FINAL ORDER

27.11.2024

FPA-PMLA-4044/ALD/2021

By this appeal under Section 26 of the Prevention of Money Laundering Act, 2002 (in short `the Act of 2002), a challenge has been made to the order dated 09.02.2021 passed by the Adjudicating Authority refusing to confirm the Provisional Attachment Order.

2. The learned counsel for the appellant (ED) submitted that the impugned order has been passed by the Adjudicating Authority mainly relying upon the judgment of the Punjab and Haryana High Court in the case of Seema Garg Vs. Deputy Directorate of Enforcement reported in 2020 SCC Online P&H 738 to hold that the proceeds of crime defined under Section 2 (1)(u) of the Act of 2002 has been given interpretation by the Punjab and Haryana High Court. It has been held that the property liable to be attached should be such which is acquired or derived directly or indirectly out of the criminal activity relating to scheduled offence. The word `the value of any such property’ referred in the definition of proceeds of crime should have some nexus to the commission of crime. The Adjudicating Authority refused to subscribe to the view taken by Delhi High Court in the case of Enforcement Directorate v. Axis Bank,reported in 2019 SCC OnLine Del 7854. The Adjudicating Authority relied on the judgment of the Andhra Pradesh High Court in the case of M/s Satyam Computer Services Limited Vs. Directorate Of Enforcement(Writ Petition No. 37487/2012), decided on 31.12.2018 to give narrow meaning to the proceeds of crime despite three Benches judgment of the Apex Court in the case of Vijay MadanlalChoudhary and Others v. Union of India &Ors. reported in (2022) SCC Online 929. In the light of the judgment of the Delhi High Court in the case of Prakash Industries Ltd. v. Directorate of Enforcementreported in 2022 SCC OnLine Del 2087, the impugned order is not sustainable, rather deserves to be set aside with the remand of the case.

3. The learned counsel for the appellant (ED) further submitted that the judgment of the Punjab and Haryana High Court in the case of Seema Garg (supra) has been challenged before the Apex Court and the same is still pending.

4. The counsel made a reference of the crime involved in the case which pertains to misappropriation of funds as well as abuse of power under Mahatma Gandhi National Rural Guarantee Scheme. The case was registered in pursuance to a direction of the Allahabad High Court (Lucknow Bench) in Writ Petition No.12802 (M/B) decided by the order dated 31.01.2014. Serious allegation exists against the respondents; however, elaborate argument is not required because attachment has not been confirmed by the Adjudicating Authority on the ground that the appellant (ED) were not authorized to attach the property other than which is involved directly or indirectly in the commission of crime and derived or obtained out of the criminal activity pertaining to scheduled offence. In view of the above, the limited argument has been raised because the Adjudicating Authority has not dealt with the issues and surprisingly the order has been passed in ignorance of the judgment of the Supreme Court in the case of Vijay MadanlalChoudhary (supra).

5. The appeal has been contested by the respondent. It is submitted that the Adjudicating Authority has taken a proper view in the matter. The appellant (ED) failed to show that the property attached was derived or obtained directly or indirectly as a result of criminal activity relating to scheduled offence. The Adjudicating Authority rightly relied on the judgment of Punjab and Haryana High Court in the case of Seema Garg (supra). The SLP against the said judgment has already been dismissed though it was in limini. The fact, however, remains that subsequently judgment of the Andhra Pradesh High Court in the case of Satyam Computer Services (supra) has taken the same view. A further reference of the recent judgment of the Supreme Court in the case of PavanaDibur Vs. Deputy Director, Directorate of