Coda Payments India Pvt. Ltd. Vs Dy. Director (Bombay High Court)
Summary: The Bombay High Court allowed the appeal filed by M/s Coda Payments India Pvt. Ltd. under Section 42 of the Prevention of Money Laundering Act, 2002 (PMLA), challenging the order dated 6 March 2025 of the Appellate Tribunal under SAFEMA, New Delhi, which had dismissed the appellant’s appeal and affirmed the Adjudicating Authority’s order dated 15 March 2023 in Original Application No. 750 of 2022. The proceedings concerned freezing of the appellant’s bank accounts and merchant/payment aggregator accounts and retention of seized records and material.
The appellant, a company providing technology-enabled services for monetisation and sale of digital content through brands including ‘Codashop’ and ‘Codapay’, stated that it acted as an intermediary through payment aggregators and recognised payment channels. The Enforcement Directorate (ED), however, alleged that the Indian company functioned as a conduit for collecting monies from Indian users and remitting them outside India. Proceedings arose from ECIR/HYZO/35/2021 dated 28 December 2021, based on ten FIRs principally alleging offences under Sections 420 and 120-B of the Indian Penal Code, 1860 concerning alleged unauthorised deductions from users of online games.
Following searches on 23 September 2022, the ED froze identified bank accounts and merchant IDs under Section 17(1A) of the PMLA and subsequently obtained orders for retention of seized property and records under Sections 20(1) and 21(1). The ED filed Original Application No. 750 of 2022 under Section 17(4), and the Adjudicating Authority confirmed continuation of the freezing and retention.
