AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (9) TMI 265
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....EPL to the extent of Rs.2,45,00,000/-; (ii) Rs.11,86,710/- lying as fixed deposit in its account; (iii) Rs.1,26,540/- credited in A/c No.0153201100424; and (iv) Rs.7,160/- deposited in A/c No.0153201002578. 3. The impugned order is premised on the basis that the said amounts have been used in commission of a scheduled offence and are proceeds of crime in terms of Section 2(u) and (v) of the PML Act. 4. The petitioner has assailed the impugned order on several grounds including that the ED has not provided any reason to believe that HEPL is in possession of the proceeds of crime, the existence of such reasons is a precondition for issuing any order under Section 5(1) of the PML Act. In this regard, reliance is placed on the decision of the Division Bench of this Court in J. Sekar v. Union of India & Ors.: 2018 SCC Online Del (6523). The petitioner also claims that the impugned order is without jurisdiction, as the funds attached by the ED are investments made in or by HEPL and cannot, by any stretch, be held to be proceeds of crime. Factual context 5. Before proceeding further, it would be relevant to refer to the facts as narrated in the impugned order. The impugne....
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.... venture company (GCL) for carrying out mining activities including excavation work. It is stated in the impugned order that HEPL applied for mining lease to the Directorate of Mines and Mineral, Kolkata but the same was not processed in view of the decision of the Supreme Court delivered on 24.09.2014. The impugned order further indicates that investments had been made by joint venture partners (HPPCL and EMTA) in subscribing to the shares of HEPL. HEPL, in turn, had also subscribed to the share capital of GCL. It is stated that GCL, in turn, made an investment of Rs.4.90 crores for development of the coal block and on cancellation of the same had received back a sum of Rs.4,78,81,951/-. Submissions 10. Mr. Abhimanyu Bhandari, the learned counsel appearing for HEPL assailed the impugned order, essentially, on two grounds. First he submitted that the ED had no reason to believe that the properties attached are proceeds of crime. He further stated that the ED had not communicated such reasons to believe. He relied on the decision of the Division Bench of this Court in J. Sekar (supra) in support of his contention that the same was necessary. Second, he submitted that there was no ....
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.... offence under Section 3 of the PML Act was also alleged to have been committed outside the territorial jurisdiction of this Court. The FIR on the basis of which proceedings under the PML Act had commenced was also registered in Calcutta. The Railway administration had also issued a show cause notice in respect of the allegations made against the petitioner in that case and the same was also subject matter of challenge before the Calcutta High Court, which was pending consideration at the material time. In this view, it is clear that no part of the cause of action had arisen within the territorial jurisdiction of this Court. The facts in this case are materially different; in the present case, the offence of money laundering has allegedly been committed within the territorial jurisdiction of this Court. 14. The next question to be examined is whether any interference with the impugned order is warranted by this Court at this stage. It is relevant to note that the impugned order is only a provisional order of attachment and the question whether the same has to be confirmed is now required to be adjudicated by the Adjudicating Authority in terms of Section 8 of the PML Act. In this ....
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....e language of Section 2(u) of the PML Act that the expression "proceeds of crime" refers to a property, which is "derived or obtained" by any person as a result of criminal activity. Therefore, in order to pass an order of provisional attachment, it was necessary for the ED to have reasons to believe that the property sought to be attached was "derived or obtained" from any scheduled crime. 18. A plain reading of the impugned order indicates that there is no material whatsoever on the basis of which the ED could have possibly concluded that the investments made by HEPL were 'derived or obtained' as a result of any criminal activity relating to a scheduled offence. In the impugned order, the ED has elaborately discussed the allegation made against HEPL. It is also recorded that at the time of filing of the application for allocation of coal block, the capital of HEPL was Rs.5 lakhs which had swelled upto Rs.7.91 crores after filing application for a coal block. The investment made by joint venture constituents of HEPL, namely, Himachal Pradesh Power Corporation Ltd. and EMTA, were further invested by HEPL; including in subscribing to the shares of CGL. The same cannot by any stretc....