Madras High Court
R.Subramanian vs The Deputy Director on 13 November, 2024
Author: S.M.Subramaniam
Bench: S.M.Subramaniam
2024:MHC:3917
Crl.O.P.No.7733 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED :13.11.2024
CORAM :
THE HONOURABLE MR. JUSTICE S.M.SUBRAMANIAM
AND
THE HONOURABLE MR. JUSTICE M.JOTHIRAMAN
Crl.O.P.No.7733 of 2019
R.Subramanian .....Petitioner
Vs.
1.The Deputy Director
Directorate of Enforcement
Chennai Zonal Office
3rd Floor C Block
Murugesa Naicker Complex
84 Greams Road
Chennai 600 006.
2.The Assistant Director
Office of the Directorate of Enforcement
Chennai Zonal Office
3rd Floor C Block
Murugesa Naicker Complex
84 Greams Road
Chennai 600 006. ... Respondents
Prayer: Criminal Original Petition filed under Section 482 of Cr.P.C., praying
to call for the records and quash the PAO No.11/2018 dated 31.12.2018 passed
by the 1st respondent in ECIR/CEZO/8/2014 on the file of 2nd respondent.
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Page 1 of 9
Crl.O.P.No.7733 of 2019
For Petitioner : Mr.R.Subramanian (Party in person)
For Respondents : Mr.AR.L.Sunderesan
Additional Solicitor General of India
Assisted by Mr.N.Ramesh for R1 and R2
Special Public Prosecutor for ED
ORDER
(Order of the Court was made by S.M.SUBRAMANIAM, J.)
Under assail in the present Criminal Original Petition is the Provisional
Attachment Order dated 13.12.2018 issued by the Competent Authority of
Directorate of Enforcement.
2. The petitioner, appearing in person, is an accused in a money
laundering case. Admittedly, ECIR/CEZO/8/2014 was registered by the
Directorate of Enforcement and launched an investigation under the provisions
of Prevention of Money Laundering Act, 2002 (hereinafter referred as 'PMLA'
for brevity). The scheduled offence was registered by the Central Bureau of
Investigation (CBI) (BS&FC), Bangalore, in FIR No.18 of 2013 dated
26.07.2013, alleging an offence under Section 420 of Indian Penal Code (IPC).
On completion of investigation, a complaint under Section 45 of PMLA, read
with Sections 3 and 4 has been filed before the Court concerned.
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3. The petitioner challenged the Provisional Attachment Order No.11 of
2018 dated 31.12.2018 issued by the Deputy Director, Directorate of
Enforcement, under Section 5(1) of the PMLA. The petitioner states that the
authority issued the impugned provisional attachment order has no jurisdiction
and the properties provisionally attached cannot be construed as proceeds of
crime within the meaning of Section 2(1)(u) of PMLA. The subject properties
under provisional attachment were either purchased by the petitioner or were
ancestral properties of the petitioner, which were in his possession even prior to
the registration of a criminal case by the Central Bureau of Investigation (CBI)
at Bangalore. Thus, recording of Enforcement Case Information Report (ECIR)
under the provisions of the PMLA itself is untenable.
4. In support of the above grounds, the petitioner in person relied on the
judgment of the Hon'ble Supreme Court of India in the case of Vijay Madanlal
Choudhary and Others Vs. Union of India and Others1. The petitioner further
relied on the case of Pavana Dibbur vs. Directorate of Enforcement2.
5. The petitioner states that the properties purchased prior to investigation
of PMLA proceedings cannot be subjected to provisional attachment under
1. 2022 SCC Online SC 929
2. 2023 SCC Online SC 1586
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Section 5(1) of PMLA. Thus, the provisional attachment order is infirm.
6. Mr.AR.L.Sunderesan, learned Additional Solicitor General of India
appearing on behalf of the respondents would oppose by stating that provisional
attachment order was passed by the Deputy Director, Directorate of
Enforcement in proceedings dated 31.12.2018. Subsequently, a complaint was
filed before the Adjudicating Authority under Section 8 of PMLA. Thus, the
impugned provisional attachment order lost its relevance and would not provide
cause at present to the petitioner to maintain the present criminal original
petition. The period of 180 days contemplated for provisional attachment order
had been lapsed. However, the provisional attachment order was passed in
consonance with the provisions of Section 2(1)(u) and Section 5(1) of PMLA
and there is no infirmity as such.
7. We have considered the rival submissions made between the parties to
the lis on hand.
8. Section 2(1)(u) of the Prevention of Money Laundering Act, 2002
defines “proceeds of crime” as “any property derived or obtained, directly or
indirectly, by any person as a result of criminal activity relating to a scheduled
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offence or the value of any such property or where such property is taken or
held outside the country, then the property equivalent in value held within the
country or abroad”.
9. The definition of “Proceeds of Crime” is wide enough to cover various
facts and circumstances relating to offence of money laundering. The value of
the properties is considered as proceeds of crime and further it says that
property equal in value held within the country or abroad also constitute
proceeds of crime.
10. With reference to Section 2(1)(u) of PMLA, “Proceeds of Crime”, the
Hon'ble Supreme Court in Vijay Madanlal Choudhary's case cited supra held
as follows;
“298. It was also urged before us that the
attachment of property must be equivalent in value of the
proceeds of crime only if the proceeds of crime are
situated outside India. This argument, in our opinion, is
tenuous. For, the definition of “proceeds of crime” is wide
enough to not only refer to the property derived or
obtained as a result of criminal activity relating to a
scheduled offence, but also of the value of any such
property. If the property is taken or held outside the
country, even in such a case, the property equivalent in
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value held within the country or abroad can be proceeded
with. The definition of “property” as in Section 2(1)(v) is
equally wide enough to encompass the value of the
property of proceeds of crime. Such interpretation would
further the legislative intent in recovery of the proceeds of
crime and vesting it in the Central Government for
effective prevention of money-laundering.”
11. The Hon'ble Apex Court ruled that the definition of proceeds of crime
is wide enough to not only refer to the property derived or obtained as a result
of criminal activity relating to a schedule offence, but also of the value of any
such property.
12. The definition of “property” under Section 2(1)(v) is equally wide
encompass the value of the property of proceeds of crime. The wider
implications as interpreted by the Hon'ble Supreme Court in Vijay Madanlal
Choudhary's case cited supra would be sufficient to form an opinion that the
properties purchased prior to the commencement of alleged offence and value of
the proceeds of crime can be subjected to attachment as it constitute proceeds of
crime within the definition of Section 2(1)(u) of PMLA.
13. In the present case, the impugned provisional attachment order has
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been stayed by this Court and therefore, the period of 180 days as contemplated
does not apply to the present case. However, the fact remains that a complaint
has already been filed under the provisions of PMLA. Therefore, the provisional
attachment order impugned lost its relevance and thus, no further adjudication
needs to be undertaken. The petitioner is at liberty to approach the Competent
Forum constituted under PMLA in the manner known to law.
14. The petitioner, appearing in person, would submit that he is in the
process of contesting the complaint filed before the Adjudicating Authority.
Accordingly, the Adjudicating Authority shall proceed with the case in
accordance with law by following the procedures as contemplated under PMLA
and uninfluenced by the observations made in this order regarding the facts of
the case.
15. Considering the facts and circumstances, we hold that the petitioner
has not established any grounds for the purpose of considering the relief as such
sought for in the present criminal original petition.
16. Accordingly, the Criminal Original Petition in Crl.O.P.No.7733 of
2019 stands dismissed.
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[S.M.S., J.] [M.J.R., J.]
13.11.2024
Index: Yes
Speaking
msv/Jeni
To
1.The Deputy Director
Directorate of Enforcement
Chennai Zonal Office
3rd Floor C Block
Murugesa Naicker Complex
84 Greams Road
Chennai 600 006.
2.The Assistant Director
Office of the Directorate of Enforcement
Chennai Zonal Office
3rd Floor C Block
Murugesa Naicker Complex
84 Greams Road
Chennai 600 006.
https://www.mhc.tn.gov.in/judis
S.M.SUBRAMANIAM, J.
AND
M.JOTHIRAMAN, J.
msv/Jeni
11.11.2024
https://www.mhc.tn.gov.in/judis
