Orissa High Court
M/S. Deepak Steel And Power Ltd vs Enforcement Directorate on 22 September, 2025
Author: Aditya Kumar Mohapatra
Bench: Aditya Kumar Mohapatra
IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.511 of 2025
M/s. Deepak Steel And Power Ltd., ..... Petitioner
Keonjhar
Represented By Adv. - A.S.
Nadkarni, Sr. Adv.
Along with
Shibani Shankar Pradhan,
Adv.
-versus-
Enforcement Directorate, Govt. Of ..... Opp. Party
India
Represented By Adv. -
Bibekananda Nayak, Sr.
Adv. for ED
CRLMC No.506 of 2025
M/s. Deepak Steel And Power Ltd., ..... Petitioner
Keonjhar
Represented By Adv. - A.S.
Nadkarni, Sr. Adv.
Along with
Shibani Shankar Pradhan,
Adv.
-versus-
State of Odisha (Vig.) ..... Opp. Party
Represented By Adv. - N.
Maharana, A.S.C. (Vig.)
Page 1 of 27
CORAM:
THE HON'BLE MR. JUSTICE ADITYA KUMAR MOHAPATRA
I.A. No.391 of 2025 (CRLMC No.511 of 2025)
&
I.A. No.393 of 2025 (CRLMC No.506 of 2025)
ORDER
22.09.2025 Order No.
05.
1. The aforesaid interim applications bearing I.A No.391 of 2025 (arising out of CRLMC No.511 of 2025) and I.A No.393 of 2025 (arising out of CRLMC No.506 of 2025) have been filed by the same Petitioner with similar prayers. As such, both the matters are taken together for disposal.
2. The I.A No.391 of 2025 has been filed with a prayer to stay of the proceeding pending against the petitioner in Complaint Case(PMLA) No.40 of 2018 pending in the Special Court (PMLA)-cum-Sessions Judge, Khurda at Bhubaneswar, arising out of ECIR No. 0I/2014/BSZO and all proceedings emanating therefrom, along with an additional prayer seeking stay of the order dated 3.9.2024 passed by the learned Adjudicating Authority (under the PMLA) at New Delhi in Original Complaint No. 500 of 2015 whereby the order of provisional attachment of the movable and immovable properties of the Petitioner-Corporation has been confirmed and to allow operation of the plants redeeming the licenses of the units. Page 2 of 27
3. Similarly, the I.A No.393 of 2025 (arising out of CRLMC No.506 of 2025), has been filed with a prayer to stay the criminal proceeding pending against the petitioner in V.G.R Case No.5 (c) of 2013 pending in the Court of the learned Special Judge(Vigilance), Keonjhar, along with a further prayer to stay the attachment and thereby allow operation of the plants redeeming all the licenses of the plants which were cancelled. FACTS
4. At the outset, it is pertinent to mention that the adjudication of the parent CRLMC applications is currently underway before this Court and the instant order is confined to the adjudication of the aforementioned two interlocutory applications filed with the prayers as indicated here in above. The context in which the aforesaid interlocutory applications have been filed, is as follows; Initially, several entities involved in mining operation in the State were directed by the judgment dated 02.08.2017, passed in the PIL instituted upon the inquiry report of the Justice Shah Commission on illegal mining, of the Hon'ble Supreme Court and the report of the Central Empowerment Committee to pay compensation with regard to the illegally extracted minerals. The present Petitioner, which is a Company incorporated as per the Act, has purchased minerals from a lease holder, who is one of the entities directed to furnish compensation with respect to illegal mining activities, during the period 2004-2009. Page 3 of 27
5. Subsequently, a Vigilance case was lodged against the Petitioner, following which an ECIR was lodged by the Director of Enforcement which resulted in Complaint Case (PMLA) No.40 of 2018 before the learned Sessions Judge-cum-Special Court under the Prevention of Money Laundering Act, 2002. Thereafter a provisional order of attachment, in respect of several scheduled properties in the name of the Petitioner- Company, was issued by the Directorate of Enforcement on 21.05.2015. A copy of the order is under Annexure-5 to CRLMC No.511 of 2025. Finally, the provisional attachment order has been confirmed by the learned Adjudicating Authority, under the PMLA, at New Delhi, vide its order dated 03.06.2024. In the present interlocutory applications the Petitioner has a specific prayer to allow operation of the Petitioner's Plant(s) attached in the aforesaid provisional order of attachment, which has been subsequently confirmed by the appropriate authority. CONTENTIONS OF THE PETITIONER-COMPANY
6. Heard Mr. A.S. Nadkarni, learned Senior Counsel along with M/s. Shibani Shankar Pradhan, learned counsel for the Petitioner-Company.
7. Learned Senior Counsel for the Petitioner-Company at the very outset contended that the present Petitioner has been falsely implicated in a malicious prosecution. It was the learned Counsel's contention that the sole allegation against the Company is that it was one of the purchasers of iron Page 4 of 27 ore from a certain lessee. It was contended that such an allegation is devoid of merit, as the Petitioner-Company has maintained an unblemished operational record from 1994 until 2013. The learned counsel for the Petitioner contended that the transactions with the concerned Lessee occurred only during a limited period between 2004 and 2009, which constitutes a narrow window when viewed against the backdrop of the Petitioner's long-standing lawful operations. It was further submitted that the business activities of the Petitioner, both prior to and subsequent to the said period in question, are entirely unblemished, which further suggests that allegations made against the Petitioner-Company are baseless and does not in any way warrant the initiation of the prosecution against the Petitioner.
8. The Learned Counsel for the Petitioner, at this stage, further contended that in V.G.R Case No.5(c) of 2013, the Investigating Officer has filed an attachment petition bearing C.M.A No.10 of 2013, wherein the learned District Judge, Keonjhar, vide its order dated 12.09.2013, has issued ex-parte ad interim order of attachment with regard to the scheduled properties belonging to the Petitioner-Company. Similarly, in in ECIR/01/2014/BSZO, a provisional order of attachment was passed regarding the immovable and movable assets of the Petitioner-Company, which has later been confirmed by the Ld. Adjudicating Authority (under the PMLA) at New Delhi, vide its order dated 03.09.2024 in Original Page 5 of 27 Complaint No.500 of 2015. It was contended that the Adjudicating Authority has confirmed the said order of provisional attachment on the erroneous finding that the movable and immovable properties of the Petitioner-Company so attached are the proceeds of crime.
9. Furthermore, it is the contention of the Petitioner that in the instant case, the trial is still pending as of today and charges have not yet been framed against the Petitioner-Company. Moreover, in the Vigilance Case bearing VGR Case No.05/2013, merely 57 out of a total of 178 prosecution witnesses have been examined in the last 12 years and there are around 80,000 documents yet to be examined. The Learned Counsel for the Petitioner contended that given the slow pace of the trial, it is highly unlikely that the trial will be concluded any time soon. As a result, the Petitioner-Company is facing irreparable loss and suffering due to the attachment of the assets of the Petitioner-Company.
10. Next, referring to sections 5(1) and 5(4) of the PMLA, 2002, the Learned Counsel for the Petitioner contended that the attachment of property under section 5(1) shall not in any way prevent any person interested from the enjoyment of the immovable properties as per section 5(4). Learned Senior Counsel also contended that section 5(1) of the PMLA, 2002 is primarily intended to be a safeguard against any form of alienation of assets allegedly acquired from the proceeds of crime. Furthermore, since such attachment is interim in nature, the Petitioner's Page 6 of 27 ownership over such immovable properties is not automatically ousted or extinguished by means of such attachment. The Learned Counsel for the Petitioner further submitted that Section 5(4) of PMLA, 2002 explicitly provides a statutory safeguard which allows a person interested in such property to continue to enjoy and utilize the same as per his pre-attachment entitlements.
11. In furtherance of his contentions, the Learned Senior Counsel for the Petitioner also referred to section 8 of the PMLA, 2002 and contended that unequivocal protection has been afforded to the persons interested in such attached properties to enjoy the same in a lawful manner despite the provisional attachment. It was submitted that provisional attachment, as contemplated under the PMLA, 2002, is for the purpose of securing the property in the event of a potential confiscation. Such attachment, is therefore, a purely preventive measure. He further contended that section 8(4) of PMLA, 2002 contemplates physical possession only effectuating a confiscation under the said provision. This implies that there cannot be any premature deprivation of bonafide rights of third parties. Moreover, Learned Counsel for the Petitioner contended that merely because the attachment has been confirmed by the Adjudicating Authority, does not in any way mean that the ownership or possessory rights of the Petitioner have been extinguished as a result thereof. To further substantiate his contentions, the Learned Counsel for the Petitioner has placed reliance on Page 7 of 27 the decision of the Hon'ble Supreme Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. reported in (2023) 12 SCC 1; the Hon'ble Delhi Court's decisions in SRJ Infratech Pvt. Ltd. v. Director, reported in 2016 SCC OnLine Del 221 and Deputy Director, Directorate of Enforcement of Delhi Vs. Axis Bank and Ors. reported in 2019 SCC Online Del 7584; along with the decision of the Hon'ble High Court of Madras in Kamarunnisa Ghori v. Chairperson, Prevention of Money Laundering, reported in 2012 SCC OnLine Mad 2527.
12. As such, the Learned Senior Counsel for the Petitioner contended that by not allowing the Petitioner to enjoy/ use the properties attached, the Opposite Parties are acting in contravention of the legislative intent of the statute. The Learned Senior Counsel for the Petitioner further submitted that the Court must strike a balance between preventing alienation of the property and avoiding unjust deprivation or destruction of its economic utility. Denial of the Petitioner's right to operate the plants, particularly in the absence of a final finding of guilt or criminal liability, amounts to pre- trial punishment. It was contended that the Petitioner-Company has a legal right to operate and maintain the attached plants in the ordinary course of business, and in the event the plants are not kept operational then the same shall lead to not only an unmitigated deterioration of the plants and loss of revenue and livelihood, but also result in a loss of around Rs.300 crore per annum to the State exchequer. Accordingly, it was contended by the Page 8 of 27 Learned Counsel for the Petitioner that the present Interim Applications be allowed and the Petitioner be permitted to resume operations of its plants that have been attached and the relevant licenses necessary for such operation may also be redeemed and in such event the Petitioner shall unequivocally undertake to not to alienate or transfer the ownership in any such properties in any manner whatsoever.
CONTENTIONS OF THE OPPOSITE PARTIES
13. Heard Mr.Bibekananda Nayak, learned retainer counsel appearing for the Enforcement Directorate and Mr.N.Maharana, learned A.S.C for the Vigilance Department.
14. At the outset, Mr.Bibekananda Nayak, Learned Counsel for the Enforcement Directorate contended that the Petitioner has no prima facie case made out in the present CRLMC applications since the matter has already been adjudicated by this Court in CRLMC No.775 of 2019. It was submitted by the learned senior counsel that earlier, vide CRLMC No.775 of 2019 the Petitioner had challenged the order of cognizance dated 21.08.2025. However, such application was dismissed on 01.08.2019. Therefore, since an application under Section 482 of the Cr.P.C on behalf of the Petitioner was earlier dismissed, the present application under Section 482 of the Cr.P.C by the same Petitioner is not maintainable before this Court. To further substantiate his contentions, the Learned counsel for Page 9 of 27 the ED has placed reliance on the decision of the Hon'ble Supreme Court in Bhisham Lal Verma v. State of UP & Anr., reported in 2023 INSC 955.
15. Next, referring to the PMLA, 2002, the learned counsel for the E.D. submitted before this Court that the order of provisional attachment, under Annexure-4 to the CRLMC No.511 of 2025, has already been confirmed by the Adjudicating Authority under Section-8(3) of the Act, vide order dated 03.09.2024 under Annexure-5 to the aforesaid CRLMC application. It was further contended that as per Section 26 of the PMLA, 2002, the aforesaid order of confirmation of provisional attachment is an appealable order. Moreover, the order which would eventually be passed under Section 26 is further appealable under Section 42 of PMLA, 2002, before this Court. To lend credence to his arguments, the Learned Senior Counsel for the Enforcement Directorate has referred to the decision of the High Court of Madras in G. Srinivasan v. Chairperson, reported in 2011 SCC OnLine Mad 2909, specifically paragraphs 19 and 20, and A. John Kennedy v. Joint Director reported in 2020 SCC OnLine Mad 28044.
16. Further, referring to Section-8(4) of the PMLA, 2002, the Learned counsel for the ED submitted before this Court that under the aforesaid provision, after the order of confirmation of provisional attachment has been made under Section 8(3), the Director appointed under the Act shall take into possession such property which has been attached under Section 5 of the Act or frozen under Section 17(1A) of the Act. Additionally, in the Page 10 of 27 event it is not practicable to take into possession the property frozen under Section 17(1A) of the Act, then the order of confiscation shall have the same effect as if the property has been taken possession of. Thereafter, the Learned counsel for the E.D. went on to argue that in view of the provision contained in Section 8(7) of the Act, the present interlocutory applications are not maintainable before this Court. Consequently, the Learned counsel submitted that the balance of convenience in the instant case tilts heavily in favour of the Enforcement Directorate since the provisional order of attachment has already been confirmed by the Adjudicating Authority, under Annexure-5.
17. Additionally, the learned A.S.C for the Vigilance Department has specifically opposed the prayer of the Petitioner in I.A. No.393 of 2025 for staying the criminal proceeding bearing VGR. Case No.5(c) of 2023 pending in the court of learned Special Judge (Vigilance), Keonjhar on the ground that the trial in the said case is going on and there is also a statutory bar under the P.C. Act, as such, staying of the aforesaid criminal proceeding at this stage would be against the larger interest of justice. So far as the prayer of the Petitioner to allow operation of the Plants is concerned, the learned A.S.C has opposed said prayer of the Petitioner on the ground that in the event the Petitioner-Company is allowed to operate the Plants then there is every Possibility that the Petitioner might transfer Page 11 of 27 the ownership of the said plants by taking advantage of the order of this Court.
18. In such view of the matter, the learned Counsel for the Opposite Parties contended that since the Petitioner has neither availed the alternate remedy of appeal nor he has approached before the learned Trial Court under Section 8(7) of the Act before approaching this Court for relief, and also the fact that the Petitioner-Company had earlier filed a petition under Section 482 Cr.P.C, which was dismissed by a Coordinate Bench of this Court, the present Writ Petition on behalf of the Petitioner-Company is not maintainable. As such, it was contended that the present interlocutory applications are liable to be dismissed at the threshold. ANALYSIS OF THE COURT
19. Heard the learned Sr. Counsel for the petitioner and learned counsels appearing for E.D. as well as the ASC, Vigilance Dept. Perused the interlocutory applications filed. As is evident from record, the I.A. No.391 of 2025 filed in CRLMC No.511 of 2025 and the I.A. No.393 of 2025 filed in CRLMC No.506 of 2025, have been filed by the same Petitioner-Company with a prayer essentially claiming a four-fold relief; firstly, to stay the proceeding against Petitioner in Complaint Case (PMLA) No.40 of 2018 pending in the Special Court (PMLA)-cum- Sessions Judge, Khurda, Bhubaneswar, arising out of ECIR Page 12 of 27 No.01/2014/BSZO and all proceedings emanating therefrom; secondly, to stay the order dated 3.9.2024 passed by the learned Adjudicating Authority (under the PMLA) at New Delhi in Original Complaint No.500 of 2015; thirdly, to stay the criminal proceeding pending against the petitioner in V.G.R Case No.5 (c) of 2013 pending in the Court of the learned Special Judge(Vigilance), Keonjhar; fourthly, to allow the operation of the Petitioner's Plant(s) by redeeming the licenses of the said units.
20. On the contrary, the Opposite Parties-ED and Vigilance Department, at the threshold, have challenged the maintainability of the CRLMC No.511 of 2025 on the ground that earlier another CRLMC No.775 of 2019 was filed by the same Petitioner and it has been dismissed by a Coordinate Bench of this Court. Therefore, this Court is first required to ascertain whether the instant CRLMC No.511 of 2025 is maintainable before this Court.
21. It is a settled position of law that a second petition under Section 482 of the Cr.P.C would be maintainable in the event there has been some change in circumstances or there exists a fresh cause of action which has led to the filing of the second CRLMC application (reference maybe had to the judgement of the Hon'ble Supreme Court in Superintendent and Remembrancer of Legal Affairs, West Bengal v. Mohan Singh reported in (1975) 3 SCC 706 ). Similarly, in Vinod Kumar, IAS. v. Union of India, reported in 2021 SCC OnLine SC 559, the Hon'ble Supreme Court Page 13 of 27 has clarified that merely because the earlier CRLMC application was dismissed, the same would not be a sufficient bar to filing a subsequent application thereunder if the facts in the subsequent case so justify. However, that said, it must also be kept in mind that while filing a subsequent CRLMC application in light of changed circumstances, the Petitioner has not tried to raise his pleas in a piecemeal manner, i.e., the Petitioner must have honestly exhausted all the relief available to him in the prior application and has not withheld a part thereof to seek relief later. The aforesaid observation has also been made by the High Court Madras in S. Madan Kumar v. K. Arjunan, reported in 2006 SCC OnLine Mad 94.
22. In the instant case, on perusal of the Order dated 01.08.2019 passed in CRLMC No.775 of 2019, it can be seen that the said CRLMC application was filed with a singular prayer to quash the order taking cognizance dated 21.08.2018 by the learned Special Court under Prevention of Money-Laundering Act, 2002 at Bhubaneswar in Criminal Misc. (PMLA) Case No.40 of 2018 taking cognizance of offence under Section 4 of the Act. In the instant case, the parent CRLMC applications have been filed by the Petitioner-Company with a different prayer to quash the entire PMLA and Vigilance proceeding qua the Petitioner. As such, it would appear that the present CRLMC applications and the resulting I.As are maintainable. Nevertheless, at the moment since the hearing in the main CRLMC applications is on-going, this Court shall confine its Page 14 of 27 adjudication to the relief claimed in the aforementioned I.As only which have been filed with a prayer to stay the vigilance and PMLA proceedings against the Petitioner-Company and to allow the Petitioner-Company to operate the attached plant(s). So far as challenge to the order of confirmation of provisional appeal is considered, this Court is aware of the fact that the Act makes it incumbent upon the Petitioner to approach the Appellate Tribunal under Section 26 of the Act by arraying the order confirming the provisional order of attachment, and, then approach the High Court against the order of the Appellate Tribunal under Section 42 of the Act. However, in the present interlocutory applications, the Petitioner has not challenged the order of the adjudicating authority confirming the provisional attachment order. Instead, it is the prayer of the Petitioner that the Petitioner-Company be allowed to operate the plant(s) attached under the Act. In the instant case, this Court is aware of the alternate and efficacious remedy available to the Petitioner. However, given the peculiar facts and circumstances of the case, this Court is of the considerate view that it is necessary to adjudicate the grievance of the Petitioner in the interlocutory applications filed herein.
23. Reverting back to the grievance of the Petitioner in the present interlocutory applications, a careful scrutiny of Sections 5 & 8 of the Act would reveal that the primary objective of attachment of properties under the Act is to ensure that the proceeding for confiscation of the proceeds of Page 15 of 27 crime is not frustrated by the said property being transferred or alienated in any manner. Once such a property is attached, in the event there is any attempt to alienate such property, then the same would be null and void. Therefore the Act is preventive in nature. The aforesaid position was clarified by the Hon'ble Supreme Court in Vijay Madanlal Choudhary v. Union of India, reported in (2023) 12 SCC 1 in its analysis contained in paragraph 97 through till paragraph 146. The relevant paragraphs 97 and 146 are quoted hereinbelow;
"97. Even the Preamble to the Act reinforces the background in which the Act has been enacted by Parliament being commitment of the country to the international community. It is crystal clear from the Preamble that the Act has been enacted 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 neither a pure regulatory legislation nor a pure penal legislation. It is an amalgam of several facets essential to address the scourge of money laundering as such. In one sense, it is a sui generis legislation.
***
146. Accordingly, the phrase ―and projecting it as untainted property‖ was added the initial definition in the 2002 Act. However, it can also be inferred from here that since the initial strokes of drafting the Act, the intention was always to have a preventive Act and not simply a money laundering (penal) Act. Today, if one dives deep into the financial systems, anywhere in the world, it is seen that once a financial mastermind can integrate the illegitimate money into the bloodstream of an economy, it is almost indistinguishable. In fact, the money can be simply wired abroad at one click of the mouse. It is also well known that once this money leaves the country, it is almost impossible to get it back. Hence, a Page 16 of 27 simplistic argument or the view that Section 3 should only find force once the money has been laundered, does not commend to us. That has never been the intention of Parliament nor the international conventions.‖ (Emphasis supplied)
24. In fact, Section 5(4) of the Act makes it clear that nothing in Section 5 shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment.
Therefore, it is clear that the legislative intent behind attachment of properties under the Act is not to deprive the persons interested in the said property from enjoying the immovable property, especially since the Authorities can always take symbolic possession of the property under Section 8(4). Additionally, the term "attachment" has been defined under Section 2(1)(d) of the Act to specifically denote the prohibition of transfer, conversion, disposition or movement of the property in question and does not in any way restrict the right of the owner of the property for enjoyment of such property. For better appreciation, the relevant sections of the Act are quoted hereinbelow;
"2. Definitions.--(1) In this Act, unless the context otherwise requires,--
(d) "attachment" means prohibition of transfer, conversion, disposition or movement of property by an order issued under Chapter III;
***
5. Attachment of property involved in money-laundering.-- Page 17 of 27
(4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment.
Explanation.--For the purposes of this sub-section, ―person interested‖, in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property.
***
8. Adjudication.--
(4) Where the provisional order of attachment made under sub-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.]‖ Therefore it is clear that it cannot be the intention of the legislatures to completely deprive the Petitioner of his right of enjoying the property attached. Especially before the proceeding in the PMLA case is finalized. Since, completely restricting the Petitioner from enjoying its attached Plant(s) would amount to a punitive and penal action and the same is contrary to the stipulation in the Act, as is evident from the aforesaid sections.
25. As has been already clarified, the proceeding in the PMLA case involving the plant(s) of the Petitioner-Company is currently underway and has not yet been finalized, and, as such, the Petitioner-Company's right of Page 18 of 27 enjoyment of its attached properties cannot be completely restricted in view of the provisions enumerated in the Statute. Moreover, it is needless to emphasize here that any curtailment of legal right or deprivation to enjoy the property has to be in terms of the Statute and not otherwise. Such observation of this Court is also supported by the observations of the Hon'ble Supreme Court in Vijay Madanlal's case (supra), wherein the Hon'ble Apex Court has stressed on the right of the person interested to enjoy the attached property by clarifying that the power to take over possession of the attached property under Section 8(4) of the Act must not be resorted to at the drop of the hat, rather it is to be used judiciously. The Hon'ble Supreme Court has also emphasized on the principle enshrined in Section 5(4) of the Act. The relevant paragraphs are quoted hereinbelow;
"175. It is, thus, clear that the provision in the form of Section 5 provides for a balancing arrangement to secure the interest of the person as well as to ensure that the proceeds of crime remain available for being dealt with in the manner provided by the 2002 Act. This provision, in our opinion, has reasonable nexus with the objects sought to be achieved by the 2002 Act in preventing and regulating money laundering effectively. The constitutional validity including interpretation of Section 5 has already been answered against the petitioners by different High Courts [ (1) Bombay High Court in Radha Mohan Lakhotia v. Enforcement Directorate, 2010 SCC OnLine Bom 1116; (2) High Court of Andhra Pradesh in B. Rama Raju v. Union of India, 2011 SCC OnLine AP 152; (3) High Court of Gujarat in Alive Hospitality and Food (P) Ltd. v. Union of India, 2013 SCC OnLine Guj 3909; (4) High Court of Karnataka in K. Sowbaghya v. Union of India, 2016 SCC OnLine Kar 282; (5) High Court of Sikkim at Gangtok Page 19 of 27 in Usha Agarwal v. Union of India, 2017 SCC OnLine Sikk 146; and Delhi High Court in J. Sekar v. Union of India, 2018 SCC OnLine Del 6523] . We do not wish to dilate on those decisions for the view already expressed hitherto.
***
179. The other grievance of the petitioners is in reference to the stipulation in sub-section (4) of Section 8 providing for taking possession of the property. This provision ought to be invoked only in exceptional situation keeping in mind the peculiar facts of the case. In that, merely because the provisional attachment order passed under Section 5(1) is confirmed, it does not follow that the property stands confiscated; and until an order of confiscation is formally passed, there is no reason to hasten the process of taking possession of such property. The principle set out in Section 5(4) of the 2002 Act needs to be extended even after confirmation of provisional attachment order until a formal confiscation order is passed.
***
180. Section 5(4) clearly states that nothing in Section 5 including the order of provisional attachment shall prevent the person interested in the enjoyment of immovable property attached under sub-section (1) from such enjoyment. The need to take possession of the attached property would arise only for giving effect to the order of confiscation. This is also because sub-section (6) of Section 8 postulates that where on conclusion of a trial under the 2002 Act which is obviously in respect of offence of money laundering, the Special Court finds that the offence of money laundering 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. Once the possession of the property is taken in terms of sub- section (4) and the finding in favour of the person is rendered by the Special Court thereafter and during the interregnum if the property changes hands and title vest in some third party, it would result in civil consequences even to third party. That is certainly avoidable unless it is absolutely necessary in the Page 20 of 27 peculiar facts of a particular case so as to invoke the option available under sub-section (4) of Section 8.
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183. It is unfathomable as to how the action of confiscation can be resorted to in respect of property in the event of his acquittal or discharge in connection with the scheduled offence. Resultantly, we would sum up by observing that the provision in the form of Section 8(4) can be resorted to only by way of an exception and not as a rule. The analogy drawn by the Union of India on the basis of decisions of this Court in Divl.
Forest Officer v. G.V. Sudhakar Rao [Divl. Forest Officer v. G.V. Sudhakar Rao, (1985) 4 SCC 573 : 1986 SCC (Cri) 34] , Biswanath Bhattacharya [Biswanath Bhattacharya v. Union of India, (2014) 4 SCC 392 : (2014) 2 SCC (Cri) 342] , Yogendra Kumar Jaiswal v. State of Bihar [Yogendra Kumar Jaiswal v. State of Bihar, (2016) 3 SCC 183 : (2016) 2 SCC (Cri) 1] , will be of no avail in the context of the scheme of attachment, confiscation and vesting of proceeds of crime in the Central Government provided for in the 2002 Act."
(Emphasis Supplied)
26. The Hon'ble High Court of Madras in Kamarunnisa Ghori v. Chairperson, Prevention of Money Laundering, reported in 2012 SCC OnLine Mad 2527 had infact taken not of the same at a much prior in point of time as thus;
"73. A careful scrutiny of Sections 5 & 8 would show that the object of attachment is to ensure that the proceedings for confiscation of proceeds of crime, are not frustrated. By retaining symbolic, legal and constructive possession of the property, the Government can always ensure that the proceedings for confiscation are not frustrated. Once a property is attached and necessary encumbrances are entered in the records of the Sub- Registrar and once a prohibitive order is also passed, no alienation Page 21 of 27 can take place. Even if any alienations take place, they would be null and void. Therefore, merely because physical possession is retained by a person Accused of the scheduled offences under the Prevention of Money Laundering Act, 2002, it does not mean that the proceedings for confiscation may get frustrated. Section 5(4) of the Act, in fact, makes it clear that nothing in Section 5 shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. It must be noted that Section 5(4) uses the expression "enjoyment of the immovable property". Therefore, without depriving persons interested, from enjoying the immovable property, the Respondents can always take symbolic possession under Section 8(4)."
A similar view has been taken by the Hon'ble High Court of Delhi in Deputy Director, Directorate of Enforcement of Delhi Vs. Axis Bank and Ors. reported in 2019 SCC Online Del 7584 and in the case of M/s. SRJ Infratech Pvt. Ltd. v. Director reported in 2016 SCC online Del 221.
27. In so far as, the judgements relied upon by the Ld. Counsel for the Enforcement Directorate are concerned, the same are to no avail as the same deal with a situation where a party intends to get his order of attachment lifted or vacated. In the present case the Ld. Sr. Counsel for the petitioner has in fact abandoned such a prayer at this stage and has confined his argument to the proposition that it is a statutory right that enjoyment of his property cannot be denied until the conclusion of the trial. Thus, these judgments relied upon by the Ld. Counsel for the enforcement directorate are not applicable to the facts of the case. Page 22 of 27
28. Ultimately, considering the submissions of the learned counsels for both the parties, and taking into consideration the aforesaid analysis and the peculiar facts and circumstances of the present case, this Court is of the considered view that in the event the property attached is left unattended, then it might lead to the deterioration and destruction of the property in question and eventually leading to depreciation of the value of the property in question. This will ultimately render futile the entire objective of attachment of the Property, which is to preserve the property so that necessary action can be taken under the Act in the event the Special Court, under Section 8(5) of the Act, finds that the offence of money laundering has indeed been committed. Moreover, it has also been brought to the notice of the Court that that the livelihoods of many of the locals in the region are directly connected to the operation of the attached plant(s). If such plant(s) is not allowed to be operated, the locals engaged/ employed therein are likely to suffer great hardships and they would be rendered jobless.
29. It is a well-established principle which cannot be controverted that while the State has the right to secure properties suspected to be proceeds of crime, such attachment ought not to result in complete paralysis of a company's legitimate business operations. More so, when the trial has remained pending for over 10 years and no finding of guilt has been arrived at. It appears from the record that the plants and immovable Page 23 of 27 properties of the Petitioner have been attached since 2013. The charges are yet to be framed and the trial is far from conclusion given the number of witnesses and voluminous records. In such facts of the case equities have to be balanced between preventing alienation of the property and avoiding unjust deprivation or destruction of its economic utility. Denying the Petitioner the right to operate the plants, particularly in the absence of a final finding of guilt or criminal liability, amounts to pre-trial punishment and defeats the very object of the attachment, which is merely to secure the property and not to punish.
30. In the aforesaid factual background, this court is also required to take into consideration the economic cost of closure of the unit before even they are found guilty of the offences alleged against them. It is apposite to mention here that the industrial production adds to the economic growth of the nation besides adding to the overall progress of the GDP of the Country. Once a unit is closed by order of the court at an interim stage, it is very difficult to revive the same at a later stage. Moreover, the order of attachment being preventive in nature, the same cannot be given effect to in a manner that is akin to a punitive action even before the trial gets over. In such a scenario, the courts are required to take a balanced approach. While preventing alienation, transfer, or disposition of the unit in question in furtherance of the object of the statute, the courts must also ensure that till the time the trial is concluded the property in question doesn't lose its Page 24 of 27 value and that the such orders passed by the court should not have an adverse impact on the economy apart from safeguarding the interest of the countless number of workers engaged in such industry before the final verdict is delivered by the trial court.
31. Additionally, this Court is also of the observation that the attachment of Property under Section 5(1) the PMLA and the confirmation thereof by the Adjudicating Authority under Section 8(3), is merely provisional in nature and is meant to be a measure to safeguard the property for being confiscated at a later stage in the event it is found by the trial court that such property has been acquired with the proceeds of crime. In the instant case, the proceedings in both the PMLA and Vigilance case are on-going. Therefore, in the meantime, in order to preserve the attached plant(s) from being deteriorated and to safeguard the livelihood of the locals that depend on the operation of the plant(s) for their subsistence, this Court is of the view that in the larger interest of justice the attached plant(s) of the Petitioner in the present PMLA and Vigilance proceedings should be allowed to be operated by the Petitioner-Company.
32. At this juncture, Mr. Nadkarni, learned Sr. Counsel appearing on behalf of the Petitioner-Company very fairly submitted before this Court that he doesn't want to press the applications filed for stay of further proceedings. He also contended that the Petitioner doesn't want to challenge the attachment order. Finally, learned Senior Counsel confined Page 25 of 27 his prayer to grant of permission to operate the unit subject such terms and conditions as would be deemed just and proper by this court in the given facts and circumstances of the present case. In view of such submission, the prayer for stay of the further proceedings in both PMLA as well as the Vigilance Case stands disposed of as not pressed. Since the order of attachment has not been challenged in the CRLMC application, no order is required to be passed in that regard.
33. Finally, keeping in view the prayer of the Petitioner-Company only to the extent of grant of permission to operate the units in question and in view of the aforesaid analysis of the factual as well the legal position, this court is convinced with regard to the prayer and right of the Petitioner to enjoy the property by maintaining and operating the plants, while the same continues to remain attached. Accordingly, this court is inclined to allow the present applications with certain directions. The Petitioner is permitted to operate and carry on the commercial activities in respect of the plants/ units located in Topadihi and Uliburu in Keonjhar District Keonjhar in the following manner;
(a) The attachment orders as imposed by the ED and Vigilance department respectively will continue to be in effect and remain undisturbed. The present order is limited to the use and operation of only the 2 units as above-mentioned. It is clarified again at the cost Page 26 of 27 of repetition that all attachments with regard to all properties (movable and immovable) of the Petitioner-Company shall continue to remain in force till conclusion of the trial. The Opposite Parties, however, are expected to provide all reasonable assistance in order to enable the Petitioner-Company to operate and maintain the two plants/units concerned,
(b) The Petitioner-Company shall not, in any manner, alienate or transfer the plants/ units in question,
(c) The Petitioner-Company shall seek and obtain all requisite statutory/governmental permissions and licenses prior to operating such units,
(d) The Petitioner-Company shall allow the prosecution to inspect the units/ records at all reasonable time,
(e) Needless to say, the prosecution is at liberty to move an application immediately in the event the Petitioner-Company violates the conditions imposed by this court in any manner whatsoever.
34. Accordingly, the present I.As are disposed of.
(A.K. Mohapatra) Judge Anil Signature Not Verified Digitally Signed Page 27 of 27 Signed by: ANIL KUMAR SAHOO Designation: Junior Stenographer Reason: Authentication Location: High Court of Orissa Date: 22-Sep-2025 18:57:34