PRAYAGRAJ: The Allahabad High Court on Thursday refused to quash proceedings by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA) concerning the FIR related to the Grand Venice project in Greater Noida, Gautam Budh Nagar. The court made important observations regarding the jurisdictional prerequisites and statutory protections governing the powers exercised under the Act.
The Grand Venice project was developed on a commercial plot allocated by the Greater Noida Industrial Development Authority, intended for a theme-based commercial mall and an adjacent commercial tower.
On June 9, 2015, an FIR was filed at the Kasna police station against the petitioner and others under sections 406 (criminal breach of trust) and 420 (cheating) of the IPC, alleging irregularities related to the project. Between 2015 and 2019, numerous similar FIRs were filed concerning the same project, accusing the developers of failing to deliver units, not providing promised returns, and delayed possession.
The writ petition was initiated under Article 226 to challenge the registration of the ECIR, and the search and seizure conducted under section 17 of the PMLA, as well as the issuance of non-bailable warrants (NBWs). The petitioner argued that the only remaining predicate offense was under section 406 IPC, which is not classified as a scheduled offense under the PMLA.
Furthermore, the petitioner highlighted that the proceedings in the original FIR were stayed and consolidated per orders from the Supreme Court.
While opting not to intervene at this stage, a division bench consisting of Justice Chandra Dhari Singh and Justice Lakshmi Kant Shukla emphasized that the existence of a scheduled offense is essential for the initiation and continuation of PMLA proceedings. They noted that since section 420 of the IPC was removed in the supplementary charge-sheet, leaving only section 406, significant questions arose regarding the continuation of PMLA jurisdiction, which would need to be addressed later.
After partially approving and disposing of writ petitions submitted by Satinder Singh Bhasin and others, the court acknowledged the impact of the stayed proceedings in the principal FIR and the Supreme Court’s consolidation order affecting multiple FIRs connected to the Grand Venice Project. The court stressed that these consolidation orders influence the predicate offense’s operational domain and cautioned that investigating agencies must adhere to established judicial directions.
Consequently, the court instructed the ED to refrain from pursuing any investigations, inquiries, summons, searches, seizures, attachments, or other coercive measures related to the offenses and allegations stemming from the consolidated FIR, until the charge-framing stage. “Any final order issued by the competent court concerning these FIRs, whichever is earliest,” the court stated.
