TaxTMI 
TaxTMI 
2015 (11) TMI 191
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....on the petitioner seeks to quash the order dated 10th September, 2014, the proceedings registered as ECIR No.KLZO/02/2014 and the direction contained in the letter dated 19th September, 2014. The case of the petitioner is that the notice dated 19th June, 2014 issued by the adjudicating authority under the 2002 Act was challenged. By order dated 22nd July, 2014 the writ petition was dismissed. In appeal from the said order the Division Bench passed an order on 28th July, 2014 thereby granting liberty to the appellant to raise all objections including the applicability of the 2002 Act before the concerned authority. The adjudicating authority was also directed to decide the preliminary objection raised regarding applicability of the 2002 Act....
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....ility of the 2002 Act has passed the order dated 10th September, 2014. This, therefore, renders the order dated 10th September, 2014 bad, as without deciding the preliminary objection raised as directed by the order dated 28th July, 2014, the adjudicating authority could not have passed the order on merits. After passing of the said order dated 10th September, 2014 a request was made by the Enforcement Directorate to freeze the bank accounts of the petitioner. This request is nothing but a mandate to the banks to prohibit withdrawal. The said direction can either be passed under Section 5 of the 2002 Act or Section 17 of the 2002 Act, but the said has not been passed thereunder. Section 5 permits provisional attachment of the property invol....
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.... preamble of the 2002 Act categorically states that the enactment is to prevent money laundering and to provide for confiscation of property derived therefrom and for matters connected or incidental thereto. The request to freeze is an incident of money laundering and a precautionary measure adopted to prevent depletion of assets by the writ petitioner, as appears from the balance sheet of the petitioner. In fact, in the case of Subrata Chattoraj versus Union of India and Ors., in an affidavit filed by the State of Odisha it has been categorically stated that M/s. Rose Valley Hotel & Entertainment Ltd. expressed its willingness to pay back the investors. It was also categorically stated by the Supreme Court in the said decision that attachm....
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....ed 19th September, 2014. In the ECIR the property suspected to be proceeds of crime is not mentioned as the said is to be ascertained upon investigation. Therefore, proceedings will have to be initiated and unless the said is initiated the provisions of the 2002 Act will not apply. The request is a mandate without statutory backing and through submission the scope of investigation is sought to be extended. The only proceeding which exists today, is the ECIR and by issuance of letter dated 19th September, 2014, the Directorate is fishing for evidence. Proceeds of crime is to be identified and without identifying the same no action will lie. Sections 5 and 17 of the 2002 Act are the only provisions of the statute which empowers attachment an....
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.... and on appeal liberty was granted to the writ petitioner to raise all objections before the adjudicating authority including the applicability of the 2002 Act. The said was to be decided as a preliminary issue along with steps taken by the Directorate under Section 17(1) of the 2002 Act before deciding any other issue. The adjudicating authority after considering the submission of the parties passed the order dated 10th September, 2014. On a reading of the said order it is apparently clear that the applicability of the 2002 Act has not been addressed and no finding given in respect thereof. This, therefore, is contrary to the order dated 28th July, 2014 passed by the Appeal Court in AST 345 of 2014 with ASTA 246 of 2014. As the merits of t....
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....he High Court may not strike down an illegal order although it will be lawful to do so. One instance of denying such relief is where quashing of an illegal order would revive another illegal one. In the instant case to quash the letter dated 19th September, 2014 will give rise to a situation likely to do injustice to the debenture holders, therefore, no interference is called for with the letter dated 19th September, 2014. At this stage to form any opinion on the applicability of the 2002 Act would amount to usurping the power of the adjudicating authority. Needless to mention that investigation will continue and in the event the same is completed before a decision is taken by the adjudicating authority, let no effect be given to the order....