PMLA writ jurisdiction and proceeds of crime principles upheld where attachment rested on tangible material and statutory procedure was followed.

Writ jurisdiction was held inappropriate to bypass the PMLA's statutory remedy where the impugned action rested on tangible material and no exceptional ground for interference was shown. The Court accepted territorial jurisdiction because a substantial part of the cause of action arose in Delhi. It further held that the provisional attachment and show-cause notice were supported by a recorded reason to believe based on FIR material, a charge-sheet report, bank records, ledger entries and statements. The Court also treated digital login IDs as property capable of constituting proceeds of crime and rejected challenges based on alleged single-member functioning of the Adjudicating Authority or absence of prior attachment.

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Issues: (i) Whether the writ petitions were maintainable in view of the statutory remedy under the PMLA and the territorial-jurisdiction objection; (ii) Whether the provisional attachment order and the consequential show-cause notice were vitiated for want of proper reason to believe; (iii) Whether the attached properties could be treated as proceeds of crime where the underlying betting activity was said not to be a scheduled offence; (iv) Whether the show-cause notice was invalid because the Adjudicating Authority allegedly functioned as a single-member bench and because prior attachment was absent.

Issue (i): Whether the writ petitions were maintainable in view of the statutory remedy under the PMLA and the territorial-jurisdiction objection?

Analysis: The existence of an efficacious alternative remedy under the PMLA weighed against exercise of writ jurisdiction. The Court held that the writ jurisdiction under Article 226 is to be invoked only in exceptional situations such as violation of fundamental rights, breach of natural justice, or patent want of jurisdiction or challenge to vires. It further held that a substantial part of the cause of action had arisen within Delhi because the relevant acts of procurement and distribution of login IDs were carried out there, and therefore the territorial objection was not sustainable.

Conclusion: The preliminary objections to maintainability were rejected.

Issue (ii): Whether the provisional attachment order and the consequential show-cause notice were vitiated for want of proper reason to believe?

Analysis: Sections 5(1) and 8(1) of the PMLA require the authority to form a reason to believe on the basis of material in its possession. On the material referred to in the attachment order, including the FIR, the report under Section 173 of the Code of Criminal Procedure, 1973, bank records, ledger entries and recorded statements, the Court found a live nexus between the material and the conclusion that the properties were liable to attachment and adjudication. The Court held that the belief was founded on tangible material and was not mechanical or based on mere suspicion.

Conclusion: The provisional attachment order and the consequential show-cause notice were not held to be invalid for want of reason to believe.

Issue (iii): Whether the attached properties could be treated as proceeds of crime where the underlying betting activity was said not to be a scheduled offence?

Analysis: The Court construed the definitions of property and proceeds of crime broadly under the PMLA. It held that intangible digital assets such as login IDs can qualify as property, and that proceeds generated from downstream activity remain traceable to the original tainted property when the chain of criminal conduct originates from a scheduled offence. The Court accepted that the procurement and distribution of the IDs, without lawful verification and in furtherance of a larger conspiracy, brought the case within the ambit of criminal activity relatable to a scheduled offence.

Conclusion: The attached properties were treated as capable of constituting proceeds of crime under the PMLA.

Issue (iv): Whether the show-cause notice was invalid because the Adjudicating Authority allegedly functioned as a single-member bench and because prior attachment was absent?

Analysis: Reading Sections 6(2), 6(5)(b) and 6(7) harmoniously, the Court held that the Adjudicating Authority can validly function through benches including a single-member bench. It also held that issuance of notice under Section 8(1) is triggered by the statutory preconditions and is not dependent upon prior attachment as a jurisdictional prerequisite. The Court therefore rejected the contention that the notice was void for lack of composition or for absence of an earlier attachment order.

Conclusion: The challenge to the show-cause notice on these grounds failed.

Final Conclusion: The Court upheld the impugned PMLA proceedings and found no legal infirmity warranting interference under writ jurisdiction.

Ratio Decidendi: Writ jurisdiction should not ordinarily be used to bypass the PMLA's statutory adjudicatory hierarchy where the impugned action is founded on tangible material, the authority has recorded a reason to believe, and the statutory scheme itself permits adjudication by the Adjudicating Authority without prior attachment as a jurisdictional condition.

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