Supreme Court allows M3M's plea to substitute land of real estate company, attached under PMLA

New Delhi: In a significant order, the Supreme Court has allowed the substitution of land attached under the Prevention of Money Laundering Act (PMLA), granting major relief to real estate company, M3M Group.

A bench of Justices P S Narasimha and R Mahadevan, while hearing a plea filed by M3M, held that a property attached under the PMLA may be substituted by an alternate asset of equivalent or higher value.

The decision was seen as a decisive shift in enforcement jurisprudence, striking a balance between the State’s interest in securing alleged proceeds of crime and the fundamental right of legitimate enterprises to pursue economic activity.

M3M filed the application seeking to substitute the provisionally attached land with an alternate parcel of equal or greater value, to enable development activity to proceed, while maintaining complete compliance with the PMLA’s safeguards.

The property was attached by a provisional attachment order issued on July 18, 2024.

The court allowed the substitution after considering an affidavit filed by the ED.

The central agency verified that the proposed commercial units located in M3M Broadway, Gurugram, had a total fair market value of Rs 317 crore. This included Rs 275 crore worth of units initially proposed and another Rs 42 crore worth of additional units later offered by the real estate company.

The counsel submitted that the ED is agreeable to the substitution of the property, but requested that it be subject to certain conditions.

In its June 30 order, the bench said, "While we allow the substitution of the property as indicated in paragraphs 10(a), 10(b) and 10(c) in the additional affidavit, the same shall be subject to the conditions as specified in paragraphs 10(d)(i) to 10(d)(ix). It is also agreed by the learned counsel appearing for the parties that after this order, nothing really survives in the Special Leave Petition. The Special Leave Petition stands disposed of.”

The court also made it clear that the order passed in the facts and circumstances of the case and would not be treated as a precedent.