Point of Law: Provisional attachment order - Act itself does not provide any opportunity of hearing to concerned party prior to passing of order of provisions attached under Section 5 of Act. Rightly so as after order under Section 5 of Act, aggrieved party has multi layered remedies under Act.

JUDGMENT :

SAURABH LAVANIA, J.

1. By means of the present writ petition, a challenge has been made to the provisional attachment order no. 2 of 2021 dated 09.03.2021 (annexed as annexure no. 1 to the writ petition) passed by respondent no. 4 in exercise of power under sub-Section 1 of Section 5 of the Prevention of Money Laundering Act, 2002 (in short ‘Act’). The petitioner has also sought consequential relief which is to the effect that respondents may be directed not to give effect to the provisional attachment order no. 2 of 2021 dated 09.03.2021. The reliefs as sought in the writ petition on reproduction, reads as under:-

“(a) issue a writ, order or direction in the nature of CERTIORARI quashing the impugned provisional attachment order no. 02/2021 dated 09.03.2021 (Annexure No. 1) passed by respondent no. 4 with respect to the four sugar mills of the petitioner and all other consequential proceeding arising thereof in respect of the petitioner.

(b) issue a writ, order or direction in the nature of mandamus commanding the respondents not to give effect to the provisional attachment order no. 02/2021 dated 09.03.2021 passed by respondent no. 4 and not to unnecessary harass the petitioner.”

2. For the purpose of admission and interim relief sought in the writ petition, Sri. Satya Prakash Singh, Learned Senior Advocate assisted by Sri. Karunanidhi Yadav, Advocate submitted that the impugned provisional attachment order has been passed in violation of the provisions of Section 5 of the Act. The procedure, as required has not been followed prior to passing of the impugned order. Even no opportunity was provided by the concerned authority before passing the impugned order.

3. It is further submitted that the entire controversy is related with the disinvestment policy of sugar mills in the State of U.P., which were sold to different companies through auction. Elaborating his arguments, he submitted that, a Public Interest Litigation (PIL) No. 5283 of 2021 (Sacchidanand Gupta vs. State of U.P. and Others) was filed before this Court challenging the auction of sugar mills, which was dismissed by this Court vide judgment and order dated 20.08.2016 and the same was challenged before Hon’ble Apex Court in SLP No. 26351 of 2016. In SLP, an order dated 16.09.2016 was passed. As per interim order dated 16.09.2016, the respondents therein (including the petitioner) are free to use the sugar mills purchased by them as sugar mills and make them functional and if the sugar mills have gone out of production, the same cannot be transferred or otherwise alienated or encumbered without the permission of Hon’ble Apex Court. In this way, there is no question of alienation of the property and creation of third party right, as such, the impugned provisional attachment order is liable to be interfered by this Court in the writ jurisdiction.

4. He further stated that before passing the provisional attachment order under Section 5 of the Act, the concerned authority is required to record the reasons to believe on the basis of material in his possession that if such proceeds of crime are concealed, transferred or dealt with in any manner then it would frustrate the proceedings relating to confiscation of such proceeds of crime and in the instant case, there is already an interim order of Hon’ble Apex Court and as such, no third party right can be created in terms of the same as such also the impugned order is not sustainable.

5. He further submitted that the proceedings have been initiated on account of political vendetta and to settle the political scores. On this aspect, he submitted that Mohd. Iqbal, father of Mohd. Wazid and Mohd. Javed, who is the director of the Company, had been frontline leader of Bahujan Samaj Party and taking into account the same, an FIR dated 07.11.2017 was lodged at Police Station-Gomti Nagar, Lucknow registered as case crime no. 1409 of 2017, under Sections 420, 468, 471, 477A IPC and 629A of the Companies Act, 1956. Aggrieved by