AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (7) TMI 866
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....ss woman, dentist with strong roots in society and belongs to a respectable family hailing from Perumbavoor, Kerala, had got married to Mr. Sukash Channdersekhar on 18.07.2014. After marriage, they both lived together in Bangalore and Chennai. 3. In August 2021, the Special Cell of the Delhi Police had registered an FIR against unknown individuals for orchestrating a criminal conspiracy. The conspirators, pretending to be high-ranking government officials, had extorted approximately Rs. 200 crores from a complainant, Mrs. Aditi Singh. The ordeal began when Mrs. Singh had received a call from a man, claiming to be the Law Secretary of India, who had offered to assist her in her legal battles including obtaining bail for her husband. He had directed her to communicate with his junior officer, Abhinav, via Telegram. Abhinav had convinced her that she was under surveillance and had pressured her to contribute Rs. 20 crores to a party fund, which she had managed to arrange through various means. Later, the man had demanded an additional Rs. 130 crores, and had extended threats to her. Succumbing to the pressure, Mrs. Singh had ended up paying around Rs. 200 crores. Investigations later....
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....nnai, and thus, the said premises was also searched, leading to recovery of one more luxury vehicle. Investigation further revealed that one other luxury car, owned by Mrs. Leena Paulose through her proprietary concern namely M/s Super Car Artistry had been given to M/s Lanson Toyota in Chennai for repairing, which was then seized after conducting a search at the premises of M/s Lanson Toyota. It was also revealed that one associate of Mr. Sukash Chandrasekhar i.e. Mr. Arun Muthu had also purchased some high-end cars, which had been funded by Mr. Sukash. Therefore, a search had also been conducted at the residence of Mr. Arun Muthu, which led to seizure of four vehicles. It was also revealed that some vehicles of Mr. Sukash Chandrasekhar/Mrs. Leena Paulose were kept at the business premises of one Mr. Karthik, located in Chennai. Pursuant to search conducted at this premises, four more cars were recovered and seized by the Directorate of Enforcement. 8. The investigation further revealed that Mr. Sukash had purchased these cars either in the name of some firms of his wife or third parties, and had made cash payments through his associates Mr. B. Mohanraj, Mr. Arun Muthu, etc. and ....
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....e said vehicles as per details given in Table B and therefore, the above said 26 vehicles are now liable to be taken into possession by the ED. Order of the adjudicating authority is annexed with the application. Same has not been challenged by A-2 from whose possession the vehicles have been attached. Therefore, the possession of above said vehicles are ordered to be given to ED for disposal in accordance with law and the Rules of 2013. Application is accordingly disposed off." 13. Thereafter, an application was moved by the State praying that the Directorate of Enforcement be directed to not dispose of the said vehicles without prior intimation to the Delhi Police/ Economic Offences Wing. The petitioner herein i.e. Mrs. Leena Paulose had also filed her objections to the prayer of Directorate of Enforcement, for sale of vehicles in question. 14. After considering the submissions made on behalf of all the parties, the learned Additional Sessions Judge vide order dated 14.02.2023 held that the Directorate of Enforcement was at liberty to proceed ahead to dispose off the 26 vehicles as per Rule 4 of Prevention of Money Laundering (Taking Possession of Attached or Frozen Propertie....
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....red to cooperate with each other and in this regard before disposing off those vehicles, an inventory of engine number, registration number etc. would be prepared by ED along with photographs of those vehicles for the purpose of record/proof of those vehicles during the course of trial in ED as well as State matter. ED is also directed to file the report regarding disposal of those 234 vehicles in its ED matter as well as in the present matter. Representative of EOW can also participate in the process of auction of those vehicles so that they can also record the proceedings for the purpose of record of this case. With these directions application of State disposed off." 15. The above-mentioned orders dated 20.12.2022 and 14.02.2023, and the action of respondent i.e. Directorate of Enforcement of selling the 26 vehicles seized in the present case, has been challenged by the petitioner by way of present petition. SUBMISSIONS BEFORE THIS COURT Submissions on behalf of Petitioner 16. Learned counsel, appearing on behalf of petitioner Mrs. Leena Paulose, argues that the petitioner is suffering from depression with memory loss, after prolonged isolated life in jail for more than 16....
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....is stated that after the arrest of the petitioner and questioning of her near and dear ones, the professional associates such as Chartered Accountants etc. had started distancing themselves from the petitioner. The petitioner was not allowed professional meetings with her staff and associates and, therefore, she is unable to cross check the business transactions of the firm for the purpose of answering the queries of the Directorate of Enforcement. It is stated that the petitioner has been implicated in the present case only for the reason of being wife of accused no. 1 i.e. Mr. Sukash Chandrasekhar and that she was having an independent business in the name of M/s Super Car Artistry for buying and selling cars. It is also argued that most of the cars are taken on legally valid Loan Agreements and the petitioner was paying the EMI for the same without fail. 20. It is also argued that any action of the respondent, of selling the cars, will go to the root of the Articles 14, 19 and 21 of the Constitution of India as the chances of a dignified life to the petitioner will be denied to her and ignoring the fact that 26 cars are essential for her business activities. It is also argued t....
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....f Enforcement for disposal in accordance with law and the Rules of 2013, vide order dated 20.12.2022. 25. It is submitted that pursuant thereto, another application was moved by the State (EOW) with the prayer for giving directions to Directorate of Enforcement, not to dispose off the vehicles seized during investigation, without prior intimation to Delhi Police/EOW. Further, a reply to the was also filed on behalf of the present petitioner objecting to sale/disposal of 26 vehicles. The Directorate of Enforcement in its reply had submitted that the amount received from the disposal of the vehicles will be kept available for transfer to the actual claimant. It is argued that after having considered the submissions on behalf of all the parties, learned Additional Sessions Judge in continuation of its earlier order dated 20.12.2022, directed vide order dated 14.02.2023 that the Directorate of Enforcement was at liberty to proceed ahead to dispose of the 26 vehicles as per Rule 4 of Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by Adjudicatory Authority), Rules 2013. It was also ordered that the representative of EOW can participate in th....
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....e Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, on the basis of information in his possession, has reason to believe (the reason for such belief to be recorded in writing) that any person- (i) has committed any act which constitutes money-laundering, or (ii) is in possession of any proceeds of crime involved in money laundering, or (iii) is in possession of any records relating to money laundering, or (iv) is in possession of any property related to crime, then, subject to the rules made in this behalf, he may authorise any officer subordinate to him to - (a) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such records or proceeds of crime are kept; (b) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not available; (c) seize any record or property found as a result of such search; (d) place marks of identification on such record or property, if required or make or cause to be made extracts or copies therefrom; (e) make a note or ....
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....ng whether all or any of the properties referred to in the notice issued under subsection (1) are involved in money-laundering: Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering. (3) Where the Adjudicating Authority decides 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 subsection (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 investigation for a period not exceeding three hundred and sixty-five days or the pendency of the proceedings relating to any 3 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....
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....ating Authority, as the case may be, and deposit the sale proceeds in the nearest Government Treasury or branch of the State Bank of India or its subsidiaries or in any nationalised bank in fixed deposit and retain the receipt thereof: Provided that where the owner of the property furnishes the fixed deposit receipt of a nationalised bank equivalent to the value of property in the name of Director of Enforcement, the authorised officer may accept and retain such fixed deposit receipt as security and send a report to the Special Court or Adjudicating Authority, as the case may be, for information and appropriate action: Provided further that where the movable property is a mode of conveyance of any description, the authorised officer, after obtaining its valuation report from the Motor Licensing Authority or any other authority, as the case may be, may accept and retain the fixed deposit receipt of a nationalised bank equivalent to the value of the movable property as security in the name of Director of Enforcement and send a report to the Special Court or Adjudicating Authority, as the case may be, for information and appropriate action. (3) Where the attached property confir....
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....rozen under Section 17 of PMLA, in such manner as may be prescribed. (iii) Rule 4 of Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by Adjudicatory Authority), Rules 2013 provides that where the attached property confirmed by the Adjudicating Authority, is liable to speedy and natural decay or the expense of maintenance is likely to exceed its value, the authorized officer shall sell such property with the leave of the concerned Special Court or Adjudicating Authority, as the case may be, and deposit the sale proceeds in the nearest Government Treasury or branch of the State Bank of India or its subsidiaries or in any nationalised bank in fixed deposit and retain the receipt thereof. Whether the proceedings carried out in this case by the Directorate of Enforcement are as per law? 35. Having gone through the records of the case, this Court is of the opinion that in the present case, in order to collect the records relating to the money laundering and to trace proceeds of crime involved in money laundering, the Directorate of Enforcement had carried out search under Section 17 of PMLA at several locations and premises. In this proces....
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....usal of the record leads to only one conclusion that the procedure followed by the respondent was in accordance with the provisions of PMLA and the Rules of 2013. Even the petitioner, neither through the contents of the petition nor during the course of arguments, has been able to point out any infirmity in the above-mentioned process followed by the respondent. Further, the validity of the relevant rule(s) of Rules of 2013, as referred hereinabove, has also not been assailed before this Court by the petitioner herein. Whether Vehicles are subject to natural decay? 41. Rule 4 of Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by Adjudicatory Authority), Rules 2013 provides the manner of taking possession of movable properties is concerned, which clearly outlines as follows: (i) Where the property in question is a movable property, the authorized officer shall take physical possession of such property and deposit it in a warehouse or a storage place [Rule 4(1)]. (ii) Where the property in question is liable to speedy and natural decay or the expense of maintenance is likely to exceed its value, such property shall be sold of with th....
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....s of the Coordinate Bench in case of Manjit Singh v. State 2014 DHC 4541 wherein it was observed, though in context of release of vehicles on superdari, that vehicles which deteriorate with time must be disposed of speedily. The relevant observations are extracted hereunder: "20. In case of perishable properties or those subject to speedy and natural decay, disposal should be ordered keeping in view the expected life of the property rather than the conclusion of investigation/trial. Certain items like vehicles, which also deteriorate with time, speedy disposal shall similarly be ensured to effectively implement the mandate of the Supreme Court in Sunderbhai Ambalal Desai v. State of Gujarat (supra 1) that articles are not to be kept for a period of more than one month. As regards valuable articles and currency notes, mandate of the Supreme Court as prescribed in above mentioned judgments should be strictly ensured." (Emphasis supplied) 46. Therefore, the relevant rules of PMLA which allow the sale of seized vehicles and depositing the proceeds of the same into a fixed deposit addresses the above-mentioned issues. For the accused, if the trial concludes in his favor after sever....
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....ing (Taking Possession of Attached or Frozen Properties Confirmed by Adjudicatory Authority), Rules 2013, which have been framed by the Central Government in exercise of power under Section 73 of PMLA. This procedure has been explained in detail in the preceding paragraphs. 51. Therefore, there is no merit in the argument that the sale of seized vehicles in this case is against the mandate of Section 8(6) of PMLA. Needless to say, as per Section 8(6), if the accused persons in this case are found not guilty of offence of money laundering, they would be entitled to receive the amount generated from selling the movable property i.e. cars in the present case, which the Directorate of Enforcement is obliged to keep deposited in the nearest Government Treasury or branch of the State Bank of India or its subsidiaries or in any nationalised bank in fixed deposit. Conclusion 52. This Court has also considered the arguments presented on behalf of Mrs. Leena Paulose, who claims to be a model, actor, dentist, and successful businesswoman. She has also claimed her involvement in various business activities, including M/s Super Car Artistry. However, her statements contain contradictions and....
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....ry loss due to prolonged incarceration and she does not remember any details of the cars in question except 5 cars, and in the other, she states that most of the cars were taken on loans, based on legally valid loan agreements and she was paying the EMIs for the same without fail and the said cars are essential for continuing with her business activities. 56. The petitioner also states that these 26 cars are essential for continuing with her business activities, but at the same time, she mentions in the petition that she does not even remember the complete facts about her business M/s Super Car Artistry. Likewise, she further states that she is emotionally connected with some of these cars and once sold, no amount of money can get it back. However, at the same time, it is important to note that at-least 8 cars were not even recovered from the residential or business premises of the petitioner Mrs. Leena Paulose, but from the premises of Mr. Arun Muthu and Mr. Karthik. Strangely, the petitioner does not even remember the make and registration number of the cars in question, nor does she know where the registration papers and other relevant documents of the cars in question were, wh....