Kolkata: In a significant judgment that reinforces the statutory framework of the Prevention of Money Laundering Act (PMLA), the Calcutta High Court has held that a writ petition challenging the Enforcement Directorate’s (ED) provisional attachment order becomes "academic" once that attachment is confirmed by the Adjudicating Authority.
A Division Bench comprising Justice Rajarshi Bharadwaj and Justice Uday Kumar emphasized that when a law provides a specific and complete mechanism for appeals, individuals must follow that path instead of approaching the High Court directly through writ jurisdiction.
The case stems from an investigation into the I-Core Group, a company accused of running an illegal Ponzi scheme (Chit Fund) and duping thousands of investors. The Enforcement Directorate alleged that funds collected from the public were "proceeds of crime."
The ED had issued a Provisional Attachment Order (PAO) against renowned journalist Suman Chattopadhyay and his media companies, M/s Disha Productions & Media Pvt. Ltd. and M/s Ek Din Media Pvt. Ltd. The agency attached assets worth roughly ₹2.86 crores, claiming these were linked to illegal transactions with the I-Core Group.
The petitioners initially moved a Single Judge bench of the Calcutta High Court. They argued that:
- There was no direct link (nexus) between the attached properties and the alleged crime.
- Many of the properties were acquired long before the alleged transactions took place.
- The ED did not follow due process or record proper "reasons to believe" before seizing the assets.
The Single Judge had accepted these arguments and quashed the ED’s attachment order. Aggrieved by this, the ED moved the Division Bench in appeal.
The Division Bench took a different view. By the time the matter reached the appeal stage, the "provisional" nature of the attachment had changed. The Adjudicating Authority under the PMLA had already stepped in, reviewed the evidence, and confirmed the attachment. Furthermore, the parties had already approached the PMLA Appellate Tribunal to challenge this confirmation.
The Court noted that the PMLA is a "complete code." It has a built-in hierarchy for justice:
- Step 1: Provisional Attachment by the ED.
- Step 2: Adjudication by the Adjudicating Authority.
- Step 3: Appeal before the Appellate Tribunal.
- Step 4: Final trial in a Special PMLA Court.
The High Court observed that because the statutory process had moved forward to the appeal stage, the initial challenge to the "provisional" order was now a dead issue—or "academic."
A key highlight of the judgment is the Court's reminder about the limits of Writ Jurisdiction (Article 226). While High Courts have the power to intervene, they should exercise "self-restraint" if an "efficacious alternative remedy" (a proper legal path) exists.
Citing the Supreme Court's landmark judgment in Vijay Madanlal Choudhary v. Union of India, the Calcutta High Court reiterated that the PMLA provides enough safeguards. If a person is unhappy with an attachment, they must convince the Adjudicating Authority or the Tribunal, rather than asking the High Court to examine the merits of the evidence at a preliminary stage.
This ruling is a boost for the Enforcement Directorate as it prevents "parallel proceedings." Often, accused parties approach High Courts to stay investigations or attachments while the statutory process is still ongoing.
The Court’s message is clear: Once the Adjudicating Authority confirms an attachment, the High Court will not entertain a writ petition to look into the facts of the case. The aggrieved party must fight their battle in the Appellate Tribunal.
Setting aside the Single Judge's earlier order, the Division Bench directed Suman Chattopadhyay and other parties to pursue their remedies before the PMLA Appellate Tribunal. The ruling ensures that the specialized machinery created to tackle money laundering remains the primary forum for such disputes, maintaining the integrity of the PMLA’s legal structure.
Case Details: * Case Title: Enforcement Directorate & Anr. v. Sri Suman Chattopadhyay & Ors.
- Case No.: MAT 1214 of 2022
- Court: Calcutta High Court