2015 (11) TMI 1655 - HC - Money Laundering

Substitution of property attached - Territorial jurisdiction of Court - Held that - The challenge in this petition is confined to substitution of the property provisionally attached and attachment whereof has been confirmed by the Adjudicating Authority and on which aspect the possibility of conflicting orders of different foras does not arise. This Court otherwise has territorial jurisdiction as the Adjudicating Authority, before which the petitioner sought such substitution and which refused to go into the said question, is admittedly within the territorial jurisdiction of this Court. This writ petition shall be treated as the representation of the petitioner to the respondent No.2 for substitution of the property attached. (ii) The petitioner may within two weeks hereof make a further representation with documents to the respondent No.2. (iii) The respondent No.2 shall within three weeks hereof give an opportunity of hearing to the petitioner to enable the petitioner to satisfy the respondent No.2 on all aspects in support of its representation. (iv) The petitioner shall render all further information and particulars as may be required by the respondent No.2 to be able to make the said decision. (v) The respondent No.2 shall pass a reasoned order on the representation aforesaid of the petitioner on or before 31st December, 2015. (vi) In the event of the respondent No.2 permitting the petitioner to so substitute the property attached, the substitute property shall be deemed to have been attached under the provisional order and the attachment thereof shall be deemed to have been confirmed by the order already passed by the Adjudicating Authority and, in the appeal already preferred by the petitioner before the Appellate Authority, the property attached shall again be read with reference to the substitute property and the petitioner shall not derive any advantage therefrom.

Summary

Issues: Territorial jurisdiction of the court, availability of alternative remedy under Section 26 of the Prevention of Money Laundering Act, 2002, substitution of property provisionally attached.

Territorial Jurisdiction:
The judgment addresses the issue of territorial jurisdiction raised by the respondent, stating that the challenge in the petition is limited to the substitution of the property provisionally attached, which falls within the territorial jurisdiction of the court. It is emphasized that conflicting orders from different forums are not a concern in this specific matter, as the Adjudicating Authority involved is within the court's jurisdiction.

Availability of Alternative Remedy under Section 26:
The court acknowledges the availability of an alternative remedy under Section 26 of the Prevention of Money Laundering Act, 2002. However, it notes that even if the petitioner were to seek the same relief before the Appellate Authority or Tribunal, the assessment of the alternative property offered would still depend on the respondent. The Adjudicating Authority's refusal to consider the request for substitution was solely due to lack of jurisdiction, not the availability of an alternative remedy.

Substitution of Property Provisionally Attached:
The judgment provides directions for the petitioner to treat the writ petition as a representation to the respondent for the substitution of the attached property. The petitioner is given a timeline to make a further representation with supporting documents. The respondent is mandated to provide an opportunity for a hearing to the petitioner and pass a reasoned order on the representation by a specified date. If the substitution is permitted, the substitute property will be deemed attached under the provisional order. It is clarified that the order should not be considered as a precedent due to the peculiar facts of the case.

In conclusion, the court addresses the issues of territorial jurisdiction, availability of alternative remedy under Section 26, and the substitution of provisionally attached property, providing detailed directions for further proceedings in the case.