The Enforcement Directorate provisionally attached a property of Aham and Swaham on December 10, 2005 under the Prevention of Money Laundering (Amendment) Act, 2005 stating that the said property was acquired through pro

The contention of Aham and Swaham is that the property alleged to have been purchased with proceeds of crime was actually bought on 1st April 2005 before the Prevention of Money Laundering Act came into force and hence cannot be confiscated. This case is similar to the case of Mahanivesh Oils and Foods Pvt Ltd vs Directorate of Enforcement filed in the Delhi High Court. On 08.05.2009, an FIR was lodged by the CBI on a written complaint made by NAFED wherein it was alleged that Mr. Homi Rajvansh - the Additional Managing Director of NAFED, had hatched a conspiracy, in connivance with the directors of M/s M.K. Agri International Ltd. (hereafter 'MKAIL'), for making wrongful gains by executing Memoranda of Understanding (MOUs) with MKAIL on behalf of NAFED for import of raw sugar and selling the same by entering into three High Seas Sale (HSS) Agreements with M/s M.K. International Ltd. (hereafter 'MIL'), a sister concern of MKAIL, without charging/recovering any cost for the commodity. MIL on 10.02.2005, through its director - Mr. M.K. Agarwal issued cheques for an amount aggregating to ₹1.5 crores in favour of its two holding companies namely, M/s Duoroyale Enterprises Ltd. and M/s Sri Radhey Trading Pvt. Ltd. Subsequently, both the said companies issued two cheques each amounting to ₹75 lacs in favour of M/s Mahanivesh Oils & Foods Pvt. Ltd., the petitioner company, where Smt. Alka Rajvansh - wife of Mr. Homi Rajvansh was a Director. On 16.02.2005 and 17.02.2005, M/s Mahanivesh Oils and Foods Pvt. Ltd., issued two cheques of ₹1,32,00,000/- and ₹10,81,000/- respectively in favour of M/s Uppal Agencies Pvt. Ltd. for purchase of the ground floor and basement of the property situated at E-14/3, Vasant Vihar, New Delhi (hereafter 'the said property'). It is alleged that Smt. Alka Rajvansh used the funds received from M/s Duoroyale Enterprises Ltd. and M/s Sri Radhey Trading Pvt Ltd. for purchasing the abovementioned property pursuant to a sale deed dated 18.03.2005 executed by Shri B.K. Uppal in favour of the petitioner company. The property was provisionally attached by the Enforcement Directorate under the provisions of the Prevention of Money Laundering Act, 2005 as having been purchased through proceeds of crime. (Kickback paid by MIL for the high sea sales contract). Petitioner challenged this attachment before the High Court. The Delhi High Court held that any proceeds of crime arose from the occurrence of a scheduled offence and hence falling under Section 5(1) of the PMLA Act. The central issue in the instant case was not whether an offence was committed but whether Section 5 can be enforced where the offence and the use of the proceeds of the crime happened before the Act came into force. Article 20(1) of the Constitution expressly forbids that no person can be convicted for an offence except for the violation of a law in force at the time of commission of the Act charged as an offence. On this basis the Delhi High Court held the attachment of property by the Enforcement Directorate is not tenable and set aside the order. In the instant case the contention of Aham and Swaham are similar to the above case, they having purchased the property on 1st April 2005. They have a strong case to appeal in the High Court to set aside the attachment on the grounds that the transaction happened before the PMLA Act became operative.