Supreme Court: In a Special Leave Petition filed by M3M Group challenging an order passed by the Sikkim High Court, the division bench of Pamidighantam Sri Narasimha and R. Mahadevan, JJ. permitted the substitution of attached land with an alternative property, thereby paving the way for the commencement of a flagship project at the site.
M3M Group had prayed for interim relief, stating that, without prejudice to their rights and contentions, and as had been offered to respondent 2 ‘under protest’, this Court was pleased to direct the respondents to substitute the provisionally attached property with any unencumbered marketable assets, in the interest of justice.
The property proposed for substitution comprises unsold commercial units within the project titled “M3M Broadway,” located in Village Fazilpur Jharsa, Gurugram, Haryana.
The Court noted that the Enforcement Directorate agreed to the substitution of the property, subject to certain conditions.
The Court allowed the substitution of the property. However, the substitution was made subject to the following conditions:
i. Submission of No Encumbrance Certificate:
M3M Group had been required to establish clear and marketable title, along with undisputed ownership of the assets proposed for substitution, supported by verifiable documentary evidence, to the satisfaction of the Court. The substituted assets had to be free from all encumbrances, including mortgages, liens, pledges, or any third-party claims or security interests. A certificate to this effect had been submitted by M3M Group.
ii. Undertaking Not to Alienate:
M3M Group had been required to provide a notarized undertaking that the substituted property would not be sold, transferred, or otherwise alienated during the pendency of the proceedings.
iii. Submission of Title Documents:
The original title documents of the substituted property had to be deposited with the ED or the Court, with a formal acknowledgment.
iv. Indemnity Bond:
M3M Group had been directed to furnish an indemnity bond to indemnify the ED/government in case of any loss or legal deficiency arising from the substitution.
v. Undertaking to Safeguard Third-Party Rights Created for Other Commercial Units of the Project:
Transactions involving third-party retail buyers/investors for other commercial units in the project (MЗM Broadway) had remained unaffected by the present enforcement proceedings. M3M Group had been prohibited from relying on the pendency of such proceedings to obstruct or delay legitimate transactions, registrations, or the progress of the project. This was to safeguard the interests of genuine purchasers and uphold the commercial viability of the overall project.
vi. Consent to Hand Over Possession of Alternate Assets in the Event of Confirmation of Attachment by the Ld. Adjudicating Authority:
In the event of the confirmation of attachment with respect to the alternate assets by the Ld. Adjudicating Authority, M3M Group had been required to hand over possession of the alternate assets to the ED.
vii. Disclosure of Source of Acquisition Funds:
M3M Group had been required to provide a complete and transparent disclosure of the source of funds used to acquire the substituted assets, with supporting financial records, to ensure that the substituted assets were untainted and not derived from proceeds of crime.
viii. Cooperation with Investigation:
M3M Group had continued to fully cooperate with the investigation by the ED or any other authority under the PMLA and had produced any documents or appeared for inquiry when required.
ix. No Prejudice to Ongoing Investigation or Trial:
The substitution of properties had been without prejudice to the rights of the Directorate of Enforcement and had not been construed as an acknowledgment of the legality of the source or legitimacy of the attached properties. It had not affected the merits of the ongoing investigation or trial.
The Court further clarified that this order was passed in the specific facts and circumstances of the case and should not be treated as a precedent.
[The Joint Director v. Eastern Institute for Integrated Learning in Management University, Petition(s) for Special Leave to Appeal (Crl.) No. 265/2024, decided on 30-06-2025]
Advocates who appeared in this case :
For Petitioner(s): Dr. Abhishek Manu Singhvi, Sr. Adv. Mr. Vikram Chaudhary, Sr. Adv. Mr. Atul Nanda, Sr. Adv. Mr. Rajat Joneja, Adv. Mr. Yash Verma, Adv. Mr. Avishkar Singhvi, Adv. Mr. Ashish Garg, Adv. Mr. Rishi Sehgal, Adv. Ms. Muskaan Khurana, Adv. Mr. Nikilesh Ramachandran, AOR Mr. Tushar Mehta, Solicitor General(N/P) Mr. Suryaprakash V. Raju, A.S.G.(N/P) Mr. Zoheb Hossain, Adv. Mr. Kanu Agrawal, Adv. Mr. Prasenjeet Mohapatra, Adv. Ms. Saumya Tandon, Adv. Mr. Mayank Pandey, Adv. Mr. Arvind Kumar Sharma, AOR Ms. Bhawna Gandhi, Adv. 1 Ms. Akshita Gupta, Adv.
For Respondent(s): Ms. Sonali Jain, AOR Mr. Arvind Kumar Sharma, AOR
