The Punjab and Haryana High Court has refused to interfere with the arrest of two senior real estate promoters accused of diverting massive homebuyer funds, holding that the Enforcement Directorate (ED) acted within the framework of the Prevention of Money Laundering Act (PMLA). The court dismissed criminal writ petitions filed by Arvind Walia and Sandeep Yadav, both promoters and directors of Ramprastha Promoters & Developers Pvt. Ltd.
Background of the Case
The case stems from complaints by thousands of homebuyers who invested in residential projects launched by Ramprastha Group in Gurugram. According to the ED, the company collected around ₹1,100 crore from buyers but failed to deliver possession of nearly 2,600 flats and plots even after 15–17 years.
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Investigations revealed that a large portion of these funds was allegedly diverted to other group companies and third-party entities in the form of loans and advances. Multiple FIRs were registered by the Haryana Police and Delhi’s Economic Offences Wing for cheating and criminal conspiracy, forming the basis of the ED’s money laundering probe.
The ED registered its Enforcement Case Information Report (ECIR) in August 2021 and arrested both promoters on July 21, 2025, after searches, seizures, and provisional attachment of properties.
What the Petitioners Argued
The accused challenged their arrest on several grounds. They claimed that on the date of arrest, there was no valid “scheduled offence” pending against them, as some FIRs had been stayed or later closed following settlements. They also alleged that the ED failed to properly apply its mind before arresting them and violated mandatory safeguards under Section 19 of the PMLA.
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“The arrest was mechanical and based on incomplete facts,” the petitioners argued, asserting that the ED ignored material that was favourable to them.
ED’s Stand
The Enforcement Directorate countered these claims, stating that the arrest was backed by extensive material gathered during investigation. It argued that settlement or later cancellation of FIRs does not automatically wipe out money laundering allegations.
The ED maintained that all statutory requirements were followed, including informing the accused of the grounds of arrest and forwarding relevant material to the adjudicating authority on the same day.
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Court’s Observations
Justice Tribhuvan Dahiya examined the scope of judicial review in arrest matters under the PMLA and stressed that courts cannot conduct a mini-trial at this stage.
The court observed that similarity between the “grounds of arrest” and “reasons to believe” does not, by itself, show non-application of mind. It also rejected the argument that adding more FIRs to the ECIR after arrest made the custody illegal.
“The ECIR is an internal administrative document. Its contents or later additions do not determine the legality of arrest,” the bench noted.
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On procedural compliance, the court found that the ED had forwarded arrest-related documents and material to the adjudicating authority as required by law.
Decision
Concluding that there was no violation of statutory safeguards or constitutional rights, the High Court dismissed both petitions.
It upheld the arrest and remand orders, ruling that the ED’s action was lawful and supported by material on record.
