Manas Monson & Mimisha Monson v. Registrar/Administrative Officer, Adjudicating Authority (PMLA) & Deputy Director, Directorate of Enforcement, Kochi Zonal Office (WP(C) No.19874/2024)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE V.G.ARUN** **MONDAY, THE 29[TH] DAY OF JULY 2024 / 7TH SRAVANA, 1946 WP(C) NO. 19874 OF 2024** ## **PETITIONERS:** - **1 MANAS MONSON AGED 30 YEARS S/O. MONSON MAVUNKAL, MAVUNKAL HOUSE, VALLYIL BHAGAM, CHERTHALA P.O, ALAPPUZHA DISTRICT, PIN - 688524** - **2 MIMISHA MONSON AGED 28 YEARS D/O. MONSON MAVUNKAL, MAVUNKAL HOUSE, VALLYIL BHAGAM, CHERTHALA P.O, ALAPPUZHA DISTRICT, PIN - 688524** **BY ADVS. M.G.SREEJITH VIDYAJITH M. BINCY JOSE ROJIN DEVASSY** ## **RESPONDENTS:** - **1 THE REGISTRAR/ADMINISTRATIVE OFFICER ADJUDICATING AUTHORITY (PMLA) ROOM NO.26, 4TH FLOOR JEEVAN DEEP BUILDING PARLIAMENT STREET, NEW DELHI, PIN - 110001** - **2 THE DEPUTY DIRECTOR DIRECTORATE OF ENFORCEMENT DIRECTORATE OF ENFORCEMENT GOVT. OF INDIA COCHIN ZONAL OFFICE, KANOOS CASTLE A.K.SESHADRI ROAD, COCHIN, PIN - 682011** ## **OTHER PRESENT:** **SRI. JAISHANKAR. V. NAIR, SC. FOR ED. SRI T.C. KRISHNA DSGI IN CHARGE.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23.07.2024, THE COURT ON 29.07.2024 DELIVERED THE FOLLOWING:** WP(C).No.19874/2024 2 ## **V.G.ARUN, J** **= = = = = = = = = = = = = = = = =** **W.P.(C).No.19874 of 2024** **= = = = = = = = = = = = = = = = = = Dated this the 29th day of July, 2024** ## **JUDGMENT** The petitioners are defendants 3 and 4 in original complaint (OC No. 2214 of 2024) pending before the Adjudicating Authority under the Prevention Of Money Laundering Act, 2002 ('the Act' for short). The complaint under Section 5(5) of the Act is filed by the second respondent, alleging, that based on the materials placed before it, the said authority reasonably believes that the movable and immovable properties belonging to the defendants, provisionally attached under Section 5(1) of the Act vide provisional attachment order No.08/KCZO/2024 dated 26.2.2024, are properties involved in money laundering in terms of section 2(1)(u) of the Act. Accordingly, the second respondent has made the following prayers in Exhibit P3 complaint:- WP(C).No.19874/2024 3 “(a) Take the complaint on record for the purpose of adjudication under Section 8(1) of the Act; and (b)Declare under Section 8(2) of the Act that properties mentioned in the provisional attachment order are involved in money laundering; (c)Confirm the attachment of property under Section 8(3) of the PMLA in respect of properties mentioned in the Provisional Attachment order No. No.08/KCZO/2024 dated 26.2.2024 issued under Sub-section (1) of Section 5 of the said Act”. ## 2. The essential facts are as under:- Certain crimes alleging misappropriation and cheating were registered against the father of the petitioners, arrayed as the first defendant in Exhibit P3 complaint. The second defendant in the complaint is the petitioners' mother, who is no more. The petitioners were initially issued with Exhibit P1, provisional attachment order. Thereupon, they submitted Exhibit P2 and P2(a) replies, stating that they have no role or participation in the scheduled offences and the provisionally attached properties are not proceeds of crime. While so, the petitioners were served with Exhibit P3 complaint and Exhibit WP(C).No.19874/2024 4 P4 show cause notice under Section 8(1) of the Act. Accordingly, the petitioners filed Exts.P5 and P5(a) replies, terming them as part written reply and sought permission to file additional written reply. It was so done on the premise that, copies of some of the documents relied on by the second respondent were not furnished along with the complaint, thereby making it impossible for the petitioners to formulate and submit an effective reply to the show cause notice. The petitioners also filed Ext. P6 application before the Adjudicating Authority, seeking copies of certain documents for submitting the detailed reply. 3. Learned counsel for the petitioners submitted that the first respondent has scheduled the hearing on the show cause notice on 30.07.2024 and going by the stipulation in Regulation 15 (2) of the Adjudicating Authority (Procedure) Regulations, 2013, no further reply will be entertained after the date fixed for hearing. Relying on Regulation 13(2), it is contended that, along with the complaint and show cause notice, respondents ought to have provided the complete set of documents relied upon. According to the learned counsel, compulsion to proceed WP(C).No.19874/2024 5 with the hearing without providing the entire set of documents is patently illegal and hence, the writ petition is maintainable. 4. Learned counsel appearing for the second respondent raised an objection as to the maintainability of the writ petition. According to the counsel, the writ petition, filed at the show cause notice stage, is liable to be dismissed _in limine_ . To buttress the contention, reliance is placed on the decisions in **Special Director v. Mohd. Ghulam Ghouse** [(2004) 3 SCC 440] and **Farida Begum Biswas v. Union of India** [2015 SCC Online Del 11834] 5. An order of attachment under the Act passes through three different stages; ( _i_ ) provisional order under Section 5(1); ( _ii_ ) confirmation of provisional order under Section 8(3); and ( _iii_ ) finality of order of attachment under Section 8(3)( _b_ ). The procedure to be followed at each stage is clearly delineated in the Act itself. The petitioners' case has reached the second stage. In this context it would be beneficial to have a careful scrutiny of Section 8, is extracted below for convenience:- WP(C).No.19874/2024 6 “8. Adjudication (1) On receipt of a complaint under sub-section (5) of Section 5, or applications made under sub-section (4) of Section 17 or under sub-section (10) of Section 18, if the Adjudicating Authority has reason to believe that any person has committed an offence under Section 3 or is in possession of proceeds of crime, it may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of Section 5, or, seized [or frozen] under Section 17 or Section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: Provided that where a notice under this sub-section specifies 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: Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property. (2) The Adjudicating Authority shall, after— (a ) considering the reply, if any, to the notice issued under subsection (1); (b ) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf; and WP(C).No.19874/2024 7 (c ) taking into account all relevant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are involved in money-laundering: Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering. (3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under subsection (1) of section 5 or retention of property or 3 [record seized or frozen under section 17 or 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property] or record shall— (a) continue during 1 [investigation for a period not exceeding 2 [three hundred and sixty-five days] or] the pendency of the proceedings relating to any 3 [offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and [(b) become final after an order of confiscation is passed under sub-section (5) or sub-section (7) of section 8 or section 58B or subsection (2A) of section 60 by the 5 [Special Court]; (4) Where the provisional order of attachment made under sub- WP(C).No.19874/2024 8 section (1) of section 5 has been confirmed under sub-section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the 7 [possession of the property attached under section 5 or frozen under sub-section (1A) of section 17, in such manner as may be prescribed: Provided that if it is not practicable to take possession of a property frozen under sub-section (1A) of section 17, the order of confiscation shall have the same effect as if the property had been taken possession of.] [(5) Where on conclusion of a trial of an offence under this Act, the Special Court finds that the offence of money-laundering has been committed, it shall order that such property involved in the money-laundering or which has been used for commission of the offence of money-laundering shall stand confiscated to the Central Government. (6) Where on conclusion of a trial under this Act, the Special Court finds that the offence of moneylaundering has not taken place or the property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it. (7) Where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a proclaimed offender or for any other reason or having commenced but could not be concluded, the Special Court shall, on an application moved by the Director or a person claiming to be entitled to possession of a property in respect of which an order has been passed under sub-section (3) of section 8, pass appropriate orders WP(C).No.19874/2024 9 regarding confiscation or release of the property, as the case may be, involved in the offence of money-laundering after having regard to the material before it.] (8) Where a property stands confiscated to the Central Government under sub-section (5), the Special Court, in such manner as may be prescribed, may also direct the Central Government to restore such confiscated property or part thereof of a claimant with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of the offence of money laundering: Provided that the Special Court shall not consider such claim unless it is satisfied that the claimant has acted in good faith and has suffered the loss despite having taken all reasonable precautions and is not involved in the offence of money laundering: Provided further that the Special Court may, if it thinks fit, consider the claim of the claimant for the purposes of restoration of such properties during the trial of the case in such manner as may be prescribed.]” 6. A reading of the provision makes it clear that the prime requirement for issuing notice or summons in a complaint is of the adjudicating authority having reason to believe that the defendant has committed an offence under Section 3 or is in possession of proceeds of crime. Once decision is taken to issue notice/summons, the procedure prescribed in Regulation 15(1) of the Adjudicating Authority (Procedure) Regulations, 2013 is WP(C).No.19874/2024 10 to be followed. Being contextually relevant Regulation 13(1) and (2) are extracted below: **“13. Issue of summon and notice** .—(1) Every summon or notice shall be issued in Form 3 or Form 4 or Form 5 or Form 6, as the case may be, and signed by the Registrar or Administrative Officer. (2) Every summon and notice shall be served by the complainant or applicant upon the defendant or respondent along with complete relied upon documents in a bound paper book and an affidavit of service along with proof of service shall be filed by the person affecting such service.” 7. The requirement, therefore is, of the defendant being served with complete set of relied upon documents. In the case at hand, the second asserts respondent asserts that copies of relied upon documents have been served on the petitioners. Here, it is pertinent to note that, while Section 5(1) speaks of 'materials in the possession' of the officer effecting the provisional attachment, going by Section 5(2), immediately after attachment under sub-section (1), the officer should forward the ‘materials in his possession’, to the Adjudicating Authority, in a sealed envelope. Moreover, Sub section (5) of Section 5 requiring the attaching officer, to file a complaint WP(C).No.19874/2024 11 stating the facts of such attachment before the Adjudicating Authority does not mention anything about submission of 'copies of materials' in the possession of the officer along with the complaint. Thus, it is for the officer to decide which all documents, from among the materials on his possession, are to be relied upon in the complaint. Regulation 13(1) requires copies of only those documents to be served on the defendants. If the defendant wants to inspect records, other than those produced with the complaint, he can do so by following the procedure prescribed in Regulation 16. 8. The above discussion leads to the conclusion that no extraordinary circumstance or patent illegality, warranting interference at the show cause notice stage, is made out by the petitioners. In the result, the writ petition is dismissed. sd/- **V.G.ARUN, JUDGE** sj WP(C).No.19874/2024 12 ## **APPENDIX OF WP(C) 19874/2024** **PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF RELEVANT PAGES OF COMMUNICATION INCLUDING THE PROVISIONAL ORDER DATED 26-02-2024 RECEIVED FROM THE 2ND RESPONDENT TO THE PETITIONERS** **Exhibit P2 TRUE COPY OF REPLY SUBMITTED BY THE PETITIONERS HEREIN DATED 12-05-2024 BEFORE THE 2ND RESPONDENT Exhibit P2(a) TRUE COPY OF REPLY SUBMITTED BY R1 IN THE PROCEEDINGS DATED 12-05-2024 THROUGH HIS COUNSEL BEFORE THE 2ND RESPONDENT** **Exhibit P3 TRUE COPY OF THE RELEVANT PAGES OF COMPLAINT IN OC NO.2214/2024 Exhibit P4 TRUE COPY OF SHOW CAUSE NOTICE DATED 04-04-2024 Exhibit P5 TRUE COPY OF WRITTEN REPLY FILED BY THE PETITIONERS (R3 AND R4) DATED 12-052024 BEFORE THE 1ST RESPONDENT Exhibit P5(a) TRUE COPY OF WRITTEN REPLY FILED BY THE R1 IN THE PROCEEDINGS DATED 12-05-2024 BEFORE THE 1ST RESPONDENT Exhibit P6 TRUE COPY OF APPLICATION SUBMITTED BY THE PETITIONERS BEFORE THE 1ST RESPONDENT DATED 13-05-2024 Exhibit P6(a) TRUE COPY OF APPLICATION SUBMITTED BY THE PETITIONERS BEFORE THE 2ND RESPONDENT DATED 13-05-2024 Exhibit P7 TRUE COPY OF APPLICATION SUBMITTED BY THE R1 IN THE ORIGINAL COMPLAINT BEFORE THE 1ST RESPONDENT DATED 13-05-2024 Exhibit P7(a) TRUE COPY OF APPLICATION SUBMITTED BY THE R1 IN THE ORIGINAL COMPLAINT BEFORE THE 2ND RESPONDENT DATED 13-05-2024**