Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, J.
M/S Himachal Emta Power Limited - Petitioner
Versus
Union of India And Ors. - Respondents
W.P.(C) 5537 of 2018 & CM Nos. 21583 of 2018 & 33487 of 2018
Decided On : 23-08-2018
Money Laundering - Provisional Attachment Order - Prevention of Money Laundering Act, 2002 - Section 5(1)
Fact of the Case:
The petitioner, M/S Himachal Emta Power Limited, challenged the provisional attachment order issued by the Enforcement Directorate under Section 5(1) of the Prevention of Money Laundering Act, 2002. The impugned order provisionally attached various investments and funds of the petitioner on the basis that they were proceeds of crime in relation to a scheduled offence.
Finding of the Court:
The court found that the impugned order was fundamentally flawed and without authority of law as it failed to establish that the attached properties were derived or obtained as a result of criminal activity relating to a scheduled offence. The court allowed the petition and set aside the impugned order and the complaint made under Section 8 of the PML Act.
Issues: The issues involved the jurisdiction of the court to entertain the petition, the requirement for the ED to furnish reasons to believe, and the basis for assuming that the petitioner had derived any benefit from the allocation of the coal block.
Ratio Decidendi: The court held that the impugned order was without authority of law as it did not establish that the attached properties were derived or obtained as a result of criminal activity relating to a scheduled offence, as required by Section 5(1) of the PML Act.
Final Decision: The petition was allowed, and the impugned order and the complaint made under Section 8 of the PML Act were set aside. The parties were left to bear their own costs, and all pending applications were disposed of.
VIBHU BAKHRU, J.
1. The petitioner–M/S Himachal Emta Power Limited (hereafter ‘HEPL’) – has filed the present petition under Article 226 & 227 of the Constitution of India, inter alia, impugning the provisional attachment order dated 29.12.2017 (hereafter ‘the impugned order’) issued by the Deputy Director, Enforcement Directorate (respondent no.2 – hereafter ‘the ED’) under Section 5(1) of the Prevention of Money Laundering Act, 2002 (hereafter ‘the PML Act’).
2. By the impugned order, the ED has provisionally attached: (i) investment made by HEPL in M/s Gaurangdih Coal Ltd. (hereafter ‘GCL’) – a joint venture company formed by HEPL and M/s JSW Steel Ltd.–for carrying out mining activities including excavation work in the coal block allocated to HEPL to the extent of Rs. 2,45,00,000/-; (ii) Rs. 11,86,710/- lying as fixed deposit in its account; (iii) Rs. 1,26,540/- credited in A/c No.0153201100424; and (iv) Rs. 7,160/- deposited in A/c No.0153201002578.
3. The impugned order is premised on the basis that the said amounts have been used in commission of a scheduled offence and are proceeds of crime in terms of Section 2(u) and (v) of the PML Act.
4. The petitioner has assailed the impugned order on several grounds including that the ED has not provided any reason to believe that HEPL is in possession of the proceeds of crime, the existence of such reasons is a pre-condition for issuing any order under Section 5(1) of the PML Act. In this regard, reliance is placed on the decision of the Division Bench of this Court in J. Sekar v. Union of India & Ors.: 2018 SCC Online Del (6523). The petitioner also claims that the impugned order is without jurisdiction, as the funds attached by the ED are investments made in or by HEPL and cannot, by any stretch, be held to be proceeds of crime.
Factual context
5. Before proceeding further, it would be relevant to refer to the facts as narrated in the impugned order. The impugned order is founded on the basis of an FIR registered by Central Bureau of Investigation (CBI) on 07.08.2014 alleging offences under Section 120-B read with Section 420 IPC against HEPL, its promoters / directors, members of the 35th Screening Committee and other unknown persons. It is alleged that the said persons have cheated the Government of India by securing allocation of Gaurangdih ABC Coal Block in favour of HEPL.
6. On 06.11.2006, the Ministry of Coal had issued an advertisement inviting applications from companies engaged in generation of power, production of iron and steel and production of cement for allocation of coal blocks for captive coal mines. In the aforesaid context, Himachal Pradesh Infrastructure Development Board invited „expression of interest? on behalf of Government of Himachal Pradesh from experienced and well established organizations for setting up a 2x250 MW capacity pithead Coal Base Thermal Power Plant in joint venture with the Government of Himachal Pradesh. M/s Eastern Minerals and Trading Agency (hereafter „EMTA?) submitted its expression of interest and, thereafter, Himachal Pradesh Power Corporation Limited (hereafter „HPPCL?) entered into a MoU dated 04.01.2007 for setting up of a pithead thermal power plant in a joint venture. Pursuant to the aforesaid MoU, HEPL was formed on 09.01.2007 as a joint venture company between EMTA and HPPCL (a Govt. of Himachal Pradesh Enterprise). It is stated that, thereafter, HEPL submitted its application for allocation of Gaurandih ABC Coal Block located in West Bengal for the proposed 500 MW captive power plant in Rani Ganj, West Bengal.
7. It is alleged that HEPL had misrepresented the status of land in question and the investment made by it in the project and had secured the allocation of the coal block based on such misrepresentations.
8. It is not necessary to examine allegations made against HEPL in any detail. Suffice it to mention that the
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
