Lucknow HQ Orchestrated Sahara’s Fund Shuffle Across India, ED Informs Allahabad High Court

Justice Subhash Vidyarthi dismissed a petition filed by four Sahara group entities, namely M/s Humara India Credit Cooperative Society Ltd., Sahara Credit Cooperative Society Ltd., Stars Multipurpose Cooperative Society Ltd., and Saharayan Universal Multipurpose Society Ltd., which had sought to set aside the ED’s search and seizure proceedings conducted in July 2024.

The petitioners had challenged the validity of the authorisation issued by the Deputy Director, ED, Kolkata Zonal Office, on July 2, 2024, and the subsequent investigation arising from ECIR No. KLZO-1/21/2023 dated March 31, 2023.

The ECIR was based on an FIR registered in Bhubaneswar in 2020 alleging that Sahara’s agents had induced depositors to invest in its cooperative societies with promises of high returns, but failed to repay them upon maturity. Although the said FIR was later closed and the closure report accepted by the magistrate, the ED stated before the High Court that over 500 similar FIRs had been lodged across the country against Sahara entities, with about 315 involving scheduled offences under the PMLA.

In its counter affidavit, the ED described the Sahara group’s Lucknow establishment as the operational hub of the entire network. It submitted that “all the deposit-taking entities of Sahara group used the same set of branches of M/s Sahara India, same set of agents and other infrastructure including the bank accounts".

The agency said that when deposits matured, “there was no bank account transfer and only books of different entities were adjusted,” and that “the maturity amount of one scheme of Sahara Group was redeposited in the existing new scheme".

The ED further submitted that “all the key decisions were taken by the head office at Lucknow” while “the Chairman, Managing Director and Board Members were only for compliance purpose and none of the decisions was taken by them in the interest of the cooperative society or its members".

It added that the maturity payments were made using new deposits, stating that “the maturity amount paid during a year by M/s Sahara India on behalf of all entities is always less than the deposits received by it, meaning thereby that the maturity amount was always paid from the new deposits received".

According to the agency, Sahara continued collecting fresh deposits even after the Supreme Court’s embargo order dated November 21, 2013, which restrained it from raising further investments. The ED alleged that the societies kept taking deposits “knowing that they are not in position to repay even their existing liabilities".

The petitioners, represented by senior advocate Vikram Chaudhary, had argued that once the predicate offence underlying the ECIR was closed, proceedings under the PMLA could not continue. They also contended that the alleged acts, at most, amounted to violations under the Banning of Unregulated Deposit Schemes Act, 2019 (BUDS Act), which is not a scheduled offence under the PMLA.

Rejecting these submissions, the court held that the BUDS Act does not bar application of the Indian Penal Code and that the Enforcement Directorate was entitled to continue proceedings under the PMLA, since several other FIRs alleging scheduled offences were still pending.

Justice Vidyarthi observed that “the aforesaid facts prima facie make out commission of offence of cheating by the petitioners so as to warrant their trial for the offence".

Finding no illegality in the ED’s actions and noting that the petitioners had alternate remedies under the PMLA, the court dismissed the plea.

Case Title: M/S Humara India Credit Cooperative Society Ltd. Thru. its Dir. Dhananjay Subramanium and 3 others vs. The Directorate of Enforcement (Ed) Deptt. of Revenue Thru. Direct. and 3 others

Order Date: October 17, 2025

Bench: Subhash Vidyarthi