2021 (4) TMI 227 - HC - Money Laundering

Court upholds validity of provisional attachment order under Prevention of Money Laundering Act, emphasizing statutory remedies

Namrata Marketing Pvt. Ltd. Newdelhi Thru Auth. Signatory Versus U.O.I. Thru Secy. Finance & Revenue Deptt. New Delhi & Ors.

The Court dismissed the writ petition challenging the provisional attachment order under the Prevention of Money Laundering Act, 2002. It held that the ... Provisional attachment with respect to the four sugar mills of the petitioner - Right to property - violation of the provisions of Section 5 of PML Act - HELD THAT:- In the instant case, assailing the provisional attachment order, no ground has been taken that the order has been passed by an incompetent authority or by an authority having no jurisdiction. In this view, it is not a case of lack of jurisdiction. Further, in this writ petition, the vires of the Act has not been challenged. In this case, Right to Property is involved. Right to property is a constitutional right, which is always subject to restriction imposed by law. Further, the Right to Property has not been included under Part-III of the Constitution of India, which deals with the Fundamental Rights. Article 300-A is under Chapter IV of Part-XII of Constitution of India and it provides Right to Property. Thus, this is also not a case of enforcement of Fundamental Right. On the other hand, this is a case of right over the property, which can efficaciously be adjudicated by Forums provided under the Act. It is trite law that the writ petition at the stage of show cause notice is not maintainable. - It is also found that in addition to remedy available under Section 8 of the Act, the party/person aggrieved by an order made by Adjudicating Authority can prefer an appeal under Section 26 of the Act before the Appellate Tribunal and thereafter any person aggrieved by any decision or order of Appellate Tribunal can file an appeal before the concerned High Court, as provided under Section 42 of the Act. The fact that the High Court has wide jurisdiction under Article 226 of the Constitution, does not mean that it can disregard the substantive provisions of a statute and pas orders which can be settled only through a mechanism prescribed by the Statute. Considering various aspects including the multilayered remedies are available to the petitioner under the statute in which the impugned order of provisional attachment has been passed, we are not inclined to entertain this writ petition challenging the provisional attachment orderunder Section 5 of the Prevention of Money Laundering Act, 2002 - petition dismissed. Issues Involved:1. Challenge to the provisional attachment order under Section 5 of the Prevention of Money Laundering Act, 2002.2. Alleged violation of procedural requirements and principles of natural justice.3. Political vendetta and ulterior motives behind the proceedings.4. Availability and adequacy of statutory remedies under the Act.5. Maintainability of writ petition under Article 226 of the Constitution of India.Detailed Analysis:1. Challenge to the Provisional Attachment Order:The petitioner challenged the provisional attachment order dated 09.03.2021 passed under Section 5(1) of the Prevention of Money Laundering Act, 2002. The petitioner sought a writ of certiorari to quash the order and a mandamus to prevent the respondents from enforcing the attachment order.2. Alleged Violation of Procedural Requirements and Principles of Natural Justice:The petitioner argued that the provisional attachment order was issued without following the required procedure under Section 5 of the Act and without providing an opportunity to be heard. The petitioner contended that the concerned authority did not record the reasons to believe that the proceeds of crime were concealed, transferred, or dealt with in a manner that would frustrate the confiscation proceedings.3. Political Vendetta and Ulterior Motives:The petitioner alleged that the proceedings were initiated due to political vendetta, highlighting that the directors of the company were associated with a political party. The petitioner referenced various legal actions and investigations, including an FIR and proceedings before the Competition Commission of India, to support the claim of political motives behind the attachment order.4. Availability and Adequacy of Statutory Remedies:The respondent's counsel argued that the writ petition was not maintainable due to the availability of adequate statutory remedies under the Act. The Act provides a multi-layered remedial framework, including the right to appeal to the Adjudicating Authority under Section 8, the Appellate Tribunal under Section 26, and the High Court under Section 42. The respondent emphasized that the petitioner should have exhausted these statutory remedies before approaching the High Court.5. Maintainability of Writ Petition under Article 226:The Court considered whether the writ petition was maintainable despite the availability of statutory remedies. The Court noted that writ jurisdiction could be invoked in cases of inherent lack of jurisdiction, violation of principles of natural justice, enforcement of fundamental rights, or challenges to the vires of the Act. However, the Court observed that the provisional attachment order was akin to a 'show-cause notice' and did not warrant a writ petition at this stage. The Court cited several precedents affirming that writ petitions are generally not maintainable against show-cause notices.Conclusion:The Court held that the provisional attachment order was passed by a competent authority and did not violate principles of natural justice. The Court emphasized the multi-layered statutory remedies available under the Act and concluded that the petitioner should exhaust these remedies before seeking writ jurisdiction. Consequently, the writ petition was dismissed with no order as to costs, and the petitioner was granted liberty to avail the statutory remedies provided under the Act.