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High Court of Judicature at Madras
V. RAMASUBRAMANIAN, J.
Dr. V.M. Ganesan & Another
Versus
The Joint Director, Directorate of Enforcement & Others
Writ Petition Nos. 24432 & 28235 of 2014 & M.P.No.1 & 1 of 2014
Decided on: 17-11-2014
Transplantation of Human Organs Act, 1994 - Section 19 - Prevention of Money Laundering Act, 2002 - Section 2(1)(y) - Indian Penal Code, 1860 - Sections 294(b), 406, 420, 465, 468, 471, 197, 419, 506(ii) - Criminal Procedure Code, 1973 - Section 173 - Order of Provisional Attachment - Enforcement Case Information Report - Transplantation of Human Organ - counsel appearing for petitioner in first writ petition learned Senior Counsel appearing for petitioner in second writ petition and Standing Counsel appearing for Directorate of Enforcement and Additional Government Pleader appearing for State Police which is second Respondent in first writ petition - A criminal case in registered by District Crime against four persons including petitioner in first writ petition - Petitioner in first writ petition is a Nephrologists - Offences alleged against those four persons are under Sections 294(b), 406, 420, 465, 468, 471, 197, 419, 506(ii) of Indian Penal Code read with Section 19 of Transplantation of Human Organs Act, 1994 - Simultaneously two more complaints were also registered in Crime - Out of offences for which aforesaid criminal complaints had been registered some of them such as Sections 420, 471 and 419 of Indian Penal Code and Section 19 of Transplantation of Human Organs Act 1994 Scheduled Offences in terms of Section 2(1)(y) of Prevention of Money Laundering Act, 2002 - Therefore Directorate of Enforcement Chennai Zonal Office registered an Enforcement Case Information Report – Held, Fortunately Adjudicating Authority is obliged under proviso to Sub-section (2) of Section 8 to issue a notice to every person who claims property to be his own and to provide an opportunity of being heard even to such a person - Therefore Adjudicating Authority is obliged to issue a notice to Housing Finance Limited - They have already issued show cause notices to the writ petitioners, though petitioner in second writ petition is not alleged of obtaining property as a result of any criminal activity to come within definition of expression proceeds of crime - Adjudicating Authority has power why even an obligation and a statutory duty under Section 8(2) to look into evidence produced by petitioner in second writ petition and Housing Finance Limited and to come to an independent conclusion as to whether provisional order of attachment is to be confirmed or not - Therefore court of view that petitioners should submit themselves to enquiry under Section 8(1) - It is not as though court do not have jurisdiction to test rival contentions – But question as to quantum of money pumped in by Housing Finance Limited and question as to whether petitioner in second writ petition lent monies and got property in return are questions of fact into which Adjudicating Authority can conveniently go into - Since Adjudicating Authority has a statutory obligation to independently go into this question and independently come to a conclusion without being influenced by gravity of offences pleaded against petitioners court of view that petitioners should go there - In fine court conclusion is that first ground of attack to provisional order of attachment does not merit acceptance - Second ground of attack concerns questions of fact which can be conveniently dealt with by Adjudicating Authority - Therefore both writ petitions are liable to be dismissed - writ petitions are disposed of
1. While the petitioner in the first writ petition has come with a challenge to a Provisional Order of Attachment passed by the Joint Director of Enforcement, the petitioner in the second writ petition has come up with a challenge both to the provisional order of attachment as well as to a show cause notice issued by the Adjudicating Authority, proposing to confirm the Provisional Order of Attachment.
2. Since the genesis of the impugned proceedings in both cases is the same, they are taken up together, though the writ petitions are by different persons and they have come up at different points of time.
3. I have heard Mr.N.Anand Venkatesh, learned counsel appearing for the petitioner in the first writ petition, Mr.A.Ramesh, learned Senior Counsel appearing for the petitioner in the second writ petition and Mr.M.Dhandapani, learned Standing Counsel appearing for the Directorate of Enforcement and Mr.P.Sanjay Gandhi, learned Additional Government Pleader appearing for the State Police, which is the second Respondent in the first writ petition.
4. A criminal case in Crime No.29/2013 was registered by the District Crime Branch, Dharmapuri District, against four persons including the petitioner in the first writ petition. The petitioner in the first writ petition is a Nephrologist. The offences alleged against those four persons are under Sections 294(b), 406, 420, 465, 468, 471, 197, 419, 506(ii) of Indian Penal Code, 1860 read with Section 19 of Transplantation of Human Organs Act, 1994. Simultaneously, two more complaints were also registered in Crime Nos.28 and 31 of 2013.
5. Out of the offences for which the aforesaid criminal complaints had been registered, some of them such as Sections 420, 471 and 419 of the Indian Penal Code and Section 19 of the Transplantation of Human Organs Act, 1994 are Scheduled Offences in terms of Section 2(1)(y) of the Prevention of Money Laundering Act, 2002. Therefore, the Directorate of Enforcement, Chennai Zonal Office registered an Enforcement Case Information Report in ECIR No.12/CEZO/PMLA/2013 on 15.11.2013.
6. After registering the Information Report and initiating investigation into Money-Laundering, the officers of the Enforcement Directorate are said to have recorded the statement of a few persons including the Medical Director of Vinayaka Mission Hospital, Salem as well as the petitioner in the first writ petition. On the basis of the statements so recorded, the Joint Director of the Enforcement Directorate passed an order under Section 5(1) of the Prevention of Money-Laundering Act, 2002, directing provisional attachment of two properties. One of them is a land and building in Door No.248, Karkana Street, Meyanur Village, Salem, standing in the name of the petitioner in the first writ petition. The other property is a land and building in Door No.5/329, Mecano Lands, State Bank Colony, Salem, purportedly transferred by the petitioner in the first writ petition to the petitioner in the second writ petition.
7. Upon receipt of the copy of the order of Provisional Attachment dated 18.08.2014, the Nephrologist, who is one of the accused in Crime No.29/2013, has come up with the first writ petition namely W.P.No.24432 of 2014.
8. But, the petitioner in the second writ petitioner did not rush to Court immediately upon receipt of the Provisional Order of Attachment. Since the Provisional Order of Attachment is required to be sent to an Adjudicating Authority for confirmation, the Joint Director of Enforcement sent the order. Immediately thereafter, the Adjudicating Authority has issued a notice dated 15.9.2014 calling upon the petitioners to show cause as to why the properties provisionally attached should not be declared to be the properties involved in Money-Laundering and consequently to show cause as to why the attachment should not be confirmed. Upon receipt of the show cause notice, the petitioner in the second writ petition has come up with the writ petition W.P.No.28235 of
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