Bank's challenge to provisional attachment order under PMLA dismissed, alternate remedy available under Section 8(2)

Delhi HC dismissed bank's challenge to provisional attachment order under PMLA Act. Court held that predicate offences of criminal breach of trust and forgery by accused persons regarding credit facilities between 2007-2018 could be adjudicated by PMLA authorities. HC refused to interfere with Single Judge's order, noting that when statute prescribes specific adjudication mechanism, writ courts should avoid interference. Court found bank had alternate efficacious remedy under Section 8(2) PMLA Act through Adjudicating Authority and upheld relegation to statutory remedy.

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Issues Involved:
1. Challenge to the Provisional Attachment Order (PAO) under the PMLA Act.
2. Jurisdiction and efficacy of the Adjudicating Authority.
3. Priority of secured creditor over Enforcement Directorate's rights.
4. Availability of alternative remedies under the PMLA Act.

Summary:

1. Challenge to the Provisional Attachment Order (PAO) under the PMLA Act:
The Appellant sought to challenge the Order dated 22.03.2023, passed by the learned Single Judge, which dismissed the writ petition challenging the Provisional Attachment Order (PAO) No.12/2019 dated 02.09.2019. This PAO was issued by the Deputy Director, Directorate of Enforcement, New Delhi, attaching the immoveable property under Section 5(1) of the Prevention of Money Laundering Act, 2002 (PMLA Act). The Adjudicating Authority confirmed the PAO by an order dated 21.02.2020.

2. Jurisdiction and efficacy of the Adjudicating Authority:
The learned Single Judge directed the Appellant/Bank to approach the Adjudicating Authority under Section 8(2) of the PMLA Act to establish that the subject property is not involved in money laundering activities. The Court emphasized that the Adjudicating Authority has the jurisdiction to hear any aggrieved person under Section 8(2) and Section 8(8) of the PMLA Act, and the Appellant/Bank should utilize this statutory mechanism.

3. Priority of secured creditor over Enforcement Directorate's rights:
The Appellant/bank argued that the subject property, mortgaged to the bank in 2007, should not be considered proceeds of crime and that the bank, as a secured creditor, should have priority over the Enforcement Directorate's rights under the PMLA Act. However, the learned Single Judge found that the issue of whether the property could have been attached as proceeds of crime should be adjudicated by the authorities under the PMLA Act.

4. Availability of alternative remedies under the PMLA Act:
The Court reiterated the principle that when a statute provides a specific mechanism for adjudication, writ Courts should generally refrain from interfering. The Court cited precedents from the Supreme Court, emphasizing that writ jurisdiction should be exercised only in extraordinary circumstances and when no efficacious alternative remedy is available. The Court found that the Appellant/Bank has an adequate remedy within the PMLA Act's framework and upheld the learned Single Judge's decision to direct the Appellant/Bank to the Adjudicating Authority.

Conclusion:
The Court dismissed the LPA, finding no reason to interfere with the learned Single Judge's order, which directed the Appellant/Bank to approach the Adjudicating Authority under the PMLA Act. The Court emphasized the availability of alternative remedies and the statutory mechanism provided by the PMLA Act for resolving such disputes.

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