TaxTMI 
TaxTMI 
2025 (9) TMI 1890
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....2014/BSZO and all proceedings emanating therefrom, along with an additional prayer seeking stay of the order dated 3.9.2024 passed by the learned Adjudicating Authority (under the PMLA) at New Delhi in Original Complaint No. 500 of 2015 whereby the order of provisional attachment of the movable and immovable properties of the Petitioner-Corporation has been confirmed and to allow operation of the plants redeeming the licenses of the units. 3. Similarly, the I.A No.393 of 2025 (arising out of CRLMC No.506 of 2025), has been filed with a prayer to stay the criminal proceeding pending against the petitioner in V.G.R Case No.5 (c) of 2013 pending in the Court of the learned Special Judge(Vigilance), Keonjhar, along with a further prayer to stay the attachment and thereby allow operation of the plants redeeming all the licenses of the plants which were cancelled. FACTS 4. At the outset, it is pertinent to mention that the adjudication of the parent CRLMC applications is currently underway before this Court and the instant order is confined to the adjudication of the aforementioned two interlocutory applications filed with the prayers as indicated here in above. The context in w....
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....ansactions with the concerned Lessee occurred only during a limited period between 2004 and 2009, which constitutes a narrow window when viewed against the backdrop of the Petitioner's long-standing lawful operations. It was further submitted that the business activities of the Petitioner, both prior to and subsequent to the said period in question, are entirely unblemished, which further suggests that allegations made against the Petitioner-Company are baseless and does not in any way warrant the initiation of the prosecution against the Petitioner. 8. The Learned Counsel for the Petitioner, at this stage, further contended that in V.G.R Case No.5(c) of 2013, the Investigating Officer has filed an attachment petition bearing C.M.A No.10 of 2013, wherein the learned District Judge, Keonjhar, vide its order dated 12.09.2013, has issued ex-parte ad interim order of attachment with regard to the scheduled properties belonging to the Petitioner-Company. Similarly, in in ECIR/01/2014/BSZO, a provisional order of attachment was passed regarding the immovable and movable assets of the Petitioner-Company, which has later been confirmed by the Ld. Adjudicating Authority (under the PM....
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....uring the property in the event of a potential confiscation. Such attachment, is therefore, a purely preventive measure. He further contended that section 8(4) of PMLA, 2002 contemplates physical possession only effectuating a confiscation under the said provision. This implies that there cannot be any premature deprivation of bonafide rights of third parties. Moreover, Learned Counsel for the Petitioner contended that merely because the attachment has been confirmed by the Adjudicating Authority, does not in any way mean that the ownership or possessory rights of the Petitioner have been extinguished as a result thereof. To further substantiate his contentions, the Learned Counsel for the Petitioner has placed reliance on the decision of the Hon'ble Supreme Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. reported in (2023) 12 SCC 1; the Hon'ble Delhi Court's decisions in SRJ Infratech Pvt. Ltd. v. Director, reported in 2016 SCC OnLine Del 221 and Deputy Director, Directorate of Enforcement of Delhi Vs. Axis Bank and Ors. reported in 2019 SCC Online Del 7584; along with the decision of the Hon'ble High Court of Madras in Kamarunnisa Ghori v. C....
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.... of the Cr.P.C by the same Petitioner is not maintainable before this Court. To further substantiate his contentions, the Learned counsel for the ED has placed reliance on the decision of the Hon'ble Supreme Court in Bhisham Lal Verma v. State of UP & Anr., reported in 2023 INSC 955. 15. Next, referring to the PMLA, 2002, the learned counsel for the E.D. submitted before this Court that the order of provisional attachment, under Annexure-4 to the CRLMC No.511 of 2025, has already been confirmed by the Adjudicating Authority under Section-8(3) of the Act, vide order dated 03.09.2024 under Annexure-5 to the aforesaid CRLMC application. It was further contended that as per Section 26 of the PMLA, 2002, the aforesaid order of confirmation of provisional attachment is an appealable order. Moreover, the order which would eventually be passed under Section 26 is further appealable under Section 42 of PMLA, 2002, before this Court. To lend credence to his arguments, the Learned Senior Counsel for the Enforcement Directorate has referred to the decision of the High Court of Madras in G. Srinivasan v. Chairperson, reported in 2011 SCC OnLine Mad 2909, specifically paragraphs 19 and 20....
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....also the fact that the Petitioner-Company had earlier filed a petition under Section 482 Cr.P.C, which was dismissed by a Coordinate Bench of this Court, the present Writ Petition on behalf of the Petitioner-Company is not maintainable. As such, it was contended that the present interlocutory applications are liable to be dismissed at the threshold. ANALYSIS OF THE COURT 19. Heard the learned Sr. Counsel for the petitioner and learned counsels appearing for E.D. as well as the ASC, Vigilance Dept. Perused the interlocutory applications filed. As is evident from record, the I.A. No.391 of 2025 filed in CRLMC No.511 of 2025 and the I.A. No.393 of 2025 filed in CRLMC No.506 of 2025, have been filed by the same Petitioner-Company with a prayer essentially claiming a four-fold relief; firstly, to stay the proceeding against Petitioner in Complaint Case (PMLA) No.40 of 2018 pending in the Special Court (PMLA)-cum- Sessions Judge, Khurda, Bhubaneswar, arising out of ECIR No.01/2014/BSZO and all proceedings emanating therefrom; secondly, to stay the order dated 3.9.2024 passed by the learned Adjudicating Authority (under the PMLA) at New Delhi in Original Complaint No.500 of 2015; th....
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....e of offence under Section 4 of the Act. In the instant case, the parent CRLMC applications have been filed by the Petitioner-Company with a different prayer to quash the entire PMLA and Vigilance proceeding qua the Petitioner. As such, it would appear that the present CRLMC applications and the resulting I.As are maintainable. Nevertheless, at the moment since the hearing in the main CRLMC applications is on-going, this Court shall confine its adjudication to the relief claimed in the aforementioned I.As only which have been filed with a prayer to stay the vigilance and PMLA proceedings against the Petitioner-Company and to allow the Petitioner-Company to operate the attached plant(s). So far as challenge to the order of confirmation of provisional appeal is considered, this Court is aware of the fact that the Act makes it incumbent upon the Petitioner to approach the Appellate Tribunal under Section 26 of the Act by arraying the order confirming the provisional order of attachment, and, then approach the High Court against the order of the Appellate Tribunal under Section 42 of the Act. However, in the present interlocutory applications, the Petitioner has not challenged the orde....
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....stems, anywhere in the world, it is seen that once a financial mastermind can integrate the illegitimate money into the bloodstream of an economy, it is almost indistinguishable. In fact, the money can be simply wired abroad at one click of the mouse. It is also well known that once this money leaves the country, it is almost impossible to get it back. Hence, a simplistic argument or the view that Section 3 should only find force once the money has been laundered, does not commend to us. That has never been the intention of Parliament nor the international conventions." (Emphasis supplied) 24. In fact, Section 5(4) of the Act makes it clear that nothing in Section 5 shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Therefore, it is clear that the legislative intent behind attachment of properties under the Act is not to deprive the persons interested in the said property from enjoying the immovable property, especially since the Authorities can always take symbolic possession of the property under Section 8(4). Additionally, the term "attachment" has been defined under Section 2(1)(d) of the Act ....
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....d in the Statute. Moreover, it is needless to emphasize here that any curtailment of legal right or deprivation to enjoy the property has to be in terms of the Statute and not otherwise. Such observation of this Court is also supported by the observations of the Hon'ble Supreme Court in Vijay Madanlal's case (supra), wherein the Hon'ble Apex Court has stressed on the right of the person interested to enjoy the attached property by clarifying that the power to take over possession of the attached property under Section 8(4) of the Act must not be resorted to at the drop of the hat, rather it is to be used judiciously. The Hon'ble Supreme Court has also emphasized on the principle enshrined in Section 5(4) of the Act. The relevant paragraphs are quoted hereinbelow; "175. It is, thus, clear that the provision in the form of Section 5 provides for a balancing arrangement to secure the interest of the person as well as to ensure that the proceeds of crime remain available for being dealt with in the manner provided by the 2002 Act. This provision, in our opinion, has reasonable nexus with the objects sought to be achieved by the 2002 Act in preventing and regula....
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....sub- section (4) and the finding in favour of the person is rendered by the Special Court thereafter and during the interregnum if the property changes hands and title vest in some third party, it would result in civil consequences even to third party. That is certainly avoidable unless it is absolutely necessary in the peculiar facts of a particular case so as to invoke the option available under sub-section (4) of Section 8. *** 183. It is unfathomable as to how the action of confiscation can be resorted to in respect of property in the event of his acquittal or discharge in connection with the scheduled offence. Resultantly, we would sum up by observing that the provision in the form of Section 8(4) can be resorted to only by way of an exception and not as a rule. The analogy drawn by the Union of India on the basis of decisions of this Court in Divl. Forest Officer v. G.V. Sudhakar Rao [Divl. Forest Officer v. G.V. Sudhakar Rao, (1985) 4 SCC 573 : 1986 SCC (Cri) 34], Biswanath Bhattacharya [Biswanath Bhattacharya v. Union of India, (2014) 4 SCC 392 : (2014) 2 SCC (Cri) 342], Yogendra Kumar Jaiswal v. State of Bihar [Yogendra Kumar Jaiswal v. State of Bihar, (2....
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....ument to the proposition that it is a statutory right that enjoyment of his property cannot be denied until the conclusion of the trial. Thus, these judgments relied upon by the Ld. Counsel for the enforcement directorate are not applicable to the facts of the case. 28. Ultimately, considering the submissions of the learned counsels for both the parties, and taking into consideration the aforesaid analysis and the peculiar facts and circumstances of the present case, this Court is of the considered view that in the event the property attached is left unattended, then it might lead to the deterioration and destruction of the property in question and eventually leading to depreciation of the value of the property in question. This will ultimately render futile the entire objective of attachment of the Property, which is to preserve the property so that necessary action can be taken under the Act in the event the Special Court, under Section 8(5) of the Act, finds that the offence of money laundering has indeed been committed. Moreover, it has also been brought to the notice of the Court that that the livelihoods of many of the locals in the region are directly connected to the ope....
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....ss number of workers engaged in such industry before the final verdict is delivered by the trial court. 31. Additionally, this Court is also of the observation that the attachment of Property under Section 5(1) the PMLA and the confirmation thereof by the Adjudicating Authority under Section 8(3), is merely provisional in nature and is meant to be a measure to safeguard the property for being confiscated at a later stage in the event it is found by the trial court that such property has been acquired with the proceeds of crime. In the instant case, the proceedings in both the PMLA and Vigilance case are on-going. Therefore, in the meantime, in order to preserve the attached plant(s) from being deteriorated and to safeguard the livelihood of the locals that depend on the operation of the plant(s) for their subsistence, this Court is of the view that in the larger interest of justice the attached plant(s) of the Petitioner in the present PMLA and Vigilance proceedings should be allowed to be operated by the Petitioner-Company. 32. At this juncture, Mr. Nadkarni, learned Sr. Counsel appearing on behalf of the Petitioner-Company very fairly submitted before this Court that he doe....