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IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
Prpl Enterprises Pvt. Ltd. (formerly Known As Piramal Realty Pvt. Ltd.) – Appellant
Versus
Directorate of Enforcement – Respondent
W.P.(C) 11152 of 2022 and CM APPL. 32766 of 2022
Decided On : 16-02-2023
Money Laundering - Attachment of Properties - Prevention of Money Laundering Act - Section 5 - Sections 420, 406, and 34 of the Indian Penal Code, 1860 - Section 2(1)(u) of the PMLA
Fact of the Case:
The petitioner, a lender to M/s Omkar Realtors and Developers Pvt. Ltd., challenged the attachment of its properties by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA) based on an FIR. The closure report for the case was filed and accepted by the trial court, and the case against M/s Omkar Realtors and Developers Pvt. Ltd. was closed. The Special Court under PMLA discharged M/s Omkar Realtors and Developers Pvt. Ltd., and the Supreme Court held that when the accused person has been discharged/acquitted in the scheduled offence, there can be no offence of money laundering against them. The Supreme Court also held that no offence of money laundering can be made out against any person having property linked to the person accused in the scheduled offence. The court considered various judgments affirming this legal position and concluded that the impugned provisional attachment orders against the properties of the petitioner cannot continue as the petitioner was not accused but merely a lender to M/s Omkar Realtors and Developers Pvt. Ltd. The attached properties were released.
Finding of the Court:
The court found that the closure report for the case was filed and accepted, the case against M/s Omkar Realtors and Developers Pvt. Ltd. was closed, and the Special Court under PMLA discharged M/s Omkar Realtors and Developers Pvt. Ltd. The court also found that when the accused person has been discharged/acquitted in the scheduled offence, there can be no offence of money laundering against them, and no offence of money laundering can be made out against any person having property linked to the person accused in the scheduled offence. Therefore, the impugned provisional attachment orders against the properties of the petitioner cannot continue as the petitioner was not accused but merely a lender to M/s Omkar Realtors and Developers Pvt. Ltd. The attached properties were released.
Issues: The issues involved in the case were the validity of the provisional attachment orders against the properties of the petitioner under the PMLA, the closure of the case against M/s Omkar Realtors and Developers Pvt. Ltd., and the discharge of M/s Omkar Realtors and Developers Pvt. Ltd. by the Special Court under PMLA.
Ratio Decidendi: The ratio decidendi of the case was that when the accused person has been discharged/acquitted in the scheduled offence, there can be no offence of money laundering against them, and no offence of money laundering can be made out against any person having property linked to the person accused in the scheduled offence. The court considered various judgments affirming this legal position and concluded that the impugned provisional attachment orders against the properties of the petitioner cannot continue as the petitioner was not accused but merely a lender to M/s Omkar Realtors and Developers Pvt. Ltd. The attached properties were released.
Final Decision: The court disposed of the petition and granted liberty to the ED to seek revival of the provisional attachment orders in accordance with law if there is any change in the circumstances. Liberty was also granted to the petitioner to move an appropriate application if the properties are not released.
JUDGMENT
Prathiba M. Singh, J.(Oral)
1. This hearing has been done through hybrid mode.
2. The present petition is connected with Writ Petition Civil 11473/2022 titled 'Omkar Realtors and Developers Private Limited v. Adjudicating Authority, Prevention of Money Laundering through its Registrar and Ors.' The Petitioner is aggrieved by the impugned Provisional Attachment Order dated 14th January, 2022 i.e., PAO No. 1/2022 by which one of the properties which was mortgaged with the Petitioner was attached/seized by the Directorate of Enforcement (ED) under Section 5 of the Prevention of Money Laundering Act (hereinafter 'PMLA'). The basis of the PAO is FIR No. 109/2020 dated 7th March, 2020 registered with City Chowk Police Station Aurangabad invoking Sections 420, 406 and 34 of the Indian Penal Code, 1860. The details of the properties attached in the impugned PAO are set out below:
6.2 Ms. Loveleen Behera, Vice President, Yes Bank Ltd., during her statement recorded on 01.09.2021 under the provisions of Section 50 of PMLA, has interalia stated that during the year 2015, the then saleable area of Omkar 1973 Project was mortgaged with Yes Bank Ltd. and M/s Piramal Realty Pvt. Ltd; that in the year 2016, M/s Surana Developers (Wadala) LLP, a company of M/s ORDPL, approached the Yes Bank Ltd., for an additional loan of Rs. 410 crores for Anand Nagar SRA CHS Scheme; that Yes Bank Ltd., disbursed an amount of Rs. 410 crores and against the said loan, a saleable area of 3.5 lakhs sq ft. to be loaded in Omkar 1973 project, Worli, was mortgaged with the Yes Bank Ltd and therefore, the specific saleable area of 3.5 lakhs sq ft. of M/s Surana Developers (Wadala) LLP for Anand Nagar SRA CHS Scheme was mortgaged only with the Yes Bank Ltd. and the other saleable area of identified units of area 5 lakhs sq ft. in Omkar 1973 Worli was mortgaged with M/s Piramal Realty Pvt. Ltd. only with residual charge on Yes Bank Ltd. and the rest of saleable area of Omkar 1973 project, Worli was mortgaged with both Yes Bank Ltd. and M/s Piramal Realty Pvt. Ltd. She further stated that earlier the saleable area of 3.5 lakhs sq ft of Anand Nagar SRA CHS Scheme was mortgaged only with the Yes Bank Ltd; that by the year 2019, the development right of Surana Developers (Wadala) LLP's LOI for Anand Nagar SRA CHS Scheme, was also cross collateralised for Rs. 1300 crores which was the other loans of Yes Bank Ltd. and therefore, the total saleable area mortgaged for Rs. 1300 crores and the total saleable area of Anand Nagar SRA CHS Scheme were now mortgaged with both Yes Bank Ltd. and M/s Piramal Realty Pvt. Ltd., due to cross collateral; that Yes Bank Ltd. has primary charge on the Omkar 1973 Project for an outstanding amount of Rs. 1300 crores and a residual charge for Rs. 410 crores of Surana Developers which means if Rs. 1300 crores given as loan to M/s ORDPL is paid by them and still there are some more saleable area left to be sold, then the same could be used for the payment of Rs. 410 crores given as loan by Yes Bank Ltd. to M/s Surana Developers; that Yes Bank Ltd. and M/s Piramal Realty Pvt. Ltd. has entered into Inter Creditor Agreement dated 02.03.2021; that Yes Bank Ltd. loan exposure of Rs. 1810 crores was classified as NPA in the year 2019; that the loan exposure of Rs. 872 crores of M/s Piramal Realty Pvt. Ltd. was not paid by M/s ORDPL and the same were still outstanding.
6.3 From the above, it is revealed that for the constructions of Tower A, B & C in Omkar 1973 Worli, the Project has been financed by M/s Yes Bank Ltd. and M/s Piramal Realty Pvt. Ltd. and accordingly both have created their charges on the said project.
6.4 From the investigation conducted so far it is revealed that the Proceed of Crime to the extent of Rs. 330 crores has been spent for the constructions of Tower A, B & C in Omkar 1973 Worli. However, as per the statement given by Shri Pradeep Jain, the construction work in all the three towers was going on simultaneously and the ve
AI
The discharge or acquittal of the accused in the scheduled offence has consequences on the money laundering proceedings under the Prevention of Money Laundering Act.
The Prevention of Money Laundering Act proceedings are independent of the predicate offence and must proceed without delay, reflecting the urgency in addressing economic crimes.
Prosecution under the Prevention of Money Laundering Act, 2002 is not sustainable without a registered scheduled offence, as established by the Supreme Court in Vijay Madanlal Choudhary.
The main legal point established in the judgment is that the PMLA is an independent sui generis Act, and the complainant is required to prove the case independently, without presuming the derivation ....
Proceedings under the Prevention of Money Laundering Act are independent and can be based on continuing laundering activities, regardless of the scheduled offence's date of commission.
The trial under the Prevention of Money Laundering Act is independent of any pending trial for the predicate offence, as affirmed by the court.
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