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IN THE HIGH COURT OF DELHI AT NEW DELHI
Subramonium Prasad, J.
Brij Bala Kapur - Appellant
Versus
Directorate of Enforcement Surat Sub Zonal Unit - Respondent
W.P.(C) 14448 of 2023 & CM APPL. 57250 of 2023
Decided On : 06-02-2024
PMLA - Provisional Attachment Order - 5, 8(1), 8(2) - The court discussed the Provisional Attachment Order (PAO) under the Prevention of Money Laundering Act, 2002 (PMLA, 2002) and the legal provisions of Sections 5, 8(1), and 8(2) of the PMLA, 2002. The court emphasized the procedure for provisional attachment, adjudication, and appeal under the PMLA, 2002, and highlighted the importance of exhausting statutory remedies before seeking judicial intervention.
Fact of the Case:
The Petitioner challenged the Provisional Attachment Order (PAO) under the PMLA, 2002, which was based on allegations of money laundering and illegal remittances involving various companies and individuals. The Petitioner contended that the properties attached were purchased prior to the period under scrutiny and that there was no application of mind by the Respondent in passing the PAO.
Finding of the Court:
The court held that the Adjudicating Authority has the power to examine the facts of the case before concluding whether the properties in question are proceeds of crime. It emphasized that the offences under the PMLA Act are distinct from offences under the IPC and that the companies can still be convicted for the predicate offence, indicating that the proceedings against the Petitioner should not be dropped solely based on the discharge of some individuals.
Issues: The issues revolved around the validity of the PAO under the PMLA, 2002, the application of mind by the Respondent in passing the PAO, and the distinct nature of offences under the PMLA Act compared to the IPC.
Ratio Decidendi: The court emphasized the importance of exhausting statutory remedies before seeking judicial intervention, highlighted the distinct nature of offences under the PMLA Act, and underscored the power of the Adjudicating Authority to examine the facts of the case before concluding whether the properties in question are proceeds of crime.
Final Decision: The writ petition was dismissed, and the court emphasized that the Petitioner should exhaust the statutory remedies available under the PMLA, 2002 before seeking judicial intervention.
JUDGMENT
1. The Petitioner has approached this Court challenging the Provisional Attachment Order (PAO) bearing No.3/2023 dated 06.10.2023 passed by the Respondent.
2. The facts as mentioned in the Provisional Attachment Order (PAO) are that an FIR No. 1/16/2014 dated 11.04.2014 was registered by the Detection of Crime Branch, Surat Police for the offences under Sections 120(B), 420, 465, 467, 468, 471 and 477A of the Indian Penal Code, 1860 (hereinafter referred to as "IPC") on the basis of a complaint received from ICICI Bank, Surat against M/s R. A. Distributors Pvt. Ltd and its Directors alleging that the company had prepared 17 fake bills of entry and presented the same before the ICICI Bank for making foreign outward remittances. Another FIR No. 1/17/2014 dated 13.04.2014 was also registered by the Detection of Crime Branch, Surat Police against M/s Harmony Diamonds Pvt. Ltd., M/s Agni Gems Pvt. Ltd. and their Directors for similar offences. The PAO further indicates that the chargesheets have been filed. The chargesheet names the following:
| S. No. | Date of Chargesheet | FIR No. | Name of Accused |
| 1. | 19.08.2014 | I/16/2014 | Sunil Agarwal |
| 2. | 30.09.2014 | I/16/2014 | Madan Lal Jain |
| 3. | 04.11.2014 | I/16/2014 | Afroz Mohd Hasanfatta |
| 4. | 26.10.2017 | I/17/2014 | Pankaj S Jain |
3. The allegations against the accused are that they hatched a well- planned conspiracy by forming different companies/partnership/proprietorship firms and lured people by offering them side income of Rs.10,000-12,000 just to obtained their photos, ID proofs and residence proofs and enlist them as Directors of M/s RA. Distributors Pvt. Ltd, M/s Riddhi Exim Pvt. Ltd., M/s M.B. Offshore Distributors Pvt. Ltd., M/s Maa Mumba Devi Gems Pvt. Ltd., M/s Hem Jewels Pvt. Ltd. etc. It is stated that some persons who were lured with money, were called to the office of the accused located at Office No. 416- 417, Opera House, Panchratna Building, Mumbai. Bank employees were present at the location with documents required to open new bank accounts and such forms were filled and signatures were taken. It is mentioned that at places signatures of the witnesses were forged and false KYC documents were presented for opening accounts in ICICI Bank. After the accounts were opened, the amounts were credited on different occasions with the help of one Prafulbhai Mohanbhai Patel in Axis Bank accounts of M/s Aarzoo Enterprise, M/s G.T. Traders, M/s Vandana & Co. etc., through RTGS/NEFT and thereafter, the said amount deposited in Axis Bank were transferred to the accounts in ICICI Bank, Ring Road Branch, Surat.
4. The chargesheets also reveal that the accused deposited forged bills of entry by affixing counterfeit stamps and forged the signatures of Sh. Abhay Desai, Appraising Officer, Diamond Bourse, Custom Department, Surat and of Shri R. S. Paliya, Custom Inspector to show that cut and polished diamonds were imported during the year 2010-2011 from Dubai and Hong Kong by (1) M/s R. A. Distributors Pvt. Ltd., (2) M/s Maa Mumbadevi Gems Pvt. Ltd., (3) M/s Hem Jewells Pvt. Ltd., (4) M/s Ridhhi Exim Pvt. Ltd., (5) M/s M. B. Offshore Distributors Pvt. Ltd., (6) M/s Trinetra Trading Company Pvt. Ltd., and (7) M/s Ramshyam Exports Pvt. Ltd., and during the period from October, 2013 to March, 2014 deposited bogus and fabricated bills of entries in ICICI Bank, Ring Road Branch, Surat by forging the signatures of the directors on whose behalf the accounts were opened (who were lured with money) and remitted a total sum of Rs. 428,37,24,350/- illegally to different Hong Kong and UAE based companies.
5. When investigation was done on the basis of aforesaid FIRs, it was found that the amounts were remitted from the following companies having accounts with ICICI Bank, Ring Road, Surat:
6. Proceedings were also initiated under the Prevention of Money Laundering Act, 2002 (hereinafter referred to as "PMLA, 2002"). During the course of investigation, statemen
Properties acquired before the commission of an alleged offence cannot be attached under the Prevention of Money Laundering Act, and due process must be followed in such proceedings.
Writ petitions are not entertained when alternative statutory remedies are available under the relevant legislation, emphasizing adherence to legal protocols for addressing grievances.
The court emphasizes that when statutory remedies are available, the extraordinary jurisdiction under Article 226 of the Constitution should not be exercised unless there are exceptional reasons to d....
The court emphasized the availability of an alternate efficacious remedy within the scope of the PMLA Act and upheld the decision to relegate the Appellant/Bank to the Adjudicating Authority.
The main legal principle established is that properties to be proceeded against under PMLA must be connected to the criminal activity, and ex facie illegal acts can be interfered with under Article 2....
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