M/s Kraft Alloy Private Limited v. t1 Union of lndia

in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operalion of the letter dated 28-09-2022 of the 2nd respondent and direct the 3rd respondent to receive, register and release the conveyance documents submitted by the petitioner herein pertaining to plots in land admeasuring Ac.08-07 Gts in Sy No.78 of Hafeezpet Village pending disposal of the Writ Petition. Counsel for the Petitioner: SRI MAYUR REDDY, Sr. COUNSEL, REP. FOR SRI SAINI ARAVIND Counsel for the Respondent No.1 & 2: SRI D.NARENDER NAIK, SC FOR ED Counsel for the Respondent No.3: GP FOR STAMPS & REGIITRATION Counsel for the Respondent No.4: SRI S.M.MOIZUDDIN IPARTY-IN-PERSON] The Court made the following: ORDER a HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION No. 29088 OF 2025 ORDER: eard Sri Mayrr Reddy, learned Senior Counsel on behalf of Sri Saini Aravind, learned counsel for petitioner, Sri D. Narender Naik, learned Standing Counsel for Enforcement Directorate and Sri S.M. Moizuddin, part5r-in-person.

2. Petitioner-M/ s Kraft Alloy Pvt. Ltd. filed this Writ Petition seeking two reliefs against Respondent Nos. 2 and 3 viz., Deputy Director, Enforcement Directorate, Hyderabad and the Sub Registrar, District Registrar Officer, Ranga Reddy District. They are d.) to quash the Enforcement Directorate (R-2) letter dated 28.O9 -2022 addressed to the 3'd respondent; b) to direct the Sub-Registrar, RR District (R-3) to register all deeds of conveyance relating to petitioner's property without reference or restraint caused by the said letter dated 28.O9.2022. 3. The brief case of Petitioner is that: M/s Aashi Realtors and frf/ " Neeharika Infrastructure Rrt Ltd., were the absolute owners of the land ^.{ admeasuring Acs.4.07 gts. and Acs.4.00, totally Acs. 8-07 gts, in Survey No. 78, Hafeezpet Village, Serilingampally Mandal, 2 RR District, Hyderabad. They availed Rs. 11O crores financial facility from M/s SREI Equipment Finance Ltd. and mortgaged the property in question in their favour. Sin<;e M/s Aashi Realtors defauited in repayment, the Creditor-M/s SREI Equipment Finance Ltd., invoked the provisions of SARFAESI Act; Ioan accounts were declared as Non-Performing Assets (NPA) on 16.01.2O191; thereafter, the Authorized Oflicer under the SARFAESI Act brought the property in question to public auction on 30.12.2O19. Petitioner emerged as the successful bidder. Alter receiving the entire sale consideration, a sa,le certificate dated 14.O1.2020 was issued in favour of petitioner in accordance with the SARFAESI Act, thus, petitioner has become the absolute owner and lawful possessor of the property in question with effect from the said date.

3.1. On issuance of Sale Certificate datectrl4.O 1.2O2O, petitioner approached the Sub-Registrar concerned seeking registration of SaIe Certificate, however, registration was denied on the ground that the Tahsildar stated that lancls situated in Survey No. 78 of Hafeezpet are prohibited from registration I under Section 22-A of the Registration Act. Hence, petitioner filed Writ Petition No. 24348 of 2O2O, wherein this Court, by a / order dated O4.O2.2O21, directed the Sub-Registrar to register the documents submitted by petitioner. Since the said orders were not implemented, petitioner filed Contempt Case No. 262 of 2021.

3.2. It is stated, to circumvent the contempt proceedings, the State authorities preferred SLP No. 2844 of 2021 challenging the order of this Court dated 04.O2.2021. The Hon'ble Supreme Court while admitting the SLP, had not granted any interim stay or interim suspension. Meantime, the Hon'ble Supreme Court in SLP No. 2844 of 2021 and other tagged SLPs filed by the State, by order dated 13.03.2O23 grarted leave and directed that the existing orders of status quo would continue to operate. Petitioner contends that no status quo was ordered in SLP and only a direction not to take coercive steps was ordered. When petitioner approached the 3.d I respondent for registration, they were informed that the 2nd respondent forwarded the letter dated 28.O9.2022, impugned in this Writ Petition, directing not to create any e.rt'umbrarce or register arly conveyance deed in respect of the land purchased by petitioner in the public auction. I 4 I I

3.3. Petitioner contends that in the impugrred letter, the 2^d respondent informed about the pendency of ECIR No. HYZO|34|2O20 against one Sukesh Gupta arrd others. It is further stated that subject property had earlier stood in the name of M/s Aashi Realtors and petitioner had purchased the same in an auction conducted by the creditor-M/s SREI Equipment Finance Ltd. It is evident from the letter that it is valid only for a period of six months. It is contended that as M/s SREI kad not recovered its dues fully from the aforesaid sale to pelitioner in public auction, it proceeded against its borrower- M/s Aashi Realtors to liquidate the property given under second charge. However, it was later discovered that property under second charge without obtaining consent. Hence M/s SREI lodged a complaint before CCS Police Station, Hyderabad registered as FIR No. 41 of 2O2O, based on *hith, th. Z"o respondent authorities registered Enforcement Case Information Report (ECIR) No. HYZOl34/2O2O. During pendency of investigation, the impugned letter was addresqEd to the 3.d respondent directing not to create any encumbrance such as sa.le, etcetera. The said letter was valid only for six months. -/ I 3 .4. The CCS Police filed charge sheet before XII ACMMM Court, Hyderabad. CRLP No. 1559 of 2O2O filed to quash the FIR No. 41 /2O2O was dismissed, and the SLP against it also was dismissed. Petitioner contends that as heid by the Hon'ble Supreme Court in The Inspector General of Registration o. G. lWddhurdmbalt, a Sale Certificate does not require registration under Section 17 (2)(x111 of the Registration Act. Existence of a predicate offence is an essential and indispensabie condition for continuation of any proceedings under the Prevention of Money Laundering Act, 2002. This principle extends to continuance and validity of ECIR. Without a valid under\ring FIR for the scheduled offence, the very foundation upon which PMLA proceedings rest becomes untenable. In the absence of such a predicate offence or a valid FIR, the ECIR which is anci11ary and dependent on tle schedule offence, loses its legal sanctity and cannot be continued, is the other contention.

4. The 2nd respondent-Enforcement DiSectorate filed ., its memo substantiating its letter 28.09.2022. However, in para- 5 it is stated as under: t2022 Live Law (SC) 969 i 6 " However, upon subsequent perusa1 of the affidavit and documents filed by the petilioner, arrd upon being apprised of the fact that the subject properties were reportedly sold by the secured creditor in a public auction on 74.OL.2O2O i.e-, prior to the date of the said attachment order on 26.08.2021, the respondent submits that it has no objection to the release of the properties mentioned in the petitioner's aflidavit dated lO.LO.2O25, subject to verillcation of the authenticity of the sale certificate, confirmation of pal,ment of consideration, and compliance rvith applicable legal procedures. The respondent further submits that it remains bound by the directions and orders that may be passed by this Hon'ble Court in this regard."

5. While things stood thus, one Mr. Sahebzada Mohammed Moizuddin S/o late Mohammed Ghouse Mohiuddin Khan, an Advocate by profession, filed I.A. No. 2 of 2025, seeking permission to come on record as Respondent No.4, on the ground that he has rights and interest in the lands in Survey No. 78, Haleezpet Village, Balanagar Mandal, Medcha-l Malkajgiri District ie. lands in question. He also frled I.A. No.3 of 2025 s,eeking permission to contest , the writ petition in person. Writ petitioner contested the I.As by filing counter afhdavit. Writ petitioner's preliminary objection is that Mr. Sahebzacla Mohammed Moizuddin S/o late Molifrnmed Ghouse Mohiuddin Khan has been declared as Vexatious Litigant in OSA No. 3 of 2O22 and the same was upheld by the Hon'ble Supreme Court, hence he does not haue any right to interfere -/ '1 with the present Writ Petition. However, by order dated

06.11.2025, LA.Nos. 2 and 3 are ordered.

6. Be that as it may. Admittedly since M/s Aashi Realtors and M/s Neeharika Infrastructure Pvt Ltd., who have availed financia-l facility of Rs. l1O crores from M/s SREI Equipment Finarce Ltd., defaulted in repayment of the same, the mortgaged property i.e. land in question was sold in public auction to the highest bidder i.e. petitioner and a Sale Certificate dated 14.O1.2O2O was issued duly confirming the sale. When writ petitioner approached the 3d respondent for registration of Sale Certificate the same was denied, at the first instance, on the ground that lands in question are prohibited lands under Section 22-A of the Registration Act. Against this rejection, petitioner Iiled Writ Petition No. 24348 of 2p2O and this Court by order dated 04.02.2021, directed the registration authorities to register the Sale Certifrcate. Later the matter was carried to the Hon'ble Supreme Court, where no order adverse to petitioner was passed- When petitioner approaifred the 3'd respondent for registration of SaIe Certificate, it was rejected on the ground that Enforcement Directorate addressed the I E impugned letter not to create any encumbrance or register any conveyancc deed for the lands in question. 7 . Now the 2"d respondent-Enforcement Directorate in their Memo has categorically stated that it has no objection for release of the properties in question subject to verification of the authenticity of the Sale Certificate, Conlirmation of payment of sale consideration and compliance with applicable legal procedures. As rightly contended by petitioner, registration of Sale Certificate is not mandatory as held by the Hon'ble Apex Court in The Inspector Generq.l of Registratlon o. G. Madhurqm.bal (supro/. In any case, tJlis proposition is not disputed in this Writ Petition. B. in view of the unequivocal and categorical assertion of the 2"4 respondent-Enforcement Directorate in its counter affidavit that it has no objection for release of the $operties in question subject to verification of the authenticity of the Sale Certificate, confirmation of payment of sale consideration and compliance with applicable legal procedures, it i>{or petitioner to approach the 2nd respondent with all the requisite documents and upon such approach, the 2"d respondent is directed to veriff the same and if they are intact, rdlease the properties. I a 9

9. The Writ Petition is disposed of with the above direction. No costs.

10. closed. To, The miscellaneous Appiications, if any shall stand //TRUE COPY// S A RINIVASA REDDY NT REGIS N OFFICER

1. The Secretary, Ministry of Home Affairs, New Delhi, U 2. The Deputy Director, Enforcement Directorate, Hyderabad Zonal Office of lnd ia. 510174 3rd Floor Shakar Bhavan Basheerbagh, Hyderabad.

3. The Sub-Registrar, Ranga Reddy District, District Registrar Office, Ranga Reddy Prashant Nagar, Prashanth Nagar, IDA Kukatpally, Kukatpally, Hyderabad, Telangana 5O0O7 2.

4. One CC to SRI SAINI ARAVIND, Advocate [OPUC] 5. One CC to SRI S.M.MOIZUDDIN [PARIY-IN-PERSON] 6. One CC to SRI D.NARENDER NAIK, SC FOR CENTRAL GOVT. [OPUC] 7. Two CCs to GP FOR STAMPS & REGISTRATION, High Court for the State of Telangana at Hyderabad [OU!

8. Two CD Copies BSR *g- D HIGH COURT DATED:2011112025 CC TODAY /3/r'S \f,l :.?'v \ {'ffi;$-F ORDER WP.No.29088 of 2025 , DISPOSING OF THE WRIT PETITION, WITHOUT COSTS 1 .L^ 1\