2017 (7) TMI 1377 - GUJARAT HIGH COURT - Indian Laws

Head Note / Extract:
Seeking release of freezed Bank Accounts of petitioner - seeking directions to the respondent No. 2 to communicate to the bankers of the petitioner and his family members that the accounts be no longer remained freeze and the petitioner and his family members be permitted to operate the bank accounts without any hindrance - seeking stay on the action of freezing the accounts of the petitioner and his family members as per details given at Annexure)B and allow the petitioner and his family members to operate the bank accounts - HELD THAT:- This Court, in the case of PARESHA G. SHAH VERSUS STATE OF GUJARAT & 2 [2015 (6) TMI 1173 - GUJARAT HIGH COURT] considered section 102 of the Cr.P.C. as the source of power with the authority under the PMLA to freeze the accounts of the concerned accused and his family members and others. At this stage, I must confess that in the case of Paresha G. Shah, I overlooked the provisions of section 17 of the PMLA, 2002. Section 65 of the PMLA provides that the provisions of the Code would apply insofar as they are not inconsistent with the provisions of the PMLA, 2002 to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under the PMLA. The PMLA, 2002, has provided specifically a provision for search and seizure. What is important is section 17(4) of the PMLA, 2002, which provides that the authority freezing any record or property is obliged to file an application, requesting for continuation of the order of freezing before the adjudicating authority - Section 102 of the Cr.P.C. differs to this extent with section 17(4) of the PMLA, 2002. In view of section 65 of the PMLA, 2002, when it comes to freezing the accounts, the source of power is section 17, and clause (4) will have to be complied with. In the case on hand, I inquired with Mr. Vyas, the learned Assistant Solicitor General of India, appearing for the department, whether there is anything to show as regards the compliance of section 17(4) of the PMLA, 2002. Mr. Vyas replied that ordinarily, in all cases of search, seizure and freezing of the accounts, a request is made by the authority concerned before the adjudicating authority to continue the order of freezing beyond the period of 30 days. Mr. Vyas still maintains that it is section 102 of the Cr.P.C which would apply so far as the power of freezing is concerned and not section 17(4) of the PMLA, 2002. To this extent, I am unable to agree with Mr. Vyas. Section 17(4) of the PMLA, 2002 is very specific and it casts an obligation upon the authority to make a request, within a period of 30 days from freezing, to continue the order of freezing served under sub-section (1A) before the adjudicating authority - Mr. Vyas, the learned Assistant Solicitor General of India, could not produce any materials for the purpose of showing compliance of section 17(4) of the PMLA, 2002. The Prevention of Money Laundering Act was enacted to prevent money-laundering and to provide for the confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto. On a plain reading of various sections, it is clear that under Section 2 (u) of PMLA any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence is proceeds of crime - Any person aggrieved by an order made by the Adjudicating Authority under Section 8 of PMLA can avail the remedy of appeal under Section 26 of PMLA to the Appellate Tribunal, whereby again the accused person is given an ample amount of opportunity of being heard, before any orders are passed. It is only when a person is aggrieved by the decision or order of the Appellate Tribunal that he may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him. The remedy of appeal under Section 42 of PMLA is in the nature of second appeal. The learned counsel pointed out that there is a discrepancy so far as the amount is concerned. The provisional attachment order passed by the Directorate of Enforcement talks about the cash balance in the Bank accounts, fixed deposits, investment in the LIC and LIC policies to the tune of ₹ 3,72,66,630/-, whereas in the complaint lodged before the Designated Court under the PMLA, 2002, the amount shown is ₹ 1,02,16,000/-. According to the learned counsel, once a complaint is filed in the Special Court, the same cannot be now even amended. Having regard to the nature of the issue raised in this petition, I do not propose to go into this controversy at this stage. Application dismissed.