Syed Akeel Shah vs Directorate Of Enforcement
2022 Latest Caselaw 1806 j&K/2

                                                                 Sr. No.16
                                                                 Suppl. List.
IN THE HIGH COURT OF JAMMU & KASHMIR AND LADAKH
                   AT SRINAGAR


CJ Court
                              LPA No.203/2022
                              CM No.5867/2022
                              LPA No.204/2022
                              CM No.5869/2022


SYED AKEEL SHAH
SYED ADEEL SHAH                                           ...APPELLANT(S)
Through: -    Mr. Syed Faisal Qadri, Sr. Advocate, with
              Mr. Salih Pirzada, Advocate.

Vs.

DIRECTORATE OF ENFORCEMENT
& ORS.                                             ...RESPONDENT(S)
Through: -    Mr. T. M. Shamsi, DSGI.

CORAM:

       HON'BLE THE CHIEF JUSTICE
       HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE

                           JUDGMENT(ORAL)

20.10.2022

Sanjay Dhar 'J'

1) By this common judgment, we propose to decide two

Letters Patent Appeals filed against two separate

judgments dated 18th October, 2022, passed by learned

Writ Court in WP(C) No.2269/2022 and WP(C)

No.2270/2022. In both these cases common question of

law which arose for consideration is whether for the

purpose of taking possession of the property attached LPA Nos.203/2022 & 204/2022 1|Page under Section 5 or frozen under sub-section 1-A of Section

17 of the Prevention of Money Laundering Act, 2002

(hereinafter referred to as PMLA), the Director or any other

officer authorized by him has to wait for the expiry of the

period of limitation for filing appeal against the attachment

order that has been confirmed in terms of sub-section (3)

of Section 8 of the PMLA for taking its possession in terms

of Section 8(4) of the PMLA.

2) The learned Writ Court has vide the impugned

judgments answered the aforesaid question in negative by

holding that the Director or the authorized officer is not

bound to wait till the expiry of the period of limitation for

filing appeal for the purpose of taking action in terms of

Section 8(4) of the PMLA.

3) Before adverting to the rival contentions advanced by

learned counsel for the parties, it would be apt to give a

brief background of the facts leading to the filing of the

instant appeal.

4) It appears that the respondents initiated

investigation under the provisions of the PMLA against

Shri Rahul Grover and others on the basis of two FIRs

bearing Nos.RCCHG0512018S006 and 007 dated

16.10.2018, registered by the Special Crime Branch,

LPA Nos.203/2022 & 204/2022

2|Page Central Bureau of Investigation, Chandigarh. These FIRs

pertain to offences under Section 3 and 4 of the Arms Act

read with Section 5(2) of the Jammu and Kashmir

Prevention of Corruption Act and Section 120-B of RPC.

During the investigation, it came to the fore that the

appellants herein were found to have indulged in issuance

and renewal of arms licences in contravention of the

provisions of the Arms Act in lieu of payment of monetary

considerations to the Government employees. After

analyzing the bank accounts of both the appellants, it was

found that they had purchased immovable property in the

form of 05 marls of land each at Village Chinoor, Jammu.

The source of payments used for purchasing the land and

raising construction over the land, according to the

respondents, is the illegal funds which they had received

in lieu of issuance of arms licences.

5) A provisional attachment order of the aforesaid two

properties was issued by the competent authority i.e.,

Deputy Director Enforcement Directorate, Jammu on 31st

March, 2022. The said attachment order was confirmed by

the competent authority in terms of its order dated 16th

September, 2022. After passing of the aforesaid order of

confirmation of provisional attachment in terms of Section

8(3) of the PMLA by the Adjudicating Authority, notice LPA Nos.203/2022 & 204/2022

3|Page dated 23.09.2022 was issued by the Assistant Director,

Directorate of Enforcement, Jammu, in exercise of its

powers under Section 8(4) of the PMLA, whereby the

appellants were directed to vacate the attached properties

within ten days of receipt of the notice. Two separate

notices were issued to the appellants and the same

became subject matter of challenge before the Writ Court

by way of two separate writ petitions, particulars whereof

have been given hereinbefore. As already noted, the

learned Writ Court dismissed both the writ petitions and

repelled the challenge thrown to the impugned notices.

The judgments passed by the Writ Court in the aforesaid

two writ petitions are under challenge before us.

6) We have heard learned counsel for the parties and

perused the impugned judgment passed by the Writ Court,

the grounds of appeal and the record of the case.

7) As already noted, the only question which is under

consideration before us is whether it was open to the

authorized officer to issue the impugned notices of eviction

against the appellants without waiting for the expiry of

period of limitation for filing appeal against the order of

attachment passed in terms of Section 8(3) of PMLA.

LPA Nos.203/2022 & 204/2022

4|Page

8) The learned counsel for the appellants has argued

that if the appellants are evicted from the attached

properties even before the consideration of their appeal by

the appellate authority, the statutory right of appeal given

to them in terms of Section 26 of the PMLA would become

redundant. It has been further argued that the Supreme

Court has, in the case of Vijay Mandal Choudhary & Ors.

Vs, Union of India & Ors. 2022 LiveLaw (SC) 633, while

testing the vires of sub-section (4) of Section 8 of the

PMLA, clearly laid down that taking possession of the

property before a formal order of confiscation is passed,

merely on the basis of confirmation of provisional

attachment order, should be an exception and not a rule.

It is urged that there were no exceptional circumstances

prevailing in the instant case, as such, taking of action in

terms of Section 8(4) of the PMLA by the respondents

cannot be countenanced in law.

9) There is no dispute to the legal position that the

Supreme Court in Vijay Mandal Choudhary's case

(supra) has upheld the vires of the provisions contain in

Section 8(4) of the PMLA. The said provision authorizes the

Director or any other officer to take possession of the

property regarding which provisional order of attachment

has been confirmed. As per the Rule 5(2) of the Prevention LPA Nos.203/2022 & 204/2022

5|Page of Money Laundering (Taking Possession of Attached or

Frozen Properties Confirmed by the Adjudicating

Authority),Rules, 2013 (hereinafter referred to as the Rules

of 2013), once the attachment of immovable property has

been confirmed by the Adjudicating Authority and it is

found to be in possession of the owner, the authorized

officer has to issue a notice of eviction of ten days so as to

prevent the person from enjoying such property and if

such person does not vacate the property within the

stipulated time, he has to be evicted by taking possession

thereof. Section 26 of the PMLA gives a right of appeal to

the aggrieved person against an order made by the

Adjudicating Authority and the said appeal has to be filed

within a period of 45 days from the date a copy of the order

is received by the aggrieved person.

10) A conjoint reading of all these three provisions brings

to the fore that while an aggrieved person has a right of

appeal against the order of attachment passed by the

Adjudicating Authority which the aggrieved person has to

avail within 45 days of receipt of order of attachment, the

authorized officer or the Director has the jurisdiction to

forthwith take possession of the property attached. The

expression "forthwith" is of great significance, inasmuch

as it gives power to the Director or authorized officer to LPA Nos.203/2022 & 204/2022

6|Page immediately proceed against the person whose property

has been attached by virtue of order of Adjudicating

Authority. The jurisdiction to proceed under Section 8(4)

of the PMLA would come into play immediately upon

passing of the order of attachment by the Adjudicating

Authority. There is no scope to interpret the provisions

contained in Section 8(4) and Section 26 of the PMLA and

Rule 5(2) of the Rules of 2013 to hold that for taking action

under Section 8(4) of the PMLA, the authorized officer has

to await the expiry of period of limitation i.e., 45 days.

11) The order of confirmation of attachment passed by

the Adjudicating Authority is just like a decree of a civil

court which becomes executable the moment it is drawn.

Just like execution of a decree of civil court is not to await

the period of limitation for filing an appeal before the

appellate court, similarly, an order passed under Section

8(3) of the PMLA is to be acted upon immediately and it

cannot await the expiry of period of limitation for filing

appeal against the said order. Thus, the respondents were

well within their powers to issue the impugned notice,

which is in tune with the legal position as discernible from

the provisions contained in Sections 8 and 26 of the PMLA

read with Rule 5(2) of the Rules of 2013.

LPA Nos.203/2022 & 204/2022

7|Page

12) Next it has been contended by learned counsel for the

appellants that as per the ratio laid down by the Supreme

Court in Vijay Mandal Choudhary's case, resort to action

under Section 8(4) of the PMLA should be only by way of

an exception and not as a rule. There can be no dispute to

the legal position in this regard, as has been clearly spelled

out by the Supreme Court in the aforesaid case but the

question whether a particular case is of exceptional nature

or not, can be determined only by the appellate authority

at the time of considering the merits of the appeal and not

by this Court in exercise of its writ jurisdiction. If at all the

appellants apprehend an immediate action against them

by the respondents, which apprehension is certainly borne

out from the record, it is open to them to immediately

approach the appellate authority and persuade the said

authority to stay the impugned order of attachment. They

cannot bypass the remedy of appeal by invoking the writ

jurisdiction of this Court simply by laying challenge to the

proceedings which are essentially offshoot of the order

passed by the Adjudicating Authority, which is appealable

under Section 26 of the PMLA.

13) For the foregoing reasons, we do not find any ground

to interfere in the impugned judgments passed by the

learned Writ Court. The same are well-reasoned and lucid LPA Nos.203/2022 & 204/2022

8|Page and deserve to be upheld. The appeals lack merit and are,

accordingly, dismissed

(SANJAY DHAR) (ALI MOHAMMAD MAGREY) JUDGE CHIEF JUSTICE Srinagar 20.10.2022 "Bhat Altaf, PS"

Whether the order is speaking: Yes/No Whether the order is reportable: Yes/No

LPA Nos.203/2022 & 204/2022

9|Page