2017 (10) TMI 980 - HC - Money Laundering

Provisional attachment - offence under PML Act - Held that - In the instant case, as the adjudication process has not yet started and the matter is at the stage of show-cause notice and provisional attachment, it is not proper for this Court to express any opinion on this aspect of the matter. It is also evident from the show-cause notice that allegations of money-laundering are made in respect of transactions spanning over a period of time, even beyond the period when the amendment was brought about. This is evident from paragraphs 9.40 and 9.46 of the show- cause notice. It is well established by catena of decisions of the Apex Court that High Court will not entertain a petition under Article 226 of the Constitution, if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken, itself contains a mechanism for redressal of the grievance. This is not a case where extraordinary jurisdiction of High Court under its writ jurisdiction has to be exercised ignoring the efficacious machinery provided under the Act. Hence, without expressing any opinion on the merits of the matter and making it clear that whatever prima facie opinion is expressed shall be confined only for the purpose of deciding the maintainability of the writ petition, by reserving liberty to the petitioner to urge all necessary grounds before the competent authority, this writ petition is dismissed. It is made clear that that period taken in prosecuting this writ petition before this Court shall be excluded for the purpose of time limit prescribed under the Act, both for seeking redressal by the petitioner and also with regard to duration of the provisional attachment order.

Issues Involved:
1. Maintainability of the writ petition.
2. Allegations of malafide actions by respondents.
3. Jurisdiction of respondents under the PML Act.
4. Retrospective application of the PML Act.
5. Existence of proceeds of crime.
6. Validity of the provisional attachment order.

Issue-wise Detailed Analysis:

1. Maintainability of the Writ Petition:
The respondents argued that the writ petition against the provisional attachment order and the show-cause notice is not maintainable, citing various judgments of the Apex Court and High Courts. The court noted that the High Court generally does not entertain a petition under Article 226 if an effective alternative remedy is available. This principle is well established in cases like *Nivedita Sharma vs. Cellular Operators of India & Others* and *Special Director & Another vs. Mohd. Ghulam Ghouse & Another*. The court emphasized that the petitioner should respond to the show-cause notice and pursue the statutory remedy provided under the PML Act before approaching the High Court.

2. Allegations of Malafide Actions by Respondents:
The petitioner alleged that the actions of the respondents were malafide, initiated to harass the petitioner after invoking arbitration against Antrix Corporation Limited. The court examined letters and documents, including a letter from the Department of Space to the Department of Revenue, and concluded that the decision to investigate was based on recommendations from a High Powered Review Committee, not on malafide intentions. The court found no basis to conclude malafide actions by the respondents.

3. Jurisdiction of Respondents under the PML Act:
The petitioner contended that the respondents acted without jurisdiction in initiating proceedings under the PML Act. The court referred to the definitions and provisions of the PML Act, particularly Sections 2(u), 3, 5(1)(a), 8, 23, 26, and 45, and concluded that the respondents acted within their jurisdiction. The court noted that the PML Act aims to prevent money laundering and provides for the attachment of property involved in money laundering. The authority must have reason to believe that the property constitutes proceeds of crime, which is a factual determination to be made during adjudication.

4. Retrospective Application of the PML Act:
The petitioner argued that the offences alleged occurred in 2005, before the relevant offences were included in the schedule of the PML Act in 2009, making the retrospective application of the Act unconstitutional. The court acknowledged that Section 420 IPC and other relevant sections were included in the schedule only in 2009. However, the court emphasized that the determination of whether money laundering occurred and the relevant dates are factual issues to be examined by the competent authority. The court did not accept the contention of retrospective application at this stage, noting that the adjudication process had not yet started.

5. Existence of Proceeds of Crime:
The petitioner contended that there were no proceeds of crime, and thus the PML Act did not apply. The court noted that the definition of "proceeds of crime" includes any property derived or obtained as a result of criminal activity related to a scheduled offence. The court emphasized that the determination of whether the property constitutes proceeds of crime is a factual issue to be examined by the authorities during adjudication.

6. Validity of the Provisional Attachment Order:
The petitioner argued that the provisional attachment order was invalid as there were no reasons to believe that the petitioner was in possession of proceeds of crime. The court explained that the provisional attachment order is a preemptive measure to prevent the concealment or transfer of property that may frustrate proceedings under the PML Act. The court noted that the affected person could present evidence to disprove the assumption of money laundering during the adjudication process. The court found the provisional attachment order to be in accordance with the provisions of the PML Act.

Conclusion:
The court dismissed the writ petition, emphasizing that the petitioner should pursue the statutory remedies provided under the PML Act. The court did not express any opinion on the merits of the case and clarified that the period taken in prosecuting the writ petition would be excluded for the purpose of the time limit prescribed under the Act.

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