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2021 (1) TMI 975 - HC - Money LaunderingProvisional attachment of immovable properties - Validity of summons issued under PMLA - Jurisdiction of Director/Deputy Director to attach the immovable properties which were acquired prior to coming into force of the PML Act - properties in possession of the petitioner, proceeds of the predicate crime or not - HELD THAT - The petitioner does not dispute the authority of the Deputy Director to pass the impugned provisional order of attachment. The constitutional validity of section 5 of PML Act is also not under challenge. The said order as well as the records indicate that a report has been forwarded to the Magistrate under section 173 of Cr.P.C. in relation to the scheduled offences i.e., under section 13(1)(e) read with 13(2) of the PC Act on 28.02.2013. The order reflects the application of mind and also the elaborate reasons to arrive at the conclusion that the property in question was the proceeds of crime within the meaning of section 2(1)(u) of the PML Act. The said order therefore is beyond challenge in a writ proceeding as no error of law and fact is reflected in the impugned order. Even otherwise, the PML Act has provided for adequate safeguards to protect the rights of the accused by providing that the order of attachment shall cease to have effect after the expiry of the period specified in the said section or the date of order made under sub-section (3) of section 8 of PML Act - More importantly, an adjudicatory mechanism is provided under section 8 of the PML Act and the petitioner has availed the said remedy and has participated in the proceedings before the Adjudicating Authority. Considering the contentions urged by the petitioner, the Adjudicating Authority has come to the conclusion that the petitioner has committed the scheduled offences, generated proceeds of crime and laundered them vide Annexure- E . As adequate and efficacious remedy is available to the petitioner against the said order, petitioner is not entitled for the relief (v) claimed in the petition. A reading of the complaint (Annexure-A) indicates that it was filed under section 45(1), 3 and 4 of the PML Act. It is alleged therein that accused Nos.1 to 4 have committed offence under section 3 of the PML Act and liable to be punished under section 4 of the PML Act. But the impugned order does not reveal as to the offences for which the accused have been summoned to appear before the court - As the order passed by the learned Special Judge taking cognizance and issuing summons to the petitioner does not satisfy the basic legal requirements, the impugned order to that extent has turned out to be ex-facie perverse and bad in law. To this extent, petitioner is entitled for the relief claimed in the petition. Petition allowed in part.
Issues Involved:
1. Quashing of the private complaint dated 31.01.2017. 2. Quashing of the order of taking cognizance and issuance of summons dated 06.02.2017. 3. Quashing of the registration of ECIR/BGZO/13/2016 dated 03.12.2016. 4. Quashing of the unnumbered original complaint in PAO No.2/2017 dated 26.01.2017. 5. Quashing of the Provisional Attachment Order No.02/2017 dated 26.01.2017. Issue-wise Detailed Analysis: 1. Quashing of the Private Complaint Dated 31.01.2017: The petitioner sought to quash the private complaint dated 31.01.2017, arguing that the proceedings were initiated without jurisdiction and were illegal. The petitioner contended that the properties in question were acquired before the PML Act came into force, thus falling outside its ambit. The court noted that the legality of the complaint had already been considered and upheld in a previous order, emphasizing that the PMLA provisions were rightly invoked. Consequently, the petitioner's request to quash the private complaint was rejected. 2. Quashing of the Order of Taking Cognizance and Issuance of Summons Dated 06.02.2017: The petitioner argued that the order of taking cognizance was passed without application of mind, merely reproducing legal provisions without considering the specific allegations. The court found merit in this argument, noting that the order was bald and unreasoned, failing to disclose the offences for which cognizance was taken. The court cited the Supreme Court's decision in Sunil Bharti Mittal vs. CBI, emphasizing that cognizance requires judicial application of mind. As the order did not meet these requirements, it was set aside, and the matter was remanded to the Principal City Civil & Sessions Judge for reconsideration. 3. Quashing of the Registration of ECIR/BGZO/13/2016 Dated 03.12.2016: The petitioner challenged the registration of ECIR/BGZO/13/2016, arguing that it was based on an FIR that had been closed with a 'B' summary report, indicating no evidence of the alleged offences. The court noted that the PML Act prosecutes activities connected with the proceeds of crime, independent of the predicate offence's outcome. Therefore, the closure of the FIR did not invalidate the proceedings under the PML Act. The petitioner's request to quash the registration was rejected. 4. Quashing of the Unnumbered Original Complaint in PAO No.2/2017 Dated 26.01.2017: The petitioner argued that the properties were acquired before the PML Act came into force, and thus the attachment proceedings were invalid. The court noted that the PML Act's provisions apply to the proceeds of crime, regardless of when the properties were acquired. The court also emphasized that the PML Act provides an adjudicatory mechanism for such disputes, which the petitioner had already availed. Consequently, the petitioner's request to quash the unnumbered original complaint was rejected. 5. Quashing of the Provisional Attachment Order No.02/2017 Dated 26.01.2017: The petitioner contended that the provisional attachment order did not meet the requirements of Section 5 of the PML Act and was based on properties acquired before the Act came into force. The court found that the order reflected the application of mind and was based on material indicating that the properties were proceeds of crime. The court also noted that the PML Act provides safeguards and an adjudicatory mechanism to protect the accused's rights. As the petitioner had participated in the adjudication process, the request to quash the provisional attachment order was rejected. Conclusion: The court allowed the petition in part, setting aside the order of taking cognizance and issuance of summons dated 06.02.2017, and remanding the matter for reconsideration. The other requests to quash the private complaint, registration of ECIR, unnumbered original complaint, and provisional attachment order were rejected.
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