The SAFEMA Tribunal has ruled that the Enforcement Directorate cannot attach properties bought by bona fide buyers in a developer's fraud case, clarifying the definition of 'proceeds of crime'.
SAFEMA Tribunal Rules on ED's Attachment Authority
The SAFEMA Tribunal has made a pivotal ruling clarifying that properties purchased by alleged bona fide buyers cannot be classified as 'proceeds of crime' for the purpose of attachment by the Enforcement Directorate (ED). This decision arose in the context of a developer's fraud case.
In the ruling, the Tribunal emphasized that such properties should not be subjected to attachment as the buyers engaged in legitimate transactions without knowledge of the developer's fraudulent actions. This judgment aims to protect innocent third-party buyers, highlighting the need for a clear distinction in the application of laws relating to proceeds of crime.
This ruling could impact future enforcement actions by the ED and serves as a reminder for practitioners to advise clients on due diligence when engaging in property transactions relative to potential fraud allegations.
Citations
- SAFEMA Case Ruling (2026) Volume SR 132 Page 50
