- 1 - NC: 2025:KHC:8433 WP No. 29299 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 29299 OF 2023 (GM-RES) BETWEEN: THE COMPETENT AUTHORITY FOR - IMA AND OTHER SCAM CASES 3RD FLOOR, MINI V.V.TOWER PODIUM BLOCK DR. AMBEDKAR VEEDHI BENGALURU - 560 001. REPRESENTED BY ITS COMPETENT AUTHORITY AND SPECIAL OFFICER SRI. AMLAN ADITYA BISWAS AGED ABOUT 55 YEARS BENGALURU. (APPLICANT IN IA. NO. 1/2022 IN SPL.C 1088/2019) …PETITIONER (BY SRI VEERESH R. BUDIHAL, ADVOCATE) AND: 1. THE DIRECTORATE OF ENFORCEMENT GOVERNMENT OF INDIA REPRESENTED BY ITS ASSISTANT DIRECTOR BENGALURU ZONAL OFFICE 3RD FLOOR, B – BLOCK, BMTC SHANTHINAGAR, TTMC, K.H. ROAD BENGALURU - 560 027 Digitally signed by NAGAVENI Location: High Court of Karnataka - 2 - NC: 2025:KHC:8433 WP No. 29299 of 2023 (COMPLAINANT IN SPL. C.C. NO. 1088/2019 AND NON APPLICANT/RESPONDENT NO.1 IN IA. NO.1/2022) 2. MOHAMMED MANSOOR KHAN DIRECTOR M/S. I.M.ADVISORY PVT. LTD., R/O NO. 9, 5TH FLOOR, PARK ROAD TASKER TOWN, SHIVAJINAGAR BENGALURU - 560 051, (ACCUSED NO. 1 IN SPL. C. C. NO. 1088/2019) …RESPONDENTS (BY SRI P.PRASANNA KUMAR, ADVOCATE FOR R1) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF CR.P.C., 1973 R/W SECTION 47 OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002 PRAYING TO SET ASIDE THE ORDER DATED 04/02/2023 PASSED BY THE HONBLE COURT OF THE XXI ADDL. CITY CIVIL AND SESSION JUDGE, BENGALURU (CCH-04) ON I.A. NO. 1/2022 IN SPL. CC NO. 1088/2019, VIDE ANNEXURE-K, AND ALLOW THE SAID APPLICATION VIDE ANNEXURE-G, AS PRAYED FOR. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA ORAL ORDER The petitioner/Competent Authority for IMA and other Scam Cases is at the doors of this Court calling in question an order dated 4-02-2023 passed by the Court of the XXI - 3 - NC: 2025:KHC:8433 WP No. 29299 of 2023 Additional City Civil and Sessions Judge, Bengaluru on I.A.No.1 of 2022 in Special C.C.No.1088 of 2019 whereby the application of the petitioner comes to be rejected. 2. Heard Sri Veeresh R.Budihal, learned counsel appearing for the petitioner and Sri P.Prasanna Kumar, learned counsel appearing for respondent No.1. 3. Facts in brief, germane are as follows:- The petitioner is an Authority appointed under the provisions of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (hereinafter referred to as ‘the Act’ for short). The 2nd respondent, Director of one M/s I.M. Advisory Private Limited (‘IMA’ for short) is an accused in several cases and those matters are pending before the Special Court. The issue in the lis is with regard to attachment and handing over of properties attached to the petitioner. The 2nd respondent is said to have cheated several depositors by floating Ponzi schemes. The 1st respondent/Directorate of Enforcement, after registration of crimes against the 2nd respondent, exercising its powers under the Prevention of - 4 - NC: 2025:KHC:8433 WP No. 29299 of 2023 Money Laundering Act, 2002 (‘Money Laundering Act’ for short) and issues several provisional attachment orders of certain properties belonging to IMA. 4. The petitioner also exercising powers under the Act attached certain properties by issuing a notification under Section 3(2) of the Act, which was made absolute by the Special Court constituted under Section 5(2) of the Act. The said attachment order was challenged by filing a Miscellaneous First Appeal before this Court. This Court, in terms of its order dated 6-04-2022, passed in M.F.A.No.3055 of 2022, held that before the petitioner could exercise power under Section 11(2)(c) of the Act, the State Government or the petitioner ought to have obtained permission from the Authority by filing an application under Section 8(7) of the Money Laundering Act. It further observed that any auction or sale of the assets during the pendency of the appeal will be subject to further orders passed in the appeal. 5. In compliance with the direction as aforesaid, the petitioner files an application before the concerned Court seeking de-attachment under Rule 3 of the Prevention of Money - 5 - NC: 2025:KHC:8433 WP No. 29299 of 2023 Laundering (Restoration of Confiscated Property) Rules, 2016 (‘the Rules’ for short) inter alia in I.A.No.1 of 2022. The Special Court dismisses the application as premature, since trial had not yet commenced. Challenging the said order the petitioner is before this Court seeking a direction for release of the property in its favour. 6. The learned counsel appearing for the petitioner Sri Veeresh R.Budihal taking this Court through the provisions of the statute and the orders passed by this Court in the Miscellaneous First Appeal and the concerned Court impugned herein, would seek to submit that investors are from the State and the petitioner is a specially constituted Authority to oversee grievances of investors in the IMA Scheme. He would submit that Enforcement Directorate is bound to release the property in favour of the petitioner. 7. Per contra, the learned counsel Sri P. Prasanna Kumar, representing the 1st respondent/Enforcement Directorate, on instructions would submit that the Enforcement Directorate has no objection to release properties that are overlapping which are under attachment both by the petitioner and the - 6 - NC: 2025:KHC:8433 WP No. 29299 of 2023 Enforcement Directorate. In that light, all that remains for consideration is, whether the order dated 04-02-2023 passed on I.A.No.1 of 2022 is sustainable or otherwise? 8. The petitioner/Competent Authority files an application in Special C.C.No.1088 of 2019 wherein the complainant is the Enforcement Directorate. Accused No.1 therein is the Director of IMA. The petitioner had also attached certain properties invoking its power under the provisions of the Act and the Enforcement Directorate under Section 5 of the Money Laundering Act. The petitioner files the application seeking release of the properties in its favour. The issue framed on the said application by the concerned Court is as follows: “(1) Whether the properties attached by the Directorate of Enforcement as per Annexure-C of the application filed by the Competent Authority for IMA Group under KPIDFE Act can be restored in their favour?” This comes to be rejected by the concerned Court by the following order: “15. Another argument put forth by the learned counsel for accused No.1 is that, the Competent Authority for IMA Group under KPIDFE Act is a stranger to this case and hence, cannot maintain any application herein. In support of this contention, he has also relied upon the decision of Hon’ble Supreme Court in Janatha Dal v. - 7 - NC: 2025:KHC:8433 WP No. 29299 of 2023 H.S.Choudhary and others reported in (1991) 3 SCC 756. But, in this case, the above decision cannot be applied. Here the provision under Section 8(7) and 8(8) of PML Act themselves permit a claimant who is entitled for the attached property to approach the Special Court seeking relief. Such being the case, it cannot be said that the Competent Authority for IMA Group under KPIDFE Act has no locus standi to present this application. Therefore, this contention of the accused No.1 holds no merit. 16. Though the learned Special Public Prosecutor for the Competent Authority for IMA Group under KPIDFE Act has relied upon the decision of the Special Judge for MPID and PMLA at Bombay in Misc. Appln. No.434 of 2019 which is contemporary court same is not a binding precedent and it is not possible to follow the reasons therein. Legislature in its wisdom has through it fit that, the applications seeking restoration of attached property be filed after commencement of trial. The wordings of sections 8(7) and 8(8) of PML Act along with Rule 3 and Rule 3A of PML (RoCP) Rules make it abundantly clear that, this application can only be filed on commencement of trial. Therefore, as on date, these applications are premature in nature. This puts the Competent Authority for IMA Group under KPIDFE Act in difficulty as they are bound by the orders of the Special Court of KPIDFE cases in Misc.No.688 of 2019 and coupled cases. But this difficulty is only temporary as this order does not take away the right of Competent Authority for IMA Group under KPIDFE Act to file a fresh application at the appropriate stage. 17. Though both side have argued on the merits of the application, in view of the finding that this application is premature in nature, it would not be proper to consider other merits of this application at this stage. Same can be considered when Competent Authority for IMA Group under KPIDFE Act file a fresh application at the appropriate stage. As the application is premature, point No.1 is answered in the negative.” The only reason rendered is that the application does not merit any consideration as the trial has not yet commenced. Several - 8 - NC: 2025:KHC:8433 WP No. 29299 of 2023 legal propositions are put forth by the petitioner to buttress his submission that the petitioner is entitled for release of properties from the hands of the Enforcement Directorate. Those legal contentions need not be gone into in the case at hand, as the Enforcement Directorate has submitted that it has no objection for release of properties attached by it under the provisions of Money Laundering Act in favour of the petitioner. Who would be entitled to have a better charge over the properties need not be gone into. It would suffice if the petition is disposed of with a direction to the 1st respondent/Directorate of Enforcement to honour and comply with the submissions/undertaking and de-attach the properties from its fold and permit attachment of those properties into the petitioner’s fold. 9. With the aforesaid observations, the petition stands disposed. Sd/- (M.NAGAPRASANNA) JUDGE Bkp/List No.: 19 Sl No.: 5/CT:SS