Enforcement Directorate Ensures Release of Attached Properties to Legitimate Claimant in Cox & Kings Money Laundering Case.

Headnote:

The Enforcement Directorate (ED), Mumbai Zonal Office, has facilitated the restoration of attached properties valued at ₹520.80 crore to the legitimate claimant—Macrotech Developers Ltd., the Successful Resolution Applicant (SRA) in the insolvency proceedings of V Hotels Ltd. This action follows directions of the Hon’ble Supreme Court under Section 8(8) of the PMLA, 2002. The Cox & Kings Ltd. (CKL) money laundering case involves identified Proceeds of Crime of approximately ₹4,100 crore. The Supreme Court also recorded appreciation for the ED officers for their efforts in securing justice through the restoration of assets.

Background:

• The total Proceeds of Crime in the Cox & Kings Ltd. fraud amount to approximately ₹4,100 crore.

• Investigation revealed that ₹1,066 crore of the Proceeds of Crime had been siphoned to M/s V Hotels Ltd.

• Out of this, ₹520.80 crore remained outstanding and was attached under the Prevention of Money Laundering Act (PMLA), 2002, with the attachment later confirmed by the Adjudicating Authority.

• M/s V Hotels Ltd. entered Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), where Macrotech Developers Ltd. was approved as the Successful Resolution Applicant (SRA).

• Pursuant to the Hon’ble Supreme Court’s order (arising from a Special Leave Petition filed by ED), the SRA deposited ₹520.80 crore in an interest-bearing fixed deposit with SBI, representing the substituted value of the attached properties.

Court’s Observations:

• In proceedings before the Hon’ble Supreme Court, ED, relying on Section 8(8) of PMLA and Section 32A of IBC, expressed its consent for restitution of the deposited amount to the SRA.

• ED specified that restitution would be subject to verification that the SRA had no connection with the former management or beneficiaries of the Proceeds of Crime.

• The Hon’ble Supreme Court ordered restoration of ₹520.80 crore (with interest) to the SRA under Section 8(8) of PMLA.

• The Court expressly recorded appreciation for ED officers, stating:

“We place on record our appreciation for the earnest efforts made by the officers of the Directorate of Enforcement in restoring the attached properties to secure the interests of justice.”

Legal Provisions Discussed:

• Section 8(8), Prevention of Money Laundering Act, 2002 – Restoration of confiscated/attached property to rightful claimants.

• Section 32A, Insolvency and Bankruptcy Code, 2016 – Protection of successful resolution applicants from past liabilities of corporate debtors.

• Insolvency and Bankruptcy Code (IBC) – CIRP framework leading to approval of Macrotech Developers Ltd. as SRA.

Status

The Directorate reiterates its commitment to confiscating Proceeds of Crime, prosecuting money laundering offences, and ensuring restitution of assets to rightful stakeholders in accordance with the PMLA.