PMLA Attachment Without Scheduled Offence Unsustainable: Chhattisgarh High Court

The Chhattisgarh High Court allowed multiple appeals filed by IAS officer Ranu Sahu and her family members, setting aside the confirmation of property attachments by the Enforcement Directorate (ED) and held that the Prevention of Money Laundering Act, 2002 (PMLA) attachment without scheduled offence is unsustainable. The Bench of Chief Justice Ramesh Sinha and Justice Ravindra Kumar Agrawal was dealing with a batch of appeals arising out of a common order passed by the Appellate Tribunal under SAFEMA, which had upheld the provisional attachment of properties worth several crores. The case stems from an ED investigation linked to an alleged coal levy extortion racket in Chhattisgarh. The ED registered an ECIR based on an FIR alleging offences under the Indian Penal Code, including conspiracy and extortion. Subsequently, multiple provisional attachment orders (PAOs) were issued attaching properties allegedly representing “proceeds of crime.” In particular, a third Provisional Attachment Order dated 08.05.2023 led to attachment of properties worth approximately ₹5.52 crore belonging to Ranu Sahu and her relatives, which was later confirmed by the Adjudicating Authority and upheld by the Appellate Tribunal. The appellants challenged the ED’s action on multiple grounds: Absence of Scheduled Offence: It was argued that no charge-sheet was ultimately filed for any “scheduled offence” under the PMLA, which is a sine qua non for initiating money laundering proceedings. No Nexus with Proceeds of Crime: The alleged proceeds of crime (₹5.52 crore) were based on vague diary entries and lacked corroborative evidence. Properties Purchased Prior to Alleged Offence: Several attached properties were acquired before the alleged commission of the predicate offence. Mechanical Orders: Both the Adjudicating Authority and Appellate Tribunal allegedly passed templated, non-speaking orders without proper application of mind. The appellants also contended that family members were wrongly implicated merely on the presumption that properties held by them were benami or linked to alleged illegal proceeds. The ED alleged that a coal transportation cartel led by Suryakant Tiwari collected illegal levies of ₹25 per tonne and that Ranu Sahu, during her tenure as District Collector in key districts, facilitated the scheme and received kickbacks. The agency relied heavily on handwritten diary entries, WhatsApp chats and statements recorded under Section 50 of PMLA to establish the alleged laundering of proceeds into immovable properties. BUY NOW: Litigation Guide on Evidentiary Value of Electronic Evidence Including WhatsApp Chats The High Court emphasized that proceedings under PMLA cannot survive in the absence of a valid scheduled offence. The Court noted that the charge-sheet in the predicate FIR did not include any scheduled offence, thereby undermining the very foundation of the ECIR. There must be a clear and direct link between the alleged proceeds of crime and the attached properties. Mere assumptions or unverified diary entries are insufficient. Properties unconnected with the alleged offence cannot be attached merely as “value equivalent” under the second proviso to Section 5(1) PMLA. The Court took note of the mechanical and templated nature of orders passed by the Adjudicating Authority and Appellate Tribunal, indicating lack of independent reasoning. The “reasons to believe” requirement under Section 5(1) was not properly satisfied, especially in relation to properties acquired prior to the alleged offence. Case Details Case Title: Tushar Sahu Versus The Deputy Director Directorate of Enforcement Citation: JURISHOUR-928-HC-2026(CHH) Case No.: MA No. 21 of 2026 Date: 22/04/2026 Counsel For Appellant: Somaya Gupta Counsel For Respondent: Dr. Saurabh Kumar Pande Click Here To Read Order Read More: NDPS Bail Granted for Intermediate Quantity: Telangana High Court Releases Woman Accused in Hyderabad Airport

PMLA Attachment Without Scheduled Offence Unsustainable: Chhattisgarh High Court

Membership Required

Latest articles

Supreme Court Directs Expeditious Completion of Limited Use Subway at Vaniyambadi, Sets Six-Month Timeline for Railway Work

2 Year Bar on Advocate for Breaching Client Confidentiality Upheld: Supreme Court

Supreme Court Modifies 3-Year Practice Rule for Civil Judge Recruitment

Supreme Court Declines to Reconsider ‘Industry’ Test, Upholds Bangalore Water Supply Ruling for Pending Industrial Disputes

More like this

Supreme Court Directs Expeditious Completion of Limited Use Subway at Vaniyambadi, Sets Six-Month Timeline for Railway Work

2 Year Bar on Advocate for Breaching Client Confidentiality Upheld: Supreme Court

Supreme Court Modifies 3-Year Practice Rule for Civil Judge Recruitment

About us

Company

Categories