Punjab-Haryana High Court
Dilbag Singh @ Dilbag Singh Sandhu vs Union Of India Through Secretary And ... on 13 November, 2024
Author: Anil Kshetarpal
Bench: Anil Kshetarpal
Neutral Citation No:=2024:PHHC:143784-DB
CWP-22688-2024 and
other connected cases -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
1. CWP-22688-2024
Reserved on: 22.10.2024
Date of decision: 13.11.2024
DILBAG SINGH @ DILBAG SANDHU
..Petitioner
Versus
UNION OF INDIA AND OTHERS
..Respondents
2. CWP-24522-2024
BHUPINDER SINGH
..Petitioner
Versus
UNION OF INDIA AND OTHERS
..Respondents
3. CWP-24530-2024
MANOJ KUMAR
..Petitioner
Versus
UNION OF INDIA AND OTHERS
..Respondents
4. CWP-24532-2024
RAJINDER SINGH
..Petitioner
Versus
UNION OF INDIA AND OTHERS
..Respondents
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5. CWP-24585-2024
KULWINDER SINGH
..Petitioner
Versus
UNION OF INDIA AND OTHERS
..Respondents
6. CWP-24617-2024
PARAMJEET SINGH
..Petitioner
Versus
UNION OF INDIA AND OTHERS
..Respondents
7. CWP-28070-2024
KULWINDER SINGH
..Petitioner
Versus
UNION OF INDIA AND OTHERS
..Respondents
CORAM: HON'BLE MR. JUSTICE SHEEL NAGU, CHIEF JUSTICE
HON'BLE MR. JUSTICE ANIL KSHETARPAL
Present: Mr. Chetan Mittal, Senior Advocate with
Mr. Anshul Mangla, Advocate
Ms. Shifali Goyal, Advocate
Mr. Vinay Arya, Advocate
Mr. Ritvik Garg, Advocate
and Mr. Himanshu Chauhan, Advocate
for the petitioner(s).
Mr. Zoheb Hossain, Special Counsel (through v.c.)
Mr. Lokesh Narang, Advocate for the respondents
ANIL KSHETARPAL, J.
TABLE OF CONTENTS:-
Sr. No. Description Page No.
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I Proceeds of crime: Definition, 7
Amendment and Judicial
Interpretation.
II Alleged Failure to Record 12
Reasons to Believe:- Key
Nuances and Implications.
III Evaluation of Fulfillment of First 14
Proviso to Section 5(1) in light of
the challenge.
IV Significance of the expression 17
"Immediately" and its
interpretation.
VI Subsequent Complaints to be a 19
part of the Original Complaint.
VII Availability of an Efficacious 20
Alternative Remedy.
1. Factual Matrix:-
1.1 With the consent of learned counsel for the parties, as many as
six writ petitions involving common issues shall stand disposed of by this
common order. The facts in this case have been derived from CWP-22688-
2024, in which the arguments were made.
1.2 The petitioner has raised the following issues:-
"A. Whether any property of the petitioner can be
attached which were acquired prior to the scheduled
offence and cannot be said to have any connection with
the proceeds of crime in view of the Hon'ble Supreme
Court judgment in Pavana Dibbur vs. Directorate of
Enforcement 2023 SCC Online 1586 as well as the
Division Bench judgment in Seema Garg vs. Deputy
Director, Directorate of Enforcement 2020 (2) RCR
(Criminal) 701 upheld by the Hon'ble Supreme Court
and followed by various High Courts?
B. Whether the impugned PAO is also without
jurisdiction on account of non-compliance of mandatory
provisions of Section 5(1) i.e. "reason to believe" as was
held by the Hon'ble Supreme Court in Vijay Madanlal
Choudhary & others v. Union of India & others 2022
SCC Online SC 929 and Radha Krishan Industries Vs.
State of Himachal, 2021 (6) SCC 771?
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C. Whether the impugned order is liable to be set-aside
on account of non-compliance of various provisions of
PMLA Act:
i. In gross violation of First Proviso to Section 5(1)
as no final report was submitted in 3 of the 8 FIRs
coupled with the fact that cancelation report was
presented in 2 FIRs and the petitioner was not
charge sheeted in the other 3 FIRs;
ii. In gross violation of Section 5(2) read with Rule
3 & 5 of 2005 Rules, as the copy of the Impugned
PAO alongwith the material in possession of
respondent ED was not "immediately" forwarded
to Ld. Adjudicating Authority since the Impugned
PAO was passed on 09.08.2024 and the
compliance of Section 5(2) was admittedly made
only on 12.08.2024;
iii. Completely false plea taken in the Impugned
PAO with regards to violation of the Orders of the
Hon'ble NGT while raising allegations with
regards to illegal mining;
iv. While passing the Impugned PAO, respondent
dated 19.01.2019 (P-24/Pg.394) registered at the
behest of respondent ED since the same was not a
part of the scheduled offences and the investigation
was still pending in the said FIR;"
1.3 As per the petition, the petitioner is involved in following cases
involving schedule offences:-
S. No. FIRs Schedule Status
Offences
1. 0226 dt. Sections 120-B Yet to present
14.10.2022 & 420 of IPC, report.
P.S. Pratap 1860
Nagar
2. 0116 dt. Sections 120-B, Final Report
23.03.2023 411 & 420 of Submitted.
P.S. Bilaspur IPC, 1860
3. 0111 dt. Sections 420, Yet to present
01.06.2023 467 & 471 of report.
P.S. Pratap IPC, 1860
Nagar
4. 0206 dt. Sections 420 of Yet to present
19.09.2022 IPC, 1860 report.
P.S. Pratap
Nagar
5. 0216 dt. Sections 471 of Final Report
30.09.2022 IPC, 1860 Submitted.
P.S. Pratap
Nagar
6. 0204 dt. Sections 120-B Final Report
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14.09.2022 & 420 of IPC, Submitted.
P.S. Pratap 1860
Nagar
7. 0033 dt. Sections 420, Cancelation
10.02.2023 467 & 471 of report
P.S. Pratap IPC, 1860 presented.
Nagar
8. 0054 dt. Sections 420, Cancelation
16.02.2023 467 & 471 of report
P.S. Bilaspur IPC, 1860 presented.
9. 001 dt. Sections 120-B Pending
19.01.2024 & 420 of IPC, investigation.
1860 and
Section 15 of
Environmental
Protection Act,
1.4 It is evident that out of 9 FIRs, 7 are pending, whereas, the final
report in 3 FIRs has already been submitted. On 23.09.2023, the ECIR was
registered. Between 04.01.2024 to 08.01.2024, search was carried out, which
ultimately led to the petitioner's arrest on 08.01.2024. FIR No.21 dated
19.01.2024, was registered against the petitioner and others on a complaint
made by the Enforcement Directorate, however, his arrest was declared
illegal by the High Court on 08.02.2024, whereas the special leave petition
filed to challenge the order was withdrawn. On 09.08.2024, the Deputy
Director passed a 'Provisional Attachment Order' (in short 'PAO'),
attaching the property of the petitioner and others after observing that the
investigation reveals that total proceeds of crime worth Rs.337,12,74,800/-
through illegal mining activities till date have been found and the
beneficiaries were the petitioner, his brother Rajinder Singh, Manoj
Wadhwa, Kulwinder Singh etc. These six writ petitions have been filed
under Article 226/227 of the Constitution of India, challenging the
correctness of the aforesaid PAO in which Enforcement Directorate (in short
'ED') has already filed its reply.
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2. Submissions made by the rival parties:
2.1 Learned counsel representing the parties have also filed their
written submissions apart from oral arguments.
2.2 The Petitioner's counsel while referring to the definition of
proceeds of crime in Section 2(1)(u) of Prevention of Money Laundering
Act, 2002 (in short '2002 Act'), relying upon judgments in Pavana Dibbur
Vs. Directorate of Enforcement, 2023 SCC (online) 1586, Seema Garg Vs.
Deputy Director, Directorate of Enforcement, 2020(2) RCR (Criminal)
701, Abdullah Ali Balsharaf Vs. Directorate of Enforcement, 2019(3) RCR
(Criminal) 798, Kumar Pappu Singh Vs. Union of India, 2021(3) ALT
571, HDFC Bank Limited Vs. Government of India and others, 2021
Criminal Law Journal 3969, M/s Himachal Emta Power Limited Vs.
Union of India, WP (Civil)5537 of 2018, decided on 23.08.2018 and
Hemanshu Rajnikant Shah Vs. Assistant Director, Enforcement
Directorate, 2023 Criminal Law Journal 1999, submits that the attached
properties were purchased before the alleged scheduled offences and were
untainted properties, hence could not be attached. He asserts that the
impugned PAO is without jurisdiction as it has been passed without
complying with the mandatory provisions of Section 5(1) of '2002 Act'.
Section 5(1) allows the Director or any other officer not below the rank of
Deputy Director to temporarily attach the property after recording 'reasons
to believe'. He asserts that as the legal requirement as provided in Section
5(1) is violated as the authority has failed to record 'reasons to believe',
hence the impugned PAO is illegal. He firmly contended that the impugned
order along with the material in possession of Enforcement Directorate was
not 'immediately forwarded' to the adjudicating authority and ED has taken
false plea before this Court.
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2.3 Per contra, the Enforcement Directorate's counsel has defended
the impugned order while relying upon the judgments of the Supreme Court
passed in Vijay Madanlal Chaudhary and others Vs. Union of India and
others, 2022 SCC (Online) (SC) 729 (para 298), Deputy Director,
Directorate of Enforcement Vs. Axis Bank and others, 2019 SCC (Online)
(Delhi) 7858 (paras 103 to 107) and Prakash Industries Limited and
another Vs. Directorate of Enforcement, WP (Civil) 14999 of 2021,
decided on 19.07.2022.
3. Analysis and Discussion:-
I. PROCEEDS OF CRIME: DEFINITION, AMENDMENT
AND JUDICIAL INTERPRETATION:-
3.1 The transformatory history of definition of proceeds of crime in
Section 2(1)(u) of 2002 Act has been elucidated by the Delhi High Court in
Prakash Industries case (supra) in a chart, which is reproduced below:-
Section 2009 2015 2013 2018 2019
Amendment Amendment Amendment Amendment Amendment
Section 2(1)(u) "proceeds of crime, proceeds of crime, "proceeds of crime,
"proceeds of crime, means any property means any means any property
means any derived or obtained, property derived derived or obtained,
property derived or directly or indirectly, by or obtained, directly or indirectly,
obtained, directly any person as a result of directly or by any person as a
or indirectly, by criminal activity indirectly, by any result of criminal
any person as a relating to the person as a result activity relating to the
result of criminal scheduled offence or of criminal scheduled offence or
activity relating to the value of any such activity relating to the value of any such
the scheduled property, [or where the scheduled property, or where such
offence or the such property is taken offence or the property is taken or
value of any such or held outside the value of any such held outside the
property country, then the property, or where country, then the
property equivalent in such property is property equivalent in
value held within the taken or held value held within the
country]" outside the country or abroad.
country, then the Explanation- For
property removal of doubts, it
equivalent in value is hereby clarified
held within the that "proceeds of
country [or crime" including
abroad] property not only
derived or obtained
from the scheduled
offence but also any
property which may
directly or indirectly
be derived or
obtained as a result of
any criminal activity
relatable to the
scheduled offence
3.2 In light of the Division Bench's judgment in Seema Garg's
case (supra), this Bench would have been obligated to either follow it or
refer the matter to a Larger Bench. However, the Supreme Court in Vijay
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Madanlal Chaudhary's case (supra) has interpreted the provision in para
298, which is extracted as under:-
"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 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."
3.3 The aforesaid observations made by the Supreme Court enable
this Bench to re-examine the entire issue, as in the considered opinion of this
Bench, the judgment passed in Seema Garg's case (supra) is no longer a
good law. This Court has taken this view due to the subsequent
interpretation by the Supreme Court, which has superseded the legal
principles established in Seema Garg's case (supra).
3.4 It is evident that the original (unamended) definition of phrase
'proceeds of crime' was structured into two distinct parts. The first part
relates to the property derived or obtained directly or indirectly by any
person as a result of criminal activity relating to a scheduled offence,
whereas, the second part relates to the value of any such property where the
proceeds of crime are not traceable. This clearly means that if the property
derived or obtained, directly or indirectly, from the proceeds of a crime of
scheduled offence is not traceable, then any property of equivalent value
falls within the scope of the expression 'proceeds of crime'. In 2015, the
amendment restructured the definition into three parts to cover the property
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taken or held outside the country. The concept of the property of equivalent
value was introduced with respect to the aforementioned properties. The
amendment enabled the authorities to go after any other property of a person
of equivalent value. In 2019, the scope of the phrase 'proceeds of crime' was
further expanded so as to include other properties which were not directly or
indirectly the proceeds of crime, but were held abroad, to be liable to
attachment. In 2019, the explanation has been added so as to give a wider
scope to the authorities. From the objects and reasons of the '2002 Act', it
becomes evident that the money laundering posed a serious threat not only
to the financial system of the countries but also to their integrity and
sovereignty. The '2002 Act' was enacted to prevent money laundering and
connected activities. The act of money laundering is a multi-layered,
complex and complicated diversion of the property, which is required to be
prevented. Consequently, the definition of proceeds of crime has undergone
transformative changes from time to time so as to include all the complex
acts involved in the offence of money laundering.
3.5 In Axis Bank's case (Supra), the Delhi High Court has
dissected the definition in three parts while covering tainted property and
untainted property held in India; and the 'proceeds of crime' taken out of the
country or any other property of equivalent value thereof. However, this
Court is of the considered view that the definition can be divided into two
broader categories namely tainted properties and untainted properties. The
first part provides about the tainted properties derived or obtained directly or
indirectly by any person as a result of criminal activity relating to a
scheduled offence. Thereafter, the untainted properties are further divided
into two parts; the first part deals with a situation where the property derived
or obtained from 'proceeds of crime' is not traceable. In the aforesaid
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situation the competent authority is authorized to attach or confiscate any
other property of accused, which is of the same value as that of the 'proceeds
of crime'. The second sub-category is a result of amendment brought in
2015 and 2019 in the Act. It provides that if the property derived or obtained
from the proceeds of crime has already been taken out of the Country then
the property equivalent in value held within the Country or abroad can be
made liable to be attached. This position has been explained by the Delhi
High Court in an elaborate manner in Axis Bank's case (supra) and
Prakash Industries case (supra).
3.6 It is not disputed that the Supreme Court in Vijay Madanlal
Chaudhary's case (supra) was examining the scope of the '2002 Act'
including definition of phrase 'proceeds of crime'. The submission put forth
by the learned counsel that the phrase 'or the value of any such property' is
superfluous was rejected by the Court and it was held that the definition of
'proceeds of crime' is wide enough to not only include to the property
derived or obtained as a result of criminal activity related to a schedule
offence but also any other property of equivalent value.
3.7 While interpreting a statutory provision, it is the bounden buty
of the Courts to interpret it in manner so that each word used by the statute
conveys a meaning it was assigned by the Legislature. The words used in
statute are of utmost significance. The Court cannot widen or restrict the
provisions on its own whims and fancies. When a statute's language is clear
and unambiguous, the general rule of interpretation of statute is to read the
provision as a whole and the Court must adhere strictly to the ordinary, plain
meaning of the words used. The words in a statute are used precisely, not
loosely, and efforts must be made to interpret them in a literal manner to
give effect to the objective of the Act. This approach of interpretation is
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based on the idea that the legislature's intent is best reflected in the exact
words of the statute.
3.8 Moreover, the reasoning adopted in Seema Garg's case (supra)
to the effect that there was no need to insert third part in the definition of the
'proceeds of crime' and that 'value of such property' is superfluous does not
appear sound. It appears that transformative journey of the definition of
phrase 'proceeds of crime' was not brought to the notice of the Division
Bench in Seema Garg's case (supra). In Abdullah Ali Balsharaf's case
(supra), Delhi High Court inadvertently overlooked the sub-category (i) of
second part of definition of 'proceeds of crime'. Similarly, Andhra Pradesh
High Court in Kumar Pappu Singh's case (supra) was not properly
assisted. Furthermore, the attention of Patna High Court was not drawn to
part 2(i) in HDFC Bank's case (supra). Similar is the position in M/s
Himachal Amta Power Limited's case (supra). In this case, the attention of
the Bench was not drawn to the second broader category of the definition. In
Hemanshu Rajnikant Shah's case (supra) the Court relied upon Seema
Garg's case (supra) and held that the properties acquired before the alleged
crime and before the enforcement of the '2002 Act' cannot be attached.
3.9 On the other hand the judgments passed in Vijay Madanlal
Chaudhary's case (supra), Axis Bank's case (supra) and Prakash
Industries case (supra) completely answer the question in favour of ED.
3.10 The petitioner's counsel has also heavily relied upon Pavana
Dibbur's case (supra). This Bench has carefully read the aforesaid
judgment. The aforementioned case involved attachment of properly falling
under the category of 'direct' or 'indirect' proceeds of crime. The complaint
under Section 44-45 of 2002 Act was quashed by the Supreme Court. The
Bench was never called upon to analyse the contentions based upon Section
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2(i)(u) of 2002 Act, whereas, in Vijay Madanlal Chaudhary's case (supra)
the Court directly answered the aforesaid question. Hence, there is no
substance in the first argument of learned counsel for petitioner.
II. ALLEGED FAILURE TO RECORD REASONS TO
BELIEVE:- KEY NUANCES AND IMPLICATIONS:-
3.11 The next argument of the learned counsel for petitioner is with
respect to the alleged failure to record 'reasons to believe'. On careful
reading of Section 5(1), it is evident that the PAO can be passed only where
the Director or any other officer not below the rank of Deputy Director
authorized by the Director, for the purpose of this action has 'reasons to
believe' which are required to be recorded in writing on the basis of material
in his possession. The provision mandates the 'reasons to believe' to be
recorded. On perusal of the PAO passed on 09.08.2024, it becomes evident
that the Deputy Director has passed the impugned order after recording
'reasons to believe' in writing; on the basis of material in his possession. An
elaborate order has been passed by recording sufficient and detailed reasons.
It is not in dispute that as of now seven FIRs are pending that involve
scheduled offences, out of which final reports under Section 173 Cr.P.C.
have already been filed in three.
3.12 The team of ED carried out search of the petitioner's premises
between 04.01.2024 to 08.01.2024, resulting in recovery of INR 5.29 Crores,
gold worth Rs.1.89 crore, fake e-Rawana bills, blank signed cheques and
various dummy entries have been created including GM company to route
the cash proceeds by layering such money into personal accounts to give it
the colour of legitimate money. While investigating the case, huge
discrepancy has been found in the mined minerals that were sold. It is
recorded in the order that more than Rs.337 crores have been laundered and
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provisional attachment of property worth Rs.122 crores was ordered.
3.13 Dilbag Singh, Rajinder Singh, Manoj Wadhwa, Kulwinder
Singh have already transferred some of the properties to their
children/spouses or sold to third parties. It is recorded in the impugned order
that the proceeds are likely to be concealed, transferred or otherwise dealt
with in some manner after the search was conducted. After the search was
carried, the vehicles were found transporting mined material without
e-Rawana bills. There has been a mention of large scale illegal mining by
using heavy machinery to mine boulders, gravel, sand being carried out
during the odd hours while diverting the flow of Yamuna river despite being
banned by the National Green Tribunal.
3.14 In the considered opinion of the Court, the 'PAO' has fulfilled
the mandatory requirement of recording the 'reasons to believe'. This is only
a provisional attachment order, which is subject to adjudication and
confirmation within a period of 180 days by the competent authority in
which opportunity has been provided to the petitioner. The reliance placed
on para 287 of Vijay Madanlal Chaudhary's case (supra) is not appropriate
because it has been observed that the authorized officer can order
provisional attachment only upon recording satisfaction regarding two
requirements. Specifically, the officer has to form his opinion and provide
written reasons for such belief, which must be based on material in his
possession rather than on mere assumptions. In this case, the electronic
record has been seized and there was sufficient material apart from fake
e-Rawana bills to substantiate this satisfaction.
3.15 The further reliance placed on Radha Krishan Industries Vs.
State of Himachal Pradesh 2021(6) SCC 771, is not appropriate because in
that case the Court was considering the provisions of Himachal Pradesh
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Goods and Services Tax Act, 2017 and Central Goods and Services Act,
2017. The Court found that the officer had ordered provisional attachment
under Section 83 of Himachal Pradesh Goods and Services Tax Act, 2017,
by attaching the receivables of the assessee and the commissioner failed to
form an opinion that it is necessary so to do for the purpose of protecting the
interest of government revenue. Hence, this judgment is not applicable to
facts of the present case. Similarly, reliance placed on para 45 to 48 of
Seema Garg's case (supra) is also in the peculiar facts of that case and is
not a declaration of law.
III. EVALUATION OF FULFILLMENT OF FIRST
PROVISO TO SECTION 5(1) IN LIGHT OF THE
CHALLENGE:-
3.16 The next argument of petitioner's counsel is based upon
perceived non-compliance of the Ist proviso of Section 5(1) of the 2002 Act.
It is contended that filing of final report under Section 173 Cr.P.C. in the
jurisdictional Court with respect to scheduled offences is sine qua non in
order to enable the competent authority to pass the 'PAO'. It is also
contented that the petitioner is not named as an accused in any of the first 8
FIRs in the table, which constitute the scheduled offences and cancellation
report has been presented in two FIRs, whereas, investigation in three is
pending. The final report has been submitted in only three FIRs, but the
petitioner is not named as an accused, and the ED has also failed to disclose
any material implicating the petitioner, either directly or indirectly, with the
scheduled offences or proceeds of crime.
3.17 Section 5 of '2002 Act' does not provide that the property liable
to attachment should be in possession of only the accused named in the FIR
relating to scheduled offences, Section 5(1)(a) refers to any person and not
only the accused. Secondly, Clause (a) and (b) provide for two conditions
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namely the person is in possession of any proceeds of crime and such
proceeds of crime are likely to be concealed, transferred or dealt with in any
manner which may result in frustrating the proceedings related to
confiscation of such proceeds of crime.
3.18 The first proviso to Section 5(1) is divided in the following
three parts:-
(i) The order of attachment shall be made only if a report
has been forwarded to a Magistrate under Section 173 of
Cr.P.C. in relation to a scheduled offence.
(ii) The attachment order shall not be made unless a
complaint has been filed by a person authorized to
investigate the offence mentioned in the schedule before
a Magistrate or Court for taking cognizance of the
scheduled offence as the case may be.
(iii) The attachment shall not be made unless a similar
report or complaint has been made or filed under the
corresponding law in any other Country.
3.19 Thus, it is evident that forwarding of a report to a Magistrate
under Section 173 of Cr.P.C. is not sine qua non for ordering provisional
attachment. Moreover, such report is required to be filed against a person
who is in possession of 'proceeds of crime'. The petitioner in CWP-22688-
2024, is an accused in FIR No.21, dated 19.01.2024, registered under
Section 120B, 420 IPC and Section 15 of the Environmental Protection Act,
1986. In the subsequent FIR that has been registered pursuant to the search
carried out by the Enforcement Directorate substantial material has been
found to prima facie establish not only the offence of money laundering but
also large scale illegal mining of boulders, gravel, sand on the basis of fake,
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invalid e-Rawana invoices. There is material on record to show that the
mined material has been transferred without e-Rawana invoices. There is a
huge discrepancy in the minerals mined and sold. This FIR has been filed on
the complaint filed by a person authorized to investigate the offences
mentioned in the schedule. Hence, requirement of first proviso to Section
5(1) stands fulfilled. Additionally, it is evident that out of the 9 FIRs,
cancellation report in only two has been filed and the final report has been
submitted in as many as three FIRs, which involved the scheduled offences.
As previously noted, for a provisional attachment order, it is not necessary
for the person in possession to be an accused alleged to have committed a
scheduled offence.
3.20 Moreover, the learned counsel for petitioner is not factually
correct while contending that 'PAO' does not refer to any material to
remotely suggest the petitioner's involvement. A careful reading of PAO
shows that petitioner Dilbag Singh along with his brothers and various more
accomplices was involved in illegal mining of mineral including boulders,
gravel and sand in violation of various orders passed by the National Green
Tribunal. It was found that the petitioner Dilbag Singh is the kingpin and has
substantial share in the business, which is run by creating various fake
entities in fictitious names including GM company. Electronic as well as
physical record has been seized during the search. Moreover, at this stage
only a 'PAO' has been issued, which is subject to decision by the
adjudicating authority after granting opportunity as provided in Section 6 of
2002 Act. Hence, the third argument put forth by the petitioner is
insubstantial.
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IV. SIGNIFICANCE OF THE EXPRESSION
"IMMEDIATELY" AND ITS INTERPRETATION:-
3.21 The next argument with respect to the failure of the
Enforcement Directorate to immediately forward the impugned PAO along
with the material in its possession to the adjudicating authority cannot be
accepted because the PAO was passed on Friday evening i.e. 09.08.2024. On
10.08.2024 and 11.08.2024, the offices were closed on account of holidays.
The POA along with the material in possession was forwarded to the
adjudicating authority by Enforcement Directorate on 12.08.2024. Though,
learned counsel for respondent has made reference to Section 10 of General
Clauses Act, 1897, which provides for computation of time, however, in this
case, no time limit has been prescribed. In fact this issue will not restrict the
Court in light of a recent judgment passed by the Supreme Court in Shento
Varghese Vs. Julfikar Husen and others, Criminal Appeal No.2531-2532
of 2024, decided on 13.05.2024, wherein, the word 'forthwith' as used in
Section 102(3) of Cr.P.C. has been explained in the following manner:-
"19. The meaning of the word 'forthwith' as used in
Section 102(3) has not received judicial construction by
this Court. However, this Court has examined the scope
and contours of this expression as it was used under the
Maintenance of Internal Security Act, 1971; Preventive
Detention Act, 1950; Section 157(1) of the Cr.P.C.; and
Gujarat Prevention of Anti-Social Activities Act, 1985 in
the case of Sk. Salim v. State of West Bengal, Alla China
Apparao and Others v. State of Andhra Pradesh and
Navalshankar Ishwarlal Dave v. State of Gujarat.
20. This Court, in Rao Mahmood Ahmad Khan v. Ranbir
Singh, has held that the word 'forthwith' is synonymous
with the word immediately, which means with all
reasonable quickness. When a statute requires something
to be done 'forthwith' or 'immediately' or even
'instantly' it should probably be understood as allowing
a reasonable time for doing it.
21. The expression 'forthwith' has been defined in
Black's Law Dictionary, 10th Edition as under:
"forthwith, adv. (14c) 1. Immediately; without
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delay. 2. Directly; promptly; within a reasonable
time under the circumstances; with all convenient
dispatch"
Wharton's Law Lexicon, 17th Edition describes
'forthwith' as extracted:
Forthwith, When a defendant is ordered to plead
forthwith, he must plead within twenty four hours.
When a statute or rule of Court requires an act to
be done 'forthwith', it means that the act is to be
done within a reasonable time having regard to the
object of the provision and the circumstances of the
case [Ex parte Lamb, (1881) 19 Ch D 169; 2 Chit.
Arch. Prac., 14th Edition]
22. From the discussion made above, it would emerge
that the expression 'forthwith' means 'as soon as may
be', 'with reasonable speed and expedition', 'with a
sense of urgency', and 'without any unnecessary delay'.
In other words, it would mean as soon as possible, judged
in the context of the object sought to be achieved or
accomplished.
23. We are of the considered view that the said
expression must receive a reasonable construction and in
giving such construction, regard must be had to the
nature of the act or thing to be performed and the
prevailing circumstances of the case. When it is not the
mandate of the law that the act should be done within a
fixed time, it would mean that the act must be done within
a reasonable time. It all depends upon the circumstances
that may unfold in a given case and there cannot be a
straight-jacket formula prescribed in this regard. In that
sense, the interpretation of the word 'forthwith' would
depend upon the terrain in which it travels and would
take its colour depending upon the prevailing
circumstances which can be variable.
24. Therefore, in deciding whether the police officer has
properly discharged his obligation under Section 102(3)
Cr.P.C., the Magistrate would have to, firstly, examine
whether the seizure was reported forthwith. In doing so, it
ought to have regard to the interpretation of the
expression, 'forthwith' as discussed above. If it finds that
the report was not sent forthwith, then it must examine
whether there is any explanation offered in support of the
delay. If the Magistrate finds that the delay has been
properly explained, it would leave the matter at that.
However, if it finds that there is no reasonable
explanation for the delay or that the official has acted
with deliberate disregard/ wanton negligence, then it may
direct for appropriate departmental action to be initiated
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against such erring official. We once again reiterate that
the act of seizure would not get vitiated by virtue of such
delay, as discussed in detail herein above."
3.22 It is evident that in Rao Mahmood Ahmed Khan Vs. Ranbir
Singh, 1995 (supp.) (4) SCC 275, the word 'immediately' and 'forthwith'
were treated as synonyms. Moreover, if failure to follow the statutory
provision provides no express consequences, the procedural requirement
shall be considered to be 'directory'.
V. DISPUTED QUESTIONS OF FACT:-
3.23 The next argument of the petitioner's counsel is factual and
involves disputed questions of fact. Perusal of PAO (Annexure P-1) reflects
that various orders passed by the National Green Tribunal and their violation
have been delineated in para 1.3, from page 55 to 66 of the paperbook. It has
been alleged that mining has been conducted beyond the area under lease
and no CCTV cameras have been installed at various vulnerable points.
Vehicles carrying mined material have not been provided with the GPS
system and mining has been carried out beyond the permissible depth and
National Green Tribunal has imposed penalty of Rs.2.5 crore, Rs.4.2 crore
and Rs.12 crore on M/s Delhi Royalty Company, M/s Development
Strategies India Pvt. Ltd. and M/s Mubarikpur Royalty Company,
respectively. Moreover, it is stated that against the order dated 18.11.2022,
the matter is pending before the Supreme Court. In this situation, it would
not be appropriate to quash the 'PAO' particularly when an appropriate
order after considering all aspects is yet to be passed by the adjudicating
authority as provided under Section 8 of '2002 Act'.
VI. SUBSEQUENT COMPLAINTS TO BE A PART OF
THE ORIGINAL COMPLAINT:-
3.24 The next argument of petitioner's counsel is no more res integra
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in view of the judgment passed in Civil Writ Petition No.29265 of 2023,
titled as "M/s IREO Private Limited Vs. Union of India and another,
decided on 04.09.2024:-
"3.8 In the considered opinion of this Bench, this
argument of the learned counsels suffer from a
fundamental flaw. It is evident that out of 32 FIRs, one
remains open. According to Explanation II to Section 44
of the 2002 Act, any subsequent complaint should be
incorporated into the pending complaint for further
investigation to gather additional evidence against any
accused, as reflected in the statutory language. The
legislative intent in cases involving multiple FIRs is thus
quite clear. Consequently, it can be concluded that even if
all FIRs except one have been resolved through
compromise or other means, the investigation under the
same ECIR will continue. This is because Explanation II
to Section 44 of the 2002 Act mandates that subsequent
complaints be considered part of the original complaint
by the Special Court. Moreover, sine qua non to proceed
under the 2002 Act is the offence of money laundering
which is wholly dependent upon the proceeds of crime. It
is evident that the proceeds of crime should be the result
of criminal activity related to a scheduled offence
included in the Schedule attached to the Act which
includes offence under Section 420 of the Indian Penal
Code, 1860 (hereinafter referred to as "IPC"). In that
context, the offence of money laundering is dependent
upon the proceeds of crime from criminal activity
relating to a scheduled offence, however, the registration
of FIR in the scheduled offence is not sine qua non for
initiating the proceedings under the 2002 Act. Section 66
of the 2002 Act is not dependent on the predicate offence
as explained by the Supreme Court in Pavana Dibbur v.
Directorate of Enforcement 2023 SCC Online SC
1586."
VII. AVAILABILITY OF AN EFFICACIOUS
ALTERNATIVE REMEDY:-
3.25 The Enforcement Directorate's counsel has contended that the
petitioner has efficacious remedy before the adjudicating authority under
Section 8 of '2002 Act'. He asserts that the petitioner has an alternative
remedy of appeal that can be filed against the order to be passed by
adjudicating authority under Section 8 of '2002 Act', consequently, the
Court should not entertain the writ petition.
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3.26 Though there is some substance in the argument of ED's
counsel, however, the writ petition cannot be held to be not maintainable.
3.27 The question of whether the writ petition can be entertained is
one that the Court must consider based on the facts of each case. Availability
of alternate statutory remedy is one of the grounds that dissuade the
Constitutional Court to interfere. The petitioner has filed the writ petition
based upon the interpretation given by a Division Bench in Seema Garg's
Case (supra), hence, this Court has considered it appropriate to entertain the
writ petition and to adjudicate.
4. Decision:
4.1 Keeping in view the aforesaid discussion, the writ petitions lack
merit and hence dismissed.
4.2 Needless to observe that the adjudicating authority would
proceed with the matter and pass appropriate orders in accordance with law
uninfluenced by the observations made by this Court in this order.
(ANIL KSHETARPAL) (SHEEL NAGU)
JUDGE CHIEF JUSTICE
13th November, 2024
Ayub
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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