OVERVIEW
In the case of Indrani Patnaik and Another v. Enforcement Directorate and Others, Writ Petition (Civil) No. 368/2021, the Supreme Court Prima facie held that the deposit made under Section 21(5) of the Mines and Minerals (Development and Regulation) Act, 1957 in cases of illegal mining does not come under the ambit of ‘proceeds of crime’ according to the provisions of Prevention of Money Laundering Act, 2021.
Such an order was passed by a bench comprising Hon’ble Justice A.M. Khanwilkar and Justice Dinesh Maheshwari while hearing the writ petition which sought from the court directions to refrain the Enforcement Directorate from conducting investigation and subsequent proceedings against the deposits made under Section 21(5) of the Mines and Minerals (Development and Regulation) Act, 1957.
The next hearing in this regard is scheduled to be held on the 7th of April, 2021.
RELEVANT PROVISIONS
Section 21(5) of the Mines and Minerals (Development and Regulation) Act, 1957 states that ‘Whenever any person raises, without any lawful authority, any mineral from any land, the State Government may recover from such person the mineral so raised, or, where such mineral has already been disposed of, the price thereof, and may also recover from such person, rent, royalty or tax, as the case may be, for the period during which the land was occupied by such person without any lawful authority.’
The Prevention of Money Laundering Act, 2002 defines ‘proceeds of crime’ as, ‘any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property,’ according to Section 2(u) of the Act.
Section 2(v) defines property as ‘any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located.’
DETAILS OF THE ORDER
The Court, after considering the arguments of both the sides, stated in its order that, ‘Prima facie, we find force in the argument that such deposit cannot be treated as proceeds of crime.’
The Court considered the contention of the petitioner with respect to its previous judgement in the case of the Common Cause Vs. Union of India and Ors., reported in (2017) 9 SCC 499, wherein it was held that there is no criminal liability in respect of deposit made in reference to direction under Section 21(5) of the Mines and Minerals (Development and Regulation) Act, 1957. That is to say that Section 21(5) of the said Act is not a penal provision but was enacted with a view to compensate the State for acts of illegal mining.
The Court ordered that “Until the next date of hearing, no precipitative steps be taken against the petitioner.”
The Court further went on to clarify that “this does not mean that the investigation undertaken by the Enforcement Directorate should be put on hold. That may continue in accordance with law.”
CONCLUSION
The petition states that “the Enforcement Directorate is proceeding against the petitioner in respect of such deposit made by the petitioner.” Such deposit refers to deposit made under the provisions of Section 21(5) of the Mines and Minerals (Development and Regulation) Act.
But since it was prima facie observed by the apex Court that such deposit is not to be considered as proceeds to crime, the Court put a stay on any precipitative actions taken against the petitioner until further information came to light in the next hearing in this regard.
The court urged the Enforcement Directorate to carry on with their investigation in accordance with law and not to put a hold on it due to such order.
The matter will next be heard on 7th April.
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