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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 ..... Case by the 2nd respondent. At the time of alleged execution of lease arrangement, the accused in the crime registered by CID and also the case registered by Enforcement Directorate, several Directors were suffering from more than one disability of free participation, much less voluntarily part possession by creating third party interest on the properties held by them subjected to attachment under the PMLA, 2002. The sequence of events stated by petitioners appears to be improbable, since this Court is not adjudicating on legality of orders passed under Section 8(4) of the PMLA, 2002, further deliberation is not undertaken, except to note that the assertion of petitioners that a right or a subsisting right is created is without merit and warrants rejection. This Court refrains from expressing further view in this behalf. Therefore, the very documents on which the petitioners rely upon, this Court has difficulty in recognising the right claimed by the petitioners, much less protect the right or possession alternatively pleaded by petitioners in exercise of jurisdiction under Article 226 of the Constitution of India. The petitioners are governed by the law as on the date of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 proceedings No. ECIR/l/HZO/2009, dated 24-7-2014 evicting the petitioner as illegal and violative of the PMLA, 2002. Averments in W.P. No. 4985 of 2014 10. One K. Annapurna Kumari wife of K.S.S. Prasada Raju claims to be an agriculturist and earning the livelihood by carrying out agricultural operations. The petitioner states that for the benefit of herself and her family members, she entered into an agreement for carrying out agricultural activities on kaul basis with 3rd respondent and claims to be in possessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... malinga 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 and 7-1-2010, CBI filed charge-sheet and supplementary charge-sheets against seven accused under the provisions of IPC. On 30-3-2010, the Joint Director of Enforcement Directorate under Section 5 of the PMLA, 2002 passed order provisionally attaching all the properties allegedly involved or acquired by committing offences under the PMLA, 2002. According to the rigor of Section 5 of the PMLA, 2002, on 19-4-2010, the complaint was filed before the adjudicating authority to confirm the provisional attachment order dated 30-3-2010. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 authorities in terms of Section 54 of the Act. (Emphasis added) 22. According to petitioners, the notice issued by 2nd respondent is grossly arbitrary, unenforceable, unreasonable, capricious and violative of Articles 14 and 21 of the Constitution of India. The petitioners make comparison with an analogous provision in Securitization and Reconstruction of Financial Assets [and Enforcement of Security Interest] Act, 2002 and contend that the jurisdiction to take over under that Act is restricted to i.e. an obligation accepted by les ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome 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 Authority) Rules, 2013 and relies on Rule 5 to draw the distinction between pre - and post - Rules 2013. For appreciating the legal ground raised by respondents, this Court refers to Rule 2 of Rules 2013, which deals with the date of coming into force as the date of publication of Rules in the Official Gazette. In other wards, the case of 2nd respondent is that on 29-3-2011 possession of properties covered by attachment order was taken under Section 8(4) of the PMLA, 2002 with the assistance provided under Section 54. The 2nd respondent treats the petitioners as occ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice 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 reiterate the stand taken in W.P. No. 4985 of 2014. Hence, not referred once again. 33. Before proceeding further, it is useful to explain the status of owners/lessors from whom the alleged substantive right to uninterrupted possession is claimed by petitioners. K. Annapurna Kumari, petitioner in W.P. No. 4985 of 2014 claims to be a tenant of respondent Nos. 3 to 6 private limited companies. R. Gajapathi Kumar Raju, petitioner in W.P. No. 21733 of 2014 claims from respondent No. 3B. Teja Raju. D. Rajesh, petitioner in W.P. No. 21914 of 2014 claims from R.3 therein/B. Rama Raju. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 into cannot and could not be looked at in isolation, for the FIR by CID was filed on 9-1-2009. The 2nd respondent gets jurisdiction subject to satisfying a few requirements under the PMLA, 2002 and in the case on hand, the jurisdiction to invoke the provisions of the PMLA, 2002 began with the Enforcement Directorate registering Enforcement Case Information Register against the accused persons. Therefore, the dates relied on by the petitioners clearly show that when the whole issue is under investigation, the transactions on which the petitioners are relying upon are brought into existence and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raging 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, 2002 operates in all together different sphere and purpose, the payments made will not result in recognising any status of petitioners vis- -vis the subject matter of writ petitions for enforcing their right. He prays for allowing the authorities to proceed under Section 54 and the steps taken under Section 54 amount to acting in accordance with law. 39. I have heard at great length the counsel appearing for the parties. The writ prayers seek protection of possession claimed by petitioners against respondents or allow petitioners to continue to remain in possession of properties claimed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney 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 property is required by notice to indicate the source of his income, earning or assets, out of which or by means of which he has acquired the property provisionally attached or seized. An order confirming the provisional attachment, as already noticed, may be passed only on the adjudicating authority being satisfied, on considering the material on record including the material or evidence furnished in response to the notice issued under section 8(1); the reply furnished in response thereto; and taking all and other relevant material into consideration, to record a finding that the property or so much of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 crime registered by CID and also the case registered by Enforcement Directorate, several Directors were suffering from more than one disability of free participation, much less voluntarily part possession by creating third party interest on the properties held by them subjected to attachment under the PMLA, 2002. The sequence of events stated by petitioners appears to be improbable, since this Court is not adjudicating on legality of orders passed under Section 8(4) of the PMLA, 2002, further deliberation is not undertaken, except to note that the assertion of petitioners that a right or a subsisting right is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 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. is one of the first steps undertaken in discharging the functions and powers by the authorities under the PMLA, 2002. The petitioners are governed by the law as on the date of orders passed under Sections 5(5) and 8(4) and therefore by operation of Section 8(4) read with possession claimed to have been taken on 29-3-2011 and without any resistance thereafter by the accused in the Enforcement Case, the steps taken by the 2nd respondent are one in the nature of removing the occupation of persons without right and title and for such eventualities Section 54 authorises the 2nd respondent to take the assi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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