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PMLA used against MP Power Plant.
The Delhi High Court has stayed for time being, an order attaching a power plant in Madhya Pradesh, after noting that a previous attachment order arising from the same matter was not approved by the Adjudicating Authority under the Prevention of Money Laundering Act (PMLA). (M/s BLA Power Private Limited and Ors v. Palash Bhoyar, Deputy Director Directorate of Enforcement and Anr.)
The Counsel appearing before Justice Rekha Palli had referred to the doctrine of res-judicata.
The High Court observed that the respondent, Enforcement Directorate (ED), was not in a position to dispute the fact that the impugned provisional attachment order or PAO was based on the same FIR as referred to in the previous PAO dated January 4, 2018. The High Court held that the operation of the impugned PAO dated 07.06.2021 shall remain stayed, as also all consequential proceedings emanating therefrom.
Delhi High Court stayed the attachment order of a Power Plant observing a previous order on the same fact was not approved by the Adjudicating Authority under the Prevention of Money Laundering Act.
The petitioners, M/s BLA Power Private Limited, M/s BLA Industries Private Limited, and company director Anup Agarwalla, through their Counsel, submitted that the PAO was wholly illegal and without jurisdiction, as the “identical” PAO previously gone by the Enforcement Directorate in respect of the equivalent FIR was not approved by the adjudicating authority, PMLA, which heard the parties at length and concluded on June 20, 2018, that no case was made out against the petitioners for either generating proceeds of crime or laundering them. It was also argued that though the Palash Bhoyar, Deputy Director ED, assailed the order by way of an appeal before the Appellate Tribunal, PMLA, it hasn’t stayed. The Counsel, therefore, contended that the impugned PAO dated June 7, 2021, was clearly barred by res-judicata and prayed that it has stayed.
The petitioners argued in their plea that they had neither committed any scheduled offense nor directly or indirectly addressed any proceeds of crime as is alleged.
Petitioner no 1 is a limited company that owns a 90 MW thermal power plant (2 X 45 MW) located in Gadarwara Tahsil of Narsinghpur District in the state of Madhya Pradesh and currently employs around 180 people. The said power plant has assets in the form of land, building, boiler, turbine, etc., while, Petitioner no 2 is an associate concern of the petitioner no 1,” the plea argued.
The petition also claimed that M/s BLA Industries Private Limited had mined coal pursuant to a valid mining lease, washed it in its washery, and thereafter, sold the washed coal to specified end-users in the State of Madhya Pradesh after obtaining all necessary approvals from the Central Government as well as the State Government. The actions of the petitioners were in compliance with the legal provisions while having duly deposited all taxes, royalties, and dues as required, to both the Central and State Governments.
The ED in the meantime sought six weeks to file a reply.
The petition also quoted the ED’s allegation as stating that therefore, from the above investigation it is revealed that the proceeds of crime in the form of money generated from the sale of coal by M/s BLA Industries Pvt Ltd. has been placed and layered through its various bank accounts and finally integrated in the form of purchase of immovable properties ad-measuring 348.34 acres …having registered sale value (as per sale deed) amounting to ?4.53 crore which are being projected as untainted and are therefore liable for attachment under Section 5 of PMLA, 2002.
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