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Money Laundering - Case Laws
Showing 181 to 196 of 196 Records
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2021 (1) TMI 1186 - MADRAS HIGH COURT
Money Laundering - predicate offence - proceeds of crime - Section 43(1) of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Under Section 24 of the PML Act, the burden is on the accused to prove that the proceeds of crime was not involved in money laundering. In this case, M/s. Maze Group of Technology was into finance business which cannot be said to be per se a criminal activity. Even assuming for a moment that they were into a criminal activity and the sum of ₹ 15 lakhs that was given as advance by Manoharan to Kumar Ganesa Perumal was proceeds of crime, the mere fact that Kumar Ganesa Perumal agreed to sell his property to Manoharan, cannot, by itself, bring him into the net of Section 3 of the PML Act without anything more.
Petition allowed.
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2021 (1) TMI 1180 - SUPREME COURT
Denial of anticipatory bail - allegation is that between 21 August 2015, when his successor was elected, and the assumption of office on 31 August 2015, the appellant had executed four pattas causing a deficit of ₹ 32,133 to the treasury - offences under the provisions of Sections 13(1)(c), (d) and Section 13(2) of the Prevention of Corruption Act 1988 as well as Sections 420, 467, 468 and 120B of the Indian Penal Code 1860 - HELD THAT:- Since the charge sheet has already been filed and having regard to the facts and circumstances, the grant of anticipatory bail under Section 438 would be in order.
It is directed that in the event of the arrest of the petitioner, he shall be released on bail, subject to such terms and conditions as may be imposed by the trial court, in connection with FIR No 310 of 2017 registered at PS OP Anti Corruption Bureau, Jhunjhunu, Rajasthan - appeal allowed.
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2021 (1) TMI 1161 - DELHI HIGH COURT
Status quo with regard to the ownership, possession and encumbrance upon the properties - HELD THAT:- The Adjudicating Authority shall not proceed further as this LPA is pending before this Court.
The operation, implementation and execution of the judgment and order of the learned Single Judge is stayed - List on 29.01.2021.
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2021 (1) TMI 1145 - PRINCIPAL SPECIAL JUDGE FOR CBI CASES, HYDERABAD
Money Laundering - predicate/scheduled offences - Hearing on charges in the scheduled offence - entitlement to mould the prayer in the original petition by filing a memo, “that to take up the hearing on charges in the scheduled offence and the offence of money laundering simultaneously” - HELD THAT:- On careful reading of Section 43(2) of PML Act, it does not contemplate a trial of predicate/scheduled offence and the offence of money laundering simultaneously. The section only says that while trying an offence under the Act, a Special Court shall also try an offence, other than any offence referred to in sub-section (1) with which the accused may under the Code of Criminal Procedure be charged at the same trial - On reading of Section 44(1)(a) of PML Act, it only says that the offence punishable under Section 4 (PML Act) and any scheduled offence connected to the offence under that section shall be triable by the Special Court, in which the offence has been committed. The plain reading of the section goes to show that the Special Court can also try the scheduled offence but not simultaneously with money laundering offence.
Authorised person from Enforcement Directorate can also file an application before the Special Court which is dealing with the scheduled offence, which is other than the Special Court dealing with money laundering offence. On such application being filed by authorised person from Enforcement Directorate, predicate/scheduled offence can be committed to the Special Court as enshrined in Section 44(1)(c) of PML Act.
On careful reading of Section 2(1)(u) of PML Act, 2002, a wider definition is given to proceeds of crime including property not only derived or obtained from the scheduled offence, but also any property which may directly or indirectly be derived or obtained as a result of criminal activity relatable to a scheduled offence. Section 3 of PML Act, 2002, further clarifies that a person shall be guilty of offence of money laundering if such a person is found to have directly or indirectly attempted to indulge in concealment, possession, acquisition, use, projecting as untainted property, claiming as untainted property and the process or activity connected with the proceeds of crime is a continuing activity. Which itself shows the offence of money laundering is a continuing offence. Section 44(1)(d) Explanation provides for, that the Special Court shall not be dependent on any orders passed in respect of the scheduled offence - Sections 2(1)(u), 3 and 44(1)(d) of PML Act, 2002 clearly goes to show that the offence of money laundering is a stand-alone offence and the trial proceedings are completely different with that of the scheduled offence. Trial of money laundering offence is independent trial and it is governed by its own provisions, it will not meddle with the trial of scheduled offence.
Prevention of Corruption Act, 1988 and The Prevention of Money Laundering Act, 2002, are two different enactments, they decide the controversies that arise under respective Acts, one authority cannot interfere with the function of other authority under different Acts. PML Act has overriding effect under Section 71.
There are no merits in the applications and the same are dismissed.
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2021 (1) TMI 1115 - BOMBAY HIGH COURT
Grant of bail - attachment of London based property - foreign proceeds of crime - siphoning off of funds - criminal conspiracy with Kapil Wadhwan, Promoter Director of M/s.DHFL and others for extending financial assistance to M/s. Dewan Housing Finance Corporation Ltd (DHFL) in lieu of substantial undue benefit to applicant and his family members through companies held by them - HELD THAT:- The proceeds of crime according to complainant involved in this case is ₹ 5050 Crores. It is also revealed that the applicant had siphoned off huge amount out of India through his family/group owned controlled companies. It is found that out of the proceeds of crime of ₹ 600 Crores, ₹ 378 Crores were invested overseas. The investigation in relation to exact foreign proceeds of crime is still under investigation. The applicant and his family members have incorporated or beneficially interest in various companies. The applicant is desperately trying to dispose of his property. He has given online advertisement for sale of his London based property - The said property is attached by ED vide provisional attachment order dated 25th September 2020 being proceeds of crime in terms of Section 2 (1) (u) of PMLA Act. According to complainant if the applicant is released on bail, he will try to sell that property. Further investigation is still in progress.
The offence is of serious nature. There is voluminous evidence showing involvement of the applicant in the crime. In the light of nature of evidence, no case for grant of bail is made out. It is settled law that while granting bail the Court has to keeping in mind the nature of accusations, evidence in support thereof. Huge loss of public fund is required to be viewed seriously. The Special Court under PMLA has analysed the material on record - there are no reason to deviate from the said observation. The applicant being MD/CEO of YES Bank has allegedly misused his position to gain undue financial gain to him and his family members. The applicant and his family earned beneficial. The statement of witnesses shows the modus operandi of the accused.
Investigation revealed that YES Bank extended loans to entities despite incurring losses. These entities extended loan to company owned by family members of applicant. There was no active or operating business in DUVPL. The loan proposal was approved by DHFL on the basis of standard properties furnished as security by DUVPL, a company owned by daughters of applicant. DUVPL has no business activity and not generating revenue. Investigation revealed that money was laundered to buy properties at several places in India and abroad - There are specific allegations against applicant that he has gained financial benefits. The submissions urged by applicant is in the nature of defense. It cannot be disputed that money lying with YES Bank is public Money.
It is settled law that, the Court has to take into consideration nature of accusations, evidence in support, severity of punishment which conviction will entail, reasonable apprehension of witnesses being tampered with larger interest of public/state. It is also settled law that economic loss of public offences involving huge funds to be viewed seriously.
On the basis of evidence on record no case for grant of bail is made out - bail application ejected.
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2021 (1) TMI 1107 - BOMBAY SESSIONS COURT
Seeking seven days custody of both the accused for their interrogation - money laundering - proceeds of crime - diversion of funds - schedule offence under Section 420 of IPC - HELD THAT:- No doubt udner Section 17(1)(f) of PMLA on 26.01.2021 the statement of accused Babulal Varma came to be recorded by ED and also questions pertaining to ₹ 410 crores obtained from Yes Bank was also put forth including non-constructions of tenements. But the facts remain to be answered that when these two persons are now arrested and produced before this Court, who not only obtained SRA scheme for construction, but mortgaged it and now even without making construction of the Rehab scheme at Wadala and Antop Hill they have diverted ₹ 410 crores, which was obtained as a loan from Yes Bank, after mortgaging FSI and after construction of rehabilitating building.
The proceeds of crime diverted out of criminal activities in view of schedule offence under Section 420 of IPC has been used and parked by the accused and thus, projected them as untainted. In such circumstances, complaint came to be registered and it needs to be investigated in detail. If it is not investigated definitely diversion of funds, for the purpose of which it was obtained was not carried out and thereafter, obtaining loan of ₹ 3,155/- crores out of said loan ₹ 2,755 crores was disbursed. Out of the same ₹ 1800 crores is outstanding and same has turned NPA.
Hence entire factual aspects of this money laundering after registration of FIR is within exclusive knowledge of both the accused and all these crucial facts, which are in their domain has to be exploded to being unearth deeply and direct involvement of M/s Omkar Realtors & Developers Pvt. Ltd. It appears active conspiracy in the case. Even both the accused form 25.01.2021 assisting the investigation and came to be arrested on 27.01.2021. Therefore, further investigation by ED has to be carried out for which their presence along with ED officials pertaining to this ECIR is necessary.
Both the accused i.e Babulal Varma and Kamalkishore Gupta, remanded in the custody of ED for further interrogation till 30.01.2021 - application allowed.
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2021 (1) TMI 1035 - ATPMLA
Acquisition of foreign exchange - not bringing into India the goods of the value, quantity and quality for which foreign exchange was acquired by the parties through the appellant bank by seeking remittance on the basis of import documents which are allegedly later found to be not genuine - contravention of Section 8(1) of Foreign Exchange Regulation Act, (FERA) 1973 and Section 8(2) and 8(4) of FERA, 1973 - delay of more than two years in passing the impugned order - HELD THAT:- Without going into the merit of the case and without opining on merit, on the short question of delay in delivering the order, the appeal filed by M/s. South Indian Bank Ltd. is allowed - The impugned order dated 09.03.2009 passed on Show Cause Notice bearing no. T-4/1-B/SDE/AKB/2002-SCN-I dated 04.01.2002 read with corrigendum dated 13.02.2002, limited to the present appellant, is set-aside and the case is remanded to the Adjudicating Authority for deciding it afresh in accordance with law, preferably within a period of six months from the date of appearance of the parties before the Adjudicating Authority. The Adjudicating Authority shall decide the case relating to the present appellant on all legal and factual issues after affording opportunities to both the parties i.e. M/s. South Indian Bank Ltd. and the Enforcement Directorate.
Appeal allowed by way of remand.
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2021 (1) TMI 975 - KARNATAKA HIGH COURT
Provisional attachment of immovable properties - Validity of summons issued under PMLA - Jurisdiction of Director/Deputy Director to attach the immovable properties which were acquired prior to coming into force of the PML Act - properties in possession of the petitioner, proceeds of the predicate crime or not - HELD THAT:- The petitioner does not dispute the authority of the Deputy Director to pass the impugned provisional order of attachment. The constitutional validity of section 5 of PML Act is also not under challenge. The said order as well as the records indicate that a report has been forwarded to the Magistrate under section 173 of Cr.P.C. in relation to the scheduled offences i.e., under section 13(1)(e) read with 13(2) of the PC Act on 28.02.2013. The order reflects the application of mind and also the elaborate reasons to arrive at the conclusion that the property in question was the proceeds of crime within the meaning of section 2(1)(u) of the PML Act. The said order therefore is beyond challenge in a writ proceeding as no error of law and fact is reflected in the impugned order. Even otherwise, the PML Act has provided for adequate safeguards to protect the rights of the accused by providing that the order of attachment shall cease to have effect after the expiry of the period specified in the said section or the date of order made under sub-section (3) of section 8 of PML Act - More importantly, an adjudicatory mechanism is provided under section 8 of the PML Act and the petitioner has availed the said remedy and has participated in the proceedings before the Adjudicating Authority. Considering the contentions urged by the petitioner, the Adjudicating Authority has come to the conclusion that the petitioner has committed the scheduled offences, generated proceeds of crime and laundered them vide Annexure-‘E’. As adequate and efficacious remedy is available to the petitioner against the said order, petitioner is not entitled for the relief (v) claimed in the petition.
A reading of the complaint (Annexure-A) indicates that it was filed under section 45(1), 3 and 4 of the PML Act. It is alleged therein that accused Nos.1 to 4 have committed offence under section 3 of the PML Act and liable to be punished under section 4 of the PML Act. But the impugned order does not reveal as to the offences for which the accused have been summoned to appear before the court - As the order passed by the learned Special Judge taking cognizance and issuing summons to the petitioner does not satisfy the basic legal requirements, the impugned order to that extent has turned out to be ex-facie perverse and bad in law. To this extent, petitioner is entitled for the relief claimed in the petition.
Petition allowed in part.
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2021 (1) TMI 662 - ALLAHABAD HIGH COURT
Seeking extension of the period of interim bail granted - Sections 3/4 of Prevention of Money Laundering Act, 2002 - HELD THAT:- As it is evident that the order dated 09.12.2020 passed in Bail Application No.5974 of 2020 of applicant is not appended with the present application and it is well settled as per the doctrine of merger that the interim order is automatically merged in the final order, and in the present case, the order of interim bail dated 14.10.2020 passed in Bail Application No.5974 of 2020 is merged in the final order dated 09.12.2020 passed in Bail Application No.5974 of 2020, therefore, it is open to the applicant either to move his second bail application under Section 439 Cr.P.C. or challenge the rejection order dated 09.12.2020, but in place of doing so, the present application under Section 482 Cr.P.C. has been moved with a prayer that the interim bail granted by this Court vide order dated 14.10.2020 passed in bail application No.5974 of 2020 be extended for a period of ten weeks, which is not permissible, therefore, the Court is of the view that the present application (U/S 482 Cr.P.C.) of applicant for extension of his interim bail is not maintainable.
The application is misconceived and is, thus, hereby dismissed.
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2021 (1) TMI 630 - DELHI HIGH COURT
Money Laundering - seeking a copy of order dated 1st January, 2021 passed under Section 8(3) of the Prevention of Money Laundering Act, 2002 be supplied to the Petitioner - further seeking that the period of at least 45 days in order to enable the Petitioner to approach the Appellate Tribunal under Section 26 of the PMLA, should not be affected.
HELD THAT:- Considering the facts and circumstances of the present case, 20 days’ time is granted to the Petitioner to avail of its appellate remedies and physical possession of the immovable property shall not be taken for a period of 20 days from today. The question of law raised is left open.
Further, in order to avoid such a dispute in future and to ensure fairness and non-arbitrariness, the Registrar of the Adjudicating Authority under the PMLA shall ensure that in future, all orders passed by the Adjudicating Authority, apart from being served in accordance with the provisions of the Act, Rules and Regulations, would also be uploaded on the website of the Adjudicating Authority within 48 hours from the date of the pronouncement. The Adjudicating Authority shall also fix a specific date for pronouncement of orders in open Court in terms of Regulation 27.
Petition disposed off.
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2021 (1) TMI 569 - KARNATAKA HIGH COURT
Money Laundering - proceeds of crime - assets disproportionate to known source of income - existence of predicate offence or not - scheduled offence or not - direct allegations are leveled against the accused attracting the ingredients of the offence under section 3 of the PML Act - HELD THAT:- From the plain reading of section 3 read with section 2(1)(u) of the PML Act, it is clear that what is made punishable under section 3 is the activity connected with the proceeds of crime either by getting oneself involved in the process or activity connected thereto or directly or indirectly attempting to indulge or knowingly assist or knowingly be a party to the alleged activities and projecting it as untainted property. The prosecution under section 3 of the PML Act cannot be equated with the prosecution under section 13 of the PC Act. Both are distinct and separate offences. A reading of section 3 of PML Act would clearly indicate that even without there being any conviction of the accused in a predicate offence and even if the offender under section 3 of the PML Act is not a party to the predicate offence, still the prosecution could be launched against the offender, if he is found involved in any process or activity connected with the 'proceeds of crime'.
Since the allegations made in the complaint and the material produced in support thereof prima facie disclose ingredients of the above offences, the Trial Court was not justified in discharging the accused solely relying on the overruled decisions rendered by the High Court of Jharkhand and Delhi. The material on record clearly makes out sufficient grounds for proceeding against the accused. In that view of the matter, impugned order cannot be sustained.
Criminal Revision Petition is allowed.
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2021 (1) TMI 568 - KARNATAKA HIGH COURT
Money Laundering - provisional attachment order - proceeds of crime - existence of predicate offence or not - petitioner as well as the original accused filed their objections to the provisional attachment interalia contending that the properties acquired by the petitioner and her husband were not the "proceeds of crime" - It is the submission of learned counsel for the petitioner that prior to amendment of section 5 of PML Act, the provision postulated a charge for the schedule offence. But this requirement was done away with after the amendment Act 2 of 2013 w.e.f. 15.02.2013 - HELD THAT:- The prosecution under section 3 of the PML Act cannot be equated with the prosecution under section 13 of the PC Act or other offences specified in the Schedule namely IPC or other laws. They are distinct and separate offences. Prosecution under section 3 of PML Act is not based on the outcome of the trial of the offenders under section 13 of the PC Act. A reading of section 3 of PML Act in unamended form would clearly indicate that even without there being any conviction of the accused in a predicate offence and even if the offender under section 3 of the PML Act is not a party to the predicate offence, still the prosecution could be launched against him if the offender is found involved in any process or activity connected with the 'proceeds of crime'.
What is necessary to constitute the offence of money laundering is the existence of proceeds of crime and not the pendency of predicate offence as vehemently contended by the learned counsel appearing for the petitioner. This Court as well as various other Courts have analysed this provision and have consistently held that the offence under section 3 of the PML Act is an independent and stand alone offence. Therefore, the argument of learned counsel for petitioner that without the existence of predicate offence and without there being any conviction of the petitioner for the predicate offence, her prosecution for the offence of money-laundering cannot be sustained being contrary to the language of section 3 of the PML Act and the intendment of the Legislature in enacting section 3 of the PML Act and the allied provisions is liable to be rejected and is accordingly rejected.
Petition dismissed.
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2021 (1) TMI 556 - DELHI HIGH COURT
Levy of penalty - allegation is that the Petitioner has been held to be a “reporting entity” and a “payment system operator”, under Section 2(1)(wa) and Section 2(1)(rc) of the Prevention of Money Laundering Act, 2002 - case of the Petitioner is that it merely facilitates transactions and does not actually enter into any transactions with either of the parties conducting the same - HELD THAT:- This court is of the opinion that the question as to whether a business like the Petitioner’s, which is of recent origin in India. ought to fall within the ambit of a `payment system’ and whether the Petitioner would be a `payment system operator’ and a `reporting entity’, requires consideration.
A perusal of the RBI’s affidavit filed in another writ petition, shows that the stand of the RBI is that the Petitioner would not be attracted by the Payments and Settlements Scheme, under the PSS Act.
The stand of the RBI in the affidavit filed in another writ petition appears to be in contrast with the view taken in the impugned order. The RBI and Union of India ought to take a clear stand after due consultation as to whether they consider platforms such as that of the Petitioners as being within the purview of the PML Act. Accordingly, the Secretary, Ministry of Finance, is directed to constitute a Committee with a nominee of the RBI and the Ministry of Finance, to clarify their position as to whether companies like the Petitioners who claim to be facilitators of monetary transactions, both in foreign exchange and in Indian Rupees, ought to be categorised as “payment system operators” and hence “reporting entities” under the PML Act. Let the Committee meet within ten days and the conclusion of the Committee be filed, by way of an affidavit, within two weeks thereafter.
In the meantime, the Petitioner shall, henceforth, maintain records of all transactions under Section 12(1)(a) of the PML Act, in electronic form on a secure server, located in India, for the same to be retrieved, if required, subject to further orders in this writ petition.
List before the Registrar General for acceptance of the Bank Guarantee on 16th February, 2021. List this matter for further hearing on 26th February, 2021.
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2021 (1) TMI 259 - KERALA HIGH COURT
Petition filed challenging the summon issued - anticipation of threat and coercion during appearance - seeking direction to respondents to abstain from harassing, threatening or coercing the petitioners during questioning - seeking permission of presence of a legal practitioner - seeking to to limit the questioning time between 9.30 a.m and 4.30 p.m - seeking direction to respondents to provide copies of the statements taken from them.
HELD THAT:- The question regarding maintainability of writ petition against a summons under Section 50 and the entitlement to have the presence of a legal practitioner during questioning was considered and negated by this Court in C.M. RAVEENDRAN VERSUS UNION OF INDIA ASST. DIRECTOR, ENFORCEMENT DIRECTORATE [2020 (12) TMI 703 - KERALA HIGH COURT]. Therein, reliance was placed on the judgments of the Apex Court in KIRIT SHRIMANKAR VERSUS UNION OF INDIA AND OTHERS [2014 (12) TMI 150 - SUPREME COURT] and UNION OF INDIA AND ANOTHER VERSUS KUNISETTY SATYANARAYANA [2006 (11) TMI 543 - SUPREME COURT] - In Kirit Shrimankar, the petitioner had approached the Apex Court after the Customs officials conducted a search in the residential premises of his former wife. The petitioner alleged that he was threatened with arrest and incarceration if he did not submit to the dictates of the Customs Officials. The Apex Court observed that it was highly premature for the petitioner to seek remedy under Article 32 of the Constitution of India based on such flimsy averments, which cannot form the basis for a prima facie apprehension. Thereupon, the petitioner withdrew the writ petition. In Kunisetty Satyanarayana, the appellant had approached the court on being served with a show cause notice by his employer as to the genuineness of his caste certificate.
The decision of the High Court of Delhi in VIRBHADRA SINGH & ANOTHER VERSUS ENFORCEMENT DIRECTORATE & ANOTHER, CHUNNI LAL CHAUHAN VERSUS ASSISTANT DIRECTOR, ENFORCEMENT DIRECTORATE & ANOTHER, VIKRAMADITYA SINGH VERSUS ASSISTANT DIRECTOR, ENFORCEMENT DIRECTORATE AND PICHESWAR GADDE VERSUS ENFORCEMENT DIRECTORATE MINISTRY OF FINANCE & OTHERS [2017 (7) TMI 109 - DELHI HIGH COURT]], is to the effect that, no person is entitled in law to evade the command of the summons issued under Section 50 of the Act on the ground of a possibility of such person being prosecuted in future.
Hence, the legal position is that a person issued with summons under Section 50(2) of the Act is bound to appear in person or through authorised agents, as the case may be and to state the truth upon any subject respecting which he is examined and that, no cause of action arises merely for reason of a person being thus summoned - As held by the Apex Court in DUKHISHYAM BENUPANI VERSUS ARUN KUMAR BAJORIA [1997 (11) TMI 428 - SUPREME COURT], it is not for this Court to monitor the investigation and to decide the venue, the timings, the questions and the manner of questioning.
Petition dismissed.
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2021 (1) TMI 182 - ATPMLA
Maintainability of appeal - competency of Assistant Director to file the appeal - scope of Deputy Director - section 2(1)(c),2(1)(j) & 2(1)(k) of PMLA Act - It is submitted by respondent that no other person or authorities other than authorized authority under the Act can prefer an appeal and that reference has made to the title of the appeal and the affidavit thereto - HELD THAT:- Section 2(1)(c) has defined the word ‘the Assistant Director’ whereas section 2(1)(j) defined the word ‘Deputy Director’ and section 2(1)(k) has defined the words ‘Director, Additional Director and Joint Director. They are being defined as the authorities appointed under sub-section 1 of 49 of the said Act. Section 48 of the said Act specified the classes of authorities for the purpose of the PMLA, 2002(the said Act.). The Director or Additional Director or Joint Director have been put under the same class in sub clause (a) whereas the Deputy Director, and Assistant Director have been placed under sub-clause (b) and (c) of the section 48 of the said Act. If the section 2(1)(k) is read with section 48(a) of the said Act, it is clear that the Director, Additional Director and Joint Director are put in the same classes of authority for the purpose of this Act, so the decision taken by the Joint Director with the approval of the Special Director (Special Director is higher in rank than Additional Director in the hierarchy of the Enforcement Directorate) to file appeal is not contrary to the provisions of PMLA, 2002. It is not that for each and every case to file appeal before this Appellate Tribunal the Director who is the head of Enforcement Directorate is to take a decision to file appeal. If any of the officers in the same class of officer (section 48(a) of the said Act) has taken a decision to file an appeal then in my considered view there is no illegality.
In this particular appeal, it is the department who is aggrieved and who has filed the appeal. Since, the decision has been taken at the level of Special Director, Kolkata, that the Assistant Director/I.O. to file the appeal, it is nothing but a ministerial work to be performed by the Assistant Director. The ld. counsel for the respondent no. 2 has raised strong objection to the statement mentioned in para 2 of In the Affidavit to the memo of appeal and submitted that Assistant Director is not competent. I do not agree with the aforesaid submission of the ld. counsel for the respondent no. 2 on the ground that the Assistant Director, Mr. Sudarshan Ghosh, who is the investigating officer of this case has been duly authorized with the approval of the authority of the level of Special Director to file the appeal vide internal note dated 22.11.2019. The ld. counsel for the respondent nos 2 & 14 have not disputed the genuineness of the said internal note. The only dispute they have raised is that the Assistant Director ought not to have been authorized to file the appeal. Right from beginning from the stage of the registration of case till its logical conclusion it is the Enforcement Directorate, the investigating agency under PMLA, is involved.
Merely saying that since the filing of appeal by an Assistant Director is contrary to law and therefore they are prejudiced is not sufficient - Raising of objection without showing substantial prejudice being caused on account of procedural lapse as prescribed under the Act is not sufficient in the given present facts and circumstance of the case particularly when the department itself has filed the appeal through its authority i.e. the Assistant Director, who is being duly authorized by the competent authority of the same class of ‘the Director’.
The PMLA, 2002 has provided two forum of appeal relating to have attachment, one forum is Appellate Tribunal constituted u/s 25 of the said Act and the second appeal lie to High Court u/s 42 of the said Act - Under section 26(1) of the said Act, the word ‘the Director’ is appearing where as no authority is specifically named under section 42 of the said Act. That does not mean neither the Director nor any of the other classes of authorities as prescribed under section 48 or 49 of the Act are eligible to file appeal before the Hon’ble High Courts. Appeals are being filed by the ED under section 42 of the said Act before High Courts through either of the class of authorities as specified under section 48 of the said Act read with the notification GSR. 441(E) dated 01.07.2005. It is not that always the director is signing the appeal and the affidavit therein.
The appeal is maintainable - With the consent of both the parties list the appeal on 18th January, 2021.
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2021 (1) TMI 68 - ATPMLA
Money laundering - seeking release of provisionally attached mortgaged properties (flats) - proceeds of crime - assignment of debts due and payable by borrowers including the loan in favour of the appellant - case of appellant is that the mortgaged properties were purchased by the borrowers when no such alleged scheduled offence were in the picture and that the title deeds have duly been registered and stamped which makes it further clear that the properties were not acquired from the proceed of crime - HELD THAT:- As per the submission of appellant it appears that no order on appellant’s application for substitution has been passed nor the contention raised in the reply, oral arguments advanced and the written submissions filed by the appellant is found placed in the impugned order. The Adjudicating Authority in the internal page 306 to 311 of the impugned order has reflected only the reply/written submissions filed on behalf of Defendant No. 58 i.e. (M/s. Bajaj Finance Limited) wherein it is specifically mentioned in internal page no. 311 para (ix) that the present appellant has been assigned with the loan account and Bajaj Finance Co. Ltd. no longer has any rights, title interest in the Mumbai properties - the Adjudicating Authority neither passed any order of substitution of substituting the present appellant in place of Defendant No. 58.
There appears to be non-compliance of the provisions of Sections 8(1) and 8(2)(b) of PMLA, 2002 read with proviso to Section 8(2) of the PMLA, 2002 and also there is violation of principle of natural justice.
It appears that the Adjudicating Authority ought to have substituted the present appellant in place of M/s. Bajaj Finance Ltd. and should have considered the submissions made by the present appellant and should have dealt with the same in accordance with law. Having not done so the impugned order, qua the appellant and qua the properties involved herein, is illegal and, therefore, liable to be set aside.
The case is remanded to the Adjudicating Authority for re-adjudication of the case qua the appellants and qua the properties involved herein - Appeal allowed y way of remand.
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