In a landmark decision, the Kerala High Court has restricted the powers of the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA), emphasizing that assets unrelated to money laundering cannot be targeted. The court’s ruling came in response to a plea challenging the provisional attachment of bank accounts and property by the ED, which was deemed illegal as the property in question was acquired well before any alleged criminal activities.
Justice Bechu Kurian Thomas, delivering the judgment, highlighted the primary purpose of the PMLA to combat money laundering by targeting only proceeds directly linked to criminal activities. The court asserted that the law cannot be stretched to cover assets acquired innocently or unrelated to the alleged crimes.
The case involved Satish Motilal Bidri, a Maharashtra businessman, whose assets were frozen by the ED during an investigation into alleged money laundering activities of M/s. Masters Finserv. Bidri argued that the ED’s actions were unjustified since the property in question was acquired in 2004, long before the alleged offenses.
The court’s decision underscores the importance of maintaining the integrity of property rights and ensuring that legal actions under the PMLA are strictly tied to criminal activities. It set aside the provisional attachment order, directing Bidri to seek adjudication through appropriate legal channels provided by the PMLA.
This ruling not only clarifies the scope of the PMLA but also safeguards individuals from arbitrary actions by law enforcement agencies, reinforcing the principle of legality in asset seizure cases.
