The Bombay High Court has directed the Enforcement Directorate (ED) to deposit half of the interest earned on a ₹46 crore amount, lying in deposit in connection with a property attachment case, into the Armed Forces Welfare Fund. The court underlined that supporting the families of soldiers who have laid down their lives for the nation is a matter of pressing national importance and that public funds under judicial control should serve a broader social purpose.
A division bench of Justice A.S. Gadkari and Justice R.R. Bhosale passed the order while dismissing an appeal filed by the ED. The appeal challenged a 2019 order of the appellate tribunal that had set aside the attachment of properties worth ₹141.50 crore belonging to Shapoorji Pallonji and Company Limited (SPCL).
The bench observed that once the attachment order had been quashed and the funds had remained under judicial custody, the interest accrued on such deposits could not be claimed entirely by the agency. The court held that directing a portion of the interest towards a welfare cause aligned with constitutional values and public interest.
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Court rejects ED’s revenue claim
During the hearing, the ED argued that the interest earned on the deposited amount should be treated as government revenue. The court, however, rejected the submission, noting that the attachment was ultimately found to be unsustainable. In such circumstances, the agency could not assert an absolute right over the interest generated during the pendency of proceedings.
The bench clarified that the direction to contribute to the Armed Forces Welfare Fund was issued in light of the specific facts of the case and should not be treated as a binding precedent in all attachment-related matters.
The court also remarked that judicial discretion must factor in the larger societal context, especially when funds remain idle for years during prolonged litigation.
ED attaches ₹35 crore assets in Sumaya Group case
In a separate development, the Enforcement Directorate has provisionally attached movable and immovable assets worth ₹35.22 crore in a money laundering case involving the Sumaya Group and related entities. The attachment has been made under the provisions of the Prevention of Money Laundering Act (PMLA), the agency said on Wednesday.
According to the ED, the attached assets include bank balances, demat account holdings, mutual fund investments and other financial instruments. Certain immovable properties allegedly acquired using proceeds of crime have also been brought under attachment.
Probe linked to ₹137 crore alleged fraud
The investigation is being conducted by the ED’s Mumbai zonal office on the basis of an FIR registered at Worli police station. The FIR names Sumaya Industries Limited, its promoters and other associated individuals, accusing them of criminal conspiracy and cheating.
Investigators allege that the accused floated an investment scheme under the banner of “Need to Feed,” promising abnormally high returns to investors. Funds to the tune of nearly ₹137 crore were allegedly collected and subsequently diverted for purposes other than those promised, including personal and unrelated business expenditures.
Layered financial transactions under scanner
The ED said it is carrying out a detailed examination of the financial trail, including scrutiny of multiple bank accounts, investment vehicles and interlinked companies. Officials indicated that the money was routed through layered transactions to obscure its origin and end use.
The agency added that further attachments cannot be ruled out as the probe progresses and more assets linked to the alleged proceeds of crime are identified.
Judicial oversight and enforcement action
The two developments underscore parallel trends in India’s economic offence landscape—on one hand, courts exercising close scrutiny over attachment and use of seized funds, and on the other, enforcement agencies stepping up action against complex financial frauds.
Legal experts said the High Court’s ruling reinforces the principle that enforcement powers must operate within judicial safeguards, while the Sumaya Group case reflects the ED’s continued focus on investor-linked frauds involving alleged misuse of public money.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.