Jammu & Kashmir High Court - Srinagar Bench
Farooq Abdullah vs Directorate Of Enforcement And Anr on 1 April, 2021
Bench: Chief Justice, Vinod Chatterji Koul
Sr. No.201
IN THE HIGH COURT OF JAMMU AND KASHMIR
AT SRINAGAR
CJ Court
Case: WP(C) No.408/2021
CM No.1276/2021
CM No.1277/2021
Farooq Abdullah ...Petitioner(s)/Appellants.
Through: Mr. Sidharth Luthra, Sr. Advocate, with
Mr. Shri Singh, Advocate, (Through Virtual Mode)
Mr. Areeb Javed Kawoosa, Advocate.
Vs.
Directorate of Enforcement and anr. ....Respondent(s)
Through: Mr. Tushar Mehta, Solicitor General of India, with
Mr. Zoheb Hossain, Spl.Counsel ED (Through
virtual mode)
Mr. Tahir Majid Shamsi, ASGI, with
Ms. Nazima, Advocate.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE VINOD CHATTERJI KOUL, JUDGE
ORDER
01.04.2021
1. The petitioner had been the president of the Jammu and Kashmir Cricket Association (JKCA) for some of the years probably from 2001 to 2012. During the year 2002-03, the Board of Control for Cricket in India (BCCI) transferred Rs.112,33,05,618/- to JKCA. It is alleged that out of the said amount a sum of Rs.43.69 Crores has been siphoned off and mis- appropriated by the then Treasurer who was got illegally appointed and continued on the post by the petitioner.
WP(C) No.408/2021 1
2. In connection with the above allegations of mis-appropriation of funds of JKCA, an FIR No.27 of 2012 was lodged on 10.03.2012 under Sections 120-B, 406 and 409 of Ranbir Penal Code against the office bearers of the JKCA.
3. In PIL No.08/2014 Majid Yaqoob Dar & anr. v. State of Jammu & Kashmir and others, the High Court directed for the transfer of the investigation in pursuance to the above FIR to the Central Bureau of Investigation (CBI). The CBI on completion of the investigation charge sheeted six persons including the petitioner and the then Treasurer, JKCA, for causing wrongful loss to the JKCA to the tune of Rs.43.69 crores. It is in this background that proceedings for provisional attachment of the properties of the petitioner have been initiated under Section 5(1) of the Prevention of Money Laundering Act (PMLA). An order of provisional attachment has been passed on 18.12.2020 and a notice under Section 8 of the PMLA dated 05.02.2021 has been issued to the petitioner under Section 8(1) of the PMLA to show cause as to why the properties provisionally attached should not be declared to be properties involved in money laundering and confiscated by the Government.
4. A complaint has also been filed on 15.01.2021 by the Competent Authority before the Adjudicating Authority as required under Section 5(5) of the PMLA.
5. The petitioner has thus filed this petition under Article 226 of the Constitution of India inter alia praying for quashing of the Original Complaint dated 15.01.2021 filed before the Adjudicating Authority; WP(C) No.408/2021 2 quashing of the provisional attachment order dated 18.12.2020; and the notice dated 05.02.2021.
6. It is pertinent to mention here that similar proceedings were initiated against the Treasurer of the JKCA who had challenged the same by filing WP(C) No.2780 of 2019. It was dismissed vide judgment and order dated 15.10.2019 but against the same LPA No.293/2019 is pending before the Division Bench of this Court but with no interim protection or stay. It is in view of the pendency of the above LPA that the learned Single Judge seized of this petition vide order dated 18.03.2021 expressed opinion that the matter be considered by the Division Bench to which counsel for the parties have agreed. Accordingly, this petition has been laid before the Division Bench. At the very outset the court indicated counsel for the parties that it would be better if the above LPA is heard first and then the present petition as both of them arise from the same incident based upon identical facts but probably as there is no interim order passed in the previous writ petition and no stay order is operating in the LPA arising out of it, learned counsel for the petitioner insisted for hearing the petition on merits as he intends to press for the grant of interim protection.
7. Heard Sh. Sidharth Luthra, Senior Counsel, assisted by Shri Singh and Sh. Tushar Mehta, Solicitor General of India, assisted by Mr. Zoheb Hossain, Advocate through video conferencing.
8. Sh. Luthra, after taking us to the various provisions of the PMLA submitted that the petitioner can only be proceeded under the PMLA in connection with the scheduled offence as per the Schedule-A of the Act. The offences under Sections 406 and 409 of RPC are not the scheduled offences WP(C) No.408/2021 3 and merely for an offence under Section 120-B RPC, the petitioner is not liable to be proceeded with under the PMLA. Moreover, the Schedule enlists the offence of criminal conspiracy under Section 120-B Indian Penal Code as one of the scheduled offences and does not refer to any offence under RPA muchless under Section 120-B RPC. The order of provisional attachment does not contain any reason to believe nor does the properties inherited by him or received in gift from his ancestors or any property which has been privately acquired by him are liable to attachment as they are not "proceeds of the crime". The order of provisional attachment greatly undervalues the properties attached so as to attach almost all the properties of the petitioner. Therefore, the entire proceedings are without jurisdiction and are malafide.
9. Learned Solicitor General in defence submitted that the PMPLA has been enacted by the Parliament in view of the political declaration adopted by the Special Session of the United Nations General Assembly calling upon the member states to adopt national money laundering legislation. India being the member State accordingly enacted the aforesaid Act extending it to the whole of India. Thus, it cannot be said that the aforesaid enactment is beyond the legislative competence of the Parliament. He refers to Section 2(2) of the PMLA to contend that any reference in the Schedule to the said Act to any enactment or provision which is not in force in the "area" where it is applicable would be construed as a reference to the corresponding law or the corresponding provision, if any, in force in that "area". Thus, as the Act is applicable to the whole of India, it is applicable to the Jammu & Kashmir also and the reference to Section 120-B in the Schedule to the said WP(C) No.408/2021 4 Act refers to Section 122-B of RPC as they are corresponding and pari materia. The subsequent addition of Section 2(ia) of the PMLA defining "corresponding law" to mean law of any foreign country in no way obliterates the provision of Section 2(2) of the Act. He further submits that the Competent Authority has recorded reasons to believe in passing the provisional order of attachment which are implicit from the plain reading of the order as a whole. The investigation clearly disclose that the petitioner has committed an offence of money laundering within the meaning of Section 3 of the PMLA and that he is one of the beneficiaries of the proceeds of the crime. The time of the commission of the scheduled offence is not relevant but the commission of the act of money laundering alone is material which is a continuing offence and it continues till the time the money so laundered is being projected as untainted.
10. Both sides attempted to rely upon certain precedents which we need not to discuss as we are not adjudicating upon the various issues raised at this stage without giving an opportunity to the respondents to file their response.
11. Learned Solicitor General has however attempted to distinguish the decision of the Supreme Court in Opto Circuit India Limited v. Axis Bank and others : 2021 SCC online SC 55 which concerns the PMLA on the ground that in the said case the order impugned was of final attachment rather than provisional.
12. In view of the aforesaid facts and circumstances and looking to the fact that presently the petitioner has only been served with a show cause notice in which we are told 20th April, 2021 is the next date fixed and the WP(C) No.408/2021 5 fact that the order of attachment is provisional in nature which is valid for a period of 180 days only, we do not consider it to be an appropriate case to pass any interim order at this stage particularly when the laundering of 43.69 crores of the amount is not in dispute which in all fairness ought to be returned to the public body i.e., JKCA.
13. The petitioner, in addition, is faced with an order of dismissal of an identical writ petition and as such, has to overcome all the findings returned and the reasoning recorded by the writ court therein before establishing a prima facie case and balance of convenience in his favour for the grant of interim order or to be successful in this petition. In the light of the dismissal of the earlier writ petition against which LPA is pending but without any interim protection, it is all the more reason for us not to pass any interim order at this stage.
14. Accordingly, we direct the respondents to file their counter affidavit to this petition within a period of three weeks, one week thereafter is allowed to the petitioner to file rejoinder affidavit.
15. List for admission/ final disposal on 11th May, 2021 along with LPA No. 293/2019 which shall also be considered finally on the said date.
(VINOD CHATTERJI KOUL) (PANKAJ MITHAL)
JUDGE CHIEF JUSTICE
Srinagar
01.04.2021
Abdul Qayoom, PS
WP(C) No.408/2021 6
ABDUL QAYOOM LONE
2021.04.02 17:31
I attest to the accuracy and
integrity of this document