Madras High Court
R.M.Sivagami Aachi vs The Deputy Director on 4 July, 2022
W.P(MD) No.14007 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 04.07.2022
CORAM:
THE HONOURABLE MR.JUSTICE P.N.PRAKASH
and
THE HONOURABLE MRS.JUSTICE R.HEMALATHA
W.P.(MD) No.14007 of 2022
1.R.M.Sivagami Aachi
2.P.L.Muthuveerappan ... Petitioners
-vs-
1.The Deputy Director,
Directorate of Enforcement,
Government of India,
III Floor, C-Block,
Murugesan Naikar Complex,
No.84, Greems Road,
Thousand Lights,
Chennai – 600 006.
2.The Adjudicating Authority,
(Prevention of Money Laundering Act),
IV Floor, Jeevan Deep Building,
Parliament Street,
New Delhi 110001.
3.P.K.M.Selvam
4.S.Shankara Narayanan
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W.P(MD) No.14007 of 2022
5.The Sub Registrar,
Thallakulam,
Madurai District. ... Respondents
PRAYER: Petition filed under Article 226 of the Constitution of India,
to issue a writ of certiorarified mandamus calling for the entire records in
connection with the impugned order dated 09.09.2021 passed by the
second respondent in M.A.46/20 confirming the order passed by the first
respondent dated 31.05.2017 in original complaint No.674/2017 insofar
as the property at Serial Nos.17 and 25 are concerned and quash the same
and direct the fifth respondent to remove the entry of attachment made by
the first respondent may deem fit and appropriate.
For Petitioner : Mr.Isaac Mohanlal, Senior Advocate
for Mr.R.Karunanidhi
For Respondents : Mr.R.Vijaya Rajan,
Spl. Public Prosecutor for R1, R2
Mr.A.K.Manikkam,
Spl. Government Pleader for R5
ORDER
(Made by P.N.PRAKASH, J.)
This writ petition has been filed seeking issuance of a writ of
certiorari to quash the impugned notice dated 09.09.2021.
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W.P(MD) No.14007 of 2022
2. The minimum facts that are required for deciding this writ
petition are as under:-
2.1 The dispute in this case is in relation to a land measuring
5.75 acres in Survey Nos.91/2-A2, 207/2-A and 91/2A in Kalikappan
Village, Madurai District (“the said property” for brevity).
2.2 The petitioners are siblings. According to them, the said
property originally belonged to their father, C.Palaniyappa Chettiar, who
had settled the property in their favour on 02.03.1966, after which, they
were in joint ownership and possession of the said property.
2.3 It is the further case of the petitioners that the said property
was given to Muthaiya Thevar and Alagar via an oral agreement for
cultivation purposes some time in the year 1971. Thus, the said Muthaiya
Thevar and Alagar were “cultivating tenants” in the said property.
2.4 After the death of Muthaiya Thevar, a portion of the said
property came into the hands of his son Veeranna Thevar. Similarly, on
the death of Alagar, the balance portion of the said property came into the
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W.P(MD) No.14007 of 2022
possession of his widow Karuppayee.
2.5 Veeranna Thevar executed a makeover deed dated
24.11.2006 for a consideration of Rs.81,000/- (Rupees Eighty One
Thousand only) in favour of one P.K.M.Selvam and S.Shankara
Narayanan (who are accused in the predicate offence), who were partners
in M/s.M.s.Granites.
2.6 Similarly, Karuppayee also executed a makeover deed dated
24.06.2008 for a consideration of Rs.50,000/- (Rupees Fifty Thousand
only) in favour of the said P.K.M.Selvam and S.Shankara Narayanan.
2.7 While so, an FIR in Crime No.196 of 2012 was registered
against M/s.M.S.Granites for the offences under Sections 447, 379, 406
and 420 IPC r/w Section 3(1) of the Tamil Nadu Property (Prevention of
Damage and Loss) Act, 1992 and other provisions of the Mines and
Minerals Development Regulation Act, 1957.
2.8 The said FIR then culminated in a final report dated
19.08.2013 before the Judicial Magistrate, Melur, in which,
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W.P(MD) No.14007 of 2022
M/s.M.S.Granites (A7), S.Shankara Narayanan (A2) and P.K.M.Selvam
(A4) were shown as accused apart from other persons. Since the police
prosecution disclosed a “scheduled offence” under the Prevention of
Money Laundering Act, 2002 (in short “the PML Act”), the Enforcement
Directorate registered a case under the PML Act and took up
investigation in order to find out if M/s.M.S.Granites and other partners
had generated any proceeds of crime via commission of the alleged
criminal activities in Crime No.196 of 2012 and had projected the same
as untainted property.
2.9 During the investigation by the Enforcement Directorate,
they found that the “said property” was acquired by P.K.M.Selvam and
Shankara Narayanan from Veeranna Thevar and Karuppayee through the
said makeover deeds with the money generated from the commission of
the predicate offence referred to in Crime No.196 of 2012.
2.10 Therefore, the Enforcement Directorate issued a provisional
order of attachment dated 22.12.2016 under Section 5 of the PML Act
and the matter was referred to the Adjudicating Authority for further
orders under Section 8, ibid.
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W.P(MD) No.14007 of 2022
2.11 The Adjudicating Authority, by order dated 31.05.2017,
confirmed the provisional order of attachment without hearing the
petitioners herein. Therefore, the petitioners filed a statutory appeal
under Section 26 of the PML Act before the Appellate Tribunal, which
was allowed on 24.12.2020 and the matter was remanded to the
Adjudicating Authority for fresh disposal in accordance with law after
hearing the petitioners, since the Appellate Authority had failed to hear
the petitioners, in whose names the said property was standing, even
according to the Revenue records.
2.12 Accordingly, the Adjudicating Authority heard the
petitioners and by the impugned order dated 09.09.2021, has confirmed
the provisional order of attachment, aggrieved by which, the present writ
petition has been filed.
3. Heard Mr.Isaac Mohanlal, learned Senior Advocate,
appearing for the learned counsel on record for the petitioners and
Mr.R.Vijaya Rajan, learned Special Public Prosecutor, appearing for the
respondents 1 and 2 and Mr.A.K.Manikkam, learned Special Government
Pleader, appearing for the fifth respondent.
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W.P(MD) No.14007 of 2022
4. At the outset, it is pertinent to point out that when a
statutory appeal remedy is available under Sections 25 and 26 of the
PML Act, it will not be appropriate for the petitioners to approach this
Court by filing the present writ petition instead of approaching the
Appellate Tribunal.
5. Mr.Isaac Mohanlal, learned Senior Advocate, contended that
this Court is not denuded of the power to entertain this writ petition
albeit the fact that there is an appeal remedy provided under the statute.
In support of this submission, he placed strong reliance on the judgment
of the Supreme Court in Magadh Sugar and Energy Limited v. State of
Bihar and Ors., [(2021) SCC Online SC 801], wherein, in paragraph No.
32, the Supreme Court has stated as under:-
“The issues raised by the appellant are questions of
law which require, upon a comprehensive reading of the
Bihar Electricity Act, a determination of whether tax can be
levied on the supply of electricity by a power generator
(which also manufactures sugar) supplying electricity to a
distributor; and whether the first respondent has the
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legislative competence to levy duty on the sale of electricity
to an intermediary distributor in view of the decision of this
Court in State of AP (supra). The question of whether the
appellant is liable to file returns under Sections
6B(1) and 5A of the Act is directly related to the issue of
whether the sale of electricity by the appellant to BSEB falls
under the charging provisions of Section 3(1). The questions
raised by the appellant can be adjudicated without delving
into any factual dispute. Thus, the present matter is
amenable to the writ jurisdiction of the High Court.”
6. One can have no two opinions on the aforesaid statement of
law, in that, the power of the High Court under Article 226 of the
Constitution of India does not stand automatically denuded on account of
the existence of an appeal remedy in a statute.
7. However, Mr.Isaac Mohanlal contended that when the issue
involved is a complex question of law, it could be determined only by the
High Court and not by the Appellate Authority.
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W.P(MD) No.14007 of 2022
8. We are unable to countenance this submission for the reason
that, there is no such prohibition in the PML Act for the Appellate
Authority to decide and determine a complex question of law and fact.
When we posed to Mr.Isaac Mohanlal as to what is the complex question
of law involved in this case, he raised the query “can the two makeover
deeds dated 24.11.2006 and 24.06.2008 be construed by the Adjudicating
Authority under the PML Act, as transfer of the ownership of the
property merely because the amount that has been shown therein as
consideration is proximate to the market value of the property?”
9. Mr.Isaac Mohanlal, learned Senior Advocate, contended that
the entire decision of the Adjudicating Authority is based on the above
premise and therefore, the above question raised by him could be best
decided only by this Court under Article 226 of the Constitution of India
and not by the Appellate Tribunal.
10. We carefully considered the aforesaid submission. In effect,
it is the contention of Mr.Isaac Mohanlal that the makeover deeds ought
not to have been considered as sale deeds, merely based on the
consideration amount found therein and eventually, the same cannot be
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W.P(MD) No.14007 of 2022
attached as land belonging to the accused P.K.M.Selvam (A4) and
S.Shankara Narayanan (A2).
11. Though at the first blush, this submission of Mr.Isaac
Mohanlal did look attractive, but, there is a fundamental fallacy in it
inasmuch as, the determination by the Adjudicating Authority under the
PML Act is not related to declaration of rights of parties whatsoever.
They are purely incidental questions. The scheme of the PML Act is,
when the Enforcement Directorate finds a property that has been
acquired by a person with the money generated from a criminal activity,
Section 5 of PML Act requires them to secure the property as an interim
measure and hand over the same to the criminal Court for final
adjudication. Nothing more or nothing less. It is an action in rem in
contradistinction to an action in persona which the accused would face
both under the prosecution for the predicate offence as well for the
prosecution under Section 3 r/w 4 of the PML Act. Admittedly, in this
case, the petitioners are not accused either in the predicate offence or
under Section 3 r/w 4 of the PML Act.
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W.P(MD) No.14007 of 2022
12. Assuming for a moment that they are the legal owners of the
said property and if they found that the said Veeranna Thevar and
Karuppayee had, by two makeover deeds, transferred the said property to
P.K.M.Selvam and Shankara Narayanan, the remedy is not in this
collateral proceedings under the PML Act, but in a suit for declaring the
two makeover deeds as null and void. In this case, what the Adjudicating
Authority has found is, the two accused, viz., P.K.M.Selvam and
Shankara Narayanan have prima facie generated proceeds of crime via
illegal mining referred to in Crime No.196 of 2012 and with the money
so generated, they have acquired the said property from Veeranna Thevar
and Karuppayee via two makeover deeds dated 24.11.2006 and
24.06.2008 and therefore, the said property appears to be proceeds of
crime, which has to be protected till a final decision is taken by the
criminal Court qua the accused in the case. This, in our opinion, could be
easily determined by the Tribunal constituted under the PML Act and
therefore, the facts of the present case do not pass muster the
contingencies laid down in Magadh Sugar and Energy Limited (supra)
for the High Court to exercise the powers of the Appellate Tribunal under
the PML Act.
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W.P(MD) No.14007 of 2022
13. Mr.Isaac Mohanlal submitted that since the period of
limitation for filing the statutory appeal has lapsed, the petitioners may
be left remediless.
14. In our opinion, the appeal can also be filed with an
application for condonation of delay and in such event, we are confident
that the Appellate Tribunal would show indulgence.
15. In the result, this writ petition stands dismissed with liberty
to the petitioners to approach the Appellate Tribunal in accordance with
law. It is made clear that whatever is stated above is only for the limited
purpose of deciding as to whether this Court should entertain this writ
petition or not, and the Appellate Tribunal shall proceed with the case of
the petitioners without, in any manner, being influenced by what has
been stated above. No costs.
[P.N.P., J.] [R.H., J.]
04.07.2022
Index : Yes / No
Internet : Yes / No
pkn
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W.P(MD) No.14007 of 2022
To:
1.The Deputy Director,
Directorate of Enforcement,
Government of India,
III Floor, C-Block,
Murugesan Naikar Complex,
No.84, Greems Road,
Thousand Lights,
Chennai – 600 006.
2.The Adjudicating Authority,
(Prevention of Money Laundering Act),
IV Floor, Jeevan Deep Building,
Parliament Street,
New Delhi 110 001.
3.The Sub Registrar,
Thallakulam,
Madurai District.
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W.P(MD) No.14007 of 2022
P.N.PRAKASH, J.
and
R.HEMALATHA, J.
pkn
W.P.(MD) No.14007 of 2022
04.07.2022
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