Court emphasizes statutory remedy under Prevention of Money Laundering Act, 2002, allowing appeal against attachment confirmation; quashment of predicate offence to be raised before tribunal
In a significant judgment delivered on September 25, 2026, the Karnataka High Court, presided over by Justice M. Nagaprasanna, dismissed the writ petition filed by Dr. Bhimashankar Bilgundi challenging the confirmation of a provisional attachment order under the Prevention of Money Laundering Act, 2002 (PMLA). The order confirmed the attachment of properties and bank accounts linked to alleged money laundering activities related to a predicate offence that was subsequently quashed by the same High Court.
The case originated from Crime No. 19 of 2024 registered for offences under Sections 34, 419, and 420 of the Indian Penal Code (IPC), involving an alleged siphoning off of over Rs. 81 crore from bank accounts of postgraduate medical students. Following the crime registration, the Directorate of Enforcement initiated provisional attachment proceedings under Section 5 of the PMLA in July 2024. Despite an interim stay on the criminal investigation granted by the court in February 2025, the Directorate proceeded with the attachment of properties owned by the petitioner and his family members.
The petitioner contended that since the predicate offence in the underlying criminal case had been quashed by the High Court in November 2025, the attachment proceedings could no longer sustain. He sought quashment of the entire attachment process and the confirmation order dated December 11, 2025, asserting that the foundation for attachment had ceased to exist.
However, the Karnataka High Court noted that the PMLA is a self-contained and exhaustive code providing a complete adjudicatory hierarchy. Specifically, Sections 5 and 8 of the Act provide for provisional attachment and its confirmation by the Adjudicating Authority, while Section 26 empowers aggrieved persons to prefer an appeal to the Appellate Tribunal, constituted under Section 42, and subsequently to the High Court under Section 42.
The Court emphasized that although a writ petition under Article 226 of the Constitution of India is maintainable against attachment orders, its entertainability is discretionary and should ordinarily be declined when an efficacious statutory remedy exists. The Court relied on precedents from the Kerala and Calcutta High Courts, which have consistently held that judicial restraint is necessary in matters governed by the PMLA, and that alternative remedies must be exhausted before invoking writ jurisdiction.
Further, the Court acknowledged that the petitioner is free to raise all contentions, including the effect of the quashment of the predicate offence, before the Appellate Tribunal. Importantly, the Court directed that if the petitioner prefers an appeal within 30 days from receipt of the judgment, the Tribunal shall consider the appeal on its merits, without regard to any delay in filing.
This judgment underscores the importance of following the legislative framework provided under the PMLA for challenging attachment orders and reinforces the principle that constitutional courts must exercise caution in interfering with orders passed under specialized statutes with dedicated appellate mechanisms.
Bottom Line:
Prevention of Money Laundering Act, 2002 - Order confirming provisional attachment under Section 8 - Though writ petition under Article 226 is maintainable, High Court should ordinarily decline interference when efficacious statutory remedy of appeal under Section 26 is available - PMLA is a complete code providing adjudicatory hierarchy - Effect of quashment/obliteration of predicate offence can be urged before Appellate Tribunal - Appeal filed within time granted by Court to be considered on merits without reference to delay.
Statutory provision(s):
Prevention of Money Laundering Act, 2002 Sections 5, 8, 17, 26, 42; Constitution of India Article 226; Bharatiya Nyaya Sanhita Section 528 (corresponding to Section 482 Cr.P.C.)
