Reiterating that extraordinary writ jurisdiction under Article 226 of the Constitution of India should not be exercised when a special enactment provides an efficacious statutory mechanism for redressal of grievances, the High Court of Chhattisgarh, presided over by Justice Bibhu Datta Guru, has dismissed a writ petition seeking to substitute immovable properties attached under the Prevention of Money Laundering Act, 2002 (PMLA) with a Fixed Deposit. The Court held that an accused or property owner cannot claim an absolute statutory right to demand substitution of attached assets.
Background of the Case
The petitioners, Hrishabh Soni (proprietor of Shourya Enterprises and partner in Swarnim Ventures) and his wife Komal Soni (proprietor of Bhavy Agency and partner in Swarnim Ventures), were engaged in government supplies and project works in Chhattisgarh.
The matter arose from investigations into alleged irregularities in District Mineral Fund (DMF) tender allotments. The Directorate of Enforcement (ED) registered ECIR/RPZO/02/2023 on March 20, 2023, based on scheduled offences. On December 9, 2024, the ED issued a Provisional Attachment Order attaching eleven immovable properties belonging to the petitioners, either jointly or individually, as the alleged equivalent value of proceeds of crime under Section 2(1)(u) of the PMLA.
The Adjudicating Authority confirmed the provisional attachment on May 23, 2025. The petitioners challenged the confirmation order before the Appellate Tribunal under the PMLA (PMLAT). During the pendency of these substantive statutory appeals, the petitioners moved interlocutory applications seeking to substitute six identified attached properties by furnishing an equivalent Fixed Deposit amounting to Rs. 4,36,05,780.
On April 7, 2026, the PMLAT dismissed the applications, holding that neither the PMLA nor the Prevention of Money-laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013 (the 2013 Rules) provides for the substitution of attached immovable properties with a Fixed Deposit, except in limited situations under Rules 5(5) and 6. Aggrieved by the rejection, the petitioners filed a writ petition under Article 226 before the High Court, praying for a writ of mandamus directing the enforcement agency to accept the Fixed Deposit and release the properties.
Arguments of the Parties
Appearing for the petitioners, senior counsel submitted that the continued attachment caused severe financial hardship, affecting their commercial standing, cash flows, and ability to service institutional borrowings. It was argued that the properties were attached not as direct proceeds of crime but as “equivalent value of proceeds of crime” under Section 2(1)(u) of the PMLA, meaning the statutory purpose was value preservation rather than punitive deprivation. The petitioners contended that offering a liquid, unencumbered Fixed Deposit of Rs. 4,36,05,780 fully safeguarded the enforcement authorities’ interests. They further argued that the High Court under Article 226 possessed wide powers to mould appropriate relief, unaffected by statutory limitations binding the Tribunal, placing reliance on decisions including Eastern Institute for Integrated Learning in Management University, Y.S. Bharathi Reddy, and A. Raja.
Opposing the petition, counsel for the Directorate of Enforcement raised a preliminary objection that an efficacious statutory remedy of appeal before the High Court is expressly provided under Section 42 of the PMLA against orders of the Appellate Tribunal. On merits, the respondent submitted that Rule 5(5) of the 2013 Rules is strictly confined to joint ownership properties up to the estimated share of the individual involved and employs the discretionary expression “may accept,” conferring no enforceable right on an applicant. The respondent also highlighted that a Prosecution Complaint had already been filed before the Special Court (PMLA), Raipur, which had taken cognizance and initiated confiscation proceedings under Section 8(5) of the PMLA concerning an alleged scheme involving siphoned DMF funds.
Court’s Analysis
Analyzing the statutory framework under Sections 2(1)(u), 5, 8, 24, and 42 of the PMLA alongside Rule 5(5) of the 2013 Rules, the Court observed that the rule operates within narrow confines and cannot be expanded to create a general right of substitution:
“Rule 5(5) of the 2013 Rules, however, operates in a specific situation. The provision contemplates a case where the immovable property confirmed by the Adjudicating Authority is under joint ownership and permits acceptance of the equivalent value of the Fixed Deposit to the extent of the share of the concerned person in the property, as estimated by the authorised officer. The provision, therefore, cannot, on its plain terms, be construed as conferring an unrestricted or general right upon every person whose immovable property has been attached and confirmed to demand substitution thereof by a Fixed Deposit. It is also significant that Rule 5(5) employs the expression “may accept” and not “shall accept”. Thus, even where the contingency contemplated by the provision exists, acceptance of the Fixed Deposit is not couched as an absolute or mandatory statutory entitlement of the person concerned.”
The Court held that the mere offer of equivalent security does not generate an enforceable legal entitlement:
“In the present case, the petitioners have not demonstrated any statutory or other enforceable right to seek substitution of the attached properties in the manner sought by them. The mere offer of an equivalent Fixed Deposit cannot, by itself, create such a right.”
Distinguishing the decisions cited by the petitioners, including Eastern Institute for Integrated Learning in Management University, the bench observed:
“The principle that attachment under the PMLA is intended to preserve the value of the property does not, by itself, establish an unconditional right in favour of the person whose property has been attached to insist upon substitution by an alternative security. The question whether, in a given case, an alternative security ought to be accepted necessarily depends upon the statutory framework and the facts and circumstances of that case.”
Addressing the claim of commercial and financial hardship, the Court stated:
“This Court is conscious that continued attachment of immovable properties may cause inconvenience to the person concerned. However, hardship by itself cannot confer a right to substitution contrary to the statutory scheme, particularly when the validity of the attachment itself is yet to be adjudicated in the pending statutory appeals.”
On the maintainability of the writ petition, the Court pointed out that Section 42 of the PMLA provides a dedicated appellate remedy before the High Court against decisions of the Appellate Tribunal within sixty days. Citing Supreme Court rulings in Authorized Officer, State Bank of Travancore v. Mathew K.C., Commissioner of Income Tax v. Chhabil Dass Agarwal, and Rikhab Chand Jain v. Union of India, the Court reiterated the settled legal principle:
“Be that as it may, it is the well settled proposition of law that when a special enactment provides a statutory efficacious mechanism for redressal of the grievance, the High Court should not exercise its extraordinary jurisdiction under Article 226 of the Constitution of India.”
Decision
Holding that the petitioners failed to demonstrate any jurisdictional error, perversity, or manifest illegality in the order of the PMLAT, and highlighting the availability of the statutory appellate remedy under Section 42 of the PMLA while substantive appeals remain pending before the Tribunal, the High Court declined to exercise its extraordinary discretionary jurisdiction under Article 226 of the Constitution.
Accordingly, the High Court dismissed the writ petition as devoid of merit, with no order as to costs.
Case Title: Hrishabh Soni & Anr. Versus Deputy Director, Directorate of Enforcement
Case No.: WPC No. 3241 of 2026
Bench: Justice Bibhu Datta Guru
Date: August 31, 2026
