The Karnataka High Court has held that the  ED cannot invoke emergency attachment powers without demonstrating urgency and consequently quashed an Enforcement Directorate (ED) order attaching properties allegedly linked to the Mysuru Urban Development Authority (MUDA) site allotment controversy, holding that the agency failed to satisfy the mandatory statutory requirements for invoking its extraordinary powers. 

The bench of Justice S. Sunil Dutt Yadav set aside the ED’s provisional attachment order observing that the agency merely reproduced the language of the statute without demonstrating any objective material showing that immediate attachment was necessary to prevent frustration of proceedings under the PMLA. 

The petitioner, 70-year-old Jayamma, claimed ownership rights over land in Survey No. 13 of Malalavadi Village, Mysuru, inherited after the death of her predecessors. According to her, the land was utilized for the formation of the Jayanagar Layout without formal acquisition by MUDA. In lieu of compensation, MUDA allegedly allotted certain sites and executed sale deeds in favour of the petitioner and her daughter. 

The controversy arose after a complaint was lodged before a Special Court alleging irregularities in MUDA site allotments. Pursuant to the complaint, the Karnataka Lokayukta Police registered a criminal case involving allegations of conspiracy, cheating, corruption, benami transactions, and land grabbing. Subsequently, the Enforcement Directorate registered an Enforcement Case Information Report (ECIR) and initiated money laundering proceedings. 

Although Jayamma was not named as an accused in the predicate offence, the ED treated the sites allotted to her as “proceeds of crime” and provisionally attached them under Section 5 of the PMLA. 

The principal question before the Court was whether the ED had validly exercised powers under the Second Proviso to Section 5(1) of the PMLA, which permits immediate attachment of property even before a chargesheet is filed, provided the authority records reasons showing that non-attachment is likely to frustrate proceedings under the Act. 

The petitioner argued that the ED had failed to record any specific material demonstrating urgency and had merely reproduced statutory language in a generalized and cyclostyled manner. The agency, on the other hand, contended that non-attachment could lead to dissipation of proceeds of crime and that the petitioner should pursue statutory remedies before the Adjudicating Authority and Appellate Tribunal under the PMLA. 

Before examining the merits, the Court addressed the ED’s objection regarding maintainability. The agency argued that since the Adjudicating Authority had already confirmed the attachment order and an appeal was available under Section 26 of the PMLA, the writ petition should not be entertained. 

Rejecting this objection, the Court relied upon Supreme Court precedents including Whirlpool Corporation and Godrej Sara Lee Ltd., holding that writ jurisdiction can be invoked where the challenge concerns jurisdictional defects or violations of mandatory statutory procedure. The Court emphasized that proceedings before the Adjudicating Authority examine whether property is involved in money laundering but do not provide an avenue to test compliance with the procedural safeguards contained in the Second Proviso to Section 5(1). 

A detailed scrutiny of the attachment order revealed that the ED’s justification was confined to a general statement that failure to attach the properties immediately could frustrate proceedings and adversely affect the economic system. 

The Court held that such broad assertions did not satisfy the statutory mandate. It observed that there must be a clear nexus between the material available with the authority and the conclusion that immediate attachment is necessary. Mere reproduction of statutory phrases cannot substitute genuine application of mind. 

Justice Yadav observed that where the law prescribes a specific procedure for exercising power, authorities must strictly adhere to that procedure. Failure to do so renders the exercise of power invalid. 

The Court also found that the factual circumstances themselves undermined the ED’s claim of urgency. The petitioner had already initiated separate proceedings seeking mutation (katha) of the allotted sites, and the mutation process had not yet been completed. Without mutation entries, the Court noted, the immovable properties could not practically be transferred or used to create third-party rights. 

Consequently, there was no objective material suggesting that the properties were at risk of being dissipated or transferred in a manner that would frustrate future PMLA proceedings. 

The Court further distinguished between material indicating a prima facie offence of money laundering and material justifying immediate attachment. While the former may support initiation of proceedings, the latter requires an independent assessment of urgency, which was absent in the present case. 

Allowing the writ petition, the High Court quashed the provisional attachment order dated June 9, 2025. The Court also set aside all consequential proceedings arising from that attachment insofar as they affected the petitioner’s rights, including the subsequent confirmation order. 

However, the Court clarified that the Enforcement Directorate remains at liberty to initiate fresh proceedings if it can satisfy the requirements of the Second Proviso to Section 5(1) and establish circumstances warranting immediate attachment in accordance with law. 

Case Details

Case Title: Smt. Jayamma Versus ED

Citation: JURISHOUR-1566-HC-2026(KAR) 

Case No.: Writ Petition No. 28108 Of 2025 (Gm-Res)

Date: 02/06/2026

Counsel For Petitioner: Jaysham Jayasimha Rao., Advocate

Counsel For Respondent: Aravind Kamat, Addl. Solicitor General 

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