TaxTMI 
TaxTMI 
2026 (9) TMI 2072
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....Mr. Tanmaya Mehta, Mr. Harshit Sethi, Ms. Shilpa Ohri, Mr. Jai Sikand and Ms. Khushboo Nahar, Advocates for GWC. Mr. Mahesh Jethmalani, Senior Advocate with Ms. Kanika Singhal, Mr. Shivam Singh Rana and Ms. Deepshikha, Advocates for IRP. Mr. Krishnan Venugopal, Senior Advocate with Ms. Pooja Mahajan, Mr. Savar Mahajan, Ms. Srivastava Reddy and Ms. Urvashi Girdhar, Advocates for GWA, Mr. Vikas Pahwa and Mr. Anurag Ahluwalia, Senior Advocates with Mr. Raj Kamal, Mr. Shivam Sachdeva, Mr. Harneet Singh, Mr. Manish Kumar Sharma, Advocates for M/s Lavender Infraprojects. Mr. Kanu Agrawal with Mr. Gaurav Vats, Mr. Shubham Shukla, Advocates for Intervenor/Mamta Jain. Mr. Amit Chadha, Senior Advocate with Mr. Shashwat Tripathi with Ms. Ridhima Verma, Mr. Raushal Kumar, Ms. Madhu Ayachit, Ms. Aparajita Singh, Advocates for Lotus Valley LLP and White Lotus Projects. For the Respondents Through: Mr. Ramji Srinivasan, Senior Advocate with Mr. Tanmaya Mehta, Mr. Harshit Sethi, Ms. Shilpa Ohri, Mr. Jai Sikand and Ms. Khushboo Nahar, Advocates for GWC. Mr. Nitesh Jain and Mr. Lakshmikant Srivastava, Advocates for applicant. Mr. Mahesh Jethmalani, Senior Advocate with Ms. Kanika Singhal, Mr. Shi....
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....of the BNSS, Greenopolis Welfare Association ('GWA') also challenges the impugned order and seeks further relief in the following terms: "a) Call for the records of case CT No. 09/2025 titled as "ED v Nirmal Singh & Ors.", currently pending adjudication before the Court of Ld. ASJ-02, South-East District, Saket Courts, New Delhi; "b) Set aside and quash the Impugned Order dated 27.11.2025 passed in Misc. No. 1337 of 2025 by Ld. Special Court, PMLA in Prosecution Complaint bearing Number CT Case 09 of 2025 titled as Enforcement Directorate vs. Nirmal Singh & Ors.; and/or "c) In the interim, stay the effect of the Impugned Order dated 27.11.2025 passed by the Court of Ld. ASJ-02, South-East District, Saket Courts, New Delhi in Misc. No. 1337/2025, in the matter titled as "ED v Nirmal Singh & Ors" bearing case No. CT No. 09/2025; and/or In the alternative: "d) Clarify that the restitution shall be made only to the homebuyers that paid monies to Three C Shelters and further, such restitution shall be made by Respondent No. 1 in accordance with Prevention of Money Laundering (Restoration of Property Rules) 2016; "e) Issue directions to the ef....
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....ill pending before the High Court, we do not express any opinion on the merits, allegations or cross-allegations made by the parties. All that we deem appropriate is to request the learned Judge to make an endeavour to take up the main case on the date fixed for final disposal. Learned senior counsel for the parties have assured that full cooperation shall be extended to the learned Judge. "7. Hon'ble Chief Justice of the High Court shall also list the interim applications, if any, which have been filed in the main case before Justice Anup Jairam Bhambhani, as per the roster. Any order on those applications may be passed after hearing both sides. "8. At this stage, Mr. S.V. Raju, learned ASG representing the Directorate of Enforcement (ED) has suggested reappointment of a former Judge of this Court as the monitoring authority. We do not express any opinion in relation thereto and leave it open to the ED to make such prayer before the High Court." 5. Thereafter some of the parties moved applications before the Supreme Court seeking a clarification in relation to a portion of order dated 10.04.2026. Those applications were disposed-of by the Supreme Court vide or....
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....s, including in para 4(iv) of order dated 10.08.2026 as extracted above. 8. Before proceeding it is necessary to give context of the dispute that has led to multiple proceedings being filed by various parties claiming conflicting rights. To that end, it would be desirable to narrate in some detail the chequered history of the present batch of matters. II. GENESIS OF THE DISPUTE 9. The genesis of the dispute between the parties is a Development Agreement dated 02.11.2011 that was entered into between M/s Three C Shelters Pvt. Ltd. ('3C Shelters'), M/s Orris Infrastructure Pvt. Ltd. ('Orris'), M/s Three C Universal Developers Pvt. Ltd. and certain land owners ('development agreement'), for construction and development of a residential project on a parcel of land admeasuring about 47.218 acres situate in villages Hayatpur and Badha, forming part of Sector 89, Gurgaon, Haryana ('Greenopolis project' or 'project'). 10. The development agreement was accompanied by certain other ancillary contracts and agreements. The development was planned so as to be divided between 3C Shelters and Orris in the proportion of 65 is to 35 respectively, namely that 3C Shelters was to have righ....
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....Greenopolis project. 15. In 2016-2017 ED commenced investigation in the matter, which they claim has shown that both 3C Shelters and Orris had diverted and siphoned-off significant sums of money to entities that were related to them, instead of applying those funds on the project. It is contended that a sum of about Rs 214.09 crore out of the Rs. 873.83 crore collected, was siphoned-off by 3C Shelters in collusion with its group companies. Parallelly, several homebuyers also filed complaints with the Economic Offences Wing of the Delhi Police ('EOW'), which culminated in registration of FIR No. 137 of 2017 dated 24.08.2017 under sections 406/420/467/468/471/120B of the Indian Penal Code, 1860 at P.S.: EOW against 3C Shelters, Orris as well as their promoters/directors. Arising from the said FIR a chargesheet is stated to have been filed on 27.09.2019. 16. An association of homebuyers, GWA, also filed a complaint bearing No. 225/2018 dated 04.05.2018 before the HRERA seeking a direction to both 3C Shelters and Orris to complete the project and hand-over possession of the units in a time-bound manner. Considering the ambiguities involved in the matter, with consent of all conce....
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.... through the Corporate Insolvency Resolution Process ('CIRP') that were pending against 3C Shelters. 20. Much has happened in the proceedings before the NCLT in the meantime. Inter-alia the 1st Interim Resolution Professional ('IRP') was replaced by a 2nd Resolution Professional ('RP'), who (latter) was suspended by the Insolvency & Bankruptcy Board of India ('IBBI'), which led to the NCLT to appointing a 3rd IRP on 14.12.2022, who is presently in seisin of the affairs of 3C Shelters. 21. The CIRP proceedings in relation to 3C Shelters were set-aside by the National Company Law Appellate Tribunal ('NCLAT') vide order dated 28.08.2023, against which appeals were filed before the Supreme Court. By its order dated 13.10.2023 passed in Civil Appeal bearing Diary No. 36252/2023 and connected matters, the Supreme Court directed all parties to maintain status quo inter-alia as regards the assets that are subject matter of the proceedings before the NCLT and NCLAT, namely the assets of 3C Shelters. Subsequently, vide order dated 19.11.2024 the Supreme Court restored the CIRP process in respect of 3C Shelters. This court is informed that the Supreme Court has now reserved judgement on....
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....s, Orris and their former promoters/directors. However it transpires that subsequently the PMLA Court has dropped charges against Orris by its orders dated 25.10.2025 and 22.11.2025. 27. In the course of the proceedings two associations claiming to represent the homebuyers of the project have been in the picture: 27.1. The Greenopolis Welfare Association, which was registered on 23.05.2013 under the Societies Registration Act, 1860 with the object of furthering the interests of the members/owners/allottees of the project; and 27.2. The Greenopolis Welfare Confederation, which has come to be registered much later on 04.12.2022 under the Haryana Registration & Regulation of Societies Act 2012, purportedly for the same purpose. 28. In the proceedings before the PMLA Court, GWC moved an application dated 14.10.2025 under section 8(8) of the PMLA seeking leave to intervene in those proceedings and praying for restitution of the assets that were attached by ED and for other reliefs; and by way of the impugned order the PMLA Court has allowed that application, thereby directing ED to release the assets attached vide Provisional Attachment Order ('PAO') dated 28.03.....
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.... upon, this Court is of the considered view that, in order to curtail multiplicity of proceedings and to obviate any further complications in the matter, it is necessary to direct that all parties to the present writ petition, as well as any third parties, shall refrain from taking any action in contravention of or in derogation of the order dated 20 November 2025 passed by the Hon'ble Supreme Court and the order dated 27 November 2025 passed by the learned Special Judge, till the next date of hearing." 32. Subsequently, GWC moved an application seeking clarification of order dated 03.01.2026, which was listed before the same Bench that had passed the said order; and vide order dated 21.01.2026 the learned Bench issued the following clarification: "21. The order dated 03rd January, 2026, is clarified to the extent that any party, related to "Greenopolis Project" would be bound by the order dated 20th November, 2026 [sic 2025], of Hon'ble Supreme Court and the order dated 27th November, 2025, of ld. Special Judge till the next date of hearing. As regards the submissions of the learned Counsel for the Applicant/Petitioner seeking an interpretation of the expression 'third....
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.... had also filed impleadment/intervention applications seeking to be heard in the matter, this court has heard Lavender, Lotus Valley and White Lotus since the said applicants have claimed ownership rights in the properties attached by ED. Also, insofar as parties claiming to be homebuyers are concerned, this court has not individually heard such parties since their stand-point has been represented by the associations and their individual pleas would be considered by the monitoring committee that this court proposes to appoint in the matter. 37. It may be observed at this point that, though the parties had made certain prayers in their respective petitions, in the course of the present proceedings all parties have said that they seek holistic resolution of their grievances in relation to the project, and to that end, the parties have deviated somewhat from the restrictive ambit of the prayers they had made in their respective petitions. III. SUBMISSIONS ON BEHALF OF DIRECTORATE OF ENFORCEMENT 38. Challenging order dated 27.11.2025 passed by the PMLA Court, Mr. Vivek Gurnani, learned Panel Counsel appearing for ED has drawn attention to para 30 of the said order, which reads....
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....f them. 44. Learned counsel has further submitted that, under the scheme of the PMLA, the attached properties do not admit of any third-party rights unless restitution is ordered by the PMLA Court which can only be done after framing of charges; and that the power to determine the fate of attached properties can only be decided after commencement of trial as contemplated under section 8(8) of the PMLA. 45. Mr. Gurnani has also drawn attention of this court to Rule 3A of the Prevention of Money-laundering (Restoration of Property) Rules, 2016 ('PML Rules'), and in particular Rule 3A(2), which reads as under: 3A. Manner of restoration of property during trial. (1) ...... (2) When the property referred to in sub-rule (1) is insufficient to meet the loss suffered by the claimant as a result of the offence of money-laundering, the Special Court, as it thinks fit, may pass an order of restoration of property directing the Central Government, if necessary, to auction such property and disburse on a pro-rata basis in accordance with the share of loss suffered by each claimant and may give custody thereof to such claimant on his executing a bond undertaking ....
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.... exercise of its powers under Article 226 of the Constitution, this court possesses ample power to constitute a committee and to invest such committee with the power to take account of, manage, and if necessary, dispose-of the assets of the concerned entities attached by ED for the purpose of enabling restitution to the claimants/homebuyers, and that such power is not confined to, or exercisable solely by, the machinery under PMLA. 52. In this regard, Mr. Gurnani has placed reliance on order dated 05.05.2015 passed by the Calcutta High Court in M.P.S. Greenery Developers Ltd. vs. Bhaskar Dasgupta & Ors. Order dated 05.05.2015 in M.A.T. 559/2015 with CAN 3608/2015, wherein, in exercise of its writ/appellate jurisdiction, the High Court appointed a committee and vested it with the power to take-over, manage and deal with the properties/assets of the concerned group of companies, for the purpose of ensuring restitution to defrauded claimants in proceedings emanating under the Securities and Exchange Board of India Act, 1992. 53. Learned counsel has further placed reliance on a similar course adopted by the Calcutta High Court in Rose Valley Real Estates & Constructions Ltd. & An....
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...."What have been stated above, are merely broad guidelines for the purpose of carrying out the exercise of disposal of the assets of the petitioner situated in West Bengal. The detailed procedure and modalities, I repeat, will be worked out by the Committee. In case the Committee faces any difficulty, it shall be at liberty to approach this Court for appropriate orders. "The Committee is directed to file an interim report before this Court after three months of the communication of this order to the members of the Committee." 54. It has been submitted that various High Courts have, over the course of several proceedings, continued to exercise and develop this jurisdiction, including by permitting an appointed committee to take-over and disburse monies accruing from properties attached by ED by authorising the auction of such properties. It is further submitted that adoption of such processes has resulted in restitution of attached assets to the claimants, notwithstanding the pendency of the underlying proceedings under the PMLA. 55. Accordingly, it has been ED's submission that a similar committee may be constituted in the present matter, with appropriate aut....
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....s conferred on the poor and the disadvantaged which are the creation of statute and they need to be enforced as urgently and vigorously as fundamental rights." (emphasis supplied) 57. Drawing upon the principle laid down by the Supreme Court in Bandhua Mukti Morcha, learned counsel for ED has submitted that Rule 3A of the PML Rules does not circumscribe or oust the jurisdiction of this court under Article 226 of the Constitution. It has been argued that Rule 3A, by its own terms, governs applications for restoration filed only before the Special Court constituted under the PMLA, and is confined to that forum alone. It contains no language, express or implied, excluding or curtailing the independent constitutional powers of this court to grant analogous relief in exercise of its writ jurisdiction. It has been submitted that a delegated rule framed under a statute cannot restrict the plenary constitutional powers of this court under Article 226, which powers exist outside of, and above, the statutory scheme of the PMLA. It is therefore the submission that this court is not denuded of the power to appoint a committee and to empower it to take possession of and dispose-of t....
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....applicable to all homebuyers. Furthermore, it has been argued that, in the proceedings before the PMLA Court, the IRP very curiously suo-motu furnished an undertaking, assuring the restitution of the assets siphoned-off from 3C Shelters, culminating in the passing of order dated 27.11.2025 by that court. It has been submitted that, by way of their writ petition, the GWC is now seeking execution or enforcement of orders passed by the Supreme Court and the PMLA Court, as it were, by way of writ proceedings. 59.5. It has been argued that, in a collusive attempt to obtain orders behind the back of genuine homebuyers and in order to make the remedies of homebuyers infructuous, GWC and the IRP have misleadingly obtained from this court order dated 03.01.2026, in a surreptitious and hurried fashion during court vacations on a Saturday, based on gross misrepresentation. It has been pointed-out that an order dated 21.01.2026 was also obtained from this court without genuine homebuyers being heard in the matter. 59.6. In these circumstances, it has been submitted that it is necessary to appoint a monitoring committee so as to give expeditious and tangible relief to genuine ....
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....ention of the court has been drawn to the provisions of section 8 of PMLA, which section inter-alia provides that a claimant who establishes that he has a legitimate interest in an attached property, who may have suffered a quantifiable loss as a result of money laundering; who has acted in good faith; has suffered loss despite having taken all reasonable precautions; and is not himself involved in the offence of money laundering, may seek restitution of the attached property or of the value of the attached property. 59.13. It has been argued that only the original 3C Shelters homebuyers, who have together paid about Rs. 873.83 crore to 3C Shelters, can claim to satisfy the said conditions. It has been contended that 3C Shelters, namely the company which was the vehicle for siphoning off the homebuyers' funds itself, can never be said to satisfy any of those conditions. As a consequence, the IRP of 3C Shelters also cannot have any role before the monitoring committee. 59.14. It has further been argued that the statutory procedure prescribed under Rule 3A(2) of the PML Rules contemplates action only by the Central Government for auctioning attached properties and f....
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....tigation is still underway and ED has only attached assets worth about Rs 509.47 crore out of the identified amount of Rs 873.83 crore, which is stated to have been collected from 3C Shelters homebuyers, learned counsel for GWA have submitted that it would be premature and prejudicial to homebuyers to commence restitution of assets at this stage, and the better course of action would be to deposit the money generated from the sale of the attached assets in an escrow account. 59.21. Learned counsel have also cited other similar cases relating to Amrapali Builders [Bikram Chatterji vs. Union of India, (2019) 19 SCC 161] and Unitech Ltd., [Bhupinder Singh vs. Unitech Ltd., Civil Appeal No. 10856/2916 (multiple orders)] to submit that in those cases the Supreme Court has said that homebuyers must be provided homes and their right cannot be restricted to receiving compensation alone. 59.22. Arising from the aforesaid submissions learned counsel for GWA have assured their full cooperation to the proposed monitoring committee. V. SUBMISSIONS ON BEHALF OF GREENOPOLIS WELFARE CONFEDERATION 60. Mr. Ramji Srinivasan, learned senior counsel and Mr. Tanmaya Mehta, learne....
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....s that there is neither a standard nor a machinery by which the PMLA Court could be converted into a civil court or to an insolvency court, for adjudicating the performance of contracts. 60.5. It has accordingly been contended that GWA's claim that proceeds of the liquidated assets should be applied for construction of flats is wholly outside the remit of the PMLA Court. It has been submitted that 3C Shelters does not have any asset, nor any land parcel where flats can be constructed; and what the GWA is seeking is annulment of the findings of the NCLT, usurping the jurisdiction of the CoC and the NCLT, to decide the course of resolution of the corporate debtor and the enforcement of obligations, all of which are executory and in futuro. It has been submitted that the second proviso to section 8(8) of the PMLA is concerned only with restoration i.e., with returning to the financial claimants the monies of which they were cheated. 60.6. It has also been submitted that this court is not a creature of the PMLA; and Rule 3A of the PML Rules cannot bind a constitutional court when exercising its plenary jurisdiction under Article 226 of the Constitution. It is GWC's ar....
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....gument on behalf of GWC has been that involvement of immovable property is not by itself a ground for a stay in every case, and for the same reason, Rule 3A of the PML Rules permits attached property to be restored, subject however to requiring a claimant to furnish a bond, the very purpose of which is to secure the owner against the liquidation, if the liquidation is later found to have been wrongful. It has further been submitted that whether money is adequate recompense for an immovable property wrongfully liquidated, is a question the legislature has itself answered, as a matter of policy in section 8(8) of the PMLA read with PML Rules. 60.10. Without prejudice to the aforesaid contentions however, and on a suggestion from this court, lastly it has been submitted that GWC has placed on record its written consent that if this court appoints a committee headed by a retired Judge of Supreme Court, in place of the IRP to liquidate the assets and restore the monies to the cheated financial claimants, such course would be acceptable to GWC. 60.11. While concluding their submissions, GWC has placed on record a copy of an e-mail communication signed by their Secretary....
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.... creditors including banks and homebuyers. It has been submitted that the said notification records that strict enforcement under the PMLA and value maximisation under the IBC are not conflicting objectives, and that a standard undertaking to be filed by Insolvency Professionals before the PMLA Court had been finalised and circulated by the IBBI for that very purpose. It has accordingly been submitted that the course adopted by the IRP is one that is expressly contemplated and facilitated by ED's own notification. 61.2. It has submitted that the IRP's conduct throughout has been guided by, and remains consistent with, the undertaking dated 17.11.2025 furnished by him to the PMLA Court, which was taken on record by the Supreme Court vide its order dated 20.11.2025 and which also forms the basis of order dated 27.11.2025 passed by the PMLA Court. It has been submitted that the IRP continues to stand by the said undertaking in its entirety, and has at every stage, sought to give effect to it. 61.3. It has further been argued that the allegations of bias levelled against the IRP by GWA and by the intervenors in the present proceedings are baseless and are categoricall....
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....fore verification of genuine claimants has already been undertaken by the IRP pursuant to order dated 26.05.2023 passed by the NCLT and order dated 19.07.2023 passed by the NCLAT, and that Status Report-1 prepared in that behalf forms part of the Relied Upon Documents annexed by ED to its prosecution complaint. It has been submitted that, while the IRP is not averse to any further verification exercise, but any fresh verification would, in substance, be an empty formality which would only delay the restitution process to the prejudice of the very homebuyers it is intended to protect. 61.8. It has been submitted that, on the strength of the assets identified through the IRP's investigative work, ED has proceeded to attach properties by way of its PAOs dated 28/29.03.2025 and 08.07.2025, and that the remit of the monitoring committee may be so fixed as to enable the authority to take control and possession of the assets so enlisted, as also of other assets under investigation and attachment as directed by the PMLA Court vide order dated 27.11.2025. It has been submitted that the remit of the monitoring committee may also extend to the appointment of Government-approved value....
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....uld be dealt with strictly in accordance with the provisions of section 8(8) of the PMLA and Rule 3A(2) of the PML Rules under the supervision of the monitoring committee. VII. SUBMISSIONS ON BEHALF OF MAMTA JAIN 62. Mr. Kanu Agrawal, learned counsel appearing on behalf of the intervenor, Mamta Jain, whose application for impleadment/intervention stands allowed by the Supreme Court vide order dated 10.04.2026, has, at the outset submitted that once parties have invoked the provisions of the PMLA and adopted the forum of the PMLA Court for seeking restitution, they must proceed under that statute and ought not to be permitted to resort to the procedures available under the IBC. It has been submitted that the IRP's role is restricted to proceedings under the IBC, and therefore, regardless of the fact that the IRP has purported to file an undertaking based on the IBBI circular, neither the circular nor the undertaking can override the statutory mechanism prescribed for restitution under PMLA. It has been submitted that the writ petition filed by GWC, insofar as it seeks to enforce what is, in substance, the undertaking furnished by the IRP, is not maintainable. 63. In this re....
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....he operative part of the impugned order are the PML Rules and not rules framed under the IBC. 66. On the question of the competing non-obstante clauses, learned counsel has submitted that section 238 of the IBC and section 71 of the PMLA each contain a non-obstante clause but the existence of such clauses does not obviate the requirement of harmoniously construing the two enactments and ascertaining whether there is, in fact, any irreconcilable inconsistency between them. It has been argued that if two enactments operate in different fields and are directed towards different purposes, each ought to be permitted to operate within its own field. Reliance has been placed on the "dominant purpose" test, as enunciated by the Supreme Court in State Bank of India vs. Union of India (2026) 5 SCC 693, paras 84 to 91. It has been submitted that the IBC cannot be read in a manner that makes inroads into the sovereign function of the State under the PMLA. 67. It has further been submitted that the present proceedings concern restoration under the PMLA and not resolution under the IBC and that the Special Court constituted under the PMLA cannot exercise powers under the IBC, just as the N....
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.... has been submitted that recognising Orris as a financial creditor has the consequence of conferring upon Orris a dominant position in the CoC, with corresponding influence over the IRP/RP and on all decisions taken under the IBC. Learned counsel has submitted that, if restitution were to proceed through the IBC mechanism, the process would effectively come under the control of Orris, notwithstanding the fact that Orris is one of the principal accused in the PMLA proceedings. 72. Insofar as the setting-up of a monitoring committee is concerned, Mr. Agarwal has submitted that the applicant does not oppose the setting up of such committee for the purposes envisaged nor does the applicant object to the attached properties being valued and disposed-of provided the proceeds are utilised for construction of flats, and not for being disbursed to the claimants in money. 73. Mr. Agrawal has submitted that the IRP ought not to have any role in the proceedings before the monitoring committee. It has been submitted that restoration of the attached properties ought to proceed strictly in accordance with section 8(8) of the PMLA and the PML Rules. 74. Learned counsel has further submitt....
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....jects Pvt. Ltd. ('Lavender') has filed two applications in the present proceedings, being Crl. M.A. No. 4233/2026, seeking impleadment; and Crl. M.A. No. 4234/2026, seeking recall of the orders dated 03.01.2026 and 21.01.2026 passed by this court. Notice on the impleadment application was issued by this court vide order dated 07.02.2026, and considering the averments in the application and the nature of the prayer made, it is considered appropriate to hear them on the merits of the present matter. 80. It must be recorded that Lavender has also moved CRL.M.C. No. 3359/2026 before a Co-ordinate Bench of this court challenging an order dated 24.04.2026 passed by the PMLA Court dismissing their application seeking intervention in the PMLA Court proceedings and for recall/review/modification of order dated 27.11.2025, i.e., the impugned order, which Bench has kept the said petition pending, awaiting the outcome of the present proceedings. 81. Mr. Vikas Pahwa and Mr. Anurag Ahluwalia, learned senior counsel appearing on behalf of Lavender have made the following essential submissions: 81.1. It has been submitted that Lavender is an independent and exclusive owner of proper....
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..... It has been submitted that, since Lavender acquired the Nehru Place Property in the year 2010, prior even to the execution of the development agreement and the launch of the project, the acquisition of the said property could not conceivably have been on account of any intent to defeat the law. Reliance in this behalf has been placed on the decision of this court in Deputy Director, ED vs. Axis Bank & Ors. (2019) SCC Online Del 7854, wherein it has been held that where a third party has acquired an interest in the property at a time anterior to the commission of the criminal activity, such acquisition cannot be on account of any intent to defeat the law, and that it is only where the tainted property is not traceable that the deemed tainted property, being the second and third kinds of property under section 2(1)(u), may be attached. 81.5. It has been submitted that, in the present case, the tainted property held by Orris was available and traceable, the prosecution complaint itself having recorded that Orris received an aggregate sum of Rs. 586.44 crore from 3C Shelters, in addition to receiving Rs. 390 crore from homebuyers; and that the bona fide course of action for ....
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....l of the corporate debtor. Reference has been made to the Supreme Court decisions in Embassy Property Developments Pvt. Ltd. vs. State of Karnataka & Ors. (2020) 13 SCC 308 (para 40) and Victory Iron Works Ltd. vs. Jitendra Lohia & Anr. 7 SCC 227 (paras 23 and 42), wherein it has been held that only assets owned by the corporate debtor fall within the purview of section 18 of the IBC. 81.8. It has been argued that the undertaking furnished by the IRP could not enlarge the asset pool of the corporate debtor beyond the assets recognised under the IBC; and that an earlier attempt made by the IRP to take control of and liquidate the Nehru Place Property was thwarted and rejected by a learned Single Judge of this court vide judgment dated 20.07.2026 in W.P.(C) No. 174/2024. 81.9. It has also been submitted that ED's stand taken before this court in support of restitution is contradictory to their stand as recorded in order dated 27.11.2025 by the PMLA Court, since before the PMLA Court ED had objected to the restoration application, submitting that it was premature and not maintainable since even charges had not been framed in the case as required in section 8(8) of th....
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....that, while Lavender does not oppose the constitution of such committee, the remit of the committee must, as a first step, be confined to verification of genuine homebuyers in terms of Rule 2(b) of the PML Rules, which defines 'claimant' as a person who has suffered a quantifiable loss; and that statutory restoration in terms of section 8(8) of the PMLA read with Rule 3A of the PML Rules must be conducted subsequently and by the PMLA Court alone. It has accordingly been submitted that the monitoring committee cannot be vested with the statutory power of adjudication, restitution, restoration, sale, transfer or distribution of attached properties, which power remains within the exclusive statutory domain of the PMLA Court and is exercisable only in accordance with section 8(8) and Rule 3A; and that the parties be relegated to the statutory mechanism prescribed under the PMLA, with no coercive or irreversible steps being permitted in respect of Lavender's property. 81.15. Learned senior counsel have also submitted that Lavender has no objection to the above exercise being undertaken, though it is Lavender's case that the verification exercise has no bearing on Lavender's sta....
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....the matter, this court has heard the said two parties as intervenors in the matter. 83. For completeness, it may be mentioned that Lotus Valley has also moved CRL. REV. P. No. 307/2026 challenging order dated 27.11.2025, which petition is pending before a Co-ordinate Bench of this court, which Bench has kept the said petition pending, awaiting the outcome of the present proceedings. 84. The principal contentions raised by Mr. Amit Chadha, learned senior counsel appearing on behalf of Lotus Valley and White Lotus are summarized hereinbelow: 84.1. It has been submitted that the vide PAO No. 12/2025 dated 28/29.03.2025, ED has arbitrarily and incorrectly attached the immovable properties belonging to the applicants viz., a plot of land ad-measuring 13.75 acres at Gajjar, Garhshankar, Punjab (owned by Lotus Valley) and a plot of land ad-measuring 14 acres at Mehdood, Garhshankar, Punjab (owned by White Lotus). 84.2. It has been argued that the investigation carried-out by ED has been inherently biased and that ED has turned a Nelson's eye to the actual proceeds of crime involved in the case on the premise that they are not traceable, and has instead attached ass....
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....ebut the argument that the applicants are a 'front' for the accused persons, learned senior counsel has argued that the majority shareholder/stakeholder in both Lotus Valley and White Lotus, has in fact himself been a victim at the hands of the promoters of 3C Shelters, who have duped him and have not cleared his dues, including payments towards commission, supervision charges, and out-of-pocket expenses incurred by him in furtherance of the oral understanding/arrangement with the promoters. It has been argued that as a result of the fraud perpetrated by the promoters, the majority shareholder/stakeholder has initiated multiple civil and criminal proceedings against the promoters. 84.8. It has been submitted that by way of prayer (c) in W.P. (Crl.) No. 2/2026 they have sought implementation of order dated 27.11.2025 passed by the PMLA Court; however the said order has been passed without hearing the applicants and thereby violating the principles of natural justice, as well as in contravention of Rule 3A(4) of the PML Rules. It has further been submitted that the said order is also in violation of Rule 3A(1) of the PML Rules since it was passed at a stage prior to the fram....
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.... proceedings are some 1650 homebuyers, who have paid around Rs. 776.60 crore to 3C Shelters and Rs. 383.06 crore to Orris, and are seeking expeditious and tangible redressal of their grievances. They either want that the units they have booked in the project be allotted to them along with delay penalty and/or are asking for refund of the monies paid along with interest. 89. In this backdrop, the issues that need to be addressed by the present judgment are three: 89.1. One, the validity and correctness of impugned order dated 27.11.2025 passed by the PMLA Court; 89.2. Two, the matter of verifying as to who are the genuine homebuyers in the project, and as to who would be entitled to claim units and/or compensation, regardless of whether they paid money to 3C Shelters or Orris; and 89.3. Three, the matter of collection and collation of the monies available under the PMLA regime, by liquidation of the assets attached by ED. A very important question that must be addressed is as to what would happen if the properties that are presently attached are subsequently released from attachment by an appropriate court or authority under the scheme of the PMLA. 9....
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....manner as may be prescribed. * * * * * 3A. Manner of restoration of property during trial. (1) The Special Court, after framing of the charge under section 4 of the Act, on the basis of an application moved for restoration of a property attached under sub-section (1) of section 5, or, seized or frozen under section 17 or section 18 of the Act prior to confiscation, if it thinks fit, may, for the purposes of the second proviso to sub-section (8) of section 8 of the Act, cause to be published a notice in two daily newspapers, one in English language and one in vernacular language, having sufficient circulation in the locality where such property is situated calling upon the claimants, who claim to have a legitimate interest in such property or part thereof, to submit and establish their claims, if any, for obtaining restoration of such property or part thereof. (2) When the property referred to in sub-rule (1) is insufficient to meet the loss suffered by the claimant as a result of the offence of money-laundering, the Special Court, as it thinks fit, may pass an order of restoration of property directing the Central Government, if necessary, to auc....
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....ibed in Rule 3A of the PML Rules, which rule was inserted by an amendment with effect from 11.01.2019. It is to be noted that since confiscation of property only happens upon conclusion of trial while the second proviso contemplates restoration of properties during the course of trial, Rule 3A does not refer to confiscated property but to attached property. Also, the manner for restoration of confiscated properties is already prescribed in Rule 3, and accordingly, the insertion of Rule 3A is intended to apply to restoration of properties that are 'attached' but not yet 'confiscated'. Rule 3A requires the Special Court to issue public notice, calling upon claimants who have a legitimate interest in the attached property, to submit and establish their claims. 92.5. However, to be sure, Rule 3A in its terms, empowers the Special Court to restore attached property "after framing of the charge". 92.6. Rule 3A further prescribes that where the attached property is insufficient to meet the loss suffered by a claimant, the Special Court may direct the Central Government to auction the attached property and disburse the proceeds on a pro rata basis in accordance with the s....
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....res,- xxx xxx xxx (b) "claimant" means a person who has acted in good faith and has suffered a quantifiable loss as a result of the offence of Money-laundering despite having taken all reasonable precautions, and is not involved in the offence of money-laundering"; (emphasis supplied) Rule 3A of 2016 Rules "3A. Manner of restoration of property during trial. - (1) The Special Court, after framing of the charge under section 4 of the Act, on the basis of an application moved for restoration of a property attached under sub-section (1) of section 5, or, seized or frozen under section 17 or section 18 of the Act prior to confiscation, if it thinks fit, may, for the purposes of the second proviso to sub-section (8) of section 8 of the Act, cause to be published a notice in two daily newspapers, one in English language and one in vernacular language, having sufficient circulation in the locality where such property is situated calling upon the claimants, who claim to have a legitimate interest in such property or part thereof, to submit and establish their claims, if any, for obtaining restoration of such property or part thereof." (....
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....nt, we conclude as follows: * Section 8(7) and Section 8(8) of the PMLA are stand-alone provisions. * Section 8(7) of the PMLA gets attracted only in case of a contingency and an application under the said provision can be decided by the Special Court only once the confirmation order attains finality. * The expression "material before it" occurring in Section 8(7) of the PMLA has a limited import to the extent of showing the contingency and the entitlement to possession as regards the Director or any third party. In case of a party who has suffered an adverse order under Section 8(3) of the PMLA, relief under Section 8(7) of the PMLA can be sought for, provided there is new material that was not placed before or considered by the Adjudicating Authority under Section 8(3) of the PMLA, or by the higher forums, if so challenged. * An application under the second proviso to Section 8(8) of the PMLA can only be filed subject to satisfying the essential conditions laid down by Rules 2(b) and 3A of the 2016 Rules". (bold alongwith underscoring in original; underscoring only supplied) 94. Having noticed the relevant provisions of the PMLA as well a....
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....sonnel at all immovable properties forming part of the Provisional Attachment Order dated 28.03.2025. to safeguard the same from alienation. encroachment, or dissipation; "c. Direct the Enforcement Directorate to take immediate possession and control of the attached properties and to publicly notify the attachment so as to prevent any unauthorised dealings therewith; "d. Further direct that the proceeds realised from the attached assets, upon completion of due legal process, be utilised towards restitution and compensation of the bonafide financial creditors of Three C Shelters Pvt. Ltd., in a transparent and equitable manner under supervision of this Hon'ble Court; and "e. Pass such other or further orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case and in the interest of justice." 99. In the first instance, an application under section 8(8) of the PMLA was not maintainable at the instance of GWC at all, since they were not a 'claimant' in relation to the properties attached by ED. Undisputedly, GWC is an association registered under the Haryana Registration & Regulation of Societies Act 201....
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....rtedly dated 17.11.2025 before the PMLA Court premised on the IBBI Circular extending certain assurances; and based on the undertaking so furnished by the IRP, the PMLA Court proceeded to allow GWC's application and passed orders directing the restoration of the attached properties to the IRP in lieu of the undertaking offered by the latter. 102. The IBBI Circular, based on which the IRP is stated to have given the undertaking, stipulates that ED must facilitate and support the resolution process under the IBC and that efforts should be to maximise the value for creditors. The circular further says that the objective behind it is to enable the IRP to restitute assets attached by ED to genuine claimants. Based on this premise, the IRP had offered to the PMLA Court inter-alia the following assurances: (i) an assurance against misuse of restituted assets; (ii) an assurance of periodic reporting and disclosure in the insolvency process; (iii) an assurance against restitution of assets to any accused person; (iv) full cooperation to ED during investigation; and (v) the IRP further said that his undertaking shall remain effective until ....
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....company, which (latter) are the assets attached by ED. Ergo, the pool of assets that is subject of the IBC proceedings is distinct from the pool of assets that is the subject matter of the PMLA proceedings. The PMLA Court has omitted to consider any of the aforesaid aspects before proceeding to release the attached properties to the IRP. 109. Besides, the PMLA Court also failed to notice that Rule 3A of the PML Rules, which governs restoration of attached properties by the PMLA Court, comes into play only after framing of charges, which stage had not been reached. 110. Furthermore, the PMLA Court also lost sight of the fact that its direction that the properties attached by the way of the provisional attachment order be "restored as per rules" could, at best only have referred to rules framed under PMLA. Therefore, the further direction that the IRP must abide by the undertaking submitted by him before the PMLA Court was, for lack of a better word, meaningless, since the IRP had no statutory role in the proceedings before the PMLA Court. 111. It is very important to understand the scope and purport of what had transpired before the Supreme Court, which led to the passing o....
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....tands in this case therefore, the properties attached by ED under the PMLA do not fall within the remit of the IRP. 114. To compound the errors committed, the PMLA Court also directed that the attached properties "may be disposed off by the liquidator for the purpose of restitution, in accordance with law". In so directing, the PMLA Court mixed-up the role of the IRP under the IBC with its own role under the PMLA. 115. Insofar as order dated 03.01.2026 passed by the learned Predecessor Bench in the present proceedings is concerned, the following paras of the order are required to be noticed: "11. In view of the foregoing circumstances, the present Writ Petition has been filed by the Petitioner. At this stage, the Petitioner seeks enforcement of the directions issued by the Hon'ble Supreme Court vide Order dated 20th November, 2025, as well as the operative directions contained in the Order passed by the Ld. Special Judge dated 27th November, 2025, along with the undertaking furnished by the IRP. The Petitioner prays that the parties concerned be bound to strictly comply with the aforesaid judicial directions and undertaking. * * * * * "17. Upon cons....
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....order should also include the NCLT, which, according to the GWC, was passing orders contrary to the direction contained in order dated 03.01.2026. 120. Disposing-of that clarification application, the Predecessor Bench observed as follows: "21. The order dated 03rd January, 2026, is clarified to the extent that any party, related to "Greenopolis Project" would be bound by the order dated 20th November, 2026 [sic, 2025], of Hon'ble Supreme Court and the order dated 27th November, 2025, of ld. Special Judge till the next date of hearing. As regards the submissions of the learned Counsel for the Applicant/Petitioner seeking an interpretation of the expression 'third parties' to include statutory authorities and other adjudicatory fora, including, but not limited to the NCLT, it is evident that, as a matter of settled law, all judicial and quasi-judicial bodies subordinate to the Hon'ble Supreme Court are bound by its orders and cannot, nor ought to, act in derogation thereof in any manner." 121. As to whether the phrase "third parties" used in order dated 03.01.2026 also included the NCLT or any other quasi-judicial or judicial forums, the Predecessor Bench observed as ....
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....nd otherwise deal with properties, including properties attached by ED under the PMLA, for purposes of restitution to defrauded investors/depositors. It is noticed that in the said case the Calcutta High Court had exercised such jurisdiction independently of, and notwithstanding, the machinery contemplated under Rule 3A of the PML Rules which, according to ED, operate only on the Special Court. 129. Though it has been submitted by ED that the constraints that apply to the Special Court under Rule 3A of the PML Rules do not apply to this court while exercising its extraordinary constitutional jurisdiction under Article 226 of the Constitution, considering the course that this court proposes to adopt in the present case, it is not necessary to express any opinion on this submission made by ED at this stage. Given the manifold complexities arising from the sheer numbers of claimants and competing claims over the attached assets, it is considered appropriate to defer any detailed directions concerning restitution of the attached properties to a subsequent stage, when a comprehensive picture emerges on record. 130. However, based on the detailed discussions set-out above, deriving....
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....led, at his discretion, to engage up to 08 Advocates to assist as Law Clerks for performing such functions as the Monitoring Committee may assign. The Chairperson shall be entitled to change any of the Advocates engaged, if he so desires, at any stage in the course of functioning of the Monitoring Committee; 134.5. Furthermore, the Directorate of Enforcement shall assign 02 Officers not below the rank of Assistant Director, one of them being the Investigating Officer of the matter, to assist the Monitoring Committee in performing its functions; 134.6. The Directorate of Enforcement shall also provide all required infrastructural, secretarial, and logistical support and facilities as the Chairperson may require for the functioning of the Monitoring Committee, including by providing requisite office accommodation; staff for secretarial work and maintenance of records and other necessary assistance; as well as assistance for setting-up and operation of a website, if so desired by the Monitoring Committee; and 134.7. The Directorate of Enforcement shall place before the Monitoring Committee all records, data and details concerning homebuyers available with it....
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....reements, challan/receipt of payment, and/or relevant bank account statements or any other document(s) which they seek to rely upon; 135.4. Every claimant/homebuyer shall file an affidavit, duly attested by a Notary Public, deposing that the claimant bears no relationship, affiliation, or nexus with the promoters of 3C Shelters, Orris, or any of their affiliate, associate or group entities. Every claimant/homebuyer shall also disclose whether the claimant is a property dealer or broker or otherwise engaged in the real estate business. The Monitoring Committee shall be empowered to call for further particulars, insist upon production of original documents, and conduct such summary scrutiny as it deems fit to satisfy itself in relation to the statements made on affidavit and assess the bona fides of each claimant/homebuyer. Any affidavit filed before the Monitoring Committee and any other information placed before it shall be treated as an affidavit and information filed before this court, with all its legal effect and consequences; 135.5. The Monitoring Committee shall be at liberty to requisition information, assistance, and records from any public authority or re....