Calcutta HC Overturns Single Judge’s Quash of ED’s ₹2.86 Crore Property Attachment; Says Tribunal Must Decide Under PMLA [Read Order]

In a recent ruling The Calcutta High Court Division Bench has overturned a Single Judge’s order that had quashed the Enforcement Directorate’s provisional attachment of properties worth ₹2.86 crore under the Prevention of Money Laundering Act (PMLA).

The matter arose from allegations that companies linked to respondent Suman Chattopadhyay had received over ₹9.83 crore from the I‑Core Group, a chit fund enterprise later found to be operating a Ponzi scheme. The ED provisionally attached five movable properties valued at ₹63.5 lakh and four immovable properties worth ₹2.23 crore in March 2022, citing them as “proceeds of crime.”

The Single Judge, in June 2022, quashed the attachment, holding that the order failed to establish a proper nexus between the properties and alleged money laundering. The ED appealed, arguing that provisional attachment only requires a “reason to believe”.

The appellant, the enforcement director, argued that hat the Single Judge erred in quashing the provisional attachment order dated March 29, 2022, which had attached properties worth ₹2.86 crore under Section 5(1) of the PMLA. They contended that the writ court exceeded its jurisdiction by conducting a merit‑based examination of the attachment, which is a matter reserved for the Adjudicating Authority and the Special Court under the statute.

It is also argued that during the pendency of the writ petition, they had already filed a complaint before the Adjudicating Authority, which subsequently confirmed the attachment in September 2022, and that the respondents had availed statutory appeals before the Appellate Tribunal and that writ jurisdiction should not be invoked when a complete adjudicatory hierarchy exists under the PMLA, citing Supreme Court precedents cautioning against premature judicial intervention.

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On the other hand respondent argued that the Enforcement Directorate’s provisional attachment order dated March 29, 2022, was rightly quashed by the Single Judge because it suffered from a jurisdictional defect and lacked the mandatory “reasons to believe” under Section 5(1) of the PMLA.

They further maintained that once the attachment order was quashed, it was equivalent to non‑existence, and the ED could not later cure its defects by adding new reasons or evidence. Stressing that the failure to comply with statutory requirements violated principles of natural justice, they relied on precedents like Seema Garg v. ED, Pavana Dibbur v. ED, and Whirlpool v. Registrar of Trade Marks to argue that writ jurisdiction is valid when orders are void ab initio or passed without jurisdiction.

After hearing both sides, the High Court noted that during the pendency of the writ petition, the Adjudicating Authority had already confirmed the attachment in September 2022,and the borrowers had filed statutory appeals before the Appellate Tribunal (PMLA), New Delhi.

Also observing that the issue had become “academic” in light of the statutory process, and pointed out that writ jurisdiction should not be invoked when a complete adjudicatory hierarchy exists under the PMLA.

The Division bench Justice Rajarshi Bharadwaj, Justice Uday Kumar set aside the Single Judge’s order, directed the parties to pursue remedies before the Tribunal, and imposed no costs.

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