2011 (8) TMI 1245 - HC - Money Laundering

Issues Involved:
1. Legality of Provisional Attachment Orders dated 21-10-2010.
2. Violation of Article 20 of the Constitution of India.
3. Validity of proceedings under Section 8 of the Prevention of Money-Laundering Act, 2002 (PML Act).
4. Applicability of the PML Act to offenses committed before the amendment to the Schedule of the Act on 01-06-2009.
5. Effect of stay orders on the validity of provisional attachment orders.

Detailed Analysis:

1. Legality of Provisional Attachment Orders dated 21-10-2010:
The petitioners, husband and wife, challenged the legality of the provisional attachment orders issued on 21-10-2010. The court examined whether the Director of Enforcement had adequate material to believe that the petitioners were in possession of proceeds of crime, had been charged with a scheduled offense, and that the proceeds were likely to be concealed or transferred. The court found that the conditions prescribed under Section 5 of the PML Act were satisfied, as the charge against the first petitioner was laid on 22-11-2009, post the amendment of the Schedule on 01-06-2009, which included offenses under Sections 120-B and 420 IPC. Therefore, the provisional attachment order dated 21-10-2010 was held to be valid.

2. Violation of Article 20 of the Constitution of India:
The petitioners contended that the proceedings under the PML Act violated Article 20 of the Constitution, which prohibits conviction or sentence under ex post facto laws. The court referred to the judgment in RAO SHIV BAHADUR SINGH's case, which clarified that Article 20 prohibits only conviction or sentence under ex post facto laws, not the trial itself. Since the present case involved provisional attachment and not conviction or sentence, the court held that Article 20 was not applicable, and the petitioners' contention was dismissed.

3. Validity of Proceedings under Section 8 of the PML Act:
The court noted that the adjudicating authority issued a notice on 07-12-2010 for the petitioners to participate in the adjudication process. The petitioners challenged this under the grounds that the offenses under Sections 120-B and 420 IPC were not part of the Schedule when the alleged offenses were committed. However, the court found that the offenses were included in the Schedule post the amendment on 01-06-2009, and the charge against the first petitioner was laid on 22-11-2009. Therefore, the proceedings under Section 8 of the PML Act were held to be valid.

4. Applicability of the PML Act to Offenses Committed Before the Amendment:
The petitioners argued that the offenses under Sections 120-B and 420 IPC were not part of the Schedule at the time of the alleged commission of the offenses. The court clarified that the PML Act's amendment on 01-06-2009 included these offenses in the Schedule. Since the charge against the first petitioner was laid on 22-11-2009, the court held that the PML Act was applicable to the offenses, and the amendment did not constitute an ex post facto law as it pertained to the regulatory mechanism and not to conviction or sentencing.

5. Effect of Stay Orders on the Validity of Provisional Attachment Orders:
The petitioners contended that the provisional attachment order ceased to have effect after the expiry of 150 days as prescribed under Subsection (1) of Section 5 of the PML Act. The court noted that the adjudicating authority's notice under Subsection (1) of Section 8 was stayed on 10-11-2010, along with the provisional attachment orders. The court applied the principle of "actus curiae neminem gravabit" (an act of the court shall prejudice no one) and declared that the time between 10-11-2010 and the date of the court's decision should be excluded from the 150-day period. Thus, the provisional attachment orders remained valid.

Conclusion:
The writ petition was dismissed, with the court holding that the provisional attachment orders and the proceedings under the PML Act were valid and did not violate Article 20 of the Constitution. The court also clarified that the amendment to the Schedule of the PML Act, including offenses under Sections 120-B and 420 IPC, was applicable to the petitioners. The stay orders did not affect the validity of the provisional attachment orders due to the exclusion of the period during which the stay was in effect.

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