June 2, 2026: Chhattisgarh HC PMLA ruling has delivered a significant judgment under the Prevention of Money Laundering Act (PMLA), allowing the Enforcement Directorate (ED) to consider liquidation of frozen shares and reinvestment of proceeds in safer regulated financial instruments to preserve asset value.

Author: Aadarsh Patel | EQMint

The case involved multiple companies linked to the alleged Mahadev Online Book betting syndicate, whose Demat accounts and securities worth nearly ₹423.60 crore were frozen by the ED in February 2024.

The petitioners argued that the frozen assets mainly consisted of listed equity shares, which are exposed to market volatility and risk losing value during prolonged legal proceedings. They requested permission for the shares to be liquidated under ED supervision and reinvested into SEBI-regulated low-risk instruments such as mutual funds and debt products.

Justice Ravindra Kumar Agrawal observed that preservation under PMLA should not merely mean retaining ownership of assets but also protecting their economic value. The Court stated that market-linked securities require a practical approach because their value fluctuates continuously.

The Court ultimately directed that:

• petitioners can submit liquidation proposals to ED
• ED may seek expert SEBI advice
• sale proceeds must remain under ED control
• funds can only be invested in low-risk regulated instruments
• petitioners will have no operational control over the proceeds

Importantly, the Court clarified that it has not ruled on whether the assets are proceeds of crime, leaving that issue open before the Appellate Tribunal and Special Court under PMLA.

EQMint analysis on Chhattisgarh HC PMLA Ruling

This judgment could become an important precedent in financial crime investigations involving market-linked assets. The Court has effectively recognized that preserving frozen assets also means preserving their economic value, especially in volatile equity markets.

For the ED and financial regulators, the ruling may influence future handling of frozen securities, Demat accounts and investment portfolios under PMLA investigations.

For more such information visit EQMint

Join our Whatsapp channel for timely updates: Whatsapp

Disclaimer:  This article is not an investment advice and is for educational purpose only.