2021 (4) TMI 283 - HC - Money Laundering

Provisional attachment order - money laundering - siphoning of funds - scheduled offence as per the Schedule-A of the Act or not - reason to believe present or not - HELD THAT - Looking to the fact that presently the petitioner has only been served with a show cause notice in which we are told 20th April, 2021 is the next date fixed and the fact that the order of attachment is provisional in nature which is valid for a period of 180 days only, we do not consider it to be an appropriate case to pass any interim order at this stage particularly when the laundering of 43.69 crores of the amount is not in dispute which in all fairness ought to be returned to the public body i.e., JKCA. The petitioner, in addition, is faced with an order of dismissal of an identical writ petition and as such, has to overcome all the findings returned and the reasoning recorded by the writ court therein before establishing a prima facie case and balance of convenience in his favour for the grant of interim order or to be successful in this petition - the respondents are directed to file their counter affidavit to this petition within a period of three weeks, one week thereafter is allowed to the petitioner to file rejoinder affidavit. List for admission/ final disposal on 11th May, 2021 along with LPA No. 293/2019 which shall also be considered finally on the said date.

Summary

Issues:
Allegations of misappropriation of funds by the treasurer of a cricket association, initiation of proceedings under the Prevention of Money Laundering Act (PMLA), challenge to the provisional attachment order and notice, interpretation of scheduled offences under the PMLA, jurisdictional aspects of the PMLA, applicability of the PMLA to Jammu & Kashmir, distinction between provisional and final attachment orders, consideration of interim relief, necessity of responding to counter-affidavits.

Analysis:
The judgment revolves around the petitioner's tenure as the president of a cricket association and the subsequent misappropriation of funds by the treasurer, leading to investigations under the PMLA. The petitioner challenges the provisional attachment order, notice, and complaint, seeking their quashing. The petitioner argues that the offences under Sections 406 and 409 of the Ranbir Penal Code are not scheduled offences under the PMLA, questioning the jurisdiction of the authorities. On the other hand, the Solicitor General defends the PMLA's applicability, citing legislative competence and the broad interpretation of scheduled offences. The Competent Authority's reasons for the provisional attachment are highlighted, emphasizing the alleged money laundering offence and the petitioner's involvement as a beneficiary.

The court refrains from interim relief due to the provisional nature of the attachment order, the pending LPA against a similar challenge, and the need to address the substantial amount allegedly laundered. The judgment underscores the importance of responding to counter-affidavits, signaling a fair and comprehensive consideration of all arguments. The distinction between provisional and final attachment orders is briefly discussed, with a reference to a relevant Supreme Court decision. The court sets timelines for filing counter-affidavits and rejoinders, indicating a structured and procedural approach to the case. The listing for final disposal along with a related LPA on a specified date aims at expeditious resolution and judicial efficiency.