2013 (11) TMI 1713 - HC - Indian Laws

Summary

Issues Involved:
1. Legality of the directive to debit freeze the petitioner's bank account.
2. Compliance with the procedure prescribed under the PMLA.
3. Availability of alternative remedies under the statutory scheme of the PMLA.
4. Jurisdiction of the High Court under Article 226 of the Constitution of India.

Summary:

1. Legality of the directive to debit freeze the petitioner's bank account:
The petitioners challenged the action of respondent No.2 in issuing a directive dated 12.07.2011 to respondent No.3 bank to debit freeze their Current Account No.003010200078603, and the consequent action by the bank on 09.09.2011. The petitioners argued that this action was illegal as the procedure prescribed under the PMLA was not followed.

2. Compliance with the procedure prescribed under the PMLA:
Respondent No.2 issued a provisional attachment order No. 7/2011 u/s 5 of the PMLA, attaching properties including two wind turbines acquired by the petitioner. This order was confirmed by the Adjudicating Authority u/s 8(3) of the PMLA. The respondents argued that the directive to freeze the account was within their investigatory powers under the PMLA, which includes attachment, search, and seizure of properties involved in money laundering. The court found substance in the respondent's contention that the statutory mandate under the PMLA allows for such actions to prevent the proceeds of crime from changing hands.

3. Availability of alternative remedies under the statutory scheme of the PMLA:
The court noted that the petitioners had not exhausted the alternative remedies available under the PMLA, such as appealing to the Appellate Tribunal u/s 26 and further to the High Court u/s 42. The court cited previous judgments emphasizing the necessity of exhausting statutory remedies before invoking the writ jurisdiction under Article 226.

4. Jurisdiction of the High Court under Article 226 of the Constitution of India:
The court reiterated that Article 226 is not meant to bypass statutory procedures and remedies. It emphasized that the High Court should not entertain petitions under Article 226 when efficacious alternative remedies are available under the statute. The court referred to the Supreme Court's observations in various cases, including *Asstt. Collector of Central Excise, Chandan Nagar, West Bengal Vs. Dunlop India Ltd. and others* and *Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement & Another*, to support this view.

Conclusion:
The court rejected the petition, holding that the petitioners should have availed the alternative remedies provided under the PMLA. It concluded that intervening at this stage would undermine the statutory mandate of the PMLA. The notice was discharged, and no interference was warranted under Article 226 of the Constitution of India.