Team News Riveting
New Delhi, July 21
In a big relief to Prakash Industries Limited (PIL), the Delhi High Court has quashed the provisional order of attachment passed by the Directorate of Enforcement (ED) that facilitated seizing company’s properties worth about Rs 227 crore.
In December 2021, the ED had provisionally attached properties worth Rs 227.95 crore of PIL, Hisar, Haryana under the provisions of Prevention of Money Laundering Act (PMLA), 2002 in a coal block allocation case. The attached assets were in the form of land at Hisar, Delhi, Noida and various parts of Chhattisgarh.
Justice Yashwant Varma of the Delhi High Court on Tuesday ruled the impugned proceedings arising out of the order of attachment Nos.8337, 8338, 8339, 8340/2021 dated 01 December 2021 as well as the show cause notice dated 13 January 2022 and all proceedings relating to OC No.1586/2021 shall consequently stand quashed.
The Court observed that the facts of the present petitions reflect that the respondents have attached properties and assets which had been purchased prior to the allocation having been made, some which were acquired prior to the promulgation of the Act itself and some after it came into force. Those details have been set forth in Annexure A 38 of the second writ petition and are not being reproduced here for the sake of brevity.
Justice Varma also ruled that coal allocation could not amount to proceeds of crime per se under the money-laundering law. According to the order, only the gains that might have been obtained by the utilisation of the coal-block allocation could possibly be viewed as proceeds of crime.
The CBI had booked the company for allegedly obtaining coal allocation as well as diversion of extracted coal. The FIR and charge sheet were quashed by a lower Court. The CBI filed a second FIR in 2016 and a new charge sheet in 2020.
The Court said the argument based on possession of property and the right of the Directorate to consequently attach the same was clearly rendered unsustainable when viewed in light of the fact that those properties were not treated as untainted or permissibly attachable property constituting property equivalent in value to any such tainted properties. The allegations in the show cause notice are that these properties constitute proceeds of crime in themselves and are thus tainted property.
“As has been found in the judgment since the chargesheet bids us to restrict scrutiny of events only up to 04 September 2003, the impugned action could have been sustained if it had been found that proceeds of crime had been derived upto that date. That is clearly not the allegation leveled. Insofar as acquisitions made post that date and the coming into force of the Act is concerned, it is faced with the specter of the first chargesheet having already been quashed. The judgment of the Court quashing those proceedings compels and constrains the Court to acknowledge that no criminal activity was indulged in,” the Court said, adding viewed from that perspective also, the Court comes to the conclusion that the submissions advanced by the respondents based on the aspect of continued possession is also liable to negatived.
