Archive · 5 Nov 2025
Profits from Bribe Money in Shares are Proceeds of Crime: Delhi HC
Imagine someone gets money illegally, like a bribe.
Then, they use that money to buy shares in a company.
The stock market goes up, and their shares become worth much more.
A court has now said that even the extra money they made from the shares is still considered 'tainted' or illegal money.
This is because it all started with the bribe.
The court also said that actions like this are part of money laundering.
They confirmed that authorities can take action against these profits, even if the money was invested in shares.
This decision overturned a previous ruling that had questioned the authority to seize these specific gains.
The Delhi High Court ruled that profits from bribe money invested in shares are considered proceeds of crime.
The court stated that the offense of money laundering includes all activities connected with illicit proceeds, even after investment.
The judgment allows for the attachment of the entire increased value of investments made with bribe money.
The ruling was made while allowing ED appeals against a single judge's order concerning the Fatehpur Coal Block allocation case.
The division bench set aside the single judge's order, stating it was inappropriate to interfere with the Provisional Attachment Order.
- Who
- The Delhi High Court (Division Bench) and the Enforcement Directorate (ED)
- What
- Ruled that profits earned from investing bribe money in shares constitute proceeds of crime, upholding the ED's power to attach such assets.
- When
- November 3 judgment, reported November 5
- Where
- Delhi High Court
- Why
- To clarify that money laundering offenses extend to profits from investments derived from illicit sources, and to allow ED appeals against a single judge's order that had questioned the Provisional Attachment Order (PAO).
Enforcement Directorate (ED)
Single Judge Order
Issuance of Provisional Attachment Order (PAO)
Enforcement Directorate (ED)
The ED correctly issued a PAO to attach properties valued at Rs 122.74 crore, considering undue financial gains from the sale of preferential shares as proceeds of crime.
Single Judge Order
The ED lacked the power and jurisdiction to issue the PAO because the issuance of preferential shares did not form part of the FIR, chargesheet, or ECIR.
Interference in PAO Issuance
Enforcement Directorate (ED)
The division bench held that a single judge ought not to have interfered with the issuance of the PAO, as it is a provisional measure pending adjudication and does not determine final rights.
Single Judge Order
The single judge interfered due to concerns about the ED's power and jurisdiction in issuing the PAO, and it was inappropriate to interfere with the PAO.
- Court
- Delhi High Court
- Date of Judgment
- November 3
- Case Related To
- Allocation of Fatehpur Coal Block to M/s Prakash Industries Limited (PIL)
- Amount Attached (Provisional)
- Rs 122.74 crore
- Key Legislation
- Prevention of Corruption Act, Prevention of Money Laundering Act (PMLA)
