2022 (5) TMI 1043 - HC - Money Laundering

Service of notice - Eviction notice - direction to vacate the premises - owner of property - HELD THAT - This Court has gone through the materials on record. It is an admitted fact that the petitioner is not the owner of the property. The property in question was in the name of the wife of the petitioner who has sold the property to one Pawan Kumar Singh in the year 2005. Pawan Kumar Singh was the accused in ECIR/02/PAT./2012 and he was the owner of M/s Classic Coal Construction Pvt. Ltd. and with regard to that coal company, Pawan Kumar Singh was facing the money laundering case. Thus, it is an admitted that the property in question was in the name of Pawan Kumar Singh, however, the petitioner was continuing and living in the property in question. It is section 5 of the said Act, which provides for procedure for attachment of the property involved in money laundering. On perusal of section 8 of PMLA, it is crystal clear that if the adjudicating authority is having reason to believe that any person has committed the offence under section 3 or in possession of the proceeds of crime as on the date of registration of the case is made out, the competent authority is empowered to register the case under the provisions of the said Act - In the case in hand, the disputed questions of fact are involved. The petitioner has already filed a title suit with regard to the property in question which is still pending. The learned counsel for the Enforcement Directorate has contended that notices have been issued which has been disputed by the petitioner. It appears that the petitioner is third party and if third party is involved, in the statute care has been taken to adjudicate the same in light of section 9 of the said Act and the Special court is empowered to exercise that. Section 26 of the Act also speaks to file appeal if any person is aggrieved by the order made by the adjudicating authority under the Act - Section 26 of the Act also speaks that any person can file appeal before the Appellate Tribunal. So far the judgment relied by Mr. Kalyan Roy, the learned counsel appearing on behalf of the petitioner with regard to principles of natural justice is not in dispute if the court comes to the conclusion that principles of natural justice has been violated alternative remedy is not a bar to entertain the writ petition. However, in the case in hand the statute is very clear and the property in question taken over by the Enforcement Directorate. This Court is not inclined to quash the notice - It is open to the petitioner to avail remedy under the law - Petition disposed off.

Summary

Issues Involved:
1. Quashing of eviction notice dated 08.06.2021.
2. Alleged violation of principles of natural justice.
3. Provisional attachment and adjudication under the Prevention of Money Laundering Act, 2002.
4. Availability of alternative remedies under the Act.

Issue-wise Detailed Analysis:

1. Quashing of Eviction Notice Dated 08.06.2021:
The petitioner sought to quash the eviction notice dated 08.06.2021 issued by respondent no.5, directing the petitioner to vacate the premises within 10 days. The petitioner argued that the notice was issued without hearing him and that he had been in possession of the property since 1991, having purchased it in his wife's name in 1993. The property was later sold by his wife to Pawan Kumar Singh in 2005, who was accused of money laundering. The Enforcement Directorate (E.D.) took possession of the property following the notice. The E.D. contended that the eviction notice was served properly, and the property was taken under section 8(4) of the Prevention of Money Laundering Act, 2002 (the Act), as Pawan Kumar Singh was involved in money laundering.

2. Alleged Violation of Principles of Natural Justice:
The petitioner claimed that the eviction notice and the provisional attachment order were issued without hearing him, violating section 8 of the Act, which mandates a hearing before passing any order. He cited Rule 5 and Rule 6 of the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority), Rules, 2013, arguing that the statutory provisions for serving notice and taking possession were not followed. The E.D. countered that notices were properly served, and the petitioner had the opportunity to vacate but failed to do so. The court acknowledged the petitioner's argument regarding the violation of natural justice but noted that even if the principles were violated, remitting the matter back would be futile as the property had already been seized.

3. Provisional Attachment and Adjudication under the Prevention of Money Laundering Act, 2002:
The property in question was attached under section 5 of the Act due to Pawan Kumar Singh's involvement in money laundering. The adjudicating authority confirmed the attachment under section 8(3) of the Act. The court reviewed the statutory provisions, including section 8, which outlines the procedure for adjudication, and noted that the competent authority is empowered to register a case if there is reason to believe that a person is in possession of proceeds of crime. The court found that the procedure prescribed under the Act, including issuing notices and providing a hearing, was followed.

4. Availability of Alternative Remedies under the Act:
The court highlighted that the petitioner had alternative remedies available under the Act. Section 26 provides for an appeal to the Appellate Tribunal, and section 9 allows for approaching the Special Court. The court emphasized that the petitioner could file an appropriate petition for restoration of the property before the Special Court, which would have the first jurisdiction. The court noted that the petitioner could put his case effectively before the Special Court by showing his bona fides. The court also mentioned that the pendency of the writ petition would be considered for the purpose of limitation if the petitioner chose to file a petition before the appropriate court.

Conclusion:
The court dismissed the writ petition, stating that it was not inclined to quash the eviction notice dated 08.06.2021. The court reiterated that the petitioner had remedies available under the law and could approach the Special Court or the Appellate Tribunal. The court disposed of the interlocutory application (I.A. No.2874 of 2021) and noted that the pendency of the writ petition would be considered for limitation purposes if the petitioner filed a petition before the appropriate court.