TaxTMI 
TaxTMI 
2026 (8) TMI 1854
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....mander Rastogi, Mr. Kaif Ali Rizvi and Ms. Richa Patel, learned counsel for the petitioners. Also heard Ms. Annapurna Tiwari, learned counsel for the respondent No. 1/Union of India as well as Mr. Zoheb Hossain (through Video Conferencing), Special Counsel and Dr.Saurabh Kumar Pande, Special Public Prosecutor for the respondent No. 2/Enforcement Directorate (for short, the ED). 2. By this petition under Article 226 of the Constitution of India, the petitioner(s) seek for the following relief(s): "10.1 Issue a writ, order or direction under Article 226 of the Constitution of India, calling for the records and proceedings culminating in the Provisional Attachment Order dated 28.05.2026 passed by the Respondent under Section 5(1) of the Prevention of Money Laundering Act, 2002 in ECIR/RPZO/04/2024, for the kind perusal of this Hon'ble Court; and 10.2 Upon examining the records so called for, issue an appropriate writ or any other appropriate writ, order or direction, quashing and setting aside the Provisional Attachment Order dated 28.05.2026 passed by the Respondent under Section 5(1) of the Prevention of Money Laundering Act, 2002 in ECIR/RPZO/04/2024 and co....
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....naccounted income. It was directed that the amount of Rs. 60 Crores would be treated as unaccounted business income in the hands of RKA (Rs.33 Crores), BFP (Rs.7 Crores) & Rahul Agrawal (Rs.20 Crores) and be charged to tax accordingly. The aforesaid assessment order dated 28.09.2021 was challenged by the petitioner No. 1 and R.K. Group entities before the CIT(A), and vide order dated 22.12.2022, passed under Section 250 of the IT Act, the explanation offered by the assessees qua lack of entry in books of accounts and the source of the Rs. 60 Crores cash was accepted, thereby allowing the appeal and deleting the addition of Rs. 60 Crores to the incomes of the RK Group entities. The Pr. CIT (Central) Bhopal, exercising powers under Section 263 of the IT Act, vide order dated 17.08.2023, subjected the aforesaid assessment order dated 28.09.2021 to revision and set it aside to the Assessment Officer on specific issues regarding expenses claimed by RK Group in respect of the acquisition of the Hotel from SBIL. The said remand did not pertain to the alleged Rs. 60 Crores unaccounted cash. Consequently, an assessment order dated 08.01.2024 came to be issued under Section 143 read with 263....
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....eets. In the meantime, the aforesaid order of CIT(A) dated 12.12.2022 regarding the alleged unaccounted cash of Rs. 60 Crores, was challenged before the Income Tax Appellate Tribunal, Raipur (for short, the ITAT) whereby, the order of the CIT(A) dated 12.12.2022 was upheld and the appeals filed by the IT Department were dismissed. On 02.07.2025, Laxmi Narayan Bansal @ Pappu Bansal, who is one of the accused in the FIR/ECIR, stated in his statement under Section 50 of the PMLA, recorded by the respondent Department that he had paid Rs. 40,00,00,000/- in cash to Vijay Agrawal in 2019 out of the PoC generated through the liquor scam. He also stated that a further amount of Rs. 70,00,00,000/- was supplied to Vijay Agrawal by him, through one Probir Sharma at the instance of one Chaitanya Baghel (another accused in the FIR/ECIR), thereby bringing the total to Rs. 110,00,00,000/- all of which was allegedly given by Vijay Agrawal to his nephew - the petitioner No. 1 - for purchase of some hotel in Goa, as told to him by Chaitanya Baghel. On 15.07.2025, the ED conducted search proceedings at various locations including the petitioner No. 1 which led to recovery of digital devices and docum....
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....s passed by the IT authorities such as the Assessment Officer, CIT(A) and ITAT, in respect of FY 2019-20. As per the impugned order, one Sameer Biyani's statement dated 23.07.2025, recorded under Section 50 PMLA, which allegedly corroborates the utilization of proceeds of crime amounting to Rs. 110 Crores for the purchase of the Hotel. Sameer Biyani specifically claimed that he and one Vishal Saxena collected Rs. 60 Crores from petitioner No. 1 - as directed by one Jayprakash Agrawal of M/s SBIL. 7. On 12.08.2025, an Original Application No. 234/2025 was filed by the ED before the Adjudicating Authority (for short, the AA) for retention of devices, documents and cash seized vide search conducted on 15.07.2025. As per the impugned order, one Probir Kumar Sharma stated in his statement under Section 50, PMLA that he had personally handed Rs.70 Crores in cash to Vijay Agrawal from Laxmi Narayan Bansal on the personal instructions of Chaitanya Baghel. On 24.12.2025, the aforestated OA No. 234/2025 filed by the ED was allowed by the learned AA. On 28.05.2026, the impugned order dated 28.05.2026 was issued by the respondent/ED, attaching the Hotel treating it as proceeds of crime as d....
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....mpugned order fails to establish any nexus, direct or indirect, between the PoC of Rs. 110 Crores given by Laxmi Narayan Bansal to Vijay Agrawal and the purchase consideration paid for purchasing the Hotel by the petitioners. The petitioners have never had any relation to the liquor business either in the State of Chhattisgarh or in any other part of India in the past or present, whatsoever. Therefore, there is no chance of any nexus of the petitioners with the subject scam in any manner. The respondent-ED has fundamentally ignored the undisputed fact that the cash component of Rs. 60 Crores utilised towards acquisition of the subject property was generated from the legitimate business operations of the petitioner's business entities and constituted cash available with such entities in the ordinary course of business. The explanation regarding the availability and source of the said cash was accepted by the CIT(A) and subsequently affirmed by the ITAT. Once the competent statutory authorities have accepted that the cash emanated from legitimate business operations and available business cash, the respondent-ED could not disregard those findings and proceed on the assumption tha....
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....grawal family group shall have no right, claim or ownership in the petitioner No. 2 company. The admission by petitioner No. 1 of cash payment of Rs. 60 Crores for acquisition of the Hotel, the Income Tax Appraisal Report dated 10.10.2019 and statements of Sameer Biyani and Vishal Saxena, lends no credit to the case of the ED, when considered in light of the fact that the order dated 12.12.2022 of CIT (A) under Section 250 of the IT Act reversed the finding made in the assessment order dated 28.09.2021, deleting the addition of Rs. 60 Crores and thereby accepting the explanation for the cash amounting to Rs. 60 Crores i.e. necessary entries in the books of accounts were yet to be made on the date of the search proceedings and adequate cash in hand was available in the books of RK Associates and Hoteliers Pvt. Ltd., Brandavan Food Products Pvt. Ltd., Satyam Caterers Pvt. Ltd. and petitioner No. 1, which through an MoU was agreed to be invested in the attached property via cash payment to Sir Biotech India Ltd. In view of the above, the source of cash amounting to Rs. 60 Crores stood explained and the order dated 04.07.2024 passed by the ITAT, which upheld the aforesaid order of CIT(....
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....carried out by the ED as no conclusive and unambiguous reason has been advanced by the ED for passing the Impugned Order. In this regard, the Hon'ble Supreme Court in Vijay Madanlal Chaudhary v. Union of India {(2023) 12 SCC 1} has held that the authorized officer while passing the PAO has to record satisfaction and reason on the basis of material in his possession and therefore such provisional attachment cannot be a mechanical exercise. He also places reliance on the judgment rendered by the Karnataka High Court in Smt. Jayamma v. The Directorate of Enforcement {Writ Petition No. 28108 of 2025 (GM-RES)} and the Hon'ble High Court of Gujarat in Bhanuben & Anr. v. State of Gujarat & Ors. {2017 SCC OnLine Guj 2517}. The respondent ED, in view of the facts and circumstances of the case at hand, has failed to demonstrate any reason to believe or regard the subject property as one obtained, directly or indirectly, through proceeds of crime - as defined under Section 2(u) of the PMLA. Therefore, the respondent ED lacked the foundational facts to exercise power under Section 5(1) to attach the subject property. In this regard reference may be had to the judgment passed by the Hon'ble....
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.... attempting to dovetail the PoC amount of Rs. 110 Crores with the Hotel's "total" purchase consideration which is stated to be Rs. 110 Crores (para CC of impugned order), whereas, total project value/sale consideration of the Hotel is variedly recorded as:- * Rs.214 Crores with unaccounted cash component of Rs.118.25 Crores as per the Income Tax Department Appraisal Report dated 10.10.2019; [description of RUD-15 and reason to believe no. 9 of the impugned order] * Rs. 198 Crores comprising Rs.80 Crores through banking channels (Rs. 50 Crores sale deed + Rs.30 Crores SBTIL plant and machinery substantiated through bills ) and Rs.118 Crores (Rs. 60 Crores purchase cash + Rs.58 Crores though through banking transaction for furniture and fixtures) as per statement of Sameer Biyani [description of RUD-20 in the impugned order]; * Rs.140 Crores as per the MoU dated 12.07.2019 executed between entities of RK Group and balance Rs.52 Crores through banking transaction for furniture and fixtures thereby making the total project cost was reduced to Rs. 192 Crores. 14. Mr. Bhandari further places reliance on the judgment passed by the Hon'ble High Court of An....
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....its own procedure. In terms of the said provision, the "Adjudicating Authority (Procedure) Regulations, 2013" have been published in the Official Gazette on 18.03.2013. Regulation 2(1)(c) and Regulation 26 thereof read as under: "Regulation 2(1)(c)- Bench means a Bench of the Adjudicating Authority constituted by the Chairperson of the Adjudicating Authority;" "Regulation 26-Issue of Order - (1) The order supported by reasons recorded shall be pronounced in open Court and on the date fixed in that behalf. (2) Every sheet of the order shall bear the signature of the Chairperson and Members constituting the Bench." 15. Mr. Bhandari submits that a bare perusal of these Rules would leave no manner of doubt that the proceedings before AA cannot be conducted by a single Member/Chairperson alone. Any interpretation to the contrary accorded by the respondents is untenable. Section 6(2) clearly employs use of the expression "shall" and contemplates that AA shall consist of a Chairperson and two other Members. Section 6(5) provides that, subject to the provisions of the Act, the jurisdiction of AA may be exercised by Benches thereof. The Chairp....
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....l of the Department of Revenue, Ministry of Finance. However, all administrative assistance to the AA also comes from the Ministry of Finance, which is in itself a litigant before the AA. This violates the basic principle that no man can be a judge in his own cause. The impugned PAO which has been passed in such a casual manner has resulted in the denting the reputation and goodwill of the petitioners in the hospitality industry and has succeeded to create an atmosphere of fear and uncertainty among the employees, guests and anyone in relation thereto. In such circumstances, the business of the petitioners is under distress, which in turn is a direct and unjustified violation of the petitioners' fundamental right to carry on business and trade under Article 19(1)(g) of the Constitution of India. The impugned PAO, will not only have an adverse impact on the petitioners' business and good will, (as the petitioner No.2 is actively considering the launch of an Initial Public Offering for listing on a stock exchange.), but also consequently cascade into a direct wider impact onto petitioner No. 1 and his other group concerns which have approximately 50 thousand employees engaged across ....
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.... or suspicion of commission of a scheduled offence. Further placing reliance on the decision of the Apex Court in Madras Bar Assn. v. Union of India {(2026) 2 SCC 1}, he submits that the Apex Court has observed ata paragraphs 34, 35 and 8 that a quasi judicial authority must be prescribed by a judicial member and inclusion of Technical Members are only justified when specialised expertise is essential. 18. Mr. Bhandari next submits that the Hon'ble Supreme Court has stayed orders where the Hon'ble High Courts have refused to interfere with the show cause notice issued by a Single Member of the AA. In Tushar Bansal & Others v. Adjudicating Authority and others {SLP (C) 5066/2026}, the Apex Court has stayed the order of the Delhi High Court in Naresh Bansal v. Adjudicating Authority {WP(C) No. 11361/2015} wherein the High Court had refused to interfere with the show cause notice issued by a Single Member of the AA. Similarly, in Samridh Surekha & Others v. Union of India {SLP(C) No. 5308/2026}, the Apex Court has stayed the order passed by the Calcutta High Court in Samridh Surekha & Others v. Union of India {WPA No. 1387/2026}, wherein also the Calcutta High Court refused to inte....
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....RPZO/04/2024 was accordingly recorded on 11.04.2024. The predicate agency has filed its charge sheet dated 29.06.2024 and supplementary charge sheets dated 26.09.2024, 17.11.2024, 27.06.2025, 30.06.2025, 24.08.2025, 24.11.2025 and 07.04.2026. This Directorate has filed prosecution complaints dated 19.06.2024, 30.08.2024, 05.10.2024, 12.03.2025, 15.09.2025, 26.12.2025 and 29.05.2026 before the Hon'ble Special Court (PMLA), Raipur, of which cognizance has not been taken yet. The criminal syndicate led by Anwar Dhebar and Anil Tuteja, operating through Arun Pati Tripathi as Managing Director of CSMCL, generated proceeds of crime quantified by the predicate agency at Rs. 2883,19,99,622/- through four mechanisms. Part A, being illegal commission on the accounted sale of country liquor by artificially inflating CSMCL's procurement price, yielded Rs. 319,32,67,275/-. Part B, being the clandestine manufacture and sale of unaccounted country liquor through State run outlets using duplicate holograms, yielded Rs. 2174,67,36,000/-. Part C, being annual cartel commission from distillers, yielded Rs. 52,00,00,000/-. The FL-10A mechanism yielded Rs. 88,69,25,305/- and Rs. 248,50,71,042/-. Laxmi ....
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....y point in a black car, and, significantly, that he also carried interest payments back from Vijay Kumar Agrawal to Pappu Bansal on 2 to 3 occasions. The last of these facts is of considerable importance: it demonstrates not an isolated or accidental receipt but a continuing, serviced financial arrangement in respect of the very corpus, which the recipient was deploying and upon which he was paying a return. The total proceeds of crime shown to have been received by Vijay Kumar Agrawal is thus Rs. 110,00,00,000/-. On 15.07.2025 search proceedings under Section 17 were conducted at the residential premises of Vijay Kumar Agrawal at Durg and cash of Rs. 66,11,000/- was seized. His claim, recorded the same day, that the cash represented daily sales of his Hotel Sagar International was falsified on that very day by the statement of his own Manager, Vijay Swain, who deposed that the monthly income of that hotel is approximately Rs. 20 lakh, of which only about Rs. 1 lakh is received in cash and even that is deposited into bank accounts. In his subsequent statements dated 16.07.2025, 21.07.2025, 24.07.2025, 28.07.2025 and 01.08.2025 he furnished no credible explanation of the source of t....
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....c marker of the third stage of money laundering, namely integration, as explained by the Hon'ble Supreme Court in Vijay Madanlal Choudhary (supra). 23. The declared annual income of petitioner No. 1 is approximately Rs.2.06 crore. The admitted cash component of Rs. 60 Crores alone represents roughly thirty years, and the total consideration of Rs. 110 Crores roughly fifty five years, of his entire declared income before tax and living expenses. The group entities are audited by Grant Thornton, are subject to a transaction audit by Deloitte and operate on an SAP platform with inbuilt controls over revenue, expenses, cash and banking. No mechanism has been identified, and none exists, by which Rs. 60 Crores of off-book cash could have been accumulated within those systems without detection. The attachment is precisely quantified and limited by the Directorate itself. Of the Rs. 110,00,00,000/- of PoC shown to have been delivered to Vijay Kumar Agrawal Rs. 60,00,00,000/- has been traced into the subject property as the undisclosed cash component of the purchase consideration and is attached as direct proceeds of crime under the first limb of Section 2(1)(u). The balance Rs. 50,00,0....
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.... record, and only then record a finding. That is a full adjudication upon evidence: the petitioners are entitled to file documents, lead evidence and be heard. (iv) Section 8(3) provides that the attachment lapses unless confirmed by a reasoned order; if the Authority is not satisfied, the property stands released. (v) Section 26 provides a full statutory appeal to the Appellate Tribunal on facts and law, and Section 42 provides an appeal to this Hon'ble Court. 25. Mr. Hossain submits that every ground urged in the petition is a ground which the AA is statutorily bound to consider under Section 8(2) upon evidence. That is true of the alleged absence of proceeds of crime, of the alleged absence of a money trail, of the effect of the income tax orders, of the alleged inadequacy of the reasons to believe, of the Memorandum of Family Settlement, of the resignation of Vijay Kumar Agrawal, and of the discharge of the burden under Sections 23 and 24. Not one of them requires, or is capable of, summary determination under Article 226. It is respectfully submitted that where a statute creates a complete machinery for obtaining relief, the writ jurisdiction ought not to ....
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....ed under Section 5(1) read with the authorisation dated 07.02.2007, in an ECIR validly recorded on 11.04.2024, in relation to offences squarely falling within Paragraphs 1 and 8 of Part A of the Schedule, after the condition in the first proviso stood satisfied by the charge sheet dated 07.04.2026, and upon reasons recorded in writing in the body of the order itself. The petitioners mischaracterise a question of merits as a "jurisdictional fact". 26. The entire architecture of the petition rests on the proposition that the existence of PoC is a jurisdictional fact whose objective existence a writ court must itself determine. That proposition misreads Section 5(1). The provision does not condition the power upon the prior proof of proceeds of crime; it conditions it upon the authorised officer having "reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession". The jurisdictional fact is therefore the existence of relevant material bearing a live and rational link to the belief recorded. Whether that material ultimately establishes that the property is proceeds of crime is the very issue remitted by Parliament to the Adjud....
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.... admission dated 29.07.2025 regarding personal delivery of Rs. 60 crore in cash in 8 to 10 installments. Such selective disclosure of a material admission amounts to suppression of a relevant fact. The petitioners have deliberately chosen not to annex the prosecution complaints and charge-sheets on the ground of "bulkiness", while simultaneously relying extensively upon the contents, omissions and alleged deficiencies of those very documents. The petitioners cannot rely upon documents selectively while withholding the documents themselves from the record. Petitioner No. 1 sought to explain the Rs. 60 Crores in cash as having been generated from his railway catering business. This explanation, however, stands contradicted by his own depositions dated 16.07.2025 and 30.07.2025, wherein he stated that cash generated from the mail/express catering business is collected by Axis Bank CNA agencies from the respective yards and directly credited into the companies' current accounts through the Cash Management System, while the revenue from Rajdhani, Shatabdi and Duronto services is embedded in the ticket fare and received entirely through banking channels. Thus, on his own showing, the bus....
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....ne whether the particular cash paid was derived from criminal activity or related to a scheduled offence. The enquiry under Sections 68, 69 and 69C of the IT Act concerns whether an investment or expenditure is unexplained. A sufficient book balance satisfies that fiscal test; it does not establish the identity or lawful provenance of the actual cash paid. As the petitioners themselves raise the possibility of substitution of legitimate cash by tainted funds, the burden under Section 24 of the PMLA lies upon them to disprove such substitution before the AA. The issue of criminal provenance was never before the income-tax authorities. The CIT(A) decided the matter on 22.12.2022, whereas the FIR and ECIR were registered only in 2024 and the material statements relied upon by the Directorate were recorded in 2025. The income-tax findings therefore could not have adjudicated material that did not then exist. The ITA and the PMLA operate in different fields and apply different tests. An income-tax finding that cash is adequately explained for taxation purposes does not establish that the same cash is not proceeds of crime. Section 71 of the PMLA gives the Act overriding effect. There is....
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....6, decided on 22.04.2026} placing reliance on the decision of the Madras High Court, in G.Gopalakrishnan v. Deputy Director {W.P.(MD) Nos. 11454} has in unequivocal terms held that even a single member Bench of the AA could adjudicate the disputes under PMLA. The Hon'ble Madras High Court has also clearly held that it is not mandatory that such Single Member Benches should comprise of Judicial members and even administrative members constituting Single Member Benches of the Tribunal would amount to sufficient compliance of the law. In Naresh Bansal (supra), the Hon'ble Delhi High Court, by its order dated 24.11.2025, refused to interfere with the notice issued by a Single Member. In Samridh Surekha & Others (supra) the Hon'ble Calcutta High Court, by its judgment dated 28.01.2026, likewise refused to interfere. Those are the only two considered decisions upon the point placed before this Hon'ble Court, and both are against the petitioners. What the Hon'ble Supreme Court has done, by its orders dated 09.02.2026 and 09.03.2026, is to stay those judgments pending consideration. It is settled that an order staying the operation of a judgment does not efface it, does not amount t....
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....quence would be that the Section 8 proceedings await a properly constituted Bench, and not that the attachment is void ab initio. The contention of the petitioners that the AA receives administrative assistance from the Ministry of Finance and that this offends the rule against a person being a judge in his own cause, is in substance a challenge to the constitutional validity of the statutory scheme itself. No such challenge has been pleaded, no relief in that behalf has been claimed, and the vires of Section 6 has already been considered and upheld. Mr. Hossain further submits that no interim relief could be granted in a petition which itself is not maintainable. In support of his contentions, he places reliance on the decision of the Apex Court in Bharat Coking Coal Ltd. v. Indian Newspaper Society {(2011) 14 SCC 140} and Directorate of Enforcement v. M/s. ZO Pvt. Ltd. {order dated 15.05.2026, SLP(C) No. 12671/2026} and further that any interim order which does not finally and conclusively decide an issue cannot be a precedent. In support thereof, he places reliance on the decision of the Apex Court in State of Assam v. Barak Upatyaka D.U.Karmachari Sanstha {(2009) 5 SCC 694}. So....
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....ndari, in response to the argument with regard to forum non conveniens, submits that the Delhi High Court, in Aasma Mohammed Farooq & Another (supra), vide its order dated 05.12.2018 itself has, at paragraph 12, agreed with the conclusion of the learned Single Judge in the case of Rashmi Cement Ltd. v. ED {WP(Crl.) No. 2170/2017, dated 30.08.2017} and the judgment in Rashmi Cement Ltd. (supra), takes note of a Five Judge decision in Sterling Agro Industries Ltd. v. Union of India {ILR (2011 VI Delhi 729}. He next submits that Section 42 of the PMLA is in respect of appeal against the order passed by the Appellate Tribunal. In Rashmi Cement, the FIR and the case registered by the ED against the petitioner therein was in Calcutta and as such, the Delhi High Court asked the petitioner to approach the Calcutta High Court. In the present case, the trial of the ED is in the jurisdiction of the Chhattisgarh High Court and as such, this petition is maintainable before this Court, though the property which has been sought to be attached, is located in Goa. The predicate offence is alleged to have been committed in Chhattisgarh. 35. At the outset, it would be appropriate to notice the nat....
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....here a statute provides an efficacious and comprehensive mechanism for adjudication of the very questions sought to be raised in a writ petition, the High Court ordinarily ought not to short-circuit such statutory proceedings, particularly when the challenge involves disputed questions of fact requiring appreciation of evidence. The exceptions recognised in Whirlpool Corporation (supra) namely, enforcement of fundamental rights, violation of principles of natural justice, proceedings wholly without jurisdiction, or challenge to the vires of a statute, do not appear to be attracted in the present case. There is no allegation that the petitioners have been denied an opportunity of hearing before the AA. There is no challenge to the vires of any provision of the PMLA. The impugned order has been passed by the authorised officer under Section 5(1) in an ECIR registered pursuant to a scheduled offence and after the statutory condition contemplated under the Act had arisen. What is essentially challenged is the sufficiency, correctness and probative value of the material relied upon by the authorised officer. Such a challenge cannot, in the facts of the present case, be equated with a ch....
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....lected Rs. 60 Crores in cash from petitioner No. 1 in eight to ten instalments. The statement of Vishal Saxena is also relied upon to corroborate payment of Rs. 50 Crores through banking channels and Rs. 60 Crores in cash. Whether these statements are truthful, whether they are corroborated sufficiently, whether they are capable of being relied upon, and what evidentiary value they ultimately possess are matters which fall within the domain of the statutory adjudication. At this stage, their existence as material before the authorised officer cannot be disputed. 40. The contention of the petitioners that the impugned order rests merely upon the numerical coincidence between the alleged Rs. 110 Crores of proceeds of crime and the Rs. 110 Crores comprising the registered consideration and cash component of the Hotel, also cannot be accepted at this stage. The respondent's case, as projected before us, is not founded upon numerical coincidence alone. It is founded upon a chain of circumstances. According to the respondent, Laxmi Narayan Bansal disclosed payment of Rs.40 Crores to Vijay Kumar Agrawal and further disclosed another Rs.70 Crores having been delivered through Probir....
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....fore, no question of the ED being bound by an adjudication which never examined whether the cash in question represented proceeds of crime arising from a scheduled offence. The argument that no money trail has been established from Vijay Kumar Agrawal to petitioner No. 1 also cannot be accepted as a ground for quashing the provisional attachment at this stage. The alleged transaction is stated to have been carried out in cash. Consequently, the absence of a banking trail cannot, by itself, conclusively negate the allegation. The respondent relies upon oral statements, the circumstances of the payment, the admitted cash component, the alleged physical transportation of cash and the circumstances surrounding the acquisition of the Hotel. 42. The petitioners, on the other hand, rely upon the family settlement dated 01.05.2019, the resignation of Vijay Kumar Agrawal from the Directorship of petitioner No.2 and their assertion that the cash was generated from legitimate business operations. These are matters which require evidentiary examination. The Court exercising jurisdiction under Article 226 cannot undertake an exercise of weighing these competing versions and determine which o....
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....n the basis of the material collected. The petitioners' assertion that they are strangers to the scheduled offence is therefore a matter to be examined on the evidence and cannot, without more, nullify the provisional attachment. 45. Another significant submission concerns the invocation of the power under Section 5(1) and the requirement of recording reasons to believe. The impugned order, as placed before us, does not merely reproduce the statutory language. It refers to the scheduled offence, the ECIR, the material collected during investigation, the statements of persons alleged to be involved in the distribution of proceeds of crime, the alleged payment of Rs. 110 Crores to Vijay Kumar Agrawal, the acquisition of the Hotel, the admitted cash payment of Rs. 60 Crores, and the circumstances connecting the transaction. The authorised officer has recorded reasons for treating the subject property as liable to attachment. Whether those reasons ultimately withstand the scrutiny of the AA is a different matter. At this stage, it cannot be held that the statutory requirement of recording reasons to believe was wholly absent. 46. The second proviso to Section 5(1), including ....
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....from the validity of the provisional attachment. At the highest, if the constitution of the Bench is found legally defective in the appropriate proceedings, the consequence would concern the conduct of the adjudication under Section 8. It would not follow that the prior provisional attachment was void ab initio. 49. This Court, in Mr. Sourabh v. Directorate of Enforcement {MA No. 34 of 2025, decided on 23.07.2025) while dealing with the issue of coram non judice, observed as under: "107. With regard to the issue of quorum of learned AA, the said issue is no longer res integra. The Madras High Court in G.Gopalakrishnan v. Deputy Director W.P.(MD) Nos. 11454 of 2018, has in unequivocal terms held that even a single member Bench of the Adjudicating Authority could adjudicate the disputes under PMLA. In fact, in the decision of the Delhi High Court in "J. Sekar (supra) it was held that less than three Member Adjudicating Authority is permissible under PMLA. The Hon'ble Madras High Court has also clearly held that it is not mandatory that such Single Member Benches should comprise of Judicial members and even administrative members constituting single member benches of t....
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....and acquisition of the property before the AA. Likewise, the decisions concerning the scope of judicial review where an order is wholly without jurisdiction do not assist the petitioners because, as already noticed, the present case is not one where the Authorised Officer lacked statutory authority to pass the order. The petitioners have also placed emphasis upon the fact that petitioner No. 1 disclosed the source of Rs. 60 Crores to the ED and explained that the amount represented cash generated through legitimate business operations. The respondent, however, disputes this explanation and relies upon statements made by petitioner No. 1 himself concerning the manner in which cash generated from his business was ordinarily collected and deposited through banking channels. Thus, there are two competing factual narratives. Whether the explanation offered by petitioner No. 1 is genuine, whether the books contained sufficient cash balances, whether such balances could actually have been deployed in the manner asserted, and whether the cash ultimately paid to the vendor was the same legitimate cash or tainted money are questions requiring factual adjudication. The writ jurisdiction is no....
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....is wholly without jurisdiction. There can be no quarrel with the said proposition. However, the principle cannot be invoked merely by labelling every error of fact, appreciation of evidence or insufficiency of material as a jurisdictional defect. In the present case, the authorised officer was vested with jurisdiction under Section 5(1). An ECIR had been registered in respect of scheduled offences. The predicate agency had filed charge-sheet(s). The respondent No. 2 had collected material during investigation. The authorised officer recorded reasons and passed the provisional attachment order. The jurisdictional foundation is therefore not absent. The petitioners' challenge is essentially directed against the correctness of the conclusion drawn from the material. Such a challenge is qualitatively different from absence of jurisdiction. 58. It is equally significant that the petitioners have an efficacious statutory remedy which has already been activated. The respondent has filed Original Complaint No.472 of 2026 before the AA. The petitioners can place before the said Authority every document and every contention raised before us, including the orders of the Income Tax auth....