Mr. Zoheb Hossain, Spl Counsel for ED with Mr. Vivek Gurnani, Panel Counsel with v. M/S. HI-TECH MERCANTILE INDIA PVT LTD & ORS. &

Judgment

1. These Appeals assail the correctness of the Judgement and Order dated 19.07.2022 [hereinafter referred to as „IJ‟] passed by the learned Single Judge [hereinafter referred to as „LSJ‟] in Writ Petitions which raised substantially similar challenges. Since, both the Appeals arise from the same lis and turn upon overlapping issues; they are with the consent of learned counsel for the respective parties, being disposed of by this consolidated judgment. However, for the sake of convenience and with the consent of the parties, the LPA 590/2022 is being treated as the lead case to extrapolate our decision in both the Appeals. BRIEF BACKGROUND:

2. The dispute between the parties arises out of an allocation of the Chotia Coal Block in favour of M/s Prakash Industries Limited [hereinafter referred to as „PIL‟]. The primary allegation against PIL was that they have attained the allocation, though fraudulent activities resulting in financial gains leading to proceeds of crime. The allocation of the Coal Block was made in favour of PIL on

04.09.2003. However, such allocation as on date stands cancelled by the Supreme Court via its judgment in W.P.(Crl) 120/2012 captioned Signature Not Verified Signed By:JAI NARAYAN Signing Date:17.10.2025 13:08:59 LPA 588/2022 and connected matters Page 2 of 52 Manohar Lal Sharma v Union of India [hereinafter referred to as „ML Sharma‟], the said judgment declared the coal block allotments to be illegal and arbitrary. The Supreme Court further directed the Central Bureau of Investigation [hereinafter referred to as „CBI‟] to continue with its investigation into all such allotments. The dispute in the present round of litigation finds its genesis in two different chargesheets filed by CBI, on account of alleged misrepresentations by PIL in attaining such allocation, leading to multiple consequential proceedings which is being set out distinctly hereinbelow for easy reference. First Chargesheet and its consequential proceedings

3. The first chargesheet was registered by CBI on 17.11.2012 vide CC No. 3/2012 and charges were framed against PIL and other accused persons on the basis of First Information Report („FIR‟) bearing no. RC/AC2/2010/A0001 dated 07.04.2010 under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 [hereinafter referred to as „PCA‟], and Sections 120-B, 420, 467, 468, and 471 of the Indian Penal Code, 1860 [hereinafter referred to as „IPC‟]. The allegations in the said FIR broadly pertained to the alleged illegal and fraudulent allotment of coal blocks during the relevant allocation period and its subsequent financial gain.

4. Aggrieved by the filing of the first chargesheet, PIL approached this Court challenging its validity. This Court by way of an Order dated 05.09.2014, allowed the Petition and quashed the FIR and the consequential chargesheet. Thereafter, CBI preferred a SLP(Crl) No. Signature Not Verified Signed By:JAI NARAYAN Signing Date:17.10.2025 13:08:59 LPA 588/2022 and connected matters Page 3 of 52 2756/2015, before the Supreme Court, assailing the order of this Court which is pending adjudication. Second Chargesheet and its consequential proceedings

5. Following the Supreme Court‟s direction vide judgment dated

24.09.2014 and further investigations conducted, CBI registered a second FIR bearing no. RC 221/2016/E0035 on 02.12.2016 for offences under Section 120-B read with Section 420 of the IPC. Subsequently, CBI also filed a chargesheet bearing no. 01/2020 on

23.01.2020 before the Special Judge. Thereafter, on 16.10.2021, a supplementary chargesheet under Section 173(8) of Code of Criminal Procedure, 1806 [hereinafter referred to as “CrPC”] was filed to place additional material on record. On the basis of the material placed on record, the Special Judge, on 22.10.2021, proceeded to frame charges against the listed accused, including PIL, in relation to the second FIR. Resultantly, PIL instituted a SLP (Crl) 656-657/2022, wherein the Supreme Court vide Order dated 06.05.2022 has stayed further proceedings before the Trial Court.

6. Consequent to the registration of the second FIR by CBI, the Directorate of Enforcement (Appellant herein) [hereinafter referred to as „Directorate‟] initiated simultaneous proceeding under Prevention of Money Laundering Act, 2002 [hereinafter referred to as „PMLA‟] on 03.03.2017 and registered ECIR No. ECIR/01/CDZO/2017, alleging generation of proceeds of crime by way of illegal coal block allotment and related fraudulent misrepresentation made to attain the allocation. Resultantly, on 01.12.2021, the Directorate issued a Signature Not Verified Signed By:JAI NARAYAN Signing Date:17.10.2025 13:08:59 LPA 588/2022 and connected matters Page 4 of 52 Provisional Attachment Order [hereinafter referred to as “PAO”] under Section 5(1) of the PMLA, attaching assets valued at approximately Rs. 227 Crores, as being proceeds of crime arising out of illegal acts connected to the allocation.

7. Aggrieved, by the said attachment, PIL filed a petition on

22.12.2021 assailing the correctness of the PAO. Meanwhile, on

28.12.2021, the Directorate filed an Original Complaint [hereinafter referred to as “OC”] before the Adjudicating Authority under Section

5(5) of the PMLA seeking confirmation of the PAO. Subsequently, a Show Cause Notice [hereinafter referred to as “SCN”] was also issued under Section 8(1) of the PMLA. As a result, an amendment application was preferred by PIL to include the said proceedings initiated by the Adjudicating Authority as a matter for adjudication, which was allowed on 03.03.2022. However, the said order was then challenged in a Letter Patent Appeal („LPA‟) and was dismissed accordingly.

8. The LSJ vide the IJ allowed the Writ Petition, thereby setting aside and quashing the PAO and the consequential proceedings, holding that the allocation of a coal block cannot be construed either as a property or conferment of right in property and further holding the allocation, per se, cannot be recognised as representing proceeds of crime.

9. The Appellant, has now approached this Court in Appeal, seeking to challenge the correctness of the judgment. Signature Not Verified Signed By:JAI NARAYAN Signing Date:17.10.2025 13:08:59 LPA 588/2022 and connected matters Page 5 of 52

10. This Court has heard learned senior counsel for the parties at length and with their able assistance perused the paper book.

11. Learned senior counsel for the parties have filed their respective written submission and have relied upon judgements thereof. The contentions of the parties are examined hereinafter.

12. The submissions advanced by the learned counsel for the parties pertain to both the procedural aspects including a preliminary objection regarding the maintainability of the Appeal as well as the substantive merits of the case. Therefore, this Court deems it appropriate to bifurcate the submissions under two distinct heads: I. Submissions relating to maintainability of the Appeals; and II. Submissions concerning the merits of the case. SUBMISSION ON BEHALF OF THE PARTIES ON I. MAINTAINABILTY OF THE APPEAL Preliminary objection on maintainability by PIL

13. Learned senior counsel for PIL, while raising preliminary objection, has made the following submissions:

13.1 It is contended that no intra court appeal is maintainable under Clause X of the Letters Patent against the judgment passed by the LSJ in exercise of jurisdiction under Article 227 of the Constitution of India [hereinafter referred to as “COI”], as it was not acting in its original jurisdiction. Signature Not Verified Signed By:JAI NARAYAN Signing Date:17.10.2025 13:08:59 LPA 588/2022 and connected matters Page 6 of 52

13.2 It has been submitted that initially only the PAO was challenged under Article 226 of the COI. However, due to the change in circumstances namely, the issuance of SCN under Section 8(1) of the PMLA coupled with complaint bearing No. 1586/2021 being filed under Section 5(5) of the PMLA, an amendment was made to the Writ Petition. The said amendment was allowed by the LSJ, taking into consideration the infirmities in the order passed under Section 8(1) of PMLA.

13.3 In view of the aforestated, it has been argued that the LSJ exercised its supervisory jurisdiction under Article 227 of the COI, thereby setting aside the proceedings and the order of the subordinate authority, with a finding that the same was, without jurisdiction and without authority of law.

13.4 It has also been argued that the SCN was issued by the Adjudicating Authority after due application of mind and in form of a judicial order, and that the LSJ, while exercising supervisory jurisdiction, has set aside such an order. Reference in this regard was made to a Division Bench judgement of Telangana in Enforcement Directorate v Karvy India Realty Limited and Others1; Abdul Kuddus v Union of India & Ors.2; and Ajay Singh and Anr and Etc v State of Chattisgarh and Anr3.

13.5 With respect to ML Sharma (Supra), it is contended that the bar imposed in the said judgement pertains solely to criminal proceedings.