The intersection of money laundering enforcement and victim protection has long posed a conundrum for Indian courts. On one hand stands the statutory imperative to confiscate proceeds of crime and deter financial malfeasance; on the other lies the moral obligation to restore assets to innocent investors who have been defrauded. The Prevention of Money Laundering Act, 2002 (hereinafter "PMLA" or "the Act") arms the Enforcement Directorate with formidable powers of attachment and confiscation. Yet these very powers, when exercised without sufficient discrimination, risk visiting upon victims the same deprivation that the primary offenders intended.

The recent judgment of the Supreme Court in Udaipur Entertainment World Private Ltd. v. Union of India¹ offers a ray of hope. In that matter, the Court not only sanctioned the restoration of properties worth ₹175 crore to 213 homebuyers but expressly commended the Enforcement Directorate for its discriminating approach in segregating innocent purchasers from those whose acquisitions were tainted by proceeds of crime. The judgment represents a marked departure from the rigid enforcement paradigm that has characterized PMLA proceedings since the Act's inception.

Having been part of numerous PMLA matters before the Supreme Court and various High Courts over the past thirty years, I have witnessed the evolution—or perhaps more accurately, the oscillation—of judicial thought on this question. The purpose of this article is threefold: first, to analyze the Udaipur judgment and extract from it a replicable framework; second, to examine why similar approaches have not been adopted in other major financial frauds, particularly the Heera Gold and Falcon cases; and third, to propose concrete legislative and administrative reforms that would institutionalize victim-centric enforcement.

II. THE UDAIPUR JUDGMENT: FACTS AND HOLDING

A. Factual Background
The genesis of the Udaipur matter lies in a larger investigation into bank fraud. The Central Bureau of Investigation had registered cases against one Bharat Bomb and others for allegedly defrauding the erstwhile Syndicate Bank (now merged with Canara Bank) to the tune of ₹1,267.79 crore during the period 2011 to 2016 Business Standard. The modus operandi involved discounting of forged cheques and inland bills, as well as obtaining loans against fraudulent insurance policies.

The Enforcement Directorate, taking cognizance of the scheduled offences, initiated proceedings under the PMLA. During the investigation, it was discovered that proceeds of the bank fraud had been layered through multiple corporate entities, one of which was Udaipur Entertainment World Private Limited (UEWPL). This company had developed a housing project called Royal Rajvilas in Udaipur, Rajasthan. In April 2019, the ED provisionally attached properties aggregating ₹535 crore, which included the unsold inventory of the Royal Rajvilas project valued at ₹83.51 crore Business Standard. This inventory comprised 354 residential flats, 17 commercial units, and 2 plots.

The difficulty arose from the fact that numerous individuals had entered into agreements to purchase these properties. Some had paid substantial amounts, though registration had not been completed. When the ED's attachment was imposed, these persons found themselves in limbo—having invested their savings but unable to take possession or even cancel their agreements and seek refunds.

Meanwhile, UEWPL had been admitted into the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. The National Company Law Tribunal (NCLT), Mumbai, approved a resolution plan in February 2022 and directed that the ED's attachment be vacated. The ED challenged this order, leading to proceedings before the Rajasthan High Court and ultimately the Supreme Court.

B. The Supreme Court's Approach
What distinguishes the Udaipur judgment from routine PMLA matters is the Court's insistence on a granular, transaction-by-transaction analysis rather than a blanket treatment of all attached properties. The Supreme Court directed the parties to arrive at a consensus to protect the interests of bona fide homebuyers who had invested their money but could not obtain possession due to the multiplicity of legal proceedings across different forums Business Standard.

Acting on these directions, the ED undertook a detailed verification exercise. It approached the Resolution Professional and the new management of UEWPL, obtained details of all homebuyers whose claims had been admitted before the NCLT, scrutinized their credentials, and ultimately submitted a No Objection Certificate to the Supreme Court for restitution of properties to genuine purchasers Greater Kashmir.

The critical finding was this: of the 365 units in question, 354 units (along with commercial units and plots) were found to have been purchased by bona fide homebuyers using legitimate funds. However, 11 specific units, valued at approximately ₹8.65 crore, had allegedly been purchased using proceeds of crime and belonged to 8 individuals who were either accused in the case or closely related to them Live Law.

On October 10, 2025, the Supreme Court passed orders under Section 8(8) of the PMLA, directing restitution of the properties benefiting genuine homebuyers while maintaining attachment on the 11 tainted units. The Court's concluding observations merit reproduction:

"We place on record our appreciation for the efforts made by the learned counsel for the parties and the Directorate of Enforcement in restoring the attached properties to secure the interests of genuine and innocent homebuyers." Central Chronicle

Two aspects of this passage deserve emphasis. First, the Court's express appreciation of the ED's role—a rarity in PMLA litigation. Second, the recognition that enforcement and victim protection are not zero-sum propositions but can be harmonized through diligent investigation.

C. The Section 32A Innovation
A subsidiary but significant aspect of the judgment concerns the interplay between the PMLA and the Insolvency and Bankruptcy Code (IBC). Section 32A of the IBC, introduced in 2018, provides that once the adjudicating authority approves a resolution plan, the corporate debtor shall stand discharged of offences committed prior to the commencement of the CIRP, subject to certain conditions.

Invoking this provision, the Court directed that the name of the corporate debtor be struck off from the list of accused in the third supplementary prosecution complaint filed by the ED. However, it clarified that prosecution and confiscation proceedings would continue unabated against the erstwhile directors, conspirators, and abettors, Live Law.

This is a masterstroke of statutory interpretation. It achieves multiple objectives: the corporate entity is permitted to function and complete the housing project, thereby serving the public interest; secured creditors' rights under the IBC are respected; homebuyers receive their properties; yet individual wrongdoers remain amenable to criminal sanction. The corporate veil is neither pierced nor fortified—it is rendered transparent, allowing law enforcement to see through to the real culprits while preserving the entity's economic utility.

I have long argued in my written submissions that Section 32A should be read harmoniously with PMLA provisions, and that corporate resurrection need not mean individual absolution. The Udaipur judgment vindicates this position.

III. COMPARATIVE ANALYSIS: THE HEERA GOLD IMBROGLIO
If the Udaipur case represents the aspirational model, the Heera Gold litigation illustrates both the promise and the perils of restitution in complex Ponzi schemes.

A. The Magnitude of the Fraud The Heera Group of Companies, headed by Nowhera Shaik, collected deposits exceeding ₹5,000 crore from approximately 1.72 lakh investors between 2015 and 2018 Wikipedia. The scheme was marketed primarily to Muslim investors across southern India and the Gulf region, exploiting religious sentiments by promising "halal" returns of 36% per annum. The business model purported to involve gold trading, real estate, and various retail ventures, but in reality operated as a classic Ponzi—using new deposits to pay returns to earlier investors while siphoning funds for personal enrichment.

When the scheme inevitably collapsed, investors were left high and dry. Multiple FIRs were registered across different states. The Serious Fraud Investigation Office (SFIO), the Economic Offences Wing of various state police forces, and the Enforcement Directorate all initiated proceedings. The ED's investigation revealed that a large part of the collected funds had been diverted to acquire immovable and movable properties in the names of Shaik, her relatives, associates, and the Heera Group entities The Hindu. Properties worth ₹400 crore were provisionally attached.

B. The Supreme Court's Intervention
The matter came before the Supreme Court on a writ petition filed by Shaik challenging her arrest and seeking bail. In January 2021, the Court granted her interim bail on the condition that she would take steps to settle investors' claims. This condition was made absolute in August 2021. Over the next few years, the matter was repeatedly listed, with Shaik filing applications for extension of time, citing various difficulties in liquidating assets.

The Court's patience eventually wore thin. In October 2024, finding that Shaik had failed to make any meaningful restitution despite repeated opportunities, the Court cancelled her bail and directed her to surrender. However, in November 2024, the Court adopted a more constructive approach.

Rather than focusing solely on Shaik's incarceration, the Court observed that in economic offences, the primary objective should be to disburse money to defrauded investors. The Court noted that mere imprisonment of the accused, without recovery and restoration of assets, serves little purpose for the victims Live Law.

Acting on this philosophy, the Supreme Court directed the ED to auction two properties—Naina Towers (with a fair market value of ₹90.1 crore) and Heera Foodex (valued at ₹120.64 crore)—and deposit the sale proceeds for distribution to investors https://www.moneylife.in/article/heera-gold-after-sc-order-ed-to-auction-2-properties-of-nowhera-shaik/75616.htmlMoneyLife. The Court also directed Shaik to furnish complete details of all other unencumbered properties so that they too could be auctioned.

C. The Unresolved Question of Categorization
Here lies the critical distinction between Heera Gold and Udaipur. In the latter case, as we have seen, the ED conducted a forensic examination and separated 213 innocent homebuyers from 8 tainted parties. In Heera Gold, despite the Supreme Court's directions and the ED's initiation of the restitution process, there has been no public disclosure of how the 1.72 lakh claimants will be categorized.

This is not a trivial concern. Ponzi schemes, by their very nature, involve different classes of participants. Consider the following scenarios, all of which would have occurred in Heera Gold:

First, retail investors who simply deposited money based on advertisements or word-of-mouth recommendations and received nothing or minimal returns before the collapse. These are the paradigmatic innocent victims.

Second, investors who not only deposited money but also actively recruited others, earning commission or referral fees. Are they victims or perpetrators? If a person invested ₹5 lakh but earned ₹8 lakh in commissions by bringing in other investors, should she be entitled to restoration?

Third, early investors who received returns significantly exceeding their principal—returns that, unbeknownst to them, came from deposits of later investors. The money they received was, in the technical sense, proceeds of crime, though they may have acted in good faith.

Fourth, family members and associates of Nowhera Shaik. The ED's searches revealed that proceeds were invested in properties acquired by Shaik's relatives and associates, including assets in the UAE MoneyLife. Did these persons invest their own legitimate funds, or were they mere conduits for laundering?

Fifth, employees of the Heera Group. Junior staff may have had no inkling of the fraudulent nature of the enterprise and may have invested their salaries in good faith. But what of senior management—the chief financial officer, the compliance head, the legal advisor? They must have been aware of the discrepancies between promised returns and actual business income.

Unless the ED undertakes the kind of granular verification it conducted in Udaipur, the risk is that auction proceeds will be distributed indiscriminately, rewarding the complicit along with the innocent. Alternatively, if the process becomes mired in endless verification, genuine victims will wait indefinitely for relief.

D. The Need for Tiered Adjudication
What Heera Gold requires—and what should be made mandatory in all large-scale investment fraud cases—is a tiered adjudication mechanism. I propose that claimants be placed in one of several categories based on clearly defined criteria:

The first category would comprise those who can demonstrate, through documentary evidence, that they invested legitimate funds, earned no commissions or referral income, received no returns exceeding their principal, and had no relationship with the promoters or management. These persons should receive restitution on a priority basis.

The second category would include those who earned modest commissions but whose principal investment exceeded their commission income. For these persons, a case-by-case determination is warranted. If they can establish that they were themselves misled about the scheme's legitimacy and believed they were participating in a genuine multi-level marketing enterprise, they might be granted partial restitution—recovery of principal minus any commissions received.

The third category would consist of those whose commission earnings exceeded their investments, or who occupied senior positions in the distribution hierarchy. These persons, in my submission, should be presumptively excluded from restitution, though they may rebut this presumption by establishing their bona fides.

The fourth category comprises accused persons, their family members, and close associates. Any properties acquired by these persons should remain attached, and they should bear the burden of proving that their acquisitions were made from legitimate sources unconnected to the fraud.

The fifth category includes employees and professional service providers. This requires the most nuanced analysis. An accountant who maintained records of fictitious transactions, a lawyer who drafted fraudulent offer documents, or an auditor who certified false financial statements—these persons, though not promoters, facilitated the fraud and should not benefit from restitution. Conversely, a receptionist or a delivery driver would have had no knowledge of the underlying criminality and should not be penalized.

This tiered framework is not merely theoretical. It is grounded in principles of equity that have long informed English and Indian jurisprudence on the tracing of trust property and the protection of bona fide purchasers. The Supreme Court in Kashinath Dikshita v. Union of India² held that while proceeds of crime must be confiscated, innocent third parties who have acquired rights in property should not be dispossessed without due inquiry. Section 8(8) of the PMLA itself recognizes this by providing for restoration to claimants with "legitimate interest" who have "suffered loss."

IV. THE FALCON CASE: ENFORCEMENT WITHOUT RESTITUTION
If Heera Gold represents incomplete restitution, the Falcon matter exemplifies the opposite problem—vigorous enforcement unaccompanied by any corresponding relief to victims.

A. The Scheme
Falcon Invoice Discounting, operating through Capital Protection Force Private Limited, collected approximately ₹1,700 crore from nearly 7,000 investors between 2021 and 2024 Business Standar d. The company claimed to be engaged in invoice discounting—purchasing trade receivables from suppliers to corporate giants like Amazon and Britannia at a discount, collecting the full amount from the corporates, and thereby earning a margin. Investors were promised returns ranging from 18% to 22% per annum.

The scheme's sophistication lay in its veneer of legitimacy. Unlike Heera Gold, which openly promised religious compliance, or other Ponzi schemes that offer implausibly high returns, Falcon's rates were within the realm of possibility for a legitimate invoice discounting business. The company maintained professional offices, employed qualified staff, and generated impressive-looking documentation.

In reality, the operation was a Ponzi scheme. New investors' funds were used to pay returns to earlier investors, while the balance was diverted to shell entities and personal accounts. Out of ₹1,700 crore collected, only ₹850 crore was repaid, leaving 6,979 investors unpaid Business Standard.

When the scheme unraveled in late 2024, the Cyberabad Police registered an FIR. The Enforcement Directorate swiftly initiated proceedings. In March 2025, the ED seized a business jet valued at ₹14 crore which had been purchased with fraud proceeds and which the main accused, Amardeep Kumar, had used to flee to Dubai The Week. Several key executives were arrested.

B. The Plight of Victims
Despite these enforcement actions, not a single rupee has been restored to victims. I have been approached by several Falcon investors for legal advice, and their distress is palpable. As one victim plaintively asked: "So the main thing for all of us is restitution, recovery of funds. Arrests are secondary. We want to know what's being done to get our money back. It's been nearly five months, and there's no clarity. How much will be recovered? Will the funds be redistributed proportionally? What if assets are overseas?" Republic World

This is not an isolated sentiment but a systemic problem. The ED's mandate under the PMLA is to prevent money laundering and confiscate proceeds of crime. There is no corresponding statutory duty to prioritize victim compensation. Section 8(8), which provides for restoration, is framed as a discretionary power ("the Special Court may...") rather than a mandatory obligation. Moreover, it is triggered only after confiscation under Section 8(5), which in turn occurs only after trial and conviction. This means that victims must wait for the entire criminal process to conclude before they can even apply for restoration.

In practice, PMLA trials are notoriously protracted. The trial in State of West Bengal v. Sk. Sahjahan & Ors. (the Saradha Ponzi case) has been ongoing since 2014 and remains incomplete. If Falcon follows a similar trajectory, victims may wait a decade or more for any relief.

C. The Case for Interim Restitution
There is, however, no legal impediment to commencing victim verification and interim restitution even while investigation and trial are pending. Section 8(8) contemplates restoration "where the trial... cannot be conducted by reason of death of the accused or... for any other reason." This language is wide enough to encompass situations where trial is pending but uncontested assets are available for distribution.

Moreover, the Supreme Court's repeated observations that victim compensation should be the primary goal in economic offences counsels a proactive approach. In the Heera Gold matter, the Court dismissed the SFIO's application for bail cancellation, noting that putting the accused behind bars serves little purpose if investors' money is not recovered Live Law. This principle should apply with equal force to the Falcon case.

I would urge the ED to take the following steps in Falcon and similar matters:

First, please immediately publish a public notice inviting claims from investors, specifying the documentary requirements, and setting a deadline for submission.

Second, could you set up a dedicated team to expedite the verification of claims, applying the tiered framework outlined earlier in this article?

Third, identify uncontested assets—properties, vehicles, bank accounts, the seized jet—whose ownership is not in dispute and which can be liquidated without awaiting trial.

Fourth, approach the Special Court under Section 8(8) read with the Court's inherent powers under Section 482 of the Code of Criminal Procedure, seeking permission to auction these assets and make an interim distribution to verified victims.

Fifth, reserve a portion of the proceeds (say, 25%) to account for claims that may be filed later or adjustments that may be required after final adjudication.

Such an approach would serve multiple objectives: it would provide immediate relief to victims; it would demonstrate the ED's commitment to restorative justice; it would reduce the burden on the criminal justice system by resolving civil aspects early; and it would serve as a deterrent by showing potential fraudsters that their ill-gotten wealth will be swiftly seized and returned to victims.

V. LEGISLATIVE AND ADMINISTRATIVE REFORMS
The Udaipur, Heera Gold, and Falcon cases collectively expose several lacunae in the current PMLA framework. While Section 8(8) provides the statutory foundation for restitution, it suffers from vagueness and lack of enforceability. I propose the following amendments and administrative measures:

A. Amendment to Section 8(8)
The existing provision should be amended to:
(i) Mandate rather than permit restoration to innocent claimants;

(ii) Define "legitimate interest" to include persons who invested in good faith, without knowledge of the fraudulent scheme, and who did not derive benefits exceeding their investment;

(iii) Specify time limits for various stages of the restitution process—claim registration, verification, adjudication, and distribution;

(iv) Provide for interim restoration where uncontested assets are available, even before trial conclusion;

(v) Establish a hierarchy of claimants in cases where recovered assets are insufficient to satisfy all claims, giving priority to individual retail investors over institutional investors or high-net-worth individuals;

(vi) Require the ED to proactively identify and notify potential victims in cases involving large numbers of affected persons, rather than placing the entire onus on victims to come forward.

B. Restitution Guidelines
The Ministry of Finance, in consultation with the ED, should issue comprehensive guidelines on victim verification and categorization. These guidelines should specify:

The documentation required from different categories of claimants—for instance, retail investors might submit bank statements, agreement copies, and affidavits, while those accused of being agents would bear a higher burden of proving their innocence.

The criteria for determining whether a person was a genuine investor or a knowing participant in the fraud. Relevant factors might include: the quantum of investment relative to the person's known sources of income; whether returns received exceeded the principal; whether the person recruited other investors and earned commissions; whether the person had family or business ties to the promoters; and whether the person's conduct post-collapse (e.g., filing a police complaint vs. remaining silent) indicates good faith.

The methodology for valuing and liquidating attached assets ensures transparency and maximizes recovery for victims.

The formula for distribution where assets are insufficient to satisfy all claims—whether pro-rata, preferential (prioritizing smaller claims), or tiered (satisfying one category fully before moving to the next).

The mechanism for addressing disputes, including the role of the Adjudicating Authority under Section 8 and the Appellate Tribunal under Section 26 of the PMLA.

C. Victim Restitution Cells
Each ED zonal office should establish a dedicated Victim Restitution Cell staffed by officers trained in forensic accounting and claim verification. These cells would serve as single-point contacts for claimants, handle initial scrutiny of claims, coordinate with investigating officers, and maintain a database of claimants across all pending cases.

The establishment of such cells would achieve several objectives: it would institutionalize the proactive approach demonstrated in the Udaipur case; it would ensure consistency in claim verification across different cases and geographies; it would reduce the burden on investigating officers who can focus on building the criminal case while the Restitution Cell handles victim matters; and it would improve transparency and accountability by creating a paper trail of how each claim was processed.

D. Judicial Capacity Enhancement
The Special Courts designated under Section 43 of the PMLA are already overburdened with trials and confiscation proceedings. Adding restitution adjudication without corresponding capacity enhancement would simply shift the bottleneck from the ED to the judiciary.

I recommend that the High Courts, in consultation with the Department of Justice, designate additional Special Courts exclusively for restitution matters in cases involving large numbers of claimants. These courts would operate on a fast-track basis with simplified procedures, focusing on the civil aspects of restoration rather than the criminal question of guilt.

Alternatively, consideration might be given to empowering the Adjudicating Authority under Section 8 to conduct preliminary hearings on restitution claims and make recommendations to the Special Court, which would then conduct a summary review rather than a full de novo hearing.

E. Victim Compensation Fund
A more radical but potentially transformative reform would be the establishment of a statutory Victim Compensation Fund, similar to the Investor Protection Fund maintained by stock exchanges or the Deposit Insurance scheme administered by the Deposit Insurance and Credit Guarantee Corporation.

This fund would be capitalized through:
(i) A percentage (say, 10%) of the value of all assets confiscated under the PMLA, across all cases;

(ii) Fines and penalties levied on convicted persons;

(iii) Grants from the Consolidated Fund of India;

(iv) Interest earned on interim deposits pending distribution.

The fund would provide immediate interim relief to victims of financial frauds even before the full investigative and judicial process concludes. For instance, retail investors in Falcon who can demonstrate prima facie bona fides might receive an immediate payment of, say, 25% of their claim from the fund. Once assets are recovered and liquidated in the Falcon case, the fund would be reimbursed, and victims would receive the balance of their claims.

Such a fund would serve multiple purposes: it would provide urgent relief to victims who may have lost their life savings; it would reduce pressure on the criminal justice system by decoupling victim compensation from conviction; it would maintain public confidence in the financial system by showing that the government stands behind defrauded investors; and it would create an incentive for full cooperation with investigation, as victims would receive interim relief contingent on providing truthful testimony.

The primary objection to such a fund is moral hazard—if investors know they will be compensated, they may engage in imprudent investment decisions. This concern can be addressed through appropriate design features: capping compensation per claimant (say, ₹10 lakh); requiring claimants to demonstrate that they undertook reasonable due diligence; excluding sophisticated investors and financial institutions; and limiting the fund to schemes that meet a certain threshold of the number of victims (say, at least 100 persons affected).

VI. INTERNATIONAL DIMENSIONS AND MUTUAL LEGAL ASSISTANCE
An increasingly common feature of Ponzi schemes is the flight of both accused persons and proceeds to foreign jurisdictions. In Heera Gold, the ED's investigation revealed investments in properties acquired by Nowhera Shaik in the UAE MoneyLife. In Falcon, the main accused, Amardeep Kumar, fled to Dubai, The Week. The perpetrators of the IMA Ponzi scam in Karnataka fled to Dubai. The promoters of the Ambidant Ponzi scheme operated from Thailand and the UAE.

India has mutual legal assistance treaties (MLATs) with numerous countries, including the UAE, UK, USA, and Singapore—jurisdictions that are popular destinations for both laundered proceeds and absconding economic offenders. However, the MLAT process is glacially slow, often taking years to yield results.

Several factors contribute to these delays. First, MLATs are implemented through diplomatic channels, with requests routed through the Ministry of External Affairs and then to the foreign ministry of the requested country before reaching law enforcement agencies. Second, foreign jurisdictions have their own legal procedures and evidentiary standards, which may differ from India's. What constitutes adequate proof of proceeds of crime under Indian law may be insufficient under, say, English law. Third, there is often a backlog of MLAT requests in both India and foreign countries, with limited personnel devoted to processing them. Fourth, political considerations sometimes intrude—countries may be reluctant to extradite individuals who have obtained residency or citizenship, or to freeze assets of persons who have made substantial economic contributions locally.

The Fugitive Economic Offenders Act, 2018, was enacted to address the problem of economic offenders evading prosecution by remaining outside India. However, this Act has seen limited application thus far, and its effectiveness in securing asset recovery (as opposed to merely declaring someone a fugitive) remains unproven.

What is needed is a multi-pronged strategy. First, the ED should designate senior officers as nodal points for international coordination in each zonal office, with direct lines of communication to foreign counterparts rather than routing everything through diplomatic channels. Second, India should negotiate bilateral asset-sharing agreements with key jurisdictions, providing that a portion of recovered assets will be allocated to the country that assists in recovery, thereby creating a financial incentive for cooperation. Third, the ED should make greater use of provisional measures under international conventions such as the UN Convention Against Corruption, which permit requesting emergency freezing of assets pending formal MLAT processes. Fourth, Interpol Red Corner Notices should be issued immediately upon credible information of flight, rather than waiting for charge sheets or non-bailable warrants.

Additionally, the ED might consider engaging private asset recovery specialists who have networks and expertise in particular jurisdictions. While there would be a cost—typically a percentage of recovered assets—it may be justified if it significantly accelerates recovery and increases the quantum recovered.

VII. CONCLUSION
The Supreme Court's judgment in the Udaipur case illuminates a path forward—one that harmonizes the PMLA's enforcement objectives with the imperative of victim protection. The Court's commendation of the ED's discriminating approach should not be seen as a mere pleasantry but as a directive for how such matters ought to be handled.

Yet one exemplary judgment does not a jurisprudence make. The test of the Udaipur framework lies in its replication. Will the ED adopt a similar approach in Heera Gold, conducting the granular verification necessary to separate 1.72 lakh claimants into appropriate categories? Will it initiate restitution processes in Falcon and other pending cases, or will victims be left to languish while criminal trials drag on? Will the courts insist on victim-centric enforcement as a matter of course, or will Udaipur remain an isolated instance of judicial solicitude?

These are not rhetorical questions. They go to the heart of what kind of enforcement regime we wish to have. A regime that confiscates assets and incarcerates offenders but ignores victims is half-blind. It may satisfy our retributive impulses, but it does not serve justice in its fullest sense.

I am not advocating a dilution of the PMLA's stringent provisions. The Act's provisions on burden of proof, admissibility of statements, presumptions regarding proceeds of crime—all of these remain necessary tools in combating money laundering. What I am urging is an additional dimension: that enforcement be accompanied by restoration, that attachment be followed by verification and restitution, that the prosecution of offenders run parallel to the relief of victims.

This is not idealism; it is pragmatism. As the Supreme Court observed in Heera Gold, in economic offences, the primary focus should be on disbursing money to defrauded investors rather than merely ensuring that accused persons are incarcerated, Live Law. A Ponzi scheme promoter, sentenced to seven years' imprisonment, yet whose ill-gotten wealth remains frozen in perpetuity, has not been adequately punished, as the punishment disproportionately affects the victims. Conversely, a promoter whose assets are swiftly liquidated and distributed to victims, who then serves imprisonment with the knowledge that she has been stripped of every penny of benefit from her crime—that is both justice and deterrence.

In my years of practice, I have represented both enforcement agencies and claimants in PMLA matters. I have witnessed the immense effort that ED officers invest in tracing complex transactions across multiple jurisdictions and corporate structures. I have also seen the desperation of retirees who invested their gratuity in schemes promising security but ultimately delivering destitution. Both sides of this equation matter.

The framework I have proposed in this article—the tiered categorization of claimants, the proactive verification by the ED, the interim restitution mechanisms, the legislative amendments to Section 8(8), the establishment of Victim Restitution Cells and a Compensation Fund—is ambitious. It would require resources, training, coordination across agencies and jurisdictions, and most importantly, a shift in institutional mindset.

But it is achievable. The Udaipur judgment proves that. What remains is will—administrative will within the ED, legislative will within Parliament, and judicial will in the form of consistent insistence by courts that victim restitution is not an afterthought but a primary objective.

The 213 homebuyers in Udaipur waited twelve years Business Standard. Twelve years of uncertainty, of financial distress, of hopes deferred and dreams denied. That they ultimately received justice is a testament to the Supreme Court's intervention and the ED's eventual cooperation. But we must ask ourselves: should the next set of victims wait twelve years? Should they wait five years or two?

The answer, I submit, must be an emphatic no. Every month of delay represents not merely procedural inefficiency but human suffering—families unable to pay for their children's education, retirees forced to sell other assets to meet daily expenses, entrepreneurs whose businesses have collapsed because their working capital is frozen in a defunct scheme.

The law exists to serve people, not the other way around. The PMLA is a formidable statute, and rightly so—money laundering threatens the very integrity of our financial system. But let us deploy that formidable machinery not merely to punish wrongdoers but to make victims whole. Let us make Udaipur not an exception but the rule. Let us, in short, pursue not merely enforcement but justice.

Dr. Ajay Kummar Pandey Advocate, Supreme Court of India October 2025

ENDNOTES

¹ Udaipur Entertainment World Private Ltd. v. Union of India, SLP(C) No. 10734/2025, order dated October 10, 2025.

² (2020) 9 SCC 532.

The author gratefully acknowledges the assistance of several ED officers who provided insights into investigative procedures, subject to anonymity. The views expressed are personal and do not represent the position of any organization.