2023 (1) TMI 298 - HC - Money Laundering

Provisional attachment order - seeking eviction of the present owner - the case is that since the Petitioner is 50% owner of all these properties, the occupants cannot be evicted in this manner - HELD THAT - Admittedly, Sh. Pankaj Jain and Sh. Sanjay Jain are brothers. They own equal shares in the properties listed above. The ED is seeking eviction of the occupants from the properties, qua the share of Sh. Pankaj Jain, but the same are under occupation of the family of Sh. Sanjay Jain or tenants. The appeal filed by Sh. Pankaj Jain against whom the attachment order has been finally confirmed, is presently pending before the Appellate Tribunal constituted under Section 25 of PMLA. A perusal of Section 26 of the Prevention of Money Laundering Act, 2002 shows that orders of attachment passed by the Adjudicating Authority are appealable to the Appellate Tribunal at the instance of any person aggrieved . In the opinion of this Court, Sh. Sanjay Jain who is the Petitioner before this Court would also be a person aggrieved who would be entitled to approach the Appellate Tribunal and challenge the attachment order or object to the impugned notices issued pursuant to the attachment order - Admittedly, the family of the Petitioner is residing in two of the seven premises from where the occupants are sought to be evicted. Some of the premises are also tenanted premises. Thus, the effect of Rule 5(3) and Rule 5(5) would have to be considered by the Tribunal. Even the Petitioner s challenge to the provisional attachment order in respect of these very properties is stated to be pending before the Adjudicating Authority and the same is yet to be confirmed. The Petitioner is permitted to file an appeal, within a week challenging the final attachment order passed by the Adjudicating Authority dated 29th September, 2022 before the Appellate Tribunal - Petition disposed off.

Summary

Issues:
Challenge to eviction notices based on attachment orders, interpretation of Prevention of Money Laundering Act, 2002, applicability of Rule 5(3) and Rule 5(5) of the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013.

Analysis:

Issue 1: Challenge to Eviction Notices
The petitioner challenged eviction notices issued by the Enforcement Directorate based on attachment orders. The notices sought eviction of occupants from multiple properties owned by the petitioner and his brother. The petitioner argued that since he is a 50% owner of the properties, the occupants cannot be evicted. The value of the properties and the petitioner's share were specified, and it was contended that the eviction sought was contrary to Rule 5(5) of the Prevention of Money Laundering Rules.

Issue 2: Interpretation of Prevention of Money Laundering Act, 2002
The court examined the provisions of the Prevention of Money Laundering Act, 2002, specifically focusing on Section 26 which allows for appeals to the Appellate Tribunal against orders made by the Adjudicating Authority. The court noted that the petitioner, being a 'person aggrieved,' had the right to challenge the attachment order or object to the impugned notices through the Appellate Tribunal.

Issue 3: Applicability of Rule 5(3) and Rule 5(5) of the 2013 Rules
Rule 5 of the Prevention of Money Laundering Rules outlines the manner of taking possession of immovable property. The court considered the petitioner's family residing in some of the properties and the properties being tenanted premises. The court highlighted the relevance of Rule 5(3) regarding properties given on lease and Rule 5(5) concerning immovable property under joint ownership, emphasizing the need to assess the impact of these rules on the current situation.

Conclusion:
The court issued directions allowing the petitioner to file an appeal challenging the final attachment order before the Appellate Tribunal. Alternatively, the petitioner could approach the Tribunal in the pending appeal filed by his brother to challenge the eviction notices. The Tribunal was instructed to consider the submissions under Rule 5(3) and Rule 5(5) of the 2013 Rules. Until the Tribunal's decision, the occupants were protected from eviction. The petition was disposed of, leaving all remedies open for the parties involved.