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2026 DAILYLAW 53448 (MAD)

P. K. Selvaraj v. Deputy Director, Directorate of Enforcement

2026-04-28

K K Ramakrishnan, N Anand Venkatesh

body2026
ORDER : N.ANAND VENKATESH, J. This writ petition has been filed for the issue of writ of mandamus directing the first respondent to issue a letter of no objection to respondent Nos.2 to 6 in the light of the order dated 27.03.2019 passed by the Appellate Tribunal for PMLA and consequently to direct the respondent Nos.2 to 4 to remove the entries regarding the attachment under the Prevention of Money Laundering Act (hereinafter referred to as “the Act”) in the respective encumbrance certificates for the eight properties which have been described in the schedule. 2. Heard the learned counsel on either side. 3. In the year 2012, multiple criminal cases came to be filed against the petitioners. Thereafter, in the year 2015, proceedings were initiated under the Act by treating the scheduled offences as the predicate offences culminating in the registration of ECIR / CEZO/ 14 /2015. A provisional attachment order came to be passed on 26.07.2017 by attaching 45 immovable properties belonging to the petitioners, which was confirmed by the Adjudicating Authority by order dated 17.01.2018. Out of those properties, 10 of the properties were mortgaged to the secured creditors. 4. The secured creditors challenged the attachment order before the Appellate Tribunal for PMLA, which by order dated 27.03.2019 set aside the attachment insofar as the mortgaged properties are concerned by holding that they are not acquired from the proceeds of crime. The said order has not been put to challenge and it has become final. 5. The grievance of the petitioners is that despite the order passed by the Appellate Tribunal, the attachment continued to be reflected in the Encumbrance Certificates. As a matter of fact, in the year 2022, the compensation was awarded for acquisition of one of the property, but, however, the disbursement was not made by citing the subsisting encumbrance that is reflected pursuant to the original attachment order. Hence, W.P.(MD).No.16026 of 2024 came to be filed before this Court for a direction to the concerned authority to pay the entire compensation amount in favour of the creditors to whom the property had been mortgaged. This writ petition came to be allowed by an order dated 25.07.2024 and the relevant portion is extracted hereunder. “2. The petitioner had availed loan and various credit facilities from R2 & R3. He had also mortgaged his assets. This writ petition came to be allowed by an order dated 25.07.2024 and the relevant portion is extracted hereunder. “2. The petitioner had availed loan and various credit facilities from R2 & R3. He had also mortgaged his assets. Proceedings under PMLA were initiated against the petitioner and others by the Enforcement Directorate. The assets that were mortgaged in favour of R2 & R3 were attached by the Enforcement Directorate. Questioning the same, the second respondent herein as well as the third respondent filed appeals before the appellate tribunal for PMLA Act cases, New Delhi. Their appeals were allowed on 27.03.2019. A portion of the secured assets was acquired by the first respondent. Compensation payable to the petitioner has also been determined. Award has been passed. But the amount had not been released in view of the attachment effected by the Enforcement Directorate. 3. The case of the petitioner is that since the attachment effected by the Enforcement Directorate had been lifted by the appellate tribunal in favour of the respondents 2 & 3, compensation amount has to be necessarily disbursed to the respondents 2 & 3. (*)The learned Senior counsel appearing for the petitioner submits that the petitioner has received an offer from the second respondent on 03.07.2024 that they would accept a sum of Rs.7 ½ crores as One Time Settlement (OTS amount) and that the petitioner had also accepted to pay the said amount vide letter dated 04.07.2024 and that the second respondent had written to the jurisdictional Tahsildar on 10.07.2024 setting out their bank account details. The appellate tribunal rendered its decision way back on 27.03.2019. It is stated by the learned senior counsel appearing for the petitioner on instructions that this order has not been put to challenge. In view of the same, I direct the first respondent to disburse a sum of rupees 7.5 crores to the second respondent forthwith and without any delay. The balance compensation amount shall be credited to the account of the third respondent again forthwith and without any delay. The petitioner shall furnish the bank account details of the second respondent as well as the third respondent along with the order copy to the first respondent. “ 6. The balance compensation amount shall be credited to the account of the third respondent again forthwith and without any delay. The petitioner shall furnish the bank account details of the second respondent as well as the third respondent along with the order copy to the first respondent. “ 6. In the light of the fact that the encumbrance entries continued to be reflected in the encumbrance certificates despite quashing the order of attachment, the petitioners have knocked the doors of this Court seeking for appropriate directions. 7. In our considered view, the order of attachment has already been set aside by the Appellate Tribunal by order dated 27.03.2019. In fact, this was taken into account by this Court when the earlier writ petition was filed in W.P.(MD).No.16026 of 2024. Thereafter, the encumbrance entries cannot continue to be reflected in the encumbrance certificates. At this juncture, we take note of the judgment of the Hon'ble Apex Court that was cited by the learned counsel appearing for the petitioners in M/s. Nav Nirman Builders and Developers Private Limited, through its Managing Director, Naveen Singh Vs. the Union of India, through the Deputy Director, Directorate of Enforcement, Govt of India, Ranchi, Jharkhand in SLP (Crl.) No.9216 of 2023 dated 06.02.2026 and the relevant portion is extracted hereunder: “46. As discussed, the powers of the Appellate Tribunal are rather wide and exhaustive. What is referred to under Section 8(7) of the PMLA is a confirmation order which has attained finality. At the cost of repetition, once an order under Section 8(3) of the PMLA is challenged before a higher forum a deemed embargo operates on the conclusion of the proceedings under Section 8(7) of the PMLA. Hence, the Special Court cannot go into the issues which the higher forums have been entrusted with. When an appeal is provided for under the statute, it gives a vested right to any aggrieved person to exhaust the same.” 8. It is clear from the above that once an order under Section 8(3) of the Act is challenged before a higher forum, the deemed embargo operates on the conclusion of the proceedings under Section 8(7) of the Act. Under such circumstances, it is not justified if the encumbrance entries continue reflecting the original attachment order which is no longer subsisting. 9. Under such circumstances, it is not justified if the encumbrance entries continue reflecting the original attachment order which is no longer subsisting. 9. In the light of the above discussion, there shall be a direction to the first respondent to issue necessary letter of no objection to the respondent Nos.2 to 6 in line with the order dated 27.03.2019 passed by the Appellate Tribunal for PMLA and consequently, respondent Nos.2 to 4 shall act upon the communication from the first respondent and remove the entries regarding the attachment under the Act in respect of the encumbrance certificates covering the eight properties which have been described in the schedule. The entire process shall be completed within a period of six weeks from the date of receipt of a copy of this order. 10. This writ petition (Criminal) is disposed of in the above terms.