Court Allows Writ Petition Despite Statutory Remedy; Quashes PMLA Attachment for Lack of Nexus

The court found the writ petition maintainable despite the availability of an alternative statutory remedy, allowing for interference due to a patent jurisdictional error. It held that provisional attachment of third-party property under the PMLA was without jurisdiction as there was no nexus to the alleged crime, leading to a gross abuse of process. The court determined that quashing the Section 5 order nullified any connected adjudication under Section 8, requiring both to be quashed. Partial interim relief was granted, restraining coercive action on immovable properties, while allowing actions on shares and office room. The court found a strong case for the petitioners regarding immovable properties, scheduling the matter for final hearing.

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Issues Involved:
1. Maintainability of the writ petition under Article 226 of the Constitution of India.
2. Provisional attachment of third-party property under Section 5 (1) of the PMLA.
3. Effect of quashing an order under Section 5 (1) on connected adjudication under Section 8 of the PMLA.

Issue-wise Detailed Analysis:

1. Maintainability of the writ petition under Article 226 of the Constitution of India:
The court examined whether the writ petition is maintainable despite the availability of an alternative statutory remedy. It was argued by the petitioners that a patent jurisdictional error can be interfered with by the court even if an alternative remedy is available. The court referenced the Whirlpool case, which outlines limited windows for such interference, and Chhabil Das's case, which allows for exceptions to the alternative remedy bar when a statutory authority fails to act in accordance with the statute or acts without jurisdiction. The court concluded that the distinction between an "alternative" and a "statutory" remedy is artificial and not supported by cited judgments, thus determining that the writ petition is maintainable if a patent jurisdictional contravention is established.

2. Provisional attachment of third-party property under Section 5 (1) of the PMLA:
The court delved into whether a third-party property, having no nexus with the proceeds of crime, can be provisionally attached under Section 5 (1) of the PMLA. The definition of "proceeds of crime" under Section 2 (1) (u) of the PMLA was discussed, which includes any property derived or obtained directly or indirectly from criminal activity relating to a scheduled offense. The court noted that the attached property and shares were acquired much prior to the alleged crime and that the petitioners are not involved in the crime. The court referenced several judgments, including Bacha Guzdar, which established that shareholders have no rights in the assets of the company, and concluded that the provisional attachment of the company's assets was without jurisdiction as there was no nexus between the property and the alleged crime. The court found that the respondents acted in gross abuse of the process of law by attaching the company's property.

3. Effect of quashing an order under Section 5 (1) on connected adjudication under Section 8 of the PMLA:
The court examined the argument that the proceeding under Section 8 of the PMLA is independent of the provisional attachment order under Section 5 (1). The court referenced the Supreme Court judgment in M/s Kaushalya Infrastructure, which held that quashing a Section 5 order on technical grounds does not per se invalidate the Section 8 adjudication. However, the court distinguished the present case, noting that the provisional attachment order was held to be patently de hors jurisdiction, thus nullifying the premise of any resultant proceeding or adjudication under Section 8. The court concluded that the provisional attachment order and the connected adjudication under Section 8 stand vitiated and are required to be quashed.

Interim Order:
The court granted partial interim relief, restraining the respondents from taking any coercive action regarding the immovable properties of the petitioner no. 1-company until the disposal of the writ petition. However, the respondents were allowed to proceed with actions concerning the shares and office room mentioned in the impugned order. The court also ordered the petitioners to maintain the status quo regarding the land until the writ petition is disposed of.

Conclusion:
The court found a strong prima facie case in favor of the petitioners regarding the immovable properties and granted interim relief accordingly. The respondents were directed to file their affidavits, and the matter was scheduled for final hearing.

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