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2024 (7) TMI 1044 - HC - Money LaunderingMoney Laundering - Provisional Attachment Order - possession of proceeds of crime - petitions have been filed on the primary ground that the respondents lack jurisdiction to initiate action under the Prevention of Money Laundering Act 2002 - reasons to believe. Whether even assuming that the respondents have material to show that there was illegal sand mining and it had generated huge proceeds they would be entitled to initiate action under PMLA in the absence of a scheduled offence investigated by any other investigation agency and determination of proceeds of crime? HELD THAT - The respondents have proceeded on the premise that a scheduled offence has been committed and that it has generated proceeds of crime. Neither in their counter nor in any of the Provisional Attachment Orders the respondents have spelt out the exact scheduled offence committed by the petitioners. That apart they have also not spelt out as to whether an FIR has been registered for a scheduled offence said to have been committed by either the petitioners or someone else whose proceeds of crime are held by the petitioners. Above all the exact proceeds of crime have not been determined. In the instant case neither the FIRs relied upon by the respondents nor the reasons given by the respondents for initiating proceedings under PMLA warrant an emergent action. It is noted that though the Provisional Attachment Orders were passed as early as in January 2024 the respondents have not taken any action to inform the concerned jurisdictional Police about the commission of any scheduled offence by the petitioners or any other person through whom the petitioners are dealing with the proceeds of crime. Strangely the respondents have chosen to write a letter purporting to be communication under Section 66 (2) of the PMLA on 13.06.2024 to the Director General of Police. In the said letter the materials that were available to the respondents as early as January 2024 were reiterated. There was no reason as to why the respondents had suddenly discovered the need to send a letter on 13.06.2024 when the matters were heard by this Court on 12.06.2024. An attachment of property would result in serious consequences for the concerned persons and cannot be based on assumptions made by the respondents as observed by the Hon ble Supreme Court. The FIRs relied upon by the respondents are not even remotely connected to the petitioners. There are no other FIRs as on date to connect the alleged proceeds of crime in the possession of the petitioners in connection to any scheduled offence - There is absolutely no discussion as to what is the proceeds of crime and how they had arrived at that figure. Even if there is proceeds of crime the respondents cannot assume jurisdiction to attach all other properties on the premise that they were ill-gotten. The Schedule to the Attachment Order suggests that all the money that is lying in the bank accounts were also subject matter of the attachment. The respondents case is that there are other FIRs and the State of Tamil Nadu is refusing to share those particulars with the respondents. If that is the case the remedy lies elsewhere. We are also informed that the respondents have filed a petition before the Hon ble Supreme Court for a direction to the State of Tamil Nadu to share the information - unless an information with regard to any case in the scheduled offence is registered and such an offence has generated proceeds of crime which is dealt with by the petitioners no action can be initiated. As stated earlier the materials collected and the reasons shown in the Provisional Attachment Order even if accepted to be true only suggests that the respondents have unearthed large scale illegal sand mining and that may have generated illegal money. The Hon ble Supreme Court in Vijay Madhanlal Choudhary s case 2022 (7) TMI 1316 - SUPREME COURT has observed that even assuming that the money obtained by the petitioners is ill-gotten in the absence of any scheduled offence that has resulted in proceeds of crime the respondents cannot assume jurisdiction to initiate action under PMLA. However we would also make it clear that the respondents would have every right to initiate such action to ensure that the scheduled offence is registered and is investigated. Till such time the properties of the petitioner cannot be subjected to attachment and the respondents otherwise cannot initiate any action under the PMLA. One cannot put the cart before the horse. The impugned actions which are challenged in the Writ Petitions are without jurisdiction and they are liable to be quashed and as such stand quashed - Provisional Attachment Orders impugned in the Writ Petitions are quashed - Petition disposed off.
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