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2021 (7) TMI 463 - HC - Money LaunderingMoney Laundering - proceeds of crime - scheduled offences - attachment of tainted property - respondents were of the view that since no tainted property of respondent No.5 was available for attachment the property which was acquired by untainted money could also be attached - HELD THAT:- A conjoint reading of the aforesaid provisions of SARFAESI Act and Bankruptcy Law makes it clear that the secured creditors have preferential right of realization of their dues against all other debts and government dues. Provisional attachment of the “proceeds of crime” under Section 5 of the PML Act is not an exercise for recovery of government dues of any nature; rather it is an exercise to seize /confiscate the property acquired by unlawful means of money laundering. Therefore, both the laws SARFAESI and Bankruptcy Act on the one hand; and PML Act on the other; operates in two different fields - the two statutes neither covers the same field nor overlaps against each other. Since SARFAESI Act only protects the interest of secured creditors against other debts and government dues. Whether in the facts and circumstances of the case, the petitioner should be relegated to the cumbersome litigation before the referred statutory body? - HELD THAT:- It is well settled by a catena of judicial pronouncements that the jurisdiction of the High Court under Article 226 of the Constitution of India is broad, plenary, equitable and discretionary one. It is equally settled that the writ jurisdiction of the High Court cannot be completely excluded by statute. However, certain self-imposed limitations are there. To illustrate the High Court should not act as Court of Appeal or entertain disputed question of fact while exercising writ jurisdiction under Article 226. Ordinarily, the High Courts should refrain to exercise jurisdiction under Article 226 if alternative remedy is there to the petitioner. In the case on hand what is noticeable that the statutory authority under Section 5 of the P.M.L.A., 2002 has not acted in accordance with the provisions of the enactment in question rather acted in defiance of the fundamental principles of judicial procedure and in total violation of the principles of natural justice. What can be provisionally attached under Section 5(1) of the P.M.L. Act is a ‘proceeds of crime’ and to establish that the property attached is ‘proceeds of crime’, there must be material in possession of the authority to ventilate that the authority had “reason to believe”. In the case on hand, the authority appears to have passed the order contained in Annexure-3 in flagrant violation of the mandate of Section 5(1) of the P.M.L.A, 2002, as there was no material before the authority to come to the conclusion that the property-in-question was ‘proceeds of crime’ or such ‘proceeds of crime’ was likely to be concealed, transferred etc. - the property in question was not proceeds of crime as defined under the Prevention of Money-Laundering Act nor the impugned order reveals that there was a direct nexus between the property in question and the proceeds of crime. Therefore, evidently, there was no material before the authority concerned to have “reason to believe” that the property in question was proceeds of crime. Only perfunctory recording of the fact that the authority has “reason to believe” and has material before him for such belief would not suffice unless there is evident material for such belief. This is a fit case wherein this Court should exercise its jurisdiction under Article 226 of the Constitution of India - Application allowed without any costs.
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