Ms Lotus Valley Global Llp And Anr. vs Directorate Of Enforcement And Ors

$~88
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 24.08.2026
# CNR No. DLHC010397222026
+ LPA 662/2026 & CM APPL. 57178/2026
MS LOTUS VALLEY GLOBAL LLP AND ANR......Appellants
Through: Ms. Beenashaw Soni, Senior Advocate
along with Ms. Ridhima Verma, Mr.
Shashwat Tripathi, Ms. Madhu
Ayachit & Ms. Aparajita Singh,
Advocates.
versus
DIRECTORATE OF ENFORCEMENT AND ORS.....Respondents
Through: Mr. Vivek Gurnani, Panel Counsel
with Mr. Kanishk Maurya, Advocate
for ED.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE TEJAS KARIA
TEJAS KARIA, J. ( Oral )
CM APPL. 57179/2026 ( Exemption )
1. Exemption is allowed, subject to all just exceptions.
2. The Application stands disposed of.
LPA 662/2026
3. The present intra court Appeal is preferred against the order dated
23.07.2026 (“ Impugned Order ”) passed in W.P.(C) 11796/2025 (“ Writ
Petition ”), whereby learned Single Judge disposed of the Writ Petition,
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Signed By:NEELAM
SHARMA
Signing Date:02.09.2026
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granting liberty to the Appellants to assail the order dated 23.09.2025
(“ Adjudication Order ”) passed by learned Adjudicating Authority under the
Prevention of Money Laundering Act, 2002 (“ PMLA ”), in accordance with
law.
4. Learned Senior Counsel for the Appellants submitted that learned
Single Judge ought to have examined the validity of the Provisional
Attachment Order (“ PAO ”), instead of relegating the Appellants to the
statutory remedy of appeal under Section 26 of the PMLA. It was further
submitted on behalf of the Appellants that learned Single Judge, during the
pendency of the Writ Petition, by order dated 19.09.2025 permitted learned
Adjudicating Authority to proceed, while observing that any order passed by
learned Adjudicating Authority would remain subject to the final outcome of
the Writ Petition. However, by passing the Impugned Order, the protection so
granted was rendered illusory.
5. It was further submitted by learned Senior Counsel for the Appellants
that the Appellants were not named as accused in the first information report
registered in respect of the predicate offence (“ FIR ”), and yet their properties
had been attached as property of equivalent value within the meaning of
“ proceeds of crime ” under Section 2(1)(u) of the PMLA. Learned Senior
Counsel for the Appellants placed reliance upon Deputy Director, Directorate
of Enforcement, Delhi v. Axis Bank & Ors. , 2019 SCC OnLine Del 7854, to
submit that where Section 2(1)(u) of the PMLA is invoked, the property of
equivalent value sought to be attached must be the property of the person
accused of the offence of money laundering.
6. Learned Senior Counsel for the Appellants further placed reliance upon
Bharati Sahakari Bank Ltd. v. Union of India , 2026 SCC OnLine Del 2536,
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Signed By:NEELAM
SHARMA
Signing Date:02.09.2026
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to submit that where the jurisdiction to invoke the power of provisional
attachment under Section 5 of the PMLA is itself assailed, the availability of
a statutory appellate remedy under Section 26 of the PMLA cannot, by itself,
constitute a sufficient ground to decline the exercise of jurisdiction under
Article 226 of the Constitution of India, 1950 (“ Constitution ”). It was further
submitted that in Bharati Sahakari ( supra ), a Coordinate Bench of this Court
had set aside the order of learned single judge relegating the petitioner therein
to the statutory remedy and had restored the writ petition for fresh
consideration.
7. Learned Senior Counsel for the Appellants also placed reliance upon
Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing
Authority & Ors. , 2023 SCC OnLine SC 95, to submit that the availability of
an alternate statutory remedy does not operate as an absolute bar to the
exercise of jurisdiction under Article 226 of the Constitution, particularly
where the impugned action is without jurisdiction. It was further submitted
that the Impugned Order did not disclose the reasons which persuaded learned
Single Judge to decline the exercise of discretionary jurisdiction vested under
Article 226 of the Constitution.
8. Learned Counsel appearing for the Directorate of Enforcement (“ ED ”)
submitted that the PMLA provides a complete mechanism for redressal of
grievances, comprising adjudication before learned Adjudicating Authority,
an appeal to learned Appellate Tribunal under Section 26 of the PMLA and a
further appeal to this Court under Section 42 of the PMLA. Learned Counsel
for the ED placed reliance upon Gold Croft Properties (P) Ltd. v.
Enforcement Directorate , 2023 SCC OnLine Del 5900, and Commissioner
of Income Tax v. Chhabil Dass Agarwal , (2014) 1 SCC 603, to submit that,
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Signed By:NEELAM
SHARMA
Signing Date:02.09.2026
18:19:26

in view of the availability of an alternate statutory remedy, the Writ Petition
was not maintainable.
9. It was further submitted on behalf of the ED that the PAO does not
suffer from any jurisdictional infirmity. Learned Counsel for the ED
contended that the power under Section 5 of the PMLA is not confined to
persons arrayed as accused, and that attachment of property of equivalent
value is not restricted only to cases where the proceeds of crime are held
outside the country. It was further submitted by learned Counsel for ED that
the properties of the Appellants had been attached on the basis of the
statements of the accused in the FIR relating to the predicate offence. Learned
Counsel also submitted that the beneficial ownership of the Appellants was
still under investigation and that, attachment proceedings being civil in nature,
such questions are required to be determined by the authorities under the
PMLA on the standard of preponderance of probabilities.
10. We have heard learned Senior Counsel appearing for the Appellants as
well as learned Counsel appearing for the ED, and have perused the material
placed on record.
11. It is well settled that the availability of an alternate statutory remedy
operates as a self-imposed restraint on the exercise of jurisdiction under
Article 226 of the Constitution and does not constitute an absolute bar thereto.
A writ petition may, notwithstanding the availability of an alternate remedy,
be entertained where the impugned action is alleged to suffer from inherent
lack of jurisdiction. Therefore, the only question that arises for consideration
in this Appeal is whether the challenge raised by the Appellants is one of
inherent lack of jurisdiction.
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Signed By:NEELAM
SHARMA
Signing Date:02.09.2026
18:19:26

12. Section 5 of the PMLA confers power upon the ED to provisionally
attach property, including property of equivalent value within the meaning of
“ proceeds of crime ” under Section 2(1)(u) of the PMLA. The Appellants’
contention that their properties could not have been attached, as they were not
named as accused in the FIR, does not disclose any inherent lack of
jurisdiction. It raises, at best, a plea of erroneous exercise of jurisdiction,
involving disputed questions of fact. Such issues are appropriately agitated in
the statutory appeal under Section 26 of the PMLA and are not amenable to
examination in writ jurisdiction.
13. We also find ourselves in agreement with the view taken by learned
Single Judge that the PAO does not survive independently as on date. Upon
its confirmation, the PAO has merged into the Adjudication Order, which is
now the operative order against the Appellants. It is against the Adjudication
Order that an appeal lies before learned Appellate Tribunal under Section 26
of the PMLA, with a further statutory appeal to this Court under Section 42
of the PMLA. Learned Single Judge, therefore, rightly relegated the
Appellants to the said remedy.
14. The Appellants’ reliance upon Bharati Sahakari ( supra ) is misplaced.
In that case, the attached property had been mortgaged to the appellant therein
by a borrower accused under the PMLA and was also subject to proceedings
under the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (“ SARFAESI Act ”), pursuant to
which possession of the property had already been taken by the appellant
therein. The challenge to attachment, therefore, arose from the rights of a
secured creditor and the interplay between the SARFAESI Act and the
PMLA. The present case stands on a different footing, as the attached
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Signed By:NEELAM
SHARMA
Signing Date:02.09.2026
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properties admittedly stand in the names of the Appellants themselves, and no
competing statutory regime or prior secured interest has been invoked.
15. The observation in the order dated 19.09.2025 passed by learned Single
Judge during the pendency of the Writ Petition, that any order passed by
learned Adjudicating Authority would remain subject to the final outcome of
the Writ Petition, did not preclude learned Single Judge from relegating the
Appellants to the efficacious statutory remedy under the PMLA once the
Adjudication Order was passed, having found that the issue raised by the
Appellants was an alleged erroneous exercise of jurisdiction involving
disputed questions of fact, and not any inherent lack of jurisdiction.
Accordingly, learned Single Judge rightly declined to entertain the Writ
Petition.
16. In view of the foregoing discussion, we are of the considered view that
the Impugned Order does not suffer from any illegality, perversity or
jurisdictional error warranting interference in the present intra-court Appeal.
Learned Single Judge has not adjudicated upon the merits of the controversy
and has only relegated the Appellants to the efficacious statutory remedy
available under the PMLA. Such exercise of discretion, in the facts and
circumstances of the case, cannot be said to be arbitrary or contrary to law.
Accordingly, the present Appeal deserves to be dismissed.
17. We, however, make it clear that we have not examined the merits of the
controversy. Accordingly, all rights and contentions of the parties, including
the Appellants’ objection with respect to the exercise of jurisdiction by the
ED in passing the PAO, are expressly kept open to be urged in the event the
Appellants prefer an appeal under Section 26 of the PMLA, and such an
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Signed By:NEELAM
SHARMA
Signing Date:02.09.2026
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appeal shall be considered and decided on its own merits, uninfluenced by
any observations made hereinabove or in the Impugned Order.
18. Accordingly, the Appeal is dismissed in the aforesaid terms. Pending
application(s), if any, also stand disposed of. There shall be no order as to
costs.
TEJAS KARIA, J
DEVENDRA KUMAR UPADHYAYA, CJ
AUGUST 24, 2026
Sz
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LPA 662/2026 Page 7 of 7
Signed By:NEELAM
SHARMA
Signing Date:02.09.2026
18:19:26