### Direction to Refrain From "Coercive Steps" Restricts Arrest but Does Not Prohibit Statutory Property Attachment

In brief

The question

1. Whether the legal import of the direction "not to take any coercive steps" includes a prohibition against statutory actions like provisional attachment of property.

The court held

The Court held that "no coercive steps" implies only protection from arrest and does not stay statutory proceedings such as property attachment.

It also directed

The writ petition was disposed of, and the petitioner was relegated to the statutory forum—the Adjudicating Authority under the PMLA—to contest the provisional attachment or submit undertakings regarding non-alienation of property.

The interim stay on the attachment order was effectively vacated as the petitioner was directed to participate in the statutory adjudicatory process.

01Facts

The petitioner, a former director of Generis Consulting Services Private Limited, was accused of involvement in a ₹7.9 crore money transaction in a predicate offence (Crime No. 26/2020).

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In an earlier petition (W.P. No. 7336/2026), the High Court issued an order on 10.03.2026 directing the petitioner to cooperate with the Enforcement Directorate (ED) and ordered the respondent "not to take any coercive steps".

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Following this, the ED issued a Provisional Attachment Order (PAO) on 28.03.2026, attaching the petitioner’s properties.

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A Coordinate Bench subsequently stayed the PAO on 29.04.2026, interpreting the term "coercive steps" as "precipitative action".

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02Issues

i.1. Whether the legal import of the direction "not to take any coercive steps" includes a prohibition against statutory actions like provisional attachment of property.

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ii.2. Whether the issuance of a Provisional Attachment Order by the Enforcement Directorate constitutes a violation of a judicial order restraining "coercive steps".

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03Law Applied

The Court applied the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) regarding the ED's power to initiate attachment and prosecution.

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The Court distinguished between "no coercive steps," interpreted as a shield for personal liberty against arrest and detention, and "no precipitative action," which has a wider amplitude to suspend the entire statutory process.

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The Court relied on Menka Gambhir v. Union of India (2022 SCC OnLine Cal 3349) and Satya Prakash Bagla v. State (2025 SCC OnLine Del 7658) to affirm that "coercive steps" refers specifically to custodial interrogation and arrest, not the freezing of accounts or attachment of property.

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Provisions in the judgment · 1 · Linked ones open on LawLens

Prevention of Money-Laundering Act, 2002 Section 5

04Reasoning

The Court reasoned that judicial orders must be understood by the precise language employed.

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A restraint on "coercive steps" is a protection of personal liberty under Article 21 and does not denude a statutory authority of its power to investigate, collect evidence, or invoke civil remedies like attachment under the PMLA.

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The Court found that the Coordinate Bench's subsequent stay of the PAO was based on a factually erroneous premise that "precipitative action" had been stayed, whereas the original order only restrained "coercive steps".

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Since the PAO does not impinge upon the petitioner’s physical liberty or result in arrest, it does not fall within the ambit of "coercive steps".

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Consequently, the ED acted within its jurisdiction to safeguard the proceeds of crime while the petitioner remained protected from arrest.

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