TaxTMI 
TaxTMI 
2018 (10) TMI 330
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.... 2013 was filed by the wife of the writ petitioner Rt.Rev.Dr.Manickam Dorai in the second writ petition viz., WP No.8384 of 2013. 3. The facts in nutshell to be considered in these writ petitions are that the writ petitioners are husband and wife. The writ petitioner in WP No.8384 of 2013 Rt.Rev.Dr.Manickam Dorai was holding the post of Bishop of CSI Diocese, Coimbatore from 2000 till 8.1.2012. The writ petitioner in WP No.8383 of 2013 Mrs.Soodamani Dorai was a retired Primary and Middle School Teacher. The writ petitioners have two children, namely, one Mrs.Mercy Angela Dorai, an Engineer working in abroad and Dr.Jeremy Bliss was doing Post Graduation in Medical Education at CMC, Vellore. 4. By this time, the second daughter would have completed her Post Graduation Course. Rt.Rev.Dr.Manickam Dorai was officiating as Bishop of CSI Diocese, Coimbatore, one Mr.E.Premkumar lodged a criminal complaint before the CBCID, Coimbatore as against Rt.Rev.Dr.Manickam Dorai for the alleged misuse of Bishopship of CSI Diocese, Coimbatore by helping his relatives etc., during the period between 2005 and 2008. 5. Based on the criminal complaint, the CBCID, Coimbatore registered an FIR in ....
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....diators through whom the seller was paid. To that effect, the respondent-Authorities itself called for the records and the bank statements from the Citi Bank. 8. During the pendency of the above money laundering proceedings, the income tax Assessing Officer, Vellore, on the very same set of allegations that the subject matter of property under attachment has been purchased out of unexplained income. Hence, made an addition to income and issued a demand notice to pay the tax vide its proceedings dated 30.3.2016 as against the assessee Mrs.Soodamani Dorai. When the above proceedings of the Assessing Officer was appealed before the CIT (A), Chennai, the above order of the Id.A.O. was confirmed by the CIT(A), Chennai vide its order dated 2.5.2017. As against the above order of the CIT(A), Chennai, appeal preferred before the ITAT, 'D' Bench, Chennai, by Mrs.Soodamani Dorai and the above appeal was allowed, both the orders of the Id.A.O and the CIT (A), Chennai was set aside with a direction to the Id.A.O to delete the addition of Rs. 7,50,000/- made in the hands of the Assessee as unexplained investment vide its order dated 23.10.2017. The above order of the ITAT, 'D&....
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....preferred the present writ petitions that too, during show cause notice stage, are not maintainable in law and liable to be dismissed in limine. 11. In respect of the contentions of the respondents, they have referred the case of Raj Kumar Shivhare vs. Assistant Director, Directorate of Enforcement and Another in Civil Appeal No.3221 of 2010 (arising out of SLP (Civil) No.28877 of 2008) dated 12.10.2010, the Hon'ble Supreme Court of India held as follows:- "34. When a statutory forum is created by law for redressal of grievance and that too in a fiscal Statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go bye by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating the aspect of the matter. It has however dismissed the writ petition on the ground of lack of territorial jurisdiction. 35.No reason could be assigned by the appellant's counsel to demonstrate why the appellate jurisd....
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....dment was brought about. This 23is evident from paragraphs 9.40 and 9.46 of the show- cause notice. 29. It is well established by catena of decisions of the Apex Court that High Court will not entertain a petition under Article 226 of the Constitution, if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken, itself contains a mechanism for redressal of the grievance. This principle is well enunciated in the case of NIVEDITA SHARMA VS. CELLULAR OPERATORS OF INDIA & OTHERS - 2011 (14) SCC 337. In fact, the Apex Court in the case of SPECIAL DIRECTOR & ANOTHER VS. MOHD. GHULAM GHOUSE & ANOTHER - 2004 (3) SCC 440, has deprecated the practice of High Courts entertaining writ petitions questioning the legality of the showcause notices, thereby stalling enquiries retarding investigative process initiated to find actual facts with the participation and in the presence of the parties unless the petitioner established absolute want of jurisdiction of authority to even investigate into facts. It is observed in this context that 24writ petitions should not be entertained and the petitioner should invaria....
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....acts and circumstances of the case. The show cause notice has been issued exactly in accordance with the provisions of the Prevention of Money Laundering Act, 2002 and therefore, it cannot be said that the show cause notices prejudges the issues. The writ petitioners are getting an opportunity to discharge their burden before the Adjudicating Authority (PMLA) under Section 8(1) and 24 of the Act. 16. In respect of jurisdiction of the authority is concerned, the Prevention of Money Laundering Act, 2002 has been enacted pursuant to an International Convention. Chapter-II of the Act, deals with offence of money laundering and Chapter-III of the Act, deals with attachment, adjudication and confiscation. The offence of money laundering is a new offence, which is of criminal nature whereas Chapter-III deals with attachment of the property pending trial and is of a civil nature. Reading of the various provisions of Chapter-III, including Section 11 of the Prevention of Money Laundering Act, 2002 would go to prove the same. The proceedings under Chapter-III are deemed to be judicial proceedings for the purpose of Sections 193 and 228 of the Indian Penal Code. At this juncture, Sections ....
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....a trial of an offence under this Act, the Special Court finds that the offence of money laundering has been committed, it shall order that such property involved in the money laundering or which has been used for commission of the offence of money laundering shall stand confiscated to the Central Government. 3. Section 8(6) where the attachment of any property or retention of the seized property or record becomes final under clause (b) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity of being heard to the person concerned, make an order confiscating such property. Section 8(6) where on conclusion of a trial under this Act, the Special Court finds that the offence of money laundering has not taken place or the property is not involved in money laundering, it shall order release of such property to the person entitled to receive it. (sub-sections 5,6 and 7 substituted for sub-sections 5 and 6, ibid, by virtue of above Amendment Act, 2012) 17. It is contended by the writ petitioners that the Central Offence was committed in 2005 and FIR was registered in 2009, charge sheet was filed in 2011 and the provisions of Section 420 of the Indian....
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....es may be ultimately able to produce materials to disprove the assumption regardinginvolvement of property in money laundering. The process of provisional attachment being preemptive in nature is an urgency clause. The purpose of a provisional attachment order is to prevent a scenario where any proceedings under the PML Act might get frustrated if the property was not attached immediately. It would be always open to the affected person to place such materials as would convince the authorities that the property attached was not involved in money laundering or that it was not part of the proceeds of crime. Hence, at this stage, the contention urged by petitioner alleging that authorities have acted against the settled principles of law by retrospectively operating penal laws thereby violating Article 20(1) of the Constitution of India, cannot be accepted, at this stage. The said contention proceeds on the assumption that the act of money laundering had occurred in the year 2005 or prior to 2009. What shall happen if any person continues to derive the property or value of such property, no matter when the offence was inserted in the schedule? Whether proceedings can be initiated again....
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....in Crl.OP Nos.10500 of 2017 and 10497 of 2017 passed by this Court and also the judgment of Hon'ble Division Bench of High Court of Delhi in the case of Directorate of enforcement vs. Mahanivesh Oils and Foods Pvt Ltd (LPA No.144 of 2016) and C.M. No.8046 of 2016 dated 30.11.2016. 22. In respect of the question whether criminal proceedings initiated by the police is a bar for proceedings under the Prevention of Money Laundering Act, the provisions of PMLA, 2002 are independent and having self-contained code. Before Amendment Act, 2012, the proceedings of PMLA, 2002 were fully depending upon the scheduled offence. However, after Amendment Act, 2012, with effect from 15.2.2013, the amendments were made in Sections 5(1), 8(3), 8(5), 8(6), 8(7) and 8(8) of the Act, which are very well evident that the proceedings are independent from scheduled offence proceedings. It would not be out of place to humbly submit herein that the provision of Section 5(1)(b) that "such person has been charged of having committed a scheduled offence and" was deleted by the Amendemnt Act, 2012, with effect from 15.2.2013. In the case of Samsuddin vs. Union of India, it has been held that the offe....
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.... is not correct. In any event, it is open to the petitioners to contend the same before the Adjudicating Authority and to establish that they are not in possession of any tainted property based on whatever documents that are available with them. 25. The writ petitioners can show their source of income before the Adjudicating Authority under Section 8(1) of the Act. The writ petitioner in WP No.8383 of 2013 filed certain typed set of documents along with an affidavit explaining the source of her income to obtain the properties that were provisionally attached. It is pertinent to note that veracity of the documents and the affidavit are unknown and have to be proved by the writ petitioner. Further, the contents and the veracity of the documents being a disputed question of fact, cannot be adjudicated by this Court under Article 226 of the Constitution of India and the writ petitioner can appear before the third respondent in pursuance of the show cause notice, produce the said documents, offer explanation for the source of income to acquire the property and have the order of attachment set aside. The third respondent, being an Adjudicatory Authority, specifically constituted for t....
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....by the Act 21 of 2009, which is ex post facto law is hit by the protection enshrined under Article 20(1) of the Constitution of India i.e., a Criminal Law cannot be applied retrospectively for the offences committed prior to the promulgation or amendment of the said Statute. (vi) That apart, the respondents herein for registering ECIR No.3 of 2012 as against one of the writ petitioners Rt.Rev.Dr.Manickam Dorai, relied the source of information that being in FIR No.1 of 2009 and the charge sheet therein but the authority herein failed to note that the criminal proceedings in C.C.No.58 of 2011 arising out of FIR No.1 of 2009 was stayed by this Court in Crl.O.P.No.15098 of 2011 vide its order dated 9.9.2011 and the said Crl.O.P., is still pending on the file of this Court. Therefore, the information being relied for the registration of money laundering case as on the date was non est in law, in view of the stay granted by this Court. Hence, the case under the Act as against Rt.Rev.Dr.Manickam Dorai and the consequent provisional attachment etc., against Mrs.Soodamani Dorai also falls to the ground without any legs to stand. 27. The learned counsel for the writ petitioners ....
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....lways been in existence is violative of Article 20(1) of the Constitution. Article 20(1) of the Constitution is as follows: "No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence." Article 20(1) deals with ex post facto laws though that expression has not been used in the Article. Usually, a law prescribes a rule of conduct by which persons ought to be governed in respect of their civil rights. Certain penalties are also imposed under the criminal law for breach of any law. Though a sovereign legislature has power to legislate retrospectively, creation of an offence for an act which at the time of its commission was not an offence or imposition of a penalty greater than that which was under the law provided violates Article 20(1). In the well-known case of Phillips v. Eyre [(1870) 6 QB 1, pp. 23 & 25] and also in the American case of Calder v. Bull [3 Dallas 386 : 1 Law Ed 648, 649] the principle underlying the provision has be....
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....y and giving it retrospective effect a new offence may be created retrospectively. It was contended that by shifting the burden of proof as provided for in Section 5(3) of the Prevention of Corruption Act, 1947, a new offence is created. It is unnecessary for us to consider the larger question as to whether in certain circumstances giving retrospective effect to the procedure may amount to creation of an offence retrospectively. In the present case the old procedure is revived and no new procedure is given retrospective effect. The procedure given effect to is not of such a nature as to result in the creation of a new offence." 29. In the case of Soni Devrajbhai Babubhai vs. State of Gujarat [(1991) 4 SCC 298], wherein the Hon'ble Supreme Court in paragraphs 9 to 11, held as under:- "9. It is clear from the above historical background that the offence of dowry death punishable under Section 304-B of the Indian Penal Code is a new offence inserted in the Indian Penal Code with effect from November 19, 1986 when Act 43 of 1986 came into force. The offence under Section 304-B is punishable with a minimum sentence of seven years which may extend to life imprisonment and....
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....ous amendment made in the Indian Evidence Act for proving the offence of dowry death. The fact that the Indian Evidence Act was so amended simultaneously with the insertion of Section 304-B in the Indian Penal Code by the same Amendment Act is another pointer in this direction. This contention is, therefore, rejected. 11. It follows that the view taken by the High Court that the respondents cannot be tried and punished for the offence provided in Section 304-B of the Indian Penal Code which is a new offence created subsequent to the commission of the offence attributed to the respondents does not suffer from any infirmity. However, as earlier indicated, in case the accusation against the respondents discloses commission of any other more stringent pre-existing offence by the respondents than Section 498 2DA of the Indian Penal Code, the appellant would be entitled to raise that question and the court will then consider and decide it on that basis. No such argument having been advanced before us or any of the courts below so far, the same does not arise for consideration in the present proceeding. With these observations, the appeal is dismissed." 30. In the cas....
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....e is enacted, but in cases of penal statutes if there is any doubt the same is normally resolved in favour of the alleged offender." 32. In the case of Harjit Singh vs. State of Punjab [(2011) 4 SCC 441], the Hon'ble Supreme Court, in paragraph 14, held as under:- "14. Thus, it is evident that under the aforesaid notification, the whole quantity of material recovered in the form of mixture is to be considered for the purpose of imposition of punishment. However, the submission is not acceptable as it is a settled legal proposition that a penal provision providing for enhancing the sentence does not operate retrospectively. This amendment, in fact, provides for a procedure which may enhance the sentence. Thus, its application would be violative of restrictions imposed by Article 20 of the Constitution of India. We are of the view that the said Notification dated 18-11-2009 cannot be applied retrospectively and therefore, has no application so far as the instant case is concerned." 33. In the case of Ritesh Agarwal vs. SEBI [(2008) 8 SCC 205], the Hon'ble Supreme Court, in paragraph 25, held as under:- "25. The question as to whether ....
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....pted from such general rule, under another equally well-settled principle of constitutional law i.e. no ex post facto legislation is permissible with respect to criminal law. Article 20 contains such exception to the general authority of the sovereign legislature functioning under the Constitution to make retrospective or retroactive laws." 35. In the case of Obulapuram Mining Company Pvt. Ltd. vs. Joint Director, Directorate of Enforcement [ILR 2017 KAR 1846 (DB)], the Hon'ble High Court of Karnataka, in paragraphs 5, 10, 11, 12, 17 and 18, held as under:- "5. Mr.Nandrajog, submits that those offences were included as scheduled offences only on June 1, 2009. He draws our attention to page 225 of the paperbook to show that the alleged offences were allegedly committed between June 21, 2007 and May 15, 2009. Therefore, he submits that all the offences were allegedly committed prior to the coming into operation of the amendment to the PML Act. 10. It can be seen from the records that all the offences allegedly committed by the writ petitioner were earlier to the insertion of the provision in the schedule of the Prevention of Money Laundering (Amendme....
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....ly with respect to the property derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence or the value of such property. 21. Thus, plainly, the occurrence of a scheduled offence is the substratal condition for giving rise to any proceeds of crime and consequently, the application of Section 5(1) of the Act. A commission of a scheduled offence is the fundamental pre-condition for any proceeding under the Act as without a scheduled offence being committed, the question of proceeds of crime coming into existence does not arise. 22. In view of the above, the contention that the Act is completely independent of the principal crime (scheduled offence) giving rise to proceeds of crime is unmerited. It is necessary to bear in mind that the substratal subject of the Act is to prevent moneylaundering and confiscate the proceeds of crime. In that perspective, there is an inextricable link between the Act and the occurrence of a crime. It cannot be disputed that the offence of money-laundering is a separate offence under section 3 of the Act, which is punishable under Section 4 of the Act. However as sta....
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....ence of moneylaundering punishable under Section 4 of the Act. It is important to note that the punishment under Section 4 of the Act is not for commission of a scheduled offence but for laundering proceeds of a scheduled crime. The fact that the scheduled crime may have been committed prior to the Act coming into force would not render the Act a retrospective statute as only the offence of moneylaundering committed after the enforcement of the Act can be proceeded against under the Act. 34. In the circumstances, it cannot be readily accepted that any offence of moneylaundering had been committed after the Act coming into force. This Act cannot be read as to empower the authorities to initiate proceedings in respect of money-laundering offences done prior to 01.07.2005 or prior to the related crime being included as a scheduled offence under the Act." 37. In the case of Shri Ajay Kumar Gupta vs Adjudicating Authority (PMLA) [decided on 13.7.2017 in Crl.O.P.Nos.10497 and 10500 of 2017], wherein this Court, in paragraphs 6, 7, 9, 10, 11, 12, 13, 14, 15 and 16, held as under:- "6. In the light of the above submissions, now the point that arise for consideration in....
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....in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be or a similar report or complaint has been made or filed under the corresponding law of any other country: Provided further that, notwithstanding anything contained in [first proviso], any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material ....
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....e Amended Act of 2009. As per the amendment, even if the case instituted in respect of scheduled offence results in acquittal of the accused, a person could still be prosecuted under Section 3 and 4 of the Prevention of Money Laundering Act. In nut shell, this amendment has made the Prevention of Money Laundering Act an independent Act. Section 5 clearly stipulated that there is a requirement of law that before any attachment, reasons in writing to be recorded by the officer concerned. It is to be noted that in this case, admittedly the offence is related to the check period from 01.05.1997 to 30.06.2005 and even at that time, the Prevention of Money Laundering Act was not in force and came into force only on 1.7.2005 and the Section13 of the Prevention of Corruption Act was included in the schedule, in the year 2009. 10. In this regard it is useful to refer the judgment of the Division Bench of Karnataka High Court in the case of M/s Obulapuram Mining Company Pvt. Ltd., vs. Directorate of Enforcement in W.P.Nos.5962 of 2016, 11442 of 2016 and 11440-11441 of 2016 the Division Bench held as follows: 10. It can be seen from the records that all the offences allegedl....
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....eduled offence is the fundamental pre-condition for any proceeding under the Act as without a scheduled offence being committed, the question of proceeds of crime coming into existence does not arise. 22. In view of the above, the contention that the Act is completely independent of the principal crime (scheduled offence) giving rise to proceeds of crime is unmerited. It is necessary to bear in mind that the substratal subject of the Act is to prevent moneylaundering and confiscate the proceeds of crime. In that perspective, there is an inextricable link between the Act and the occurrence of a crime. It cannot be disputed that the offence of money-laundering is a separate offence unde Section 3 of the Act, which is punishable under Section 4 of the Act. However as stated earlier, the offence of money-laundering relates to the proceeds of crime, the genesis of which is a scheduled offence. In the aforesaid circumstances, before initiation of any proceeding under Section 5 of the Act, it would be necessary for the concerned authorities to identify the scheduled crime. The First Proviso to Section 5also indicates that no order of attachment shall be made unless in re....
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....oneylaundering committed after the enforcement of the Act can be proceeded against under the Act. 34. In the circumstances, it cannot be readily accepted that any offence of moneylaundering had been committed after the Act coming into force. This Act cannot be read as to empower the authorities to initiate proceedings in respect of money-laundering offences done prior to 01.07.2005 or prior to the related crime being included as a scheduled offence under the Act. 12. From the above judgments and also the fact that the offences allegedly committed by the first and second petitioners prior to 1.7.2005, the Prevention of Money Laundering Act was not in force. Even after 1.7.2005, the offences were not included in the scheduled offences till 1.6.2009. Since the charge sheet dated 13.1.2009, even on that date, Prevention of Corruption Act has not included in the scheduled list of offences. Therefore, this court is of the view that if retrospective effect is given to any statute of any penal nature, it will be directly in conflict with the fundamental rights of the citizen enshrined in Article 20(1) of the Constitution of India. Admittedly, 2nd respondent filed....
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.... 15. In view of the above, the Provisional Attachment Order No.09/2017 dated 7.4.2017 in ECIR/CEZO/08/2015 and the Original Complaint in O.C.No.855 of 2017 are quashed. The point is answered accordingly. 16. In the result, the petitions are ordered as prayed for. Connected M.Ps are closed." 38. In the case of Narbada Prasad vs. Chhaganlal [AIR 1969 SC 395], wherein the Hon'ble Supreme Court, in paragraph 5, held as under:- "5. ......................................There was no compliance with the provisions of Section 33(5) of the Representation of the People Act and there was no power in the court to dispense with this requirement. It is a wellunderstood rule of law that if a thing is to be done in a particular manner it must be done in that manner or not at all. Other modes of compliance are excluded.................." 39. In the case of Chief Information Commr. vs. State of Manipur [(2011) 15 SCC 1], wherein the Hon'ble Supreme Court, in paragraph 40, held as under:- "40. It is well known that when a procedure is laid down statutorily and there is no challenge to the said statutory procedure the Court should not, in the name of ....
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....150].)" 41. In the case of Oryx Fisheries (P) Ltd. vs. Union of India [(2010) 13 SCC 427], wherein the Hon'ble Supreme Court, in paragraphs 27, 28, 29, 30, 31, 32, 33, 34, 35 and 40, held as under:- "27. It is no doubt true that at the stage of show cause, the person proceeded against must be told the charges against him so that he can take his defence and prove his innocence. It is obvious that at that stage the authority issuing the charge-sheet, cannot, instead of telling him the charges, confront him with definite conclusions of his alleged guilt. If that is done, as has been done in this instant case, the entire proceeding initiated by the show-cause notice gets vitiated by unfairness and bias and the subsequent proceedings become an idle ceremony. 28. Justice is rooted in confidence and justice is the goal of a quasi-judicial proceeding also. If the functioning of a quasijudicial authority has to inspire confidence in the minds of those subjected to its jurisdiction, such authority must act with utmost fairness. Its fairness is obviously to be manifested by the language in which charges are couched and conveyed to the person proceeded against. ....
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....en mind as they are to act fairly in adjudging the guilt or otherwise of the person proceeded against and specially when he has the power to take a punitive step against the person after giving him a showcause notice. 33. The principle that justice must not only be done but it must eminently appear to be done as well is equally applicable to quasijudicial proceeding if such a proceeding has to inspire confidence in the mind of those who are subject to it. 34. A somewhat similar observation was made by this Court in Kumaon Mandal Vikas Nigam Ltd. v. Girja Shankar Pant [(2001) 1 SCC 182 : 2001 SCC (L&S) 189] . In that case, this Court was dealing with a showcause notice-cum-charge-sheet issued to an employee. While dealing with the same, this Court in para 25 (SCC p. 198 of the Report) by referring to the language in the showcause notice observed as follows: "25. Upon consideration of the language in the show-cause notice-cum-charge-sheet, it has been very strongly contended that it is clear that the officer concerned has a mindset even at the stage of framing of charges and we also do find some justification in such a submission since the chain is otherwis....
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.... (i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system. (j) Insistence on reason is a requirement for both judicial accountability and transparency. (k) If a judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or 'rubber-stamp reasons' is not to be equated with a valid decision-making process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the judges and decision-makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial C....
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....ind to impose the punishment of dismissal on the respondent herein. A postdecisional hearing given by the High Court was illusory in this case. 49. In K.I. Shephard v. Union of India [(1987) 4 SCC 431 : 1987 SCC (L&S) 438 : AIR 1988 SC 686] this Court held: (SCC p. 449, para 16) 'It is common experience that once a decision has been taken, there is a tendency to uphold it and a representation may not really yield any fruitful purpose.' "(See also Shekhar Ghosh v. Union of India [(2007) 1 SCC 331 : (2006) 11 Scale 363] and Rajesh Kumar v. D.C.I.T. [(2007) 2 SCC 181 : (2006) 11 Scale 409])." 43. In the case of Syed Mohideen v. Government of Tamil Nadu [(1985) 2 LLN 379 (FB)(Mad.)], wherein the Hon'ble Full Bench of this Court, in paragraph 23, held as under:- "23. While referring to the exception to the rule of stare decisis, it is observed in Precedent in English Law by Rupert Cross, 1961 Edn., page 130, as follows: "No doubt any Court would decline to follow a case decided by itself or any other Court (even one of superior jurisdiction), if the judgment erroneously assumed the existence or non-existence of a statute, and that assu....
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....ed counsel for the writ petitioners mainly contended that only by virtue of an amendment came into force with effect from 1.6.2009 (Act 21 of 2009), the case was registered against the writ petitioners. However, the entire alleged transactions are the basis for registration of a case by the respondents falls before the issuance of the amendment and therefore, the very registration of the case is non est in law. The alleged offences, if any, committed prior to the legislation cannot be taken as a ground for registering the case. The proceeds of crime contemplated under the Prevention of Money Laundering Act, 2002 is the vital factor and in the present case, the proceeds of crime does not fall under the Prevention of Money Laundering Act, 2002, when the alleged offences were committed by the writ petitioners. Thus, the very registration of a case under the Prevention of Money Laundering Act, 2002, is unsustainable. 46. In this context, the learned counsel for the writ petitioners urged this Court that the respondents have no jurisdiction and this apart, the Income Tax Appellate Tribunal adjudicated the issues connected with the present writ petitions and the writ petitioners we....
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....such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or Court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country: Provided further that, notwithstanding anything contained in clause (b), any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the nonattachment of the property is likely to frustrate any proceeding under this Act." 50. Section 5(5) of the Act, is extracted hereunder:- "(5) The Director or any other officer who....
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....es under sub-section (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of section 5 or retention of property or record seized or frozen under Section 17 or Section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property or record shall- (a) continue during the pendency of the proceedings relating to any offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and (b) become final after an order of confiscation is passed under sub-section (5) or sub-section (7) of Section 8 or Section 58-B or sub-section (2A) of section 60 by the Special Court." 52. With reference to Section 8, it is categorically stated that if the Adjudicating Authority has reason to believe that any person has committed an offence under Section 3 or is in possession of proceeds of crime. Thus, the possession of proceeds of crime, as on the date of registration of a case is made out, then the respondents ....
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....questioned at this stage in view of the fact that the writ petitioners are not having sufficient opportunity to establish their case before the Authorities Competent and that they are not having any such possession or use of such proceeds of crime. Under these circumstances, the writ petitions cannot be entertained. 56. Considering the facts and circumstances of the present writ petitions, this Court is of an opinion that the very maintainability of the writ petitions are to be adjudicated at the first instance. Undoubtedly, the Authorities Competent must be allowed to exercise their powers under the provisions of various Statutes, if they have a reason to believe that some alleged offences are committed by any person. This apart, the legal principles are now settled by the Constitutional Courts across the country as well as the Apex Court that the mixed question of facts and certain disputed factual circumstances can never be considered by the High Courts under Article 226 of the Constitution of India, during the initial stage when the enquiry and investigations are in progress. These principles are to be adopted even while admitting of such writ petitions for hearing. As th....
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....w of the fact that the provisions of the Prevention of Money Laundering Act, 2002 categorically enumerates that the proceeds of crime, including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. This apart, Section 8 also contemplates offence under Section 3 or is in possession of proceeds of crime. Thus, it is not as if the date of occurrence which is relevant. If the proceeds of crime is not the possession of the alleged offenders, then also the authorities under the Act, are empowered to register a case under the provisions of the Prevention of Money Laundering Act, 2002. 61. However, the facts regarding the possession of proceeds of crime or its use or concealment or acquisition, are to be decided only by adjudicating the facts and circumstances and by verifying the documents and other relevant records. Thus, the institution of the proceedings by the respondents under the provisions of the Prevention of Money Laundering Act, 2002, cannot be found fault with. The very arguments advanced on behalf of the petitioners deserve no merit consideration in view of the fact that the provi....
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....only by participating in the adjudication process to be conducted by the respondents under the provisions of the Prevention of Money Laundering Act, 2002. However, this Court cannot by comparing the findings of the order passed by the Income Tax Appellate Authority under the Income Tax Act and the initiation of proceedings under the Prevention of Money Laundering Act, 2002. 64. It is left open to the writ petitions to submit their respective statements before the respondents, explaining all such situations and the documents relied upon by them for the purpose of establishing their case. Contrarily, those material facts, which all are displayed and not verified by the competent Investigating Authorities, can never be considered by this Court for the purpose of quashing the entire proceedings instituted under the Prevention of Money Laundering Act, 2002. 65. The procedures contemplated under the Prevention of Money Laundering Act, 2002, is that the authorities must have reason to believe for initiationof proceedings. Thereafter, various procedures are contemplated providing opportunity to the alleged offenders to submit their statements, documents etc., before the Competent Aut....
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....arcated in the Constitution of India is also to be considered, while exercising the powers of judicial review in the matter of dispensing with the appeal remedy provided for an aggrieved person under a statute. If the High Courts started interfering with such Appellate powers without any valid and substantiated reasons, then the very purpose and object of the statute and provision of appeal under the statute became an empty formality and the High Courts also should see that the provisions of appeal contemplated under the statutes are implemented in its real spirit and in accordance with the procedures contemplated under the rules constituted thereon. While entertaining a writ petition as narrated by the Apex Court, the provision of efficacious alternative remedy under the statute also to be considered. If the writ petitions are entertained in a routine manner, by not allowing the competent Appellate authority to exercise their powers under the provisions of the statute, then this Court is of an opinion that the power of judicial review has not exercised in a proper manner. Thus, it is necessary for this Court to elaborate the legal principle settled in respect of the separation of ....
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....) Even without express provision of the separation of powers,the doctrine of separation of powers is an entrenched principle in the Constitution of India. The doctrine of separation of powers informs the Indian constitutional structure and it is an essential constituent of rule of law. In other words, the doctrine of separation of power though not expressly engrafted in the Constitution, its sweep, operation and visibility are apparent from the scheme of Indian Constitution. Constitution has made demarcation, without drawing formal lines between the three organslegislature, executive and judiciary. In that sense, even in the absence of express provision for separation of power, the separation of power between legislature, executive and judiciary is not different from the constitutions of the countries which contain express provision for separation of powers. (ii) Independence of courts from the executive and legislature is fundamental to the rule of law and one of the basic tenets of Indian Constitution. Separation of judicial power is a significant constitutional principle under the Constitution of India. (iii) Separation of powers betw....
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....onal Courts cannot make an appeal provision as an empty formality. Every Appellate Authority created under the statute to be trusted in normal circumstances unless there is a specific allegation, which is substantiated in a writ proceedings. Thus, the institutional functions and exhausting the appeal remedies by the aggrieved persons, are to be enforced in all circumstances and writ proceedings can be entertained only on exceptional circumstances. Rule is to prefer an appeal and entertaining a writ is only an exception. This being the legal principles to be followed, this Court cannot entertain the writ petitions in a routine manner by waiving the remedy of appeal provided under the statute. 21.Now, let us look into the legal principles settled by the Apex Court for exhausting the efficacious alternative remedy provided under the statute. 22.When an effective alternative remedy is available, a writ petition cannot be maintained 1. In City and Industrial Development Corporation v. DosuAardeshirBhiwandiwala and Ors. MANU/SC/8250/2008 : (2009) 1 SCC 168, this Court had observed that: The Court while exercising its jurisdiction under Article 226 is d....
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....ut of loans granted by financial institutions, the remedy of appeal by the aggrieved under Section 17 before the Debt Recovery Tribunal, followed by a right to appeal before the Appellate Tribunal under Section 18. The High Court ought not to have entertained the writ petition in view of the adequate alternate statutory remedies available to the Respondent. The interim order was passed on the very first date, without an opportunity to the Appellant to file a reply. Reliance was placed on United Bank of India vs. Satyawati Tandon and others, 2010 (8) SCC 110, and General Manager, Sri Siddeshwara Cooperative Bank Limited and another vs. Ikbal and others, 2013 (10) SCC 83. The writ petition ought to have been dismissed at the threshold on the ground of maintainability. The Division Bench erred in declining to interfere with the same. The Supreme Court agreed to the arguments and held the same also noted that the writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to not....
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....724. There are two well recognized exceptions to the doctrine of exhaustion of statutory remedies. First is when the proceedings are taken before the forum under a provision of law which is ultra vires, it is open to a party aggrieved thereby to move the High Court for quashing the proceedings on the ground that they are incompetent without a party being obliged to wait until those proceedings run their full course. Secondly, the doctrine has no application when the impugned order has been made in violation of the principles of natural justice. We may add that where the proceedings itself are an abuse of process of law the High Court in an appropriate case can entertain a writ petition." 67. In view of the fact that the compex facts and circumstances raised in these writ petitions, cannot be adjudicated by this Court at this stage, since the writ petitioners have challenged the very show cause notice and the attachment order passed. The writ petitioners are bound to submit their statements, documents to the respondents to establish their innocence at the first instance, so as to avoid further proceedings under the provisions of the Prevention of Money Laundering Act, 20....