The Supreme Court declined to quash the PMLA proceedings, holding that the statutory appellate mechanism under the Act must be exhausted first. The Court emphasized that the Appellate Tribunal is the appropriate forum to determine whether the attached property constitutes “proceeds of crime” and if its withdrawal violated the law, thereby refusing to exercise its extraordinary jurisdiction at this stage.
Facts Of The Case:
JSW Steel Limited entered into a contract with Obulapuram Mining Company (OMC) for the supply of iron ore, making an advance payment. After OMC and its associates, including Ananthpur Mining Corporation (AMC), partially supplied the ore, they failed to complete the supply. JSW initiated arbitration, which resulted in an award directing a refund of the outstanding balance. Concurrently, an investigation into illegal mining by AMC, a firm linked to G. Janardhan Reddy, was initiated. While JSW was initially named in the CBI case, it was later exonerated. The Enforcement Directorate (ED) registered a case under the PMLA and issued Provisional Attachment Orders (PAOs) against JSW’s bank accounts, alleging that a sum payable to AMC constituted “proceeds of crime.” JSW challenged these attachments and, during the legal process, withdrew funds from the attached accounts. The ED subsequently filed a prosecution complaint, and the Special Court took cognizance. JSW approached the High Court, challenging the PMLA proceedings and the cognizance order, but its writ petitions were dismissed, leading to the present appeal before the Supreme Court.
Procedural History:
The procedural history of this case commenced with the Enforcement Directorate (ED) registering an ECIR and issuing Provisional Attachment Orders (PAOs) against JSW Steel’s bank accounts. JSW challenged these orders through writ petitions before the High Court of Karnataka, which were dismissed. The High Court relegated JSW to the statutory remedy of appealing before the Appellate Tribunal under the PMLA, which remains pending. Subsequently, the ED filed a prosecution complaint, and the Special Court took cognizance, issuing summons. JSW again approached the High Court, challenging the cognizance and the underlying proceedings, but both writ petitions were dismissed via a common order. This led to the filing of the present criminal appeals before the Supreme Court, which have now been disposed of with directions to pursue the pending statutory appeal.
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Court Observation:
The Supreme Court observed that the statutory appellate mechanism under the PMLA provides a comprehensive and self-contained process for adjudication, which the appellants were already pursuing. It emphasized that constitutional jurisdiction should not ordinarily be exercised when an efficacious alternate remedy is available and being actively pursued. The Court noted that the core issue—whether the specific sum constituted “proceeds of crime” and whether its withdrawal violated the PAOs—falls squarely within the domain of the Appellate Tribunal. Consequently, it declined to quash the proceedings, stating that interference at this stage would prejudge issues pending before the statutory forum and that the apprehension of arbitrary prosecution was misplaced.
Final Decision & Judgement:
The Supreme Court disposed of the appeals and declined to quash the PMLA proceedings or the cognizance order. It held that the appellants must exhaust the statutory remedy available to them, directing them to pursue their pending appeals before the PMLA Appellate Tribunal. The Tribunal was instructed to decide the matter on its own merits, uninfluenced by the Supreme Court’s observations. There was no order as to costs.
Case Details:
Case Title: JSW Steel Limited Etc. Versus Deputy Director, Directorate of Enforcement Etc. Appeal Number: Criminal Appeal Nos. 4183 – 4184 of 2025 Date of Judgement: October 07, 2025 Judges/Justice Name: Justice Dipankar Datta and Justice Augustine George Masih
Download The Judgement Here