The SAFEMA Appellate Tribunal at New Delhi upheld attachment of a payment aggregator’s funds under the PMLA, holding it failed to explain their source and could not claim a payment gateway’s ignorance.
The Appellate Tribunal under SAFEMA, New Delhi, has dismissed an appeal under Section 26 of the Prevention of Money-laundering Act, 2002 against confirmation of a provisional attachment order (PAO) dated 8 Aug 2024. The order attached ₹33,73,26,957 of a payment aggregator, held in a virtual nodal account with PayU Payments Pvt. Ltd. and in two bank accounts [Fonepaisa Payment Solutions Pvt. Ltd. v. The Deputy Director, Directorate of Enforcement, Guwahati, 2026-juristway.com-3332-AT (SAFEMA)(New Delhi)-PMLA].
The appeal was decided by Justice Munishwar Nath Bhandari, Chairman. The case arose from the HPZ token app, which promised returns on cryptocurrency mining and collected about ₹100 crore from the public before shutting down. FIRs were registered in Kohima, Guwahati and by the CBI. The Enforcement Directorate (ED) alleged that payment intermediaries, including the appellant, received and moved proceeds of crime. The Adjudicating Authority confirmed the attachment on 14 Jan 2025.
The appellant argued that there was no material to form a reason to believe, no link between victims’ money and its account, and that the FIRs concerned cryptocurrency, not the gaming and betting apps the ED later relied on. It also said that a supplementary prosecution complaint could not fill gaps in the case.
The Tribunal rejected each point. The emails and letters seized before the PAO supported the reason to believe, which was recorded independently. An FIR is not an encyclopedia, and material found in further investigation can be placed on record. It distinguished Razorpay Software Private Limited (Karnataka High Court), where cognizance was quashed because the company was a payment gateway without knowledge, holding that the appellant acted as a payment aggregator for those accused of cheating the public and had admitted failing to do due diligence. J. Sekar did not help, as its operation is stayed by the Supreme Court.
On the reverse burden under Section 24, the Tribunal accepted that the ED must first lay foundational facts, as noted in Adnan Nisar, and found it had done so. The appellant gave no source for the ₹33,14,50,433 in its PayU account beyond calling it pooled funds of legitimate businesses, and made no disclosure for its Axis Bank balances. The appeal was dismissed.
2026-juristway.com-3332-AT (SAFEMA)(New Delhi)-PMLA
