Calcutta High Court (Appellete Side)
Gautam Dhandhania & Anr vs Union Of India & Ors on 16 March, 2026
IN THE HIGH COURT AT CALCUTTA
(Constitutional Writ Jurisdiction)
APPELLATE SIDE
Present:
The Hon'ble Justice Krishna Rao
W.P.A. No. 5200 of 2026
Gautam Dhandhania & Anr.
Vs.
Union of India & Ors.
Mr. Raj Mohan Chattoraj, Sr. Adv.
Mr. Sankar Prasad Dolopati
Mr. Rohan Dwaipayan Bhowmick
Ms. Debapriya Ghosh
Ms. Ankita Das
Ms. Priyanka Yadav
...For the petitioners.
Mr. Vipul Kundalia, Sr. Adv.
Mr. Soumen Bhattacharjee
Mr. Dhirodatto Chaudhuri
.... For the U.O.I.
Mr. Dhiraj Trivedi, Ld. D.S.G.I.
Mr. Bhaskar Prosad Banerjee
.... For the E.D.
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Hearing Concluded On : 09.03.2026
Judgment on :16.03.2026
Krishna Rao, J.:
1. The petitioners have filed the present writ petition praying for a
direction upon the respondents for supply of all “Relied Upon
Documents” (RUDs) and for quashing of the impugned show cause
notice dated 25th November, 2025, issued under Section 8(1) of the
Prevention of Money-laundering Act, 2002 (PMLA, 2002).
2. On receipt of an application filed by the Deputy Director, Enforcement
Directorate under Sub-Section 4 of Section 17 of the PMLA, 2002, the
Adjudicating Authority had issued show cause notice to the petitioners
on 27th November, 2025, calling upon the petitioners to show cause as
to why the retention under Sections 20 and 21 of the PMLA, 2002 of
movable properties in the form of cash, digital devices and documents/
records seized, shall not be permitted to be retained by the
Enforcement Directorate in terms of 17(4) of the Act of 2002.
3. On receipt of the notice, the petitioners through his Advocate sent a
reply to the Deputy Director, Enforcement Directorate on 16th
December, 2025 and the copy of the said notice was also sent to the
Registrar of the Adjudicating Authority informing that the “Relied Upon
Documents” have not been received by the petitioners and thus
requested to provide the documents to the petitioner. On receipt of the
notice, the Registrar of the Adjudicating Authority by an e-mail dated
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18th December, 2025, requested the Enforcement Directorate for
necessary action and to submit proof of service of documents. The
Learned Advocate for the petitioners by an email dated 21st December,
2025, informed the Registrar of the Adjudicating Authority that the
Enforcement Directorate has not complied with the direction and no
documents have been supplied to the petitioner.
4. On 24th December, 2025, the petitioners have received a copy of
Original Application in PDF file which was signed by the Deputy
Director of the Enforcement Director on 13th November, 2025. On 24th
December, 2025, the petitioners received a PDF file being named as
“RUD-1” being copy of the ECIR/KLZO-II/15/2023 dated 11th May,
2023. The petitioners have further received three (3) PDF files being
“RUD-2A”, “RUD-2B” and “RUD-3” dated 24th December, 2025.
5. On 4th January, 2026, the petitioners have sent a legal notice to the
Adjudicating Authority informing that inspite of several requests made
by the petitioner, no records as mandated under Rule 13(2), has been
supplied to the petitioners and requested to extend time to file reply
subject to supply of documents as provided under Rule 13(2) of the
Adjudicating Authority (Procedure) Regulations, 2013. The Adjudicating
Authority has extended the time till 25th January, 2026. The Learned
Advocate for the petitioners again sent a notice to the Adjudicating
Authority on 5th January, 2026 informing that the petitioners have not
received documents and requested to extend the time to file reply and
also direct the Enforcement Directorate to supply documents in
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compliance with the provisions of Rule 13(2) of the Adjudicating
Authority (Procedure) Regulations, 2013.
6. On 23rd January, 2026, the petitioners have again sent a notice
through his Learned Advocate through email by giving details of the
documents which are the “Relied Upon Documents” but not served to
the petitioners and requested for supply of documents and extension of
time to reply the show cause notice.
7. The petitioners have not received any further document inspite of
request made to the Adjudicating Authority, the petitioners have sent
para wise comments by an email through his Learned Advocate on 25th
January, 2026, without prejudiced to his rights and contentions with
the request to withdraw the show cause notice dated 25th November,
2025. The petitioners again on 29th January, 2026, by an email
through his Learned Advocate informed the Adjudicating Authority to
the “Relied Upon Documents” supplied to the petitioners are actually
not the “Relied Upon Documents” and the Enforcement Directorate
misrepresented by suppressing the original documents and by
misleading have obtained an order of reason to believe.
8. Mr. Raj Mohan Chattoraj, Learned Senior Advocate representing the
petitioners submits that in spite of several requests made by the
petitioner, no “Relied Upon Documents” have been served upon the
petitioners in compliance with Rule 13(2) of the Adjudicating Authority
(Procedure) Regulations, 2013.
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9. Mr. Chattoraj submits that the petitioners have submitted details of the
documents which the petitioners require for submission of reply to the
show cause notice but the respondents have not supplied the same and
have violated the provisions of Rule 13(2) of the Adjudicating Authority
(Procedure) Regulations, 2013. He submits that the petitioners by an
email dated 23rd January, 2026, requested the Registrar for inspection
of records of the case and by an email dated 5th February, 2026, the
Registrar has allowed the inspection of the records on 10th February,
2026. The petitioners have submitted challan and also applied for
certified copy of the records of the Original Application.
10. Mr. Chattoraj submits that the Original Application received by the
petitioners from the Adjudicating Authority on 24th December, 2025
from which it reveals that the said application was filed on 13th
November, 2025, but in the show cause notice dated 27th November,
2025, it is recorded that the application was filed on 8th November,
2025. To ascertain the same, the petitioners have applied certified copy
of the same but it was not provided to the petitioner.
11. Mr. Chattoraj in support of his submission, has relied upon the
following judgment:
(i) Natwar Singh vs. Director of Enforcement
and Another reported in (2010) 13 SCC
255.
(ii) Excel Powmin Ltd. vs. Union of India and
Another reported in 2020 SCC OnLine Cal
384.
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(iii) J. Sekar vs. Union of India and Others
reported in 2018 SCC OnLine Del 13481.
(iv) Naresh Jain vs. Deputy Director
Directorate of Enforcement, Delhi reported
in 2019 SCC OnLine Del 11877.
12. Mr. Dhiraj Trivedi, Learned D.S.G.I representing the Enforcement
Directorate submits that show cause notice was issued to the
petitioners but the petitioners failed to submit any reply to the show
cause notice. He submits that as per Section 8(2) of the PMLA, 2002,
considering the reply, if any, to the notice issued under Section 8(1)
and after hearing the person and the applicant and after taking into
consideration the materials on record, the Adjudicating Authority will
decide whether the properties referred are involved in the money
laundering or not.
13. Mr. Trivedi submits that the petitioners have disclosed that “Relied
Upon Documents” being RUD-1, RUD-2A, RUD-2B and RUD-3 are
served upon the petitioner. He relied upon Sub-Rule (11) of Rule 13 of
the Adjudicating Authority (Procedure) Regulations, 2013 and submits
that the Act provides communication through electronics mode and it
was communicated to the petitioners through PDF by mail and the
same was received by the petitioners but the petitioners have raised the
only contention that as per Sub-Rule (2) of Rule 13 of the Adjudicating
Authority (Procedure) Regulations, 2013, the complete relied upon
documents was not served in a bound paper book.
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14. Mr. Trivedi submits that as per Rule 15 of the Adjudicating Authority
(Procedure) Regulations, 2013, the petitioners have to file reply before
the date of hearing but the petitioners have not filed any reply. He
further relied upon Rule 21 of the Adjudicating Authority (Procedure)
Regulations, 2013 and submits that the petitioners are at liberty to
examine his witness before the Adjudicating Authority. He submits that
if the petitioners are aggrieved with the order, if any, passed by the
Adjudicating Authority, the petitioners are at liberty to file appeal under
Section 26 of the PMLA, 2002.
15. Mr. Trivedi submits that on 28th October, 2025 and 29th October, 2025,
residential premises of the petitioners were searched and seized one
mobile phone having Sim No. 9830025499. The device used by the
petitioners for both personal and business communications was found
to be relevant to ongoing money laundering investigation. He further
submits that an amount of Rs. 3,00,12,000/- in cash was seized from
the office premises of the petitioners and the petitioners claimed that it
was business cash maintained as part of working capital, though the
explanation leaked corroborating of necessity or withdrawn of Rs.
3,00,12,000/-. The petitioners have to show the justification of the said
amount but the petitioners failed to justify the same and accordingly
the matter was referred to the Adjudicating Authority. He further
submits that the Adjudicating Authority has the power to summons,
production of documents and evidences and if the petitioners intent to
produce evidence or any document is required to be produced, the
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petitioners can take appropriate steps before the Adjudicating Authority
for production of documents and recording of evidences.
16. Mr. Vipul Kundalia, Learned Senior Advocate representing the Union of
India by adopting the submission of Mr. Trivedi submits that the
petitioners can raise all the issues before the Adjudicating Authority as
the authority has all the power to decide the issue, if any, raised by the
petitioners and if the petitioners are aggrieved with the order of the
Adjudicating Authority, the petitioners can prefer an appeal under
Section 26 of the PMLA, 2002.
17. Heard the Learned Counsel for the respective parties, perused the
materials on record and the judgments relied by the petitioner. The
main issue raised by the petitioners in the present writ petition that the
respondents have not supplied the complete “Relied Upon Documents”
in a bound paper book in terms of Sub-Rule (2) of Rule 13 of the
Adjudicating Authority (Procedure) Regulations, 2013.
18. Rule 13 of the Adjudicating Authority (Procedure) Regulations, 2013
reads as follows:
“13. Issue of Summons and Notice- (1) Every
summon or notice shall be issued in Form 3 or
Form 4 or Form 5 or Form 6, as the case may
be, and signed by the Registrar or
Administrative Officer.
(2) Every summon and notice shall be served by
the complainant or applicant upon the
defendant or respondent along with complete
relied upon documents in a bound paper book
and an affidavit of service along with proof of
9service shall be filed by the person affecting
such service.
(3)(a) The service of summon or notice upon the
defendant or respondent may ordinarily be
made by,-
(i) Dasti i.e. delivering or tendering
personally; or
(ii) registered post acknowledgement due
(AD), or by speed post or courier
service; or
(iii) Electronic mail (e-mail) or by fax
message.
(iv) If any summon or notice, when
tendered, is refused or if the person on
whom the summon to be served
refuses to sign an acknowledgment of
service, then the complainant or
applicant shall make a report to this
effect and in such event, such summon
or notice shall be deemed to have been
served.
(4) If for any reason the such summon or notice can
not be served personally, the complainant or
applicant may serve the same by affixing a
copy of the summon on the outer door or some
other conspicuous part of the house or office in
which the defendant/ respondent resides or
carries on business or personally works for
gain, and shall then return the original to the
Registrar or Administrative Officer, with a
report endorsed thereon or annexed thereto
stating that he has so affixed the copy, the
circumstances under which he did so and the
name and address of the person, if any, in
whose presence the copy was affixed and the
Authority issuing the summon or notice shall
in that event declare that the summon has
been duly served on the defendants or
respondents.
(5) Where the notice is to be served upon a
company, corporation or firm, it may be served
upon the Secretary, Director or other principal
officer of the company or corporation at its
registered office or the concerned corporate
10office or upon the proprietor or partner of the
firm at the address of the firm.
(6) In a proceeding relating to any business or work
against a person who does not reside within
the jurisdiction of the Adjudicating Authority
the service of summon or notice may be made
on any manager or agent, who, at the time of
service, personally carries on such business or
work for such person within such limits, which
shall be deemed good service.
(7) Where the defendant or respondent is confined
in a prison, the summon ornotice shall be
delivered or sent by post or otherwise to the
officer in charge of the prison for service on the
defendant or respondent.
(8) Where the defendant or respondent resides out
of India and has no agent in India empowered
to accept service, the summon shall be
addressed to the defendant or respondent at
the place where he is residing and sent to him
by post or by courier or by email or by fax.
(9) Where the Central Government has, by
notification in the Official Gazette, declared in
respect of any foreign territory that summon or
notice to be served on defendants or
respondents actually and voluntarily residing
or carrying on business or personally working
for gain in that foreign territory may be sent to
an officer of the Government of the foreign
territory specified by the Central Government
the summon or notice may be sent to such
officer, through the Ministry of the Government
of India dealing with foreign affairs or in such
other manner as may be specified by the
Central Government; and if such officer
returns, any such summon or notice with an
endorsement purporting to have been made by
him that the summon or notice has been
served on the defendant, such endorsement
shall be deemed to be evidence of service.
(10) Where a counsel accepts the summon or notice
on behalf of any defendant or respondent and
files, the vakalatnama or authority on his
behalf, service of summon or notice upon such
11defendant or respondent shall be dispensed
with.
(11) Notwithstanding anything in sub-regulation
(3), a summon or notice may be communicated
through electronic mode as provided in section
13 of the Information Technology Act, 2000 (21
of 2000) and transmission of such
communication shall be regarded as valid
service.”
19. The allegation against the petitioners are that on 28th October, 2025,
and 29th October, 2025, during the search proceeding conducted at the
residential premises of the petitioner, one mobile phone was seized and
cash amount of Rs. 3,00,12,000/- was seized from the office premises
but the petitioners failed to produce any documentary evidence of its
source of the said amount. In his statement, the petitioners stated that
he is the Managing Director of Ms. Radiant Enterprises Pvt. Ltd. and
his company is engaged in warehousing and logistic operation. He
admitted to having entered into an agreement dated 1st August, 2016
with Sri Sujit Bose (MLA), who was paid approximately Rs. 63 lakhs
between 2016 and 2018 for manpower management and Industrial
Relation Consultancy but he has not produced documentary evidence
work performed beyond oral assurances.
20. The petitioners by a letter dated 23rd January, 2026, requested for
supply of 34 documents. As per the provision of Sub-Section (2) of
Section 13 of the Adjudicating Authority (Procedure) Regulations, 2013,
complete relied upon documents in a bound paper book and an
affidavit of service along with the proof of service has to be filed by the
person affecting such service. Sub-Section 3(iii) that the service of
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summons or notices can also be served through electronic mail (e-mail)
or by fax massage. In the present case, notice was served upon the
petitioners through email. As per Sub Section 11 of Section 13
summons or notice served through electronic mode as provided under
Section 13 of the Information Technology Act, 2000 has been regarded
as valid service. Thus, there is no doubt that service of notice upon the
petitioners through email is valid.
21. Considering the reply, if any, to the notice issued under Sub-Section 1
of Section 8, after hearing the aggrieved person and the Director or any
other officer authorized and taking into account all the relevant
materials placed on record, the Adjudicating Authority shall record a
finding whether all or any properties referred to in the notice are
involved in money laundering.
22. As per Section 11 of the Act, the Adjudicating Authority shall have the
same powers as vested in a Civil Court under the Code of Civil
Procedure, 1908. The Adjudicating Authority has the power to allow the
parties for discovery and inspection of documents, enforcing the
attendance of any person, including any officer of a banking company,
and examining him on oath, compelling the production of records,
receiving evidence on affidavits, issuing commission for examination of
witness and documents and any other matter which may be prescribed.
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23. Rule 16 of the Regulations of 2013 provides for inspection of records
and Rule 21 provides for examination of witness and issuance of
commission.
24. In the present case, the main grievance of the petitioners are that relied
upon documents has not served upon the petitioners, thus, the
petitioners are not a position to give proper reply to the show cause
notice issued under Section 8(1) of the Act. The petitioners are also
apprehending that in the notice dated 20th February, 2026, it is
mentioned that the Adjudicating Authority has fixed the matter for final
argument on 9th March, 2026, thus the petitioners will not get any
further opportunity of hearing.
25. In the case of Naresh Jain Vs. Deputy Director of Enforcement
Delhi reported in 2019 SCC OnLine Del 11877, the Hon’ble Division
Bench of the Delhi High Court held that:
“62. The guidelines of recording the reason to
believe have been laid down in various judgements
of Apex Court and High Courts. It is held time and
again by the said Hon’ble Courts directing that the
approach should be not the subjective satisfaction
of the officer concerned. Such power given to the
officer concerned is not an arbitrary power and has
to be exercised in accordance with the restraints
imposed by law. The belief must be that of an
honest and reasonable person based upon
reasonable grounds, the officer concerned may act
on direct or circumstantial evidence but not on mere
suspicion or the allegations mentioned in the FIR or
charge-sheet so that the same can be scrutinized in
order to verify whether they are relevant and
germane or not.”
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26. In the present case along with show cause notice recoding of reasons
under Section 8(1) of the PMLA, 2002 by the Adjudicating Authority is
served to the petitioner. In the reasons to believe the Adjudicating
Authority recorded that:
“8. Upon prima facie perusal of the facts, and
upon reviewing the RUDs, it is noted that in relation
to the scheduled offence, the respondents are
involved in the process of money laundering as
defined under section 3 of the PMLA, 2002. The role
of the respondent(s) and the involvement of
movable properties in the form of cash, digital
devices & documents/records seized in the
generation, concealment, layering, or placement of
the proceeds of crime, along with analysis and
investigation, have been mentioned on pages 15-46
of the OA.
9. Since, there is a scheduled offence under
PMLA and the role of the respondents in money
laundering has been described in the application,
therefore, there are prima facie reasons to believe
that M/s. Chinese Quisine Restaurant & Ors. are
involved in the offence of money laundering.
However, the final view shall be taken after
receiving responses from both sides and granting
an opportunity for a hearing to both parties, as per
the schedule mentioned in the show cause notice
u/s 8(1) of the PMLA. Therefore, the prayer made
by the applicant for the retention of movable
properties in the form of cash, digital devices &
documents/records seized during searches
conducted on 10.10.2025, 11.10.2025, 28.10.2025
& 29.10.2025 is justified and needs to be
considered.”
Considering the above, this Court did not find any illegality in
recording the reasons to believe by the Adjudicating Authority.
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27. In the case of J. Sekar Vs. Union of India & Others reported in 2018
SCC OnLine Del 13481, the Hon’ble Division Bench of the Delhi High
Court held that:
“26. To complete the scheme of the PMLA,
after the provisional attachment order is passed
under Section 5(1) PMLA, the officer making such
order will immediately forward a copy thereof to
the AA in a sealed envelope, as stipulated under
Section 5(2) PMLA.
27. Section 5 (3) PMLA states that the
provisional attachment order shall cease to have
effect on the expiry of the period specified in
Section 5 (1) or on the date when the AA makes an
order under Section 8 (2) PMLA, whichever is
earlier. As already noted, under Section 5(5) PMLA,
the officer making such order must file a complaint
before the AA within 30 days of the order of
provisional attachment being made.
28. As far as the AA is concerned, under
Section 8(1), once such a complaint is received and
if the AA “has a reason to believe that any person
has committed an offence under section 3 or is in
possession of the proceeds of crime”, the AA may
serve a notice (SCN) of not less than 30 days on
such person calling upon him to indicate the
sources of his income, earning or assets or by
means of which he has acquired the property
attached under Section 5(1) PMLA or seized or
frozen under Sections 17 or 18 PMLA.
29. The above SCN would require the noticee
to produce evidence on which he relies and other
relevant information and particulars to show cause
why all or any of the property “should not be
declared to be the properties involved in money-
laundering and confiscated by the Central
Government”.
30. Section 8 (2) requires the AA to consider
the reply to the SCN issued under Section 8(1)
PMLA; to hear the aggrieved person as well as the
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officer issuing the order of provisional attachment
and also taken to account “all relevant materials
placed on record before the AA”. After following the
above procedure, the AA will record its finding
whether all the properties referred to in the SCN
are involved in money-laundering.
31. If the AA is satisfied that any such
property is in fact involved in money-laundering the
AA will confirm the attachment of such property
and record a finding to that effect. Thereupon, the
attachment of such property will continue during
the pendency of the criminal proceedings. It will
become final after an order of confiscation is
passed either under Section 8(5) or 8(7) PMLA, or
Section 58B PMLA or Section 60(2A) PMLA by the
special court constituted for trial of the offences
under the PMLA. Under Section 8 (4) PMLA, upon
confirmation of the order of provisional attachment,
the Director or other officer authorized by him shall
“forthwith take the possession of property
attached”.
32. Section 8 (5) PMLA states that upon
conclusion of the trial where the special court finds
that the offence of money-laundering has been
committed, it shall order that the property involved
in money-laundering shall stand confiscated to the
Central Government. If it finds to the contrary, then
under Section 8 (6) it shall order the release of the
property to the person entitled to receive it.
33. The order of the AA is subject to appeal
before the Appellate Tribunal (AT) constituted under
Section 25 of the PMLA. Thus, the AA is not the
final authority under the PMLA as far as the
attachment of proceeds of crime is concerned.
Appeals can be filed to the AT both by the Director
and by the person aggrieved by the order of the AA.
The limitation for filing such an appeal under
Section 26(3) PMLA is 45 days from the date on
which a copy of the order of the AA is received.
Section 26(4) envisages the AT giving a hearing to
the parties and passing orders either “confirming,
modifying or setting aside” the order of the AA.
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34. Against the order of the AT, there is yet
another appeal provided for which is to be made
before the High Court under Section 42 PMLA. This
appeal would be on “any question of law or fact”
arising out of the order of the AT.
35. Chapter VII separately deals with the
Special Courts constituted to try the offences under
the PMLA. The order of the Special Court is subject
to appeal and revision by the High Court under
Section 47 of the PMLA read with the corresponding
provisions of Chapters 29 and 30 of the CrPC, as
the case may be.
36. There are, therefore, two parallel streams
– (i) criminal proceedings before the Special Court
for trial of the offences under Section 3 read with
Section 4 PMLA and; (ii) the departmental
proceedings before the authorities instituted under
the PMLA, i.e. the Director, the AA, and the AT, the
orders of which are subject to appeal before the
High Court.”
28. The Adjudicating Authority issued Show Cause notice to the petitioners
along with the copy of Original Application. The Relied Upon
Documents were also sent to the petitioners through USB by email. The
petitioners are not satisfied with the Relied Upon Documents served
upon the petitioner. The petitioners have submitted his request to the
Adjudicating Authority for supply of further Relied Upon Documents.
By notice dated 23rd January, 2026, the petitioners have again
requested for supply of Relied Upon Documents and also filed para wise
comments before the Adjudicating Authority without prejudice to thier
rights and contentions.
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29. This Court finds that the petitioners have filed his para wise comments
to the Adjudicating Authority and also requested for supply of relied
upon documents. It is upon the Adjudicating Authority to decide
whether the documents which have already supplied to the petitioners
are the only “Relied Upon Documents” or the complete “Relied Upon
Documents” are not served upon the petitioner.
30. Considering the above, the writ petition is disposed of with the following
directions:
a. The Adjudicating Authority shall first decide
whether the documents which the petitioners
have requested to supply the same are the
relied upon documents and if the same are
relied upon documents, and not served upon
the petitioners, before taking up the matter for
further hearing to direct the ED to supply the
same to the petitioner within two weeks.
b. If any order is passed for supply of further
relied upon documents to the petitioner, the
petitioners shall be given an opportunity to file
supplementary reply dealing with the further
relied upon documents within two weeks from
the date of supply of documents, if any, by the
E.D.c. If any of the party is aggrieved with the order of
Adjudicating Authority with respect to supply of
Relied Upon Documents, the parties shall be at
liberty to take appropriate steps in accordance
with Section 26 of the PMLA, 2002.
31. With the above direction, WPA No. 5200 of 2026 is disposed of.
Interim order stands vacated.
Parties shall be entitled to act on the basis of a server copy of the
Judgment placed on the official website of the Court.
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Urgent Xerox certified photocopies of this judgment, if applied for,
be given to the parties upon compliance of the requisite formalities.
(Krishna Rao, J.)
