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The Bombay High Court has granted interim relief to Russian national Pavel Aleksandrovich Prozorov , alleged mastermind of the OctaFX investment fraud, by restraining the adjudicating authority under the Prevention of Money Laundering Act, 2002 (PMLA) from confirming attachment of his properties until the next hearing. The matter will be heard again on January 19 . The order was passed by a Division Bench of Justice Revati Mohite Dere and Justice Sandesh Patil on December 22, in response to a writ petition moved through Prozorov’s power of attorney holder, Raviraja Kanyadi . Background of the Case: ED Probe and Alleged Forex Investment Scam Alleged Fraudulent Investment Scheme According to the Enforcement Directorate: • OctaFX allegedly lured investors with claims of – 2× returns in five months, and – 3× returns in eight months • The platform presented itself as a global forex trading service • It allegedly operated without RBI authorization • Investor funds were allegedly routed ove...

Introduction The Delhi High Court has delivered a significant ruling reinforcing the constitutional right to property and the statutory safeguards built into the Prevention of Money Laundering Act, 2002 (PMLA). The court held that the Enforcement Directorate (ED) cannot freeze or attach property based merely on suspicion; instead, it must show valid and recorded “reasons to believe” supported by material evidence. The judgment provides important clarity on the limits of ED’s powers and the legal standards required for deprivation of property. Statutory Framework Under PMLA Section 17(1): Search and Seizure – Requirement of “Reasons to Believe” Section 17(1) of the PMLA empowers ED officers to enter and search premises and seize records or property. However, this power is conditional. The officer must possess “reasons to believe” that: A person has committed an offence under the Act, or The person is in possession of proceeds of crime. These reasons must be recorded in wr...