB Scam Associate)
Facts:
Similar to Nirav Modi, Choksi allegedly laundered fraud proceeds through real estate in India and Antigua.
Legal Proceedings:
ED issued look-out notices, attached properties, and filed PMLA charges.
Held:
Courts upheld ED’s investigation powers, including international cooperation for tracing assets.
PMLA enforcement was seen as effective against international laundering.
Significance:
Confirmed ED’s authority to track proceeds globally, even if suspects are abroad.
6. Enforcement Directorate v. Rajiv Saxena (Vijay Mallya’s Associate)
Facts:
Rajiv Saxena allegedly helped Mallya divert funds overseas through shell entities.
Legal Proceedings:
ED attached assets and filed PMLA charges.
Held:
High Court recognized that accomplices aiding money laundering are also liable under PMLA, not just primary offenders.
Significance:
Reinforced prosecution of intermediaries in laundering schemes.
🧩 Legal Principles Emerging
| Principle | Explanation |
|---|---|
| PMLA Authority | ED can attach, investigate, and prosecute money laundering offenses. |
| High-profile Individuals | Status, political or corporate, does not grant immunity. |
| International Cooperation | ED can collaborate with foreign agencies for assets and extradition. |
| Accomplice Liability | Persons assisting in laundering, including financial intermediaries, can be prosecuted. |
| Linkage to Predicate Offence | Money laundering charges often depend on a predicate offence like fraud, tax evasion, or bank scam. |
| Judicial Oversight | Courts ensure ED powers are exercised lawfully; attachment of assets requires judicial approval. |
🔹 Summary
High-profile laundering cases are complex, multi-jurisdictional, and involve huge sums.
PMLA is the central statute enabling investigation, attachment, and prosecution.
Courts have consistently upheld ED powers, balancing enforcement with rights of accused.
Landmark cases include Vijay Mallya, Nirav Modi, Lalit Modi, Saradha Scam, and associates like Mehul Choksi.
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