The Delhi High Court presided by Mr. Justice Yashwant Varma has quashed the attachment order of property allegedly purchased on wrongful mining of coal.
The petitioners, Prakash Industries Ltd. (PIL), applied for the grant of a mining lease in 1992. The Ministry of Coal permitsexploring the Hasdeo-Arand coal block for captive development. Under the aforesaid communication, PIL is stated to have apprised the Ministry to undertake preparatory steps for exploration of the Chotia block falling within the Hasdeo-Arand and Panchvahini coalfields. The application for allocation of the Chotia coal block remained pending for consideration till it was allocated to PIL in 2003.
It was alleged that PIL wrongfully mined coal between 2006-2015 and extracted coal valued at Rs.951.77 crores. It is further alleged that based on the revenues generated as a result of the said criminal activity, various properties were purchased by PIL acting through its related and sister concerns and initiated provisional order of attachment under the provisions of the Prevention of Money Laundering Act, 2002. The aggrieved petitioner approached High Court.
The counsel for the petitioner contended that the allocation of coal cannot be construed as being proceeds of crime since it does not represent property that may be said to be derived or obtained as a result of criminal activity relating to a scheduled offence.The counsel for the petitioner further submitted that the allocation of coal was made on 04 September 2003, at a time when neither the Act was in force nor an offence of money laundering in existence.
The High Court observed that the proceedings under the Act cannot travel beyond the gamut of that charge sheet. Any event or offense that may have been allegedly committed before04 September 2003clearly falls beyond the pale of scrutiny for the purposes of adjudging the validity of the impugned proceedings. The Court further observed that the allocation of a coal block in itself did not give rise to any monetary gains. It was only when the same was utilized that the question of illegal gains would have arisen.
The single bench quashed the attachment and held that “the argument based on possession of the property and the right of the Directorate to consequently attach the same is clearly rendered unsustainable when viewed in light of the fact that those properties are not treated as untainted or permissibly attachable property constituting property equivalent in value to any such tainted properties”.
Mr. Kapil Sibal appeared for the petitioner and Mr. S.V. Raju appeared for the respondent.
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