Enforcement Officer Exceeded Authority in Property Attachment Instruction

The court held that the Assistant Director of the Directorate of Enforcement exceeded authority by instructing the Tehsildar not to issue revenue extracts for properties not attached under Section 5 of the Prevention of Money Laundering Act, 2002. The court found the communication arbitrary and ultra vires, emphasizing that only designated officers under Section 5 have the power to attach properties. The impugned communication was deemed illegal and without jurisdiction, leading to its quashing. The court directed the Tehsildar to proceed lawfully for properties not covered by attachment orders, highlighting the importance of adherence to prescribed procedures by authorized officers.

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Issues Involved:
1. Permissibility of the Assistant Director, Directorate of Enforcement, to instruct the Tehsildar not to issue revenue extracts for properties not attached under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA).
2. Jurisdiction and authority of the Assistant Director under the PMLA.
3. Impact of ongoing investigations on the issuance of revenue extracts.

Detailed Analysis:

1. Permissibility of the Assistant Director, Directorate of Enforcement, to instruct the Tehsildar not to issue revenue extracts for properties not attached under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA):

The primary issue in this case was whether the Assistant Director of the Directorate of Enforcement could instruct the Tehsildar not to issue revenue extracts for properties that were not attached under Section 5 of the PMLA. The court noted that the petitioner-company's properties, except for the ones explicitly attached by the Provisional Attachment Orders (PAOs), were not subject to any attachment orders. The court observed that the Enforcement Directorate's power is limited to properties that have been attached under Section 5 of the PMLA. The impugned communication by the Assistant Director was deemed arbitrary and ultra vires, as it extended beyond the properties officially attached by the PAOs.

2. Jurisdiction and authority of the Assistant Director under the PMLA:

The court examined the jurisdiction and authority of the Assistant Director under the PMLA. It was highlighted that Section 5 of the PMLA authorizes only the Director or an officer not below the rank of Deputy Director to provisionally attach properties if there is reason to believe that the properties are proceeds of crime and are likely to be concealed, transferred, or dealt with in a manner frustrating confiscation proceedings. The Assistant Director, who issued the impugned communication, did not have the authority under Section 5 to issue such instructions. The court emphasized that the law does not permit any officer other than those designated under Section 5 to take such actions, thereby rendering the Assistant Director's communication without jurisdiction and illegal.

3. Impact of ongoing investigations on the issuance of revenue extracts:

The respondents argued that further investigations were ongoing, and issuing revenue extracts could result in the non-availability of properties for future attachments and jeopardize the investigation. However, the court noted that no provisional order of attachment had been made for the properties in question, and the investigation's status did not justify the impugned communication. The court clarified that the law requires the existence of material evidence at the time of making a provisional attachment order, and such actions cannot be based on presumptions about future evidence. The court concluded that the Assistant Director's communication was not supported by the necessary legal procedures and safeguards.

Conclusion:

The court concluded that the impugned communication dated 18.03.2020 by the Assistant Director was illegal and without jurisdiction. The court quashed the communication and directed the Tehsildar to proceed in accordance with the law for properties not covered by the attachment orders. The court emphasized that the designated officers under Section 5 of the PMLA must follow the prescribed procedures and cannot act beyond their authority. The writ petition was allowed, and the impugned communication was quashed, with no order as to costs.

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