IMPORTANT POINT
Possession under Section 8(4) of the PMLA should be an exception, not a rule, and requires careful consideration of the case's specific circumstances.

JUDGMENT :

Sureshwar Thakur, J.

Through the instant writ petition, the petitioner herein seeks the quashing/setting aside of notice of eviction dated 06.06.2024 (Annexure P-2), as became issued under Section 8 (4) of the Prevention of Money Laundering Act, 2002 (hereinafter for short called as ‘the PMLA’), provisions whereof are extracted hereinafter.

“8. Adjudication.—

(1) xxxx xxxx

(2) xxxx xxxx

(3) xxxx xxxx

(4) Where the provisional order of attachment made under sub-section (1) of section 5 has been confirmed under subsection (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the property attached under section 5 or frozen under subsection (1A) of section 17, in such manner as may be prescribed:

Provided that if it is not practicable to take possession of a property frozen under sub-section (1A) of section 17, the order of confiscation shall have the same effect as if the property had been taken possession of.

(5) xxxx xxxx

(6) xxxx xxxx .....”

2. The learned counsel for the petitioner submits, that the said eviction notice, is illegal and violative of the settled law, as enunciated by the Apex Court in a verdict rendered in case titled as Vijay Madanlal Choudhary Vs. Union of India, (2002) SCC Online SC 929. The relevant paragraphs of the said verdict are extracted hereinafter.

73. The other grievance of the petitioners is in reference to the stipulation in sub-section (4) of Section 8 providing for taking possession of the property. This provision ought to be invoked only in exceptional situation keeping in mind the peculiar facts of the case. In that, merely because the provisional attachment order passed under Section 5(1) is confirmed, it does not follow that the property stands confiscated; and until an order of confiscation is formally passed, there is no reason to hasten the process of taking possession of such property. The principle set out in Section 5(4) of the 2002 Act needs to be extended even after confirmation of provisional attachment order until a formal confiscation order is passed. Section 5(4) clearly states that nothing in Section 5 including the order of provisional attachment shall prevent the person interested in the enjoyment of immovable property attached under sub-section (1) from such enjoyment. The need to take possession of the attached property would arise only for giving effect to the order of confiscation. This is also because sub-section (6) of Section 8 postulates that where on conclusion of a trial under the 2002 Act which is obviously in respect of offence of money- laundering, the Special Court finds that the offence of money- laundering has not taken place or the property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it. Once the possession of the property is taken in terms of subsection (4) and the finding in favour of the person is rendered by the Special Court thereafter and during the interregnum if the property changes hands and title vest in some third party, it would result in civil consequences even to third party. That is certainly avoidable unless it is absolutely necessary in the peculiar facts of a particular case so as to invoke the option available under sub-section (4) of Section 8.

75. The learned counsel appearing for the Union of India, had invited our attention to the recommendations made by FATF in 2003 and 2012 to justify the provision under consideration. The fact that non-conviction based confiscation model is permissible, it does not warrant an extreme and drastic action of physical dispossession of the person from the property in every case — which can be industrial/commercial/business and also residential property, until a formal order of confiscation is passed under Section 8(5) or 8(7) of the 2002 Act. As demonstrated earlier, it is possible that the Special Court in the trial concerning money-laundering offence may eventually decide the issue i