Writ Challenge To ED Provisional Attachment Becomes Academic Once PMLA Attachment Is Confirmed And Appeals Are Pending; Statutory Tribunal Remedy Must Be Used: Calcutta High Court
Sanchayita Lahkar
The Calcutta High Court Division Bench of Justice Rajarshi Bharadwaj and Justice Uday Kumar set aside a Single Judge’s order that had quashed the Enforcement Directorate’s provisional attachment of multiple movable and immovable properties under the Prevention of Money Laundering Act. The Bench held that once such an attachment is confirmed by the Adjudicating Authority and statutory appeals are pending before the Appellate Tribunal, a parallel writ challenge becomes academic and should not be entertained. The dispute arises from an ED investigation alleging that funds received through transactions linked to a chit fund-style scheme constituted proceeds of crime, warranting attachment pending adjudication.
The attachment was based on an investigation pursuant to an Enforcement Case Information Report dated March 15, 2021. It was alleged that the principal writ petitioner and his wife, as directors of certain media companies, had engaged in financial transactions with the I-Core Group, which was found to be operating a ponzi scheme and misappropriating public deposits.
The writ petitioners challenged the attachment contending absence of nexus with proceeds of crime, lack of prior notice, and procedural lapses. During pendency, the Adjudicating Authority confirmed the attachment under Section 8(3), and the writ petitioners preferred appeals under Section 26 before the Appellate Tribunal, which remained pending.
Having heard the parties, the Court observed, “this Court is of the opinion that the controversy raised in the instant appeal has become purely academic in nature and does not warrant adjudication on merits.”
The Bench recorded, “The Provisional Attachment Order dated March 29, 2022 under Section 5(1) of the PMLA, challenged before the Learned Single Judge, stands confirmed by the Adjudicating Authority vide order dated September 23, 2022 under Section 8(3). The respondents have availed statutory appellate remedies under Section 26 before the Appellate Tribunal (PMLA), New Delhi, where appeals (Nos. 5087/2022, 5088/2022, 5089/2022 and 5173/2022) remain pending adjudication.”
The Court further observed, “It is a settled principle of jurisprudence that Courts refrain from deciding academic or infructuous matters, particularly where a comprehensive statutory mechanism exists for redressal.” It recorded that, “The High Court must not interfere if there is an adequate efficacious alternative remedy available unless exceptional circumstances warrant such interference.”
Referring to the statutory framework, the Bench stated, “The PMLA provides such a complete adjudicatory hierarchy such as, provisional attachment under Section 5, confirmation under Section 8, appeal under section 26 and Special Court trial.” It further recorded, “None of the recognized exceptions such as futile remedy, jurisdictional defect or natural justice violation are attracted herein.”
The Court also noted, “This position is fortified under the PMLA regime by the Constitution Bench in Vijay Madanlal Choudhary (supra), which upheld the Act's constitutional validity and cautioned that writ courts must exercise utmost restraint against interfering with provisional attachments, interim measures to secure proceeds of crime. 'Reasons to believe' requires prima facie satisfaction only, conclusive proof awaits statutory adjudication.”
Additionally, it recorded, “The Adjudicating Authority's confirmation, despite awareness of writ pendency, underscores statutory primacy over premature writ intervention.” The Bench stated, “Therefore, entertaining parallel writ proceedings post-adjudication would multiply litigation and frustrate public interest in protecting laundered assets. Exhaustion of statutory remedies remains the rule of judicial discipline.”
The Court directed, “The impugned order dated June 28, 2022 is set aside. The matter being academic, the parties shall expeditiously pursue Appellate Tribunal proceedings. The application being CAN 1 of 2022 is disposed of. There shall be no order as to costs.”
Advocates Representing the Parties:
For the Petitioners: Mr. Arijit Chakrabarti, Mr. Debsoumya Basak, Ms. Swati Kumari Singh
For the Respondents: Mr. Deepan Sarkar, Ms. Deepti Priya, Ms. Iran Hasan, Mr. Sanket Sarangi, Mr. Himanshu Bhawsinghka
Case Title: Enforcement Directorate & Anr. Vs. Sri Suman Chattopadhyay & Ors.
Case Number: MAT 1214 of 2022 With CAN 1 of 2022
Bench: Justice Rajarshi Bharadwaj and Justice Uday Kumar
