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2025 (7) TMI 932

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....ailed to exhaust the statutory remedies available under the Prevention of Money Laundering Act, 2002 (hereinafter referred to as "the Act"). However, liberty was reserved to the appellants/petitioners to challenge the impugned orders before the appropriate statutory authorities, and such authorities were directed to consider the objections and claims raised by the petitioners, untrammelled by the observations made in the impugned judgment. Being aggrieved these appeals have been preferred. 2. The case of the appellants as projected in the Writ Petition are as under: 2.1. The Union Territory of Lakshadweep Administration (UTLA), headed by its Administrator, is entrusted with the procurement and construction of water vessels for the use of the UTLA. Landing barges are essential for the transportation of passengers and cargo between the Lakshadweep Islands and the mainland. 2.2. In 2006, the Ministry of Shipping, Government of India, accorded sanction to the UTLA for the acquisition of two landing barges through an open tender process. Pursuant thereto, the Shipping Corporation of India floated Tender No. T&S/NB/UTLA/2000PAS/LB/2006 dated 04.04.2006, on behalf of UTLA, inviting bid....

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....on under the Act. Upon completion of the investigation, the CBI filed the final report. 2.11. The final report was challenged before this Court by filing Crl. M.C. No.3306 of 2017, and by order dated 19.05.2017, the proceedings were stayed. The petition is still pending. 2.12. The investigation under the Act is alleged to have revealed that the accused, by the commission of scheduled and related offences, had derived proceeds of crime in the form of immovable properties (lands, houses, etc.) and movable properties (barges, bank balances, securities, deposits, etc.). 2.13. While so, on 03.04.2024, the Assistant Director, Director of Enforcement, issued notices exercising powers under Section 54 of the Act to the Nodal Officers of the Axis Bank, Union Bank, Andhra Bank (Union Bank), Bank of Baroda, Standard Chartered Bank, State Bank of India, the Surat Peoples Cooperative Bank Ltd, and HSBC and calling for information and statements of all accounts relating to individuals for the purpose of investigation in the case of VSPL and more importantly, the above Banks were directed not to allow any debit transactions from the said account without prior intimation in writing of the Assis....

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....n by an independent Adjudicating Authority. Under Section 5(2), the officer issuing the provisional attachment order is mandated to forward a copy of the same to the Adjudicating Authority in a sealed envelope. Sub-section (5) of Section 5 requires that a complaint be filed by the said officer before the Adjudicating Authority within 30 days of the order. The said exercise has in fact been carried out in the instant case. As per Section 8(1) of the Act, upon receipt of the complaint, 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 issue a show cause notice to such person. The notice shall call upon the noticee to disclose the sources of his income, earnings, or assets through which the property under provisional attachment was acquired, and to produce supporting evidence, relevant particulars, and information, demonstrating why such property should not be declared as involved in money laundering and consequently confiscated by the Central Government. Section 8(2) further mandates the Adjudicating Authority to consider the reply submitted by the noticee, provide an opportuni....

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....nd even then, only for compelling reasons. If any precedents are required, one only needs to refer to the judgment of the Apex Court in Special Director and Another v. Mohmmad Ghulam Ghouse [(2004) 3 SCC 440], wherein despite the existence of alternate remedies under Foreign Exchange Regulation Act (FERA), 1973 and Foreign Exchange Management Act (FEMA), 1999, it was observed by the Apex Court as under: "This Court in a large number of cases has deprecated the practice of the High Courts entertaining writ petitions questioning legality of the show-cause notices stalling enquiries as proposed and retarding investigative process to find actual facts with the participation and in the presence of the parties. Unless the High Court is satisfied that the show-cause notice was totally non est in the eye of the law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine, and the writ petitioner should invariably be directed to respond to the show-cause notice and take all stands highlighted in the writ petition. Whether the show-cause notice was founded on any legal premises....

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....has issued a notice dated 03.04.2024 (for instance Ext.P11 in W.P.(Crl) No.1310 of 2024) to various banks, the relevant portion of which reads as under: "This office is conducting an investigation in the case M/s. Vipul Shipyard Pvt. Ltd., in file No. ECIR/KCZO/04/2021. In this connection, it is requested that the following documents may be furnished to this office by return of mail today i.e., 30.042024. Hard copy of the same should reach this office within 2 (two) days from the date of receipt of this letter certifying u/s. 2A of Bankers Book Evidence Act, 1981. Bank Account Statements of all accounts maintained (including closed) by the following persons/entities starting from opening of accounts to till date in MS Excel only in the proforma attached alongwith closing balance as of today 03.04.2024. You are further directed that any debit transaction from the said account should not be allowed without prior intimation in writing of the undersigned." (emphasis supplied by us) Practically, by issuing the above notice, the banks are interdicted from permitting the appellants from operating the accounts without prior intimation to the department. 13. It needs to be noted at this....