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IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
Prime Ispat Limited & Ors. – Appellants
Versus
Union of India & Ors. – Respondents
W.P.(C) 10166 of 2021 & CM APPL. 31354 of 2021 and W.P.(C) 10613 of 2022 & CM APPL. 30735 of 2022
Decided On : 10-02-2023
PMLA - Challenge to provisional attachment order - Section 5 of PMLA - [Section 5(1) of the PMLA] - The court discussed the impugned provisional attachment order (PAO) dated 27th November, 2020, issued under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA Act). The court highlighted the previous orders of the Adjudicating Authority and the Appellate Tribunal, the plea of res judicata, and the implications of the establishment of the Appellate Tribunal under the PMLA Act. The legal provisions of Section 5(1) of the PMLA Act and the principles of res judicata were central to the court's analysis and decision.
Fact of the Case:
The Petitioners challenged the provisional attachment order (PAO) dated 27th November, 2020, issued under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA Act). The Petitioners contended that the Adjudicating Authority had previously concluded that no case of money laundering was made out against them.
Finding of the Court:
The court held that the present petition should be treated as an appeal challenging the PAO dated 27th November, 2020, and should be considered by the Appellate Tribunal under the PMLA Act along with the two pending appeals filed by the Enforcement Directorate (ED). The interim orders issued by the court were to continue until the Appellate Tribunal's decision.
Issues: The issues included the challenge to the provisional attachment order, the plea of res judicata, and the implications of the establishment of the Appellate Tribunal under the PMLA Act.
Ratio Decidendi: The court emphasized that the entire issue should be comprehensively considered by the Appellate Tribunal to avoid multiplicity of proceedings and conflicting rulings. The court also considered the implications of the establishment of the Appellate Tribunal under the PMLA Act and the period of limitation for filing the petition.
Final Decision: The present petition was treated as an appeal challenging the PAO dated 27th November, 2020, and was directed to be considered by the Appellate Tribunal under the PMLA Act. The interim orders issued by the court were to continue until the Appellate Tribunal's decision.
JUDGMENT
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
Background
2. The Petitioners challenge the provisional attachment order (PAO) dated 27th November, 2020, bearing PAO No.03 of 2020, passed by the Deputy Director, Directorate of Enforcement, Raipur under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA Act). The impugned PAO has been issued by the Directorate of Enforcement (ED) in Enforcement Case Information Report (ECIR) bearing No. ECIR/01/NGR/2011 dated 10th January, 2011. The petitioners also challenge the show cause notice dated 7th January, 2021 issued by the Adjudicating Authority (hereinafter 'AA') in the Original Complaint bearing O.C No. No. 1380 of 2020. The Petitioners in these cases are:
(i) M/s. Prime Ispat Limited
(ii) Sh. Pawan Kumar Agrawal
(iii) Sh. Ashok Kumar Agrawal
(iv) M/s. Shree Ram Vihar
3. One of the present writ petitions, i.e., W.P.(C) 10166/2021 titled 'Prime Ispat Limited & Ors. v. Union of India and Ors.' was considered on 14th September, 2021, on which date, the following order was passed:
"CM APPL. 31355/2021 & CM APPL. 31356/2021
1. Exemption allowed, subject to all just exceptions.
2. The notarized affidavit be filed within one week.
3. The applications stand disposed of.
W.P.(C) 10166/2021 & CM APPL. 31354/2021 (stay)
4. Vide the present petition, the petitioners seek to assail the provisional attachment order (PAO) dated 27.11.2020 passed by the respondent no.2 under Section 5(1) of the PMLA. The petitioners also assail the consequential proceedings arising from the said PAO.
5. Learned counsel for the petitioners submits that a PAO issued by the respondent no.2 on 04.04.2017 in respect of the same allegation was not approved by the adjudicating authority vide its orders passed on 14.05.2018 and 27.06.2018 by categorically recording that no case of money laundering was made out against the petitioners. He submits that although the respondents have assailed the said orders passed by the adjudicating authority by way of an appeal, which is pending before the Appellate Tribunal-PMLA and the parties have been directed to maintain status quo vide an order passed on 13.11.2019, the respondents could not have issued the impugned PAO or initiated any further proceedings against the petitioner at this stage.
6. Issue notice. Learned counsel for the respondents accepts notice. While urging that the present petition is not maintainable, he prays for, and is granted, four weeks' time to file counter affidavit. Rejoinder thereto, if any, be filed within four weeks thereafter.
7. List along with W.P(C)8421/2021 on 07.01.2022.
8. Till the next date, the adjudicating authority will not proceed with the matter and will therefore fix a date after the next date of hearing before this Court."
4. It is the submission of Mr. Anupam Sharma, ld. Counsel appearing for the Respondents that the Appellate Tribunal under the PMLA Act has now been constituted and the Petitioner ought to be relegated to the Appellate Tribunal.
5. On the other hand, Mr. Abhimanyu Bandari, Ld. Counsel for the Petitioners submits that in view of this writ pending before this Court, the Petitioners had not filed an appeal before the Appellate Tribunal.
6. Paragraph 2(kk) in the impugned PAO i.e., PAO No. 03 of 2020, dated 27th November, 2020 reads as:
"That, against an amount of Rs 36,09,17,400 out of the total money laundered, which was integrated in M/s. PIL by way of share capital and share premium through 13 shell companies created by Shri Sunil Agrawal, CA and used for the creation of assets in the said company, total fixed assets amounting to Rs.35,49,56,341 of M/s. PIL and immovable property total amounting to Rs.59,61,059 belonging to Sh. Babulal Agrawal & Sh. Babulal Agrawal, HUF had been attached by ED through Deputy Director, Enforcement Directorate, Raipur Sub-Zonal Office, Raipur, under the provisions of sec 5 (1) of the PMLA, 2002, vide Provisional Attachment Order 01/2017 dated 04.0
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