PMLA 4/8 - Capital

“Zuerst kamen sie” - Martin Niemöller

Scene: A gleaming corporate office in Mumbai. Employees buzz around unsuspectingly until three stern Enforcement Directorate (ED) officers walk in, flanked by an administrative officer. At the top floor, inside a glass cabin, sits Rajat Malhotra, founder of a successful export firm, known equally for his sharp suits and sharper mind.

RAJAT MALHOTRA (smiling wryly as ED officials enter): Gentlemen, unless you’re here with a cheque, I assume this is not a courtesy call?

ED OFFICER 1 (producing a thick file): Mr. Malhotra, we’re exercising powers under the Prevention of Money Laundering Act, 2002 (PMLA). Your corporate headquarters and warehouse are now attached.

RAJAT (raising an eyebrow): Attached? What is this? On what basis?

ED OFFICER 2: “This” sir, is Proceeds of Crime. Linked to a money laundering offence.

RAJAT: Ah yes, I’ve heard about it. You have been investigating something. But that offence, alleged I may say, was committed by the previous owners. Me or my company had nothing to do with it. The offence, I believe, happened in 1984? PMLA was enacted in 2002. That’s like taking my car away because the person I bought a motorcycle from forgot to wear a helmet before helmets were invented..

ED OFFICER 1: Yes. But the courts have upheld that money laundering is a continuing offence. So if the tainted property still exists, or if we can trace its value anywhere, we can attach it today. Doesn’t matter when the predicate offence occurred or who owns the property now.

RAJAT (leaning forward): So you're enforcing today’s law on yesterday’s act and punishing tomorrow’s business?

ED OFFICER 3 (smiling): That’s one way to put it…

RAJAT: Even if you can’t find the specific assets from back then?

ED OFFICER 2: Yes! The PMLA allows us to attach equivalent value. So if the Rs. 10 crore you allegedly laundered is untraceable, but you now if own a warehouse or flat or factory or shop or bank account or shares worth Rs. 10 crores – we seize that instead.

RAJAT: Do I at least get to pick which Rs. 10 crore you take? Or is that too democratic? And I will remind you that this is investment money. White, taxed, declared. And this warehouse? It's operational. It's not some benami farm.

ED OFFICER 1: Doesn’t matter. The law doesn't discriminate between dormant and operational capital. We attach book value, not market value. Your books still show the warehouse at Rs. 10 crore.

RAJAT (eyes narrowing): It was bought a decade ago. It’s worth four times that today.

ED OFFICER 3: Well, congratulations on the appreciation. But we aren’t valuers. The law goes by what’s on record. Actually your accountant helped us there.

RAJAT: You know there’s an old saying, “It is better to be roughly right than precisely wrong.”

ED OFFICER 2: We actually have a different approach – be legally precise, but economically blind

RAJAT (scoffing): Why not just take my office chairs too? Or staff uniforms?

ED OFFICER 1 (checking the list): Actually, office equipment is part of the inventory frozen. Also, please vacate all floors. We’re taking possession.

RAJAT (stunned): Possession? My employees are still in there! My operations team, my engineers! You plan to boot them out?

ED OFFICER 3: Yes. We're empowered to take control, including physical assets. Occupants will be given 24 hours to vacate.

RAJAT (furious): This is economic sabotage! You don’t just take possession; you bleed a business dry. Capital isn’t just cash and property – it’s the flow of capital that gives the economy its lifeblood. When you seize a company’s office, freeze its account, or take possession of its warehouse, you’re not just punishing a criminal. You’re choking an enterprise. The banks will lose their collateral. Employees will lose their jobs. Entire families will lose their source of income. Customers lose trust. And the economy loses momentum. You pause operations, you kill everything.

ED OFFICER 2 (dryly): The economy is... an unfortunate externality in this process.

RAJAT: And what happens to my bank loan against this warehouse? It’s mortgaged!

ED OFFICER 1 (flipping a page): Yes, like that Rajokri farmhouse — Rs. 120 crore asset, mortgaged to a bank. We attached that too and converted it into our “office”. The borrower lost it. The bank lost its security. Fair’s fair.

RAJAT (jaw clenched): So you evict me, confiscate a live operation, and kill my employees' livelihoods. All this before trial? Before a single witness has testified? You know there’s something called Article 19(1)(g) of the constitution, which guarantees the right to practice any trade or profession.

ED OFFICER 3: Yes. But under the amended law, we can even sell your property before conviction. It’s called non-conviction based confiscation, or NCBC.

RAJAT: Sounds like a medical condition

ED OFFICER 2: Yes. Symptoms may include loss of assets, dignity, and sanity.

RAJAT: And if I’m acquitted?

ED OFFICER 2 (shrugging): There’s no provision for that. No restoration, no compensation. Not even an apology! The law’s silent.

RAJAT: Brilliant. So what exactly are you going to do with my warehouse? Start packing ED-branded fidget spinners?

ED OFFICER 1 (deadpan): It could be repurposed. For documentation, maybe storage. We do have a lot of documentation and constantly need administrative space. National interest you see.

RAJAT (sarcastic): Of course. National interest. And in the meantime, my factory stalls, orders lapse, vendors drop off, staff scattered; and you’ll say the law is doing its job.

ED OFFICER 3: We’re fighting crime. Not managing your balance sheet, Mr. Malhotra.

RAJAT: What is the logic of possession here? Had it been shares instead of property, will you vote in the AGMs? Do you take rent from seized flats? Do you become landlords? There are no timelines in this process. No trials. No outcomes.

ED OFFICER 2: That’s the beauty of it! The process itself is the punishment. We don’t need to wait for trial to conclude.

RAJAT: And when you call me for deposition, you’re asking for my entire family’s financial records. My wife’s jewellery? Mother’s pension receipts? Even my son’s tutoring bills?

ED OFFICER 2: If he’s connected to your finances, yes. Under PMLA, we can ask for detailed disclosures – not just from you, but from all linked individuals.

RAJAT (bitter now): You realize what all this does to investor sentiment, right? Foreign capital doesn’t like uncertainty. What message do we send when a legally acquired asset can be seized because someone else, somewhere in the chain of ownership, might have committed a crime decades ago? They’ll stop investing in the country.

ED OFFICER 1: We’re FATF compliant. Foreign investors will adjust. Everyone has faith in the legal system.

RAJAT: You think capital adjusts? No. Capital escapes.

(Pauses. He looks around the office one last time. The lights still buzz. His employees, unaware, continue working on their screens.)

RAJAT (grimly): This isn’t economic enforcement. It’s economic execution.

ED OFFICER 3 (quietly): We are neither economists nor harbingers of justice, Mr. Malhotra. We are enforcers.

[Fade out to the ED seal being fixed on the main gate. A business choked. A room emptied. Years go by. No trial, no verdict, just silence where capital once flowed.]