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2024 (12) TMI 291 - AT - Money LaunderingLegitimacy of the Provisional Attachment Order under the Prevention of Money Laundering Act, 2002 - undervaluation of reserve price - HELD THAT - The facts on record shows that initially a complaint was filed under Section 200 Cr. P.C. and in pursuance to it, the cognizance of the offence was taken by the learned Judicial Magistrate First Class vide its order dated 14.10.2011 for the offence under Section 120-B read with Section 409,420,468,471 and 34 IPC. It is, however, a fact that the allegation levelled in the said FIR was pertaining to the auction of the factory and sale it to M/s Guru Commodity Services Pvt. Ltd. in an illegal manner. The allegation was for undervaluation of the property for auction. However, the allegations aforesaid were tested by the Additional Sessions Judge followed by the judgment of Bombay High Court holding allegations to be erroneous. It would be gainful to refer and quote the relevant para of the order of the learned Additional Sessions Judge which would otherwise deal with the main issue raised by the appellants. The attachment order has been passed in reference to the FIR registered in the year 2019 pursuant to the order of the Bombay High Court in a PIL. The allegation in the PIL was of general nature regarding working of the co-operative societies at different levels. The FIR was registered in pursuance to the order of the High Court to deal with the irregularities in the functions of the co-operative societies in lending and borrowing the loans - the issue raised in the Provisional Attachment Order to make out a case is on the basis of facts unconnected to FIR registered in the year 2019. It was totally on different issues. In view of the above, the reasons for the police to give closure report though it is pending consideration before the competent court. The perusal of the order of the Adjudicating Authority shows brief facts of the case and even the outcome of the investigation pursuant to the FIR registered in the year 2019 but the respondents and Adjudicating Authority were persuaded to have taken initial FIR and allegation contained therein to be the basis for passing the impugned orders. It is not found that the impugned order can sustain - the impugned orders are set aside - The appeal is allowed.
Issues Involved:
1. Legitimacy of the Provisional Attachment Order under the Prevention of Money Laundering Act, 2002. 2. Allegations of undervaluation and irregularities in the auction process of the property. 3. Validity of the FIRs and their relevance to the Provisional Attachment Order. 4. Legal implications of previous judicial decisions on the current attachment order. Issue-wise Analysis: 1. Legitimacy of the Provisional Attachment Order: The appeals challenge the order confirming the Provisional Attachment Order dated 01.07.2021 under Section 26 of the Prevention of Money Laundering Act, 2002. The property attached includes a factory belonging to M/s Guru Commodity Services Pvt. Ltd., leased to M/s Jarandeshwar Sugar Mills Pvt. Ltd., and mortgaged to Pune District Central Co-operative Bank Ltd. The appellants argue that the attachment is unjustified as it relies on allegations previously quashed by higher judicial authorities. 2. Allegations of Undervaluation and Irregularities in the Auction Process: The appellants contend that the Board of Directors of the Maharashtra State Co-operative Bank sold the property in 2010 by undervaluing it, fixing a reserve price of Rs. 45 crores against an actual value exceeding Rs. 100 crores. It was alleged that the tender process was not conducted fairly, with M/s Guru Commodity Services Pvt. Ltd. lacking the financial capacity to participate, allegedly using funds from proxy parties. However, these allegations were dismissed by the Additional Sessions Judge and upheld by the Bombay High Court, which found no evidence of criminality or undervaluation in the auction process. 3. Validity of the FIRs and Their Relevance to the Provisional Attachment Order: The FIR lodged on 26.08.2019 was claimed to pertain to different issues, not those justifying the attachment. The appellants argued that the FIR was based on a PIL concerning the general functioning of co-operative societies, not the specific allegations of undervaluation or irregularities in the auction. The Tribunal noted that the allegations in the Provisional Attachment Order were previously addressed and dismissed by the Bombay High Court, thus lacking a valid basis for the attachment. 4. Legal Implications of Previous Judicial Decisions: The Tribunal emphasized that the allegations forming the basis of the Provisional Attachment Order were previously quashed by the Additional Sessions Judge, a decision upheld by the Bombay High Court. The Tribunal found no justification for reopening issues settled by these judgments. It was noted that the Provisional Attachment Order was based on facts unconnected to the 2019 FIR, which dealt with different issues. The Tribunal concluded that the attachment order could not be sustained, as it was based on allegations already resolved in favor of the appellants. Conclusion: The Tribunal set aside the impugned orders, finding no grounds to sustain the Provisional Attachment Order. The appeal was allowed, emphasizing that the allegations previously quashed by higher courts could not be used to justify the attachment. The Tribunal highlighted the necessity of respecting final judicial decisions, which had already addressed the issues raised in the attachment order.
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