Case Note & Summary
The petitioner, Smt. Jayamma, filed a writ petition under Articles 226 and 227 of the Constitution of India challenging the provisional attachment order No.14/2025 dated 09.06.2025 passed by the Directorate of Enforcement under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA). The petitioner claimed that she inherited certain lands from her husband and that those lands were utilized for formation of Jayanagar Layout without acquisition by the Mysore Urban Development Authority (MUDA). She alleged that she had represented MUDA for allotment of sites in lieu of compensation, but instead of receiving compensation, the Enforcement Directorate attached the property as proceeds of crime. The respondent argued that the property was involved in money laundering arising from a MUDA land scam and that the petitioner had an alternative remedy under Section 8 of PMLA to appear before the Adjudicating Authority. The court, after hearing both sides, held that the provisional attachment order under Section 5 PMLA does not require prior notice or hearing and that the petitioner's defence of being an innocent owner must be raised before the Adjudicating Authority. The court found that the writ petition was not maintainable as the petitioner had an efficacious alternative remedy under Section 8 PMLA and no exceptional circumstances were shown to bypass it. Accordingly, the petition was dismissed with liberty to the petitioner to approach the Adjudicating Authority.
Headnote
A) Prevention of Money Laundering Act - Provisional Attachment - Section 5 PMLA - Validity - Petitioner challenged provisional attachment order under Section 5 PMLA on grounds of being an innocent owner without notice - Court held that Section 5 does not require prior hearing and the petitioner must raise defence before the Adjudicating Authority under Section 8 PMLA - Held that writ petition is not maintainable as alternative remedy is available and efficacious (Paras 1-10). B) Prevention of Money Laundering Act - Proceeds of Crime - Section 2(1)(u) PMLA - Definition - Land allegedly used for layout without acquisition claimed as proceeds of crime - Court noted that the property was allegedly acquired through criminal activity relating to MUDA land scam - Held that the petitioner's claim of inheritance and innocent ownership requires evidence to be examined by Adjudicating Authority (Paras 3-8). C) Constitutional Law - Writ Jurisdiction - Article 226 - Alternative Remedy - Maintainability - Petitioner sought to quash provisional attachment order without approaching Adjudicating Authority - Court held that existence of alternative remedy under Section 8 PMLA bars entertainment of writ petition unless exceptional circumstances exist - Held that no exceptional case made out (Paras 9-10).
Issue of Consideration
Whether the provisional attachment order under Section 5 of the Prevention of Money Laundering Act, 2002 is valid and whether the writ petition is maintainable without exhausting the alternative remedy under Section 8 of the PMLA.
Final Decision
Writ petition dismissed. Petitioner granted liberty to approach the Adjudicating Authority under Section 8 of PMLA to raise all defences.
Law Points
- Provisional attachment under PMLA Section 5 does not require prior adjudication
- Writ petition against provisional attachment order not maintainable without exhausting alternative remedy under Section 8 PMLA
- Burden on petitioner to show property not proceeds of crime
- Innocent owner defence must be raised before Adjudicating Authority
