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2020 (12) TMI 1351 - HC - Money LaunderingMaintainability of writ petition - territorial Jurisdiction - Money Laundering - proceeds of crime - Validity and/or legality of the registration of Enforcement Case Information Report (ECIR) in proceedings in ECIR. No. KCZO/4/2014 dated 19.08.2014 - Validity of provisional attachment order - Whether the Writ Petitions are maintainable as against the PAO passed by the Deputy Director of the Enforcement Directorate Cochin when there is an alternative remedy before the statutory authority at Delhi? - Whether this Court has jurisdiction to entertain these Writ Petitions on the ground that the properties of the petitioners which are subjected to attachment under the PAO are situated within the State of Tamil Nadu? HELD THAT - On a perusal of the reasons assigned in the impugned PAO it is seen that reason was recorded to the effect that huge money was earned by the petitioners predominantly through the business of Sikkim Lotteries in the year 2009-2010 and 2010-2011 which they have claimed as legitimate income in the Income Tax Returns. It was further recorded in the impugned PAO that on a comparison of the money earned by the petitioners and the remittance made to the Sikkim Government towards sale of Lottery it was a pittance received by the Government of Sikkim and thereby Government Revenue have been misappropriated. It is also recorded that such an earnings was by way of a conspiracy with the officials of the Sikkim Government to cheat the Government of Sikkim which is a glaring violation of the provisions of the Lotteries (Regulation) Act. Admittedly as against the PAO there is an alternative remedy of appeal provided under Sections 8(1) and 8(2) of the PMLA Act 2002 before the Adjudicating Authority (PMLA) New Delhi but the petitioners have not availed of such a remedy before the Adjudicating Authority. Instead the petitioners have approached this Court with these writ petitions - It is trite law that when an alternative and appellate remedy is inbuilt in the statute resorting to invoke the inherent and discretionary jurisdiction conferred upon this Court under Article 226 of The Constitution of India is not proper - thus when alternative remedy is available the present Writ Petitions are not maintainable. The hastiness with which the petitioners have filed the present writ petitions before this Court is not proper when there is an alternative remedy provided under Section 8 of PMLA. Thus first of all the Writ Petitions are not maintainable before this Court when there is an efficacious alternative remedy available for the petitioners to approach the concerned authority under the PMLA; secondly only a small fraction of cause of action had arisen before this Court and the larger and substantial part of cause of action had arisen only in the State of Kerala where the FIRs have been registered and the trial is pending before the Special Court at Kerala. Therefore this Court is not the appropriate Court to entertain the present Writ Petitions. Petition dismissed.
Issues Involved:
1. Validity and legality of the registration of Enforcement Case Information Report (ECIR). 2. Legality of the Provisional Attachment Order (PAO) issued under Section 5(1) of the Prevention of Money Laundering Act (PMLA). 3. Maintainability of the writ petitions before the High Court of Madras. 4. Territorial jurisdiction of the High Court of Madras to entertain the writ petitions. 5. Availability and exhaustion of alternative remedies under PMLA. Detailed Analysis: 1. Validity and Legality of ECIR Registration: The writ petitions challenge the registration of ECIR No. KCZO/4/2014 dated 19.08.2014 by the Enforcement Directorate (ED) and the consequential PAO. The petitioners argue that the ECIR was registered based on a CBI final report which did not have sufficient material for prosecution and that the allegations of cheating and conspiracy were not substantiated. The respondent-ED countered by stating that the ECIR was registered on the basis of a CBI charge sheet which named seven persons as accused for offences under Sections 120-B, 420 IPC, and the Lotteries (Regulation) Act. The ED argued that the ECIR was validly registered as it was based on the CBI's findings of defalcation of money belonging to the State of Sikkim. 2. Legality of the Provisional Attachment Order (PAO): The petitioners contended that the PAO dated 22.07.2019 was issued without valid reasons and did not comply with the requirement of recording reasons to believe that the property was involved in money laundering. They argued that the PAO was issued without considering the No Due Certificate issued by the State of Sikkim, which indicated that there were no dues from the sole distributor. The respondent-ED maintained that the PAO was issued after recording valid reasons, including the manipulation of lottery sales and non-remittance of proceeds to the Sikkim Government, which constituted proceeds of crime under PMLA. 3. Maintainability of the Writ Petitions: The respondent-ED argued that the writ petitions were not maintainable as the petitioners had not exhausted the alternative remedy available under Sections 8(1) and 8(2) of PMLA before the Adjudicating Authority. The ED cited several judicial precedents to support the argument that writ petitions should not be entertained when an efficacious alternative remedy is available. The petitioners contended that the writ petitions were maintainable as the PAO was issued without jurisdiction and violated their fundamental rights. 4. Territorial Jurisdiction of the High Court of Madras: The petitioners argued that the High Court of Madras had jurisdiction to entertain the writ petitions as the properties attached were situated in Coimbatore, Tamil Nadu, and part of the cause of action arose within the State of Tamil Nadu. The respondent-ED countered that the primary cause of action arose in Kerala, where the offences were committed, FIRs were registered, and the CBI charge sheet was filed. The ED argued that the High Court of Kerala was the appropriate forum for adjudicating the issues. 5. Availability and Exhaustion of Alternative Remedies: The court emphasized that when an alternative remedy is available, the writ jurisdiction under Article 226 of the Constitution should not be invoked. The court noted that the petitioners had an alternative remedy before the Adjudicating Authority under PMLA and could appeal to the Appellate Tribunal and the High Court if aggrieved by the decisions of the Adjudicating Authority. Conclusion: The High Court of Madras dismissed the writ petitions on the grounds of maintainability and territorial jurisdiction. The court held that the petitioners should have availed the alternative remedy before the Adjudicating Authority under PMLA. The court also ruled that the primary cause of action arose in Kerala, and the High Court of Kerala was the appropriate forum for adjudicating the issues. The writ petitions were dismissed, and the interim orders were vacated.
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