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TMI Blog2018 (7) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... these writ petitions and also person/company through whom the right of lease or possession is claimed by petitioners. W.P. No. 4985 of 2014 4. The petitioner claims possession as cultivating tenant of Acs, 145-71 cents in Sy. Nos. 1, 107/7, 106, 108, 109/1, 109/2 and 112 situated at Vemavaram and Anuru Villages, Thadongi Mandal, East Godavari District. 5. The petitioner challenges proceedings No. ECIR/I/HZO/2009/2971, dated 19-12-2013 ordering eviction of the petitioner, as illegal and violative of the Prevention of Money-laundering Act, 2002 (for short 'PMLA 2002'). W.P. No. 21733 of 2014 6. The petitioner claims possession as tenant of land measuring 840 sq. yards, Plot No. 48, Sy. No. 174 situated at Gundla Pochampally Village, Medchal Mandal, Ranga Reddy District. 7. The petitioner challenges proceedings No. ECIR/l/HZO/2009, dated 24-7-2014 evicting the petitioner, as illegal and violative of the PMLA, 2002. W.P. No. 21914 of 2014 8. The petitioner claims possession as tenant of land measuring 700 sq. yards, Plot No. 58, Sy. No. 174 situated at Gundla Pochampally Village, Medchal Mandal, Ranga Reddy District. 9. The petitioner challenges p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proximately 4500 sq. ft. in the land measuring 700 sq. yards covered by Plot No. 58 in Sy. No.174 of Gundla Pochampally Village, Medchal Mandal, Ranga Reddy District. The lease arrangement dated 15-3-2010 is filed as annexure P-1. The lease is for a period of six years subject to other terms and conditions stated in P-1. 15. With the above prelude, this Court now refers to a few orders passed by 2nd respondent which resulted in attracting the jurisdiction of 2nd respondent under the PMLA, 2002. 16. On 8-1-2009, B. Ramalinga Raju made a few revelations which have bearing on the conduct of business and also the veracity of statements disclosed by M/s. Satyam Computers Limited in its balance sheets, etc. On 9-1-2009, basing on the disclosures and other information, CID registered FIR against the Managing Director and Directors of Satyam Computers. 17. On the strength of registration of a crime on 9-1-2009, on 23-1-2009 the Enforcement Directorate registered Enforcement Case Information Register against the Managing Director and Directors of Satyam Computers under Sections 3 and 4 of the PMLA, 2002. On 20-2-2009, the FIR was transferred to CBI. On 7-4-2009, 22-11-2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of the Prevention of Money-laundering Adjudicating Authority in the above OC No. 48/2010, the Directorate has taken possession of the above said properties on 29-3-2011 by drawing panchanama in the presence of panch witnesses. A copy of the notice about taking possession of the properties was affixed to the poles which were erected in respect of each property. Subsequent to the attachment and taking possession of the scheduled properties, the first amongst you depositing the lease amounts half-yearly from March, 2011 to the Departmental account. As per Section 8(4) of Prevention of Money-laundering Act and as per the Central Government notified Rules vide Gazette Notification GSR No. 558(E) dated 19-8-2013 for taking possession of the attached or frozen properties confirmed by the Adjudicating Authority, the authorized officer shall forthwith take possession of the attached properties by evicting the occupants as the lease deed entered in between first amongst you with the 2-5 amongst you is unregistered. Therefore you are hereby called upon to vacate the premises within 60 days after receipt of this Notice failing which you will be vacated with the assistance of local aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the 2nd respondent stepped into the shoes of the 3rd and 6th respondents and the concept of atornment of tenancy would come in is absolutely false and the same is not applicable to the facts of the case. The office of 2nd respondent is not coming into the shoes of the 3rd and 6th respondent and the office of the 2nd respondent is discharging the statutory functions under the provisions of "Prevention of Money-laundering Act." Hence, the question of the 2nd respondent continuing the tenancy does not arise and the concept of atornment of tenancy will not come into play, since the office of 2nd respondent is not concerned with the tenancy or other leasehold rights. As per the orders of the adjudicating authority and as confirmed by the appellate authority, the subject property is part of Crime proceeds and rightly the same was attached. Hence, the question of the recognizing the petitioner's lease hold rights more particularly when the lease is un-registered does not arise and the writ petition is liable to be dismissed." 27. The 3rd respondent refers to the Prevention of Money-laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheduled offence is convicted, the PMLA, 2002 provides for confiscation of proceeds of crime to the Central Government. The PMLA, 2002 is aimed to prevent money-laundering and provides confiscation of property derived from or involved in money-laundering and for matters concerned therewith and incidental thereto. Therefore, the steps taken for removing the petitioners from occupation is in accordance with the provisions of the PMLA, 2002 and the Rules made thereunder. The petitioners do not have right to continue to have possession of subject property. Without prejudice to above objections, it is specifically stated that the alleged lease is unregistered one and claiming protection of possession under unregistered lease arrangement for 10 years is illegal and impermissible. The 2nd respondent states that the right claimed by the petitioners is unenforceable under Article 226 of the Constitution of India. The 2nd respondent objects to maintainability of the writ petition on the ground that the petitioners have effective alternative remedy under Section 42 of the PMLA, 2002. 32. The counter-affidavits filed in W.P. Nos. 21733 of 2014 and 21914 of 2014 substantially reiter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hamper the ongoing proceedings under the PMLA, 2002. To prove bona fides that the agreed obligation is consistently discharged by the petitioners, the petitioners rely on the unilateral payment of lease amount paid to 2nd respondent. In the light of above contentions, counsel firstly pray for setting aside the proceedings referred in the respective writ prayers and/or alternatively pray for continuing the possession of petitioners of respective properties subject to other proceedings under the PMLA, 2002. 37. Per contra, Sri P.S.P. Suresh Kumar vehemently contends that the challenge to proceedings dated Nos. ECIR/1/HZ0/2009/2971, dated 19-12-2013, ECIR/1/HZO/2009, dated 24-7-2014 and ECIR/1/HZO/2009, dated 24-7-2014 is misconceived and the writ prayers are completely not maintainable under Article 226 of Constitution of India. According to him, even assuming without admitting, the petitioners if, have grievance against the orders impugned in the writ petitions, the petitioners have effective remedy of appeal under Section 42 of the PMLA, 2002. The counsel by adverting to the facts of the writ petitions contends that the dates on which the lease arrangement has been entered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scope and object of the PMLA, 2002. The statement of objects and reasons, areas of operation of Sections 5 and 8, etc., considered by the Division Bench do have bearing in considering the writ prayers. He further contends that if this Court considers the alternative prayer of continuing petitioners to retain possession, the same amounts to exercising the jurisdiction of this Court under Article 226 of the Constitution of India to prevent the authorities having jurisdiction from performing their functions or obligations in the manner prescribed by enactment and secondly amounts to encouraging parallel adjudication under Article 226 of the Constitution of India by passing the PMLA, 2002. 38. On the payments made by the petitioners, he contends that firstly the atornment of lease is neither accepted nor recognised by the 2nd respondent. Unilateral payments made by petitioners particularly, after possession was taken under Section 8(4) on 29-3-2011. The payments by petitioners cannot and could not be treated as acquiescence by 2nd respondent for any purpose. The payments made by the petitioners are unilateral and particularly, the jurisdiction of officers under the PMLA, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the derivative of criminal activity is laundered through one or more layered transactions and finds its way to the ownership, control or possession of non-offenders as well; but in respect of scheduled offences. 43. The object of the Act is to prevent money-laundering and connected activities and confiscation of "proceeds of crime" and preventing legitimising of the money earned through illegal and criminal activities by investments in movable and immovable properties often involving layering of the money generated through illegal activities, i.e., by inducting and integrating the money with legitimate money and its species like movable and immovable property. Therefore, it is that the Act defines the expression "proceeds of crime" expansively to subserve the broad objectives of the Act. We thus do not find any infirmity in the provisions of the Act. xxxx 102. At the stage of confirmation of provisional attachment however, the person in ownership, control or possession of property is provided an opportunity to show cause why all or part of such property be not declared to be involved in money-laundering and confiscated by the Central Government. The person interested in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as, June, 2011, the petitioners claim a right to possession through lease arrangement. As already noted, the lease arrangement pleaded is certainly after the cloud has shrouded on the activities of the accused in the crime registered on 9-1-2009 and subsequent registration of Enforcement Case by the 2nd respondent. These dates are merely referred for the purpose of appreciating the conduct of petitioners in enforcing a right in a matter of serious implication and ramification. Be that as it may, the annexures relied on by petitioners are unregistered lease arrangement (deed), the right claimed or transferred under an unregistered lease deed is for more than 11 months and not disputed by the counsel for the petitioners. The lease deed even as on date remains more like ipse dixit assertion by petitioners. The lessors/accused under the PMLA, 2002 remain ex parte in these proceedings and there is nothing on record to verify whether the lessors while participating in the enquiry under Section 8(4) of the PMLA, 2002 have referred to any of these transactions now relied on by petitioners. It is matter of record that at the time of alleged execution of lease arrangement, the accused in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unctions or duties under a statute. Further, by entertaining these prayers under Article 226, parallel adjudication is undertaken and this Court is of the view that while the issues are substantially protected before the authorities/Court under the PMLA, 2002, those authorities are allowed to discharge their duties. The scheme of the PMLA, 2002 starts with registration of enforcement case, provisional attachment, confirmation of attachment order, adjudication, first appeal, second appeal and upon conviction, confiscation of property attached under Section 5 of the PMLA, 2002. Section 8(4) which reads as follows : "Where the provisional order of attachment made under sub-section (1) of section 5 has been confirmed under sub-section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the property attached under Section 5 or frozen under sub-section (1A) of Section 17, in such manner as may be prescribed : Provided that if it is not practicable to take possession of a property frozen under sub-section (1A) of Section 17, the order of confiscation shall have the same effect as if the property had been taken possession of." ..... X X X X Extracts X X X X X X X X Extracts X X X X
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