9911796707
TMI Blog2024 (12) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... not the date of the provisional order. Even if the attachment is wholly illegal, still, at least for the period during which the provisional attachment remained in force, the property would have the taint of a proceeds of crime - Thus, if an order of attachment of a property is without jurisdiction or a non est, the remedy under the statute may not be a completely efficacious and alternative mechanism. Hence, if the order of provisional attachment under section 5 of PML Act is without jurisdiction, a writ petition is maintainable and can even be entertained. Whether the order of provisional attachment of immovable properties of the petitioner, dated 13-10-2023, is wholly without jurisdiction? - HELD THAT:- A perusal of Ext.P1 reveals that the authority who issued the said order had no case that any proceeds of the crime involving the petitioners had been taken out of the country. In such circumstances, the attachment of properties purchased by the petitioners prior to 2014, under the provisions of section 5(1) of PML Act is ex-facie null and void and wholly without jurisdiction - Since this Court is of the view that the provisional attachment of properties purchased prior to 2014 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank relating to the disbursement of loans to other persons and an investigation was being conducted. While so, petitioners received summons from the first respondent requiring their presence and production of documents relating to the loans availed by them, which were duly complied with. Petitioners allege that during the enquiry they were made to sign certain statements dictated by the officials of the first respondent and later they were served with a provisional order of attachment dated 13.10.2023 bearing No. 05/2023. The order attached five of their immovable properties four belonging to the second petitioner and one that of the first petitioner apart from the motorcar of the second petitioner and the bank accounts held by them. Petitioners allege that the provisional attachment order is manifestly illegal, without jurisdiction or authority and have hence approached this Court under Article 226 of the Constitution of India. 4. A statement has been filed by the respondents contending that the writ petition is not maintainable as the remedy lies elsewhere under the PML It was pleaded that the committee members including the Secretary and other persons of the bank had conspired f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel contended that even if the entire allegations are assumed to be admitted for the sake of arguments, still, what can be attached under the PML Act are only tainted properties and not those which have no connection with the crime or are not proceeds of crime. Learned counsel submitted that, out of the five properties attached, three of them were purchased in the years 1999, 1997 and 2005, while the period during which the offences were allegedly committed at the bank is stated to be between 2014 to 2018 and therefore under no circumstances can those three properties of the petitioners be attached even provisionally. The learned counsel also argued that when the provisional attachment is null and void, the alternative remedy cannot be a restraint for this Court to interfere. 7. Sri. A.R.L Sunderesan, the Additional Solicitor General of India, instructed by Sri. Jayashankar V. Nair, learned counsel for the respondents on the other hand contended that the writ petition itself is not maintainable as the petitioners have alternative remedies provided under the statute and since they have already invoked the said remedy, this Court is precluded from considering the said contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Amongst the self-imposed restrictions, though, availability of an effective and efficacious alternative remedy is one, the same by itself, would not operate as a bar in at least four contingencies, namely, where the writ petition has been filed for the enforcement of any of the fundamental rights or where there has been a violation of the principle of natural justice or where the impugned order is without jurisdiction or the vires of an Act is challenged, as held in the often quoted decision of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Others [(1998) 8 SCC 1] and the Constitution Bench decision in V. Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani and Another [AIR 1961 SC 1506]. Further when a question of law is involved, the alternative remedy under a statute shall not be a restraint to entertain a writ petition. 12. In this context, it is apposite to refer to the decision in Godrej Sara Lee Ltd v. Excise Taxation Officer Cum Assessing Authority and Others [2023 SCC OnLine SC 95], wherein it was held that the power under Article 226 is plenary in nature and the limitation on the exercise of such power must be found in the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Adjudicating Authority has been challenged before the Appellate Tribunal. Despite the aforesaid proceedings, this Court s jurisdiction under Article 226 of the Constitution cannot be taken away, if the initial order itself was without jurisdiction. 15. The scheme of section 5 (3) of the PML Act indicates that a person aggrieved by a provisional order of attachment cannot challenge such an order before any authority. In Santiago Martin v. Union of India (supra) at paragraph 38 it was observed that there is no appeal against a provisional attachment order. The statute contemplates a complaint to be filed by the Officer who issued the attachment order to prefer a complaint to the Adjudicating Authority under section 5 (2) of the PML Act. If the provisional attachment is found to be illegal, the Adjudicating Authority s order will be effective only from such a date and not the date of the provisional order. Even if the attachment is wholly illegal, still, at least for the period during which the provisional attachment remained in force, the property would have the taint of a proceeds of crime. The stigma on the property will not be effaced at least for the said period. Thus, if an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad. Explanation : For the removal of doubts, it is hereby clarified that proceeds of crime include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. 20. Section 5 of PML Act authorizes the attachment of proceeds of The above-extracted definition indicates that there can be three types of proceeds of crime, which are: (i) property derived or obtained as a result of a criminal activity, (ii) value of any such property and, (iii) if the property is taken or held outside India, then a property equivalent in value held within India. 21. The definition of the term proceeds of crime explicitly states that when the proceeds of a crime is a property, such property must have been obtained or derived as a result of any criminal activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to action against any person for money laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum. For, the expression derived or obtained is indicative of criminal activity relating to a scheduled offence already accomplished. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money laundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. This interpretation alone can be countenanced on the basis of the provisions of the 2002 Act, in particular Section 2 (1) (u) read with Section 3. Taking any other view would be rewriting of these provisions and disregarding the express language of definition clause proceeds of crime , as it obtains as of now 19. Anothe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent itself, only about the challenge to the relevant provisions of the PML Act, and did not deal with facts and issues. However, in Pavana Dibbur s case (supra), the Supreme Court specifically dealt with the question regarding the attachment of properties acquired prior to the commission of the predicate offence. Thus, on a combined reading of the decisions in Vijay Madanlal Choudhary s case, (supra) and Pavana Dibbur s case (supra), it is evident that the immovable property acquired by the petitioners prior to the commission of the predicate offence cannot be attached under section 5 of the PML Act, unless the proceeds of crime were taken out of the country. 26. The above view is fortified by the decision of the High Court of Andhra Pradesh in Kumar Pappu Singh v. Union of India, Ministry of Finance and Others [2021 SCC OnLine AP 983], which held that the properties purchased before the commission of offence cannot fall within the definition of proceeds of crime and cannot be attached or confiscated under the Act. The High Court of Patna in HDFC Bank Limited Chotisaraiganj v Government of India [2021 SCC OnLine Pat 4222], held that the property derived from a legitimate source can ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
