The allocation of coal does not constitute proceeds of crime under the Prevention of Money Laundering Act if no illegal gains are derived or shown, particularly after quashing of the related first chargesheet.

JUDGMENT

1. For the purposes of ease of reference, this decision has been divided under the following categories:

A. INTRODUCTION

2. These two writ petitions challenge proceedings initiated by the Directorate of Enforcement, the respondents herein, under the provisions of the Prevention of Money Laundering Act, 2002¹ . The leading writ petition had come to be preferred at a time when a provisional order of attachment came to be made under the Act. The Court, by its order of 06 January 2022, entertained the writ petition and called upon the respondents to file their replies. On 03 March 2022, this Court took notice of the proceedings initiated by the Adjudicating Authority before whom the matter came to be placed for the purposes of confirmation of the provisional order of attachment. Taking note of the rival submissions, this Court on that date allowed the amendments proposed and passed the following detailed order:

"CM APPL. 10948/2022 (for amendment of petition) in W.P.(C) 14999/2021 CM APPL. 10951/2022 (for amendment of petition) in W.P.(C) 15000/2021

The record reflects that the present petition was instituted at a stage when a Provisional Order of Attachment had come to be made in terms of the provisions of Section 5 of the Prevention of Money Laundering Act, 2002 [PMLA]. The submissions of respective parties were noticed in some detail in the order of 06 January 2022. Pursuant to that order, parties were directed to exchange pleadings. Counter and rejoinder affidavits have subsequently come to be filed. By way of the present application for amendment, the petitioners lay challenge to the notices issued under Section 8 of the PMLA by the Adjudicating Authority.

Learned counsel appearing for the Enforcement Directorate has, at the outset, submitted that in the fitness of things, the petitioners should be called upon to file their replies to the show-cause notices leaving it open to the Adjudicating Authority to decide all contentions which are urged before this Court.

While ordinarily that may have sufficed, this Court notes that, by the order of 06 January 2022, the challenge to the initiation of proceedings under the PMLA on jurisdictional grounds was duly entertained. The Court had taken notice of the challenge mounted on the ground that the offenses which are alleged to have been committed, were not enumerated as a "scheduled offense" at the relevant point of time. In that view of the matter and since the Court has already taken note of the challenge raised, it would be inappropriate to grant liberty to the Adjudicating Authority to independently rule on the questions which are raised here.

The amendments essentially assail further proceedings and steps taken pursuant to the Provisional Order of Attachment. In view of the aforesaid, the amendments as proposed by way of the present application are allowed.

The Court notes that the amended writ petition already exists on the record.

The application shall stand disposed of.

W.P.(C) 14999/2021 & CM APPLs. 47329/2021, 553/2022, 10949/2022