1. A Private Limited Company has filed this petition under Article 226 of the Constitution of India, challenging Ext.P1 order passed by the 4th respondent under Section 17(1-A) of the Prevention of Money Laundering Act, 2002 (hereafter referred to as ‘PMLA’), freezing the accounts maintained by the above Company in five banks.

2. According to the petitioner, they are in no way involved in any scheduled offence under the PMLA, and they came to know about the freezing of their accounts only when the banks concerned sent intimations informing them about their inability to transact due to the freeze order received from the 4th respondent. It is contended by the petitioner that the 4th respondent, being an Assistant Director, was incompetent to pass the order under Section 17 of the PMLA. It is also stated that the impugned order passed by the 4th respondent is bad due to the omission to incorporate the reason to believe the element of money laundering. It is further contended that the copy of the order passed by the 4th respondent under Section 17(1-A) of the PMLA was not served on the petitioner. Another contention raised by the petitioner challenging the legal sanctity of Ext.P1 order is that the aforesaid order does not contain the indication that freezing of account was resorted to, since it was not practicable to seize the record or property related to money laundering. The petitioner would further allege that the freezing order, along with a copy of the reasons so recorded and materials in possession of the seizing officer, were not forwarded immediately to the Adjudicating Authority under Section 17(2) of the PMLA. The petitioner seeks urgent intervention of this Court for the reason that the continuation of the freezing of their accounts would result in the total destruction of their business in the travel and tourism sector.

3. The respondents 2 to 4 filed counter affidavit opposing the relief sought for in this writ petition. According to the respondents, this Court has no territorial jurisdiction to entertain this writ petition since the impugned order was passed at Panaji in Goa. It is stated that the predicate offence involved was one registered by the Cyber Crime Police Station, North Goa, under Sections 318(4), 319(2) and 336(3) r/w Section 3(5) of the Bharatiya Nyaya Sanhita, 2023, and Section 66D of the I.T Act, 2000, in connection with large scale ‘digital arrest’ cyber fraud. According to the respondents 2 to 4, the 4th respondent is fully competent to pass Ext.P1 order under Section 17(1-A) of the PMLA. As regards the omission to incorporate the ‘reasons to believe’ in Ext.P1, it is stated that the law does not require the incorporation of reasons to believe in that order. It is further stated that the competent authority had already recorded the reasons to believe and transmitted the same to the Adjudicating Authority in a sealed cover as mandated by law. According to respondents 2 to 4, there is due compliance of all the requirements of the PMLA in the proceedings initiated against the petitioner. It is further stated that the petitioner is having the option to redress its grievance before the Adjudicating Authority in the proceedings under Section 8 of the PMLA. It is also pointed out that the petitioner is having the option to prefer appeal against the decision of the Adjudicating Authority before the Appellate Tribunal under Section 26 of the PMLA, and a further appeal before the High Court under Section 42 of the PMLA. Thus, it is contended that the petitioner is not entitled to get any relief in this writ petition under Article 226 of the Constitution of India since the petitioner is having alternate efficacious remedy provided under the Statute.

4. Heard the learned counsel for the petitioner, the learned Standing Counsel for respondents 2 to 4, and the learned ASGI for the first respondent.

5. The challenge raised by the respondents 2 to 4 against the territorial jurisdiction of this Court to entertain this writ petition pertaining to the order passed by the 4th respondent at Panaji in Goa, cannot be accepted since the impact and consequence of the aforesaid order are said to have been suffered at Kozhikode where the petitioner’s registered office, as well as the banks which maintain the accounts which are frozen by Ext P1 order, are situated. Thus, it is obvious that a part of the cause of action for the institution of this writ petition has arisen at Kozhikode in Kerala, within the territorial limits of jurisdiction of this Court. Therefore, the challenge against the maintainability of the writ petition is prima facie, unsustainable.

6. The contention of the petitioner that the 4th respondent was incompetent to issue Ext P1 order, is totally untenable in view of the provisions contained in Section 17 of the PMLA. As per Sub-Section(1) of Section 17 of the PMLA, the Director or any other officer not below the rank of Deputy Director may authorise any officer subordinate to him to effect search and seizure as provided under Clauses (a) to (f) of that Sub-Section, if such Director or Deputy Director has reason to believe the commission of offence of money laundering and the possession of proceeds of crime involved in the money laundering or the possession of any property related to that crime, by any person. Sub-Section (1-A) of Section 17 covers the situation where it is not practicable to seize the records and property related to money laundering. In the case of Bank Records, it goes without saying that it is not practicable to seize such record or property. In such a situation, the officer authorised under Sub-Section (1) may make an order to freeze such property. Thus, it is manifest from the provisions contained in Sub-Sections (1) & (1-A) of Section 17 of the PMLA, that the officer subordinate to the Deputy Director or Director, upon proper authorisation, is empowered to freeze such property, if it is found that it is not practicable to seize the records or property related to money laundering. There need not be any further elaboration on that point since the provisions contained under Section 17 of the PMLA, leave no room for any doubt about the authority and power of the subordinate officer authorised by the Director or Deputy Director of the PMLA to proceed with seizure and freezing of the property found to be related to money laundering. The argument advanced by the learned counsel for the petitioner against the incompetence of the 4th respondent to pass Ext P1 order, is thus totally unsustainable.

7. As regards the challenge against the failure to record the reasons to believe in Ext P1 order, it has to be stated that the provisions contained in the PMLA do not contain any requirement that the order of freezing passed by the officer concerned should be incorporated with the reason to believe. Going by the tenor of Section 17(1), it is for the Deputy Director or Director to initiate the proceedings on the basis of the information in his possession and to record the reason to believe that any person committed the offence of money laundering or is in possession of the proceeds of crime. Sub-Section (2) of Section 17 of the PMLA requires the authorised officer under Sub-Section (1) to forward a copy of the reasons so recorded, along with the materials in his possession, to the Adjudicating Authority in a sealed envelope. Thus, it is obvious from the aforesaid provision of law that the legislature never intended to disclose such reasons to believe in the orders passed under Section 17(1-A) of the PMLA. The reasons to believe recorded by the Director or Deputy Director, along with other relevant materials, are required to be transmitted in sealed cover to the Adjudicating Authority immediately after the search and seizure by the officer authorized under Section 17(1) of the PMLA. Therefore, the absence of reason to believe in Ext P1 order, is of no consequence at all.

8. The petitioner has taken up a contention that the copy of Ext P1 order was not served to the petitioner in compliance with the requirement of Sub-Section (1-A) of Section 17 of the PMLA. The contention of the petitioner in the above regard, is against the contents of Ext P1 order wherein there is the indication that the copy of the said order had been issued to the petitioner. The name of the petitioner company figures as item No.32 in Ext P1 at the relevant portion showing the entities to which copy has been marked. Therefore, the challenge raised by the petitioner in the above regard, is also bereft of merit.

9. It is true that Ext.P1 freeze order dated 17.07.2026 is said to have been submitted before the Adjudicating Authority only on 03.08.2026, as per the averments in the counter affidavit filed by respondents 2 to 4. The learned counsel for the petitioner would argue that the aforesaid delay of 17 days is against the mandate of Sub Section (2) of Section 17 of the PMLA, which requires the authority, who has been authorised under Sub Section (1), to forward reasons so recorded, along with the materials in his possession, to the Adjudicating Authority immediately. The learned Standing Counsel for the respondents 2 to 4 has relied on Sub Section (4) of Section 17 of the PMLA, and argued that the aforesaid period of 17 days cannot be treated as an inordinate delay since the authority which effected seizure or freezing is required to file an application before the Adjudicating Authority within a period of 30 days from the date of freezing for the continuation of the order of freezing.

10. It is true that the delay of 17 days in forwarding the reasons to believe, along with the freeze order and other records, to the Adjudicating Authority, might have caused hardships to the account holder engaged in a business like tourism and travel agency. But, at the same time, it cannot be said that the aforesaid time lag would vitiate the proceedings initiated by the respondents 2 to 4 warranting the interference of this Court in exercise of its powers under Article 226 of the Constitution of India.

11. The learned counsel for the petitioner argued that there was absolutely no justification for the order of freeze of the accounts of the petitioner in its entirety, and thereby jeopardising the business being conducted by the petitioner. According to the learned counsel for the petitioner, the respondents 2 to 4 ought to have identified the actual proceeds of crime, if any, which reached the accounts of the petitioner and directed the banks concerned to put a lien upon the aforesaid accounts for that much amount of the proceeds of crime, which was found to have reached the accounts of the petitioner.

12. The argument advanced by the learned counsel for the petitioner about the restraint ought to have been followed by the authorities concerned in the matter of avoiding a freeze of the entire accounts of the petitioner, and preferring a lien for that much of the amount which was identified as the proceeds of the crime, is perfectly right. However, the aforesaid course of procedure has to be followed by the Adjudicating Authority in the enquiry to be conducted under Sub Sections (1) and (2) of Section 8 of the PMLA. As per Sub Section (1) of Section 8, the Adjudicating Authority is required to serve notice of not less than 30 days upon such persons, whom the Director or Deputy Director of Enforcement Directorate believed to be in possession of the proceeds of the crime, calling upon him to show cause why all or any of such properties attached or frozen should not be declared to be the properties involved in money laundering. Sub Section (2) requires the Adjudicating Authority to consider the reply, to hear the aggrieved person and the Director or any other officer authorised by the Enforcement Directorate and to take into account all the relevant materials placed on record before him, and thereafter to pass an order as to whether all or any of the properties referred to in the notice issued under Sub Section (1) are involved in money laundering. After the completion of the aforesaid procedures, the Adjudicating Authority has to confirm under Sub Section (3) of Section 17 of the PMLA, the attachment or freezing in respect of that property which was found to have been involved in money laundering. The aforesaid stage of the proceedings is yet to reach in the case on hand. It is also pertinent to note that Section 26 of the PMLA provides for an appeal to the Appellate Tribunal at the instance of the aggrieved person or the Director of the Enforcement Directorate. Again, Section 42 of the PMLA provides for an appeal to the High Court at the instance of the aggrieved person against the decision of the Appellate Tribunal on any question of law or fact. Since all the aforesaid procedures and remedies are still available for the petitioner, this Court is not expected to interfere with Ext.P1 order passed by the second respondent under Section 17(1-A) of the PMLA in exercise of the writ jurisdiction under Article 226 of the Constitution of India.

13. The learned counsel for the petitioner, by relying on the decision of the Hon’ble Supreme Court in OPTO Circuit India Limited v. Axis Bank and Others [(2021) 6 SCC 707], argued that this Court has to exercise its powers under Article 226 of the Constitution of India and interfere with Ext.P1 order, which is not in consonance with the mandate of Section 17 of the PMLA. The Hon’ble Supreme Court has rendered the verdict in OPTO Circuit India Limited (Supra) when it was found that the Enforcement Directorate had not invoked or exercised the statutory power under Section 17(1-A) of the PMLA and instead, issued a notice under Section 54 of the PMLA to the banks concerned requiring them not to permit transactions in the accounts specified without prior intimation to the Enforcement Directorate. Thus, the factual scenario in the aforesaid case is totally different from the present case. As far as the present case is concerned, the authorities have invoked Section 17(1-A) of the PMLA for the purpose of freezing the accounts to which, according to them, the proceeds of the crime have reached. The grievance of the petitioner against the freezing of the entire account instead of limiting it by a lien for that much amount, which was found to be proceeds of the crime, could be raised before the Adjudicating Authority, which is bound to consider the same, and pass the necessary orders after the completion of the enquiry under Sub Sections (1) to (3) of Section 8 of the PMLA. Therefore, the argument of the learned counsel for the petitioner about the applicability of the ratio in Opto Circuit India Limited (supra) to this case, cannot be accepted.

14. In the light of the discussions aforesaid, the prayers in this writ petition to quash Ext.P1 order and to direct respondents 2 to 4 to withdraw the debit freeze imposed upon the bank accounts of the petitioner’s bank, cannot be allowed. At the same time, it is highly necessary to issue a direction to the 5th respondent Adjudicating Authority to complete the proceedings of enquiry under Sections 8(1) and 8(2) of the PMLA as expeditiously as possible, so that the petitioner would be able to proceed with the operation of their accounts restricted to that much portion except the lien created over the value equivalent to proceeds of crime, or in the alternative, to challenge the verdict of the Adjudicating Authority before the Appellate Tribunal.

In the result, the writ petition stands disposed of as follows:

i) The 5th respondent Adjudicating Authority is hereby directed to complete the proceedings of enquiry under Sections 8(1) and 8(2) of the PMLA, and to pass orders as expeditiously as possible, at any rate, within a period of 45 days from the date of this judgment, as to the extent to which the freeze order of the bank accounts of the petitioner, mentioned as item Nos.23 to 32 in the tabular column shown in Ext.P1, shall continue.

ii) While passing such orders, the 5th respondent Adjudicating Authority shall ensure that the restraint upon the operation of bank accounts of the petitioner is limited to the value of the proceeds of crime, if any, that is said to have reached the petitioner.

It is made clear that the direction for time bound completion of the enquiry is made only due to the peculiar facts and circumstances of this case, and that it cannot be claimed as a precedent to be followed.