No General Right To Swap PMLA-Attached Property With Fixed Deposit: Chhattisgarh High Court In Hrishabh Soni Vs Deputy Director

1. Background And Procedural History

The Chhattisgarh High Court, in Hrishabh Soni Vs Deputy Director, was called upon to decide whether an assessee whose immovable properties stand attached and the attachment has been confirmed under the Prevention of Money Laundering Act, 2002 (PMLA), can insist on substituting those properties with a Fixed Deposit (FD) of equivalent value, by invoking the writ jurisdiction under Article 226 of the Constitution.

The writ petition was framed narrowly: the petitioners did not ask the High Court to set aside the attachment itself, which had already been confirmed by the Adjudicating Authority and was under challenge before the Appellate Tribunal (PMLAT). Instead, they sought only interim relief in the nature of a direction to the Enforcement Directorate (ED) to accept an FD in lieu of six attached immovable properties.

1.1 Reliefs Claimed

Under Article 226, the petitioners prayed for:

• A writ of mandamus directing the respondent to accept a substituted security in the form of a Fixed Deposit of ₹4,36,05,780/- in place of the attached properties at Serial Nos. 1, 3, 4, 5, 7 and 11 under the Provisional Attachment Order dated 09.12.2024; and
• Such further orders as the Court considered just.

1.2 Petitioners’ Business And Attachment Background

The petitioners explained their business framework as follows:

• Petitioner No. 1 is the proprietor of Shourya Enterprises and a partner in Swarnim Ventures.
• Petitioner No. 2, spouse of Petitioner No. 1, is proprietor of Bhavy Agency and also a partner in Swarnim Ventures.
• These entities are engaged in supply-related and project-based works for government contracts and are stated to support several livelihoods.

As per the petitioners:

• An FIR No. 24/2019 dated 16.10.2019 was lodged by the Economic Offence Wing/Anti-Corruption Bureau (EOW/ACB), Raipur, under Section 13(1)(a) of the Prevention of Corruption Act, 1988 read with Sections 409 and 120B of the Indian Penal Code (IPC), with reference to alleged irregularities involving the District Mineral Fund (DMF).
• The petitioners pointed out they were not named in this FIR and that the investigation ultimately ended in a closure report accepted by the competent Court on 08.11.2023.

Subsequently:

• FIR No. 08/2023 dated 17.07.2023 was registered at Police Station Tadoki, District Kanker, under various provisions of the IPC. Again, the petitioners asserted they were not named.
• Thereafter, FIR No. 02/2024 dated 16.01.2024 was registered by EOW/ACB, Raipur, purportedly based on material shared by the Directorate of Enforcement under Section 66(2) of the PMLA, regarding alleged conspiracy in allocations of DMF Trust tenders. In this FIR, Petitioner No. 1 was named, but the petitioners claimed that neither petitioner ultimately figured as an accused in the charge-sheet.

On the PMLA side:

• The Directorate of Enforcement registered ECIR/RPZO/02/2023 on 20.03.2023 in relation to scheduled offences, and later linked FIR Nos. 08/2023 and 02/2024 to this ECIR via addenda dated 29.08.2023 and 23.02.2024.
• Petitioner No. 1 was arrayed as an accused by addendum dated 23.02.2024, whereas Petitioner No. 2 was not named in the FIRs, ECIR or addenda.

Pursuant to this investigation:

• By Provisional Attachment Order (PAO) dated 09.12.2024, ED provisionally attached eleven immovable properties said to belong to the petitioners, singly or jointly, treating them as equivalent value of proceeds of crime under Section 2(1)(u) of the PMLA.
• The ED then filed Original Complaint No. 10 of 2025 before the Adjudicating Authority seeking confirmation of the PAO.
• A show-cause notice dated 31.01.2025 under Section 8(1) of the PMLA was issued. After written replies and oral hearing on 14.05.2025, the Adjudicating Authority confirmed the attachment by order dated 23.05.2025.

Both petitioners challenged this confirmation before PMLAT through FPA-PMLA Appeal Nos. 1440/2025 and 1441/2025, where the validity of the attachment is under substantive scrutiny.

1.3 Applications For Substitution Before PMLAT

During pendency of those appeals, the petitioners moved applications MP-PMLA-4463/RP/2025 and MP-PMLA-4465/RP/2025 before PMLAT, requesting that six of the attached properties (Serial Nos. 1, 3, 4, 5, 7 and 11) be substituted with a Fixed Deposit of ₹4,36,05,780/-, which they described as the total assessed value of those properties.

PMLAT, by order dated 07.04.2026, rejected those applications upon analysing Rules 4, 5 and 6 of the Prevention of Money-laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013 (2013 Rules). The Tribunal concluded:

• There is no general statutory provision under the PMLA or the 2013 Rules to replace an attached immovable property with an FD, except in specific contingencies contemplated in Rule 5(5) and Rule 6.
• The petitioners had not shown that their case fell within any of those specific situations.
• The case law cited by the petitioners did not compel a different outcome.
• The principal challenge to the attachment itself was to be decided in the main appeals; the substitution plea was only an ancillary interlocutory issue.

Aggrieved by this interlocutory order, rather than invoking the statutory appeal under Section 42 of PMLA, the petitioners filed the present writ petition.

2. Petitioners’ Submissions Before The High Court

2.1 Hardship And Business Disruption

Learned Senior Counsel for the petitioners argued:

• The continued attachment of the six immovable properties had paralysed legitimate business operations and created serious financial strain.
• These properties were either directly used in the petitioners’ business/investment activities or served as collateral for institutional borrowings.
• The ongoing attachment, therefore, adversely impacted cash flows, loan servicing capacity, and overall creditworthiness.

2.2 Offer Of Fixed Deposit As Equivalent Security

The petitioners stressed they were not attempting to obstruct PMLA proceedings. Rather:

• They offered an FD of ₹4,36,05,780/-, said to match the assessed value of the six specified properties.
• Such FD, according to them, would be liquid, easily verifiable, and free from encumbrances.
• From a risk-protection standpoint, an FD was asserted to be at least as secure as attached immovable property and therefore sufficient to safeguard the ED’s interest.

2.3 “Equivalent Value” Character Of Attachment

Counsel highlighted that:

• The six properties in question were not alleged to be direct proceeds of crime, but were attached as the equivalent value of proceeds of crime under Section 2(1)(u) PMLA.
• In such cases, the primary objective is preservation of value for possible eventual confiscation, not punitive deprivation of particular assets.
• Once a matching and easily realisable instrument like an FD is furnished, insisting on continuing the immovable property attachment, they contended, becomes excessive and disproportionate.