Pre‑Charge‑Sheet Provisional Attachment and the Independent Operation of the Second Proviso to Section 5(1) PMLA – Commentary on Gautam Khaitan & Anr v. Union of India & Anr (2025 DHC 10040‑DB)

I. Introduction

The Delhi High Court’s Division Bench decision in Gautam Khaitan & Anr v. Union of India & Anr, 2025 DHC 10040‑DB, arises out of the highly publicised AgustaWestland VVIP helicopter acquisition controversy. Beyond the facts of that scandal, the judgment is significant for what it says about the power of the Enforcement Directorate (ED) to provisionally attach property under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA) even before a charge-sheet under Section 173 of the Code of Criminal Procedure, 1973 (CrPC) is filed.

The Division Bench (Anil Kshetrapal, J. and Harish Vaidyanathan Shankar, J.) upholds a Single Judge’s refusal to interfere under Article 226 of the Constitution with a Provisional Attachment Order (PAO) issued by the ED. The Court clarifies two closely connected points of law:

First, after the 2013 amendment to PMLA, it is not a mandatory condition that a person must be “charged” with a scheduled offence, or that a final report under Section 173 CrPC must already be filed, before a PAO can be issued – especially where the second proviso to Section 5(1) is invoked.
Second, the writ jurisdiction of the High Court under Article 226 in relation to PAOs is narrow and is ordinarily not to be used to bypass the three‑tier statutory mechanism under PMLA (Adjudicating Authority, Appellate Tribunal, and High Court under Section 42).

The decision thus cements, at the Division Bench level in Delhi, a broad and enforcement‑oriented reading of Section 5 PMLA, treating the second proviso as an independent gateway that allows pre‑charge‑sheet attachment where immediate action is necessary to prevent frustration of PMLA proceedings.

II. Factual and Procedural Background

1. The AgustaWestland VVIP helicopter deal

The case stems from the Government of India’s decision to procure 12 AW‑101 VVIP helicopters from AgustaWestland, an Anglo‑Italian manufacturer. Originally, the Indian Air Force’s Request for Proposal (RFP) issued in October 2000 stipulated a service ceiling of 6,000 meters. This criterion was later relaxed to 4,500 meters, allegedly enabling AgustaWestland to become eligible and win the contract.

According to the prosecution, this relaxation was procured through corrupt means, involving payment of illegal gratification by AgustaWestland to two Italian intermediaries:

Mr. Guido Ralph Haschke, and
Mr. Carlo Gerosa.

The illicit funds are alleged to have been routed into India through a complex structure of companies and cross‑border transactions. The appellant Gautam Khaitan (Appellant No.1), a lawyer, is alleged to be one of the key facilitators.

2. Corporate structure and alleged money trail

The ED and CBI case, as summarised by the Court, is that:

IDS Infotech Ltd. (India) (“IDS India”) was a company for which Appellant No.1 was working as Legal Adviser. It allegedly received about 2.166 million Euros from AgustaWestland between November 2007 and April 2010.
A wholly‑owned subsidiary, IDS Sarl, Tunisia (“IDS Tunisia”), was incorporated. Within a few months, Haschke and Gerosa acquired substantial interest and control in IDS Tunisia.
Around the same time, another Indian company, Aeromatrix Info Solution Ltd. (“AISL”), was incorporated. Appellant No.1 initially served as a Director, along with two others. Haschke and Gerosa were later inducted onto its Board.
The allegation is that kickbacks paid by AgustaWestland were layered and funnelled through IDS India, IDS Tunisia, AISL and other entities, including routing through Mauritius, eventually to pay bribes to Indian officials and intermediaries, including Appellant No.1.

3. Criminal proceedings and ED action

The investigative chronology was as follows:

CBI FIR (scheduled offences):
CBI registered FIR No. RC‑217/2013/A0003 on 12.03.2013 under:
- Section 120B read with Section 420 IPC, and
- Sections 7, 8, 9, 12 and 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988.
ED ECIR (PMLA offence):
ED registered ECIR No. DLZO/15/2014/AD(VM) on 03.07.2014 under:
- Sections 3 and 4 of PMLA (offence of money‑laundering and punishment).
Search and seizure:
On 22.09.2014, ED conducted a search at the office and residence of Appellant No.1 and seized various movable and immovable properties, including jewellery.
Retention of seized jewellery:
On 17.10.2014, an order was passed for retention of jewellery, after representations seeking its return were made by the wife (Appellant No.2) and son.
Provisional Attachment Order (PAO):
On 15.11.2014, ED issued a PAO under Section 5(1) PMLA, attaching certain properties alleged to be “proceeds of crime”.

4. Writ petition and Single Judge’s decision

The appellants challenged the PAO by a writ petition under Article 226 of the Constitution, seeking its quashing. The learned Single Judge (LSJ) framed three jurisdictional issues:

Whether a PAO could be passed without a charge‑sheet under Section 173 CrPC having been filed in respect of the scheduled offences?
Whether the officer who passed the PAO had “reason to believe”, based on material in his possession, that justified the attachment?
Whether there was a breach of principles of natural justice in not issuing prior notice to the petitioners before passing the PAO?

The LSJ answered all three questions in favour of the ED and dismissed the writ petition, emphasising limited writ interference at the “nascent stage” of Section 5 proceedings and the existence of an alternative efficacious statutory remedy.

5. Letters Patent Appeal

Aggrieved, the appellants filed the present Letters Patent Appeal (LPA 72/2015), challenging the correctness of the Single Judge’s judgment dated 04.02.2015.

III. Issues Before the Division Bench

While the Division Bench did not formally re‑frame the issues, the core questions arising from the appellants’ and ED’s submissions were:

Maintainability and scope of writ jurisdiction:
Whether the High Court, exercising jurisdiction under Article 226, ought to interfere with a PAO when PMLA provides a detailed three‑tier remedial structure (Adjudicating Authority, Appellate Tribunal, and statutory appeal to the High Court under Section 42)?
Necessity of a Section 173 CrPC report (charge‑sheet) for PAO:
Does Section 5(1) PMLA, as it stood between the 2013 and 2015 amendments, mandate that a PAO can only be issued after a final report under Section 173 CrPC is filed in respect of the scheduled offence?
Nature and sufficiency of “reason to believe”:
Did the Deputy Director of ED have adequate material to form the statutory “reason to believe” that the properties were proceeds of crime likely to be concealed or transferred?
Role of the 2015 amendment:
Does the Finance Act, 2015 (Act 20 of 2015), which altered the wording of the second proviso to Section 5(1), operate retrospectively or clarificatorily, or did it bring about a substantive change?
Natural justice and pre‑decisional hearing:
Whether PMLA requires a prior notice or hearing before a PAO is issued, or whether post‑attachment remedies suffice?

IV. Summary of the Judgment

The Division Bench ultimately dismissed the appeal and affirmed the Single Judge’s judgment. The key conclusions are:

Limited writ jurisdiction: High Courts should exercise their writ jurisdiction with “due care and caution” in matters of PAO, especially where PMLA provides an efficacious alternative remedy. Writs should be invoked only in cases of mala fides, patent arbitrariness, or manifest lack of jurisdiction.
Charge‑sheet not a universal pre‑condition for PAO: After the 2013 amendment removing clause (b) of Section 5(1), it is no longer mandatory that a person against whom PAO is issued must have been charged with a scheduled offence. The Court endorses the interpretation that the second proviso to Section 5(1) operates as an independent enabling provision, permitting PAO even before a Section 173 CrPC report, where immediate attachment is needed to prevent frustration of PMLA proceedings.
First proviso not the sole gateway: The Division Bench re‑affirms, relying on its recent decision in Directorate of Enforcement v. M/s Hi‑Tech Merchantile India Pvt. Ltd. (LPA 588/2022, 17.10.2025), that while the first proviso to Section 5(1) (requiring a Section 173 CrPC report or complaint for initiation of attachment) is one jurisdictional trigger, it is not the only route. The second proviso forms a separate jurisdictional basis.
Sufficient material for “reason to believe”: The Court concurs with the LSJ that ED had cogent material—including the CBI FIR, statements recorded under PMLA, and financial records—justifying the Deputy Director’s “reason to believe” that the properties were proceeds of crime liable to be dissipated.
No error in the Single Judge addressing merits: Since the appellants themselves pressed the Single Judge to examine the material on record and the sufficiency of the “reason to believe”, they cannot, in appeal, validly complain that the Single Judge ought not to have made observations on merits while dismissing the writ on the ground of alternative remedy.
Natural justice: The Court does not disturb the LSJ’s view that the scheme of PMLA implicitly excludes a pre‑attachment hearing; adequate opportunity is provided post‑attachment before the Adjudicating Authority under Section 8 and in subsequent appeals.

V. Detailed Analysis

A. Statutory Framework: Section 5 PMLA and Its Amendments

1. Section 5 before the 2013 amendment

Originally, Section 5(1) PMLA provided that the Director/authorised officer could provisionally attach property where he had “reason to believe” that:

Any person is in possession of proceeds of crime;
Such person has been charged with having committed a scheduled offence (clause (b)); and
The proceeds of crime are likely to be concealed, transferred or dealt with in a manner frustrating confiscation proceedings.

In addition, the first proviso required, before an attachment order:

Filing of a report under Section 173 CrPC, or
Filing of a complaint by an authorised officer for the scheduled offence.

The second proviso, with a non obstante clause, allowed attachment of property even if the person had not yet been charged, where immediate attachment was necessary to prevent frustration of proceedings under PMLA.

2. The 2013 amendment (Act 2 of 2013)

The 2013 amendment fundamentally altered Section 5(1):

Clause (b)—“such person has been charged of having committed a scheduled offence”—was omitted from the main body of Section 5(1).
Section 5(1) was recast to require two conditions:
1. Any person is in possession of proceeds of crime; and
2. Such proceeds are likely to be concealed, transferred or dealt with in any manner that may frustrate confiscation.
The first proviso continued to require a report under Section 173 CrPC or a complaint regarding the scheduled offence, or a similar report/complaint under foreign law.
The second proviso was retained in essentially the same form as before, still using the wording: “notwithstanding anything contained in clause (b)…” even though clause (b) itself had been removed. This drafting anomaly lies at the heart of many interpretive debates.

The legislative effect was to delink the power of attachment from the formal stage of “being charged” with a scheduled offence and refocus it on possession and risk of dissipation of proceeds of crime.

3. The 2015 amendment (Finance Act, 2015 – Act 20 of 2015)

The 2015 amendment further modified the second proviso to Section 5(1) to read:

“Provided further that, notwithstanding anything contained in the first proviso, any property of any person may be attached…”

This change:

Replaced the earlier reference to “clause (b)” (which no longer existed) with a reference to “the first proviso”.
Thus made explicit what had been implied earlier: the second proviso operates as an exception to the first proviso, allowing immediate attachment even when the Section 173 CrPC report / complaint is not yet filed.

The appellants argued that this 2015 amendment introduced a substantive change and could not be read retrospectively to validate attachments like the present one (PAO dated 15.11.2014). The ED, conversely, argued that it was clarificatory of the original legislative intent.

B. Precedents and Authorities Cited

1. Radha Mohan Lakhotia v. Deputy Director (Bom HC, 2010)

The ED relied on the Bombay High Court’s decision in Radha Mohan Lakhotia v. Deputy Director, 2010 SCC OnLine Bom 1116, where:

Section 5(1) (as it then stood) and its provisos were interpreted to mean that the second proviso creates an independent ground for attachment.
It recognised that in urgent cases, where non‑attachment would frustrate proceedings, the ED could attach property even when a Section 173 CrPC report had not yet been filed.

This construction was later approved by the Supreme Court in Vijay Madanlal Chaudhary v. Union of India.

2. Vijay Madanlal Chaudhary v. Union of India, 2022

In Vijay Madanlal Chaudhary v. Union of India, 2022 SCC OnLine SC 929, the Supreme Court:

Upheld the constitutional validity of key provisions of PMLA, including Section 5.
Substantially approved the interpretation in Radha Mohan Lakhotia that Section 5 contemplates both:
- a “normal” route (after a Section 173 CrPC report/complaint), and
- an expedited route under the second proviso where immediate attachment is necessary.

The Delhi High Court’s reading in Gautam Khaitan is fully consistent with this Supreme Court jurisprudence.

3. Directorate of Enforcement v. M/s Hi‑Tech Merchantile India Pvt. Ltd. & Ors. (DHC, 17.10.2025)

Crucial to the Division Bench’s reasoning is its own recent judgment in LPA 588 of 2022, Directorate of Enforcement v. M/s Hi‑Tech Merchantile India Pvt. Ltd. & Ors., decided on 17.10.2025. The Bench reproduced paras 58–59 of that judgment, which held:

The first two provisos to Section 5(1) are jurisdictional preconditions for initiating attachment.
The first proviso (Section 173 report/complaint) acts as a “gateway” for initiating action, but does not confine the scope of the Directorate’s inquiry or the temporal reach of proceeds of crime.
Importantly, the filing of a Section 173 report is “one of the triggering conditions” but “not the only one”—other conditions (notably under the second proviso) may independently justify attachment.

This earlier judgment thus forms the doctrinal bedrock on which the Division Bench resolves the present appeal.

4. Other authorities cited by counsel

The ED’s counsel also referred to:

Georgia Railroad & Banking Co. v. Smith, 1888 SCC OnLine US SC 228, to argue that a proviso can operate as a non obstante clause overriding the main provision.
Zile Singh v. State of Haryana, (2004) 8 SCC 1, to submit that an amendment by substitution is ordinarily retrospective, operating as if the substituted text had always been there, particularly where it is clarificatory.

While these authorities were relied on by counsel, the Division Bench does not expressly pronounce on retrospectivity; instead, it disposes of the controversy by emphasising the independent operation of the second proviso and the effect of the 2013 amendment (omission of clause (b)).

C. The Court’s Legal Reasoning Issue‑Wise

1. Maintainability and scope of Article 226 jurisdiction

At the outset, the Court underscores the need for judicial self‑restraint in PMLA matters:

The statutory scheme of PMLA provides a full set of remedies:
- Section 8: Adjudication by the Adjudicating Authority, including full hearing on the validity of attachment;
- Section 26: Appeal to the Appellate Tribunal;
- Section 42: Further appeal to the High Court on substantial questions of law.
“Indiscriminate” use of writ petitions to challenge PAOs risks:
- circumventing the legislative scheme,
- causing multiplicity of proceedings, and
- unnecessary consumption of judicial resources.
Therefore, the writ jurisdiction should be invoked only on a clear showing of:
- mala fide exercise of power,
- patent arbitrariness, or
- manifest lack of jurisdiction.

The Court also notes that, as recorded in para 12 of the Single Judge’s judgment, the appellants themselves pressed the Single Judge to examine the material and sufficiency of the “reason to believe”. Hence, their complaint in appeal that the LSJ should not have discussed merits is “rendered inconsequential”.

This reaffirms a recurring theme in public law: where a statute provides a specific remedy and forum, that path should ordinarily be followed, and writ jurisdiction is an exception, not the norm.

2. Is a Section 173 CrPC charge‑sheet a condition precedent for PAO?

This is perhaps the most important point in the judgment. The appellants argued:

Under the unamended Section 5(1) (prior to the 2015 amendment), the power to attach could be exercised only upon filing of a final report under Section 173 CrPC in respect of the scheduled offence.
Since the PAO was issued on 15.11.2014 and the CBI charge‑sheet was filed only on 30.08.2017, the PAO was invalid.
The 2015 amendment, by which the second proviso refers to “the first proviso”, substantively changed the law and could not be retrospectively applied to justify the 2014 PAO.

The Division Bench rejects this argument for multiple reasons:

Effect of the 2013 amendment:
The omission of clause (b) (“such person has been charged with a scheduled offence”) from Section 5(1) means that, post‑2013, being charge‑sheeted is no longer a statutory condition in the main body of Section 5(1).
Independent operation of the second proviso:
Relying on Hi‑Tech Merchantile, the Court reiterates that:
- The first proviso (Section 173 CrPC report / complaint) is a jurisdictional condition, but it is not the only one.
- The second proviso also supplies a jurisdictional condition: if the Director/authorised officer has reason to believe that immediate attachment is necessary to prevent frustration of PMLA proceedings, property of “any person” may be attached.
- Thus, a PAO can be validly issued under the second proviso even in the absence of a Section 173 CrPC report.
Purpose and coherence of the statutory scheme:
Accepting the appellants’ reading would mean that, between 15.02.2013 (2013 amendment) and 14.05.2015 (2015 amendment), the second proviso would have been rendered inoperative, contrary to the evident legislative intent of plugging urgent situations.
Gateway vs. scope of inquiry:
As per Hi‑Tech Merchantile, the Section 173 report acts as a gateway triggering action under the first proviso, but does not confine the ED’s inquiry or the period of the proceeds of crime. Similarly, the second proviso is another “gateway” based on necessity for immediate action.

The Division Bench expressly endorses the Single Judge’s interpretation (paras 8.3 to 10.5 of the LSJ’s judgment) that a PAO need not await the filing of a Section 173 report and that the person against whom attachment is ordered need not have been charge‑sheeted, post‑2013.

3. “Reason to believe” and sufficiency of material

The appellants argued that para 2 of the PAO itself showed that there was no adequate material with the Deputy Director to form the requisite “reason to believe”. The Division Bench concurs with the Single Judge’s contrary assessment:

A PAO is a tentative and preventive measure, intended to preserve the property and the integrity of future proceedings, not to conclusively determine guilt or the tainted nature of the property.
The Single Judge had carefully examined the PAO and pointed out:
- The PAO recorded quantification and subsequent investment of alleged proceeds of crime.
- ED had relied on:
  - the CBI FIR,
  - statements recorded under PMLA, and
  - supporting financial records.
- ED had attached only those properties acquired by Appellant No.1 between 2009 and 2014, i.e., the period corresponding to the alleged receipt and layering of kickbacks via AISL and related entities. This indicates a rational nexus between the alleged money trail and the attached properties.
On this basis, the Court finds that the authorised officer’s belief was grounded in “cogent material” and could not be labelled arbitrary, though it remained provisional and subject to fuller scrutiny by the Adjudicating Authority.

The judgment also accepts, in line with established jurisprudence, that whether the material ultimately establishes that the assets are untainted is a matter for the Adjudicating Authority and appellate forums, not primarily for the writ court at this stage.

4. Natural justice and pre‑decisional hearing

The Single Judge had held that:

The scheme of PMLA implicitly excludes a requirement of pre‑attachment notice or hearing under Section 5(1), as the power is emergent and preventive.
Sufficient opportunity to be heard is granted subsequently:
- before the Adjudicating Authority under Section 8,
- before the Tribunal under Section 26, and
- before the High Court under Section 42.

The Division Bench does not reopen this issue and, by upholding the judgment in toto, effectively endorses this construction: no pre‑decisional hearing is mandated before a PAO under Section 5(1).

D. Alignment with Supreme Court’s PMLA Jurisprudence

While the Division Bench’s judgment predates or operates independently of some later Supreme Court clarifications, its approach is aligned with the Supreme Court’s reasoning in Vijay Madanlal Chaudhary:

PMLA’s attachment framework is preventive, intended to preserve the subject‑matter of possible confiscation.
The requirement that “reasons to believe” be recorded in writing and that the attachment be time‑bound and subject to prompt review by an Adjudicating Authority is seen as providing adequate procedural safeguards.
The absence of a pre‑decisional hearing at the attachment stage is not unconstitutional, given the availability of robust post‑attachment remedies.
Property rights under Article 300A can be restricted by “authority of law” – PMLA being such a law – provided the statutory procedure is followed.

In this sense, Gautam Khaitan is a faithful application, at the High Court level, of the enforcement‑oriented but procedurally structured model of PMLA endorsed by the Supreme Court.

VI. Simplifying Key Legal Concepts

For ease of understanding, some of the central legal concepts in the judgment are explained below in more accessible terms.

1. Provisional Attachment Order (PAO)

A Provisional Attachment Order under Section 5 PMLA is a temporary freezing of property. It does not by itself transfer ownership to the State. Instead, it:

prevents the owner from dealing with or disposing of the property,
preserves the property for future confiscation if it is ultimately found to be “proceeds of crime”.

The PAO is subject to further proceedings before the Adjudicating Authority, which can confirm, modify, or set it aside.

2. “Proceeds of crime” and “scheduled offence”

Scheduled offence: PMLA applies only when there is a “scheduled offence” – an offence listed in the Schedules to PMLA (e.g., major corruption, fraud, narcotics, etc.). The CBI FIR here, under IPC and the Prevention of Corruption Act, involved scheduled offences.
Proceeds of crime: Broadly, this means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence, including the value of such property.

3. Offence of money‑laundering (Section 3 PMLA)

Section 3 PMLA defines the offence of money‑laundering. The use of the term “whosoever” in Section 3 indicates that any person involved in any part of the process—concealment, possession, acquisition, use, projecting as untainted, or claiming as untainted—can be liable, not just the person who committed the original scheduled offence.

4. “Reason to believe”

The phrase “reason to believe” is a legal standard found in many statutes. It means:

The officer must have objective material before him, on the basis of which a reasonable person could believe that a particular state of affairs exists (here, that a person is in possession of proceeds of crime and may conceal/transfer them).
It is a lower threshold than proof required for conviction or final adjudication. It is a prima facie, provisional satisfaction, suitable for taking interim protective measures like attachment.

5. Alternative efficacious remedy

An alternative efficacious remedy refers to a remedy provided by statute which is:

available to the aggrieved party,
capable of granting appropriate relief, and
involves a specialised forum with competence to examine the issues in detail.

Where such a remedy exists, High Courts usually decline to entertain writ petitions, unless there is clear evidence of:

lack of jurisdiction,
gross violation of natural justice, or
palpable mala fides or arbitrariness.

6. Provisos and non obstante clauses

A proviso is typically an exception or qualification to what is said in the main provision.
A non obstante clause (“notwithstanding anything contained in…”) gives the proviso overriding effect over the referenced part of the statute.

In Section 5(1) PMLA:

The first proviso sets a general rule (need for a Section 173 report/complaint).
The second proviso contains a non obstante clause that allows the ED to bypass that requirement in urgent situations, by permitting immediate attachment where non‑attachment is likely to frustrate PMLA proceedings.

7. Amendment by substitution & retrospectivity

When a statute says a provision is “substituted” by a new text, courts often treat this as if the new text had been part of the statute from the beginning, especially if it appears clarificatory, as per Zile Singh.
However, whether a particular amendment is clarificatory or substantive depends on legislative intent and context.

In Gautam Khaitan, while counsel urged such arguments regarding the 2015 amendment, the Division Bench chose to rest its decision primarily on the structure of Section 5(1) post‑2013 and the independent role of the second proviso, rather than pronouncing on retrospectivity in express terms.

VII. Implications and Impact of the Judgment

1. Reinforcement of ED’s power to attach pre‑charge‑sheet

The most direct impact of the judgment is the clear affirmation that ED can issue a PAO even before a charge‑sheet under Section 173 CrPC is filed, by invoking the second proviso to Section 5(1), provided:

the officer has a recorded “reason to believe” in writing, and
non‑attachment is likely to frustrate proceedings under PMLA.

In serious economic offences and cross‑border money‑laundering cases, where funds can be quickly dissipated or moved offshore, this is a powerful tool for enforcement agencies.

2. Narrowing the window for writ challenges to PAOs

By emphasising alternative remedies and cautioning against “indiscriminate” writ petitions, the Division Bench:

Raises the threshold for successfully invoking Article 226 against a PAO. Petitioners must demonstrate:
- obvious lack of jurisdiction,
- clear mala fides, or
- patent arbitrariness amounting to abuse of power.
Indicates that challenges to sufficiency or appreciation of material, and detailed factual controversies about the tainted nature of property, belong before the Adjudicating Authority and Tribunal, not primarily in writ proceedings.

3. Impact on property rights under Article 300A

The appellants argued that pre‑charge‑sheet attachment impinges on their right to property under Article 300A. The Court’s approach implicitly affirms that:

Article 300A protects property from deprivation save by “authority of law”.
PMLA provides such authority, with detailed procedures and multiple layers of review.
Interim restrictions like PAO, where backed by statutory procedure and subject to subsequent adjudication and appeal, do not per se violate Article 300A.

However, the judgment also underscores the importance of the procedural checks in PMLA: recorded “reason to believe”, time‑bound attachment, and judicial scrutiny by specialised fora.

4. Doctrinal consolidation around Section 5(1) provisos

Together with Hi‑Tech Merchantile, this judgment further consolidates the doctrinal position in Delhi that:

Section 5(1)’s first and second provisos are alternative jurisdictional triggers, not cumulative hurdles.
The second proviso’s reference (post‑2015) to “notwithstanding anything contained in the first proviso” is not a fresh innovation but a textual clarification of a pre‑existing legislative design already implicit in the 2013 framework.

5. Strategic consequences for litigants and counsel

For future PMLA litigation:

Enforcement agencies are likely to:
- increasingly rely on the second proviso to justify early attachments in sensitive cases,
- point to Gautam Khaitan to rebut arguments that attachment must await a charge‑sheet.
Persons whose property is attached will need to:
- craft more nuanced challenges focusing on lack of jurisdiction or absence of genuine “reason to believe”,
- be prepared to pursue the full statutory route (Adjudicating Authority → Tribunal → Section 42 appeal) rather than expecting early relief under Article 226.

6. Fit into the broader trend of “strong” anti‑money‑laundering jurisprudence

Gautam Khaitan aligns with a broader judicial trend (especially after Vijay Madanlal Chaudhary) of:

Treating money‑laundering as a grave economic threat justifying robust enforcement powers,
Upholding stringent statutory measures, while relying on internal checks (recorded reasons, adjudication, and appeal) rather than externalised constitutional review at the interim stage.

VIII. Critical Evaluation

From a doctrinal and policy standpoint, the judgment exhibits both strengths and potential areas of concern.

1. Strengths

Textual and structural coherence: The Court’s reading of Section 5(1) and its provisos is consistent with the statutory text post‑2013 and with Parliament’s evident aim of enabling swift pre‑emptive action against proceeds of crime.
Consistency with Supreme Court guidance: The approach dovetails with Vijay Madanlal Chaudhary, which upheld the validity of PMLA’s attachment framework and recognised its preventive character.
Respect for legislative scheme: By emphasising alternative remedies and discouraging bypass via Article 226, the judgment respects the specialised statutory structure and avoids turning the writ court into a parallel adjudicatory forum on disputed facts.

2. Concerns and open questions

Intensity of judicial review at the PAO stage:
While a limited standard is appropriate, there remains a question as to how searching the review of “reason to believe” should be in writ proceedings. A very deferential stance may, in practice, leave little external check on potentially over‑broad attachments, especially when proceedings before the Adjudicating Authority are delayed.
Duration and practical effect of attachment:
Even though labelled “provisional”, attachments can last considerable periods, effectively paralysing the exercise of property rights. This makes the rigor of statutory safeguards and timelines particularly critical.
Retrospectivity of the 2015 amendment:
The judgment sidesteps a detailed engagement with whether the 2015 amendment is clarificatory and retrospective. While that may be pragmatic, it leaves some interpretive questions formally unresolved, though the practical position is clear after Vijay Madanlal.

Nevertheless, from the perspective of legal certainty, Gautam Khaitan provides a clear and predictable rule: pre‑charge‑sheet attachments are permissible under the second proviso, subject to recorded reasons and subsequent adjudication.

IX. Conclusion

The decision in Gautam Khaitan & Anr v. Union of India & Anr, 2025 DHC 10040‑DB is a significant contribution to PMLA jurisprudence in at least two respects:

It clarifies and affirms that, following the 2013 amendment and consistent with the design of Section 5(1), a Provisional Attachment Order can be issued even before a Section 173 CrPC charge‑sheet is filed, by invoking the second proviso where urgent attachment is required to prevent frustration of PMLA proceedings.
It reiterates the limited role of writ jurisdiction in the face of a comprehensive statutory remedial framework, confining Article 226 intervention to clear cases of mala fides, arbitrariness, or lack of jurisdiction, and leaving contested factual and evidentiary questions to the Adjudicating Authority and appellate fora under PMLA.

For practitioners and scholars, the case is thus a key authority on:

the independent operation of the second proviso to Section 5(1) PMLA,
the permissibility of pre‑charge‑sheet attachment, and
the structural relationship between statutory remedies and constitutional writ review in money‑laundering cases.

In the broader legal landscape, Gautam Khaitan marks another step in the courts’ continuing effort to balance effective enforcement against money‑laundering with fair process and respect for property rights, tilting in favour of enforcement but anchoring that tilt in a clear, structured reading of the statute.