Alok Singh
On 30th June 2025, the Supreme Court of India allowed the M3M Group to substitute property previously seized under anti-money laundering provisions with alternate assets, enabling the continued development of a major commercial complex.
The matter was before the partial court working bench comprising Justices PS Narasimha and R Mahadevan. The bench reviewed a petition by M3M India, challenging the Punjab and Haryana High Court’s stance that no legal mechanism under the Prevention of Money Laundering Act, 2002 (PMLA) allows for substitution of provisionally attached property prior to confirmation by the Adjudicating Authority. The developers had requested to replace the attached land with alternative unencumbered commercial units located within the M3M Broadway project in Gurugram.
Initially, the Enforcement Directorate (ED) opposed the plea in the lower court, but later informed the Supreme Court that it was amenable to the substitution, provided that certain safeguards were observed. The SC accept this position and approves the substitution arrangement, but the developers must strictly adhere to nine detailed conditions laid down by ED. The safeguards include the furnishing of valid documentation to establish uncontested ownership of the replacement assets, submission of a certificate confirming the absence of encumbrances, and a formal undertaking prohibiting the sale or transfer of the substituted property. In addition, original title documents must be deposited, an indemnity bond furnished, and comprehensive disclosures made regarding the source of funds used to acquire the new assets.
Notably, the Court directed that any rights or transactions involving third-party investors or buyers in other parts of the M3M Broadway project must not be disrupted due to the present proceedings. The developer has agreed to surrender the substituted property if future proceedings determine it is tainted under the PMLA.
The valuation of the proposed commercial units was initially set at ₹275 crore, with an additional ₹42 crore worth of units later included. This valuation was independently verified by a certified valuer, and the ED’s approval was granted after a comprehensive financial review.
Notably, the Court clarified that the present decision was based on the facts and circumstances of the case and shall not be treated as a precedent. The Court further emphasised that this substitution neither validates the original nor the proposed assets, nor does it reflect any opinion on the underlying merits of the ED’s investigation or prosecution.
M3M was represented by Senior Advocate Dr. Abhishek Manu Singhvi, and ED was represented by Zoheb Hossain.
Case Title: The Joint Director & Anr. v. Eastern Institute for Integrated Learning in Management University & Anr.
Case Number: SLP(Crl.) No. 265/2024 (SLP(C) No. 4027/2025 is related to the substitution issue involving M3M India.)
Judge: Justice P.S. Narasimha and Justice R. Mahadevan
Click here to access the order.
Instagram: Click here
LinkedIn: Click here
For Collaboration and Business: info.desikaanoon@gmail.com
