Important Point – A law which seeks to impose penalty for any act constituting an offence which when done or committed was not an offence would itself fall foul of Article 20(1).

VIBHU BAKHRU, J.

1. The petitioner has filed the present writ petition seeking quashing of the provisional attachment order dated 24.01.2014 (hereafter ‘impugned order’) passed by the Deputy Director, Directorate of Enforcement under section 5 (1) of Prevention of Money Laundering Act, 2002 (hereafter the ‘Act’) whereby the entire basement and ground floor of the property situated at E-14/3, Vasant Vihar, New Delhi belonging to Smt. Alka Rajvansh has been attached considering it as proceeds of crime.

2. The brief facts that are relevant for examining the controversy in the present petition are as under:-

2.1 On 08.05.2009, an FIR was lodged by the CBI on a written complaint made by Shri S.K. Maggu, Deputy Manager of National Agricultural Cooperative Marketing Federation of India (hereafter ‘NAFED’) wherein it was alleged that Mr Homi Rajvansh -the Additional Managing Director of NAFED, had hatched a conspiracy, in connivance with the directors of M/s M.K. Agri International Ltd. (hereafter ‘MKAIL’), for making wrongful gains by executing Memoranda of Understandings (MOUs) with MKAIL on behalf of NAFED for import of raw sugar and selling the same by entering into three High Seas Sale (HSS) Agreements with M/s M.K. International Ltd. (hereafter ‘MIL’), a sister concern of MKAIL, without charging/recovering any cost for the commodity.

2.2 On 16.10.2003, NAFED through Mr Homi Rajvansh entered into an MOU with M/s Earthtech Enterprises Ltd. (EEL) which is a sister concern of MKAIL and run by one of the accused Manish Kant Agarwal for import of petroleum products. On 12.02.2004, an addendum to the above MOU was signed between NAFED and EEL and certain other items were added for purchase. On the request of EEL, vide two letters dated 27.09.2004, NAFED allowed two import orders each containing 38,000/-MT of raw sugar to be imported from M/s Noble Resources SA, Switzerland. The request of EEL for opening two separate Letters Of Credit (LCs) covering the said import orders was also acceded to by NAFED.

2.3 On 30.11.2004, NAFED through Mr Homi Rajvansh entered into a MOU with MKAIL for import of various products. MKAIL is the sister concern of EEL. On the request of MKAIL, NAFED through Mr Homi Rajvansh sold the entire cargo of raw sugar under two LCs to MIL -which is also a sister concern of MKAIL -under the three separate HSS Agreements entered into by NAFED with MIL. MIL, subsequently, sold the raw sugar in the open market. It is alleged that Mr Homi Rajvansh, acting on behalf of NAFED, permitted the sale of raw sugar through the three HSS Agreements without charging the cost of the commodity and, thereby, caused wrongful loss to NAFED and wrongful gain to themselves.

2.4 On 10.02.2005, MIL through its director -Mr M.K. Agarwal issued cheques for an amount aggregating to Rs.1.5 crores in favour of its two holding companies namely, M/s Duoroyale Enterprises Ltd. and M/s Sri Radhey Trading Pvt. Ltd. Subsequently, both the said companies issued two cheques each amounting to Rs.75 lacs in favour of M/s Mahanivesh Oils & Foods Pvt. Ltd., the petitioner company, where Smt. Alka Rajvansh wife of Mr Homi Rajvansh was a Director.

2.5 On 16.02.2005 and 17.02.2005, M/s Mahanivesh Oils and Foods Pvt. Ltd., issued two cheques of Rs.1,32,00,00/- and Rs.10,81,000/-respectively in favour of M/s Uppal Agencies Pvt. Ltd. for purchase of the ground floor and basement of the property situated at E-14/3, Vasant Vihar, New Delhi (hereafter ‘the said property’).

2.6 It is alleged that Smt. Alka Rajvansh used the funds received from M/s Duoroyale Enterprises Ltd. and M/s Sri Radhey Trading Pvt. Ltd. for purchasing the above-mentioned property pursuant to a sale deed dated 18.03.2005 executed by Shri B.K. Uppal in favour of the petitioner company. By the impugned order, the Deputy Director of Directorate of Enforcement has provisionally attached the said property under Section 5(1) of the Act considering it as the ‘proceeds of crime’. A charge sheet d