Farooq Abdullah vs Directorate Of Enforcement And ...
2021 Latest Caselaw 373 j&K/2

                                                                   Sr. No.201

       IN THE HIGH COURT OF JAMMU AND KASHMIR
                     AT SRINAGAR


CJ Court

Case: WP(C) No.408/2021
      CM No.1276/2021
      CM No.1277/2021

Farooq Abdullah                              ...Petitioner(s)/Appellants.
         Through: Mr. Sidharth Luthra, Sr. Advocate, with
                  Mr. Shri Singh, Advocate, (Through Virtual Mode)
                  Mr. Areeb Javed Kawoosa, Advocate.

                                   Vs.
Directorate of Enforcement and anr.                   ....Respondent(s)
         Through: Mr. Tushar Mehta, Solicitor General of India, with
                  Mr. Zoheb Hossain, Spl.Counsel ED (Through
                  virtual mode)
                  Mr. Tahir Majid Shamsi, ASGI, with
                  Ms. Nazima, Advocate.

CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE VINOD CHATTERJI KOUL, JUDGE

                               ORDER

01.04.2021

1. The petitioner had been the president of the Jammu and Kashmir

Cricket Association (JKCA) for some of the years probably from 2001 to

2012. During the year 2002-03, the Board of Control for Cricket in India

(BCCI) transferred Rs.112,33,05,618/- to JKCA. It is alleged that out of the

said amount a sum of Rs.43.69 Crores has been siphoned off and mis-

appropriated by the then Treasurer who was got illegally appointed and

continued on the post by the petitioner.

2. In connection with the above allegations of mis-appropriation of funds

of JKCA, an FIR No.27 of 2012 was lodged on 10.03.2012 under Sections

120-B, 406 and 409 of Ranbir Penal Code against the office bearers of the

JKCA.

3. In PIL No.08/2014 Majid Yaqoob Dar & anr. v. State of Jammu &

Kashmir and others, the High Court directed for the transfer of the

investigation in pursuance to the above FIR to the Central Bureau of

Investigation (CBI). The CBI on completion of the investigation charge

sheeted six persons including the petitioner and the then Treasurer, JKCA,

for causing wrongful loss to the JKCA to the tune of Rs.43.69 crores. It is in

this background that proceedings for provisional attachment of the properties

of the petitioner have been initiated under Section 5(1) of the Prevention of

Money Laundering Act (PMLA). An order of provisional attachment has

been passed on 18.12.2020 and a notice under Section 8 of the PMLA dated

05.02.2021 has been issued to the petitioner under Section 8(1) of the PMLA

to show cause as to why the properties provisionally attached should not be

declared to be properties involved in money laundering and confiscated by

the Government.

4. A complaint has also been filed on 15.01.2021 by the Competent

Authority before the Adjudicating Authority as required under Section 5(5)

of the PMLA.

5. The petitioner has thus filed this petition under Article 226 of the

Constitution of India inter alia praying for quashing of the Original

Complaint dated 15.01.2021 filed before the Adjudicating Authority;

quashing of the provisional attachment order dated 18.12.2020; and the

notice dated 05.02.2021.

6. It is pertinent to mention here that similar proceedings were initiated

against the Treasurer of the JKCA who had challenged the same by filing

WP(C) No.2780 of 2019. It was dismissed vide judgment and order dated

15.10.2019 but against the same LPA No.293/2019 is pending before the

Division Bench of this Court but with no interim protection or stay. It is in

view of the pendency of the above LPA that the learned Single Judge seized

of this petition vide order dated 18.03.2021 expressed opinion that the matter

be considered by the Division Bench to which counsel for the parties have

agreed. Accordingly, this petition has been laid before the Division Bench.

At the very outset the court indicated counsel for the parties that it would be

better if the above LPA is heard first and then the present petition as both of

them arise from the same incident based upon identical facts but probably as

there is no interim order passed in the previous writ petition and no stay

order is operating in the LPA arising out of it, learned counsel for the

petitioner insisted for hearing the petition on merits as he intends to press for

the grant of interim protection.

7. Heard Sh. Sidharth Luthra, Senior Counsel, assisted by Shri Singh and

Sh. Tushar Mehta, Solicitor General of India, assisted by Mr. Zoheb

Hossain, Advocate through video conferencing.

8. Sh. Luthra, after taking us to the various provisions of the PMLA

submitted that the petitioner can only be proceeded under the PMLA in

connection with the scheduled offence as per the Schedule-A of the Act. The

offences under Sections 406 and 409 of RPC are not the scheduled offences

and merely for an offence under Section 120-B RPC, the petitioner is not

liable to be proceeded with under the PMLA. Moreover, the Schedule enlists

the offence of criminal conspiracy under Section 120-B Indian Penal Code

as one of the scheduled offences and does not refer to any offence under

RPA muchless under Section 120-B RPC. The order of provisional

attachment does not contain any reason to believe nor does the properties

inherited by him or received in gift from his ancestors or any property which

has been privately acquired by him are liable to attachment as they are not

"proceeds of the crime". The order of provisional attachment greatly

undervalues the properties attached so as to attach almost all the properties

of the petitioner. Therefore, the entire proceedings are without jurisdiction

and are malafide.

9. Learned Solicitor General in defence submitted that the PMPLA has

been enacted by the Parliament in view of the political declaration adopted

by the Special Session of the United Nations General Assembly calling upon

the member states to adopt national money laundering legislation. India

being the member State accordingly enacted the aforesaid Act extending it to

the whole of India. Thus, it cannot be said that the aforesaid enactment is

beyond the legislative competence of the Parliament. He refers to Section

2(2) of the PMLA to contend that any reference in the Schedule to the said

Act to any enactment or provision which is not in force in the "area" where

it is applicable would be construed as a reference to the corresponding law

or the corresponding provision, if any, in force in that "area". Thus, as the

Act is applicable to the whole of India, it is applicable to the Jammu &

Kashmir also and the reference to Section 120-B in the Schedule to the said

Act refers to Section 122-B of RPC as they are corresponding and pari

materia. The subsequent addition of Section 2(ia) of the PMLA defining

"corresponding law" to mean law of any foreign country in no way

obliterates the provision of Section 2(2) of the Act. He further submits that

the Competent Authority has recorded reasons to believe in passing the

provisional order of attachment which are implicit from the plain reading of

the order as a whole. The investigation clearly disclose that the petitioner has

committed an offence of money laundering within the meaning of Section 3

of the PMLA and that he is one of the beneficiaries of the proceeds of the

crime. The time of the commission of the scheduled offence is not relevant

but the commission of the act of money laundering alone is material which is

a continuing offence and it continues till the time the money so laundered is

being projected as untainted.

10. Both sides attempted to rely upon certain precedents which we need

not to discuss as we are not adjudicating upon the various issues raised at

this stage without giving an opportunity to the respondents to file their

response.

11. Learned Solicitor General has however attempted to distinguish the

decision of the Supreme Court in Opto Circuit India Limited v. Axis Bank

and others : 2021 SCC online SC 55 which concerns the PMLA on the

ground that in the said case the order impugned was of final attachment

rather than provisional.

12. In view of the aforesaid facts and circumstances and looking to the

fact that presently the petitioner has only been served with a show cause

notice in which we are told 20th April, 2021 is the next date fixed and the

fact that the order of attachment is provisional in nature which is valid for a

period of 180 days only, we do not consider it to be an appropriate case to

pass any interim order at this stage particularly when the laundering of 43.69

crores of the amount is not in dispute which in all fairness ought to be

returned to the public body i.e., JKCA.

13. The petitioner, in addition, is faced with an order of dismissal of an

identical writ petition and as such, has to overcome all the findings returned

and the reasoning recorded by the writ court therein before establishing a

prima facie case and balance of convenience in his favour for the grant of

interim order or to be successful in this petition. In the light of the dismissal

of the earlier writ petition against which LPA is pending but without any

interim protection, it is all the more reason for us not to pass any interim

order at this stage.

14. Accordingly, we direct the respondents to file their counter affidavit

to this petition within a period of three weeks, one week thereafter is

allowed to the petitioner to file rejoinder affidavit.

15. List for admission/ final disposal on 11th May, 2021 along with LPA

No. 293/2019 which shall also be considered finally on the said date.

                               (VINOD CHATTERJI KOUL)                (PANKAJ MITHAL)
                                             JUDGE                    CHIEF JUSTICE
           Srinagar
           01.04.2021
           Abdul Qayoom, PS





ABDUL QAYOOM LONE
2021.04.02 17:31
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