SC Allows M3M to Substitute Property Attached by ED

In a relief to real estate group M3M, the Supreme Court has permitted the substitution of a property provisionally attached by the Enforcement Directorate (ED) with alternate unencumbered assets of equal or higher value.

A bench of Justices P.S. Narasimha and R. Mahadevan held that under the Prevention of Money Laundering Act (PMLA), an attached property may be replaced with another asset, provided it meets certain legal conditions.

The plea was filed by M/s M3M India Pvt. Ltd. and M/s M3M India Infrastructure Pvt. Ltd., seeking the substitution of properties attached by the ED under a provisional order dated July 18, 2024. The proposed assets for substitution include unsold commercial units in the project “M3M Broadway” located in Village Fazilpur Jharsa, Gurugram, Haryana, with a declared consolidated value of ₹317 crore.

Appearing for the ED, Advocate Zoheb Hossain stated the agency was not opposed to the substitution, provided certain conditions were met—such as submission of a no encumbrance certificate, title documents, and an undertaking not to alienate the substituted properties.

Senior Advocate Abhishek Manu Singhvi, representing M3M, submitted that the petitioners had accepted the proposed conditions and filed an affidavit affirming compliance.

“We allow the substitution of the property as indicated in paragraphs 10(a), 10(b), and 10(c) of the additional affidavit, subject to the conditions listed in paragraphs 10(d)(i) to 10(d)(ix),” the bench observed.

Following consensus between the parties, the bench disposed of the special leave petition, noting that no further issues remained for adjudication.

However, the Court clarified that the order was passed in the specific facts of the case and shall not be treated as a precedent.

Case Title: Joint Director & Anr. v. Eastern Institute for Integrated Learning in Management University & Anr.