India: Money Laundering

The exponential growth of India’s start-up ecosystem has coincided with the proliferation of offshore special purpose vehicles (“Offshore SPVs”) incorporated in jurisdictions such as the Cayman Islands, Mauritius, Delaware, and Singapore. These entities, often characterised by minimal regulatory oversight, flexible corporate governance norms, and tax-neutral regimes, are increasingly being deployed to channel foreign capital into high-growth Indian ventures.

The enactment of the Bharatiya Nagarik Suraksha Sanhita (“BNSS”) in 2023 signals a paradigm shift in India’s criminal procedural framework, aimed to enhance the efficiency, integrity, and responsiveness of the criminal justice system. Effective from 1 July 2024, the BNSS replaces the previously governing Code of Criminal Procedure (“CrPC”) of 1973. This new legislation introduces a range of reforms, including the integration of technology in trial processes, the provision for trial in absentia, zero FIR, and e-FIR, all aimed at streamlining the criminal justice procedures.

The Supreme Court’s affirmation in Deputy Director v. Murali Krishna Chakrala (SLP (Criminal) Diary No. 8123/2024) marks a decisive moment in the jurisprudence of professional liability under the Prevention of Money Laundering Act, 2002 (PMLA).

The Allahabad High Court, in the case of Sanjay Kumar @ Sanjay Dhiman v. Directorate of Enforcement, Criminal Misc. Bail Application No. 38900 of 2025, delivered a significant ruling under the Prevention of Money Laundering Act, 2002 (“PMLA”), reiterating a legal principle which asserts that assets derived from unknown or unexplained sources cannot, merely on that basis, be presumed to constitute “proceeds of crime” arising from a scheduled offence under the PMLA.

The Court further held that a writ petition challenging the very jurisdictional foundation of the attachment is maintainable notwithstanding proceedings before the Adjudicating Authority under Section 8 of the PMLA or the availability of a statutory appellate remedy.

In Parvinder Singh vs. Directorate of Enforcement, 2026 INSC 519, the Supreme Court delivered an important ruling clarifying the scope and effect of the first proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS”), holding that an accused must be afforded an opportunity of hearing before cognizance is taken on a complaint and that non-compliance with such requirement renders the proceedings void ab initio even in money laundering matters.

We are delighted to share this month's AKP Dispute Resolution Monthly Digest.

On 10 March 2026, the Government of India issued a press release (Press Release) indicating that Union Cabinet (Cabinet) has approved amendments to the foreign direct investment (FDI) regime in India with respect to for investments into India with beneficial ownership originating from countries sharing land borders with India (LBCs) under a regulation known as "Press Note 3" (PN3).

The High Court of Delhi, through its judgment dated 16.02.2026 in Arun Suri v. Directorate of Enforcement, held that ancestral or inherited property can be attached as "equivalent value" under Section 2(1)(u) of the PMLA where the actual proceeds of crime are not traceable.