Review of Provisional Attachment Order under Money Laundering Act; Lack of Specific Reasons Leads to Order Set Aside

The High Court reviewed the legality of a provisional attachment order under the Prevention of Money Laundering Act, focusing on the attachment of two bank accounts. Finding that the order lacked specific reasons for attachment as required by Section 5(1) of the Act, the Court set aside the order concerning those accounts. The Deputy Director was directed to reassess and provide a reasoned order if needed. The Court clarified that authorities could still attach properties under the Act with proper justification.

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Issues involved:
The issues involved in the judgment are the legality of the provisional attachment order issued under the Prevention of Money Laundering Act, 2002, specifically regarding the attachment of two bank accounts without providing valid reasons.

Issue 1: Provisional Attachment Order Contrary to PMLA

The petitioners challenged the provisional attachment order issued by the Deputy Director of Enforcement, claiming it was contrary to the Prevention of Money Laundering Act, 2002. The petitioners argued that the attached accounts were related to a contract with the National Highway Authority of India and only contained transactions related to that contract. They contended that the accounts were attached without valid reasons, hindering their ability to fulfill contractual obligations and pay salaries. The respondent authorities opposed the writ petition, citing the availability of alternative remedies and the legality of the attachment under the PML Act.

Issue 2: Compliance with Section 5(1) of PMLA

The central issue was whether the provisional attachment order, specifically concerning two bank accounts, complied with Section 5(1) of the Prevention of Money Laundering Act, 2002. Section 5(1) requires authorities to have reasons to believe before attaching property related to proceeds of crime. The petitioners argued that the reasons for attaching the accounts were not provided in the order, while the respondent authorities maintained the attachment was justified due to the nature of the scheduled offenses involved.

Judgment Summary:

The High Court examined the legality of the provisional attachment order under the PML Act and focused on the attachment of two bank accounts. The Court noted that the impugned order lacked specific reasons for attaching the accounts, as required by Section 5(1) of the Act. It concluded that the attachment of the accounts was without proper reasons and set aside the order only concerning those accounts. The Deputy Director was given the opportunity to reevaluate and provide a reasoned order if necessary. The Court emphasized that authorities could still attach properties under the Act if warranted. The writ petition was disposed of accordingly.

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