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TMI Blog2024 (6) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... t of 2002. Admittedly, the petitioners, as per their claim, fall in the category of claimants and are, thus, well within their right to approach the Special Court under the Prevention of Money-Laundering Act at Jaipur, which has taken cognizance of the prosecution complaint filed by the Enforcement Directorate on 31-03-2021. It is thus abundantly clear that the remedy of the petitioners lies before the Special Court under the Prevention of Money-laundering Act, at Jaipur which has taken cognizance of the case and is seized of the matter. This remedy is available to the petitioners under Section 8 (8) of the Act read with Rule 3-A of the Rules of 2016. The petitioners have deliberately skipped the aforesaid statutory remedy which is equally efficacious and could be availed before the Special Court under Prevention of Money-Laundering Act and have rushed to this Court invoking extraordinary jurisdiction of this Court. The petitioners do not dispute the order of provisional attachment on merits nor have they any locus standi to challenge the provisional attachment of the property to the extent it represents the proceeds of crime. The short grievance of the petitioners is that the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecuted between the petitioners and respondents Nos. 4, 5 and 6. While the petitioners were waiting for the project to be completed so that they could enter their residential units, the Responded No.4, abruptly stopped the construction in the year 2018. The respondent No.4 had been putting forth one excuse or the other for not completing the construction and in the meanwhile the petitioners came to know that respondent company was being investigated for serious frauds investigated under Section 212 of the Companies Act. The investigation led to filing of a complaint under Section 439(2) read with Sections 436(a)(d)(2) and 421(1) of the Companies Act and Section 50 of the Limited Liability Partnership Act read with Section 193 of the Code of Criminal Procedure before the Court of Learned District and Session Judge-cum-Special Judge (Companies Act), Gurgaon, Haryana. The respondent Company got involved in the criminal litigation and as a result, the construction of the project remained as it was. The home buyers, including some of the petitioners herein, approached this Court by way of WPC 1185/2020 seeking inter alia direction to the official respondents therein to take appropriate s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Director of Adarsh Credit Cooperative Society Ltd [ ACCSL ] and other related persons/firms/entities. The investigation was commenced under the Act of 2002 on the basis of an FIR registered by Special Operation Group, Jaipur, under Sections 120-B, 420, 460, 471 of the IPC on the allegation of cheating the investors/members of ACCSL and diverting the money deposited by various investors in other schemes of the Society. On the basis of the investigation conducted by the respondent No.3, it was concluded that that respondent No.4 had diverted the proceeds of crime raised through public deposits to the affiliate Cooperative Societies of the ACCSL and invested in moveable and immoveable properties. It is in this background, the respondent No.3 in terms of the provisional attachment order dated 25-03-2022 attached, amongst others, the immoveable property qua the project representing value of entire project land equivalent to proceeds of crime i.e. Rs. 10,02,82,884/- and entire inventory on Block B, F and Unit No. G3, G4, G5 and G6 of Block A, representing value of proceeds of crime i.e. Rs. 10,25,70,396.01. The provisional attachment order passed by respondent No.3 stands subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations Group (SOG), Rajasthan Police, Jaipur against Mukesh Modi the founder director of Adarsh Credit Cooperative Society Ltd and Rahul Modi, its Managing Director. The SOG Jaipur has, after completing the investigation filed he preliminary charge sheet before the competent Court of law, perusal whereof reveals that the accused persons had committed various offences under IPC and other penal legislations, out of which Sections 120-B, 420, 467 and 471 of IPC are covered under Paragraph 1 of Part A of the Schedule of offences under the Act of 2002. The charge sheet further revels that the funds of ACCSL, which were collected from public deposits by assuring the public of high returns under various schemes, were later diverted and used by the accused persons for their personal gain and corresponding loss to the ACCSL and a major part of the project in question was raised by these proceeds of crime. 9. Apart from justifying the impugned order, respondents Nos. 1 to 3 have also raised following preliminary objections:- (i) That the ECIR has been registered in Jaipur and the order of provisional attachment was passed by respondent No.3 at Jaipur and confirmed by the Adjudicating Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmission granted by the Municipal Corporation. It was only after arriving at the satisfaction that the project was being raised in accordance with law, they invested their money for owning one residential unit each on the completion of the project. They have given the details of the payments made by them from time to time to the private respondents. They could not get the sale deeds executed because of the intervening circumstances i.e. registration of an FIR for Scheduled offences by the SOG, Jaipur against the founder Director and the Managing Director and other people connected with ACCSL, which led to the discovery of proceeds of crime having been diverted by the accused persons in various projects, including the project in question. The ED also swung in action and recorded formal ECIR on 22-03-2019 at Zonal Office of ED at Jaipur under the provisions of the Act. During investigation, the trail of the proceeds of crime was traced to the project Palm Springs raised at Humhama, Budgam Srinagar. This led to the provisional attachment of the property equivalent to the proceeds of crime invested in the project. It is true that while effecting provisional attachment of the property, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer authorised by him in this behalf; and (c) taking into account all relevant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice issued under subsection (1) are involved in money-laundering: Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering. (3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under subsection (1) of section 5 or retention of property or 3 [record seized or frozen under section 17 or section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property] or record shall (a) continue during 1 [investigation for a period not exceeding 2 [three hundred and sixty-five days] or] the pendency of the proceedings relating to any 3 [offence under this Act before a court or under the corresponding law of any ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (5), the Special Court, in such manner as may be prescribed, may also direct the Central Government to restore such confiscated property or part thereof of a claimant with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of the offence of money laundering: Provided that the Special Court shall not consider such claim unless it is satisfied that the claimant has acted in good faith and has suffered the loss despite having taken all reasonable precautions and is not involved in the offence of money laundering: Provided further that the Special Court may, if it thinks fit, consider the claim of the claimant for the purposes of restoration of such properties during the trial of the case in such manner as may be prescribed. 14. From perusal of Section 8, it is evident that the Director or any other officer not below the rank of Deputy Director authorized by the Director Enforcement, is authorized to pass an order in writing, provisionally attaching the property raised by any person by the proceeds of crime. The attachment of such property shall not be for a period exceeding 180 days from the date of the order. The order of provisional atta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder passed by the respondent No.3. 19. As is seen from sub-section (1) of Section 8, if the Adjudicating Authority receives a complaint under Section 5(5) of the Act, and has reason to believe that any person has committed an offence under Section 3 or is in possession of proceeds of crime, it may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of income, earning or assets, out of which or by means of which he has acquired the property attached under Section 5(1) of the Act etc. etc. The proviso 3rd to sub-section (1) prescribes that if the provisionally attached property is claimed by a person other than the person to whom notice has been issued, such person shall also be entitled to an opportunity of being heard to prove that the property is not involved in money-laundering. 20. Obviously, in the instant case the petitioners who had substantial interest in the property attached or at last a part thereof, were not given notice under Section 8(1) of the Act. In terms of third proviso to sub-section (1) of Section 8, the petitioners could have approached the respondent No.2 with the complaint that the property, they have interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aith and has suffered a quantifiable loss as a result of the offence of money-laundering, despite having taken all reasonable precautions and is otherwise not involved in money-laundering, would be a claimant entitled to invoke the second proviso to sub-section (8) of Section 8 of the Act of 2002. 22. Admittedly, the petitioners, as per their claim, fall in the category of claimants and are, thus, well within their right to approach the Special Court under the Prevention of Money-Laundering Act at Jaipur, which has taken cognizance of the prosecution complaint bearing No. 06/2021 filed by the Enforcement Directorate on 31-03-2021. 23. Rule 3-A of the Rules of 2016 prescribes the procedure for restoration of the property during trial and is also reproduced with advantage:- 3-A. Manner of restoration of property during trial.- (1) The Special Court, after framing of the charge under section 4 of the Act, on the basis of an application moved for restoration of a property attached under sub-section (1) of section 5, or, seized or frozen under section 17 or section 18 of the Act prior to confiscation, if it thinks fit, may, for the purposes of the second proviso to sub-section (8) of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal. (1) Save as otherwise provided in sub-section (3), the Director or any person aggrieved by an order made by the Adjudicating Authority under this Act, may prefer an appeal to the Appellate Tribunal. (2) Any reporting entity aggrieved by any order of the Director made under sub-section (2) of section 13, may prefer an appeal to the Appellate Tribunal. (3) Every appeal preferred under sub-section (1) or sub-section (2) shall be filed within a period of forty-five days from the date on which a copy of the order made by the Adjudicating Authority or Director is received and it shall be in such form and be accompanied by such fee as may be prescribed: Provided that the Appellate Tribunal may, after giving an opportunity of being heard, entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period. (4) On receipt of an appeal under sub-section (1) or sub-section (2), the Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against. (5) The Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation is challenged. 29. At this stage it is apt to refer to the observations made in para 15 by Hon ble the Supreme Court in Commissioner of Income Tax and ors v. Chhabil Dass Agarwal, (2014) 1 SCC 603, which read thus:- Thus, while it can be said that this Court has recognized 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 Thansingh Nathmal case, Titagarh Paper Mills case and other similar judgments that the 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 grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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