Full Judgment Text
2025 INSC 1194
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS.4183 – 4184 OF 2025
(ARISING OUT OF SLP (CRL.) NOS.7828–7829 OF 2022)
JSW STEEL LIMITED ETC. … APPELLANT(S)
VERSUS
DEPUTY DIRECTOR, DIRECTORATE
OF ENFORCEMENT ETC.
…RESPONDENT(S)
J U D G M E N T
AUGUSTINE GEORGE MASIH, J .
1. Two writ petitions were preferred by the Appellants
herein before the High Court of Karnataka, with the
Appellant No. 1, JSW Steel Limited (hereinafter “JSW”),
being common in both the petitions, whereas Appellant
No. 2, Mr. Pravin John Sequeira, Deputy General
Manager, Compliance, JSW, was the petitioner in one
of the writ petitions. Challenge in Writ Petition No. 7499
of 2022 was to the proceedings, including the
investigation emanating from ECIR/09/BZ/2012,
whereas in Writ Petition No. 11399 of 2022, the order
dated 11.04.2022 passed by the Special Court taking
cognizance of the offences against Appellants No. 1 and
Signature Not Verified
Digitally signed by
RADHA SHARMA
Date: 2025.10.07
17:36:53 IST
Reason:
2 and issuing summons was challenged. As the facts
were common, both the writ petitions were taken
Criminal Appeal Nos.4183-4184/2025 Page 1 of 16
together and disposed of by a common order dated
13.06.2022. The High Court of Karnataka proceeded to
dismiss both the writ petitions, leading to the filing of
the present appeals.
2. The facts in brief can be summed up by ascertaining
that Appellant No. 1 is a public limited company
registered under the Companies Act, 1956, involved in
the business of manufacturing steel and has plants in
various locations. JSW entered into an
agreement/contract with Obulapuram Mining
Company Private Limited (hereinafter “OMC”) for the
supply of 1.5 Million Metric Tons (MT) of iron ore, fines,
and lumps to its plant at Vijayanagar on 16.11.2009.
From November 2009 to December 2009, partial
supplies were made by OMC from its mines and
thereafter till March 2010 from its group
companies/concerns, including Ananthpur Mining
Corporation and Associate Mining Company
(hereinafter “AMC”). As OMC thereafter failed to supply
iron ore despite assurances that supply would
recommence upon reopening of the mines, JSW sought
adjustment of the remaining amount from the advance
amount of INR 130 Crore.
3. Meanwhile, this Court on 23.09.2011 in SLP (C) No.
7366-7367 of 2010 directed an investigation into the
matter of illegal mining and export of iron ore by AMC,
Criminal Appeal Nos.4183-4184/2025 Page 2 of 16
a partnership firm of G. Janardhan Reddy. Pursuant to
this direction, RC 18(A)/2011/CBI/ACB/BLR was
registered by the Central Bureau of Investigation (CBI)
against the accused, AMC, its partners G. Janardhan
Reddy and G. Lakshmi Aruna along with others. On
30.05.2012, CBI filed a chargesheet, and cognizance
was taken on the same. Though JSW was named as an
accused but subsequently, on 06.09.2013, a
supplementary final report was filed, dropping charges,
thereby exonerating it in the CBI case.
4. On 25.09.2012, Enforcement Directorate (ED)
registered ECIR/09/BZ/2012 under the Prevention of
Money Laundering Act, 2002 (PMLA) against G.
Janardhan Reddy and G. Lakshmi Aruna.
5. Because of the non-supply of the iron ore and there
being an outstanding amount against OMC, arbitration
proceedings were initiated by JSW-Appellant No. 1 by
filing an application before the High Court of Bombay.
Sole arbitrator was appointed on 05.04.2013. The
Arbitrator, by award dated 09.05.2014, directed refund
of the principal outstanding balance after adjusting the
sums payable to AMC along with interest and damages.
6. On 01.04.2019, the application filed by OMC against
the arbitral award was dismissed by the High Court of
Bombay. The said order was not challenged and
therefore had attained finality.
Criminal Appeal Nos.4183-4184/2025 Page 3 of 16
7. Execution Application No. 3 of 2017 was filed by
Appellant No. 1 on 04.05.2016 against OMC for the
enforcement of the arbitral award dated 09.05.2014 in
the High Court of Bombay.
8. On 27.03.2015, ED issued the first Provisional
Attachment Order (PAO) No. 08 of 2015 in
ECIR/09/BZ/2012 for INR 24,37,00,733.50 (Twenty-
Four Crore Thirty-Seven Lakh Seven Hundred Thirty-
Three Rupees and Fifty Paisa) attaching bank accounts
of Appellant No.1. Original Complaint No. 457/2015
was filed by ED before the Adjudicating Authority,
PMLA, on 21.04.2015. JSW challenged the PAO by
filing Writ Petition No. 17894 of 2015 before the High
Court of Karnataka. On 11.06.2015, JSW filed Writ
Petition No. 24444 of 2015 seeking quashing of Original
Complaint No. 457 of 2015 and the show cause notice
dated 27.04.2015.
9. Another PAO No. 11 of 2016 for INR 9,43,86,883.50/-
(Nine Crore Fourty Three Lakh Eighty-Six Thousand
Eight Hundred Eighty-Three Rupees and Fifty Paisa)
was issued on 30.03.2016, which JSW challenged by
filing Writ Petition No. 19313 of 2016 on 04.04.2016.
Consequently, Original Complaint No. 587 of 2016 was
filed by ED on 25.04.2016 issued therein.
10. On 29.02.2016, G. Janardhan Reddy and G. Lakshmi
Aruna filed Writ Petitions No. 11440-11441 of 2016
Criminal Appeal Nos.4183-4184/2025 Page 4 of 16
seeking quashing of ECIR/09/BZ/2012 proceedings.
In the Writ Petitions which were preferred by G.
Janardhan Reddy and G. Lakshmi Aruna and the other
petitioners therein including the ECIR’s, attachment
orders etc. were quashed by the Division Bench of High
Court of Karnataka vide order dated 13.03.2017 by
holding that the ED could not have invoked the
provisions of the PMLA with retrospective effect for the
offences which were not included in the schedule at the
time when the said offences were alleged to have been
committed.
11. Pursuant to the decision of the Division Bench of the
High Court of Karnataka, the Appellate Tribunal under
the PMLA disposed of the appeals filed by G. Janardhan
Reddy on 05.05.2017.
12. SLPs were preferred, i.e., SLP (Crl.) No. 4472-4473 of
2017 by the ED on 25.05.2017, which came up for
consideration on 24.07.2017, when this Court,
although did not grant any stay of the impugned
Judgment but ordered that the same would not be
treated as a precedent. The leave was granted, and
appeals were admitted.
13. It needs mention here that Writ Petitions as preferred
by Appellant No. 1 and No. 2 were dismissed by the
Single Judge vide common order dated 11.12.2020,
against which writ appeals were preferred, which were
Criminal Appeal Nos.4183-4184/2025 Page 5 of 16
disposed of ultimately on 04.05.2021 by relegating the
Appellant to the remedy of preferring an appeal before
the Appellate Tribunal against the orders of attachment
and confirmation by the Adjudicating Authority as
provided under the PMLA. It was further observed that
the ED would not take any precipitative action against
Appellant No. 1 pending disposal of the appeals. The
said appeals are still pending before the Appellate
Tribunal, PMLA.
14. On 27.10.2021, Bank of Baroda was sent an email by
the ED seeking to transfer INR 33,80,87,670/- (Thirty-
Three Crore Eighty Lakh Eighty-Seven Thousand Six
Hundred Seventy Rupees) from the account of
Appellant No. 1 to that of the ED. Summons were
thereafter issued to Appellant No. 2 on 29.11.2021.
15. Writ Petition No. 22238 of 2021 was preferred by the
Appellant No. 1, challenging the correctness and
legality of the e-mail dated 27.10.2021. Bank of Baroda
confirmed remittance on 09.12.2021 of INR
17,25,14,941.76 (Seventeen Crore Twenty-Five Lakh
Fourteen Thousand Nine Hundred Fourty-One Rupees
and Seventy-Six Paisa) and lien marking on
10.12.2021.
16. On 14.12.2021, when the aspect with regard to the
summoning of Appellant No. 2 and the other officials of
the Appellant No. 1 by the ED was brought to the notice
Criminal Appeal Nos.4183-4184/2025 Page 6 of 16
of the Court, the High Court of Karnataka restrained
the arrest and detention of JSW’s officials.
17. When further summons were issued, JSW moved an IA,
which was partly allowed, continuing interim protection
till the disposal of the Writ Petition. The writ petition
was eventually dismissed on 08.03.2022.
18. JSW then filed WP No. 7499 of 2022, challenging all
proceedings emanating from ECIR/09/BZ/2012.
Meanwhile, ED filed a complaint dated 08.04.2022
before the Special Court under Section 44 and Section
45(1) of the PMLA against Appellant No. 1, which was
registered as Private Complaint (PCR) No. 21 of 2022.
On 11.04.2022, the Special Court took cognizance and
issued a summons to JSW and its officials. An
additional affidavit bringing this aspect to the notice of
the High Court in Writ Petition No. 7499 of 2022 was
filed on 16.04.2022. ED filed its reply on 19.04.2022,
which came to be considered and decided against the
appellants. The said Writ Petition was heard on
20.04.2022 and judgment was reserved.
19. In the meantime, JSW received a fresh summons dated
30.05.2022 served on 03.06.2022 for appearance of its
representatives on 30.06.2022. JSW filed Writ Petition
No. 11399 of 2022 on 06.06.2022, challenging the
cognizance order dated 11.04.2022 on grounds of non-
compliance with Sections 202 & 204 CrPC. Both Writ
Criminal Appeal Nos.4183-4184/2025 Page 7 of 16
Petitions 7499 of 2022 & 11399 of 2022 were decided
together and dismissed on 13.06.2022
20. The common order is under challenge in the present
appeals.
21. Learned Senior Advocate, for the Appellant, has
submitted that the entire prosecution is founded on
mere apprehension. He emphasised that JSW was
although charge ‑ sheeted initially but subsequently the
charges have been dropped by CBI and is not named in
ECIR. In the absence of a live scheduled offence, there
can be no proceeds of crime and consequently no
offence under Section 3 PMLA. Reliance was placed on
the decision of this court in Vijay Madanlal
Choudhary and Others v. Union of India and
1
Others , to contend that quashing or discharge in
predicate offence nullifies PMLA proceedings.
22. He elaborated that the withdrawals to the tune of INR
21.45 Crore were made prior to the communication of
PAO 08 of 2015 and thus could not have constituted as
wilful frustration of the said order. The withdrawals
which were made during the period of the stay granted
by the High Court was lawful. The ED in its complaint
admits that account balances increased subsequently,
1
(2023) 12 SCC 1
Criminal Appeal Nos.4183-4184/2025 Page 8 of 16
demonstrating the absence of mens rea to project the
property as untainted.
23. He argued that cash ‑ credit accounts cannot be
subjected to attachment as they represent drawing
limits and not specific property. He further argued that
ED has misunderstood the nature of a cash credit
account. Such accounts is in the nature of an overdraft
facility where the account holder is entitled to withdraw
funds, for this reliance has been placed upon the
decision of the High Court of Bombay in Skytech
Rolling Mill Pvt. Ltd. v. Joint Commissioner of State
2
Tax Nodal 1 Raigad Divison .
24. He further relies on the decisions of this court in R.P.
3
Kapur v. State of Punjab and State of Haryana and
4
Others v. Bhajan Lal and Others , to argue that
prosecution should be quashed when allegations, taken
at face value, do not constitute an offence.
25. It was submitted that ED’s attempt to proceed with
prosecution despite the pendency of statutory appeals
before the Appellate Tribunal under Section 26 PMLA
amounts to parallel adjudication. Learned senior
advocate prayed for the quashing of the prosecution
complaint and the cognizance order.
2
2025:BHC-OS:8549-DB; Judgment dated 10.06.2025 in WP No.1928 of 2025
3
1960 SCC OnLine SC 21 : AIR 1960 SC 866
4
1992 Supp (1) SCC 335
Criminal Appeal Nos.4183-4184/2025 Page 9 of 16
26. The learned Senior Advocate appearing for the ED
vehemently opposed the appeals and submitted that
the present case discloses a clear and continuing
offence under Section 3 of the PMLA. Submission has
been made that in pursuance of this Court’s Order
dated 23.09.2011 passed in Govt. of A.P. & Ors. v. M/s
5
Obulapuram Minig. Co. P. Ltd. & Ors. Etc. , CBI
registered FIR RC 18(A)/2011/CBI/ACB/BLR on
01.10.2011 for serious offences under IPC, PC Act,
MMDR Act, and Forest Act against the partners of AMC.
After investigation, a charge sheet dated 30.05.2012
was filed depicting extractions and sale of illegally
mined iron ore to the extent of 24 Lakh MT valued at
approximately INR 480 Crore including supply of
4,31,491.27 MT to JSW Steel Ltd. during FY 2010–11
valued at INR 118.13 Crore.
27. It is submitted that the Directorate of Enforcement
recorded ECIR/09/BZ/2012 on 25.09.2012 and after
investigation found that INR 33,80,87,617/- (Thirty-
Three Crore Eighty Lakh Eighty-Seven Thousand Six
Hundred Seventeen Rupees) remained payable by JSW
to AMC which constituted “proceeds of crime” under
Section 2(1)(u) of PMLA. To secure this amount, PAO
No. 08 of 2015 dated 27.03.2015 for INR
24,37,00,733.50 (Twenty-Four Crore Thirty-Seven
5
Special Leave to Appeal (Civil) Nos. 7366-7367 of 2010
Criminal Appeal Nos.4183-4184/2025 Page 10 of 16
Lakh Seven Hundred Thirty-Three Rupees and Fifty
Paise Only) and PAO No. 11 of 2016 dated 30.03.2016
for INR 9,43,86,883.50 (Nine Crore Forty-Three Lakh
Eighty-Six Thousand Eight Hundred Eighty-Three
Rupees and Fifty Paise Only) were issued under Section
5(1) of PMLA, attaching specific amounts in three JSW
bank accounts. The PAOs were duly confirmed by the
Adjudicating Authority on 09.04.2021.
28. It is argued that despite a clear statutory bar, JSW, in
collusion with bank officials, frustrated the attachment
by withdrawing funds immediately after the issuance of
PAO 08 of 2015 on 27.03.2015. He placed reliance on
contemporaneous emails and letters from Vijaya
Bank/Bank of Baroda, particularly communications
dated 29.03.2016 and 25.05.2016, to submit that the
lien on account no. 139500301000053 was wrongfully
lifted despite written directions from the ED not to do
so. The withdrawals left only INR 7.81 Crore available
out of the attached sum, causing a shortfall of INR
16.55 Crore, which continues to be in the possession of
JSW.
29. It is stated that possession of confirmed attached
property by the accused, in defiance of lawful
attachment, squarely falls within Section 8(4) of PMLA
and constitutes “concealment, possession, acquisition
and use” of proceeds of crime punishable under Section
Criminal Appeal Nos.4183-4184/2025 Page 11 of 16
3 of PMLA. The High Court had dismissed writ petitions
of the Appellants challenging the PAOs on 11.12.2020
and the two Writ Appeals Nos. 68 of 2021 and 97 of
2021 were also dismissed on 04.05.2021. Hence, the
attachment has attained finality.
30. The further contention is that, in pursuance to multiple
summons issued under Section 50(2) of the PMLA to
Shri M.V.S. Seshagiri Rao and Appellant No.2, the
officials of JSW Steel Ltd., on 10.12.2021, 15.12.2021,
04.02.2022, and 25.02.2022, there was no cooperation
extended, and no authorised representative appeared
to depose which shows the mens rea of the Appellants.
31. The learned ASG submitted that bank accounts are
considered "property" within the meaning of Section
2(1)(v) of the PMLA, as established by this Court in
6
State of Maharashtra v. Tapas D. Neogy . He further
argued that the attachment of a specified quantum
from these accounts is therefore valid. Additionally, he
contended that the withdrawal of funds, even during
the pendency of a stay order, does not absolve JSW of
liability. This is because the stay order was prospective
in nature and did not annul the lien that had already
been marked on the accounts.
6
(1999) 7 SCC 685
Criminal Appeal Nos.4183-4184/2025 Page 12 of 16
32. In the light of the deliberate conduct of the appellants
in dissipating attached amounts and their continued
possession of INR 16.55 Crore of proceeds of crime, this
Court ought not to exercise extraordinary jurisdiction
to quash the cognizance order and prayed for dismissal
of the appeals.
33. Having heard learned Counsel for both the parties and
on perusal of the records, we note that the Appellants
have already invoked their statutory remedy before the
Appellate Tribunal under Section 26 of the PMLA,
which remains pending.
34. It is important to note that the PMLA provides a
comprehensive and self-contained adjudicatory
mechanism. Section 5 enables Provisional Attachment,
Section 8 contemplates confirmation by the
Adjudicating Authority, and Section 26 provides an
appellate remedy before the Appellate Tribunal. The
appellants, in the present case, have already invoked
their statutory remedy of Appeal, which remains
pending.
35. This Court has consistently held that constitutional or
appellate jurisdiction should ordinarily not be exercised
where an efficacious alternate remedy is available and
is actively being pursued. Reference may be made to
Union of India and Another v. Guwahati Carbon
Criminal Appeal Nos.4183-4184/2025 Page 13 of 16
7
Limited , which cautions against bypassing statutory
forums except in cases of patent illegality or
jurisdictional error.
36. We further note that it is undisputed that the ECIR
registered by the ED does not name the appellants as
accused persons. The charge-sheet filed by the CBI
under RC 18(A)/2011/CBI/ACB/BLR also does not
array them as accused, having dropped them in the
supplementary report after finding no material to
proceed. The complaint filed by the ED is predicated not
on any independent act of laundering but on the
allegation that the appellants withdrew certain sums
from the attached bank accounts in violation of the
PAOs, thereby frustrating the recovery of INR 33.80
Crore, alleged to be “proceeds of crime.”
37. The core issue before us is not whether the appellants’
entire banking operations are tainted, but whether the
specific sum of INR 33,80,87,617/- (Thirty-Three Crore
Eighty Lakh Eighty-Seven Thousand Six Hundred
Seventeen Rupees), representing unpaid consideration
for iron ore supplied by AMC, can be treated as
“proceeds of crime” and whether its withdrawal post-
PAO constitutes an offence under Section 3 PMLA. The
apprehension that the entire account balance
7
(2012) 11 SCC 651
Criminal Appeal Nos.4183-4184/2025 Page 14 of 16
constitutes proceeds of crime is misplaced, particularly
when the admitted position is that payments were
made and received through regular banking channels
and are duly reflected in the books of account.
38. Viewed thus, the appropriate course would be to permit
the statutory process to run its route to reach its logical
conclusion. Interference at this stage would prejudge
issues that are squarely within the domain of the
Appellate Tribunal, including whether the attached
property represents “proceeds of crime” within the
meaning of Section 2(1)(u) PMLA and whether the
withdrawals were in violation of law.
39. In light of these findings, we are unable to hold that the
case for quashing the cognizance order or interdicting
proceedings is made out. The allegations, at this stage,
are confined to the recovery of the quantified amount of
INR 33.80 Crore and do not extend to fastening criminal
liability upon the appellants beyond that process. The
apprehension of arbitrary prosecution is, therefore,
misplaced.
40. Accordingly, we decline to interfere with the
proceedings at this stage. The appellants shall be at
liberty to pursue their statutory appeals before the
Appellate Tribunal, which shall decide the same on
their own merits and in accordance with law,
Criminal Appeal Nos.4183-4184/2025 Page 15 of 16
uninfluenced by any observations contained herein
above.
41. The criminal appeals are disposed of accordingly.
42. There shall be no order as to costs.
43. Pending applications, if any, shall be disposed of.
.……..………..……………………..J.
[ DIPANKAR DATTA ]
.……..………..……………………..J.
[ AUGUSTINE GEORGE MASIH ]
NEW DELHI;
OCTOBER 07, 2025.
Criminal Appeal Nos.4183-4184/2025 Page 16 of 16