Telangana HC dismisses pleas against ED probe in Bhoodan land scam, upholds PMLA proceedings and statutory remedy route

News Citation : 2026 LN (HC) 299

February 12, 2026 : The Telangana High Court has dismissed two writ petitions challenging proceedings initiated by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA), holding that the petitioners must first exhaust the statutory appellate remedies available under the law.

The bench of Justice P. Sam Koshy and Justice Suddala Chalapathi Rao delivered the common order on February 12, 2026, in writ petitions filed by Lateef Rahman Sharfan and others. The petitioners had sought to quash an Enforcement Case Information Report (ECIR) registered in March 2023, along with subsequent proceedings including search, seizure, and attachment actions initiated by the ED.

The ED’s investigation stems from allegations of illegal alienation of government Bhoodan lands through forged documents, manipulation of revenue records, and fraudulent transactions. According to the agency, the activities generated substantial “proceeds of crime,” which were then routed through layered property transactions to appear legitimate.

The petitioners argued that they had no connection to any criminal activity or proceeds of crime. One petitioner claimed ownership of separate land unrelated to the disputed Bhoodan properties, while others stated they were merely caretakers of properties belonging to a third party and had no financial stake in any alleged transactions. They also contended that the predicate offence had been treated as a civil dispute and that the ED lacked jurisdiction to proceed under the PMLA.

Rejecting these arguments, the High Court held that the writ petitions were not maintainable as the PMLA provides a complete statutory mechanism for redress, including appeals before the Adjudicating Authority and Appellate Tribunal. The Court emphasized that writ jurisdiction should not be invoked to bypass such remedies, especially in economic offence cases involving money laundering.

The bench further observed that the ECIR was validly registered based on a scheduled offence under the Indian Penal Code, and that investigations revealed a prima facie conspiracy involving illegal transfer of government lands and generation of illicit proceeds.

Importantly, the Court reiterated that under the PMLA framework, a person need not be named as an accused in the predicate offence to be investigated for money laundering. The offence under the PMLA is independent and extends to anyone involved in handling or concealing proceeds of crime.

The High Court upheld the legality of search and seizure operations conducted by the ED, including the seizure of a mobile phone and property-related documents. It noted that such materials could constitute relevant evidence in tracing money laundering activities, even if they are not direct proceeds of crime.

The Court also rejected allegations of coercion and procedural violations, observing that the investigation was carried out in accordance with statutory safeguards. Statements recorded under Section 50 of the PMLA were found to be voluntary, and the search process complied with legal requirements.

Significantly, the Court referred to material indicating that certain petitioners had received amounts totaling ₹2.30 crore linked to the alleged illegal land transactions. This, according to the bench, undermined their claim of being mere caretakers and suggested active involvement in the alleged laundering of proceeds.

The judgment underscores judicial restraint in interfering with ongoing investigations into economic offences. The Court noted that money laundering poses serious threats to financial integrity and national security, and premature intervention could hinder effective enforcement.

Finding no procedural illegality, jurisdictional error, or violation of fundamental rights, the High Court dismissed both writ petitions as devoid of merit. It clarified that the petitioners remain free to pursue remedies under the statutory appellate framework of the PMLA.

Case Reference : W.P. Nos. 28703 and 28716 of 2025, Lateef Rahman Sharfan and others vs Union of India, Ministry of Finance, Department of Revenue, through the Enforcement Directorate; Counsel for petitioners: Mr. G. Ashok Reddy, for Mr. Jakkula Vamshi Krishna; Counsel for respondents: Mr. B. Mukherjee, for Mr. N. Bhujanga Rao, Deputy Solicitor General of India (R-1 & R-3), and Ms. Pranathi Karuturi, for Mr. D. Narendar Naik, Standing Counsel for Enforcement Directorate (R-2).