TMI Blog2023 (10) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... nd may or may not entertain the writ petition on its merit. However, dealing with the present facts of the case, it is undisputed that the complaint under Section 5(5) of the PMLA Act has already been made before the adjudicating authority, and notices have already been issued. The provision u/s 6 of PMLA makes it clear that the Chairman or Members of the Committee are persons with sufficient experience in the field of law, administration, finance, and accountancy. Only a person having the qualification for appointment as a District Judge or has been a Member of the Indian Legal Services and has held a post in Grade I of the service will be appointed as a Member. Therefore, there is expected to be judicial scrutiny of a complaint filed under Section 5(5) of the PMLA Act - As per the aforesaid provision, the adjudicating authority must either accept the complaint and proceed further with the same or refuse to accept the complaint. The adjudicating authority has to follow the procedure prescribed in Section 8, which suggests that detailed scrutiny would be carried out and that too, at the earliest. The Court may exercise its extraordinary powers under Article 226 of the Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received information from the Superintendent of Police, Central Bureau of Investigation, Cochin, about certain transactions recorded in the charge sheet filed during February, 2014. Having examined the materials placed before the Directorate of Enforcement, the officer found a prima facie case for the offence under Section 3 of the PMLA Act, 2002, having been committed and advised for further investigation. 4. As provided under Section 5(1) of the PMLA Act, the Enforcement Directorate authority found that the proceeds of crime involved therein are to the tune of Rs. 910,29,87,566/- and accordingly, a provisional attachment order came to be passed on 31.03.2016. 5. Later, as provided under Section 5(5) of the PMLA Act, a complaint stating the facts of such attachment came to be filed before the adjudicating authority established under the said Act. Both these proceedings, i.e., passing order of provisional attachment and filing a complaint under Section 5(5) of the PMLA Act, came to be challenged by the 1st appellant by filing W.P.(C) No. 22327/2016 before this Court. 6. By passing an interim order dated 04.08.2016, a learned Single Judge of this Court permitted to continue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1, 3, 4 and 5 worth Rs. 434,70,40,769/- belonged to the 1st appellant, whereas the property to the tune of Rs. 16,52,04,750/-, referred at Serial No. 2, belonged to his partner Sri. N. Jayamurugan. 10. Meanwhile, a supplementary charge sheet was filed in S.C. No. 533/2018. By order dated 12.05.2023, the ED authorities, exercising its power under Section 17 of the PMLA Act, froze certain bank accounts, mutual funds, fixed deposits, etc., amounting to Rs. 1,57,68,57,503/-. 11. After recording several further statements, the respondent/ED authorities again passed provisional attachment order No. 3 of 2023 on 09.06.2023, attaching the properties of the 1st appellant only to the tune of Rs. 459,07,42,047/-, referred herein-above as item No. 6. The 1st appellant/original petitioner being aggrieved by the said order and also the order of freezing under Section 17(1A) of PMLA Act dated 12.05.2023, filed the subject writ petition before the learned Single Judge on various grounds, seeking to quash the same by issuing a writ of certiorari. 12. The respondent/ED authorities filed a detailed counter affidavit dated 13.07.2023 through the Assistant Director of Director of Enforcemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 16. In support of his submissions, learned Senior Advocate appearing for the appellants has relied upon the decision of the Hon ble Supreme Court in Godrej Sara Lee Ltd. v. Excise Taxation Officer [Judgment in Civil Appeal No. 5393 of 2010 dated 01.02.2023], wherein it has been held that even if there is an alternative remedy, if the Court finds that the petitioner is seeking enforcement of any of his fundamental rights; where there is violation of principles of natural justice; where the order or the proceedings are without jurisdiction; or where the vires of an Act is challenged, the court can exercise its writ jurisdiction and deal with such cases. He would submit that in the present case, the authority has passed the impugned order dated 09.06.2023 without jurisdiction and, therefore, the same is unreasonable and perverse, in view of the fact that there is no relevant material whatsoever to provisionally seize the additional properties of the appellants when it is the case of the respondent authority itself that the share of appellant No. 1 in the partnership is to the tune of 51% only. 17. By relying upon another decision of the Hon ble Apex Court in Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablish that the proceeds of crime received by the 1st appellant are more than Rs. 464.25 Crores, and therefore, the case is required to be dealt with as if the authority has acted in excess of its jurisdiction. 21. By relying upon a decision of the Hon ble Supreme Court in Vijay Madanlal Choudhary and Others v. Union of India and Others [Judgment in S.L.P(C) Nos. 28394 of 2011 and connected cases dated 27.07.2022], learned Senior Advocate appearing for the appellants would submit that the authority cannot come to the conclusion that all the properties belonging to the 1st appellant are the proceeds of crime, particularly when the authority itself has held that the proceeds of crime derived by the 1st appellant is to the tune of Rs. 464.25 Crores. Therefore, there is no reason to pass additional orders to attach all the properties belonging to the 1st appellant. 22. Another submission made by the learned Senior Advocate is with regard to the reasons recorded by the respondent authority while passing the orders of provisional attachment. He would submit that any officer exercising his power under Section 5 of the PMLA Act has to record the reasons for his belief, based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other orders of freezing the account came to be challenged, the respondent authorities had already made a complaint to the adjudicating authority under Section 5(5) of the PMLA Act. He would submit that the adjudicating authority, established under Section 6 of the PMLA Act, which is an independent authority consisting of judicial members, can adjudicate all the issues raised in the subject writ petition and argued in this appeal. 28. He would further submit that the adjudicating authority has all the powers to deal with a complaint submitted before it under Section 5(5) of the PMLA Act. If the adjudicating authority refuses to accept the complaint or adjudicate accordingly, it may lead to the filing of a criminal case. Either party, including the authority, if aggrieved by the order passed by the adjudicating authority, can file an appeal under Section 26 of the Act, particularly under sub-section (1) of Section 26. That apart, even a decision rendered by the Appellate Tribunal is appealable under Section 42 of the Act. Any person aggrieved by the decision or order of the Appellate Tribunal would be entitled to file an appeal before the High Court within the prescribed period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director and Another. v. Mohd. Gulam Ghouse and Another reported in (2004) 3 SCC 440, learned ASGI would submit that when alternative efficacious remedy is available to the appellants, ordinarily, the High Court would not entertain such writ petitions. 33. The learned ASGI has taken us through the provisional attachment order dated 9.6.2023, which is impugned in the subject writ petition to submit that several statements have been recorded and the authority had found sufficient reason to seize the properties of the appellants mentioned therein, which does not call for any scrutiny under Article 226 of the Constitution. 34. He would further submit that, as regards the submission made by the learned Senior Advocate for the appellants about the property belonging to the partner, of which the details have been produced for the first time in this appeal by the appellants, the same can be produced before the adjudicating authority and the adjudicating authority is expected to deal with all such material and is empowered to pass appropriate orders, accepting or refusing the case put forward by the appellants. Therefore, according to the learned ASGI, all these documents are not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act. PROVIDED ALSO that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this section is stayed by the High Court, shall be excluded and a further period not exceeding thirty days from the date of order of vacation of such stay order shall be counted.; (2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed. (3) Every order of attachment made under sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector, as the case may be. (6) The appeal filed before the Appellate Tribunal under sub-section (1) or sub-section (2) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of filing of the appeal. 38. It is true that there is no provision for challenging an order of provisional attachment, passed under Section 5(1) of the PMLA Act. In the absence of any statutory appeal being provided to challenge a provisional attachment order, a petition under Article 226 of the Constitution of India may be maintainable on its own merits, and the Court may examine the case on hand and may or may not entertain the writ petition on its merit. However, dealing with the present facts of the case, it is undisputed that the complaint under Section 5(5) of the PMLA Act has already been made before the adjudicating authority, and notices have already been issued. 39. Section 6 of the PMLA Act provides composition powers of the adjudicating authority, and the same reads as under: 6. Adjudicating Authorities, composition, powers, etc. (1) The Central Government shall, by notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other terms and conditions of service of the Member shall be such as may be prescribed: PROVIDED that neither the salary and allowances nor the other terms and conditions of service of the Member shall be varied to his disadvantage after appointment. (10) If, for reasons other than temporary absence, any vacancy occurs in the office of the Chairperson or any other Member, then, the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Adjudicating Authority from the stage at which the vacancy is filled. (11) The Chairperson or any other Member may, by notice in writing under his hand addressed to the Central Government, resign his office: PROVIDED that the Chairperson or any other Member shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest. (12) The Chairperson or any other Membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: PROVIDED that where a notice under this sub- section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property. (2) The Adjudicating Authority shall, after (a) considering the reply, if any, to the notice issued under sub-section (1); (b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf; and (c) taking into account all relevant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are involved in money-laundering: PROVIDED that if the property is claimed by a person, other than a person to whom th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the offence of money- laundering has not taken place or the property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it. (7) Where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a proclaimed offender or for any other reason or having commenced but could not be concluded, the Special Court shall, on an application moved by the Director or a person claiming to be entitled to possession of a property in respect of which an order has been passed under sub- section (3) of section 8, pass appropriate orders regarding confiscation or release of the property, as the case may be, involved in the offence of money-laundering after having regard to the material before it.] [(8) Where a property stands confiscated to the Central Government under sub-section (5), the Special Court, in such manner as may be prescribed, may also direct the Central Government to restore such confiscated property or part thereof of a claimant with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of the offence of money laundering: ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
