TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 201
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....ecial Counsel (ED) along with Mr. Manish Jain, Special Counsel (ED), Mr. Vivek Gurnani, Panel Counsel (ED), Mr. Azeez Mushtaque and Mr. Pranjal Tripathi, Advocates for ED in W.P.(C) 895/2025, W.P.(C) 1260/2025 and W.P.(C) 1791/2025. JUDGMENT 1. The present petitions have been filed by the petitioners, inter alia, challenging the Provisional Attachment Orders issued under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA), bearing nos. PAO No. 06/2024 dated 06.08.2024, PAO No. 11/2024 dated 17.10.2024, and PAO No. 02/2025 dated 15.01.2025, which are the subject matter of W.P.(C) 895/2025, W.P.(C) 1260/2025, and W.P.(C) 1791/2025, respectively. 2. In W.P.(C) 895/2025 and W.P.(C) 1260/2025, the petitioner is M/s Krrish Realtech Pvt. Ltd., while in W.P.(C) 1791/2025, the petitioner is Mr. Amit Katyal (owns Krrish group companies, as mentioned in the petition). 3. The case of the petitioner is that it had initially approached the Supreme Court by filing Special Leave Petition (Civil) No. 6013 of 2022, assailing the order dated 11.03.2022 passed by the High Court of Punjab and Haryana in CWP No. 2926 of 2022, wherein no stay was granted in favour of the petition....
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....dential plots measuring 206727sq.yds. along with 7951sq.yds. of EWS plots was agreed to be in favour of BOL, called as 'Brahma Allocation', whereas allocation of 206346sq. yd. residential plots along with 7947 sq.yds. EWS plots were made in favour of Krrish, called as 'Krrish Allocation'. It was also agreed to distribute the commercial portion as well as institutional development in the ratio of 74 (BOL):26 (Krrish). Further, it was also provided that both the shareholders shall be free to dispose off licenced land from its allocation except an area measuring 30000sq. yds. from each part, which shall be kept as escrow account for payment of statuary charges and other payments 5. The area of the licence was revised in the year 2015 and revised schedule for the area measuring 141.66875acres was issued vide memo 2.12.2015 along with provisional revised layout-cum-demarcation plan for this much area, which was finalised later on vide orders dated 02.11.2016 after considering objections received from the existing allotlees/general public. (One of the objectors M/s MVN infrastructure Pvt. Ltd approached the Hon'ble High Court in CWP No. 16157 of 2014 and it was undertaken in the....
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....ng the disputes between the shareholder companies, therefore Department is also bound to consider the same for resolving various issues. 9. As per the settlement agreement, the layout plan of the colony indicating allocation for residential plots of both the companies in different colours is enclosed as Annexure 'B. Since, the BOL is main leading company, responsible to fulfil all terms & conditions of the licence and also complied with the same in letter and spirit till date, therefore, prima facie, it appears no lapse on their part rather all the complaints have been received against Krrish or KRPL, who is neither a shareholder nor a developer in the present case. Hence, after taking into account the bifurcation of licenced land for the purpose of sale as per settlement agreement dated 06.08.2012, it is hereby directed: "i. That no third-party rights on the licensed land allocated to Krrish shall be created. Further, no part of commercial and community sites situated in the licensed colony shall also be not alienated or transferred in favor of any third party till further orders. ii. That District Town Planner (Enf.) Gurugram shall take necessary action....
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.... B and List C, regarding which there is no dispute. iii. Consider appointment of a Committee in terms of Para 18 above to hear individual or multiple parties including those mentioned in Lists D and List E and also any other party claiming entitlement to allotment of a plot. iv. Directions be made to M/s Krrish Realtech Pvt. Ltd. and M/s Brahma City Pvt. Ltd. to produce all records before the Committee appointed as at Sr. No. (iii) above; v. Permit Krrish and Brahma Home Buyers' Association to assist the Committee as at Sr. No. (iii) above; vi. Permit the Committee as at Sr. No. (iii) above to appoint and take appropriate legal assistance; vii. Any other/further order(s)/ direction(s) as may be deemed fit and proper may also be passed. Justice Gita Mittal (Retd.) Special Referee Date: 24.11.2022 11. Thereafter, the Supreme Court, vide order dated 11.01.2023, remanded the matter back to the High Court of Punjab and Haryana with a direction for expeditious hearing. In the same order, the Apex Court reaffirmed its earlier direction of maintaining status quo with respect to the possession of the plots. The relev....
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....ttaching the petitioner's properties is in direct contravention of the binding orders of the Supreme Court dated 19.05.2022 and 11.01.2023, which directed status quo regarding the possession of the plots. 17. It is also submitted that the impugned attachments violate the fundamental rights of the home-buyers, guaranteed under Article 300A, i.e., no person shall be deprived of his property save by authority of law. Further, it is pointed that the respondent has suppressed the existence of the Supreme Court's orders concerning the status quo and the application of the doctrine of lis pendens. 18. It is submitted that the existence of an alternate remedy does not bar the writ jurisdiction of this Court in cases involving infringement of fundamental rights. Reliance has been places on Prakash Industries Ltd. v. Directorate of Enforcement, 2022 SCC OnLine Del 2087. 19. Further it is submitted that under Section 5(1) of the PMLA, it is the duty of the Director to pass the order "on the basis of material in his possession". However, it is averred that in the impugned PAOs, there is gross concealment regarding the status of the scheduled offence. 20. It is emphasised that the i....
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....nd allegedly diverting the same is factually baseless and legally untenable. The alleged transactions merely relate to contractual obligations arising out of builder-buyer agreements and cannot, by any stretch, constitute proceeds of crime within the meaning of Section 2(1)(u) of the PMLA. Furthermore, the respondent has attached not only the entire lands which are licensed (plots) and sold but also the sale proceeds, fixed deposits, jewellery, cars etc. and private properties of the family members and other sister companies. 27. It is also the case of the petitioner that the Adjudicating Authority under the PMLA is required, by virtue of Section 6 of the PMLA, to comprise three members including the Chairperson. In the present case, however, the Confirmation Order dated 29.01.2025 has been passed by a single Financial Member, rendering the proceedings coram non judice and void ab initio. 28. It is submitted that the petitioner had raised this specific contention before the Adjudicating Authority, pointing out that the composition of the Authority was legally defective. However, the Authority dismissed this objection by relying on the judgment in J. Sekar v. Union of India, 2....
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.... any basis, arbitrary, and illegal, having been issued in complete absence of a valid predicate offence. 36. It is urged that since the ECIR is not founded on FIR No. 30/2019, the Enforcement Directorate lacked jurisdiction to issue the impugned Provisional Attachment Orders dated 06.08.2024, 17.10.2024, and 15.01.2025. Accordingly, the present writ petitions deserve to be allowed on this ground alone. 37. It is submitted that as on date, all eight FIRs that were earlier forming the basis of PMLA proceedings stand closed, quashed, or the accused discharged, rendering the ongoing proceedings under the PMLA wholly without jurisdiction. 38. It is emphasised that, in an apparent attempt to retrospectively justify their previous illegal actions, the ED mala fidely registered FIR No. 439 of 2024 in December 2024, which is virtually identical to FIR No. 30 of 2019. The said FIR has been challenged and is pending adjudication before this Court. In any case, the subsequent registration of FIR No. 439 of 2024 cannot retrospectively validate the earlier attachments or proceedings undertaken by the ED. It is further pointed that the complainant in FIR No. 439/2024 is the ED itself, wh....
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....P. (C) 1260/2025 have become infructuous, while in W.P. (C) 1791/2025, the proceedings before the Adjudicating Authority have been completed, and judgment was reserved on 03.06.2025. vii. It is averred that when a statutory appellate remedy is availed, a party cannot simultaneously pursue parallel proceedings before a constitutional court. Reliance is placed on Jai Singh v. Union of India, (1977) 1 SCC 1 and Arunima Baruah v. Union of India, (2007) 6 SCC 120. viii. Reliance has been placed on Gold Croft Properties (P) Ltd. v. Enforcement Directorate, 2023 SCC OnLine Del 5900; Rose Valley Hotels and Entertainments Ltd. vs. The Secretary, Department of Revenue, 2015 SCC OnLine Del 10111, Rai Foundation vs. The Director, Directorate of Enforcement & Ors. 2015 SCC OnLine Del 7626, Authorized Officer, State Bank of Travancore & Anr. v. KC Mathew (2018) 3 SCC 85, and Smt. Ujjam Bai vs. State of Uttar Pradesh AIR 1962 SC 16, in support of its contentions as regards availability of alternative efficacious statutory remedy. ix. Further, it is submitted that the orders dated 29.01.2025 and 27.03.2025 passed by the Ld. Adjudicating Authority confirming PAO No. 06/20....
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....fence to render the impugned ECIR unsustainable, counsel for Petitioner states that there are three judgments to support this view. However, he is not able to cite even one. 5. In light of the above, at his request, proceedings are adjourned to 18th September, 2025." xii. It is further submitted that the learned Adjudicating Authority has already considered the issue regarding the quashing of the majority of the FIRs forming part of the alleged predicate offence and has rendered a specific finding on the same. Emphasis has been placed on the following findings of the Learned Adjudicating Authority - "10.2. From the perusal of facts in the preceding para the following observation is made with regard to the submissions made by the Defendants & the Complainant:- The Defendants argued that the issue is a civil matter, not criminal, citing court rulings against converting civil disputes into criminal ones. Five of the eight FIRs have been quashed or closed, and the remaining two involve delivery delays. The DTCP order and Supreme Court ruling prevent third-party rights, and the chargesheet contradicts claims of third-party allotments, suggesting the case is ci....
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....torate of Enforcement, W.P.(C) 12243/2022; Dyani Anthony Paul v. Union of India, 2020 SCC OnLine Kar 4995; and G. Gopalakrishnan v. Deputy Director, ED, W.P.(MD) No. 11454/2018, (Madras High Court Judgment). 40. Having heard learned counsel for the parties and perused the record, this Court finds merit in the submission of the respondents that the PMLA provides for a statutory mechanism for redressal of grievances through the Adjudicating Authority and the Appellate Tribunal constituted thereunder. 41. The present batch of petitions assails three distinct Provisional Attachment Orders issued under Section 5 of the PMLA. The status of these attachment orders is tabulated below - Case No. PAO Details Status before Adjudicating Authority W.P.(C) 1791/2025 PAO No. 02/2025 dated 15.01.2025 Arguments concluded and Judgment reserved by the Adjudicating Authority on 03.06.2025 W.P.(C) 895/2025 PAO No. 06/2024 dated 06.08.2024 Attachment has been confirmed by the Adjudicating Authority vide order dated 29.01.2025. W.P.(C) 1260/2025 PAO No. 11/2024 dated 17.10.2024. Attachment has been confirmed by the Adjudicating Authority vide order dated 27.03.20....
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...., paras 12-14) "12. In Thansingh Nathmal v. Supt. of Taxes [AIR 1964 SC 1419] this Court adverted to the rule of self-imposed restraint that the writ petition will not be entertained if an effective remedy is available to the aggrieved person and observed : (AIR p. 1423, para 7) '7. ... The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by the statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up.' 13. In Titaghur Paper Mills Co. Ltd. v. State of Orissa [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 : 1983 SCC (Tax) 131] this Court observed : (SCC pp. 440-41, para 11) '....
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.... Tripura [(1999) 1 SCC 472 : 1999 SCC (L&S) 295], Shivgonda Anna Patil v. State of Maharashtra [(1999) 3 SCC 5], C.A. Abraham v. ITO [AIR 1961 SC 609 : (1961) 2 SCR 765], Titaghur Paper Mills Co. Ltd. v. State of Orissa [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 : 1983 SCC (Tax) 131], Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath and Sons [1992 Supp (2) SCC 312], Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1], Tin Plate Co. of India Ltd. v. State of Bihar [(1998) 8 SCC 272], Sheela Devi v. Jaspal Singh [(1999) 1 SCC 209] and Punjab National Bank v. O.C. Krishnan [(2001) 6 SCC 569].) 14. In Union of India v. Guwahati Carbon Ltd. [(2012) 11 SCC 651] this Court has reiterated the aforesaid principle and observed : (SCC p. 653, para 8) "8. Before we discuss the correctness of the impugned order, we intend to remind ourselves the observations made by this Court in Munshi Ram v. Municipal Committee, Chheharta [(1979) 3 SCC 83 : 1979 SCC (Tax) 205]. In the said decision, this Court was pleased to observe that : (SCC p. 88, para 23) '23. ... [when] a revenue statute provides for a person aggrieved by an a....
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.... "21. However, the question here is whether a writ petition is to be entertained against such an order. While there can be no doubt that in case of violation of principles of natural justice or jurisdictional errors, a writ petition can be entertained, as per the settled legal position in Whirlpool Corporation (supra). However, the entertaining of a writ petition while an Appellate Tribunal is fully functional, in the opinion of this Court ought not to be done in each and every case. xxx 23. Dealing with the issue raised by ld. Sr. Counsel as to the interpretation of the expression 'an order under this Act', this Court is of the opinion that when the Appellate Tribunal can entertain an appeal against the final order passed by the Adjudicating Authority, any interim orders or procedural orders passed as part of the process of adjudication would, thus, be 'orders under this Act'. It is not to say that against each such order an appeal would be liable to be entertained. It is for the Appellate Tribunal to decide as to whether an appeal ought to be entertained at all. Construing Rule 2 of the Prevention of Money-Laundering (Appeal) Rules, 2005 to the contrar....
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....e contention of the petitioners that the attachment of their properties is in violation of the orders of the Supreme Court dated 19.05.2022 and 11.01.2023 in SLP (C) No. 6013 of 2022, whereby status quo was directed to be maintained in respect of possession of the plots pending adjudication before the Punjab and Haryana High Court, this Court is of the view that such an argument can also be appropriately raised before the Appellate Tribunal. 52. In Rohit Mahendru v. Directorate of Enforcement, W.P.(C) 12188/2022 (order dated 27.09.2024), the Court dealt with a similar plea concerning a status quo order regarding plots attached in connection with proceedings involving M/s Krrish Realtech Pvt. Ltd. and passed the following order dated 27.09.2024 - "4. Mr. Siddharth Aggarwal, Senior Counsel for Respondent No. 3, states that Respondent No. 3 is not responsible for the Petitioners as the Petitioners are a part of Krrish's Allocation within the said Project and the onus in respect of the plots within Krrish Allocation is on Respondent No. 4 Nonetheless, he apprises this Court that several proceedings have been initiated by the Petitioners including under the Real Estate (Regu....