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2020 (10) TMI 1108 - HC - Money LaunderingRelease of attached properties - Attachment of immovable properties - continued attachment of the FDRs - concealment of proceeds of crime or not - HELD THAT:- The Tribunal in the present case, in its impugned order dated 26.07.2019, agreed with most of the contentions raised on behalf of Kamats and Alemaos and even concluded in para 78, that the properties attached in the matter are liable to be released 'in the light of the reasons stated in earlier paras'. However, instead of setting aside the attachment, the Tribunal issued a host of directions in para 79, perhaps not even contemplated under the PMLA, by simply observing that there is a need to strike a balance in these matters since the trial is pending before the Special Court - Once the Tribunal concluded that the attachment orders were liable to be set aside, it could not have avoided setting aside the same, by merely observing that there are allegations by the CBI against Kamats and Alemaos who are facing trial and therefore, in the name of striking balance, confirmed the attachment of the FDRs or imposed conditions for raising the attachment on the immovable properties. The directions issued by the Tribunal in its impugned order are this, quite contrary to its reasoning. The directions, therefore, are quite unsustainable in such circumstances. On a plain reading of the provisions of Section 5(1) of the PMLA, it is apparent that the two predicates in clauses (a) and (b) have to be construed conjunctively and not disjunctively as suggested by Mr. Vaze, learned counsel for the ED. This means that the director or the authorized officer before he proceeds to make an order under Section 5(1) of the PMLA, must have reason to believe, on the basis of material in his possession, not only any person is in possession of any proceeds of crime but further, such proceeds of crime are likely to be concealed, transferred or dealt with to frustrate confiscation proceedings under Chapter III of PMLA - reading the “and” which connects the two predicates in clauses (a) and (b) might even lead to an absurd position because it might imply that even though a person is not in possession of any proceeds of crime, he is nevertheless likely to conceal, transfer or deal with 'such proceeds of crime' to frustrate confiscation proceedings under Chapter III of PMLA. Further, if the expression “and” is construed as it stands, it is not as if some absurdity would result in the construction of Section 5(1) of the PMLA or the object of Section 5(1) of the PMLA would be frustrated or defeated. There is, according to us, nothing in the text or the context obliging the Court to read “and” as “or” simply because the Court, may, in certain circumstances, have the power to do so. Therefore, based upon the supposed intention of the Legislature, the expression “and” which connects the predicates in clauses (a) and (b) of Section 5(1) of the PMLA cannot be read as “or”. There is nothing in the context to indicate that the Legislature intended to provisionally attach the proceeds of crime irrespective of whether or not there was any likelihood of such proceeds of crime being concealed, transferred, or dealt with to frustrate any confiscation proceedings under Chapter III of the PMLA. Rather, it appears that the Legislature intended to empower the director or the authorized officer to provisionally attach the proceeds of crime where such proceeds of crime were likely to be concealed, transferred, or dealt with to frustrate the confiscation proceedings. The Legislature was conscious that it was vesting the director or the authorized officer with such extraordinary powers in the teeth of the presumption of innocence and therefore, such extraordinary power was hedged with certain contentions which had to be cumulatively existent. In the present case, analysis of the Joint Director’s order dated 30.03.2017 makes it clear that there are no reasons whatsoever recorded by the Joint Director in support of his alleged belief that the proceeds of crime were likely to be concealed, transferred or dealt with in any manner by the Kamats or Alemaos to frustrate proceedings relating to the confiscation of such proceeds under Chapter III of the PMLA. The mere incantation that the officer had reason to believe that such proceeds of crime will be dealt with in a manner which may result in frustrating any proceedings relating to the confiscation of such proceeds of crime, constitutes no compliance whatsoever with the predicates of clause (b) of Section 5(1) of the PMLA. The statement made on behalf of the Appellants-Kamats that they will not sell, transfer, alienate, encumber or liquidate or encash the attached properties/FDRs and order until the conclusion of PMLA Case No.1/2018 pending before the Special Court at Mapusa and for one month thereafter, is hereby accepted. The Appellants-Kamats will have to abide by this statement - Application disposed off.
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