2021 (5) TMI 999 - HC - Money Laundering

Provisional attachment of Bank Accounts - jurisdiction of proceedings initiated against the petitioner - heavy cost for the harassment caused to petitioner - HELD THAT - This court notices that the petitioner has preferred the present writ petition in 2017 which was originally placed before the Division Bench wherein the order in RAMESHWAR SHARMA VERSUS UNION OF INDIA AND ORS 2017 (9) TMI 1953 - RAJASTHAN HIGH COURT was passed on 20.09.2017. The prayer clause of the writ petition shows that the petitioner had prayed for quashing of the order which his bank account was free zed and secondly he has also prayed to declare the proceedings initiated against the petitioner as without jurisdiction and ultra wires of the Act of 2002 - While passing the order on 20.09.2017 the Division Bench noticed that the saving account had already been seized and so far as apprehension of coercive steps are concerned the petitioner was left free to move appropriate application subsequently. The preliminary objection raised by the respondent regarding maintainability of the second stay application that it goes beyond the scope of the writ petition is found to be without basis. The petitioner has by way of the second stay application prayed in the proceedings which have now been initiated from the proceedings arising out if the ECSI case No.2040 for which the writ petition is pending before this Court in view thereof this Court would not oust the petitioner s second stay application - With regard to the new submission of learned Additional Solicitor General with regard to the two parallel remedies this court finds that presenting oneself before the Adjudicating Authority which is department itself cannot be said to be an alternate remedy available to an individual. The contention of learned ASG is that the respondents have no knowledge about the contents of the case filed by Anil Kumar Gadodia or of the order passed by the Supreme Court way back on 06.05.2021 cannot be accepted to be correct and truthful - Since the petitioner as well as Anil Kumar Gadodia are commonly arrayed as defendants in the complaint filed under Section 5 (5)of the Prevention of Money Laundering Act 2002. I would respectfully follow the order passed by the Supreme Court in Anil Kumar Gadodia s case and restrain the respondent/s from taking any coercive steps against the petitioner in the meanwhile as directed by the Supreme Court. The writ petition of Anil Kumar Gadodia has been directed to be listed before the Supreme Court on 19.07.2021 list this case thereafter on 26.07.2021.

Summary

Issues involved:
1. Scope of second stay application in relation to the main writ petition.
2. Maintainability of the second stay application.
3. Validity of the provisional attachment order under the Prevention of Money Laundering Act, 2002.
4. Consideration of parallel remedies available to the petitioner.
5. Applicability of Supreme Court principles on the exercise of power in attaching property.
6. Commonality in proceedings against the petitioner and another individual.
7. Compliance with Supreme Court's restrained order.

Detailed Analysis:

1. The petitioner filed a writ petition challenging proceedings under the Prevention of Money Laundering Act, 2002. The petitioner later filed a second stay application after a provisional attachment order was issued against his property. The court considered the scope of the second stay application in relation to the main writ petition and found that it did not go beyond the prayer clause of the original petition. The court rejected the respondent's objection regarding the maintainability of the second stay application.

2. The respondent raised a preliminary objection on the maintainability of the second stay application, arguing that it exceeded the scope of relief claimed in the main writ petition. However, the court found the objection to be without basis as the second stay application was in line with the proceedings arising from the original writ petition. The court cited judgments to support its decision that the relief sought in the second stay application was permissible.

3. The court examined the validity of the provisional attachment order issued under the Prevention of Money Laundering Act, 2002. It referenced a recent Supreme Court judgment emphasizing the need for strict adherence to statutory pre-conditions when levying such attachments. The court highlighted the importance of protecting the government revenue and ensuring a fair process before attaching any property.

4. The court considered the argument regarding parallel remedies available to the petitioner, noting that participating before the Adjudicating Authority did not constitute an alternative remedy. The court emphasized the seriousness of attachment actions and the need for careful consideration before taking such steps.

5. The court discussed the applicability of Supreme Court principles on the exercise of power in attaching property under the Act of 2002. It emphasized the importance of following statutory conditions and ensuring a valid exercise of power in such cases.

6. The court observed a commonality in the proceedings against the petitioner and another individual, Anil Kumar Gadodia. It noted that both were defendants in a complaint under the Prevention of Money Laundering Act, 2002. The court referred to a restrained order passed by the Supreme Court in Anil Kumar Gadodia's case and directed a similar restraint against coercive steps on the petitioner.

7. Finally, the court addressed compliance with the Supreme Court's restrained order and directed the listing of the petitioner's case accordingly. The court considered the commonality in the proceedings involving both the petitioner and Anil Kumar Gadodia, ensuring consistent treatment based on the Supreme Court's directives.