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2022 (10) TMI 1081 - HC - Money LaunderingPlea of alternative remedy - maintainability of the present writ petition - Money Laundering - Provisional Attachment Order - Plea of forum non convenience - Jurisdiction. Plea of alternative remedy - maintainability of the present writ petition - HELD THAT - The law is well settled that alternative remedy is not a bar to the exercise of power judicial review under Article 226 of the Constitution of India by the High Court, if the writ petition is filed when it is filed alleging breach of enforcement of fundamental rights, violation of principles of natural justice and where the order or the proceeding are wholly without jurisdiction or when the vires of an act is challenged. In the case in hand the petitioners had questioned the power and jurisdiction or of the authority and the entire proceeding initiated under PMLA, 2002 has been challenged on the ground that the authorities under PMLA are not having their jurisdiction to initiate the proceeding in the given facts of the present case - this Court is of the considered opinion that in the aforesaid factual backdrop neither the adjudication under Section 8 or Section 26 can be treated as an officious alternative remedy when the jurisdiction of authority itself is questioned. Plea of forum non convenience - HELD THAT - Section 42 of the Act, provides that High Court shall be an appellate authority against the decision of the appellate tribunal constituted under Section 25 of the PMLA, 2002. In the case in hand, the proceeding was admittedly initiated by the authorities of the Enforcement Directorate at Guwahati Zonal Office, Rajgarh in the State of Assam and as the jurisdiction of the said authority in initiating the proceeding under PMLA, 2002 is the subject matter, this Court is of the considered opinion that this Court shall have a jurisdiction to entertain the petition inasmuch as at least cause of action in part arose within the jurisdiction of this Court. This court is of the view that when the jurisdiction of an authority, more particularly the authority under PMLA, 2002 is under challenged in a writ proceeding, the explanation given in Section 42 relating to appeal before the High Court shall not be applicable in toto. Therefore, the argument of the Mr. Sarma, learned counsel in this regard is also rejected. The jurisdiction - Proof of commission of offence - HELD THAT - The Section 8 and 5 empowers the authority to act when they are satisfied that there are reasons to believe that any person has committed an offence under Section 3 of PMLA, 2002. The legislature has not used the word for proof of commission of offence but reasonable believe can be a basis to proceed under Sections 5 and 8 of the Act, 2002. Therefore, the criminal activity shall mean not a proof of criminal offence but an alleged criminal activity relating to schedule offence. In view of the aforesaid finding, it is the considered opinion of this Court that the authority in initiating the proceeding in the case in hand is having the jurisdiction. Whether the subjective satisfaction arrived at while issuing the impugned provisional attachment order, the authority had before it, any credible materials or information or such decision was supported by supervening factor? - HELD THAT - The adjudicating authority under Section 8 of the PMLA, Act is having the power of adjudicate the correctness of the attachment including provisional attachment. For the purpose of such determination, the persons whose property has attached are given opportunity to be heard and to prove that the property is not involved in money laundering. Further when the provisional attachment order is passed in violation of the Sub Section 1 of Section 5 of the PMLA, Act and its proviso, such as that the property attached is not proceeds of crime and there is no likelihood of concealment of property etc., can be raised before the adjudicating authority and adjudicating authority, in the scheme of the Act, need to determine such objection also while exercising its power under Section 8 of the PMLA, Act. It is also well settled that more the stringent provision, more the stricter requirement for adherence of procedural safeguard. The order of the adjudicating authority can also be challenged before the Appellate Authority. Section 26 (1) of the PMLA Act gives a right to the person aggrieved by an order of confirmation of provisional attachment to approach to the Appellate Tribunal. The order of such Appellate Authority can further be challenged before the High Court under Section 42 of the PMLA Act. The High Court shall have power to deal with any question of fact or law in such a proceeding - the present petitioner shall have opportunities as provided under the Act and agitate the same before the authority under the PMLA Act. This Court is of the considered opinion that the present is not a fit case wherein this Court should interfere with the order of provisional attachment in exercise of its power under Article 226 of the Constitution of India inasmuch as this Court has held that the authority is having its power and jurisdiction to issue the impugned order of attachment and that the adjudicating authority is having the power and duty to examine the validity of the order of attachment and test the same including the ground of satisfaction that is required under Section 5(1) (a) and (b) of the PMLA Act - the provisional attachment order is not interfered with. Petition disposed off.
Issues Involved:
1. Quashing of proceedings and Provisional Attachment Order. 2. Defreezing of bank accounts. 3. Jurisdiction and authority under PMLA, 2002. 4. Forum non conveniens. 5. Alternative remedy. 6. Subjective satisfaction and material basis for provisional attachment. Detailed Analysis: 1. Quashing of Proceedings and Provisional Attachment Order: The petitioners sought quashing of proceedings under File Nos. ECIR/05/GWZO/2017/1390, ECIR/05/GWZO/2017/1391, and ECIR/05/GWZO/2017/1392, as well as the Provisional Attachment Order No. 03/2018 dated 28.09.2018. The petitioners argued that the land acquisition had been settled in their favor through various judicial orders, and there was no question of tainted money. They contended that the money paid was used for community purposes. The court, however, found that the Enforcement Directorate had the jurisdiction to initiate proceedings under PMLA, 2002, based on reasonable belief and materials in possession. 2. Defreezing of Bank Accounts: The petitioners requested the defreezing of bank accounts mentioned in the Provisional Attachment Order. The court noted that the petitioners could raise their objections before the adjudicating authority under Section 8 of PMLA, 2002. The court emphasized that the adjudicating authority has the power to examine the validity of the attachment order and the grounds of satisfaction required under Section 5(1)(a) and (b) of PMLA, 2002. 3. Jurisdiction and Authority under PMLA, 2002: The petitioners challenged the jurisdiction of the Enforcement Directorate, arguing that the term "criminal activity" in Section 2(u) should mean "proved criminal activity" by a court of law. The court clarified that "criminal activity" refers to alleged involvement in a schedule offense and not necessarily a proved offense. The court held that the Enforcement Directorate had the jurisdiction to initiate proceedings under PMLA, 2002, based on reasonable belief of criminal activity. 4. Forum Non Conveniens: The State of Meghalaya raised a preliminary objection on the ground of forum non conveniens, arguing that the petitioners reside and conduct business in Meghalaya, making the High Court of Meghalaya the appropriate forum. The court rejected this argument, noting that the Union of India and the Enforcement Directorate did not raise any issue regarding forum non conveniens. The court found that it had jurisdiction to entertain the petition as the proceedings were initiated by the Enforcement Directorate at Guwahati Zonal Office, Assam. 5. Alternative Remedy: The court addressed the issue of alternative remedy, stating that alternative remedy is not a bar to judicial review under Article 226 of the Constitution of India when the jurisdiction of the authority is questioned. The court held that the petitioners could raise their objections before the adjudicating authority under Section 8 of PMLA, 2002, and further appeal to the Appellate Tribunal and High Court under Sections 26 and 42 of PMLA, 2002. 6. Subjective Satisfaction and Material Basis for Provisional Attachment: The court examined whether the subjective satisfaction for issuing the provisional attachment order was based on credible materials. It emphasized that the satisfaction must be based on materials in possession of the authority and should be in writing. The court noted that the adjudicating authority has the power to examine the correctness of the attachment order, including the grounds of satisfaction under Section 5(1)(a) and (b) of PMLA, 2002. Conclusion: The court concluded that the Enforcement Directorate had the jurisdiction to issue the provisional attachment order and that the adjudicating authority has the power to examine its validity. The court did not interfere with the provisional attachment order and directed the petitioners to avail their right to file a reply before the adjudicating authority. The writ petition was disposed of, with the court making no comment on the validity of the attachment order.
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