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TMI Blog2018 (9) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... he present petition is not maintainable in unmerited. Interference with the impugned order as warranted by this Court at this stage - Held that:- The impugned order is only a provisional order of attachment and the question whether the same has to be confirmed is now required to be adjudicated by the Adjudicating Authority in terms of Section 8 of the PML Act. In this view, this Court was initially reluctant to interfere at this stage. However, a plain reading of the impugned order clearly indicates that the impugned order is fundamentally flawed and is without authority of law. The impugned order of provisional attachment is founded on the allegation that the property sought to be attached has been used in commission of a scheduled offence and, therefore, is liable to be attached as proceeds of crime. However, it is obvious that merely because a property used in commission of crime, the same cannot be construed as proceeds of that crime. Any amount used in commission of a scheduled offence would fall within the expression “proceeds of crime” as defined under Section 2(1) (u) of the PML Act is fundamentally flawed. In the present case, the allegation against HEPL is that it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Division Bench of this Court in J. Sekar v. Union of India Ors.: 2018 SCC Online Del (6523). The petitioner also claims that the impugned order is without jurisdiction, as the funds attached by the ED are investments made in or by HEPL and cannot, by any stretch, be held to be proceeds of crime. Factual context 5. Before proceeding further, it would be relevant to refer to the facts as narrated in the impugned order. The impugned order is founded on the basis of an FIR registered by Central Bureau of Investigation (CBI) on 07.08.2014 alleging offences under Section 120-B read with Section 420 IPC against HEPL, its promoters / directors, members of the 35th Screening Committee and other unknown persons. It is alleged that the said persons have cheated the Government of India by securing allocation of Gaurangdih ABC Coal Block in favour of HEPL. 6. On 06.11.2006, the Ministry of Coal had issued an advertisement inviting applications from companies engaged in generation of power, production of iron and steel and production of cement for allocation of coal blocks for captive coal mines. In the aforesaid context, Himachal Pradesh Infrastructure Deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. Mr. Abhimanyu Bhandari, the learned counsel appearing for HEPL assailed the impugned order, essentially, on two grounds. First he submitted that the ED had no reason to believe that the properties attached are proceeds of crime. He further stated that the ED had not communicated such reasons to believe. He relied on the decision of the Division Bench of this Court in J. Sekar (supra) in support of his contention that the same was necessary. Second, he submitted that there was no basis to assume that HEPL had derived any benefit from the allocation of the coal block. He submitted that there was no dispute that mining activity was not carried out prior to cancellation of the allocation. He submitted that therefore even if the assumption that HEPL had committed the offence under Section 420 IPC is accepted, HEPL had derived no benefit which could be construed as proceeds of crime. 11. Mr. Amit Mahajan, the learned counsel appearing for the respondents resisted the present petition on the ground of jurisdiction. He submitted that the impugned order was issued by an authority in Chandigrah and therefore, this Court does not have territorial jurisdiction to entertain the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, the offence of money laundering has allegedly been committed within the territorial jurisdiction of this Court. 14. The next question to be examined is whether any interference with the impugned order is warranted by this Court at this stage. It is relevant to note that the impugned order is only a provisional order of attachment and the question whether the same has to be confirmed is now required to be adjudicated by the Adjudicating Authority in terms of Section 8 of the PML Act. In this view, this Court was initially reluctant to interfere at this stage. However, a plain reading of the impugned order clearly indicates that the impugned order is fundamentally flawed and is without authority of law. The impugned order of provisional attachment is founded on the allegation that the property sought to be attached has been used in commission of a scheduled offence and, therefore, is liable to be attached as proceeds of crime. However, it is obvious that merely because a property used in commission of crime, the same cannot be construed as proceeds of that crime. 15. At this stage, it would be relevant to refer to Section 5(1) of the PML Act, the relevant extr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to a scheduled offence. In the impugned order, the ED has elaborately discussed the allegation made against HEPL. It is also recorded that at the time of filing of the application for allocation of coal block, the capital of HEPL was ₹5 lakhs which had swelled upto ₹7.91 crores after filing application for a coal block. The investment made by joint venture constituents of HEPL, namely, Himachal Pradesh Power Corporation Ltd. and EMTA, were further invested by HEPL; including in subscribing to the shares of CGL. The same cannot by any stretch be held to be proceeds of crime. The ED has, essentially sought to attach the investments made in HEPL on the allegation that the same have been used in commission of a scheduled offence. This is apparent from paragraphs 7 and 16 of the impugned order which are set out below: 7. AND WHEREAS, the investment of ₹ 7.91,00,000/- was made after filing for allocation of Coal Block, and the same has been used in commission of scheduled offence. i.e. the allocation of coal block by fraudulent means and to further obtain mining lease on the basis of said allocation. Further, there is a balance of ₹ 1,33,700/- lying in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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