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2012 Supreme(Mad) 2960
High Court of Judicature at Madras
T. MATHIVANAN
M. Saraswathy & Another
Versus
The Registrar Adjudicating Authority Another
Crl. O.P. No. 2240 of 2011
Decided on : 13-07-2012
For the Petitioners:K.S. Viswanathan, for S. Sivakumar, Advocate.
For the Respondents: M. Dhandapani, Central Government Standing Counsel.
The applicability of the Prevention of Money-Laundering Act, 2002 to properties acquired prior to its enforcement, and the necessity of forwarding a report to the Magistrate under Section 173 Cr.P.C., for provisional attachment.
Headnote:
Money Laundering - Criminal Proceedings - P.M.L.A., 2002 - Section 5(1), Section 3, Section 4
Fact of the Case:
The petitioners, directors of a company, sought to quash criminal proceedings alleging offences under various sections of the Indian Penal Code (I.P.C.) and the Prevention of Money-Laundering Act, 2002 (P.M.L.A.,) for transferring properties purchased with crime proceeds. The petitioners argued that they were not served with notices prior to the provisional attachment order, and that P.M.L.A., 2002 cannot be applied retrospectively to offences committed before its enactment. They also contended that no report had been forwarded to a Magistrate under Section 173 Cr.P.C., as a prerequisite for provisional attachment.
Finding of the Court:
The court found that the provisions of P.M.L.A., 2002, including the second proviso to Section 5(1), are applicable to properties acquired even prior to the Act's enforcement. The court also held that the requirement of forwarding a report to the Magistrate under the first proviso to Section 5(1) did not arise at the provisional attachment stage. The court further noted that the petitioners were estopped from filing the petition to quash the proceedings due to a prior dismissal of their writ petitions on the same matter.
Issues: The issues involved the applicability of P.M.L.A., 2002 to properties acquired before its enforcement, the necessity of forwarding a report to the Magistrate under Section 173 Cr.P.C., and the estoppel of the petitioners from filing the current petition.
Ratio Decidendi: The court held that the provisions of P.M.L.A., 2002 are applicable to properties acquired prior to its enforcement, and that the requirement of forwarding a report to the Magistrate did not arise at the provisional attachment stage. The court also found that the petitioners were estopped from filing the current petition due to a prior dismissal of their writ petitions on the same matter.
Final Decision: The criminal original petition was dismissed on the ground of being devoid of any merits, and the connected miscellaneous petitions were closed.
1. Invoking the inherent jurisdiction of this Court under Section 482 Cr.P.C., the petitioners have preferred this petition seeking the relief of quashing the criminal proceedings in Original Complaint (O.C.) No.73 of 2010 in Provisional Attachment Order No.07/2010 in the case file No.ECIR/53/CZ/PMLA/2010, on the file of the first respondent.
2. The petitioners are the director and managing director of M/s.D.R.Logistics Pvt., Ltd., a company incorporated under the Indian Companies Act, 1956.
3. It is manifested from the records that the following cases viz., crime Nos.277 of 2010, dated 26.05.2010; 349 of 2010, dated 18.07.2010; 350 of 2010, dated 18.07.2010 and 391 of 2010, dated 27.08.2010, have been registered on the file of E3-Minjur Police Station, Chennai against the petitioners alleging that they have committed the offences under Sections 406, 419, 420, 447, 294(b), 465, 468, 471 and 506(ii) I.P.C.,
4. The above said first information reports have been forwarded to the concerned Magistrate under Section 157 Cr.P.C., by the Station House Officer attached to E3Minjur Police Station, Chennai to the effect that the petitioners viz., Mrs.M.Saraswathi and Mr.R.Devadoss have contravened the provisions of Section 419, 420 and 471 I.P.C., for having committed the offence of impersonation, cheating and fabrication/forgery of documents pertaining to the lands of the complainant in the above mentioned criminal cases.
5. It is also manifested that the offences committed by the petitioners are the scheduled offences as defined under Section 2(y) of the Prevention of Money-Laundering Act, 2002 (herein after it may be referred to as 'P.M.L.A.,').
6. The petitioners were making arrangements to transfer 51 numbers of immovable properties specified in the Annexure-I of the Provisional Attachment Order in favour of third parties, which were purchased by the second petitioner Mr.R.Devadoss from the crime proceeds and got registered them in the name of the first petitioner Mrs.M.Saraswathi during the period from January 2006 to August 2009, those properties were therefore provisionally attached in terms of Section 5(1) of P.M.L.A., 2002 vide Provisional Attachment Order No.7 of 2010, dated 01.11.2010 by the second respondent.
7. The provisional attachment of 51 numbers of immovable properties under the Order of Provisional Attachment are liable to be confirmed under Section 8(3) of P.M.L.A., by the first respondent. Therefore, the second respondent vide the Deputy Director, Directorate of Enforcement (Prevention of Money-Laundering Act), Government of India, Shastri Bhavan, Chennai has filed a complaint in O.C.No.73 of 2010 under Section 5(5) of P.M.L.A., 2002 before the Chairperson and Member of the Adjudicating Authority (under Prevention of Money Launder Act, 2002), New Delhi.
8. Under this circumstance, the petitioners have come forward with this petition seeking the relief of quashing the above said complaint.
9. Heard Mr.K.S.Viswanathan, learned counsel appearing for Mr.S.Sivakumar, learned counsel, who is on record for the petitioners and Mr.M.Dhandapani, learned Central Government Standing Counsel for Enforcement Directorate.
10. Mr.K.S.Viswanathan, learned counsel, while advancing his arguments, has submitted that the petitioners being the Director and the Managing Director of the Company under the name and style of M/s.D.R.Logistics Private Limited, had been doing real estate business for the past several years. Out of the profit earned from the business, they had purchased certain lands at Vallur and at Edaiyanchavadi Village, Ponneri Taluk, Thiruvallur District in the name of their family members.
11. He has submitted further that on account of downfall in their real estate business, their company had defaulted in repayment of the loan amount, which was availed from the Bank of India and in view of this fact, the Bank of India exercising its power under Section 13(2) of the Securitization and Reconstruction of
