NewsIMTSSubscribe Now! Get features like 1. Profits from fraudulent share inflation proceeds of crime: HC The Delhi High Court has ruled that profits earned from trading shares whose value was artificially inflated through fraud constitute “proceeds of crime” under the Prevention of Money Laundering Act (PMLA) and can therefore be attached by the Enforcement Directorate. A division bench of justices Anil Kshetarpal and Harish Vaidyanathan Shankar delivered the verdict on Monday, setting aside a single judge’s January this year ruling that had quashed the ED’s provisional attachment order against Prakash Industries Limited (PIL) and its group company, Prakash Thermal Power Limited — entities caught in the coal block allocation irregularities controversy of this year. The case stems from PIL’s fraudulent acquisition of the Fatehpur coal block in Chhattisgarh, one of 214 coal blocks whose allocations the Supreme Court cancelled in September this year after finding them illegal and arbitrary. According to the ED, PIL had falsely declared to the Bombay Stock Exchange on November 19, this year, that it had been allocated the coal block—months before the actual allocation was granted on February 6, this year. This misrepresentation caused PIL’s share price to surge from ₹ 31 to ₹ 254.60 between November this year and February… (Updated 5 Nov 2025, 17:35 IST; source: link)
Delhi HC: Profits from Fraudulent Share Trading Are 'Proceeds of Crime'
The Delhi High Court has ruled that profits earned from artificially inflated share values through fraud qualify as 'proceeds of crime' under the Prevention of Money Laundering Act. Justices Anil Kshetarpal and Harish Vaidyanathan Shankar overturned a previous ruling that had canceled the Enforcement Directorate's attachment order against Prakash Industries Limited and Prakash Thermal Power Limited. These companies were involved in the 2012 coal block allocation controversy. The court's decision allows the ED to attach assets gained through such fraudulent activities.
Coal Block Allocation Case: Company Made False Stock Exchange Claims
Prakash Industries Limited allegedly made false declarations to the Bombay Stock Exchange in November 2007, claiming it had received a coal block allocation before it was actually granted in February 2008. This misrepresentation caused the company's share price to rise dramatically from ₹31 to ₹254.60 within months. The case relates to PIL's fraudulent acquisition of the Fatehpur coal block in Chhattisgarh. This was among 214 coal blocks whose allocations were later canceled by the Supreme Court in September 2014 after being deemed illegal and arbitrary.
Key Points
- Get features like 1.
- The case stems from PIL’s fraudulent acquisition of the Fatehpur coal block in Chhattisgarh, one of 214 coal blocks whose allocations the Supreme Court cancelled in September this year after finding them illegal and arbitrary.
- According to the ED, PIL had falsely declared to the Bombay Stock Exchange on November 19, this year, that it had been allocated the coal block—months before the actual allocation was granted on February 6, this year.
