New Delhi, Oct 22 (UNI) In a significant legal setback to the Sahara Group, the Lucknow Bench of the Allahabad High Court today dismissed a petition filed by four of its cooperative societies seeking to quash a money laundering investigation by the Enforcement Directorate (ED).
The court ruled that the probe under the Prevention of Money Laundering Act (PMLA) is valid and can proceed.
The petition was filed by Humara India Credit Cooperative Society Ltd., Sahara Credit Cooperative Society Ltd., Stars Multipurpose Cooperative Society Ltd., and Saharayan Universal Multipurpose Society Ltd. They had challenged the ED’s Enforcement Case Information Report (ECIR) and the search and seizure operations conducted at their offices in July 2024.
Justice Subhash Vidyarthi, in his judgment, overruled the ED’s preliminary objection that the court lacked territorial jurisdiction. He held that since the societies’ head office is in Lucknow, crucial records were seized there, and a substantial part of the cause of action arose in the city, the Lucknow bench had the authority to hear the case.
The court rejected the core argument of the petitioners that the PMLA case must end because a specific criminal case (FIR) cited in the ECIR had been closed. The judgment stated that the ED’s investigation is not dependent on a single FIR but is built upon a “bundle of facts” from numerous other FIRs registered across India for scheduled offences like cheating. With over 300 such FIRs identified, the PMLA investigation has a valid foundation.
Other key arguments by the Sahara societies were also turned down.
The court found that the alleged acts could still constitute cheating under the Indian Penal Code, notwithstanding the Banning of Unregulated Deposits Scheme (BUDS) Act. It also clarified that an ongoing probe by the Serious Fraud Investigation Office (SFIO) into other Sahara companies does not legally bar the ED from investigating these specific societies.
The dismissal of the petition clears the way for the ED to continue its investigation and proceed with the prosecution complaint it has already filed before a special court in Kolkata
