Govind Kumar Kedia vs. Union Of INDIA

The petitioner has filed the present writ petition under Article 226 of the Constitution of India, claiming the following reliefs:- VED PRAKASH DEWANGAN VED PRAKASH DEWANGAN Date: 2026.06.29 17:06:48 +0530

2 That, this Hon'ble Court may kindly be pleased to issue writ in the nature of mandamus directing Respondents to return the illegally detained gold bar, coins and jewelries weighing 10.250 Kgs not proposed for retention vide O.A No. 1012 of 2023 and retained violating provisions of sec. 20 of the PMLA, 2002.

3 That this Hon'ble Court may kindly be pleased to grant stay on the effect and operation of the impugned order till disposal of present petition.

4 Any other relief which the Hon'ble Court deems fit and proper under the facts and circumstances may also be provided to the petitioner.”

Brief facts of the case are that the petitioner is engaged in trading in shares and securities through M/s Kedia Fintrade Private Limited and through their association with Motilal Oswal Financial Services Limited. According to the petitioner, they have been carrying on business for several years and have regularly complied with statutory requirements under various enactments. The petitioner has pleaded that substantial taxable income earned by them from the financial years 2016-17 to 2022-23 was duly disclosed before the Income Tax Department and taxes amounting to several crores of rupees were paid thereon. They contend that the assets held by them, including gold, jewellery and investments, originate from disclosed sources of 3 income and form part of their accounted wealth. Even before the year 2016, they were in possession of gold bars, coins and jewellery weighing approximately 4.260 kilograms, which, according to them, stood reflected in their books of accounts and stock registers. It is also their case that under the Income Declaration Scheme, 2016, they voluntarily declared an additional quantity of gold weighing 10.250 kilograms before the Income Tax Department and paid the requisite taxes thereon. Relying upon such disclosures, the petitioner contend that the gold so declared acquired a lawful and accounted status and that the authorities themselves have never disputed the factum of such declaration before the Income Tax authorities. It is also pleaded that the petitioner has also invested his own funds in share market and have a business associate agreement through their company with Motilal Oswal Finance Services Ltd., as on 31.03.2017, the cumulative capital of the petitioner was approximately 42 crores.

It is the further case of the petitioner that on 08.09.2023, officers of the Enforcement Directorate (hereinafter called as “ED”) conducted searches at their residential and business premises at Kolkata, under Section 17 of the Prevention of Money Laundering Act, 2002 (hereinafter called as “PMLA-2002”). During the course of the search, inquiries were allegedly made regarding certain persons connected with the investigation relating to the Mahadev App case and also regarding the gold and jewellery found at the premises. According to the petitioner, he furnished explanations regarding the source of acquisition of the gold and jewellery and produced material showing that a substantial quantity of the gold had already been disclosed

The pleadings further disclose that thereafter, the ED instituted Original Application No. 1012 of 2023 before the Adjudicating Authority seeking retention of 4.260 kilograms of Gold and 293.15 carats of Diamonds, under Section 17(4) of the PMLA-2002. A show- cause notice was issued to the petitioner on 13.10.2023, and they filed a detailed reply on 06.11.2023, along with supporting documents to establish the lawful acquisition of the assets. According to the petitioner, even in the rejoinder filed on 30.01.2024, before the Adjudicating Authority, the ED acknowledged that gold weighing 10.250 kilograms had been disclosed by the petitioner under the Income Declaration Scheme, 2016 and that the investigation was essentially confined to the excess quantity of gold. The petitioner, therefore, contend that there existed no basis for the continued

It is also the case of the petitioner that after hearing the parties, by order dated 15.02.2024, the Adjudicating Authority allowed the application only to the extent of retention of approximately 4.250 kilograms of gold and 8.22 carats of diamonds. According to the petitioner, the said order neither authorized nor dealt with the continued retention of the remaining 10.250 kilograms of gold. The petitioner has filed an appeal No. 651 of 2024 against the order dated 15.02.2024, emphasising that the order of retention has been challenged before the Appellate Tribunal, which remains pending; the subject matter of such appeal is confined to the assets covered by the order dated 15.02.2024. Thus, according to them, the question concerning the release of the remaining 10.250 kilograms of gold stands outside the scope of the proceedings pending before the Tribunal. As per Section 20 of PMLA-2002, the respondent authorities cannot retained any assets, which are not forming part of proceeds of crime.

The petitioner has further pleaded that after the passing of the order dated 15.02.2024, several representations were submitted before the ED seeking release of the gold weighing 10.250 kilograms on the ground that no order of retention had been obtained in respect thereof; however, no decision was communicated by the authorities despite the lapse of considerable time. It is in these circumstances

The respondent No. 2/ED, in its detailed reply, pleaded that the ED registered ECIR No. RPZO/10/2022 under the provisions of the PMLA-2002 on the basis of Charge Sheet/Final Report No. 157/2022 dated 29.07.2022 submitted by Police Station Mohan Nagar, District Durg, Chhattisgarh, against Alok Singh Rajpoot, Rampravesh Sahu, Kharag alias Raja Singh and others for offences punishable under Sections 120-B and 420 of the IPC. As per the charge-sheet, the accused persons were allegedly engaged in illegal online betting activities through the “Mahadev Online Book” platform relating to cricket matches, football, casino games, horse racing, greyhound racing, kabaddi and other events. During a raid conducted by the local police, laptops, mobile phones, bank passbooks, debit and credit cards, SIM cards, cheque books and cash were seized. The investigation further revealed that the accused persons had allegedly created online IDs, collected money from punters through banking channels and facilitated betting transactions through the Mahadev Book platform. On the basis of the said scheduled offences, the ED commenced an investigation under the PMLA. During the course of the investigation, the ED gathered information regarding several FIRs registered across the country in connection with illegal betting operations conducted through Mahadev Book and allied platforms.

The investigation disclosed that bets were being placed on various online platforms including Tiger Exchange, Gold365, Laser247, Cricketbuzz.com, Play247, Skyexchange.com and Cricketbet9.com, and the funds generated through such activities were layered through multiple bank accounts before allegedly reaching one Sourabh Chandrakar, a native of Chhattisgarh, stated to be residing in Dubai. The material further indicated that Chandrakar, along with Ravi Uppal, Kapil Chellani and Satish Kumar, was allegedly operating several offshore betting websites including Lotus365, FairPlay, Reddy Anna, Laser Book, Tiger Exchange, BetBook247 and Gold365. The investigation also revealed that betting operations through Mahadev Book were being conducted across the country on a massive scale, involving transactions running into thousands of crores of rupees. Memorandum statements of arrested accused persons recorded by the Andhra Pradesh Police allegedly detailed the manner in which bank accounts and betting panels associated with Mahadev Online Book were operated. During further investigation, various FIRs

The petitioner was not merely investor in the stock market but was active participant in the illegal betting operations conducted through the online platform "Skyexchange", allegedly promoted by Hari Shankar Tibrewal, an associate of the promoters of the Mahadev Online Book syndicate. According to the Directorate, the investigation, including analysis of digital data recovered from the petitioner's laptop, statements recorded under Section 50 of the Prevention of Money Laundering Act, 2002, and other corroborative material, revealed that the petitioner acted as a panel operator and distributor for "Skyexchange" and facilitated illegal betting transactions. It is alleged that substantial cash generated from illegal betting activities was received by him and thereafter introduced into the formal banking system through accommodation entries obtained from various entry operators. The Directorate further alleges that the petitioner, either directly or through his associates and controlled entities, invested such funds in the Indian stock market by operating several DEMAT and trading accounts, thereby layering the proceeds of crime and projecting them as untainted property. The petitioner exercised effective control over several trading accounts maintained in the names of their associates, family members and business entities, while retaining client credentials and operating such accounts for investment of the proceeds of crime. It is also alleged that the petitioner earned profits from such investments and knowingly assisted other accused persons associated with Mahadev Online Book and Skyexchange in concealing, possessing, using and projecting proceeds of crime as legitimate assets. According to the 11 Directorate, the petitioner failed to furnish any satisfactory explanation regarding the source of substantial investments, cash deposits, and gold declared by them under the Income Declaration Scheme, 2016, and the investigation revealed that such assets were also connected with the proceeds generated from illegal betting operations. On the basis of the material collected during investigation, including statements of witnesses, digital evidence, financial records and bank transactions, the ED has arraigned the petitioner as an accused in the Fourth Supplementary Prosecution Complaint dated 03.02.2025, alleging commission of offences under Sections 3 and 4 of the PMLA- 2002, and has asserted that the offence of money-laundering is a continuing offence in terms of the Explanation to Section 3 of the Act.

Learned counsel for the respondent No. 2/ED also raised a preliminary objection regarding the maintainability of the present writ petition on the ground of the availability of an efficacious statutory remedy under the Prevention of Money Laundering Act, 2002. It is pleaded that on 29.01.2026, the Provisional Attachment Order No. 04/2026 has been passed in exercise of powers under Section 5(1) of the PMLA-2002, and that the statutory scheme provides a complete adjudicatory mechanism, whereby the Adjudicating Authority under Section 8 is empowered to examine the legality of the attachment after affording an opportunity of hearing to the affected party, with a further statutory appeal under Section 26 before the Appellate Tribunal and a subsequent appeal under Section 42 before the High Court. It was contended that the petitioner has an adequate and efficacious alternative remedy before the competent statutory forum

The respondent No. 2/ED denied the grounds urged by the petitioner and submitted that the search, seizure and subsequent attachment of the subject gold bars, coins and jewellery weighing 10.250 kilograms were undertaken strictly in accordance with the provisions of the PMLA-2002. The subject assets were initially seized under Section 17 of the Act during the course of investigation and, upon collection of further material establishing their nexus with the alleged proceeds of crime, were provisionally attached under Section 5 of the Act by Provisional Attachment Order No. 04/2026 dated 29.01.2026 after due application of mind. The respondent No.2 further submitted that the proceedings for retention of seized property under Sections 17 and 20 of the Act are distinct from attachment proceedings under Section 5,

Learned counsel appearing for the petitioner would submit that the impugned Provisional Attachment Order No. 04/2026 dated 29.01.2026 is wholly arbitrary, illegal and contrary to the 14 scheme of the Prevention of Money Laundering Act, 2002. It is contended that during the search conducted on 08/09.09.2023 under Section 17 of the Act, the petitioner had fully cooperated with the investigating agency and had furnished complete particulars regarding the source of the gold bars, coins and jewellery found at their premises. According to the petitioner, gold weighing 10.250 kilograms had already been voluntarily disclosed under the Income Declaration Scheme, 2016, and the requisite taxes had been duly paid thereon, whereas the remaining quantity represented ancestral and family jewellery duly reflected in the books of account and stock registers. Learned counsel further submits that the ED itself, while filing Original Application No.1012 of 2023 before the Adjudicating Authority under Section 17(4) of the PMLA, sought retention only of approximately 4.260 kilograms of gold and diamonds, and even in its rejoinder before the Adjudicating Authority acknowledged that the gold weighing 10.250 kilograms stood disclosed under the Income Declaration Scheme, 2016. It is, therefore, argued that once no order of retention was either sought or granted in respect of the said quantity of gold, its continued detention and subsequent attachment after a considerable lapse of time is wholly dehors the statutory provisions and amounts to an arbitrary exercise of power. Learned counsel also submits that the statutory safeguards contained in Sections 17 and 20 of the PMLA cannot be circumvented by subsequently resorting to attachment under Section 5 without there being any fresh tangible material establishing the existence of "proceeds of crime".

He would further submit that the juri iction under Section 5 of the PMLA-2002 can be exercised only upon the competent authority recording a bona fide "reason to believe", founded on tangible material, that the property sought to be attached constitutes "proceeds of crime" and is likely to be concealed, transferred or dealt with in a manner that may frustrate eventual confiscation. According to the petitioner, neither the Provisional Attachment Order nor the material relied upon by the respondent No.2 discloses any live nexus between the subject gold and the alleged scheduled offences or establishes that the petitioner acquired or possessed the said assets from criminal activity. It is argued that mere declaration under the Income Declaration Scheme, 2016, may not by itself create immunity under the PMLA; nevertheless, such declaration, coupled with payment of taxes and the respondent No.2’s own acknowledgement of the disclosure during the earlier retention proceedings, constitutes a highly relevant circumstance which could not have been ignored while forming the statutory satisfaction under Section 5. Learned counsel further submits that the power of attachment under the PMLA is preventive and preservative in nature and cannot be exercised on mere suspicion or conjecture without satisfying the juri ictional requirements prescribed by the statute. It is urged that the respondent No.2 has failed to demonstrate any fresh incriminating material discovered after the conclusion of the retention proceedings so as to justify the subsequent attachment of the very same gold. The impugned action, therefore, is alleged to be violative of Articles 14 and 300A of the Constitution of India, being an arbitrary deprivation of 16 property without due authority of law. On these submissions, it is prayed that the provisional attachment order dated 29.01.2026 be quashed and the respondent No.2 be directed to release the subject gold, or pass such other appropriate orders as the Court may deem fit in the interests of justice.

Learned counsel appearing for Respondent No. 2/ED vehemently opposed the writ petition and submitted that the same is wholly misconceived, premature and not maintainable either on facts or in law. It was contended that the provisional attachment of the subject gold bars, coins and jewellery weighing 10.250 kilograms has been made strictly in exercise of powers conferred under Section 5 of the Prevention of Money Laundering Act, 2002, after recording the statutory "reason to believe", on the basis of tangible material collected during investigation establishing a prima facie nexus between the said properties and the proceeds of crime. It was argued that the attachment was preceded by a lawful search and seizure under Section 17 of the PMLA and that the Directorate, after detailed investigation, found that the petitioner had deposited approximately Rs.38 crores in cash in the bank accounts of himself and his wife despite having no legitimate source of income capable of generating such enormous wealth. According to the respondent No.2, the investigation further disclosed that the petitioner had been associated with illegal betting operations and that the cash generated from such unlawful activities was layered and ultimately converted into gold and other valuable assets. It was, therefore, submitted that the impugned Provisional Attachment Order No.04/2026 dated

Learned counsel further submitted that the principal contention of the petitioner that the gold had already been disclosed under the Income Declaration Scheme, 2016 (IDS) is legally untenable. It was argued that declaration of an asset under the Income Tax laws or payment of tax thereon neither establishes the lawful source of acquisition nor creates any immunity from proceedings under the PMLA. The offence of money-laundering is an independent offence, distinct from proceedings under the Income Tax Act, and once investigation reveals that the property has been derived or obtained from criminal activity relating to a scheduled offence, the same becomes liable for attachment and eventual confiscation under the PMLA irrespective of any disclosure made under taxation statutes. In support of the aforesaid submission, reliance was placed upon the judgment of the Supreme Court in Rohit Tandon v. Directorate of Enforcement, (2018) 11 SCC 46, particularly paragraph 33, wherein it has been categorically held that declaration in income-tax returns or payment of taxes does not absolve the person concerned from disclosing the lawful source of the property nor confer immunity against prosecution for the offence of money-laundering. It was thus contended that the petitioner's reliance upon the Income Declaration Scheme is wholly misplaced and cannot invalidate the attachment proceedings initiated under the PMLA.

Learned counsel also submitted that the present writ petition deserves to be dismissed at the threshold on the ground of availability of an effective and efficacious alternative statutory remedy. It was argued that the PMLA provides a complete code for adjudication of disputes arising from attachment proceedings. Under Section 5(5) of the Act, every provisional attachment is required to be placed before the Adjudicating Authority, which, after issuing notice under Section 8(1) and granting opportunity of hearing under Section 8(2), independently determines whether the attached property is involved in money-laundering. Against the order of the Adjudicating Authority, a statutory appeal lies before the Appellate Tribunal under Section 26, followed by a further appeal before the juri ictional High Court under Section 42 on substantial questions of law. It was submitted that since the petitioner has an adequate statutory remedy before specialized forums constituted under the Act, this Court ought not to entertain the present petition under Article 226 of the Constitution. Reliance was placed upon Pareena Swarup v. Union of India, (2008) 14 SCC 107, wherein the Supreme Court recognized the Adjudicating Authority as an expert body entrusted with determining the legality of attachment proceedings. Reliance was also placed upon Rai Foundation v. Directorate of Enforcement, 2015 SCC OnLine Del 7626; Rose Valley Hotels & Entertainment Ltd. v. Secretary, Department of Revenue, 2015 SCC OnLine Del 10111; Special Director v. Mohd. Ghulam Ghouse, AIR 2004 SC 1467; RBL Bank Ltd. v. Directorate of Enforcement and Others, 2023 SCC Online Del 8610; Gold Croft Properties Pvt. Ltd. v.

Lastly, it was argued that the issues sought to be raised by the petitioner involve serious disputed questions of fact, including the source of acquisition of the gold, its nexus with the proceeds of crime, appreciation of documentary evidence, banking transactions and findings emerging from the investigation, which cannot appropriately be adjudicated in proceedings under Article 226 of the Constitution. It was submitted that the validity of the attachment, the existence of "reason to believe", the nature of the attached assets and their eventual confiscation are all matters statutorily entrusted to the Adjudicating Authority and the Special Court under the PMLA. The respondent No. 2 contended that interference by this Court at the present stage would frustrate the statutory scheme enacted by Parliament and impede the ongoing proceedings under the Act. It was, therefore, prayed that the writ petition, being devoid of merit and barred by the availability of alternative statutory remedies, deserves to be dismissed with costs.

I have heard learned counsel for the parties at length and considered their rival submissions, and gone through the record of the writ petition.

The principal questions which arise for determination are: (i) whether the present writ petition challenging the Provisional Attachment Order

At the outset, this Court finds considerable force in the preliminary objection raised on behalf of the respondent-ED regarding the maintainability of the present writ petition. The Prevention of Money Laundering Act, 2002, is a self-contained enactment providing a complete adjudicatory mechanism against an order of provisional attachment. Section 5(5) of the PMLA-2002 mandates filing of a complaint before the Adjudicating Authority, which is empowered under Section 8 of the PMLA-2002 to independently examine whether the attached property is involved in money-laundering after issuing notice and affording full opportunity of hearing to the affected person. Against the order of the Adjudicating Authority, an appeal lies before the Appellate Tribunal under Section 26 of the PMLA-2002, and thereafter before the juri ictional High Court under Section 42 of the PMLA-2002 on substantial questions of law. The Hon'ble Supreme Court in the case of Pareena Swarup (supra) has recognized the Adjudicating Authority as an expert statutory forum constituted to determine the legality of attachment proceedings and observed that its functions are civil in nature in relation to confirmation of provisional attachment.

It is necessary to notice here the relevant provisions of Sections 8, 26 and 42 of the PMLA-2002, which are as under:- “8. Adjudication.- (1) On receipt of a complaint under sub- section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub-section (10) of section 18, if the Adjudicating Authority has reason to believe that any person has committed an offence under section 3 or is in possession of proceeds of crime], he may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub- section (1) of section 5, or, seized or frozen under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided further that where such property is held jointly by more than one person,

Appeals to Appellate Tribunal.— (1) Save as otherwise provided in sub- section (3), the Director or any person aggrieved by an order made by the Adjudicating Authority under this Act, may prefer an appeal to the Appellate Tribunal. (2) Any reporting entity aggrieved by any order of the Director made under sub- section (2) of section 13, may prefer an appeal to the Appellate Tribunal. (3) Every appeal preferred under sub- section (1) or sub-section (2) shall be filed within a period of forty-five days from the date on which a copy of the order made by 26 the Adjudicating Authority or Director is received and it shall be in such form and be accompanied by such fee as may be prescribed: Provided that the Appellate Tribunal may after giving an opportunity of being heard entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period. (4) On receipt of an appeal under sub- section (1), or sub-section (2), the Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against. (5) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the concerned Adjudicating Authority or the Director, as the case may be. (6) The appeal filed before the Appellate Tribunal under sub-section (1) or sub- section (2) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of filing of the appeal.

Appeal to High Court.— Any person aggrieved by any decision or order of the Appellate Tribunal may file an 27 appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law or fact arising out of such order: Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days. Explanation.—For the purposes of this section, “High Court” means— (i) The High Court within the juri iction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and (ii) Where the Central Government is the aggrieved party, the High Court within the juri iction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain.”

In the case of Special Director and Another v. Mohd. Ghulam Ghouse and Another, 2004(3) SCC 440, the Hon’ble Supreme Court held that where a statute provides an efficacious alternative remedy before a competent forum, the High Court should ordinarily decline to entertain a writ petition unless exceptional circumstances are demonstrated. In para 5, it has been held that:-

In the case of Rai Foundation (supra), the Delhi High Court has held that:-

It is trite law that Article 226 of the Constitution of India vests wide discretion in the Writ Court to entertain the writ petition on any grievance and to grant appropriate relief. It is an extraordinary juri iction vested in the writ Court. The Writ Courts observe self- imposed restraint in exercising the juri iction under Article 226. Availability of alternative remedy is not a bar to entertain a writ petition. However, ordinarily, the writ petition is not entertained under Article 226 if the aggrieved person has an efficacious and effective remedy provided by concerned statute whereunder an adverse decision is taken against

In the case of Krrish Realtech Pvt. Ltd. (supra), the Delhi High Court has held that:- “44. It is a well-settled legal principle that where a statute provides a selfcontained appellate mechanism, recourse to the extraordinary juri iction of this Court under Article 226 is ordinarily not maintainable.

The respondent had rightly placed reliance on Gold Croft Properties Pvt. Ltd. v. Directorate of 31 Enforcement, 2023 SCC OnLine Del 5900, wherein the Court has observed as under - "

In fact, it has rightly been noted by the learned Single Judge that the application itself was not maintainable. Further, the judgment of the learned Single Judge discloses that the matter was ready for final hearing before the Adjudicating Authority, and therefore, this Court is of the opinion that no interference is required at this juncture.

Section 26 of the PMLA provides for an appeal before the Appellate Tribunal against any Order passed by the Adjudicating Authority. There was a fully functional Appellate Tribunal at the time when the Order dated 25.01.2023 was passed by the Adjudicating Authority, and therefore, the writ petition was not maintainable before the learned Single Judge.

The Apex Court in Commissioner of Income Tax v. Chhabil Dasss Agarwal, (2014) 1 SCC 603 : (2013) 357 ITR 357 has observed as under:

In Nivedita Sharma v. Cellular Operators Assn. of India [(2011) 14 SCC 337 : (2012) 4 SCC (Civ) 947], this Court has held that where hierarchy of appeals is provided by the statute, the party must exhaust the statutory remedies before resorting to writ juri iction for relief and 32 observed as follows: (SCC pp. 343-45, paras 12-14) "

In Thansingh Nathmal v. Supt. of Taxes [1964 SCC OnLine SC 13 : AIR 1964 SC 1419] this Court adverted to the rule of self- imposed restraint that the writ petition will not be entertained if an effective remedy is available to the aggrieved person and observed: (AIR p. 1423, para 7) '7. ... The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming juri iction under Article 226 trench upon an alternative remedy provided by the statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another juri iction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up.'

In Titaghur Paper Mills Co. Ltd. v. State of Orissa [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 : 1983 SCC (Tax) 131 : (1983) 53 STC 315 : (1983) 142 ITR 663] this Court observed: (SCC pp. 440-41, para 11)

In Mafatlal Industries Ltd. v. Union of India [(1997) 5 SCC 536 : (1998) 111 STC 467] B.P. Jeevan Reddy, J. (speaking for the majority of the larger Bench) observed: (SCC p. 607, para 77) '77. ... So far as the juri iction of the High Court under Article 226—or for that matter, the juri iction of this Court under Article 32—is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their juri iction consistent with the provisions of the enactment.'" (See G. Veerappa Pillai v. Raman & Raman Ltd., [(1952) 1 SCC 334 : AIR 1952 SC 192], CCE v. Dunlop India Ltd., [(1985) 1 SCC 260 : 1985 SCC (Tax) 75 : (1985) 58 Comp Cas 145 : (1985) 154 ITR 172], Ramendra Kishore Biswas v. State of Tripura [(1999) 1 SCC 472 : 1999 SCC (L&S) 295], Shivgonda Anna Patil v. State of Maharashtra [(1999) 3 SCC 5], C.A. Abraham v. ITO [(1961) 41 ITR 425 : 1960 SCC OnLine SC 128 : AIR 1961 SC 609 : (1961) 2 SCR 765], Titaghur Paper Mills Co. Ltd. v. State of Orissa [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2

In Union of India v. Guwahati Carbon Ltd. [(2012) 11 SCC 651 : (2013) 19 GSTR 506] this Court has reiterated the aforesaid principle and observed: (SCC p. 653, para 8) "

Before we discuss the correctness of the impugned order, we intend to remind ourselves the observations made by this Court in Munshi Ram v. Municipal Committee, Chheharta [(1979) 3 SCC 83 : 1979 SCC (Tax) 205 : (1979) 118 ITR 488]. In the said decision, this Court was pleased to observe that: (SCC p. 88, para 23) '23. ... [when] a revenue statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in that forum and in that manner, and all the other forums and modes of seeking [remedy] are excluded.'"

Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental

In the instant case, the Act provides complete

In view of the above, the writ petition before the learned Single Judge was itself not maintainable."

In Dr. U.S. Awasthi v. Adjudicating Authority PMLA, 2023 SCC OnLine Del 401, the Court has observed as under - "

However, the question here is whether a writ petition is to be entertained against such an order. While there can be no doubt that in case of violation of principles of natural justice or juri ictional errors, a writ petition can be entertained, as per the settled legal position in Whirlpool Corporation (supra). However, the entertaining of a writ petition while an Appellate Tribunal is fully functional, in the opinion of this Court ought not to be done in each and every case. xxx

Dealing with the issue raised by ld. Sr. Counsel as to the interpretation of the expression 'an order under this Act', this Court is of the opinion that when the Appellate Tribunal can entertain an appeal against the final order passed by the Adjudicating Authority, any interim orders or procedural orders passed as part of the process of adjudication would, thus, be 'orders under this Act'. It is not to say that against each such order an appeal would be liable to be entertained. It is for the Appellate Tribunal to decide as to whether an appeal ought to be entertained at all. Construing Rule 2 of the Prevention of Money Laundering (Appeal) Rules, 2005 to the contrary would, in fact, mean that parallel proceedings would continue in writ petitions against procedural orders and before the Appellate Tribunal, once the final order is passed. This could lead to conflicting orders and lack of uniformity and consistency in dealing with the procedures to be followed by the Adjudicating Authority and other authorities under the PMLA."

Further, in Adventure Island Limited v. Directorate Of Enforcement, W.P.(C) 16769/2024, a Coordinate Bench of this Court has made the following observations - "

In light of the foregoing, in the opinion of the Court, the Court is not inclined to entertain the instant petition as there is an alternative statutory remedy available against the impugned orders. All the 39 grounds urged in the present petitions can be raised before the Appellate Tribunal. Accordingly, without going into the merits of the case, the present petitions are disposed of with liberty to Petitioners to take recourse to the appellate remedy under Section 26 of the Act.

Counsel for Petitioners states that they shall file the appeal within the statutory period prescribed. In the event such an appeal is filed, the Appellate Tribunal is requested to consider and decide the appeal, as expeditiously as possible, preferably within four months from today. In case Petitioners do not succeed in appeal proceedings, they shall be at liberty to take recourse to further remedies, in accordance with law."

Similarly, reliance may also be placed on Rose Valley Hotels and Entertainments Limited v. Secretary, Department of Revenue, 2015 SCC OnLine Del 10111, Rai Foundation v. Directorate of Enforcement, 2015 SCC OnLine Del 7626, Farida Begum Biswas v. Union of India, W.P.(C) 8266/2015 and State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85 : (2018) 2 SCC (Civ) 41 : (2018) 2 Comp Cas-OL 131. 49. The petitioners are not precluded from availing prescribed statutory/appellate remedy in the first instance. In the given factual conspectus, the same would not be inefficacious.

Section 26 of the PMLA specifically provides that any person aggrieved by an order of the 40 Adjudicating Authority may prefer an appeal to the Appellate Tribunal. Accordingly, the statutory scheme itself envisages that all questions relating to the validity, scope, and effect of an attachment order must first be adjudicated within the framework of the Act.

As regards the contention of the petitioners that the attachment of their properties is in violation of the orders of the Supreme Court dated 19.05.2022 and 11.01.2023 in SLP (C) No. 6013 of 2022, whereby status quo was directed to be maintained in respect of possession of the plots pending adjudication before the Punjab and Haryana High Court, this Court is of the view that such an argument can also be appropriately raised before the Appellate Tribunal.

In Rohit Mahendru v. Directorate of Enforcement, W.P.(C) 12188/2022 (order dated 27.09.2024), the Court dealt with a similar plea concerning a status quo order regarding plots attached in connection with proceedings involving M/s Krrish Realtech Pvt. Ltd. and passed the following order dated 27.09.2024 - "

Mr. Siddharth Aggarwal, Senior Counsel for Respondent No. 3, states that Respondent No. 3 is not responsible for the Petitioners as the Petitioners are a part of Krrish's Allocation within the said Project and the onus in respect of the plots within Krrish Allocation is on Respondent No. 4 Nonetheless, he apprises this Court that several proceedings have been initiated by the Petitioners including under the Real Estate (Regulation and Development) Act,

In light of the aforenoted facts, the Court suggested the counsel for Petitioners that the Petitioners could avail the remedy of appeal before the Appellate Authority, which is better equipped to deal with the contentions of parties.

On this issue, counsel for the Petitioners, on last date of hearing sought time to take instructions.

Section 26 of the PMLA Act allows any person aggrieved by an order of the Adjudicating Authority to seek remedy through an appeal before the Appellate Authority. The concept of "any person aggrieved by an order", as outlined under Section 26(1) of the PMLA Act, has also been discussed by this Court in Sanjay Jain (in JC) v. Directorate of Enforcement.

In light of the said decision considering the fact that counsel for Petitioners is agreeable to withdraw the present petition with liberty to approach the concerned tribunal, the Court is inclined to accede to their request.

In view of the above, the present writ petition is dismissed as withdrawn. The Petitioners shall be at liberty to assail the impugned order and all the contentions urged in the present petition before the Appellate Authority or the appropriate forum provided under the PMLA Act, if so advised."

All pleas of the petitioner, inter-alia, as regards juri iction/coram non judice would also necessarily be considered by the Appellate Tribunal.”

In the aforesaid circumstances of the case and availability of alternative statutory remedy of appeal, this Court is of the considered

The submission advanced on behalf of the petitioner that the gold weighing 10.250 kilograms had already been disclosed under the Income Declaration Scheme, 2016, and therefore, could not subsequently be attached under the PMLA-2002, and also does not merit acceptance. Mere disclosure of an asset before the Income Tax authorities or payment of taxes thereon cannot, by itself, establish the lawful source of acquisition or confer immunity against proceedings under the Prevention of Money Laundering Act. The offence of money-laundering is an independent offence, and if the property is ultimately found to have been derived or obtained from criminal activity relating to a scheduled offence, such property would answer the definition of "proceeds of crime" under Section 2(1)(u) of the Act, notwithstanding its disclosure before the tax authorities.

In Rohit Tandon v. Directorate of Enforcement, 2018 (11) SCC 46, the Hon'ble Supreme Court categorically held that declaration in income tax returns or payment of taxes does not absolve a person from explaining the lawful source of the property, nor does it grant immunity from prosecution for the offence of money-laundering. In para 33, it has been held that:- “33. We fail to understand as to how this argument can be countenanced. The fact that no limit for deposit was specified, would not extricate the appellant from explaining the source from where such huge amount has been acquired, possessed or used by him. The volume of demonetised currency recovered from the office and residential premises of the appellant, including the bank drafts in favour of fictitious persons and also the new currency notes for huge amount, leave no manner of doubt that it was the outcome of some process or activity connected with the proceeds of crime projecting the property as untainted property. No explanation has been offered by the appellant to dispel the legal presumption of the property being proceeds of crime. Similarly, the fact that the appellant has made declaration in the income tax returns and paid tax as per law does not extricate the appellant from disclosing the source of its receipt. No provision in the taxation laws has been brought to our notice which grants immunity to the appellant from prosecution for an offence of money laundering. In other words, the property derived or obtained by the appellant was the 46

Therefore, the petitioner cannot derive any indefeasible right merely because the subject property, i.e. the gold, had earlier been declared under the Income Declaration Scheme, 2016. 31. Equally untenable is the contention that since earlier proceedings under Sections 17 and 20 of the PMLA-2002 related only to the retention of approximately 4.260 kilograms of gold, the respondent was thereafter precluded from exercising powers under Section 5 in respect of the remaining quantity. The statutory scheme itself distinguishes proceedings relating to search and seizure, retention of seized property and provisional attachment. The proceedings under Sections 17 and 20 of the PMLA-2002 are intended to regulate retention of seized property during investigation, whereas the power under Section 5 of the PMLA-2002 is an independent statutory power exercisable whenever the competent authority, on the basis of material subsequently collected, records reasons to believe that the property constitutes proceeds of crime and is likely to be dealt with in a manner frustrating confiscation. Consequently, the earlier retention proceedings cannot operate as res judicata, nor can they amount to an adjudication regarding the lawful source of the remaining assets. Whether fresh material existed to justify the attachment and whether the statutory satisfaction recorded under Section 5 of the PMLA-2002 is ultimately sustainable are matters that fall squarely within the juri iction of the Adjudicating Authority under Section 8 of the PMLA- 2002. 47

It is also well settled that the power of judicial review under Article 226 is directed against the decision-making process and not against the merits of the decision itself. In the present case, disputed questions relating to the source of acquisition of the gold, the existence of proceeds of crime, appreciation of financial records, digital evidence, statements recorded under Section 50 of the PMLA-2002, bank transactions, and the alleged nexus between the attached property and the scheduled offences require a detailed examination of evidence, which cannot appropriately be undertaken in writ proceedings. Such issues are statutorily entrusted by Parliament to the Adjudicating Authority constituted under the PMLA-2002 and thereafter to the appellate forums created under the Act. In the absence of any patent lack of juri iction, violation of principles of natural justice or manifest illegality apparent on the face of the record, this Court finds no justification to bypass the statutory mechanism.

In view of the foregoing discussion, this Court is of the considered opinion that the petitioner has failed to make out any exceptional circumstance warranting interference under Article 226 of the Constitution. The impugned Provisional Attachment Order No. 04/2026 dated 29.01.2026 cannot be said, at this stage, to be ex facie without juri iction or contrary to the provisions of the PMLA-2002. Since the petitioner has an adequate and efficacious statutory remedy before the Adjudicating Authority under Section 8 of the PMLA-2002, followed by appellate remedies under Sections 26 and 42 of the PMLA-2002, this Court declines to exercise its extraordinary writ juri iction.

Accordingly, the writ petition is liable to be and hereby dismissed.

The petitioner is at liberty to raise all factual and legal contentions before the competent statutory forum, which shall consider the same independently and in accordance with law, without being influenced by any observation made herein, which is confined only to the adjudication of the present writ petition.

No order as to cost(s). (Ravindra Kumar Agrawal) Judge ved