Money laundering case: property attachment lifted once petitioner deposits equivalent value, fixed deposit also ordered de-frozen

HC, dealing with a money-laundering matter, considered a petition seeking release of immovable properties provisionally attached and de-freezing of a fixed deposit. Referring to the binding precedent that permitted lifting of attachment upon securing the alleged amount through a financial instrument, HC held that the attached properties could be released upon adequate monetary safeguard. Noting that the value of the attached property was Rs. 25,66,462/- as per Schedule "C" of the Provisional Attachment Order, HC directed the respondent to release the Schedule "C" properties subject to petitioner depositing the said amount with the respondent.

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1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether the Court could direct release of immovable properties provisionally attached by the enforcement authorities on the petitioner furnishing a monetary deposit equivalent to the value of the attached properties to be kept in fixed deposit with lien in favour of the authorities, subject to the final outcome of the proceedings.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Release of provisionally attached immovable properties on furnishing monetary security

(a) Legal framework (as discussed)

2.1 The Court considered and relied upon the principles laid down by the Supreme Court in a writ petition where, in the context of provisional attachment by the enforcement authorities arising out of alleged disproportionate assets and money-laundering proceedings, the Supreme Court declined to accept a bank guarantee but permitted substitution of attached properties by directing the furnishing of a fixed deposit receipt in a nationalised bank of the entire quantified amount with a lien in favour of the investigating agencies, as a pre-condition for lifting attachment; such fixed deposit was to remain subject to the final outcome of the pending criminal and PMLA matters and was treated as an interim arrangement without precedential effect.

2.2 The Court also referred to a decision of a Coordinate Bench which, applying the above Supreme Court order, held that where a fixed deposit of a specific quantified amount had been furnished in favour of the authorities pursuant to the Apex Court's directions, that fixed deposit itself constituted "properties involved in money laundering" and was liable to confiscation to the extent of the quantified "proceeds of crime"; consequently, properties exceeding that quantified amount could not be confiscated, and an order confiscating third-party immovable properties in excess of such amount was set aside.

(b) Interpretation and reasoning

2.3 The Court noted that, as per the Provisional Attachment Order and Schedule "C" thereto, the value of the petitioner's attached immovable properties was quantified at Rs. 25,66,462/-. This factual position was treated as undisputed.

2.4 The petitioner expressed willingness to deposit the entire quantified amount of Rs. 25,66,462/- with the respondent, to be invested in a fixed deposit in a nationalised bank with a lien in favour of the respondent, subject to the final outcome of the proceedings.

2.5 Applying the ratio and approach adopted by the Supreme Court in the above-referred decision, and the subsequent application of that approach by the Coordinate Bench in the later decision, the Court reasoned that a similar conditional arrangement substituting the attached immovable properties with a fixed deposit of equivalent value, carrying a lien in favour of the enforcement authorities and remaining subject to the final adjudication, would adequately secure the interest of the respondent while permitting release of the petitioner's immovable properties.

2.6 The Court rejected the respondent's general objection to the maintainability and merits of the petition in view of the above precedents and the undisputed valuation of the attached property, and considered that the "special/peculiar facts and circumstances" of the case justified granting the conditional relief sought.

(c) Conclusions

2.7 The petition was disposed of by directing the respondent to release the immovable properties provisionally attached in Schedule "C" of the complaint, subject to the petitioner depositing the sum of Rs. 25,66,462/- with the respondent.

2.8 Upon such deposit, the respondent was directed to invest the amount in a fixed deposit, marking a lien to that extent, with the fixed deposit and lien remaining subject to the final outcome of the proceedings.

2.9 The Court expressly clarified that the order was passed having regard to the special/peculiar facts and circumstances of the case and shall not be treated as a precedent or have any precedential value for any purpose.

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