The court emphasized the authority's power to attach property derived from criminal activity and highlighted the necessity of laws to protect against money laundering and swindlers.

1. The petitioner has filed the present writ petition seeking to challenge the provisional order of attachment, dated 05.10.2010 passed under Section 5(1) of the Prevention of money Laundering Act, 2002 (for short POMLA) by the second respondent Deputy Director of Enforcement, POMLA as well as the consequential complaint No.70/2010, dated 01.11.2010 pending on the file of the Adjudicating Authority under the POMLA, New Delhi.

2. The writ petition was admitted on 10.1.2011. Pending the writ petition, this court had granted an interim stay for a period of four weeks in M.P.No.2 of 2011. In the application in M.P.No.3 of 2011 for suspension of provisional attachment of moveable assets of the petitioner, only notice was ordered. Aggrieved by the interim order, the second respondent has filed a vacate stay application in M.P.No.4 of 2011. When that application came up for hearing, with the consent of both parties, the main writ petition itself was taken up for hearing.

3. Heard the arguments of Mr.R.Subramanian, learned Senior Counsel leading Mr.S.D.Venkateswaran, learned counsel appearing for petitioner, Mr.M.Dhandapani, learned Central Government Standing Counsel appearing for second respondent and M/s.Ramalingam Associates on behalf of fourth respondent Bank.

4. The facts leading to filing of the above writ petition are as follows:

In connection with the petitioner's activities in forging documents and forging records in the name of non existing companies for the purpose of getting loan from the Bank, criminal cases were registered against the petitioner. The offence committed by the petitioner is covered by POMLA and investigation was undertaken by the second respondent Enforcement Directorate. It was thereafter, the provisional attachment order was made vide GSR 441(E), dated 1.7.2005. The complaint under Section 5(5) of POMLA in O.C.No.70 of 2010 in Provisional Attachment Order No.6 of 2010, dated 05.10.2010 was filed on 1.11.2010 by the second respondent Deputy Director of Enforcement before the first respondent Adjudicating Authority at New Delhi. The first respondent on considering the complaint had issued a show cause notice under Section 8 of POMLA to the petitioner for his appearance before the first respondent calling him to show cause to his source of income, out of which or by means of which the provisionally attached movable properties were acquired. The petitioner instead of appearing before the first respondent has filed the present writ petition challenging the provisional attachment order as well as the case filed against him.

5. It was further stated that one Karthikeyan, the Managing Director of M/s.Ari Fabrics Ltd. having office at Coimbatore had entered into a Memorandum of Understanding dated 13.2.2008 with the petitioner that he should settle the amount of Rs.6.5 Crores which was obtained by the said Karthikeyan as loan for the purpose of running M/s.Ari Fabrics Ltd. For this purpose, the petitioner was appointed as the additional Director and that Board resolution was also passed. The petitioner had paid an amount of Rs.2 Crores towards the said loan to the State Bank of India, Trichy Road Branch, Coimbatore. But, however, he did not pay the balance amount as undertaken by him pursuant to the Memorandum of Undertaking, dated 13.2.2008. In fact, it was the complaint of the Managing Director of M/s.Ari Fabrics Ltd. that the petitioner without being authorised by any Board resolution had opened a current account in the name of M/s.Ari Fabrics with the fourth respondent Bank of Baroda, Udumalpet by forging the signature of the Managing Director and also made it appear as if the Board had authorised him to open the current account in the name of the Mill. The said Karthikeyan, Managing Director had filed a complaint with the District Crime Branch, Coimbatore. The criminal case was registered under Sections 120-B, 468, 471 and 409 IPC against the petitioner.

6. Similarly, though the petitioner was aut