Dismissed

G.Srinivasan v. the Chairperson, Adjudicating

Madras HC1 Apr 2011WP/530/2011

Case brief

AI extract

What is this about?

Petitioner challenged a provisional attachment order (PMLA s.5(1)) in a writ petition. The High Court held that the writ should fail as statutory remedies under the PMLA, including adjudication and appeal to the Tribunal, were available and efficacious, rendering writ jurisdiction inappropriate at the provisional stage.

What did the court decide?

Petitioner's writ petition challenging provisional attachment and adjudication notice was dismissed. Connected miscellaneous petitions closed.

G.Srinivasan Vs the Chairperson, Adjudicating — Pension and Retirement Benefits | Madras HC (2011)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 01.04.2011

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CORAM

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THE HONOURABLE MR.JUSTICE K.CHANDRU

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W.P.NO.530 of 2011 and M.P.Nos.2 to 4 of 2011

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G.Srinivasan

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.. Petitioner

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Vs. 1.The Chairperson, Adjudicating Authority under Prevention of Money Laundering Act, 2002, Government of India, Ministry of Finance, Department of Revenue, 4^th Floor, Jeevan Deep Building, Parliament Street, New Delhi-110 001. 2.The Deputy Director, Directorate of Enforcement, Prevention of Money Laundering Act (PMLA), 2002, Government of India, 3^rd Floor, 3^rd Block, Shastri Bhawan No.26,Haddows Road, Chennai-600 006.

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3.M/s.VMT Spinning Mills India Pvt. Ltd., SF No.88/1, Sedanthottam, Unjamppalayam, Somanur, Coimbatore District, Tamil Nadu-641 668.

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4.The Senior Branch Manager, Bank of Baroda, C-66, Vinayagar Koil Street, Gandhi Nagar, Udumalpet-642 154. .. Respondents

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This writ petition is preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorari to call for the records of the proceedings of the provisional attachment order – 06/2010 dated 05.10.2010 (Under subsection (1) of Section 5 of the Prevention of Money Laundering Act, 2002) in File No.ECIR/31/CZ/PMLA/2009(PM) passed by the second respondent and the consequential original complaint No.70/2010 dated 01.11.2010 pending on the file of the first respondent and to https://hcservices.ecourts.gov.in/hcservices/ quash the same.

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For Petitioner : Mr.R.Subramanian, SC for Mr.S.D.Venkateswaran

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For Respondents : Mr.M.Dhandapani, CGSC for R-2 M/s.Ramalingam Associates for R-4

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ORDER

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The petitioner has filed the present writ petition seeking to challenge the provisional order of attachment, dated 05.10.2010 passed under Section 5(1) of the Prevention of money Laundering Act, 2002 (for short POMLA) by the second respondent Deputy Director of Enforcement, POMLA as well as the consequential complaint No.70/2010, dated 01.11.2010 pending on the file of the Adjudicating Authority under the POMLA, New Delhi.

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2.The writ petition was admitted on 10.1.2011. Pending the writ petition, this court had granted an interim stay for a period of four weeks in M.P.No.2 of 2011. In the application in M.P.No.3 of 2011 for suspension of provisional attachment of moveable assets of the petitioner, only notice was ordered. Aggrieved by the interim order, the second respondent has filed a vacate stay application in M.P.No.4 of 2011. When that application came up for hearing, with the consent of both parties, the main writ petition itself was taken up for hearing.

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3.Heard the arguments of Mr.R.Subramanian, learned Senior Counsel leading Mr.S.D.Venkateswaran, learned counsel appearing for petitioner, Mr.M.Dhandapani, learned Central Government Standing Counsel appearing for second respondent and M/s.Ramalingam Associates on behalf of fourth respondent Bank.

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4.The facts leading to filing of the above writ petition are as follows:

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In connection with the petitioner's activities in forging documents and forging records in the name of non existing companies for the purpose of getting loan from the Bank, criminal cases were registered against the petitioner. The offence committed by the petitioner is covered by POMLA and investigation was undertaken by the second respondent Enforcement Directorate. It was thereafter, the provisional attachment order was made vide GSR 441(E), dated 1.7.2005. The complaint under Section 5(5) of POMLA in O.C.No.70 of 2010 in Provisional Attachment Order No.6 of 2010, dated 05.10.2010 was filed on 1.11.2010 by the second respondent Deputy Director of Enforcement before the first respondent Adjudicating Authority at New Delhi. The first respondent on considering the complaint had issued a show cause notice under Section 8 of POMLA to the petitioner for his appearance before the first respondent calling him to show cause to his source of income, out of which or by means of which the provisionally attached movable properties were acquired. The petitioner instead of appearing before the first https://hcservices.ecourts.gov.in/hcservices/ respondent has filed the present writ petition challenging the

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provisional attachment order as well as the case filed against him.

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5.It was further stated that one Karthikeyan, the Managing Director of M/s.Ari Fabrics Ltd. having office at Coimbatore had entered into a Memorandum of Understanding dated 13.2.2008 with the petitioner that he should settle the amount of Rs.6.5 Crores which was obtained by the said Karthikeyan as loan for the purpose of running M/s.Ari Fabrics Ltd. For this purpose, the petitioner was appointed as the additional Director and that Board resolution was also passed. The petitioner had paid an amount of Rs.2 Crores towards the said loan to the State Bank of India, Trichy Road Branch, Coimbatore. But, however, he did not pay the balance amount as undertaken by him pursuant to the Memorandum of Undertaking, dated 13.2.2008. In fact, it was the complaint of the Managing Director of M/s.Ari Fabrics Ltd. that the petitioner without being authorised by any Board resolution had opened a current account in the name of M/s.Ari Fabrics with the fourth respondent Bank of Baroda, Udumalpet by forging the signature of the Managing Director and also made it appear as if the Board had authorised him to open the current account in the name of the Mill. The said Karthikeyan, Managing Director had filed a complaint with the District Crime Branch, Coimbatore. The criminal case was registered under Sections 120-B, 468, 471 and 409 IPC against the petitioner.

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6.Similarly, though the petitioner was authorised to run M/s.VMT Spinning mills India Pvt. Ltd., but no authorisation was given to open a current account in the name of the said mill. On the basis of the statement given by one Sudha, Director of the said mill on 9.9.2010 before the Assistant Director, POMLA, Directorate of Enforcement as well as the statement given by the petitioner, dated 28.10.2010 that he had opened current account in the name of VMT Spinning Mills India Pvt. Ltd. by forging the signature of late Duraisamy, the then Managing Director of M/s.VMT Spinning Mills India Pvt. Ltd., as if the Board had authorised him to open the account and in the light of these facts, the provisional attachment order No.6/2010, dated 5.10.2010 impugned in the writ petition came to be made.

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7.The contention raised by the petitioner in this writ petition was that the said Karthikeyan and his group having sold the company as early as 13.2.2008 had initiated various legal proceedings to take over the company. In respect of the dispute between the petitioner and the said Karthikeyan and his group, a civil dispute is pending before the learned District Munsif Court, Coimbatore. The petitioner had also filed an arbitration O.P., which is pending before the Principal District Judge, Coimbatore. A further arbitration petition is also pending before this court. With reference to the company affairs, petitions are pending before the Company Law Board and certain company applications filed by him are also pending before this court. The petitioner had purchased the third respondent M/s.VMT Spinning Mills India Pvt. Ltd., by an agreement, dated 12.11.2007 and 08.12.2008. He was permitted to run the mill. Therefore, he had opened a Bank account with the fourth https://hcservices.ecourts.gov.in/hcservices/ respondent.

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8.It is further claimed that when a criminal case was filed by the Inspector of Police, District Crime Branch, Coimbatore, the accounts were verified in the Bank and the second respondent was satisfied about the transaction. It is on these premise, the petitioner had challenged the provisional attachment order issued under Section 5(1) of the POMLA. It is claimed that the authority should have "reason to believe" on the basis of materials that the attached subject property is the proceeds of a crime and the person charged had committed scheduled offences and that there are chances of concealment or transfer of proceeds. A mere repetition of the word "reasons to believe" cannot be a ground for passing the attachment order. The provisions of the second schedule to the Income Tax Act with reference to attachment proceedings are very clear inasmuch as there must be notice before attachment. The petitioner was kept in dark about the investigation. The impugned attachment notice was contrary to Section 5 of POMLA. The attachment can be made only in relation to the scheduled offence and a report should have been forwarded to the Magistrate or the Court taking cognizance of the scheduled offence. Since the provisional attachment under Section 5(1) is illegal, the consequential proceedings under Section 8 is also illegal. The attached bank accounts are his earnings from legal sources.

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9.Controverting these arguments, in the counter affidavit, it was contended that the provisional attachment order was passed on the basis of the materials, which include the petitioner's voluntary statement that he had availed loan amount by furnishing bogus bills raised in the name of non existing mills. The subjective satisfaction of the authority was arrived at on the basis of the materials. The materials are listed out in paragraph 8 (iv) of the counter affidavit. In the present case, since the attachment is relating to moveable property,r the second schedule to the Income Tax Act need not be notified. A copy of the provisional attachment order was sent to the fourth respondent and a report was forwarded to the Magistrate.

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10.With reference to the contention that the procedure laid down under Second schedule to the Income Tax Act was not followed, the learned CGSCl placed reliance upon the amendment made to Section 5 of the POMLA, wherein a proviso has been introduced to Section 5(1)(c), which reads as follows:

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"[Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised 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:

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Provided further that, notwithstanding anything contained in clause (b), any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the nonattachment of the property is likely to frustrate any proceeding under this Act.]"

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It was further stated that because of second proviso to Section 5, the attachment can be made even without forwarding a report under Section 173 Cr.P.C.

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11.Therefore, the short question that arises for consideration in this writ petition is whether the impugned notice of provisional attachment under Section 5(!) and the impugned notice for adjudication under Section 8 suffer from any want of jurisdiction and liable for interference by this Court?

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12.Mr.M.Dhandapani, learned Central Government Standing Counsel in support of his contentions had relied upon a judgment of the division bench of the Bombay High Court in First Appeal Nos.527 to 529 of 2010 in Radha Mohan Lakhotia Vs. The Deputy Director, PMLA, Directorate of Enforcement, Ministry of Finance, Department of Revenue, Mumbai, which arose under the provisions of POMLA. The Bombay High Court vide its judgment, dated 5.8.2010 had dealt with the scope of POMLA including Section 5(1). In analysing Section 5 (1) being invoked against a person who is not named as an accused in the commission of scheduled offence, in paragraphs 11 to 13 of its judgment, it was observed as follows:

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The question is whether section 5 can be invoked against a person who is not named as an accused in the commission of a scheduled offence? Sub-section (1) of Section 5 will have to be read as a whole conjointly with the other provisions of the Act already referred to hitherto, including section 8 thereof. Section 5 authorises the Director of any other office not below the rank of Deputy Director authorised by Director for the purposes of the said section to resort to action of "attachment of property" if he has reason to believe and the reason of such belief has been recorded in writing arrived at on the basis of material in his possession. That action is intended to freeze the proceeds of crime, which property, is derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence or value of any such property until the criminal action for the scheduled offence https://hcservices.ecourts.gov.in/hcservices/ is taken to its logical end against the accused named

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therein. The proceeds of crime means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located – which has been derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence or the value of such property. The proceeds of crime may be or can be in possession of "any person". Be it a person charged of having committed a scheduled offence "or otherwise". In the case of any other person in possession of proceeds of crime, if it is also found that he has directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property, he shall be liable to be prosecuted for offence under section 3 read with section 4 of the Act of 2002 – in addition to suffering the action of attachment of the proceeds of crime in his possession. Attachment of proceeds of crime in possession of any person (other than the person charge of having committed a scheduled offence) will, therefore, be legitimate within the sweep of Section 5 of the Act of 2002. In our opinion, the thrust of Section 5 is to attach every property involved in money-laundering irrespective of whether it is in possession of the person charged of having committed a scheduled offence or any other person – provided however it must be shown to be proceeds of crime and further, that proceeds of crime are likely to be concealed, transferred or dealt with in any manner, which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under the Act.

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Going by the definition of "person" occurring in Section 2(s) and on conjoint reading of section 2(u), which also refers to "any person", coupled with the purpose and intent for which the enactment has been brought into force, accepting the argument of the appellants would result in a pedantic approach and limiting the plenitude of action of attachment and confiscation of proceeds of crimes only in the hands of the persons who have been charged of having committed a scheduled offence and none else. Whereas, the Act has come into being to prevent money laundering and to provide for confiscation of property derived from or involved in, money laundering and for matters connected therewith or incidental thereto. It is the outcome of the Political Declaration and Global programme of Action, as annexed to the resolution S-17/2 adopted by the

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General Assembly of the United Nations at its seventeenth special session on the twenty-third day of February, 1990. It has come into being also on account of the Political Declaration adopted by the Special Session of the United Nations General Assembly held on 8^th to 10^th June, 1998 which called upon the Members States to adopt national moneylaundering legislation and programme. The term "money-laundering" has the same meaning assigned to it in Section 3 of the Act of 2002. It essentially refers to the tainted property which is derived from criminal activity relating to a scheduled offence. Such tainted property may travel at different levels or by way of circular transactions for being eventually projected as untainted property in the hands of or possession of person other than the person charged of having committed a scheduled offence. That involves direct or indirect involvement of person or persons other than the person(s) accused of having committed a scheduled offence. Such other person(s) may directly or indirectly attempt to indulge or knowingly assist or knowingly is a party or is actually involved in any process or activities connected with the proceeds of crime and projecting it as untainted property. If such is the nature of activity, the Act of 2002 is intended to deal with the same sternly. In a given case a person can be in possession of any proceeds of crime without his knowledge that the property held by him is tainted. That person may not face prosecution under Section 3 of the Act of 2002. But even in his case, an order of attachment of the proceeds of crime can be invoked and later end up with confiscation thereof depending on the outcome of the criminal action against the person charged of having committed a scheduled offence. The action of attachment is not in relation to a person as such but essentially to freeze the proceeds of crime. The interpretation given by the Appellants, if accepted would be destructive of the said legislative intent. Suffice it to observe that the term "person" appearing in clause (a) of the Section 5(1) of the Act cannot be limited to the person who has been charge of having committed a scheduled offence. If that was the intent of the legislature, there was no reason to insert clause (a). In that case, the Legislature would have simply provided for any person who has been charged of having committed a scheduled offence and in possession of any proceed of crime, such proceeds of crime can be attached and confiscated, subject to fulfillment of the specified conditions.

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13.The Appellants however, have placed emphasis on https://hcservices.ecourts.gov.in/hcservices/ the expression "such person" used in clause (b) of

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section 5(1) of the Act. According to them, the word "such" is prefix to the word "person" in clause (b). That is not superfluous, but is ascribable to the person referred to in clause (a). Which means that even clause (a) deals with person who has been charged of having committed a scheduled offence. It is not possible to countenance this submission. We are conscious of the fact that penal provisions should be strictly construed. At the same time, we cannot overlook the language of section 5 as applicable at the relevant time. In our opinion, clause (a) refers to "any person" – whether he has been charged of having committed a scheduled offence "or otherwise". The only requirement is that that person should be in possession of any proceeds of crime. The governing factor is possession of any proceeds of crime by a person. Taking any other view may defeat the legislative intent. In as much as, a person who has been charged of having committed a scheduled offence can successfully defeat the object of the enactment of attachment and confiscation of the proceeds of crime by transferring it to some other person who is not so involved with him in commission of stated scheduled offence. In our opinion, on fair reading of section 5(1) read with section 8 of the Act, it postulates two categories of persons against whom action of attachment of property can be proceeded with. The first category is any person who is in possession of any proceeds of crime. A person falling in this category need not be a person, charged of having committed a scheduled offence. The second category is of a person who has been charged of having committed a scheduled offence. Besides, being charged of having committed a scheduled offence, that person is found to be in possession of any proceeds of crime. In either case, it is open to take recourse to section 5 of the Act if the specified Authority has reason to believe and reason for such belief is recorded in writing that the proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime. Indeed, the proviso to subsection (1) as was applicable at the relevant time envisaged that no order of attachment can be made unless, in relation to the offence under paragraph 1 of Part A and Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973; or paragraph 2 of Part A of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under Section 36(1) of NDPS Act, 1985. This proviso essentially is directed against the

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second category of person covered by sub-section (1), namely, person who has been charged of having committed a schedule offence. In other words, action of attachment of proceeds of crime in possession of the person charged of a scheduled offence can be proceeded only on forwarding of a report to Magistrate under section 173 of the Code or a complaint has been filed for taking cognizance of offence by the Special Court constituted under the NDPS Act. In so far as the person who is not named in the scheduled offence, there can be no question of filing of any report or complaint for taking cognizance. That stipulation has no application to the person who is not a person having been charged of a scheduled offence. The view that we propose to take is reinforced from the purport of section 3 and 4 of the Act of 2002. The same deal with the offence of money-laundering and punishment for money-laundering respectively. Both these provisions, even on strict construction, plainly indicate that the person to be proceeded for this offence need not necessarily be charged of having committed a scheduled offence. For, the expression used in "whosoever". The offence of money-laundering under section 3 of the Act of 2002 is an independent offence. It is committed if "any person" directly or indirectly attempts to indulge or knowingly assists of knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property. Further, it would create a piquant situation as a person who is not charged of having committed a scheduled offence even if can be proceeded for offence of money laundering and even if such person is in possession of any proceeds of crime, no action of attachment and confiscation of the proceeds of crime can be resorted to qua himalbeit the proceeds of crime are in his possession. If the argument of the appellants were to be accepted, even the expression "whosoever" appearing in section 3 and 4 of the Act will have to be limited to person who has been charged of having committed a scheduled offence. The object of the enactment of 2002 would be completely defeated by such approach. Besides, the view that we propose to take is reinforced also from the purport of section 8 of the Act of 2002. It provides that the Adjudicating Authority if has reason to believe that "any person" has committed an offence under section 3, may serve notice upon such person calling upon him to indicate his source of his income, earning or assets, out of which or by means of which he has acquired the property attached under section 5(1) of the Act. Once again, the legislature has unambiguously used the term "any person" and not person charged of

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having committed a scheduled offence. Indeed, any person referred to in this provision is a person who has committed an offence under section 3 of the Act of 2002. He may not necessarily be a person charged of having committed scheduled offence. The proviso to sub-section (1) thereof stipulates that where a notice under the said sub-section specified any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person. Suffice it to observe that even section 8 contemplates adjudication to be done by the Adjudicating Authority after provisional attachment order is passed under section 5 of the Act and upon receipt of complaint under section 5(5) of the Act. We are not referring to other provisions mentioned in the said section 8(1), as we are dealing only with the case arising under section 5 of the Act. Considering the above, we are of the considered opinion that there is no merit in the argument of the appellants that action under section 5 of the Act could not have proceeded against them, as they were not charged of having committed a scheduled offence."

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13.Further, a Full Bench of this Court (to which I am a party) vide its judgment in S.Bagavathy Vs. State of Tamil Nadu, rep by its Secretary, Law Department, Chennai and another reported in 2007 (2) MLJ 526 dealt with the attachment of properties under the Tamil Nadu Protection of Interest of Depositors (in Financial Establishments) Act, 1997. While dealing with the exparte attachment, in paragraphs 27 and 28.1 to 28.4, the Full Bench had observed as follows:

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"27.The opportunity given to the financial establishments, the persons aggrieved or person interested as mentioned above is not minimal, but, should be viewed pragmatically as the same satisfies the principles of natural justice with utmost promptitude. The Act therefore provides very flexible hearing giving opportunity to the financial establishments and persons whose properties were attached and procedure provided in this regard is malleable and adaptable to the concept of principles of natural justice. The dispensation of pre-decision opportunity while passing ad interim order of attachment under Section 3 of the Act is inevitable, as the very object of the enactment is to control, rgulate and curb the activities of malicious transfer of funds by the financial establishments and to realise the amount from the financial establishments and distribute the same to the depositors equitably and thus, protect the interest of the innocent depositors.

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28.1.We, therefore, do not see any justification in the complaint for not affording a reasonable opportunity before attaching the property, as there cannot be any justified reason to fleece the funds that actually belongs to the depositors.

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28.2.If that be so, can't the State rush-in to bring out necessary enactment in order to provide a stabilised socio-economic justice and to provide infallibility by unique machinery of attaching the properties to safeguard the interest of the depositors?

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28.3.Can't the State under such circumstances save the moths from the fire except by putting out the fatal glow, by way of the impugned legislation?

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28.4.Even on the point that properties of innocent third parties were also attached without giving any opportunity to them, we do not find any force as such innocent third parties are entitled to approach the Special Court for necessary remedy, after satisfying their bona fide. For their any hardship in the interregnal period, the answer is that when a general evil is sought to be suppressed some martyrs may have to suffer, for the legislature cannot easily make meticulous exceptions and it has to proceed on broad categorizations and not singular individualization."

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14.The said judgment was taken on appeal to the Supreme Court. The Supreme Court very recently by its judgment dated 4.3.2011 in K.K.Baskaran Vs. State rep by its Secretary, Tamil Nadu and others in Civil Appeal No.2341 of 2011 had dismissed the appeal and confirmed the order of the Full Bench. In paragraphs 36 and 37, the Supreme Court had approved the law laid down by the Full Bench in relation to attachment of properties as means to achieve justice, which reads as follows:

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"36.In the case of the Tamil Nadu Act, the attachment of properties is intended to provide an effective and speedy remedy to the aggrieved depositors for the realization of their dues. The offences dealt with in the impugned Act are unique and have been enacted to deal with the economic and social disorder in society, caused by the fraudulent activities of such financial establishments.

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37.Under Section 3 & 4 of the Tamil Nadu Act, certain properties can be attached, and there is also provision for interim orders for attachment after which a post decisional hearing is provided for. In our opinion this is valid in view of the prevailing realities."

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15.In the present case, by attachment of property made by the second respondent, the petitioner is not bound to lose anything and he cannot be said to be prejudiced. On the other hand, by virtue of Section 5(3), every order of attachment made under Section 5(1) of the POMLA will lose its efficacy either after 150 days or after an order passed under Section 8(2) of the POMLA. Therefore, it is only the petitioner instead of approaching the first respondent Adjudicating Authority who had initiated proceedings under Section 8(1), had rushed to this court. Even if the attachment is made final, under Section 26, an appeal lies to the Appellate Tribunal. Therefore, the petitioner must submit his explanation to the Adjudicating Authority and convince it that the amount sought to be attached was not obtained due to any money laundering and that it was the legally earned income. Even if he fails before the first respondent, there is time enough for challenging the same before the judicial appellate Tribunal constituted under Section 26 of the POMA. When the Act itself provides for an inbuilt remedy, it is not open to the petitioner to rush to this Court at the stage of provisional attachment, which is yet to be confirmed by the Adjudicating Authority.

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16.In this context, it is necessary to refer to a judgment of the Supreme Court in Raj Kumar Shivhare v. Directorate of Enforcement reported in (2010) 4 SCC 772, wherein the Supreme Court while dealing with an alternative remedy available under the FEMA Act held that the Act cannot be bypassed and the jurisdiction under Article 226 of the Constitution of India cannot be invoked. In the following passages found in paragraphs 31 and 32, the Supreme Court had observed as follows:

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"31.When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating this aspect of the matter. It has however dismissed the writ petition on the ground of lack of territorial jurisdiction.

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32.No reason could be assigned by the appellant’s counsel to demonstrate why the appellate jurisdiction of the High Court under Section 35 of FEMA does not provide an efficacious remedy. In fact there could hardly be any reason since the High Court itself is the appellate forum."

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17.Very recently, the Supreme Court in United Bank of India v. Satyawati Tondon reported in (2010) 8 SCC 110 dealt with https://hcservices.ecourts.gov.in/hcservices/ SARFAESI Act and DRT Act and in paragraphs 55 and 56, it had held

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as follows:

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"55.It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection.

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56.Insofar as this case is concerned, we are convinced that the High Court was not at all justified in injuncting the appellant from taking action in furtherance of notice issued under Section 13(4) of the Act. In the result, the appeal is allowed and the impugned order is set aside. Since the respondent has not appeared to contest the appeal, the costs are made easy.

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Therefore, the writ petition filed by the petitioner must necessarily fail.

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18.Before parting with the case, it is necessary to refer to the observations made by the Supreme Court in K.K.Baskaran's case (cited supra), where the Supreme Court emphasized the necessity to have laws to protect the people from money laundering and swindlers. In paragraph 41 of the said judgment, the Supreme Court had observed as follows:

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"41.The State being the custodian of the welfare of the citizens as parens patriae cannot be a silent spectator without finding a solution for this malady. The financial swindlers, who are nothing but cheats and charlatans having no social responsibility, but only a lust for easy money by making false promise of attractive returns for the gullible investors, had to be dealt with strongly."

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19.In view of the above factual matrix and legal precedents, the writ petition will stand dismissed. However, there will be no order as to costs. Consequently, connected miscellaneous petitions stand closed.

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Sd/Asst. Registrar

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//true copy//

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Sub Asst.Registrar

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vvk

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To 1.The Chairperson, Adjudicating Authority under Prevention of Money Laundering Act, 2002, Government of India, Ministry of Finance, Department of Revenue, 4^th Floor, Jeevan Deep Building, Parliament Street, New Delhi-110 001. 2.The Deputy Director, Directorate of Enforcement, Prevention of Money Laundering Act (PMLA), 2002, Government of India, 3^rd Floor, 3^rd Block, Shastri Bhawan No.26,Haddows Road, Chennai-600 006. 3 The Senior Branch Manager, Bank of Baroda, C-66, Vinayagar Koil Street, Gandhi Nagar, Udumalpet-642 154. 2 cc to M/s.Ramalingam & Assciates, Advocate, Sr.No.23514 ORDER IN W.P.NO.530 of 2011 RSI {CO} TP/5.4.2011.

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G.Srinivasan v. the Chairperson, Adjudicating

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G.Srinivasan v. the Chairperson, Adjudicating

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V.Krishnan Vs the Presiding Officer

Tmt.K.P.Ranganayagi Vs the Director of Elementary

Syed Jamal, Vs the Joint Director of School

Kodanad Estate, Vs the Principal Secretary to the