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Mumbai Special Court Rejects Police Plea to Release Rs 1.75 Crore in Torres Jewellers Scam, Citing Statutory PMLA Bar

By The Legal Alpha Web Desk · 27 October 2026 · 5 min read
Mumbai Special Court Rejects Police Plea to Release Rs 1.75 Crore in Torres Jewellers Scam, Citing Statutory PMLA Bar

A Special PMLA Court in Mumbai has turned down an application by the Mumbai Police’s Economic Offences Wing (EOW) seeking the release and restoration of Rs 1.75 crore attached by the Enforcement Directorate (ED). The funds are tied to the high-profile Torres Jewellers Ponzi scheme probe run through M/s Platinum Hern Pvt Ltd.

The state police wing had approached the anti-money laundering court to use the seized demand drafts to compensate duped investors. The company allegedly promised investors weekly returns of 6% under a bogus "Moissanite" stone investment scheme, collecting over Rs 13.48 crore before halting payouts in December 2024. Although the ED voiced "no objection" to restituting the money to victims, the special court held that the request was legally premature and could not bypass statutory procedures established under the anti-money laundering framework.

Legal Topic

  • Area of Law: Criminal Law / Anti-Money Laundering Law

  • Sub-topic: Asset Attachment, Restitution to Victims, and Inter-Agency Jurisdiction under PMLA

Core Legal Issue

The matter examined whether a Special Court under the Prevention of Money Laundering Act, 2002 can order the restoration of provisionally attached assets to a state police agency for investor restitution before the completion of trial, particularly when the attachment itself has not yet been confirmed by the Adjudicating Authority.

At its core, the question was whether consent by the Enforcement Directorate and the hardship faced by defrauded investors allow the court to bypass statutory conditions for property vesting and confiscation under the PMLA.

What Did the Court Decide?

The Special PMLA Court dismissed the EOW’s application, ruling that the plea was premature and legally unsustainable at this juncture:

  • The court observed that the demand drafts, provisionally attached by the ED in March 2025, have not yet been confirmed by the PMLA Adjudicating Authority.

  • The judge emphasized that restoration of attached property under the PMLA scheme is ordinarily permissible only following formal confiscation at the conclusion of a full trial.

  • The court highlighted that early restitution is allowed only under narrow statutory exceptions—such as when a trial cannot be conducted because the accused has died or has been formally declared a proclaimed offender.

  • Finding that charges have not been framed, no accused has been declared a proclaimed offender, and the trial is yet to begin, the court held that the statutory triggers for pre-trial restoration were absent.

  • The court clarified that until property formally vests with the Central Government post-adjudication and confiscation, the ED itself has no legal standing (locus) to consent to the transfer or restitution of attached assets to any other agency.

Key Legal Points

  • Attachment Is Not Vesting: A provisional attachment order under Section 5 is merely a protective freeze; property does not vest with the Central Government until statutory adjudication and final confiscation take place.

  • Strict Limits on Pre-Trial Restitution: The PMLA permits pre-trial property restoration only under explicit statutory conditions, such as the impossibility of trial due to an accused's death or proclamation as an absconder.

  • Agency Consent Cannot Override the Statute: The ED’s "no objection" carries no legal weight if the statutory prerequisites governing the transfer of attached property have not materialized.

  • Systemic Delay Is No Excuse: The court underscored that procedural or investigative delays cannot serve as a ground to bypass mandatory statutory requirements established by Parliament.

Relevant Law

  • Section 5, Prevention of Money Laundering Act, 2002 (PMLA): Governs the provisional attachment of proceeds of crime.

  • Section 8, PMLA: Pertains to adjudication by the Adjudicating Authority and the confirmation of attachment orders.

  • Section 8(6), 8(7), and 8(8), PMLA: Outlines procedures for release, confiscation, and restoration of confiscated or attached property to claimants with quantifiable financial loss.

  • Section 9, PMLA: Details the legal vesting of confiscated property in the Central Government.

Arguments of the Parties

The Economic Offences Wing (Applicant) The EOW contended that the seized funds—consisting of Rs 1.75 crore in demand drafts—represented investors' hard-earned money siphoned off in the Torres Jewellers Ponzi racket. The agency argued that the money ought to be released immediately to state authorities so that restitution proceedings could commence to provide relief to duped depositors.

The Enforcement Directorate The ED took a cooperative stance on record, stating that it had no objection to the restitution of the seized movable assets to verified claimants who suffered quantifiable loss as a result of the fraud.

The Court's Finding on the Submissions The court declined to act on the ED's concession, clarifying that inter-agency consent cannot substitute for mandatory statutory authority. Because the assets remained under unconfirmed provisional attachment and the trial had not yet commenced, neither agency possessed the legal standing to bypass the statutory stages governing proceeds of crime.

Why Does It Matter?

This ruling reinforces the strict procedural discipline that governs financial crimes and money laundering prosecutions in India. While state police agencies and victims frequently push for rapid fund disbursement, the PMLA operates as a comprehensive, self-contained code.

The decision sends a clear message to investigating agencies that good intentions and victim hardship cannot circumvent due process. Until provisional attachments clear scrutiny before the Adjudicating Authority and the statutory thresholds for confiscation or proclaimed-offender status are met, PMLA courts cannot permit concurrent agencies to extract funds from the federal enforcement net.

Legal Takeaway

Under the PMLA, provisional attachment does not transfer property ownership to the State, and even the Enforcement Directorate cannot consent to handing over attached assets to other agencies before legal confiscation or fulfillment of specific statutory conditions. For victims seeking restitution, the statutory process of confirmation and trial milestones cannot be bypassed, no matter how sympathetic the claim.

Sources

  • Primary Source: Order of the Special PMLA Court, Greater Mumbai, in the Torres Jewellers / M/s Platinum Hern Pvt Ltd Money Laundering Case (Passed October 2026).

  • Additional Sources: Court proceedings and reporting via The Times of India.

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