Provisional Attachment Order Can't Be Challenged In Writ Jurisdiction When Alternative Remedy Under PMLA Exists: Delhi High Court

The Delhi High Court has observed that the provisional attachment order (PAO) cannot be challenged in the writ jurisdiction when an alternative remedy is available under the Prevention of Money Laundering Act, 2002.

Justice Sachin Datta rejected a batch of petitions filed by Ms Krrish Realtech Pvt Ltd and its affiliates, including director Amit Katyal, challenging the Enforcement Directorate's (ED) PAOs.

It was the petitioners' case is that they had initially approached the Supreme Court challenging Punjab and Haryana High Court's order wherein no stay was granted in their favour.

Later, while ordering status quo regarding possession of flats, the Apex Court had appointed former judge, Justice Gita Mittal as a referee to examine claims and counterclaims of all parties, including plot buyers.

The matter was remanded back to the High Court of Punjab and Haryana with a direction for expeditious hearing.

It was contended that despite the subsistence of the orders passed by the Supreme Court, ED registered an Enforcement Case Information Report (ECIR) on the basis of certain predicate offences arising from eight FIRs filed by some of the home-buyers. The FIRs alleged delay in delivery of possession of their plots or apartments.

It was submitted that at the time of registration of the ECIR, five of the eight FIRs had already been closed or quashed by competent courts of jurisdiction. Later, the ED issued the impugned PAOs which were under challenge.

Denying relief in the pleas, Justice Datta found merit in the submission of the ED that the PMLA provides for a statutory mechanism for redressal of grievances through the Adjudicating Authority and the Appellate Tribunal constituted thereunder.

The Court noted that in two of the petitions, the PAOs were already confirmed by the Adjudicating Authority and that statutory appeals were preferred before the Appellate Tribunal.

It further noted that in the third matter, proceedings before the Adjudicating Authority were concluded and the judgment was reserved on June 03.

“In view of the above, and considering the existence of an alternative and efficacious remedy under Section 26 of the PMLA, this Court is of the opinion that the present petitions do not merit interference under Article 226 of the Constitution of India,” the Court said.

It added that where a statute provides a self- contained appellate mechanism, recourse to the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India is ordinarily not maintainable.

Justice Datta concluded that the petitioners were not precluded from availing prescribed statutory or appellate remedy in the first instance and that the same would not be inefficacious.

“Section 26 of the PMLA specifically provides that any person aggrieved by an order of the 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,” the Court said.

It requested the Appellate Tribunal to consider and decide the appeals in question as expeditiously as possible, preferably within six months.

Title: MS KRRISH REALTECH PVT LTD THROUGH ITS AUTHORISED REPRESENTATIVE v. UNION OF INDIA THROUGH SECERATARY MINISTRY OF FINANCE & ANR and other connected matters

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