TaxTMI 
TaxTMI 
2025 (12) TMI 1897
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....against the common judgment dated 07.07.2025 passed by the learned Single Judge of this Court in W.P.(Crl) Nos. 48, 124 and 151 of 2025. The above petitions were preferred by the petitioners challenging the orders passed by the competent authority under section 8 of the Prevention of Money Laundering Act, 2002 ('PMLA' for the sake of brevity). The learned Single Judge relying on the observations made in Mohankumar K. and Another v. Union of India and Ors. [2025 SCC OnLine Ker.4188] held that when the Act provides for an appellate remedy, against an order passed under section 8, no interference was warranted. The Writ Petitions were accordingly dismissed granting the petitioners the liberty to agitate their grievance before the competent authority in accordance with law. The learned Single Judge also made it clear that the time during which these writ petitions were pending before this Court would stand excluded while calculating the period of limitation. The above orders are under challenge in these Appeals. 2. W.A. No. 1938 of 2025 is filed by Heera Summer Homes Pvt. Ltd., represented by its Managing Director, Sri. Abdul Rasheed. W.A. No. 1926 of 2025 is filed by A....
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....ational & Charitable Trust. The retention of the above properties was confirmed by the adjudicating authority. Challenging the same, the appellant approached this Court and filed W.P.(Crl) No. 772 of 2023. By order dated 17.08.2023, a learned Single Judge of this Court directed the ED to return the 63 original title deeds seized by them on the premise that the provisions of the PMLA permits enjoyment of the immovable properties by the owner even if they are attached under Section 5. Directions were however issued not to assign or carry out any transactions to the detriment of the investigation. The petitioner asserts that a provisional attachment order was issued under Section 5(1) of the PMLA, 2002, which stood confirmed by Ext.P5 order issued by the adjudicating authority. 5. Challenging Exts.P3 provisional order and Ext.P5 confirmation order, the petitioners approached this Court and filed separate writ petitions which were dismissed by the learned Single Judge by the impugned order. The learned Single Judge, however, granted liberty to the petitioners to agitate before the competent authority in accordance with law. It was ordered that if any appeal is filed, the time d....
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....2024) 6 SCC 579] and it was urged that in cases wherein the statutory authority has not acted in accordance with the provisions of the enactment in question, a petition under Article 226 of the Constitution could be entertained despite the availability of an alternate remedy. Reliance is also placed on the judgment rendered by a learned Single Judge of this Court in Davy Varghese v. Deputy Director, Directorate of Enforcement [2025 (1) KHC 409], Satish Motilal Bidri v. Union of India [2024 SCC (OnLine) KER 3410] and it was forcefully urged that the power of provisional attachment can be exercised in respect of property that is derived or obtained, directly or indirectly from a criminal activity relating to a scheduled offence and under no circumstances can properties acquired before the commission of an alleged offence be attached under the Act as they do not constitute proceeds of crime. 7. Sri. Jayasankar V. Nair, the learned Standing Counsel appearing for the Enforcement Directorate, submitted that the contention advanced by the learned Senior counsel is without reckoning the true nature and purport of the definition of "proceeds of crime" as defined under Section 2(1)(u) of ....
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....n relegating the parties to its statutory remedy. A perusal of the statutory framework reveals that Chapter III of the Prevention of Money Laundering Act, 2002 deals with attachment, adjudication, and confiscation of property. An order passed under Section 5(1) of the Act is merely provisional in nature, and its validity extends only for a period of 180 days, subject to confirmation 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 un....
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....it, including confirming, modifying, or setting aside the order appealed against, and shall communicate a copy of every such order to the parties to the appeal as well as to the concerned Adjudicating Authority or the Director, as applicable. The Appellate Tribunal is to endeavour to dispose of the appeal finally within six months from the date of its filing. 11. A further appeal is provided to the High Court under Section 42 of the Act. The said provision provides that any person aggrieved by a decision or order of the Appellate Tribunal may prefer an appeal to the High Court within sixty days from the date on which the decision or order is communicated to him, on any question of law or fact arising out of such decision or order. The High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, permit the appeal to be filed within a further period not exceeding sixty days. 12. In the case on hand, in terms of the directions issued by the learned Single Judge, an appeal was preferred by the Appellants before the Appellate Tribunal . Requisite Court fee was also remitted. It is contended that some defect ....
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....ative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. 45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. 15. In the case on hand the appellants have elected to approach the Appellate Remedy and after remitting the requisite fee have approached this Court with the Writ Petition. The situation in the said circumstances is even more precarious. On that preliminary ground itself, we find no reason to entertain the....
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....under: Section 5: Attachment of property involved in money-laundering.- (1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result 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 that Schedule, before a Magistrate or court for tak....
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.... 21. The learned counsel appearing for the appellant, relying upon the observations of the learned Single Judge in Satish Motilal Bidri (supra), contended that the expression "value" occurring in Section 2(1)(u) can only refer to the monetary worth of the property directly derived from criminal activity. It was further argued that attachment to the extent of the monetary value of a property not derived from criminal activity is permissible under the PMLA only where the property derived from such criminal activity has been taken out of India or is held outside the country. In other words, according to the appellant, the power to proceed against property of equivalent value, having no nexus with the predicate offence, arises only when the tainted property is located abroad. 22. The aforesaid submission appears to have been advanced without due consideration of the binding pronouncement of the Constitution Bench of the Supreme Court in Vijay Madanlal Choudhary (supra). In that case, an identical contention that attachment of property equivalent in value is permissible only when the proceeds of crime are situated outside India was expressly raised and rejected. Paragraph 172 of t....
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....s tainted. This category comprises property for which there is prima facie material showing that its source or consideration is traceable to criminal activity relating to a scheduled offence. The essence of the offence of money-laundering lies in the projection of such tainted property as untainted. This category also includes property acquired by using tainted property as consideration, whether directly or indirectly. For instance, a bribe or illegal gratification received by a public servant in cash constitutes tainted property and, therefore, proceeds of crime. If such cash is used to purchase immovable property or is converted into cryptocurrency or any other valuable asset, the resultant asset/property would equally constitute proceeds of crime, having been indirectly derived from criminal activity. 26. The second and third categories ordinarily consist of property that may be untainted in origin and acquired through legitimate means. Such property is nonetheless brought within the statutory fold where the tainted assets are untraceable, unreachable, or insufficient to account for the pecuniary advantage derived from the criminal activity. It is for this reason that the sta....