TaxTMI 
TaxTMI 
2026 (9) TMI 1041
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....e real estate business, including the purchase and sale of land, in addition to his regular business activities. In the course of his business, he purchased certain lands comprised in different survey numbers in Neimili Village through a sale deed dated 02.01.2018, registered as Document No.76 of 2018. He further purchased lands in several other survey numbers in Neimili Village through a sale deed dated 02.01.2018, registered as Document No.77 of 2018. The sale deeds were executed by M/s.VGP Investments, acting as Power of Attorney holders for the original landowners. 3. It is the further case of the petitioner that the lands in Nemili Village were notified for acquisition of Irungattukottai - Bangalore National Highway Project and the Proposal Notification for land acquisition, dated 13.12.2016, under Section 3A(1) of the National Highways Act, 1956, [hereinafter referred to as 'NHAI Act'] and the declaration of acquisition under Section 3D dated 05.12.2017, had identified the above properties as private lands. At the time of purchase by the petitioner, the land stood classified as private lands and not as Open Space Reservation (OSR). 4. It is further stated that the petit....
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.... the registration of the ECIR, the 3rd respondent conducted a search at the residential premises of the petitioner on 20.11.2025 and his statement was recorded under Section 17(1)(f) of the PML Act, during which a cash amount of Rs. 5,56,000/-, one Samsung Galaxy S25 mobile phone, and a bunch of loose sheets marked as Annexure-1 to Annexure-13, were seized. 8. Subsequent to the search and seizure, the 2nd respondent filed O.A.No.384 of 2025 dated 17.12.2025 before the Adjudicating Authority. The petitioner filed his reply on 12.02.2026. After hearing them, the Adjudicating Authority by order dated 05.05.2026 allowed O.A.No.384 under Section 8(3) of the PML Act, permitting retention of the seized materials. Further, it is stated that the petitioner has filed an appeal before the Appellate Tribunal. 9. The 2nd respondent further issued a provisional attachment order in No. 23 of 2026 dated 27.03.2026, attaching the property of the petitioner, and original complaint No.363 of 2026 was filed, and the reply is yet to be submitted. The 3rd respondent had issued summons on 09.12.2025, 22.12.2025, 01.01.2026, 29.01.2026, and 03.02.2026, pursuant to which the petitioner had appeared b....
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.... accused in the predicate offence, and the petitioner is not concerned with the crime. 14. He further submitted that when the petitioner is only a purchaser of the property, he has no role or any involvement in the gift cancellation executed by the vendor, and it was not at his instance. Except the reasons to believe and the grounds of arrest prepared, the respondents were not in possession of any materials, and in the absence of any valid materials, the very reasons to believe and reasons recorded in the grounds of arrest are void and without any substantial material. 15. He further submitted that when the existence of statutory satisfaction is lacking, as contemplated under Section 19 of the PML Act, the arrest made is illegal. Further, when there was no case or any material against the petitioner in the predicate case, there was no reason for conducting any search in the premises and, therefore, the search, seizure and arrest of the petitioner ought to be declared as illegal. 16. Learned counsel, further by placing reliance on the Section 3D notification issued by the National Highway Authority of India, submitted that when the very notification declared these lands as ....
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....ossession, the authority had recorded the reasons to believe in writing and informed the petitioner of the grounds of arrest and as such the requirement under Section 19 of the PML Act, is fully complied with and satisfied, and that the relief sought in the writ petition is baseless and not sustainable. 20. Learned Additional Solicitor General of India further submitted that already the order of attachment has been passed, which has been confirmed by the Adjudicating Authority and the petitioner had also preferred an appeal before the Appellate Tribunal. By placing the reliance on an order passed by this Court in the case of P.R.Rajeshkumar vs. The Joint Director of Enforcement, Directorate of Enforcement (W.P.Crl.No.493 of 2025 dated 10.12.2025), he submitted that, in view of the appeal pending before the Appellate Tribunal, this Court has relegated the petitioner therein to adjudicate the issues before the Appellate Tribunal and the same would be squarely applicable to the present petition also and the petitioner could raise all the issues regarding search and seizure before the Tribunal. 21. He further submitted that the petitioner had instigated and executed the fabricate....
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....on of gift deed dated 02.01.2018 executed by M/s.VGP Investments, represented by one of its partners, Mr.V.G.S.Rajesh, the gift deed dated 15.04.1991 executed in favour of Sriperumbudur Panchayat Union was unilaterally cancelled. 26. At this juncture, it is relevant to note that already, two Full Benches of this Court, in the case of Latif Estate Line India Limited vs. Hadeeja Ammal and Others [2011 (2) CTC 1], and in Sasikala vs. The Revenue Divisional Officer-cum-Sub Collector, Devakottai and Others [(2022) 7 MLJ 1], have held that any unilateral cancellation of a registered deed is null and void. Therefore, the cancellation of the gift deed dated 02.01.2018, purporting to cancel the gift deed dated 15.04.1991 executed in favour of the Sriperumbudur Panchayat Union, is null and void. Moreover, once a gift is executed and the lands get transferred and vested with the local body, it becomes Government property, and no lands can be alienated or transferred by the local authority, except with the sanction of the Government. 27. However, after execution of the cancellation of the gift deed, two sale deeds came to be registered, both dated 02.01.2018, by the landowner, represente....
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....nstigating the execution of the cancellation of the gift deed, thereby ultimately getting the properties worth of Rs. 6.20 crores registered in his favour, under two sale deeds for a meager sale consideration of Rs. 30 lakhs. 31. The claim of bona fide purchase, is liable to be rejected for the further reason as in normal circumstances, a bona fide purchaser would only purchase property free from any encumbrance. However, admittedly, the lands purchased by the petitioner are covered by the final notification issued by the NHAI, whereby the lands already stood acquired and vested with the Government, free from any encumbrance. Absolutely, there was no reason for the petitioner to venture into the purchase of the above property, covered under two sale deeds, which formed part of the acquisition for the formation of the highway, particularly when the lands already stood transferred in favour of the Government. Inspite of the fact that the lands already stood acquired by the NHAI for formation of the road, the petitioner ventured to purchase the same, by paying a sale consideration of Rs. 30 lakhs, for which even as per the sale deeds the market value was around Rs. 6.20 crores, cle....
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....itioner had purchased the property from the vendor represented by the accused/ power holder based on which the sale deed in favour of the petitioner came to be executed. 36. The petitioner was ultimately the beneficiary in purchasing the property for mere Rs. 30 lakhs when admittedly the property was worth Rs. 6.20 crores even as per the sale deeds and had immediately received compensation of Rs. 20 crores, that too being only 25% of the total value of the compensation. Based on the predicate case registered for the scheduled offences, the Enforcement Directorate registered the ECIR. 37. At this juncture, it is apposite to refer to Section 17 of the PML Act, that deals with search and seizure, which reads as follows: "17. Search and seizure.-(1) Where 1 [the 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-launde....
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....sons to be recorded in writing, enter and search the building or place where such evidence is located and seize that evidence: Provided that no authorisation referred to in sub-section (1) shall be required for search under this sub-section. (4) The authority seizing any record or property under sub-section (1) or freezing any record or property under sub-section (1A) shall, within a period of thirty days from such seizure or freezing, as the case may be, file an application, requesting for retention of such record or property seized under sub-section (1) or for continuation of the order of freezing served under sub-section (1A), before the Adjudicating Authority." 38. As per Section 17(1) of the PML Act, the authorized officer, based on information in his possession, if he has reasons to believe to be recorded in writing, that any person has committed any act which constitutes the offence, or is in possession of proceeds of crime involved in money laundering, or is in possession of any property, may enter the premises and conduct search and seize the property/material. 39. Further, Section 19 of the PML Act deals with the power of arrest by the authorised officer, w....
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....ity, by order dated 5.5.2026, allowed the application, permitting the retention of the seized materials, against which the petitioner admittedly filed an appeal before the Appellate Tribunal. 43. The 2nd respondent also issued a provisional attachment order dated 27.03.2026 and filed Complaint No.363 of 2026 before the Adjudicating Authority, which is pending. Based on the materials available in his possession and the Reasons to Believe recorded in writing, the authorised officer arrested the petitioner and informed him of the grounds of arrest on 05.02.2026. The arrest order and the grounds of arrest were furnished to the petitioner on the same day. Admittedly, when the above were issued to the petitioner, the conditions under Section 19 of the PML Act stand complied with and satisfied. 44. We have perused the Reasons to Believe recorded. The summons were served under Section 19 of the Act. The Reasons to Believe set out complete details of the crime committed and the role of the petitioner, along with Mr.V.G.S.Amaldas Rajesh and others, in executing the cancellation of the gift deed and subsequent sale deeds in respect of the land covered under O.S.R., and in receiving comp....