Can HC Entertain Writ Against ED's Provisional Attachment When Alternate Remedy Is Available Under PMLA? Punjab & Haryana HC Answers

The Punjab & Haryana High Court has said that when an alternative remedy is available under the Prevention of Money Laundering Act 2002 (PMLA) against Provisional Attachment Order (PAO) issued by the Directorate of Enforcement, it would not be appropriate for it to entertain a writ petition even before the statutory 30 days' period from the date when PAO has been passed.

Section 5(5) of PMLA stipulates that Director or any other officer of the ED who provisionally attaches any property shall, within a period of 30 days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority.

A division bench of Chief Justice Sheel Nagu and Justice Anil Kshetarpal explained that, "The jurisdiction of the Constitutional Courts to entertain the petition at any stage is plenary. However, there are self imposed limitations which should be followed by the Court."

The Court noted that senior counsels representing the petitioner have not contended that the order passed is without jurisdiction, or passed in violation of the principles of natural justice or is an abuse to the process of law.

"At this stage, only the PAO has been passed which is subject to confirmation within a period of 180 days by the Adjudicating Authority. As per Section 5(5) of the 2002 Act, the ED is required to file a complaint before the Adjudicating Authority", added the bench.

The writ petition was filed by the MGF Developments Limited challenging the PAO order where Court considered whether it would be appropriate to entertain the writ petition against PAO issued on August 28, 2024, before the statutory period of 30 days elapsed when the Adjudicating Authority is required to examine the same under Section 5 (5) of the PMLA.

To answer the question the Court referred to Vijay Madanlal Choudhary & Others v. Union of India & Others (2022), wherein while examining the constitutional validity of various provisions of PMLA, the Apex Court examined the validity of Section 5 and found that adequate safeguards have been provided under the legislation to give an opportunity to the aggrieved person to file his response/ objections before the Adjudicating Authority.

"The 2002 Act has also ensured that the PAO will be passed either by the Director or any other officer not below the rank of Deputy Director authorized by the Director for the purpose of this Section while giving reasons to believe on the basis of material in his possession," noted the bench.

The Court reiterated that once sufficient provisions have been made in the PMLA to ensure availability of the adequate remedies, it would not be appropriate for the High Court to entertain a writ petition even before the statutory 30 days' period from the date when PAO has been passed.

"It is only in the rare and exceptional cases, the Constitutional Court would entertain the petition before the expiry of the period of 30 days," added the Court.

In the light of the above, the plea was disposed of "relegating the petitioner to avail its alternative remedy."

Mr. Anand Chibber, Senior Advocate, Mr. Puneet Bali, Senior Advocate, Mr. Atul Nanda, Senior Advocate with Ms. Rameeza Hakeem, Mr. Amandeep Singh Talwar, Mr. Sachin Jain and Mr. Gursimran Moddar, Advocates for the petitioner.

Mr. Zoheb Hossain, Special Counsel and Mr. Lokesh Narang, Senior Panel Counsel, for the respondents.

Title: MGF Developments Limited v. Directorate of Enforcement and Another

Citation: 2024 LiveLaw (PH) 292

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