Back
2026 Supreme(Mad) 1439
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
N. Sathish Kumar, M. Jothiraman, JJ.
M/s. Visvas Promoters Private Limited - Appellant
Versus
The Joint Director, Directorate of Enforcement – Respondent
W.A.(MD)No.112 of 2025 and C.M.P.(MD)No.705 of 2025
Decided On : 16-04-2026
For the Appellant : Mr.T.Mohan, Senior Counsel, for Mr.S.Parthasarathy
For the Respondent: Mr.S.G.L.Rishwanth, Mr.F.Deepak, Spl. Govt. Pleader
PMLA attachment not binding on bona fide third-party purchaser whose property erroneously included in prior liquidation sale; prior court orders excluding property prevail.
Headnote:The property, originally exchanged in 1996 and purchased by appellant in 2007, was erroneously included in liquidation auction of a company wound up under Companies Act proceedings. Court orders in C.A. No. 405 of 2013 and W.M.P. Nos. 9381 & 9386 of 2022 directed refund to auction purchaser and exclusion of appellant's property from sale certificate, confirming appellant as stranger to proceedings. Attachment under PMLA against auction purchaser confirmed on 22.12.2021 without adjudicating third-party title. Issues framed: Whether attachment binds bona fide purchaser unconnected to PMLA offence. Ratio: Provisional and confirmed attachments targeted auction purchaser only; appellant's title established independently, property unconnected to money-laundering; no notice or adjudication of appellant's rights; 'claimant' under Rule 2(b) of Prevention of Money-laundering (Restoration of Confiscated Property) Rules, 2016 inapplicable as no quantifiable loss from offence. Writ Appeal allowed; attachment not binding on appellant; no need to approach Special Court.
| Table of Content |
|---|
| 1. history of property exchange, purchase, erroneous auction inclusion (Para 2 , 3) |
| 2. single judge dismissal and parties' contentions (Para 4 , 5 , 6) |
| 3. court review of facts and prior orders excluding property (Para 8 , 9 , 10) |
| 4. attachment invalid against unconnected third-party; no claimant status (Para 11 , 12 , 13 , 14) |
| 5. attachment lifted; writ appeal disposed (Para 15) |
JUDGMENT :
N. SATHISH KUMAR, J.
Challenging the order of the learned Single Judge dated 17.12.2024 passed in W.P.(MD)No.30548 of 2024, dismissing the Writ Petition, the present Writ Appeal has been filed.
2. The above said Writ Petition has been filed by the appellant herein for a direction, directing the respondents 1 and 2, to raise the attachment in respect of the property comprised in UDR S.Nos.71/2A1A to 71/2A1M, Vilangudi II Bit Village, Madurai North Taluk, Madurai District.
3. The following facts are necessary for the disposal of the writ appeal:
3.1. An extent of 1.95 acres in R.S.No.247/2 now comprised in UDR Survey No.71/2A situated at Vilangudi II Bit Village, Madurai North Taluk, Madurai District originally owned by one M/s.Visalakshi Mills Private Limited. Adjacent to the said property, an extent of 42 cents in R.S.No.236/4, presently UDR Survey No.62/4B was owned by one Muniyammal. Both the properties were exchanged by their respective owners by the exchange deed dated 25.11.1996. Accordingly M/s. Visalakshi Mills Private Limited became the absolute owner of the property comprised in R.S.No.236/4 present UDR Survey No.62/4B to an extent of 42 cents situated at Vilangudi II Bit Village, Madurai North Taluk, Madurai District. The said Muniyammal became the absolute owner of the property comprised in R.S.No.247/2 now comprised in UDR Survey No.71/2A admeasuring to an extent of 1 acre situated at Vilangudi II Bit Village, Madurai North Taluk, Madurai District. The remaining extent of 95 cents stands retained by M/s.Visalakshi Mills Private Limited. The Writ Petitioner purchased 1 Acre of land from the said Muniyammal on 11.05.2007, after sub-division as UDR.Survey No. 71/2A1 and the Writ Petitioner was also issued Patta No.1000.
3.2. In the meanwhile M/s.Visalakshi Mills Private Limited was ordered to be wound up in C.P.No.78 of 2008 by the Principal Bench of this Court. In pursuant to which, the remaining property belongs to M/s. Visalakshi Mills Private Limited was brought for auction. While bringing the property of M/s. Visalakshi Mills Private Limited for auction, the property that originally belonged to Muniyammal and was later purchased by the writ petitioner was also shown as part of the remaining property of M/s. Visalakshi Mills Private Limited. In a public auction, the said property including the Writ Petitioner's property was purchased by M/s.Disc Assets Lead India Limited. Therefore, the Writ Petitioner filed an application in C.A.No.405 of 2013 in C.P.No.78 of 2008. This Court, by Order dated 27.09.2013, allowed the application filed by the Writ Petitioner and directed the Official Liquidator to refund the sale consideration to the auction purchaser viz., M/s.Disc Assets Lead India Limited and also directed the auction purchaser to release and relinquish its right in favour of the Writ Petitioner in respect of the land to an extent of 1 acre comprised in R.S.No.247/2 under UDR Survey No. 71/2A situated at Vilangudi II Bit Village, Madurai. Accordingly, the sale consideration was returned to the auction purchaser. Further the sale certificate issued in favour of the auction purchaser was also not registered and the same was kept pending on the file of the third respondent.
3.3. In the meanwhile, the auction purchaser viz., M/s.Disc Assets Lead India Limited came under the purview of the respondents 1 and 2 by involving a criminal case. In pursuant to which, the property owned by the auction purchaser viz., M/sDisc Assets Lead India Limited was attached and about to bring the same for auction sale by the administrator appoint
