The Enforcement Directorate (ED) has alleged that Al-Falah University and its holding trust have generated criminal income of at least Rs 415.10 crore by fraudulently inducing students and parents to pay fees on the basis of false recognition and affiliation claims.
The investigating agency made this claim in a remand application filed before the court after the arrest of Al-Falah Group Chairman Jawad Ahmed Siddiqui late on Tuesday evening.
The agency had arrested Siddiqui under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002, after detailed investigation and analysis of evidence collected during the search operation conducted on Tuesday at premises belonging to Al Falah Group.
The searches were conducted in connection with the ongoing investigation into an Enforcement Case Information Report (ECIR) filed by the ED on November 14 under PMLA related to Al Falah Group.
The ED said an analysis of income tax returns from FY 2014-15 to FY 2024-25 showed that the university has shown substantial revenue in the form of voluntary contributions and educational receipts in the period since its establishment.
It said the trust declared Rs 30.89 crore in FY 2014-15 and Rs 29.48 crore as “voluntary contributions” in FY 2015-16.
Since FY 2016-17, the major income reported as ‘Receipts from main purpose’ or “Educational Revenue” includes ₹24.21 crore (FY 2018-19), ₹241.97 crore (FY 2019-20), ₹55.49 crore (FY 2020-21), ₹55.15 crore (FY 2020-21), 2021-22), Rs 289.28 crore (FY 2022-23), Rs 68.87 crore (FY 2023-24) and Rs 280.10 crore (FY 2024-25).
The agency said that in the years when the institutions did not have valid recognition, their total income stood at Rs 415.10 crore. The ED told the court that Siddiqui exercised complete control over the Al-Falah educational system, and so far only a portion of the proceeds of crime have been identified.
Seeking Siddiqui’s custodial interrogation, the ED told the court that the custody of the accused is necessary to unearth the fee structure, donations, inter-entity fund flows and any benami or off-book assets created using illicit funds.
The agency also warned about the “serious risk of tainted assets being liquidated”, adding that Siddiqui continued to exercise material influence over the trust and could misuse funds to obstruct investigations, alter ownership structures or take over assets, including the Dhauj complex.
The ED said custodial interrogation was needed to determine the role of family members and associates who appeared as trustees and directors in the university’s network, but where evidence pointed to Siddiqui as the “controlling mind”.
Citing two First Information Reports (FIRS) of the Delhi Police Crime Branch, on the basis of which the ED had registered a money laundering case against Al Falah Group, the agency said there were reasonable grounds to believe that Siddiqui committed the offense of money laundering under Section 3 of the PMLA by indulging in activities involving proceeds of crime generated through fraud, forgery and misrepresentation of NAAC and UGC accreditation.
The Crime Branch of Delhi Police had registered two FIRs on November 13, alleging that Faridabad-based Al-Falah University has made fraudulent and misleading claims of National Assessment and Accreditation Council (NAAC) accreditation with the intention of deceiving students, parents and stakeholders for ill-gotten gains.
The FIR further mentions that Al-Falah University has falsely claimed recognition from the University Grants Commission (UGC) under Section 12(B) of the UGC Act, 1956, with the aim of obtaining wrongful advantage and causing harm to the candidates, students, parents, guardians, stakeholders and general public by deceiving them.
The ED said the Al-Falah Charitable Trust was formed by a public charitable trust deed dated September 8, 1995, with Jawad Ahmed Siddiqui named as one of the first trustees and as the managing trustee.
The ED on Tuesday conducted search operations at 19 places in Delhi, including the campus of Al Falah University and residential complexes of key people of the group.
The ED said its investigation revealed that “huge amounts of money have been generated from crime. Evidence shows that crores of rupees have been transferred by the trust to family-owned entities.”
The ED said that during the searches, cash worth more than Rs 48 lakh, several digital devices and documentary evidence were recovered and seized.