S. RAMESH POTHY Vs. THE ADJUDICATING AUTHORITY ROOM NO.25, 4TH FLOOR JEEVAN DEEP BUILDING PARLIAMENT STREET NEW DELHI 110 001

JUDGEMENT

(1.) This petition has been filed to quash the order of provisional attachment passed by the 2nd respondent in reference No.19/16 dated 02.09.2016 u/s 5(1) of the Prevention of Money-Laundering Act, 2002 [hereinafter would be referred to as the PMLA] and consequently, direct release of the petitioners' property at Melandai Vaadai, Kamaraj Street, 3rd Division, Kancheepuram Town, Kancheepuram District.

(2.) For the sake of convenience, the petitioners will be referred to as the POTHYS and the others by their name.

(3.) One Sridhar, who is said to be a local don, has to his credit, about 25 criminal cases spread over several Police Stations for offences ranging from murder to criminal intimidation covered by the Penal Code, which would make even Macaulay turn in his grave. He is now an outlaw and is said to be hiding in the Middle East, presumably in Dubai and attempts are being made by the police to have him brought to India to face the music. There is no scintilla of a doubt that the offence alleged against him would fall within the definition of scheduled offence defined under Sec. 2(y) read with the Schedule to the PMLA. The police placed the necessary materials before the Deputy Director of Directorate of Enforcement for taking appropriate action under the PMLA. The Enforcement Directorate registered a case in ECIR No.CEZO/03/2016 on 09.03.2016 for offences under the PMLA. The Deputy Director issued summons to Sridhar, his wife Kumari, his younger brother Senthil, his daughter Dhanalakshmi and Ramesh Pothy, calling upon them to attend the enquiry. Sridhar and Kumari did not appear, but others appeared and gave their statements before the Deputy Director. The Deputy Director obtained information from the various Registrars of Assurance relating to the property holdings of Sridhar and his family. During enquiry, it came to light that the POTHYS had purchased immovable properties from Kumari in the year 2010 and from Dhanalakshmi in Feb. 2016, vide Doc.No.3308 of 2010 and Doc.No.1184 of 2016, respectively. A major portion of the sale consideration has been paid by the POTHYS directly into the Bank account of Kumari. It also came to light during investigation that Kumari was a house wife and had declared her income to the Income Tax authorities which was not commensurate to the value of the properties held by her. It also appears that Sridhar is not even an Income Tax assessee. Thus, the Deputy Director had sufficient reasons to believe that the properties sold by Kumari and Dhanalakshmi were fruits of the poisonous tree acquired with the proceeds of crime committed by Sridhar. Consequently, the Deputy Director, by order dated 02.09.2016, provisionally attached the properties purchased by the POTHYS totally valued at Rs.6.47 crores in terms of Sec. 5(1) of the PMLA for a period of 180 days, challenging which, the POTHYS are before this Court.