ED on Environmental Crime & Money Laundering: Prosecution Complaint Filed Against Industrial Unit for Groundwater Pollution.

Headnote:

The Directorate of Enforcement (ED), Jalandhar Zonal Office, filed a Prosecution Complaint under the Prevention of Money Laundering Act, 2002 against M/s Malbros International Pvt. Ltd., its director Gautam Malhotra, and other related persons for generating proceeds of crime through deliberate and systematic environmental pollution. The ED alleged that the accused entity unlawfully discharged untreated industrial effluents into deep aquifers through reverse boring, thereby causing severe groundwater contamination and generating proceeds of crime amounting to approximately ₹80 crore.

Background:

• The ED initiated investigation based on a criminal complaint filed by the Punjab Pollution Control Board against M/s Malbros International Pvt. Ltd. for violation of the Water (Prevention and Control of Pollution) Act, 1974.

• It was alleged that the industrial unit, situated at Village Mansoorwal, Tehsil Zira, District Ferozepur, was injecting untreated wastewater into deep aquifers through reverse boring and discharging effluents onto surrounding land, drains and a nearby sugar mill.

• The ED alleged that such activities were carried out deliberately and persistently as part of routine industrial operations, resulting in large-scale environmental damage.

• According to the investigation, the company ran its factory operations through unlawful means and generated proceeds of crime by avoiding lawful waste treatment costs, thereby unlawfully enriching itself.

ED’s Observations & Findings:

• The ED found that the accused industrial unit wilfully polluted groundwater and nearby water bodies through covert and illegal discharge of untreated effluents.

• Such pollution-related criminal activity was held to constitute a scheduled offence, giving rise to proceeds of crime under the PMLA.

• The proceeds of crime generated through the illegal operations were estimated at approximately ₹80 crore during the period under investigation.

• Searches conducted at six locations on 16.07.2024 led to the recovery and seizure of cash amounting to ₹78.15 lakh.

• Further, immovable properties worth ₹79.93 crore, comprising land, building, and plant & machinery of M/s Malbros International Pvt. Ltd., were provisionally attached vide Provisional Attachment Order dated 13.12.2025.

• A Prosecution Complaint was filed before the Special Court (PMLA), Jalandhar, on 15.12.2025 against the company and other accused persons.

Legal Provisions Discussed:

• Prevention of Money Laundering Act, 2002 – Prosecution and attachment of proceeds of crime.

• Water (Prevention and Control of Pollution) Act, 1974 – Prohibition of discharge of pollutants into water bodies.

• Concept of “Proceeds of Crime” arising from environmental offences under PMLA jurisprudence.