Case at a Glance
After the Enforcement Directorate registered an ECIR in July 2025 on predicate offences relating to betting and gambling, it searched premises, seized vehicles, jewellery, gold and digital devices, froze bank accounts, sought retention under Section 17(4) PMLA, issued a Section 8 show-cause notice and filed a prosecution complaint. Seven petitioners challenged the ECIR addendum, the seizures and the composition of the Adjudicating Authority. The Karnataka High Court held that “the Act is a complete code unto itself”, that no exceptional circumstance such as patent lack of jurisdiction or breach of natural justice was shown, and that the coram non judice challenge must await the Supreme Court’s reserved verdict in Union of India v. J. Sekar. It dismissed the petitions, reserving liberty to pursue statutory remedies.
On 22 July 2025 the ED registered ECIR/BGZO/19/2025 on the basis of four predicate offences, under Section 420 IPC and provisions of the IT Act and the Karnataka Police Act, relating to betting and gambling; the petitioners said those cases had since been closed. The ED searched premises, seized vehicles, jewellery, gold and digital devices, and froze bank accounts. It applied for retention under Section 17(4) of the PMLA on 20 September 2025, issued a show-cause notice under Section 8(1) with reasons to believe on 29 September 2025, and filed a complaint under Section 4 on 18 October 2025.
The petitioners, including a travel LLP, an infrastructure firm and several individuals, contended that the ED could not add predicate offences to an existing ECIR by addendum, that the seizures lacked reasons to believe, and that the Adjudicating Authority, having only one non-legal member, was coram non judice.
The Key Question Before the Court
Should the High Court entertain writ petitions against PMLA search, seizure, retention and adjudication steps, bypassing the statutory mechanism, and is the Adjudicating Authority coram non judice?
Discretion, Not Jurisdiction: Why the Writ Court Stepped Back
Justice M. Nagaprasanna held that “the Act is a complete code unto itself”, with a self-contained adjudication mechanism under Sections 5, 8, 17, 26 and 42 of the PMLA. Relying on JSW Steel Limited v. Enforcement Directorate, Special Director v. Mohd. Ghulam Ghouse, (2004) 01 SC CK 0006, Soodamani Dorai v. Joint Director of Enforcement (PMLA) and decisions of other High Courts including Mokshit Corporation v. Directorate of Enforcement, he held that “a writ petition should not be entertained ignoring the statutory dispensation.”
The Court noted that the petitioners had shown no exceptional circumstance, such as “patent lack of jurisdiction, breach of principles of natural justice or manifest arbitrariness”, and stressed that “the issue before this Court is not one of absence of jurisdiction but of the exercise of judicial discretion.” On the contention that the Adjudicating Authority with a single non-legal member is coram non judice, the Court declined to rule because the question is reserved before the Supreme Court in Union of India v. J. Sekar, saying it would “hold my hands at this juncture”.
What the Court Actually Held
- The PMLA is a complete code with its own adjudication and appellate mechanism.
- Writ jurisdiction will not be exercised to bypass that mechanism absent exceptional circumstances such as patent lack of jurisdiction, breach of natural justice or manifest arbitrariness.
- The coram non judice challenge to the Adjudicating Authority was not decided, pending the Supreme Court’s verdict in Union of India v. J. Sekar.
- The writ petitions were dismissed, with liberty to the petitioners to avail remedies available in law in the light of the observations made.
Why This Judgment Matters
- It reinforces that challenges to ED seizures, freezing and retention must generally go to the Adjudicating Authority and Appellate Tribunal first.
- It shows High Courts deferring on the Adjudicating Authority composition question until the Supreme Court decides J. Sekar.
- It matters for many persons whose assets are frozen in betting and gaming-related PMLA cases.
What Should Advocates Take Away From the Judgment?
For Persons Whose Assets Are Seized
- Respond to the Section 8 show-cause notice and contest retention before the Adjudicating Authority.
- Raise closure of predicate cases and lack of reasons to believe in the statutory forum.
- Keep track of the Supreme Court’s decision in J. Sekar on Adjudicating Authority composition.
For Counsel
- A writ needs a strong showing of patent lack of jurisdiction, natural-justice breach or manifest arbitrariness.
- Frame procedural objections (ECIR addendum, reasons to believe) for the Adjudicating Authority record.
- Preserve the coram non judice objection for revival after J. Sekar.
Key Takeaways
- PMLA is a complete code; use its remedies first.
- Writ courts exercise discretion, not lack of jurisdiction, in declining such petitions.
- Exceptional circumstances must be shown to invoke Article 226.
- The Adjudicating Authority composition issue awaits the Supreme Court.
Frequently Asked Questions
What was seized by the ED in this case?
Vehicles, jewellery, gold and digital devices were seized and bank accounts were frozen after searches linked to an ECIR on betting and gambling predicate offences.
Why were the writ petitions dismissed?
The Court held the PMLA is a complete code with its own mechanism, and no exceptional circumstance justifying writ interference was shown.
What about the claim that the Adjudicating Authority was improperly constituted?
The Court did not decide it, as the issue is reserved before the Supreme Court in Union of India v. J. Sekar.
Conclusion
The ruling is a firm reminder that, in money-laundering matters, the High Court’s writ jurisdiction is a discretionary, exceptional remedy and the statutory route under the PMLA is the default.
Practical takeaway: Anyone whose property is seized or frozen under the PMLA should contest it promptly before the Adjudicating Authority, raising all factual and procedural objections there.
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