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High Court of Judicature at Madras
V. RAMASUBRAMANIAN
A. Kamarunnisa Ghori & Others
Versus
The Chairperson Prevention of Money Laundering, Union of India & Others
Writ Petition Nos.1912, 2870, 13421 & 22062 of 2011 & M.P.Nos.2,2,2 & 1 of 2011
Decided on : 11-07-2012
PREVENTION OF MONEY LAUNDERING ACT, 2002 - PROVISIONAL ATTACHMENT ORDER - CONFIRMATION - ADJUDICATING AUTHORITY - OPPORTUNITY OF BEING HEARD - INDEPENDENT OWNERSHIP OF THE PROPERTIES - DISPOSSESSION FROM THE PROPERTIES - VALIDITY - CONSTITUTIONAL GUARANTEES - INTERPRETATION OF SECTION 8(4) - POSSESSION - MEANING - SYMBOLIC POSSESSION - ACTUAL PHYSICAL POSSESSION - RIGHT TO PROPERTY - CONSTITUTIONAL RIGHT - HUMAN RIGHTS - INTERPRETATION OF STATUTES - REASONABLE AND JUST INTERPRETATION - SECTION 10 - MANAGEMENT OF PROPERTIES CONFISCATED - SECTION 9 - VESTING OF A CONFISCATED PROPERTY IN THE CENTRAL GOVERNMENT - SECTION 5(4) - ENJOYMENT OF THE IMMOVABLE PROPERTY - WRIT PETITION - MAINTAINABILITY - ALTERNATIVE REMEDY OF APPEAL TO THE APPELLATE TRIBUNAL - SECTION 26(1) - SECTION 42.
Fact of the Case:
The petitioners in these writ petitions, challenge the provisional orders of attachment passed by the Director of Enforcement, which later got confirmed by the Adjudicating Authority, under the Prevention of Money Laundering Act, 2002.
Finding of the Court:
1. The petitioners in the first two writ petitions are the wife and daughter of one Md. Ismail Khan Ghori, against whom a complaint in Crime No.35 of 2010 was registered for alleged offences under Section 420 read with Section 511 IPC and Sections 4 and 5 of Prize Chits and Money Circulation Scheme (Banning) Act, 1978. 2. The petitioner in the third and fourth writ petitions is the mother of one S.Anbu, who was implicated along with one Mr.Amarchand Kothari and a few others in a criminal complaint in Crime No.4 of 2008 for offences under Sections 420, 467, 468, 471 and 406 IPC.
Issues: 1. Whether the petitioners were given adequate opportunity of being heard before passing the impugned orders? 2. Whether the respondents can attach the properties owned by the family members of the accused without deciding the question of independent ownership of the properties? 3. Whether the dispossession from the properties in pursuance of the impugned orders of the Adjudicating Authority is wholly illegal and unjustified? 4. Whether Section 8(4) of the Act is invalid for enjoining deprivation of possession of immovable property even before conclusion of guilt/conviction in the prosecution for an offence of money-laundering?
Ratio Decidendi: 1. The petitioners in the first two writ petitions were not given adequate opportunity of being heard before passing the impugned orders. However, the petitioners in the third and fourth writ petitions were given adequate opportunity of being heard. 2. The respondents can attach the properties owned by the family members of the accused even without deciding the question of independent ownership of the properties, in view of the second proviso to Section 5(1) of the Act. 3. The dispossession from the properties in pursuance of the impugned orders of the Adjudicating Authority is wholly illegal and unjustified, as the Act does not give power to the respondents to dispossess a person from a property, even before conviction by the competent court. 4. Section 8(4) of the Act is not invalid for enjoining deprivation of possession of immovable property even before conclusion of guilt/conviction in the prosecution for an offence of money-laundering, as the expression "possession" appearing in Section 8(4) should be construed to mean constructive or symbolic possession, and not actual physical possession.
Final Decision: The writ petitions are allowed to a limited extent, confirming all other portions of the impugned orders of the Deputy Director and the Adjudicating Authority, except the portion relating to actual physical possession. The respondents are directed to put the petitioners back into possession of the properties. However, the legal and constructive possession of the properties shall be deemed to remain with the Deputy Director/Director and the petitioners cannot alienate, encumber or part with possession of the properties until the conclusion of the criminal proceedings against the accused and until the conclusion of the confiscation proceedings that may be taken up after the decision of the Criminal Courts.
1. The petitioners in these writ petitions, challenge the provisional orders of attachment passed by the Director of Enforcement, which later got confirmed by the Adjudicating Authority, under the Prevention of Money Laundering Act, 2002.
2. I have heard Mr.N.Manokaran, learned counsel appearing for the petitioner in the first two writ petitions, Mr.J.Ferozkhan, learned counsel appearing for the petitioner in the third and fourth writ petitions and Mr.M.Dhandapani, learned counsel appearing for the Directorate of Enforcement.
3. The petitioners in the first two writ petitions are the wife and daughter of one Md. Ismail Khan Ghori, against whom a complaint in Crime No.35 of 2010 was registered for alleged offences under Section 420 read with Section 511 IPC and Sections 4 and 5 of Prize Chits and Money Circulation Scheme (Banning) Act, 1978. The said Md. Ismail Khan Ghori and his two sons and another person, were partners of a Company by name M/s.Green Life. It is alleged in the criminal complaint that the said Company collected huge amounts from thousands of customers in Trichy, Coimbatore, Tirunelveli etc., and cheated them. The partners were all arrested and detained in custody.
4. Thereafter, the Deputy Director of Enforcement, who is the second respondent in the first two writ petitions, passed a Provisional Attachment Order bearing No.4 of 2010 under Section 5(1) of the Prevention of Money Laundering Act, 2002, directing the attachment of certain immovable properties, allegedly purchased out of the proceeds of crime. Though this order dated 23.6.2010 passed by the second respondent could be in force for a period of 150 days, the Director is obliged under section 5 (5) of the Act to file an application for confirmation before the Adjudicating Authority within 30 days of the order of attachment.
5. Therefore, the Deputy Director filed appropriate applications in O.C.Nos. 56, 57 and
58 of 2010 before the Adjudicating Authority, praying for confirming the order of provisional attachment under Section 8(3) of the Act. On the said application, the Adjudicating Authority issued a notice to the petitioners. But it appears that a counsel, who undertook to appear for the petitioners in the first two writ petitions took adjournments thrice and failed to appear before the Adjudicating Authority thereafter. Therefore, the Adjudicating Authority proceeded to hear the matter on merits and it passed an order dated 12.11.2010, directing the confirmation of the Provisional Attachment Orders and further directing the second respondent to forthwith take possession of the properties attached. Accordingly, the Deputy Director also took actual physical possession of the properties. Therefore, the petitioners who are the wife and daughter of the prime accused, have come up with the above writ petitions, challenging the Provisional Attachment Order dated 23.6.2010 and the order of the Adjudicating Authority dated 12.11.2010.
6. The petitioner in the third and fourth writ petitions viz., W.P.Nos.13421 and 22062 of 2011, is the mother of one S.Anbu, who was implicated along with one Mr.Amarchand Kothari and a few others in a criminal complaint in Crime No.4 of 2008 for offences under Sections 420, 467, 468, 471 and 406 IPC. On the basis of the said complaint, enquiries were initiated by the Directorate of Enforcement under the Prevention of Money Laundering Act, 2002.
7. On the basis of the documents available in Crime No.4 of 2008, the Enforcement Directorate registered an Enforcement Case Information Report No.01 of 2009 dated 4.6.2009. Thereafter, a property standing in the name of the petitioner (mother of the accused by name S.Anbu) was provisionally attached by the Deputy Director in terms of Section 5(1) of Prevention of Money Laundering Act, 2002, by order No.02 of 2011 dated 28.3.2011. Challenging the provisional attachment, the petitioner filed W.P.No.13421 of 2011. Notice was ordered in the said writ petition on 10-6-2011 an
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