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TMI Blog2018 (10) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner Rt.Rev.Dr.Manickam Dorai in the second writ petition viz., WP No.8384 of 2013. 3. The facts in nutshell to be considered in these writ petitions are that the writ petitioners are husband and wife. The writ petitioner in WP No.8384 of 2013 Rt.Rev.Dr.Manickam Dorai was holding the post of Bishop of CSI Diocese, Coimbatore from 2000 till 8.1.2012. The writ petitioner in WP No.8383 of 2013 Mrs.Soodamani Dorai was a retired Primary and Middle School Teacher. The writ petitioners have two children, namely, one Mrs.Mercy Angela Dorai, an Engineer working in abroad and Dr.Jeremy Bliss was doing Post Graduation in Medical Education at CMC, Vellore. 4. By this time, the second daughter would have completed her Post Graduation Course. Rt.Rev.Dr.Manickam Dorai was officiating as Bishop of CSI Diocese, Coimbatore, one Mr.E.Premkumar lodged a criminal complaint before the CBCID, Coimbatore as against Rt.Rev.Dr.Manickam Dorai for the alleged misuse of Bishopship of CSI Diocese, Coimbatore by helping his relatives etc., during the period between 2005 and 2008. 5. Based on the criminal complaint, the CBCID, Coimbatore registered an FIR in Crime No.1 of 2009 as against Rt.Rev.Dr.Manickam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect, the respondent-Authorities itself called for the records and the bank statements from the Citi Bank. 8. During the pendency of the above money laundering proceedings, the income tax Assessing Officer, Vellore, on the very same set of allegations that the subject matter of property under attachment has been purchased out of unexplained income. Hence, made an addition to income and issued a demand notice to pay the tax vide its proceedings dated 30.3.2016 as against the assessee Mrs.Soodamani Dorai. When the above proceedings of the Assessing Officer was appealed before the CIT (A), Chennai, the above order of the Id.A.O. was confirmed by the CIT(A), Chennai vide its order dated 2.5.2017. As against the above order of the CIT(A), Chennai, appeal preferred before the ITAT, 'D' Bench, Chennai, by Mrs.Soodamani Dorai and the above appeal was allowed, both the orders of the Id.A.O and the CIT (A), Chennai was set aside with a direction to the Id.A.O to delete the addition of Rs. 7,50,000/- made in the hands of the Assessee as unexplained investment vide its order dated 23.10.2017. The above order of the ITAT, 'D' Bench, Chennai was also implemented by the Id.A.O, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se notice stage, are not maintainable in law and liable to be dismissed in limine. 11. In respect of the contentions of the respondents, they have referred the case of Raj Kumar Shivhare vs. Assistant Director, Directorate of Enforcement and Another in Civil Appeal No.3221 of 2010 (arising out of SLP (Civil) No.28877 of 2008) dated 12.10.2010, the Hon'ble Supreme Court of India held as follows:- "34. When a statutory forum is created by law for redressal of grievance and that too in a fiscal Statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go bye by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating the aspect of the matter. It has however dismissed the writ petition on the ground of lack of territorial jurisdiction. 35.No reason could be assigned by the appellant's counsel to demonstrate why the appellate jurisdiction of the High Court under Section 35 of FEMA does not provide an efficaci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. It is well established by catena of decisions of the Apex Court that High Court will not entertain a petition under Article 226 of the Constitution, if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken, itself contains a mechanism for redressal of the grievance. This principle is well enunciated in the case of NIVEDITA SHARMA VS. CELLULAR OPERATORS OF INDIA & OTHERS - 2011 (14) SCC 337. In fact, the Apex Court in the case of SPECIAL DIRECTOR & ANOTHER VS. MOHD. GHULAM GHOUSE & ANOTHER - 2004 (3) SCC 440, has deprecated the practice of High Courts entertaining writ petitions questioning the legality of the showcause notices, thereby stalling enquiries retarding investigative process initiated to find actual facts with the participation and in the presence of the parties unless the petitioner established absolute want of jurisdiction of authority to even investigate into facts. It is observed in this context that 24writ petitions should not be entertained and the petitioner should invariably be directed to respond to the show-cause notice. 30. It is necessary to notice that at the stage of prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of Money Laundering Act, 2002 and therefore, it cannot be said that the show cause notices prejudges the issues. The writ petitioners are getting an opportunity to discharge their burden before the Adjudicating Authority (PMLA) under Section 8(1) and 24 of the Act. 16. In respect of jurisdiction of the authority is concerned, the Prevention of Money Laundering Act, 2002 has been enacted pursuant to an International Convention. Chapter-II of the Act, deals with offence of money laundering and Chapter-III of the Act, deals with attachment, adjudication and confiscation. The offence of money laundering is a new offence, which is of criminal nature whereas Chapter-III deals with attachment of the property pending trial and is of a civil nature. Reading of the various provisions of Chapter-III, including Section 11 of the Prevention of Money Laundering Act, 2002 would go to prove the same. The proceedings under Chapter-III are deemed to be judicial proceedings for the purpose of Sections 193 and 228 of the Indian Penal Code. At this juncture, Sections 8(3), 8(5), 8(6) of the Prevention of Money Laundering Act, before amendment 2013 of the Act and Sections 8(3), 8(5), 8(6), 8(7) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty involved in the money laundering or which has been used for commission of the offence of money laundering shall stand confiscated to the Central Government. 3. Section 8(6) where the attachment of any property or retention of the seized property or record becomes final under clause (b) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity of being heard to the person concerned, make an order confiscating such property. Section 8(6) where on conclusion of a trial under this Act, the Special Court finds that the offence of money laundering has not taken place or the property is not involved in money laundering, it shall order release of such property to the person entitled to receive it. (sub-sections 5,6 and 7 substituted for sub-sections 5 and 6, ibid, by virtue of above Amendment Act, 2012) 17. It is contended by the writ petitioners that the Central Offence was committed in 2005 and FIR was registered in 2009, charge sheet was filed in 2011 and the provisions of Section 420 of the Indian Penal Code was not part of the Schedule under the Prevention of Money Laundering Act, 2002 till 1.7.2009 and therefore, there is a violation of Article 20(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an urgency clause. The purpose of a provisional attachment order is to prevent a scenario where any proceedings under the PML Act might get frustrated if the property was not attached immediately. It would be always open to the affected person to place such materials as would convince the authorities that the property attached was not involved in money laundering or that it was not part of the proceeds of crime. Hence, at this stage, the contention urged by petitioner alleging that authorities have acted against the settled principles of law by retrospectively operating penal laws thereby violating Article 20(1) of the Constitution of India, cannot be accepted, at this stage. The said contention proceeds on the assumption that the act of money laundering had occurred in the year 2005 or prior to 2009. What shall happen if any person continues to derive the property or value of such property, no matter when the offence was inserted in the schedule? Whether proceedings can be initiated against such person at all are larger questions that can be examined based on relevant facts as and when they emerge during the course of adjudication." 19. In the case of R.Subramanian vs. The Assis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt Ltd (LPA No.144 of 2016) and C.M. No.8046 of 2016 dated 30.11.2016. 22. In respect of the question whether criminal proceedings initiated by the police is a bar for proceedings under the Prevention of Money Laundering Act, the provisions of PMLA, 2002 are independent and having self-contained code. Before Amendment Act, 2012, the proceedings of PMLA, 2002 were fully depending upon the scheduled offence. However, after Amendment Act, 2012, with effect from 15.2.2013, the amendments were made in Sections 5(1), 8(3), 8(5), 8(6), 8(7) and 8(8) of the Act, which are very well evident that the proceedings are independent from scheduled offence proceedings. It would not be out of place to humbly submit herein that the provision of Section 5(1)(b) that "such person has been charged of having committed a scheduled offence and" was deleted by the Amendemnt Act, 2012, with effect from 15.2.2013. In the case of Samsuddin vs. Union of India, it has been held that the offence of money laundering is independent of scheduled offences and it has been further held that the time of commission of the scheduled offence is not relevant to the context of the prosecution under the Act. 23. The offe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available with them. 25. The writ petitioners can show their source of income before the Adjudicating Authority under Section 8(1) of the Act. The writ petitioner in WP No.8383 of 2013 filed certain typed set of documents along with an affidavit explaining the source of her income to obtain the properties that were provisionally attached. It is pertinent to note that veracity of the documents and the affidavit are unknown and have to be proved by the writ petitioner. Further, the contents and the veracity of the documents being a disputed question of fact, cannot be adjudicated by this Court under Article 226 of the Constitution of India and the writ petitioner can appear before the third respondent in pursuance of the show cause notice, produce the said documents, offer explanation for the source of income to acquire the property and have the order of attachment set aside. The third respondent, being an Adjudicatory Authority, specifically constituted for the said purpose, is in a better position to decide on the facts being introduced by the writ petitioner. However, the writ petitioners approached this Court without opting for the mechanism provided under the Act. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vi) That apart, the respondents herein for registering ECIR No.3 of 2012 as against one of the writ petitioners Rt.Rev.Dr.Manickam Dorai, relied the source of information that being in FIR No.1 of 2009 and the charge sheet therein but the authority herein failed to note that the criminal proceedings in C.C.No.58 of 2011 arising out of FIR No.1 of 2009 was stayed by this Court in Crl.O.P.No.15098 of 2011 vide its order dated 9.9.2011 and the said Crl.O.P., is still pending on the file of this Court. Therefore, the information being relied for the registration of money laundering case as on the date was non est in law, in view of the stay granted by this Court. Hence, the case under the Act as against Rt.Rev.Dr.Manickam Dorai and the consequent provisional attachment etc., against Mrs.Soodamani Dorai also falls to the ground without any legs to stand. 27. The learned counsel for the writ petitioners submitted the following judgments for consideration:- In the case of State of Maharashtra vs. Kaliar Koil Subramaniam Ramaswamy [(1977) 3 SCC 525] wherein in paragraph 6, the Hon'ble Supreme Court held as follows:- "6. It appears that the Legislature thereafter thought it proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h might have been inflicted under the law in force at the time of the commission of the offence." Article 20(1) deals with ex post facto laws though that expression has not been used in the Article. Usually, a law prescribes a rule of conduct by which persons ought to be governed in respect of their civil rights. Certain penalties are also imposed under the criminal law for breach of any law. Though a sovereign legislature has power to legislate retrospectively, creation of an offence for an act which at the time of its commission was not an offence or imposition of a penalty greater than that which was under the law provided violates Article 20(1). In the well-known case of Phillips v. Eyre [(1870) 6 QB 1, pp. 23 & 25] and also in the American case of Calder v. Bull [3 Dallas 386 : 1 Law Ed 648, 649] the principle underlying the provision has been fully discussed. All that Article 20(1) prohibits is ex post facto laws and is designed to prevent a person being punished for an act or omission which was considered innocent when done. It only prohibits the conviction of a person or his being subjected to a penalty under ex post facto laws. In Rao Shiv Bahadur Singh v. State of Vindh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure may amount to creation of an offence retrospectively. In the present case the old procedure is revived and no new procedure is given retrospective effect. The procedure given effect to is not of such a nature as to result in the creation of a new offence." 29. In the case of Soni Devrajbhai Babubhai vs. State of Gujarat [(1991) 4 SCC 298], wherein the Hon'ble Supreme Court in paragraphs 9 to 11, held as under:- "9. It is clear from the above historical background that the offence of dowry death punishable under Section 304-B of the Indian Penal Code is a new offence inserted in the Indian Penal Code with effect from November 19, 1986 when Act 43 of 1986 came into force. The offence under Section 304-B is punishable with a minimum sentence of seven years which may extend to life imprisonment and is triable by Court of Session. The corresponding amendments made in the Code of Criminal Procedure and the Indian Evidence Act relate to the trial and proof of the offence. Section 498-A inserted in the Indian Penal Code by the Criminal Law (Second Amendment) Act, 1983 (Act 46 of 1983) is an offence triable by a Magistrate of the First Class and is punishable with impris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be tried and punished for the offence provided in Section 304-B of the Indian Penal Code which is a new offence created subsequent to the commission of the offence attributed to the respondents does not suffer from any infirmity. However, as earlier indicated, in case the accusation against the respondents discloses commission of any other more stringent pre-existing offence by the respondents than Section 498 2DA of the Indian Penal Code, the appellant would be entitled to raise that question and the court will then consider and decide it on that basis. No such argument having been advanced before us or any of the courts below so far, the same does not arise for consideration in the present proceeding. With these observations, the appeal is dismissed." 30. In the case of Hirabhai Jhaverbhai vs. State of Gujarat [(2010) 6 SCC 688], the Hon'ble Supreme Court, in paragraphs 5 to 7, held as under:- "5. This Court finds that after coming into force of the Code of Criminal Procedure (Amendment) Act, 2005 from 23-6-2006 the offence under Section 324 IPC is made nonhttp:// compoundable. However, in this case the offence under Section 324 IPC was committed on 23-7-1986 on whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hment. However, the submission is not acceptable as it is a settled legal proposition that a penal provision providing for enhancing the sentence does not operate retrospectively. This amendment, in fact, provides for a procedure which may enhance the sentence. Thus, its application would be violative of restrictions imposed by Article 20 of the Constitution of India. We are of the view that the said Notification dated 18-11-2009 cannot be applied retrospectively and therefore, has no application so far as the instant case is concerned." 33. In the case of Ritesh Agarwal vs. SEBI [(2008) 8 SCC 205], the Hon'ble Supreme Court, in paragraph 25, held as under:- "25. The question as to whether the provisions of the FUTP Regulations are attracted in this case may now be examined. The FUTP Regulations came into force for the first time on 25-10-1995. Would it apply in a case where the cause of action arose prior thereto? Ex facie, a penal statute will not have any retrospective effect or retroactive operation. If commission of fraud was complete prior to the said date, the question of invoking the penal provisions contained in the said Regulations including Regulations 3 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11, 12, 17 and 18, held as under:- "5. Mr.Nandrajog, submits that those offences were included as scheduled offences only on June 1, 2009. He draws our attention to page 225 of the paperbook to show that the alleged offences were allegedly committed between June 21, 2007 and May 15, 2009. Therefore, he submits that all the offences were allegedly committed prior to the coming into operation of the amendment to the PML Act. 10. It can be seen from the records that all the offences allegedly committed by the writ petitioner were earlier to the insertion of the provision in the schedule of the Prevention of Money Laundering (Amendment) Act, 2009, and as such, they have no application. 11. Therefore, the Enforcement Case Information Report and the order of attachment are without jurisdiction and are liable to be quashed. As we have, already, held that the writ petitioner cannot be prosecuted for the offences alleged, as they are not the scheduled offences under the PML Act. Those offences under the Mines and Geology (Development and Regulation) Act, 1957, the Forest (Conservation) Act, 1980, the Indian Penal Code and the Prevention of Corruption Act, 1988, were included in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In view of the above, the contention that the Act is completely independent of the principal crime (scheduled offence) giving rise to proceeds of crime is unmerited. It is necessary to bear in mind that the substratal subject of the Act is to prevent moneylaundering and confiscate the proceeds of crime. In that perspective, there is an inextricable link between the Act and the occurrence of a crime. It cannot be disputed that the offence of money-laundering is a separate offence under section 3 of the Act, which is punishable under Section 4 of the Act. However as stated earlier, the offence of money-laundering relates to the proceeds of crime, the genesis of which is a scheduled offence. In the aforesaid circumstances, before initiation of any proceeding under Section 5 of the Act, it would be necessary for the concerned authorities to identify the scheduled crime. The First Proviso to Section 5also indicates that no order of attachment shall be made unless in relation to a schedule offence a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973 or a complaint has been filed by a person authorised to investigate the scheduled offen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to force. This Act cannot be read as to empower the authorities to initiate proceedings in respect of money-laundering offences done prior to 01.07.2005 or prior to the related crime being included as a scheduled offence under the Act." 37. In the case of Shri Ajay Kumar Gupta vs Adjudicating Authority (PMLA) [decided on 13.7.2017 in Crl.O.P.Nos.10497 and 10500 of 2017], wherein this Court, in paragraphs 6, 7, 9, 10, 11, 12, 13, 14, 15 and 16, held as under:- "6. In the light of the above submissions, now the point that arise for consideration in these Criminal Original Petitions is: whether the order of Provisional Attachment made and the Original Complaint filed before the Adjudicating Authority, under the Prevention of Money Laundering Act, 2002, by the second respondent are in accordance with law or liable to be quashed? 7. It is not disputed that the 1st petitioner was charge sheeted by the CBI, Anti Corruption Branch for the alleged possession of assets and pecuniary resources and the 2nd petitioner was prosecuted for abetment in the above offence. It is also not in dispute that the alleged offences against the petitioners 1 and 2, related to the period from 01.05.1997 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case may be or a similar report or complaint has been made or filed under the corresponding law of any other country: Provided further that, notwithstanding anything contained in [first proviso], any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act.] (2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed. (3) very order of attachment made under sub-section (1) shall c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of Corruption Act was included in the schedule, in the year 2009. 10. In this regard it is useful to refer the judgment of the Division Bench of Karnataka High Court in the case of M/s Obulapuram Mining Company Pvt. Ltd., vs. Directorate of Enforcement in W.P.Nos.5962 of 2016, 11442 of 2016 and 11440-11441 of 2016 the Division Bench held as follows: 10. It can be seen from the records that all the offences allegedly committed by the writ petitioner were earlier to the insertion of the provision in the schedule of the Prevention of Money Laundering (Amendment) Act, 2009 and as such, they have no application. 11. Therefore, the Enforcement Case Information Report and the order of attachment are without jurisdiction and are liable to be quashed. As we have, already, held that the writ petitioner cannot be prosecuted for the offences alleged, as they are not the scheduled offences under the PML Act. Those offences under the Mines and Geology (Development and Regulation) Act, 1957, the Forest (Conservation) Act, 1980, the Indian Penal Code and the Prevention of Corruption Act, 1988, were included in the PML Act declaring them as scheduled offences only with effect from June ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering relates to the proceeds of crime, the genesis of which is a scheduled offence. In the aforesaid circumstances, before initiation of any proceeding under Section 5 of the Act, it would be necessary for the concerned authorities to identify the scheduled crime. The First Proviso to Section 5also indicates that no order of attachment shall be made unless in relation to a schedule offence a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973 or a complaint has been filed by a person authorised to investigate the scheduled offence before a Magistrate or Court for taking cognizance of the scheduled offence. Thus, in cases where the scheduled offence is itself negated, the fundamental premise of continuing any proceedings under the Act also vanishes. Such cases where it is conclusively held that a commission of a scheduled offence is not established and such decision has attained finality pose no difficulty; in such cases, the proceedings under the Act would fail. 29. The Act is a penal statute and, therefore, can have no retrospective or retroactive operation. Article 20(1) of the Constitution of India expressly forbids that no p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has not included in the scheduled list of offences. Therefore, this court is of the view that if retrospective effect is given to any statute of any penal nature, it will be directly in conflict with the fundamental rights of the citizen enshrined in Article 20(1) of the Constitution of India. Admittedly, 2nd respondent filed the case only based on the charge sheet of the CBI, who have not conducted any enquiry on their own. In fact, all the documents are original documents of the alleged proceeds of crime, which are in the custody of the CBI Court. When the entire documents are in the custody of the Court, there cannot be any reason to believe that the properties will be dealt with in any other manner. The impugned order was as if 1st petitioner not able to offer any satisfactory explanation during examination. Therefore, the attachment officer has passed an order without a reason to believe that the proceeds of crime are likely to be transferred or disposal. In the absence of any sufficient reason, arriving to such conclusion by mere reproducing the words reason to believe it cannot be stated that the order has been passed after considering the entire gamut of materials. Admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [(2011) 15 SCC 1], wherein the Hon'ble Supreme Court, in paragraph 40, held as under:- "40. It is well known that when a procedure is laid down statutorily and there is no challenge to the said statutory procedure the Court should not, in the name of interpretation, lay down a procedure which is contrary to the express statutory provision. It is a time-honoured principle as early as from the decision in Taylor v. Taylor [(1875) 1 Ch D 426 (CA)] that where a statute provides for something to be done in a particular manner it can be done in that manner alone and all other modes of performance are necessarily forbidden. This principle has been followed by the Judicial Committee of the Privy Council in Nazir Ahmad v. Emperor [(1935-36) 63 IA 372 : AIR 1936 PC 253 (2)] and also by this Court in Deep Chand v. State of Rajasthan [AIR 1961 SC 1527 : (1961) 2 Cri LJ 705] , AIR at para 9 and also in State of U.P. v. Singhara Singh [AIR 1964 SC 358 : (1964) 1 Cri LJ 263 (2)] reported in AIR at para 8." 40. In the case of Kalabharati Advertising vs. Hemant Vimalnath Narichania [(2010) 9 SCC 437], wherein the Hon'ble Supreme Court, in paragraphs 25 and 26, held as under:- "25. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those subjected to its jurisdiction, such authority must act with utmost fairness. Its fairness is obviously to be manifested by the language in which charges are couched and conveyed to the person proceeded against. 29. In the instant case from the underlined [Ed.: Herein italicised.] portion of the show-cause notice it is clear that the third respondent has demonstrated a totally closed mind at the stage of show-cause notice itself. Such a closed mind is inconsistent with the scheme of Rule 43 which is set out below. The aforesaid Rule has been framed in exercise of the power conferred under Section 33 of the Marine Products Export Development Authority Act, 1972 and as such that Rule is statutory in nature. 30. Rule 43 of the MPEDA Rules provides as follows: "43. Cancellation of registration.-Where the Secretary or other officer is satisfied that any person has obtained a certificate of registration by furnishing incorrect information or that he has contravened any of the provisions of this rule or of the conditions mentioned in the certificate of registration, or any person who has been registered as an exporter fails during the period of twelve consecutive months to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he officer concerned has a mindset even at the stage of framing of charges and we also do find some justification in such a submission since the chain is otherwise complete." After para 25, this Court discussed in detail the emerging law of bias in different jurisdictions and ultimately held in para 35 (SCC p. 201 of the Report), the true test of bias is: "35. The test, therefore, is as to whether a mere apprehension of bias or there being a real danger of bias and it is on this score that the surrounding circumstances must and ought to be collated and necessary conclusion drawn therefrom-in the event however the conclusion is otherwise inescapable that there is existing a real danger of bias, the administrative action cannot be sustained:" (emphasis supplied) 35. Going by the aforesaid test any man of ordinary prudence would come to a conclusion that in the instant case the alleged guilt of the appellant has been prejudged at the stage of show-cause notice itself. 40. In Kranti Associates [(2010) 9 SCC 496 : (2010) 3 SCC (Civ) 852] this Court after considering various judgments formulated certain principles in SCC para 47 of the judgment which are set out below: (SCC pp. 510 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (See David Shapiro in Defence of Judicial Candor(1987) 100 Harv. L. Rev. 731-37.) (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain [(1994) 19 EHRR 553] , EHRR at p. 562, para 29 and Anya v. University of Oxford [2001 EWCA Civ 405 : 2001 ICR 847 (CA)] , wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, 'adequate and intelligent reasons must be given for judicial decisions'. (o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of 'due process'." 42. In the case of Siemens Ltd. vs. State of Maharashtra [(2006) 12 SCC 33], wherein the Hon'ble Supreme Court, in paragraphs 9 and 10, held as under:- "9. Although ordinarily a writ court may not exercise its discretionary jurisdiction in entertaining a writ petition questioning a notice to show cause unless t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision. This exception to the rule of stare decisis is probably best regarded as an aspect of a broader qualification of the rule, namely, that Courts are not bound to follow decisions reached per incuriam." The proposition that a decision per incuriam need not be followed as a binding precedent is well established. If authority is needed for this proposition, we may refer to the decision of the Court of Appeal in Young v. Bristol Aeroplane Company, Ltd. [(1944) 2 All E R. 293], where Lord Greene, M.R. observed as follows: "Where the Court has construed a statute or a rule having the force of a statute, its decision stands on the same footing as any other decision on a question of law. But where the Court is satisfied that an earlier decision was given in ignorance of the terms of a statute or a rule having the force of a statute, the position is very different. It cannot, in our opinion, be right to say that in such a case the Court is entitled to disregard the statutory provision and is bound to follow a decision of its own given when that provision was not present to its mind. Cases of this description are examples of decisions given per incuriam." 44. In the case of Ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was implemented by the Id.AO, the writ petitioners were not found fault with the allegations. Thus, the findings made in the Income Tax Appellate Tribunal order ought to have been considered by the respondents at the time of registering the case under the Prevention of Money Laundering Act, 2002. 47. In this regard, the judgments cited above by the learned counsel for the writ petitioners are also on the same legal issues. Thus, applying the principles laid down in the judgments cited by the learned counsel for the writ petitioners, the writ petitions are to be allowed. 48. The learned Additional Solicitor General of India, Mr.G.Rajagopalan, disputes the contentions raised on behalf of the writ petitioners in entirety. The learned Senior Counsel referred Section 3 of the Prevention of Money Laundering Act, 2002, which denotes the offence of money laundering and the said provision reads as under:- "3. Offence of money-Laundering.- Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected proceeds of crime including its concealment, possession, acquisition or use and projecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of such attachment before the Adjudicating Authority." 51. Section 8 of the Prevention of Money Laundering Act, 2002, enumerates adjudication. Section 8(1), (2) and (3) of the Act, read as under:- "8. Adjudication.- (1) On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub- section (10) of section 18, if the Adjudicating Authority has reason to believe that any person has committed an offence under section 3 or is in possession of proceeds of crime, he may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, or, seized or frozen under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: Provided that where a notice under this sub-section specifies any property as being held by a person on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s committed an offence under Section 3 or is in possession of proceeds of crime, they are entitled to follow the procedure by registering the complaint. This apart, Section 3 of the Act, also states that the proceeds of crime, including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. Thus, even in case where the alleged offences were committed prior to the amendment, then also if the proceeds of crime is in possession of the alleged offenders are in use, then also the Authorities Competent are empowered to register the case under the Prevention of Money Laundering Act, 2002. 54. Section 24 of the Act, denotes burden of proof. Subclause (a) states "in the case of a person charged with the offence of money-laundering under Section 3, the Authorities or the Courts shall, unless the contrary is proved, presume that such proceeds of crime are involved in money- laundering". Thereafter, Section 26 deals with the Appellate Tribunal. Section 42 of the Prevention of Money Laundering Act, 2002, provides an appeal to High Court (CMA). Any person aggrieved by any decision or order of the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eveloped at the initiate stage of initiation of proceedings by the Competent Authorities, so as to prolong the same, gain time and dilute the proceedings in order to escape from the clutches of law. Such an attitude of the litigants can never be encouraged by the Courts. Prima facie, the maintainability of the writ petitions are to be considered at the first instance. 58. In the present cases, the writ petitions are pending for about six years. The authorities competent are unable to proceed with the matter. The writ petitioners are also unable to submit their defence statements in the manner prescribed under the provisions of the Prevention of Money Laundering Act, 2002. Such situations are certainly to be averted and the persons against whom such proceedings are initiated must be allowed to submit the facts and defence before the Competent Authorities, enabling the authorities to arrive a conclusion whether there is any offence is made out or proceeds of crime are in existence. 59. No writ proceedings can be entertained against a show cause notice and the attachment order, which was issued only for the purpose of commencing the investigation and the process under the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es have any reason to believe that the alleged offender is in possession of the proceeds of crime or in use of the proceeds of crime or its concealment, then also the provisions of the Act, attracts and there is no infirmity in respect of the actions initiated by the respondents under the provisions of the Prevention of Money Laundering Act, 2002. 62. It is made clear that the very initiation under the Prevention of Money Laundering Act, 2002 is not akin to that of the initiation of criminal proceedings under the Indian Penal Code. The Prevention of Money Laundering Act, 2002 is a Special Act contemplating an administrative proceedure at the initiat stage and thereafter prosecution. The Act has got certain special purposes and therefore, the initiation of proceedings under the Prevention of Money Laundering Act, 2002 can never be compared with the initiation of criminal proceedings under the Indian Penal Code. The enactment is a distinct one wherein separate procedures are contemplated in order to protect the interest of the alleged offenders also. The authorities under the Prevention of Money Laundering Act, 2002 cannot jump into the conclusion that the offenders are arrested at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedures contemplated are for the purpose of finding out the truth behind the transactions. If the authorities come to the conclusion that the offence of money laundering is made out, then only they are empowered to proceed further against the alleged offenders. However, while undertaking the process of investigating the truth behind the allegation of money laundering, the High Court cannot entertain the writ petition, so as to quash the entire institution of the proceedings, and accordingly, the authorities must be allowed to investigate freely and failry and by following the procedures contemplated under the Prevention of Money Laundering Act, 2002. 66. This apart, the appeal provisions are available under the Statutes, as discussed above, Section 26 provides an appeal to the Appellate Tribunal. Section 42 provides an appeal to the High Court (CMA). There is a comprehensive procedure for preferring an appeal to the PMLA Appellate Tribunal and thereafter to the High Court, the present writ petitions cannot be entertained at all. The writ petitioners are bound to exhaust the alternate remedies provided under the Statutes. The question raised before this Court by the respondents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re kept in mind there can be no difficulty in discerning that the following can be regarded as the basic elements of the constitutional structure. (These cannot be catalogued but can only be illustrated): (1) The supremacy of the Constitution. (2) Republican and Democratic form of government and sovereignty of the country. (3) Secular and federal character of the Constitution. (4) Demarcation of power between the Legislature, the executive and the judiciary. (5) The dignity of the individual secured by the various freedoms and basic rights in Part III and the mandate to build a welfare State contained in Part IV. (6) The unity and the integrity of the Nation. 2. Holiness Kesavananda Bharati Sripadagalvaru v. State of Kerala and Anr. [MANU/SC/0445/1973 : (1973) 4 SCC 225]. That separation of powers between the legislature, the executive and the judiciary is the basic structure of the Constitution is expressly stated by Sikri, C.J. 3. P. Kannadasan and Ors. v. State of T.N. and Ors. [MANU/SC/0650/1996 : (1996) 5 SCC 670] the Supreme Court noted that the Constitution of India recognised the doctrine of separation of powers between the three organs of the State, namel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of equality Under Article 14 of the Constitution. (iv) The superior judiciary (High Courts and Supreme Court) is empowered by the Constitution to declare a law made by the legislature (Parliament and State legislatures) void if it is found to have transgressed the constitutional limitations or if it infringed the rights enshrined in Part III of the Constitution. (v) The doctrine of separation of powers applies to the final judgments of the courts. Legislature cannot declare any decision of a court of law to be void or of no effect. It can, however, pass an amending Act to remedy the defects pointed out by a court of law or on coming to know of it aligned. In other words, a court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. (vi) If the legislature has the power over the subject-matter and competence to make a validating law, it can at any time make such a validating law and make it retrospective. The validity of a validating law, therefore, depends upon whether the legislature possesses the competence which it claims over the subject-matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against public policy or barred by any valid law; and host of other factors. 2. KanaiyalalLalchand Sachdev and Ors. vs. State of Maharashtra and Ors. (07.02.2011 - SC) : MANU/SC/0103/2011 It is well settled that ordinarily relief Under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person. (See Sadhana Lodh v. National Insurance Co. Ltd.; Surya Dev Rai v. Ram Chander Rai and SBI v. Allied Chemical Laboratories.) 3. Commissioner of Income Tax and Ors. v. ChhabilDass Agarwal, MANU/SC/0802/2013 : 2014 (1) SCC 603, as follows: Para 15. while it can be said that this Court has recognised some exceptions to the Rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in ThansinghNathmal case, Titaghur Paper Mills case and other similar judgments that the High Court will not enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy it is within the jurisdiction of discretion of the High Court to grant relief under Article 226 of the Constitution. At the same time, it cannot be lost sight of that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere if there is an adequate efficacious alternative remedy. If somebody approaches the High Court without availing the alternative remedy provided the High Court should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction. 6. K.S. Rashid and Sons v. Income Tax Investigation Commission and Ors., AIR (1954) SC 207; Sangram Singh v. Election Tribunal, Kotah and Ors., AIR (1955) SC 425; Union of India v. T.R. Varma, AIR (1957) SC 882; State of U.P. and Ors. v. Mohammad Nooh, AIR (1958) SC 86 and M/s K.S. Venkataraman and Co. (P) Ltd. v. State of Madras, AIR (1966) SC 1089, Constitution Benches of the Supreme Court held that Article 226 of the Constitution confers on all the High Courts a very wide power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t writ petitions are filed. Thus, all those judgments referred by the learned counsel for the writ petitioners have no relevance with reference to the grounds considered in the present writ petitions. 69. Accordingly, this Court has no hesitation in coming to the conclusion that the present writ petitions are not only premature and the compex facts and circumstances now raised by the writ petitioners, cannot be adjudicated in view of the fact that the writ petitioners have not exhausted the appeal remedies provided under the Statutes and not participated in the administrative procedures contemplated under the provisions of the Prevention of Money Laundering Act, 2002, establishing their innocence or otherwise before the Competent Authorities. Such administrative procedures contemplated cannot be construed as akin to that of the criminal proceedings initiated under the Indian Penal Code. 70. This being the view of the Court, the writ petitioners, being failed to establish any legally acceptable ground, so as to interfere with the impugned orders passed by the respondents under the provisions of the Prevention of Money Laundering Act, 2002. Thus, both the writ petitions stand dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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