TaxTMI 
TaxTMI 
2023 (10) TMI 67
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....nder the Act itself, is the question to be decided in this intra court appeal filed under Section 5 of the Kerala High Court Act, 1958. 2. The brief facts emerging from the records are that, against petitioner No. 1, who is one among the two partners of a partnership firm viz., M/s. M.J. Associates, Palakkad, the 2nd petitioner, a private limited company of which petitioner No. 1 is the Managing Director, and other different entities, a charge sheet was filed by the Central Bureau of Investigation under Sections 120(b) and 420 of the Indian Penal Code, 1860, Sections 4(d), 4(f), 9 r/w. 7(3) of the Lotteries (Regulation) Act, 1998, and Rules 3(5) and 4(5) of the Lottery (Regulation) Rules, 2010, on 03.02.2014, in the Court of Chief Judicial Magistrate, Ernakulam, alleging 7 types of illegal transactions carried out in connivance with each other. 3. The Department of Enforcement, Cochin Zone, received information from the Superintendent of Police, Central Bureau of Investigation, Cochin, about certain transactions recorded in the charge sheet filed during February, 2014. Having examined the materials placed before the Directorate of Enforcement, the officer found a prima facie ....
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....Value of Attachment (in Rs.) 1 2/2016 dated 31.03.2016 122,04,03,525/- 2 2/2017 dated 09.03.2017 16,52,04,750/- 3 2/2019 dated 22.07.2019 119,59,54,679/- 4 07/2021 dated 22.12.2021 19,59,08,000/- 5 06/2022 dated 01.07.2022 173,47,74,565/- 6 03/2023 dated 09.06.2023 459,07,42,047/- Total 910,29,87,556/- 9. The total value of the attached properties upto 1.7.2022 comes to Rs. 451,22,45,519/-. The properties referred herein- above at Serial Nos. 1, 3, 4 and 5 worth Rs. 434,70,40,769/- belonged to the 1st appellant, whereas the property to the tune of Rs. 16,52,04,750/-, referred at Serial No. 2, belonged to his partner Sri. N. Jayamurugan. 10. Meanwhile, a supplementary charge sheet was filed in S.C. No. 533/2018. By order dated 12.05.2023, the ED authorities, exercising its power under Section 17 of the PMLA Act, froze certain bank accounts, mutual funds, fixed deposits, etc., amounting to Rs. 1,57,68,57,503/-. 11. After recording several further statements, the respondent/ED authorities again passed provisional attachment order No. 3 of 2023 on 09.06.2023, attaching the properties of the 1st appellant only to the t....
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....sional attachment order dated 09.06.2023 and the order of seizure passed under Section 17(1A) of the PMLA Act. Therefore, the only remedy available to an aggrieved person questioning the legality of the two orders above would be to request the High Court to exercise its powers under Article 226 of the Constitution of India and to issue a writ of mandamus or any appropriate writ, seeking to quash the said orders. Hence, the learned Single Judge ought not to have dismissed the writ petition on that ground. 16. In support of his submissions, learned Senior Advocate appearing for the appellants has relied upon the decision of the Hon'ble Supreme Court in Godrej Sara Lee Ltd. v. Excise & Taxation Officer [Judgment in Civil Appeal No. 5393 of 2010 dated 01.02.2023], wherein it has been held that even if there is an alternative remedy, if the Court finds that the petitioner is seeking enforcement of any of his fundamental rights; where there is violation of principles of natural justice; where the order or the proceedings are without jurisdiction; or where the vires of an Act is challenged, the court can exercise its writ jurisdiction and deal with such cases. He would submit that in t....
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....the tune of Rs. 464.25 Crores (51% of his share in the total proceeds of crime to the tune of Rs. 910,29,87,556/-), whereas, in the provisional attachment order dated 9.6.2023, another property of the 1st appellant to the tune of Rs. 459,07,42,047/- has been attached, which is beyond the scope of the "proceeds of crime". 20. By taking us through the order dated 9.6.2023, the learned Senior Advocate would also submit that the authority has not referred to any additional material to establish that the proceeds of crime received by the 1st appellant are more than Rs. 464.25 Crores, and therefore, the case is required to be dealt with as if the authority has acted in excess of its jurisdiction. 21. By relying upon a decision of the Hon'ble Supreme Court in Vijay Madanlal Choudhary and Others v. Union of India and Others [Judgment in S.L.P(C) Nos. 28394 of 2011 and connected cases dated 27.07.2022], learned Senior Advocate appearing for the appellants would submit that the authority cannot come to the conclusion that all the properties belonging to the 1st appellant are the proceeds of crime, particularly when the authority itself has held that the proceeds of crime derived by the....
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.... the other hand, learned Additional Solicitor General of India Sri. L. Sundareshan ably assisted by Sri. Jaishankar V. Nair, learned counsel appearing for the respondent/Director of Enforcement, would vehemently oppose the appeal. He has supported the orders passed by the Enforcement Directorate authority and the judgment impugned in this appeal. 27. The learned ASGI would submit that, during the pendency of the writ petition in which the provisional attachment orders and other orders of freezing the account came to be challenged, the respondent authorities had already made a complaint to the adjudicating authority under Section 5(5) of the PMLA Act. He would submit that the adjudicating authority, established under Section 6 of the PMLA Act, which is an independent authority consisting of judicial members, can adjudicate all the issues raised in the subject writ petition and argued in this appeal. 28. He would further submit that the adjudicating authority has all the powers to deal with a complaint submitted before it under Section 5(5) of the PMLA Act. If the adjudicating authority refuses to accept the complaint or adjudicate accordingly, it may lead to the filing of a cr....
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....tertain a writ petition when efficacious alternative remedy is available to the aggrieved party. He would also submit that this is a case where the learned Single Judge did not find any reason to exercise its discretionary power under Article 226 of the Constitution of India, as the issue is being scrutinised in detail by the competent authority established under Section 6 of the PMLA Act. 32. Placing reliance on another decision of the Hon'ble Apex Court in Special Director and Another. v. Mohd. Gulam Ghouse and Another reported in (2004) 3 SCC 440, learned ASGI would submit that when alternative efficacious remedy is available to the appellants, ordinarily, the High Court would not entertain such writ petitions. 33. The learned ASGI has taken us through the provisional attachment order dated 9.6.2023, which is impugned in the subject writ petition to submit that several statements have been recorded and the authority had found sufficient reason to seize the properties of the appellants mentioned therein, which does not call for any scrutiny under Article 226 of the Constitution. 34. He would further submit that, as regards the submission made by the learned Senior Advoca....
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....as 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 [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 in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act. PROVIDED ALSO that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this section is stayed by the High Court, shall be excluded and a further period not exceeding thirty days from the date of order of vacation of such stay order shall be co....
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.... if it is satisfied that there was sufficient cause for not filing it within that period. (4) On receipt of an appeal under sub-section (1) or sub-section (2), the Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against. (5) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the concerned Adjudicating Authority or the Director, as the case may be. (6) The appeal filed before the Appellate Tribunal under sub-section (1) or sub-section (2) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of filing of the appeal." 38. It is true that there is no provision for challenging an order of provisional attachment, passed under Section 5(1) of the PMLA Act. In the absence of any statutory appeal being provided to challenge a provisional attachment order, a petition under Article 226 of the Constitution of India may be maintainable on its own merits, and the Court ma....
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....rperson or a Member that the case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the case or matter may be transferred by the Chairperson or, as the case may be, referred to him for transfer, to such Bench as the Chairperson may deem fit. (8) The Chairperson and every Member shall hold office as such for a term of five years from the date on which he enters upon his office: PROVIDED that no Chairperson or other Member shall hold office as such after he has attained the age of [sixty-five] years. (9) The salary and allowances payable to and the other terms and conditions of service of the Member shall be such as may be prescribed: PROVIDED that neither the salary and allowances nor the other terms and conditions of service of the Member shall be varied to his disadvantage after appointment. (10) If, for reasons other than temporary absence, any vacancy occurs in the office of the Chairperson or any other Member, then, the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Adjudicatin....
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....the same reads as under: "8. Adjudication (1) On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub-section (10) of section 18, 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, it may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, or, seized [or frozen] under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: PROVIDED that where a notice under this sub- section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided further that where such property is held jointly by mor....
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....(1A) of section 17, in such manner as may be prescribed: PROVIDED that if it is not practicable to take possession of a property frozen under sub-section (1A) of section 17, the order of confiscation shall have the same effect as if the property had been taken possession of.] [(5) Where on conclusion of 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. (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. (7) Where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a proclaimed offender or for any other reason or having commenced but could not be concluded, the Special Court shall, on an application moved by the Director or....