Court clarifies "no coercive steps" order does not halt statutory processes under the Prevention of Money Laundering Act
In a significant ruling, the Karnataka High Court addressed the scope of judicial directions restraining "coercive steps" within the context of the Prevention of Money Laundering Act, 2002. The court, presided over by Justice M. Nagaprasanna, clarified that such directions are intended to preserve personal liberty by preventing arrest but do not impede ongoing investigations or statutory proceedings like provisional attachment.
The case concerned Pavitra Ramanujam, who challenged the provisional attachment order issued by the Directorate of Enforcement, arguing it violated an earlier judicial direction prohibiting coercive measures. The court reiterated that the directive to refrain from "coercive steps" primarily aims to protect individuals from arrest during investigations, without suspending the investigation or affecting other statutory powers, including attachments.
Justice Nagaprasanna emphasized the legal distinction between prohibiting coercive steps and halting precipitative action, the latter being broader and capable of suspending statutory proceedings entirely. The court noted that the provisional attachment order did not contravene the judicial mandate, as the protection extended was limited to avoiding arrest and did not paralyze the statutory process.
The ruling underscored that the petitioner retains the right to challenge the confirmation of the provisional attachment order through judicial review after the statutory process concludes. This decision reaffirms the balance between safeguarding individual liberties and allowing statutory authorities to exercise their investigative powers under the law.
Bottom line:-
Direction restraining "coercive steps" during investigation under Prevention of Money Laundering Act protects personal liberty from arrest but does not impede the statutory process or investigative powers, including attachment proceedings.
Statutory provision(s): Prevention of Money Laundering Act, 2002, Section 5
