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2018 (7) TMI 185 - HC - Money LaunderingViolation of PMLA - writ prayers seek protection of possession claimed by petitioners against respondents or allow petitioners to continue to remain in possession of properties claimed by them under lease arrangement - Held that - The petitioners claim a right through respondent Nos. 3 to 6 or respondent No. 3 as the case may be, who are accused in the case pending investigation and trial under the PMLA, 2002. The mode, manner and method of exercising jurisdiction under Sections 5 and 8 together with vires of the Act have been unsuccessful, and steps under the PMLA, 2002 are taken up by 2nd respondent. After first two important rounds namely, provisional attachment dated 30-3-2010 and order confirming provisional attachment on 21-7-2010 as late as, June, 2011, the petitioners claim a right to possession through lease arrangement. The lease arrangement pleaded is certainly after the cloud has shrouded on the activities of the accused in the crime registered on 9-1-2009 and subsequent registration of Enforcement Case by the 2nd respondent. At the time of alleged execution of lease arrangement, the accused in the crime registered by CID and also the case registered by Enforcement Directorate, several Directors were suffering from more than one disability of free participation, much less voluntarily part possession by creating third party interest on the properties held by them subjected to attachment under the PMLA, 2002. The sequence of events stated by petitioners appears to be improbable, since this Court is not adjudicating on legality of orders passed under Section 8(4) of the PMLA, 2002, further deliberation is not undertaken, except to note that the assertion of petitioners that a right or a subsisting right is created is without merit and warrants rejection. This Court refrains from expressing further view in this behalf. Therefore, the very documents on which the petitioners rely upon, this Court has difficulty in recognising the right claimed by the petitioners, much less protect the right or possession alternatively pleaded by petitioners in exercise of jurisdiction under Article 226 of the Constitution of India. The petitioners are governed by the law as on the date of orders passed under Sections 5(5) and 8(4) and therefore by operation of Section 8(4) read with possession claimed to have been taken on 29-3-2011 and without any resistance thereafter by the accused in the Enforcement Case, the steps taken by the 2nd respondent are one in the nature of removing the occupation of persons without right and title and for such eventualities Section 54 authorises the 2nd respondent to take the assistance of one or the other authorities specified therein. The proceedings, dated 19-12-2013 and 24-7-2014 are steps taken in accordance with law and are legal and valid. This Court, for the above reasons, is not persuaded to exercise its jurisdiction under Article 226 of the Constitution of India either for protecting the right claimed by the petitioners or the alternative prayer to allow petitioners to remain in possession of respective properties claimed by them.
Issues Involved:
1. Legality of eviction orders under the Prevention of Money-laundering Act, 2002 (PMLA, 2002). 2. Validity of unregistered lease agreements. 3. Jurisdiction and powers of the Enforcement Directorate under the PMLA, 2002. 4. Applicability of Article 226 of the Constitution of India for relief. Detailed Analysis: 1. Legality of Eviction Orders under PMLA, 2002: The petitioners challenged the eviction orders issued by the Enforcement Directorate (ED) as illegal and violative of the PMLA, 2002. They argued that their possession was protected under lease agreements made before the provisional attachment orders. However, the court noted that the properties were attached under Section 5 of the PMLA, 2002, and the attachment was confirmed by the adjudicating authority under Section 8(4). The court emphasized that the PMLA, 2002 aims to prevent money-laundering and confiscate properties derived from such activities. The eviction orders were found to be legal and in accordance with the provisions of the PMLA, 2002. 2. Validity of Unregistered Lease Agreements: The petitioners relied on unregistered lease agreements to claim possession of the properties. The court observed that these agreements were not registered and lacked legal standing. The lease agreements were executed after the initiation of investigations and provisional attachment orders, raising doubts about their authenticity. The court held that unregistered lease agreements could not confer any enforceable rights to the petitioners, especially when the properties were involved in money-laundering activities. 3. Jurisdiction and Powers of the Enforcement Directorate under PMLA, 2002: The ED's actions were challenged on the grounds of jurisdiction and the manner of exercising its powers. The court referred to the scheme and objectives of the PMLA, 2002, which empowers the ED to attach and confiscate properties involved in money-laundering. The court noted that the ED followed the due process under Sections 5 and 8 of the PMLA, 2002, including provisional attachment, confirmation by the adjudicating authority, and taking possession of the properties. The court upheld the ED's jurisdiction and actions as being in line with the statutory provisions. 4. Applicability of Article 226 of the Constitution of India for Relief: The petitioners sought relief under Article 226 of the Constitution of India, challenging the eviction orders. The court highlighted that the PMLA, 2002 provides a comprehensive mechanism for addressing grievances, including appeals under Section 42. The court emphasized that entertaining the writ petitions would amount to parallel adjudication, undermining the statutory process under the PMLA, 2002. The court held that the petitioners should pursue the remedies available under the PMLA, 2002, and dismissed the writ petitions. Conclusion: The court dismissed the writ petitions, upholding the legality of the eviction orders issued by the ED under the PMLA, 2002. The court found that the unregistered lease agreements relied upon by the petitioners did not confer any enforceable rights. The ED's actions were in accordance with the statutory provisions, and the petitioners were directed to seek remedies under the PMLA, 2002 instead of invoking Article 226 of the Constitution of India.
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