Allahabad High Court
Moon Light Propbuild Pvt. Ltd. Thru. … vs Union Of India Thru. Secy. Deptt. … on 21 April, 2025
Author: Pankaj Bhatia
Bench: Pankaj Bhatia
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH ?Neutral Citation No. - 2025:AHC-LKO:22421 Court No. - 6 Case :- MATTERS UNDER ARTICLE 227 No. - 2098 of 2025 Petitioner :- Moon Light Propbuild Pvt. Ltd. Thru. Power Of Attoreny Ishan Srivastava Respondent :- Union Of India Thru. Secy. Deptt. Revenue Ministry Of Finance New Delhi And 3 Others Counsel for Petitioner :- Dhawal Prakash,Ratnesh Chandra Counsel for Respondent :- A.S.G.I.,Rohit Tripathi,Shiv P. Shukla Hon'ble Pankaj Bhatia,J.
1. Supplementary affidavit and amendment application filed today are taken on record.
2. Heard Shri Ratnesh Chandra, assisted by Shri Dhawal Prakash, Shri Shashank Srivastava, Shri, Saharsh Srivastava, Ms. Riddhima Verma, Shri Shashwat Tripathi and Ms. Madhu Ayachit, learned counsel for the petitioner and Shri Rohit Tripathi, learned counsel for the respondents.
Present petition has filed by the petitioner with the following reliefs:
“a) Issue a writ in the nature of certiorari and/or any other appropriate writ/ order inter alia quashing and setting aside Annex 2 the Provisional Attachment Order No. 24 of 2024 dated 28.10.2024 passed by Opposite Party No.3 qua the assets of the Petitioner herein;
b) Issue a writ in the nature of certiorari and/or any other appropriate writ/ order inter alia quashing Annexure 3 the Original Complaint bearing no. 2483 of 2024 dated 25.11.2024 filed by the Opposite Party No.3 against the Petitioner herein before the Ld. Adjudicating Authority.”
3. When the matter was being heard, the counsel for the respondents raised preliminary objection on the maintainability of the petition under Article 227 of the Constitution of India. Both the parties were heard extensively on the said issue, which was raised as a preliminary issue and the same is being decided by means of this order.
4. Submission of learned counsel for the petitioner is that an order came to be passed against the petitioner in exercise of power under Section 5 of the Prevention of Money-Laundering Act, 2002, which is under challenge as relief no.(a). The said order is dated 28.10.2024. It is further based on record that after the passing of the said order, the matter was referred for adjudication before the Adjudicating Authority under Section 8 of thePrevention of Money-Laundering Act, 2002, where the proceedings are going on.
5. In short, the submission of learned counsel for the petitioner is that the manner in which, the powers under Section 5 of the Prevention of Money-Laundering Act, 2002 have been exercised without there being any ‘reasons to believe’, which is sin-qua-non for exercise of power, is bad in law. With regard to the pendency of the proceedings before the Adjudicating Authority, which are sought to be quashed, the submission of learned counsel for the petitioner is that even the Adjudicating Authority is liable to record ‘reasons to believe’, which have been challenged by filing an amendment application, which, according to learned counsel for the petitioner, do not satisfy the test of ‘reasons to believe’, which are required to be recorded prior to taking any further steps under Section 8 of the Prevention of Money-Laundering Act, 2002.
6. It is further argued that in case the foundation, being the order under Section 5 of thePrevention of Money-Laundering Act, 2002, falls the entire proceeding would fall, thus the continuation of adjudicating proceedings is bad in law as, the order under Section 5 of the Prevention of Money-Laundering Act, 2002, according to learned counsel for the petitioner, is contrary to the mandate of the Prevention of Money-Laundering Act, 2002.
7. Learned counsel for the respondents, on the other hand, while raising preliminary issue places reliance on the judgement of the Supreme Court in the case of Garment Craft versus Prakash Chanda Goel; (2022) 4 SCC 181 and, drawn attention towards the observations made in paragraph nos.15 and 16 of the said judgement of the Supreme Court, which are being quoted herein-below:
“15. Having heard the counsel for the parties, we are clearly of the view that the impugned order is contrary to law and cannot be sustained for several reasons, but primarily for deviation from the limited jurisdiction exercised by the High Court under Article 227 of the Constitution of India. The High Court exercising supervisory jurisdiction does not act as a court of first appeal to reappreciate, reweigh the evidence or facts upon which the determination under challenge is based. Supervisory jurisdiction is not to correct every error of fact or even a legal flaw when the final finding is justified or can be supported. The High Court is not to substitute its own decision on facts and conclusion, for that of the inferior court or tribunal. The jurisdiction exercised is in the nature of correctional jurisdiction to set right grave dereliction of duty or flagrant abuse, violation of fundamental principles of law or justice. The power under Article 227 is exercised sparingly in appropriate cases, like when there is no evidence at all to justify, or the finding is so perverse that no reasonable person can possibly come to such a conclusion that the court or tribunal has come to. It is axiomatic that such discretionary relief must be exercised to ensure there is no miscarriage of justice.
16. Explaining the scope of jurisdiction under Article 227, this Court in Estralla Rubber v. Dass Estate (P) Ltd.; (2001) 8 SCC 97 has observed:-
“6. The scope and ambit of exercise of power and jurisdiction by a High Court under Article 227 of the Constitution of India is examined and explained in a number of decisions of this Court. The exercise of power under this article involves a duty on the High Court to keep inferior courts and tribunals within the bounds of their authority and to see that they do the duty expected or required of them in a legal manner. The High Court is not vested with any unlimited prerogative to correct all kinds of hardship or wrong decisions made within the limits of the jurisdiction of the subordinate courts or tribunals. Exercise of this power and interfering with the orders of the courts or tribunals is restricted to cases of serious dereliction of duty and flagrant violation of fundamental principles of law or justice, where if the High Court does not interfere, a grave injustice remains uncorrected. It is also well settled that the High Court while acting under this article cannot exercise its power as an appellate court or substitute its own judgment in place of that of the subordinate court to correct an error, which is not apparent on the face of the record. The High Court can set aside or ignore the findings of facts of an inferior court or tribunal, if there is no evidence at all to justify or the finding is so perverse, that no reasonable person can possibly come to such a conclusion, which the court or tribunal has come to.”
8. Next reliance placed upon judgement of the Supreme Court in the case of Raj Kumar Bhatia versus Subhash Chandra Bhatia; (2028) 2 SCC 87, wherein the Supreme Court had the occasion to deal the Article 227 of the Constitution of India and recorded as under:
“12. This being the position, the case which was sought to be set up in the proposed amendment was an elaboration of what was stated in the written statement. The High Court has in the exercise of its jurisdiction under Article 227 of the Constitution entered upon the merits of the case which was sought to be set up by the appellant in the amendment. This is impermissible. Whether an amendment should be allowed is not dependent on whether the case which is proposed to be set up will eventually succeed at the trial. In enquiring into merits, the High Court transgressed the limitations on its jurisdiction under Article 227. In Sadhna Lodh v National Insurance Company; (2003) 3 SCC 524, this Court has held that the supervisory jurisdiction conferred on the High Court under Article 227 is confined only to see whether an inferior court or tribunal has proceeded within the parameters of its jurisdiction. In the exercise of its jurisdiction under Article 227, the High Court does not act as an appellate court or tribunal and it is not open to it to review or reassess the evidence upon which the inferior court or tribunal has passed an order. The trial court had in the considered exercise of its jurisdiction allowed the amendment of the written statement under Order 6 Rule 17 of the CPC. There was no reason for the High Court to interfere under Article 227. Allowing the amendment would not amount to the withdrawal of an admission contained in the written statement (as submitted by the respondent) since the amendment sought to elaborate upon an existing defence. It would also be necessary to note that it was on 21-9-2013 that an amendment of the plaint was allowed by the trial court, following which the appellant had filed a written statement to the amended plaint incorporating its defence. The amendment would cause no prejudice to the Plaintiff.”
9. Next reliance is placed on the judgement of the Supreme Court in the case of Union of India and Others versus Major General Shri Kant Sharma and Another; (2015) 6 SCC 773 and Specific reliance on paragraph nos.29, 30 and 31, wherein the Supreme Court had the occasion to deal with the manner in which the jurisdiction under Article 226 of the Constitution of India is to be exercised including the cases, where the alternative remedy is to be considered as a bar.
10. Reliance has also been placed on the judgement of the Madras High Court in the case of Ms. Aarshita Jain versus The Adjudicating Authority (PMLA) and another; 2023:MHC:3224, wherein the Madras High Court, had the occasion to deal with the jurisdiction of writ court directly lye after an order passed under Section 8(3) of the Prevention of Money-Laundering Act in view of availability of the appellate remedy under Section 26 or not, the High Court had the occasion to deal with the scope of Article 226 of the Constitution of India and the exceptions, which are craved out for exercising powers under Article 226 of the Constitution and ultimately relegated the parties to avail remedy of appeal.
11. In response to the said argument, learned counsel for the petitioner has also placed reliance on the observations made by the Supreme Court in the case of Garment Craft (supra).
12. Considering the submissions made at the bar on the preliminary issue of maintainability of the writ petition under Article 227 of the Constitution of India, it is essential to notice that the mandate of thePrevention of Money-Laundering Act, wherein, for tracing the money, which are liable to attached and confiscated, Chapter III of the said Act provides the manner in which the attachment of property is to be made and after passing the order of provisional attachment, it is incumbent that an application is made before the Adjudicating Authority under Section 8 of the Prevention of Money-Laundering Act, which is empowered to check the validity and correctnessof the order of provisional attachment. The powers of the Adjudicating Authority are prescribed under Section 6 of the Prevention of Money-Laundering Act and the manner in which the exercise of power is also defined under Section 6 of the Prevention of Money-Laundering Act. On a plain reading of Sections 6, 7 and 8 of the Prevention of Money-Laundering Act, it is clear that the Adjudicating Authority, is a quasi judicial authority, empowered to test the validity of the orders passed under Sections 5, 17 and 18 of the Prevention of Money-Laundering Act subject to the restrictions placed on exercise of powers under Section 8 of the Prevention of Money-Laundering Act itself.
13. In the present case, the Adjudicating Authority is proceeding on the basis of complaint made before it by the authority which has passed the order under Section 5 of thePrevention of Money-Laundering Act, the Adjudicating Authority has recorded the reasons to believe, which has been brought on record by the amendment application filed today and the proceedings are being taken before the Adjudicating Authority.
14. Apart from challenge to the reasons recorded as reasons to believe by the Adjudicating Authority, no error has been pointed out with regard to the manner of functioning of the Adjudicating Authority. Thus, in view of the law as explained in the case of Garment Craft (supra), prima facie, there appears to be no error in manner of exercise of power of the Adjudicating Authority warranting interference under Article 227 of the Constitution. However, the other grounds with regard to non recording of proper reasons to believe by the authority under Section 5 as well as Adjudicating Authority the same can be decided only on a petition under Article 226 of the Constitution subject to restrictions based on the exercise of power under Article 226 of the Constitution of India.
15. Thus, this petition under Article 227 of the Constitution of India is not maintainable and is accordingly dismissed.
16. I am not going into the other questions of merits of the impugned order, which can be agitated by the petitioner by taking appropriate steps in accordance with law.
17. At this stage, learned counsel for the petitioner states that he may be permitted to convert present proceedings under Article 226 of the Constitution of India.
18. Considering the said request, his request is accepted and he is directed to move appropriate application during the course of the day.
19. Let the matter be placed before the Stamp Reporter for fresh report and the matter shall be placed before appropriate Bench tomorrow i.e. 22.04.2025 as fresh.
Order Date :- 21.4.2025
Anupam S/-
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