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MADRAS HIGH COURT
M.S. Ramesh and Sunder Mohan, JJ.
K. Govindaraj and Ors. – Petitioners
versus
Union of India and Ors. – Respondents
W.P.Nos.5402, 1689, 1711, 1765, 2935, 2995, 3047, 3048, 3381, 3389, 3411, 3481, 3607, 3648, 3878, 4412, 4416, 4421, 4463, 4578, 4583, 4629, 4657, 4661, 5439, 5444, 5449, 5450, 5645, 5652, 8435, 8563, 8568, 8689, 8697, 8871, 9312, 9327, 9333, 9379, 9383, 9391, 9395, 1655 and 4891 of 2024 and 35515, 35656, 35658 of 2023 AND W.M.P.Nos.10330, 10347, 10349, 10389, 10394, 10409, 1734, 1758, 1819, 5944, 6005, 6011, 6016, 6018, 6246, 9390, 9509, 9513, 9698, 9710, 9877, 10406, 1688, 9878, 10333, 10348, 10351, 10392, 10395, 10407, 10410, 1690, 1735, 1759, 1821, 3182, 3183, 3265, 3325, 3326, 3642, 3648, 3667, 3668, 3739, 3740, 3893, 3935, 4196, 4749, 4755, 4762, 4823, 4999, 5007, 5071, 5008, 5095, 5353, 5945, 6006, 6013, 6019, 6020, 6244, 6240, 6250, 9391, 9514, 9700, 9712 and 9511 of 2024 and 35478, 35626, 35629, 35479, 35628, 35630 of 2023
Decided on 16.7.2024
Prevention of Money Laundering Act, 2002 – Section 50 – Provisional attachment order – Scheduled offence (illegal sand mining) – Neither FIRs relied upon by respondents nor reasons given by respondents for initiating proceedings under PMLA warrant emergent action – There were no urgent measures required to be taken by respondents so as to warrant action even before registration of FIR – Attachment of property would result in serious consequences for concerned persons and cannot be based on assumptions made by respondents – Even if there is proceeds of crime, respondents cannot assume jurisdiction to attach all other properties on the premise that they were ill-gotten – Unless information with regard to any case in scheduled offence is registered and such offence has generated proceeds of crime which is dealt with by petitioners, no action can be initiated – Impugned actions insofar as they relate to petitioners quashed. (Paras 20, 21, 22, 23 and 26)
Result: Writ Petitions allowed.
ORDER (COMMON)
M.S. Ramesh and Sunder Mohan, JJ.—The above Writ Petitions challenge the various actions initiated by the respondents herein against the petitioners.
(i) Twenty-four out of the captioned Writ Petitions challenge the ECIR bearing reference No. ECIR/CEZO-II/22/2023 dated 11.09.2023.
(ii) Thirteen Writ Petitions challenge the Provisional Attachment Order in No.1/2024 dated 31.01.2024, passed in respect of the properties of the petitioners.
(iii) Eleven Writ Petitions challenge the proceedings in the Original Applications filed by the respondents seeking confirmation of the Attachment Order.
2. Since the issue involved in all the Writ Petitions is the same, they were heard together and a common order is passed. The following facts are undisputed:
(a) An ECIR/CEZO-II/22/2023 was recorded on 11.09.2023 on the basis of the following four First Information Reports:
(i) FIR No. 68/2023, dated 25.04.2023, registered by Murappanadu Police Station, Thoothukudi District.
(ii) FIR No.02/2022, dated 05.02.2022 registered by V & AC, Theni.
(iii) FIR No.08/2018, dated 23.07.2018 registered by V & AC, Thanjavur.
(iv) FIR No.03/2020, dated 20.10.2020 registered by V & AC, Dindigul.
(b) Pursuant to the recording of the ECIR, searches were conducted in various places.
(c) Summons were also sent to various parties, in connection with the inquiry/investigation, with reference to the above ECIR.
(d) The Provisional Attachment Orders were passed in relation to the properties of some of the petitioners, on the ground that they were in possession of proceeds of crime and also recording the fact that they evaded the summons or did not respond to the summons.
(e) In the meanwhile, the summons were issued to all the Collectors in the State of Tamil Nadu in connection with the inquiry in the above referred ECIR. The State of Tamil Nadu and the Collectors filed Writ Petitions challenging the summons issued to them in W.P.Nos.33459 to 33468 of 2023. This Court, passed an order on 28.11.2023 granting interim stay of the operation of the summons impugned in those Writ Petitions.
(f) Some of the petitioners in the captioned Writ Petitions filed the Writ Petitions challenging the ECIR insofar as they were concerned in W.P.Nos.35515 of 2023, 35656 of 2023 and 35658 of 2023. This Court passed an order of interim stay of the operation of summons issued to the petitioners in the ECIR proceedings. In certain other captioned Writ Petitions, this Court granted stay of the ECIR proceedings against the petitioners and also stay of the Provisional Attachment Order in W.M.P.Nos. 3182, 3183, 3265, 3326 and 3325 of 2024 in W.P.No.2935, 2995, 3048 and 3407 of 2024 etc.
(g) In the meanwhile, the respondents filed a Special Leave to Appeal (Crl.) No(s). 1959 – 1963/2024 before the Hon’ble Supreme Court challenging the interim orders passed by this Court in the Writ Petitions filed by the State of Tamil Nadu and the Collectors. The Hon’ble Supreme in Special Leave to Appeal (Crl.) No(s).1959 – 1963/2024 was pleased to pass an order of stay on the execution of the orders passed by this Court in those Writ Petitions. The Hon’ble Supreme Court had also observed that since the respondents are conducting the investigation in the ECIR, the Collectors are bound to respond to the summons. Consequently, the District Collectors were directed to appear and respond to the summons issued by the respondents.
(h) The respondents also challenged the interim orders passed by this Court in W.P.No.35515 of 2023 in Special Leave to Appeal (Crl.) No(s). 3358 - 3360/2024 before the Hon’ble Supreme Court. The Hon’ble Supreme Court had observed that the proceedings before this Court would continue and directed the respondents herein to file their counter. Though the respondents herein prayed for the stay of the order, the Hon’ble Supreme Court made the above observations. It is also conceded by the respondents that the Hon’ble Supreme Court made the above obse
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