Court Upholds Statutory Remedies for Petitioner to Challenge Legality of Proceedings Before Competent Authority
In a significant judgment delivered on January 28, 2026, the Madhya Pradesh High Court at Indore dismissed a writ petition filed by Nitin Shambhukumar Kasliwal challenging the legality of search and seizure actions conducted by the Directorate of Enforcement (ED) under Section 17 of the Prevention of Money Laundering Act (PMLA), 2002. The court found the petition to be premature, emphasizing the availability of an alternative statutory remedy for the petitioner to contest the proceedings before the adjudicating authority.
The petitioner, a former Chairman and Managing Director of the now-liquidated S. Kumar's Nationwide Limited (SKNL), sought to quash the search authorization dated December 22, 2025, and subsequent search and seizure actions carried out by the ED on December 23, 2025. Kasliwal argued that the actions were illegal and arbitrary, citing a lack of credible material to justify the search under Section 17 of the PMLA, which requires a valid "reason to believe."
The court, presided over by Justices Vijay Kumar Shukla and Alok Awasthi, noted that the petitioner can raise all objections regarding the legality and validity of the search and seizure before the competent authority under Section 17(4) of the PMLA. The judgment clarified that the statutory remedy available to the petitioner renders the current petition premature.
The court further addressed the petitioner's contention regarding the impact of previous court orders, stating that the orders pertained to scheduled offences and did not extend to money laundering offences under the PMLA. It emphasized that an offence under Section 3 of the PMLA is distinct from scheduled offences, referencing the Supreme Court's decision in Vijay Madanlal Choudhary & Ors. v. Union of India, which delineates the separation of money laundering offences from scheduled offences.
The bench dismissed allegations of mala fide intent, noting the absence of specific allegations against any officials involved in the proceedings. The court concluded that, given the ongoing application under Section 17(4) of the PMLA filed by the ED, the petitioner has a full opportunity to challenge the proceedings before the adjudicating authority.
This judgment reinforces the procedural integrity of the PMLA, emphasizing the necessity for petitioners to utilize available statutory mechanisms before seeking judicial intervention. The dismissal of the petition underscores the court's commitment to upholding statutory remedies and ensuring due process in matters of economic offences.
Bottom Line:
Petition challenging the search and seizure conducted under Section 17 of the Prevention of Money Laundering Act (PMLA), 2002 dismissed on grounds of prematurity and availability of an alternative statutory remedy before the competent authority.
Statutory provision(s): Prevention of Money Laundering Act, 2002 Sections 3, 5(5), 17, 17(4); Constitution of India Article 226; Insolvency and Bankruptcy Code, 2016 Sections 7, 33(2); Indian Penal Code, 1860 Sections 420, 120B; Prevention of Corruption Act, 1988 Section 13(2) r/w 13(1)(d).
