Andhra Pradesh High Court - Amravati

M/S Agri Gold Farm Estates Pvt. ... vs Union Of India, on 25 June, 2021

[ 2882]

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
{Special original Jurisdiction)

FRIDAY, THE TWENTY FIFTH DAY OF JUNE,
TWO THOUSAND AND TWENTY ONE

'PRESENT:
THE HONOURABLE SRI JUSTICE A V SESHA SAI

WRIT PETITION NO: 9441 OF 2021

Between:

1. M/S AGRI GOLD FARM ESTATES PVT. LTD., Rep. by its Chairman Sri Avva

Venkata Rama Rao, S/o A.V. Appa Rao, Aged about 60 yrs, Occ- Nil, Resident

at Door No.23-35-39, Lakshmi Nagar, Satyanarayanapuram, Vijayawada,
Krishna Dist, Andhra Pradesh.

2. Sri Awa Venkata Rama Rao, S/o A.V. Appa Rao, Aged about 60 yrs, Occ-- Nil,
Resident at Door No.23-35-39, Lakshmi Nagar, Satyanarayanapuram,
Vijayawada, Krishna Dist, Andhra Pradesh.

Petitioners
AND

1. Union of India, Rep. by its Secretary, Ministry of Finance, 3RD Floor, Jeevan
Deep Building, Sansad Marg, New Delhi - 110 001,

2. Directorate of Enforcement, Through Joint Director, fll Floor, Shakkar Bhavan,
Basheerbagh, Hyderabad .

3. The Assistant Director, Directorate of Enforcement, IU Floor, Shakkar Bhavan,
Basheerbagh, Hyderabad

4. The Adjudicating Authority, Under the provisions of PML Act, 2002, Rep. by its
Registrar, Jeevan Buildings, Pariament Street, New Delhi,

S. The Addi. Director General --cum Competent Authority, CID Department, State of
Andhra Pradesh, 0/0 DGP Office, Mangalagiri, Amaravathi, Andhra Pradesh

8. The Addl. Director General-cum-Campetent Authority, CID Department, State of
Telangana, Lakdikapool, Hyderabad

Respondents

Petition under Article 226 of the Constitution of India praying that in the
circumstances stated in the affidavit filed therewith, the High Court may be pleased to
issue order or direction more particularly in the nature of Writ of Certiorari calling for the
records pertaining to the Provisional Attachment Orders O4/dated 24-12-2020 in
Proceedings ECIR No ECIR/HYZO/09/2018 passed by the Respondent No. 2 and the
consequential proceedings in OC No. 1391 of 2021 pending before the Respondent No.
4 and Quash the same by declaring them as iNegal, arbitrary, violation of principles of
natural juice, violation of Articles 14, 19(1)(g) and 300-A of the Constitution of India and
also violation of various orders passed by this Horible Court in PIL No. 193 of 2015.

IA NO: 1 OF 2021

Petition under Section 151 CPC praying that in the circumstances stated
in the affidavit filed in support of the petition, the High Court may be pleased to stay all
further proceedings in OC No. 1391 of 2021 pending before the Respondent No.
4/Adjudicating Authority under the provisions of Prevention of Money Laundering Act,
2002, pending disposal of WP 9441 of 2021, on the file of the High Court.

The petition coming on for hearing, upon perusing the Petition and affidavit filed
herein, and upon hearing the arguments of Sri L.Ravichander, representing Sri K
Janakirami Reddy, Advocate for the Petitioners, Sri Harinath N (Asst Solicitor General)

for the Respondent No.1 and Sri Josyula Bhaskara Rao, standing counsel for

respondent No.2 Enforcement Directorate, and the Court made the following.

ORDER:

Challenge in the present Writ Petition is to the provisional order of attachment vide 04/24.12.2020 in proceedings No.ECIR/HYZO/09/2018 passed by the Joint Director, Office of the Directorate of Enforcement-2s¢ respondent herein, and the proceedings in O.C. No.1391 of 2021 pending before 4th respondent-Adjudicating Authority constituted under the Prevention of Money Laundering Act, 2002 (for short, 'the Act').

Learned senior counsel Sri L.Ravichander, representing Sri K.Janakirami Reddy, learned counsel for the petitioners on record contends that the impugned order of provisional attachment and the consequential action of the 4 respondent-Adjudicating Authority in proceeding with the enquiry under Section 8 of the Act are highly illegal, arbitrary, unreasonable, unwarranted, without jurisdiction and opposed to the very spirit and object of the previsions of the Act and liable to be interdicted. It is further contended by the learned senior counsel that in view of initiation of the proceedings under the provisions of the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999, and the orders of confirmation of attachment passed by the learned Principal District Judge, West Godavari District, under the said enactment, the very invocation of the provisions of the Act by the 2n4 respondent in respect of the very same properties, is unwarranted and the same amounts to once again attaching the properties which are already under attachment vide attachment order passed under the provisions of the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999. It is further contended by the learned senior counsel that in the absence of necessary ingredients of Section 5 of the Act, the very invocation of the said provision of law for passing provisional order of attachment is impermissible, having regard to the facts and circumstances of the case. It is further contended that 2nd respondent passed the impugned provisional order of attachment without assigning any reasons and without application of mind to the facts and circumstances of the case. It is also the submission of the learned senior counsel that if the adjudicating authority is permitted to proceed further, the affected people would suffer irreparable loss and hardship and the properties only vest in the Central Government as per

the provisions of the Act.

In order to substantiate his arguments, learned senior counsel places reliance on the judgement of the High Court of Madras in Indian Bank vs. Government of India [2012 (4) CTC 425],

On the contrary, learned standing counsel for the 2"4 respondent- Enforcement Directorate, Sri Josyula Bhaskara Rao, strenuously and vehemently contends that in view of the availability of the alternative remedy, which had already been pressed into service before 4th respondent, the very Writ Petition filed by the petitioners herein is not maintainable and necessarily the petitioners herein have to contest the issue before the Adjudicating Authority under Section 8 of the Act. It is further contended by the learned standing counsel that the impugned order is only a provisional order of attachment and hence, it is absolutely not open for the petitioners herein to approach this Court as the issue is pending before 4th respondent herein in O.C. No.1391 of 2021, wherein the petitioners herein already filed counter. It is also the submission of the learned Standing Counsel that pendency of the proceedings under the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999, is not ground to oppose the impugned proceedings, since Section 5 of the Act empowers 2=¢ respondent to pass an order of provisional attachment. It is further contended that if any order is passed interdicting the proceedings before the Adjudicating Authority, the respondents authorities would be put to lot of inconvenience. --

In support of his submissions and contentions, learned standing counsel places reliance on the following judgments:

1) Judgment of the Hon'ble Supreme Court in Union of India and another us. Kurusetty Satyanarayana in Appeal (Civil) No.5145 of 2006 dated 22.11.2006;

2) Judgment of the Han'ble Supreme Court in United Bank of India vs. Satyawati Tondon and others in Civil Appeal arising out of SLP (C)} No.10145 of 2010 dated 26.07.2010;

3) Judgment of the composite High Court in P.Trivikrama Prasad and others vs. Enforcement Directorate and others in Writ Petition 21124 of 2014 dated 16.10.2014, and

4) Judgment of the High Court of Madras in John Kennedy and others vs. M/s. Martin Property Developers Private Limited and others in Writ Petition Nos. 25177 of 2019 and 25231 of 2019 dated 17.12.2020. a

It is also the submission of the learned standing counsel that the issue before the Adjudicating Authority is only with regard to the confirmation of the provisional attachment order by 24 respondent under Section 8 of the Act. It is further submitted that in the event of contesting the matter before Adjudicating Authority, no prejudice would be caused to the petitioners herein. It is the further submission of the learned standing counsel that in view of Section 71 of the Act, the provisions of the Act will have over-riding effect on the laws made by the State Government. It is also the submission of the learned standing counsel that only after meticulously and elaborately considering various aspects and strictly in terms of Section 5 of the Act, 2=¢ respondent herein passed the impugned order of provisional attachment. Eventually, itis submitted by the learned standing counsel that since the offences fall under the Schedule to the said enactment, the impugned proceedings cannot be faulted.

On 23.06.2021, respondent Nos.2 and 3 herein filed a counter before this Court, and when the matter was taken up yesterday, learned senior counsel submitted that he did not receive copy of the counter affidavit, Learned standing counsel submitted that a copy of the counter affidavit had been sent by e-mail yesterday. Learned senior counsel submits that he needs some time to look into the counter affidavit and to file a reply, if it is necessary. He also submits that the Adjudicating Authority-4 respondent herein is not granting time and directed the matter to be posted on 28.06.2021.

It is also the submission of the learned senior counsel that issues pertaining to the properties of the petitioners herein are pending before the High Court for the State of Telangana at Hyderabad in PIL No.193 of 2015, It is further submitted by the learned senior counsel that if any orders are passed under Section 8 of the Act pending the present Writ Petition, the very Writ Petition would become in fructuous. Learned senior counsel further submits that after verifying counter, he would file necessary reply, and eventually, the learned senior counsel prayed this Court to protect the interest of the clients for the limited period and the matter can be heard and disposed of finally after filing reply.

Having regard to the submissions of the learned counsel for both sides, this Court is of the considered opinion that various aspects which are set out above are required to be considered after completion of the

pleadings. The Court is also of the view that if the Adjudicating

Authority-4th respondent herein is permitted to pass orders in the meanwhile, the very purpose of filing the present Writ Petition would be defeated. This Court is also of the view that balance of convenience for the present is in favour of the petitioners, as such, this Court is inclined to direct the Adjudicating Authority-4th respondent herein to defer the further proceedings in O.C. No.1391 of 2021 for some time pending passing of final orders in the main Writ Petition.

In view of the above reasons, for a period six weeks from today, further proceedings before the Adjudicating Authority-4 respondent herein in O.C. No.1391 of 2021 shall be deferred.

Post the Writ Petition on 26.07.2021 with an understanding that the matter would be heard finally.

Sd/- M.RAMESH BABU ASSISTANT REGISTRAR

For ASSISTANT REGISTRAR

HTRUE COPY?/

To,

1. The Secretary, Ministry of Finance, 3RD Floor, Jeevan Deep Building, Sansad Marg, Union of India, New Delhi - 110 001,

2. The Directorate of Enforcement, Through Joint Director, Ill Floor, Shakkar Bhavan, Basheerbagh, Hyderabad

3. The Assistant Director, Directorate of Enforcement, Ill Floor, Shakkar Bhavan, Basheerbagh, Hyderabad

4. The Adjudicating Authority, Under the provisions of PML Act, 2002, Rep. by its Registrar, Jeevan Buildings, Pariament Street, New Delhi,

8. The Addi. Director General -cum Competent Authority, CID Department, State of Andhra Pradesh, 0/0 DGP Office, Mangalagiri, Amaravathi, Andhra Pradesh

6. The Addl. Director General-cum-Competent Authority, CID Department, State of Telangana, Lakdikapool, Hyderabad (Addressee Nos 1 to 6 by RPAD)

7, One CC to Sri. K Janakirami Reddy Advocate [OPUC]

8. One CC to SRI. HARINATH N (Asst Solicitor General) [OPUC]

9. One CC to Sri Josyula Bhaskara Rao, Standing Counsel for Enforcement Directorate, (OUT)

10. One spare copy

Skm °

HIGH COURT

AYVSS, J

DATED:25/06/2021

NOTE: Post the Writ Petition on 26.07.2021

ORDER

WP.No.9441 of 2021