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TMI Blog2024 (7) TMI 1170X X X X Extracts X X X X X X X X Extracts X X X X ..... e exercise of attaching the petitioner's property, would be in violation of the mandatory requirements of serving the provisional attachment order under Section 5, as well as the prior show cause notice under Section 8(1) of the Act, on the petitioner, apart from violation of the principles of natural justice and therefore cannot be legally sustainable. In the case of R. AMARABALAN VERSUS DIRECTORATE OF ENFORCEMENT (CHENNAI ZONE) , JOINT DIRECTORATE OF ENFORCEMENT (CHENNAI ZONE) , [ 2022 (4) TMI 1619 - MADRAS HIGH COURT] a Coordinate Bench of this Court had dealt with a similar situation and set aside the attachment over the property therein. When the petitioner had lawfully purchased the property on 28.11.2018, much before the Provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct property'), was originally purchased by one C.Sasi, through an auction under a sale certificate registered as Document No.6688/2016 dated 18.10.2016, on the file of the Sub Registrar, Tambaram. Thereafter, the subject property was sold to one G.T.Subash, through a sale deed registered as Document No.4214/2017 dated 12.07.2017. Ultimately, on 28.11.2018, the subject property was purchased by Revathy Vijayagopalan/the petitioner herein, through a sale deed registered as Document No.7342/2018, dated 28.11.2018. The name of the petitioner was incorporated in all the revenue records, including Patta No.12018. 2.2. The Directorate of Enforcement, Chennai Zonal Office, had passed a provisional attachment order dated 29.05.2019 under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner for the subject property also discloses the encumbrance of the registered sale deed in favour of the petitioner. Apparently, the authorities under the Act have failed to conduct due diligence over the title of the subject property before passing the provisional attachment order or confirming the same. 6. It is not in dispute that the provisional attachment order made under Section 5(1) of the Act was not served on the petitioner, after the attachment was made by the officials of the Enforcement Directorate. It would be pertinent to point out here that under Rule 3(2) of the Prevention of Money-Laundering (Issuance of Provisional Attachment Order) Rules, 2013 (hereinafter referred to as 'the Rules'), the Authorized Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 8(1), prudence may require that the term may employed in Section 8(1) be read as shall . 8. The obligation on the part of the Adjudicating Authority to issue a show cause notice under Section 8(1) of the Act has also been ratified by an Hon'ble Division Bench of the Bombay High Court in the case of Shiv Charan and Others Vs. Adjudicating Authority under the Prevention of Money Laundering Act, 2002, Department of Revenue and Another reported in 2024 SCC OnLine Bom 701. This apart, Section 6 (15) of the Act provides for the procedure to be adopted by the Adjudicating Authority, in exercising their powers. As per the said provision, the Adjudicating Authority, shall be guided by the principles of natural justice while discharging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings under Section 8 of Prevention of Money Laundering Act, 2002; (b) He was not issued any notice before the provisional order of attachment was passed and also in the confirmation proceedings. (c) There is no Presiding Officer in the Appellate Tribunal for a long time. Hence an ordinary citizen whose property has been attached behind his back by the authorities should not be made to run from pillar to post. 8. Taking into consideration the present facts and circumstances of the case, we are of the opinion that the interests of justice would be served if the provisional order of attachment in PAO No.20 of 2016 dated 02.09.2016 as confirmed in OC No.636 of 2016 dated 03.02.2017 are set aside qua the subject property alone and the attachmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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