Provisional attachment under PMLA: writ relief restrained after Adjudicating Authority confirmation; quashing order set aside, appeal allowed

Provisional attachment under the Prevention of Money Laundering Act was subsequently confirmed by the Adjudicating Authority, and statutory appellate remedies exist; therefore the challenge to the provisional attachment became academic and not amenable to fresh writ adjudication. Because confirmation occurred and no exceptional circumstances warranted bypassing the statutory scheme, the earlier Single Judge order quashing the provisional attachment was rendered unsustainable and has been set aside; the appeal is allowed. Parties are directed to pursue the pending statutory appellate remedies expeditiously, consistent with avoiding multiplicity of litigation and preserving public interest in attached assets.

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Issues: (i) Whether the controversy raised by challenge to a provisional attachment under the Prevention of Money Laundering Act, 2002 is academic or infructuous and hence not amenable to adjudication by writ jurisdiction; (ii) Whether the impugned order quashing the provisional attachment dated March 29, 2022 should be set aside in view of subsequent confirmation by the Adjudicating Authority and availability of statutory appellate remedies.

Issue (i): Whether the controversy is academic or infructuous and not fit for writ adjudication.

Analysis: The provisional attachment was subsequently confirmed by the Adjudicating Authority under Section 8(3) of the PMLA and statutory appeals under Section 26 have been filed and remain pending. A comprehensive statutory scheme exists for adjudication, confirmation and appellate review of attachments under the PMLA. Where alternative efficacious statutory remedies are available and a later statutory determination (confirmation) has occurred, the dispute regarding the provisional attachment assumes an academic character.

Conclusion: The controversy is academic and not fit for fresh adjudication by writ jurisdiction.

Issue (ii): Whether the impugned Single Judge order quashing the provisional attachment should be set aside in the circumstances.

Analysis: The provisional attachment dated March 29, 2022 had been confirmed by the Adjudicating Authority on September 23, 2022. Given the confirmation and the existence of statutory appellate remedies, intervention by writ was restrained. Exceptional circumstances justifying departure from statutory remedy exhaustion were not found. Consequently, the earlier quashing order was rendered unsustainable in view of the subsequent statutory confirmation and the need to avoid multiplicity of litigation and protect public interest in preserving attached assets pending adjudication.

Conclusion: The impugned order quashing the provisional attachment is set aside; the appeal is allowed.

Final Conclusion: The appeal is allowed on the ground that the matter had become academic following confirmation of the provisional attachment by the Adjudicating Authority and because adequate statutory remedies under the PMLA are available; parties are directed to pursue the pending appellate proceedings expeditiously.

Ratio Decidendi: Where a statutory adjudicatory mechanism exists and a provisional attachment has been confirmed by the Adjudicating Authority, writ intervention is ordinarily restrained and disputes rendered academic should not be adjudicated by writ courts, absent exceptional circumstances.

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