Case Law Details
Triad Trading Services P. Ltd. Vs Union of India (Madras High Court)W
Conclusion: A person who has purchased the property using proceeds of crime cannot said to have any interest in the property and the protection under Article 300 A cannot be pressed into service by a perpetrator of a crime. Mere order of attachment could not be said to be violative of the constitutional right to property of the Article 300 A of the Constitution of India.
Held: A provisional attachment order was passed which included the properties of assesse. It was found that money stipend from the Bank had been routed through the account of assessee. The properties belonging to assesse company were attached as it was one of the group Companies of the said R.Subramaniam. Subsequently, the adjudicating authority initiated proceedings for making the attachment order absolute for taking over the properties on which provisional attachment order under Section 5 of the Prevention of Money Laundering Act had been passed. The adjudicating authority found that the lands for which the provisional attachment had been passed are all proceeds of crime. Assessee had filed a petition contending to strike down the provisions of Section 8 (4) of the Prevention of Money Laundering Act, 2002 and the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties confirmed by Adjudicating Authority) Rules 2013 as they were violative of Article 14 of the Constitution of India. It was held that Article 300A, is attracted to those situations where the property of a person is acquired only by an administrative/executive order, and not on the basis of any law, validly made. However, even legislations which have the effect of depriving a person of his property rights without any object whatsoever also can be challenged that such legislations are violative of the Constitutional mandate under Article 300 A. A person who has purchased the property using proceeds of crime cannot said to have any interest in the property and the protection under Article 300 A cannot be pressed into service by a perpetrator of a crime. Provisional attachment was under Section 5 (1) of the Act. Adjudicating Authority while exercising its powers under Section 8 confirmed the attachment after hearing all the parties. The order confirming the attachment was appealable to the Tribunal under Section 26 of the Act and a further appeal lied to the High Court. The property was confiscated only after the criminal Court found that the offence under Section 3 of the Act had been committed. Mere order of attachment could not be said to be violative of Article 300 A of the Constitution of India. The challenge on this score could not be accepted.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Prayer in the instant writ petition is for a declaration, declaring as ultra vires the provisions of Section 8 (4) of the Prevention of Money Laundering Act, 2002 (herein after called as the Act) and the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties confirmed by Adjudicating Authority) Rules, 2013, (hereinafter called as the Rules) as being unjust, manifestly arbitrary and therefore, violative of Article 14 of the Constitution of India.
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