TMI Blog2015 (5) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... garding the interest of the revenue also so that the proceeds of crime are not frittered away. The parties have to be given a reasonable level playing field. This cannot be achieved by permitting oral applications thus depriving the respondents an opportunity of meeting the petitioner's case in a reasonable manner. Admittedly, under 17(4) of the PMLA, an application has been filed on 11.02.2015 (Annexure R-11) for retention of the records and the property seized by the Deputy Director in which details have been given of 108 bank accounts and various immovable properties owned in Himachal Pardesh owned by Shri Mukesh Mittal and his associates. The said adjudicating authority has issued notice dated 23.02.2015 (Annexure R-12 colly) to the petitioner as to why the said documents seized or frozen should not be retained as involved in money laundering and required for the purpose of investigation. A similar notice had also been issued to the husband of the petitioner to put in appearance apart from 43 other defendants. Normally and in the first instance, it is for the adjudicating authority to decide whether the order of freezing is to continue or not under Section 8(3) and in such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. More important there are no pleadings in support of the oral application. Even the evidence in respect thereof was only tendered across the bar. Further, still there was not even an application for amending the writ petition. We do not refuse to entertain the oral application for reliefs other than those that form the subject matter of the petition on a mere technicality. The nature of the reliefs sought would require detailed investigation of facts many of which are disputed. To allow such an oral application would be undesirable especially in view of the nature of this case. It would also be unfair to the respondents. They must have an opportunity of dealing with the application and the documents on affidavit. 4. As Mr. Bansal pressed the application strongly, we will refer to the oral application and the facts only to substantiate the above and without expressing a final opinion on the merits in respect thereof. 5. Mr. Bansal suggested that the reliefs can be considered on the basis of the pleadings in the Writ Petition as they are. 6. The first question that arises, therefore, is whether any challenge has been raised in the writ petition with respect to the freezing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough the reliefs were not sought in respect thereof. He, however, insisted that we ought to consider the application even with respect to such assets. 8. We will refer to a few facts only to indicate the issues involved and the complexity in the matter. The same, in our opinion, would warrant a consideration of the submissions and an application for reliefs to be made by a proper pleading and not orally across the bar. It is essential for this matter that all the facts in relation to the application are introduced in pleadings and not orally across the bar. 9. The pleaded case of the petitioner is that an FIR bearing no. 4 dated 22.07.2009 was registered under Sections 419, 420, 467, 468, 471 and 120-B IPC at P.S. Vigilance, Chandigarh against 4 accused regarding the transfer of shop-cum-flat no. 8, Sector 20-C, Chandigarh in favour of one O.P. Mittal, who was the tenant. In the investigation, a report dated 26.10.2009 had also been filed against her husband namely Sh. Gurvinder Singh Sawhney. It was alleged that on the basis of the said FIR and police report, the respondent-Directorate initiated an investigation bearing No. ECIR/CDS0/05/2013 under PMLA. Summons were issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o sell the property and the husband of the petitioner had received the amount from Harnek Singh through cheques. The property had further been sold in favour of the tenant on the basis of the said power of attorney. In such circumstances, summons were issued to the husband of the petitioner under the provisions of Section 50 and record was called for to trace the proceeds of the crime under the provisions of the PMLA. The son of the tenant had also been summoned but the husband of the petitioner was not cooperating. The details were obtained from the concerned authorities including the charge sheet from the Courts and the record of the Estate Officer was scrutinized and the said ECIR was registered. It was noticed that Harnek Singh, who was working as a Clerk with the husband of the petitioner had received a sum of ₹ 34.50 lacs from the tenant and out of that sum, ₹ 34.46 lacs had been received by the husband of the petitioner through two blank cheques on 22.01.2009 and 28.01.2009 and in such circumstances, summons had been issued to him but he was not appearing and seeking adjournments which were also granted to him. 11. For the interest of the revenue, the bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17(1A) passed by the Deputy Director was also placed on record vide which the accounts mentioned above were frozen except the account in question. 14. Thereafter, the latest status of the investigation report dated 12.02.2015 conducted was also placed on record through the Assistant Director. It was mentioned in the report that the husband of the petitioner was not cooperating and there were 4 other bank accounts in the name of the petitioner which were not disclosed by them earlier and details had been sought. The petitioner's husband was not giving the details of the receipt of the payment of ₹ 75 lacs and that he had submitted his reply and on 04.02.2015 and given proof of purchase of flat at Jal Vayu Vihar, Mohali and two documents signed by one Mrs. Manpreet Kaur Chadha and Inderjeet Kaur Narula without mentioning the address of the signatory and without supplying the copy of the income tax returns. The flat at Jal Vayu Vihar, Mohali had been sold and the copy of the sale deed had not been submitted. A reference was made to one deal struck for ₹ 75 lacs and as per the conversation recorded with Sh. Mukesh Mittal, Advocate, who had asked the husband of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.2015 after information had been received from the bank and the matter had been brought to the notice of the adjudicating authority on 11.02.2015 well within the prescribed period of 30 days. The show cause notice had been issued by the adjudicating authority on 23.02.2015 and it was open to the petitioner to submit his grievances before the adjudicating authority who was to finally decide whether to confirm the final attachment of the property and continue with the same. It was further submitted that the order passed by the adjudicating authority could be challenged in appeal and, therefore, this Court would not exercise its discretion at this point of time. It was further argued that reasons had been duly recorded before the competent authority had passed the order dated 14.01.2015 and the original record was produced for perusal. 18. The second issue which arises for consideration on Mr. Bansal's oral application is whether the concerned accounts were frozen vide order dated 12.09.2014 (Annexure P-4) or 15.09.2014 (Annexure R-7) or 04.12.2014 (Annexure R-10) or by the order dated 14.01.2015 (Annexure P-8) and whether it was done by the competent authority namely the Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk wherein, apart from account no. 1370 equivalent to new A/c. No. 1956922067, information of the joint account of the couple was also asked for by the Assistant Director. A condition was also put that no withdrawals or debits be allowed from the account/FDRs, lockers, if any without clearance from the Directorate. The relevant portion of Annexure R-7 reads as under:- Sub: Investigation under PMLA-2002 against Shri G.S. Sawhney, Harnek Singh and Others- In connection with investigations being conducted under the provisions of the Prevention of Money Laundering Act, 2002 (15 of 2003) by this Directorate in the subject case, it is required that the following documents/information in respect of the under noted accounts being maintained in your bank may please be provide on top priority basis, latest by 19.09.2014 positively: S. No. Name of the Account Holder Account Number 1 Mr. Gurwinder Singh Sawhney Sudeep Kaur Sawhney 1956922067 2 Shri G.S. Sawhney 1370 02. Please furnish certified copies of Account op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. S.K. Sawhney have been asked to submit the source of investments made by them in these accounts. Documents in support of her investment have not been furnished by Sh. G.S. Sawhney so far. A nominal balance i.e. ₹ 2,074/- only is lying with the A/c No. 1956915673 of Smt. S.K. Sawhney and there is no reason to be continued with freezing this account. It is further requested you to continue freeze all above FDRs and Saving Bank account of Sh. G.S. Sawhney (A/c No. 1956922067). 24. The factual matrix thus being clear, the arguments raised can accordingly be dealt with. 25. The challenge in the petition is only to the freezing of Account No. 1956915673 and it is relevant to mention that not a whisper was made in the writ petition that apart from this account, the petitioner had other accounts with the bank including one joint account mentioned in the table set out above in which a sum of ₹ 1,61,380/- was there along with her husband. Similarly, six FDRs in which various amounts varying from a sum of ₹ 2,00,000/- to more than ₹ 8,00,000/- had been lying with the bank had never been mentioned and neither any averment had been made that the said amounts wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or the said Officer had been under a misconception that the accounts had been frozen. It was then rightly submitted that it is settled principle that an action by an officer not authorized to pass an order cannot be held to be an order passed with jurisdiction and, therefore, the earlier orders dated 15.09.2014 and 04.12.2014 or the communication of the bank dated 12.09.2014 (Annexure P-4) cannot be said to be statutory freezing orders. Accordingly once the statutory order thus was only passed 14.01.2015 (Annexure P-8) and once the reasons have been recorded, no fault can be found in the action of the Directorate and the rival contentions can be raised at the hearing of properly instituted proceedings. 27. The matter was processed by the authority as per the detailed reasons recorded, which go on to show that there is a clear cut reasoning given that apart from the amount of Rs.35 lacs which has changed hands, another deal of Rs.40 lacs was made of this property which was paid in cash. Whether the same had been returned or not and how many people were involved in the said case and in similar cases of cheating has still to be gone into. In the reasons recorded, details of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crime are kept; (b) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not available; (c) seize any record or property found as a result of such search; (d) place marks of identification on such record or 4 [property, if required or] make or cause to be made extracts or copies therefrom; (e) make a note or an inventory of such record or property; (f) examine on oath any person, who is found to be in possession or control of any record or property, in respect of all matters relevant for the purposes of any investigation under this Act: 5 [Provided that no search shall be conducted unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 157 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or in cases where such report is not required to be forwarded, a similar report of information received or otherwise has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... safe guards have to be kept in mind to check its abuse and limit its exercise. However, a balance has to be maintained between the right of the citizen and the right of the investigating agency which cannot be restricted as it is the duty of the said agency to unearth and find out the modus operandi resorted to by the noticees and the beneficiaries of the proceeds of the crime. This exercise is thus to be adjudicated upon by the adjudicating authority before whom the complaint has thus to be filed expeditiously within a period of 30 days of the freezing under Section 17(4) of the PMLA and which has been done in the present case. It is trite law that the right of investigation cannot as such be trampled upon by this Court and the purpose of freezing cannot be ignored regarding the interest of the revenue also so that the proceeds of crime are not frittered away. The parties have to be given a reasonable level playing field. This cannot be achieved by permitting oral applications thus depriving the respondents an opportunity of meeting the petitioner's case in a reasonable manner. 30. Lastly, question arises whether this Court is to scrutinize the source of the funds and wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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