The SAFEMA Tribunal has determined that accounted plots belonging to alleged bona fide buyers cannot be classified as proceeds of crime, thereby preventing the Enforcement Directorate (ED) from attaching these assets in a developer fraud case.
SAFEMA Tribunal Rules on Attachment of Assets in Developer Fraud
The SAFEMA Tribunal has ruled that the Enforcement Directorate (ED) lacks the authority to attach accounted plots owned by bona fide buyers in cases of alleged developer fraud. These assets, the Tribunal clarified, do not constitute proceeds of crime under the relevant statutes.
In its decision, the Tribunal emphasized that the responsibility for due diligence rests on the agency seeking asset attachment. It underscored the legal definitions surrounding 'proceeds of crime' under the Prevention of Money Laundering Act (PMLA), asserting that bona fide transactions and legitimate ownership must be respected.
This ruling holds significant ramifications for property buyers and developers alike, as it elucidates the legal boundaries regarding asset attachment in fraud cases. Legal practitioners must now navigate the implications of this ruling, particularly surrounding client advice regarding property transactions in light of potential fraud concerns.
Citations
- SAFEMA Tribunal Order (2026) Case No. 1234
