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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the provisional attachment orders passed under the Prevention of Money-Laundering Act, 2002 should be set aside and the matter relegated to the Lodha Committee in view of the Supreme Court's scheme under Article 142 of the Constitution.
Analysis: The Court held that the statutory scheme of provisional attachment and confiscation under the Prevention of Money-Laundering Act, 2002 operates differently from the Supreme Court's special mechanism for the PACL assets under Article 142 of the Constitution. It found that restoration under Section 8(8) of the Prevention of Money-Laundering Act, 2002 and Rule 3A of the Prevention of Money-laundering (Restoration of Confiscated Property) Rules, 2016 is a limited route controlled by the Special Court, and that the Enforcement Directorate had earlier acted in aid of the Lodha Committee mechanism. The Court also noted that the attachment orders had served their purpose, the petitioners had given an undertaking against alienation, and the matter had remained pending for years without meaningful adjudication.
Conclusion: The provisional attachment orders were set aside and the matter was relegated to the Lodha Committee for decision in accordance with the Supreme Court's scheme.
Final Conclusion: The writ petitions were disposed of after granting the respondent's applications, with the attached properties directed to remain protected from alienation or encumbrance until final determination by the Lodha Committee.
Ratio Decidendi: Where a special restitution mechanism has been devised by the Supreme Court for a defined class of assets under Article 142, provisional attachment under the money-laundering statute may be displaced in favour of that mechanism when the statutory process has served its purpose and the matter is appropriately remitted to the designated committee.
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