TaxTMI 
TaxTMI 
2026 (2) TMI 607
X X X X Extracts X X X X
X X X X Extracts X X X X
....erred to as "PMLA"). The order provisionally attached five movable properties valued at approximately Rs. 63.5 lakhs and four immovable properties valued at around Rs. 2.23 crores belonging to the petitioners. 3. The said order arose from an investigation pursuant to Enforcement Case Information Report (ECIR) No. ECIR/KLZO-I/09/2021 dated March 15, 2021. During the inquiry, it was revealed that Sri Suman Chattopadhyay, principal petitioner, along with his wife, were directors of M/s. Disha Productions & Media Private Limited (hereinafter referred to as "DPMPL") and M/s. Ek Din Media Private Limited (hereinafter referred to as "EDMPL"). Both entities were alleged to have engaged in fraudulent financial transactions with the I-Core Group, a chit fund enterprise operating in a manner analogous to the Saradha Group chit fund scam, in which the petitioners had been previously involved. Earlier, their assets worth Rs. 1.72 crores were attached under a provisional order dated December 21, 2015, later confirmed by the Adjudicating Authority. 4. It was specifically mentioned that the respondent no. 1/ writ petitioner entered into an investment agreement dated July 29, 2009 with M/s I ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....operties predated association with I Core Group and procedural lapses in the attachment order. 9. The matter was heard before the Hon'ble Justice Moushumi Bhattacharya on June 21, 2022, who recorded that the petitioners sought a stay of the provisional attachment order. Petitioners relied on Supreme Court precedents to dispute the "reason to believe" recorded by the Enforcement Directorate in support of provisional attachment. 10. The appellants/respondents contended that the writ petition was not maintainable since, subsequent to the provisional attachment, an Original Complaint was filed with the Adjudicating Authority under Section 5(5) of the PMLA and show cause notices were issued to the petitioners under Section 8(1). These material facts had not been disclosed to the Court by the writ petitioners. The appellants further submitted that the burden to prove lawful acquisition of attached properties rested on the petitioners and that writ jurisdiction was not liable to interfere with the attachment's legality during pendency of statutory adjudication. 11. On June 28, 2022, the Single Judge quashed the provisional attachment order on the ground that it failed to comply w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... subsequent to the issuance of the Provisional Attachment Order, the appellants filed original complaint No. 1723/2022 before the Adjudicating Authority under Section 5(5) of the PMLA, seeking confirmation of the attachment. Moreover, pursuant to such complaint, show cause notices were issued to the writ petitioners on June 03, 2022 under Section 8(1) of the said Act. These material facts were not disclosed in the writ petition, thereby impairing the Court's ability to appreciate the entire factual matrix and legal framework governing the attachment. 18. The law under Section 5(1) mandates that the attachment order record "reasons to believe" that the properties attached constitute proceeds of crime. The impugned Provisional Attachment Order is a detailed, reasoned and speaking order which complies with the statutory mandate. The reasons supporting such belief are part of the investigation records maintained by the Enforcement Directorate and were forwarded to the Adjudicating Authority along with the attachment order. It was an error of law for the Court to conclude non-compliance without requisitioning the relevant materials or affidavit from the Enforcement Directorate in sup....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d commission of an offence. 22. It is submitted that the present case is part of a continuing investigation involving sophisticated financial fraud similar to established chit fund scams such as the Saradha Group, with which the petitioners have been implicated previously. Their habitual involvement in money laundering underscores the imperative need for vigilant enforcement and non-interference with provisional measures intended to preserve assets and protect the government interests. 23. The appellants urge that the impugned order failed to appreciate the severe prejudice that would ensue from vacating the provisional attachment. The ability to attach properties provisionally is critical to the prospects of successful confiscation and recovery in the ultimate adjudication. The principle of maintaining attachment during pendency of adjudicatory proceedings serves to prevent jeopardizing public interest. 24. During the pendency of the writ petition, the Adjudicating Authority confirmed the provisional attachment by order dated September 23, 2022 under Section 8(3) of the PMLA, subject to the outcome of the writ. This confirmation reaffirms the correctness and procedural pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....7. Learned counsel emphasises that Section 5(1) mandates written reasons forming an unbroken chain of possession of proceeds of crime and relation to scheduled offences all conjunctively required and absent herein. The impugned judgment rightly highlighted the PAO's general conclusions lacking factual precision, no money-trail from I-Core to respondents' pre-2009 acquisitions funded by legitimate sources like salaries and loans and no specific allegations against respondent nos. 2 and 3 and no charge-sheet against them. Properties were acquired years prior to alleged offences, stripping ED of jurisdiction, as affirmed in Enforcement Directorate v. Seema Garg reported in (2020) SCC OnLine P&H 738 and Pavana Dibbur v. Directorate of Enforcement reported in (2023) 15 SCC 91. Such jurisdictional defect overrides alternative remedy bars as mentioned in Whirlpool Corporation v. Registrar of Trade Marks reported in (1998) 8 SCC 1 and aligns with Tofan Singh v. State of Tamil Nadu reported in (2021) 4 SCC 1 on absent reasons voiding orders. 28. The scope of this appeal confines to the impugned judgment's legality, not hypothetical Section 8(3) outcomes, which follow automati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ised in the instant appeal has become purely academic in nature and does not warrant adjudication on merits. 33. The Provisional Attachment Order dated March 29, 2022 under Section 5(1) of the PMLA, challenged before the Learned Single Judge, stands confirmed by the Adjudicating Authority vide order dated September 23, 2022 under Section 8(3). The respondents have availed statutory appellate remedies under Section 26 before the Appellate Tribunal (PMLA), New Delhi, where appeals (Nos. 5087/2022, 5088/2022, 5089/2022 and 5173/2022) remain pending adjudication. 34. It is a settled principle of jurisprudence that Courts refrain from deciding academic or infructuous matters, particularly where a comprehensive statutory mechanism exists for redressal. In Chhabil Dass Agarwal (supra) the Hon'ble Supreme Court held that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. The High Court must not interfere if there is an adequate efficacious alternative remedy available unless exceptional circumstances warrant such interference. 35. The PMLA provides such a complete adjudicatory hie....