TMI Blog2017 (6) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 132 read with Section 132B to require RBL to issue a DD favouring the Department for the balance sum lying in the account that has been frozen? - Held that:- The assertion by both sets of Petitioners that this is ‘realization’ of the debt owed by the bank to the Petitioners and that the amount therein cannot be transferred to the Department is based on an incorrect understanding of the legal position under Section 281B of the Act. The said provision states that in order to protect the interests of the Revenue, it may be necessary to go in for a provisional attachment. Therefore, the direction issued to RBL by the Department does not mean that the money is finally taken over by the Revenue. It will undoubtedly be kept in a suspense account like a PD Account to await the final orders in the assessment proceedings and the issues raised as a consequence thereof. For this purpose, as already observed, the argument that this does not constitute ‘assets’ or ‘money’ within the meaning of Section 132(1) read with Section 133 of the Act has not merit. The decisions citied by learned counsel for the Petitioners do not appear to have discussed the purport of Section 281B of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess i.e., A-49, Mohan Cooperative Industrial Area, New Delhi 110044. 3. The Respondents in this petition are Ratnakar Bank Ltd. ( RBL ) and the Income Tax Department ( the Department ) (Respondents 1 and 2 respectively). 4. In W.P.(C) No.2375/2017, the Petitioner is Ms. Veena Singh. The Respondents are the Director of Income Tax (Investigation)-I ( DIT ), Assistant Director of Income Tax (Investigation), Unit 7(3) ( ADIT ), Income Tax Officer (Investigation), Special Cell ( ITO ) and the Bank Manager of RBL (Respondents No. 1 to 4 respectively). Search and survey 5. Both these petitions have been filed as a result of search, seizure and survey that was undertaken under Section 132(1) of the Income Tax Act ( the Act ) by the Department on 11th January, 2017 at the residences of Mr. Mohnish Mohan Mukkar at Satbari, New Delhi, Kailash Colony and South Extension, Part-I and Vasant Kunj in New Delhi, and on 4th February, 2017 at Chembur in Mumbai. A survey under Section 133A of the Act was conducted on 11th January, 2017 and 4th February, 2017 at Karol Bagh and Rajouri Garden Branches of RBL in Delhi, Kohinoor Magnetic Media Pvt. Ltd. and the 8 Petitioner companies [i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is submitted that no action could have been initiated under Section 132(3) without there being any action initiated under Section 132. It is averred that no liability has been established against the Petitioners with there being no tax demand upon them and that even a Show Cause Notice ( SCN ) has not been issued. 7.5 It is averred in para 9 that on the evening of 7th February 2017, the Petitioners came to know through messages from the Bank (RBL) that their accounts had been debited by ₹ 37,66,842.50 as per income tax notice and net balance was Re.0. There was another message debiting ₹ 7,93,478. Further demand drafts ( DDs ) in favour of the Department were prepared. It is pointed out that on 7th February, 2017 itself, the Petitioners through their counsel wrote to RBL requesting it not to honour the DDs. It is stated that the Petitioners owe monies to other entities in respect of the loans availed by the Petitioners and that it was not open to the Department to have debited their accounts. It is averred that the said monies were proceeds of the loans taken from other entities . 7.6 In para 11, the Petitioners have listed out the account numbers of the Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h April, 2017, a representation has been received by the Department from the Petitioners under the proviso to Section 132B of the Act. He stated that the said representation would be examined and appropriate orders would be filed not later than 2 weeks from that date. The Court directed that a copy of the said decision to be placed on record before the next date and adjourned the case to 17th May, 2017. The interim orders were directed to continue till the next date. 7.10 On 17th May, 2017, the counsel for the Department informed the Court that the above representation of the Petitioners had been disposed of. The counter-affidavits had already been filed by the Department. The Petitioners were permitted to file a rejoinder by the next date. The Court, while directing the interim orders to continue, adjourned the case to 25th May, 2017. Stand of RBL 8.1 RBL has filed a separate counter-affidavit in W.P. (C) 1180 of 2017 confirming that the companies had opened accounts with it. It is pointed out that the impleadment of RBL was misconceived and unwarranted since the grievance of the Petitioners was against the Department. RBL, without prejudice to the foregoing submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded under Section 131 of the Act on 1st February, 2017 and under Section 132(4) of the Act on oath on 4th February, 2017 has been enclosed. (c) Mr. Raj Kumar Sehgal who is stated to be the Company Secretary of the group of companies controlled by Mr. Mukkar. (d) Ms. Deepika Bajaj an employee of EFPL (Petitioner No. 5 in W.P. (C) 1180 of 2017) and looked after the administrative matters of various companies registered at A-49, Mohan Cooperative Industrial Area, Delhi. 9.2 It is stated, however, that in his statements made on oath during the search and survey proceedings, Mr. Mukkar gave false and misleading statements by denying that he had no active role in the day-to-day management of the Petitioner companies. It is further stated that during the search and survey proceedings, Mr. Mukkar as well as the other key associates had claimed that the web of companies were ultimately held by Elfington Trusts and/or Independent Trustees and Executors Private Limited (hereinafter referred to collectively as Trusts ) which were for the benefit of Mr.Jeh Mukkar, who is the minor son of Mr. Mukkar. However, they had failed to produce any documents to that end (like incorpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorized signatory of bank accounts of these eight companies, and Mr.Mukkar and/or Ms.Kiran Shiv Mukkar (mother of Mr. Mukkar) were the beneficial owners. The details received from RBL are set out in para 4.6.2 of the counter-affidavit as Table-5 and enclosed as Annexure R-9 to the counter-affidavit. 9.6 The Branch Manager of RBL is supposed to have provided information to the Department that Rule 9(1A) of the Prevention of Money Laundering Rules, 2005 (hereinafter referred to as PML Rules ) required every banking company to identify the beneficial owner and to take reasonable steps to verify its identity. It was explained that Rule 9(1A) of the PML Rules, 2005 requires that every banking company, and financial institution, as the case may be, shall identify the beneficial owner and take all reasonable steps to verify his identity. The term beneficial owner has been defined as the natural person who ultimately owns or controls a client and / or the person on whose behalf the transaction is being conducted, and includes a person who exercises ultimate effective control over a juridical person. It was further explained that the Government of India had specified the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai. This was followed by search and survey operation at the residential and office premises of Mr. Nair in Mumbai where he finally admitted that the books of accounts of all the companies controlled by Mr. Mukkar (including the Petitioner companies registered at A-49, Mohan Cooperative Industrial Estate) were maintained by Mr.Nair at his office in Chembur Naka, Mumbai. The counter-affidavit sets out the relevant portion of the said statement of Mr. Nair. The Department, accordingly, states that there was a wilful and deliberate attempt to prevent the Department from accessing the books of accounts of the Petitioner companies even though sufficient time and opportunity was granted to the Petitioners. 9.10 The counter-affidavit provides a summary of the statement made by Mr. Nair on 18th January, 2017 and the submission made through his AR. In this, he states that source of cash totalling ₹ 15 crores was received by PFHPL from DCHL. When he next appeared on 24th January, 2017 before the Department, the AR of Mr.Nair submitted covering letters stating that Mr. Mukkar was merely an advisor to a company named Halcyon Asia Support Private Limited ( Halcyon Asia ) and played ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the address mentioned in the PoA for both Mr. Jadaun and Mr. Pachauri was H-II, Madangir, New Delhi, summons under Section 131(1A) of the Act were issued on the above address and field enquiries were also made. This address was found to be incomplete and the correct address was House No.309, H-II, Madangir, New Delhi. Thereafter, submissions were recorded of both Mr. Pachauri and Mr. Jadaun between 27th January, 2017 and 30th January, 2017. 9.15 The Department states that as far as Mr. Pachauri was concerned, he was 24 years old, a Class XII pass and he did not know English; he could only sign his name in English; he got his statement recorded in Hindi; he denied signing the PoA on 19th January, 2017; did not know the names of the other Directors of the Companies in which he was a Director except Mr. Jadaun who was his childhood friend. He was employed by Mr. Sehgal (the Company Secretary for the Petitioner companies) for ₹ 12,000/- per month for signing as Director for various companies. He was not aware of the names of these companies; did not know either Mr.Praveen Kumar Pandey or Kumra Bhati Co. (the AR) and denied having signed the PoA. In fact he asserted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the counter-affidavit. The gross total income of 5 of the companies is ₹ 0. PRDPL is shown to have filed no returns. PFHIPL filed a return for AYs 2015-16 and 2016-17 on 14th February, 2017 disclosing a grand income of ₹ 2,06,46,794 and SCCPL on 2nd February, 2017 for the aforementioned AYs showing a total income of ₹ 20,29,344 and ₹ 16,32,462 respectively. From the Ministry of Corporate Affairs database it was revealed that the Petitioner companies had also defaulted on a regular basis in filing their mandatory forms and details under the Companies Act, 2013. 9.19 It is stated by the Department that pursuant to the summons issued under Section 131(1A) of the Act to DCHL on 25th January, 2017, it informed the Department by a letter dated 2nd February, 2017 that from 3rd October, 2012 till 22nd August, 2013 ₹ 10.50 crores (net of TDS) was paid to PFHIPL through bank transfers and no cash payment was made till the date of submission of the reply to the Department. 9.20 The Department states that the bank records at RBL showed that Mr. Mukkar was the beneficial owner of the bank account of the companies including the Petitioner companies. On the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question. 9.23 The Department filed an additional affidavit on 15th May, 2017 enclosing a copy of the order passed on 2nd May, 2017 in the case of PRDPL, 3rd May, 2017 in the case of EFPL, PFHIPL, LIIL, LERL, SSCPL and EFERL, and 4th May, 2017 in the case of LIPL under Section 132B of the Act by the Income Tax Officer. In each of these orders, the request for lifting of the restraint was declined since the source of funds had not been satisfactorily explained and therefore, the funds were unaccounted and unexplained. Thus, there being no outstanding tax liability or pending assessment was immaterial . Each of these orders is a detailed one which need not be further set out in the present proceedings. Rejoinder of the Petitioners in W.P. (C) 1180 of 2017 10.1 In Writ Petition (C) No. 1180 of 2017, a rejoinder has been filed on 16th May, 2017 to the Department's counter-affidavit. The rejoinder is supported by the affidavit of Mr. Praveen Pandey giving his address as A-115, South City 2, Gurugram, Haryana. It is stated that the Department has tried to build a lot of prejudice by attempting to link the companies with Mr. Mohnish Mukkar. The rejoinder then proceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... until further orders of the Taxing recovery Officer. It is stated that there is no power for an actual debit to the bank account and realization of the debt by a third party such as the Department. 10.5 It is submitted by the Petitioners that under the second proviso to Section 132B(1) of the Act, the seizure cannot exist beyond 120 days. Since 120 days have already lapsed from 11th January, 2017, there is no justification for continuing the restraint on the Petitioner s bank account. 10.6 The rejoinder then sets out the details of the (i) the nature of the activities of the Petitioner and the revenue stream; (ii) relevant facts leading to the deposit of cash and search and seizure of relevant documents; (iii) cooperation extended by Petitioners during and post search; and (iv) question of law regarding competence of the Department in directing RBL to issue DDs without an ascertained tax demand against the Petitioners. 10.7 While these details need not be discussed at this stage, it is significant that for the first time the Petitioners disclose that they can be divided into two groups of companies i.e., non-banking financial companies ( NBFCs ) and Special Purpose Vehicl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed having its registered office at A-49, Mohan Industrial Co-operative Estate, Mathura Road, New Delhi. Mr. Mohnish Mukkar serves as the principal Strategic Advisor to Halcyon Asia Support Services Private Limited. 10.9 The rejoinder sets out elaborately the past business relationship with DHCL and the litigation involving it and seeks to explain the source of the cash of ₹ 15 crores in cash which was received by Petitioner No.4 (PFHIPL), out of which ₹ 13.43 crores was made available by it to Petitioner Nos. 2 (LERL), 3 (LIIL) and 6 (LIPL). In para 8 of the rejoinder as regards Mr. Mukkar, attention is drawn to ground h of the writ petition, wherein the Petitioners have specifically stated that Mr. Mohnish Mohan Mukkar is neither a shareholder nor a director in any of the Petitioners. It is asserted that the Department's counter-affidavit nowhere mentions or establishes Mr. Mohnish Mohan Mukkar to be a Director or shareholder in any of the Petitioners. 10.10 It should be recalled at this stage that para 4.6.2.II of the Department's counter-affidavit sets out in Table 5 the details obtained from RBL showing that Beneficial Owner No.1 of the accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all! 10.13. The Petitioners have not filed a rejoinder to the counter-affidavit filed by RBL. The averments in that affidavit, therefore, remain uncontroverted. 11.1 Additionally, Petitioner Nos. 2, 3 and 6 have filed a reply to the Department's additional affidavit. This is again supported by the affidavit of Mr. Praveen Pandey who now gives his address as resident of A-115, South City 2, Gurugram, Haryana. This reply starts by stating that it is well settled that the Petitioners 2, 3 and 6 received funds and cash from Petitioner No.4 Participation Finance Holding India Pvt. Ltd. and that it is undisputed that Petitioners No. 2, 3 and 6deposited the cash, which was reflected in their books of accounts and ledgers, much prior to act of demonetization and also confirmed on their balance sheets as confirmed on September 6, 2017? ... in their respective accounts in RBL Bank in Karol Bagh 11.2 It is stated that since RBL had placed limits on the amounts that could be deposited in a single day, funds were deposited on different dates i.e., 10th, 11th, 12th and 13th November, 2016. It is clear that appropriate disclosures regarding the cash deposits were made in a t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on numerous occasions, but, has not been taken on record. Annexure. There is in fact no such Annexure. In para 7 of this rejoinder statement, it is averred that DCHL had clearly evaded the question posed by the Department in order to avoid other sanctions or reopen a criminal case, which they desperately want closed. 11.6 A reference is made to the written confirmations/sworn affidavits by Mr. T. Venkattram Reddy, the Chairman of DCHL, in proceedings in this Court and in arbitration proceedings. It is averred, therefore, that this evidence being relied upon by Respondent No.2 was completely in apposite to the other uncontroversial record placed before Respondent No. 2 and, therefore, cannot form the basis of any review. It is stated that this one-off cash dealing was an aberration against the backdrop of extreme circumstances, which cannot be ignored, as they have been. Having established the source, Petitioner No. 4 believes a review of the tax liability, if any, arising out of the receipt of the cash in the hands of the Petitioner No. 4 becomes integral to the disposition of this instant proceeding. The attempt of Petitioner No.4 has been to show that its income in 2015-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingh Jadaun. There is a further resolution dated 8th February, 2017 passed in the meeting of PFHIPL held on 16th January, 2017 authorising Mr. Pandey to execute documents etc. This, too, has been notarised by Mr. Kamlesh Sharma on 19th May, 2017. There is another similar Affidavit Ratification as well as a copy of the board resolution in respect of EFPL dated 10th May, 2017 signed by Mr. Jadaun. 11.10 Another document titled Affidavit Ratification on behalf of LIPL has purportedly been executed by Mr. Lokesh Pachauri (Affiant No. 1) and Mr. Ram Murti Kumar (Affiant No. 2) stating that an additional board resolution was provided to Mr. Pandey on 10th May, 2017. This has also been attested by Mr. Kamlesh Sharma, Notary Public on 19th May, 2017. None of these notarised papers show that there was any identification of signature in front of the Notary. There is a GPA of Mr. Jadaun where he states that he is 22 years old, residing at H-II, Madangiri, New Delhi 110062 and appoints Mr. Praveen Kumar Pandey, having office at Ch. No. 547, Lawyers Block, Saket Court Complex, New Delhi, as his legal attorney. This, too, has been attested by Mr. Kamlesh Sharma on 19th January, 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017. 12.3 Ms. Singh states that on 2nd March, 2017, her premises was searched, the almirah was opened, the contents thereof (cash of ₹ 6,02,000/-) was seized and the same almirah was put under restraint under Section 132(3) of the Act. In the evening of 10th March, 2017 Ms. Singh received an automated SMS from RBL intimating withdrawal of funds from savings accounts in the sum of ₹ 77,53,177/-. She contends that all the actions were taken in haste by the Department with no outstanding tax liabilities/pending assessment demand against her and, therefore, it was without the authority of law. 12.4 Para 3 of the writ petition sets out the grounds. These are more or less on the same lines as in W.P.(C) No. 1180 of 2017. Here, additionally, it is urged that the actions of the Respondents are arbitrary, perverse, malafide, unreasonable and also in violation of Article 300A of the Constitution of India. It is stated that restraint was placed on the Petitioner's account when the object of the search was the undisclosed income of Mr. Mukkar. 12.5 The prayer in W.P. (C) 2375 of 2017 filed on 14th March, 2017, is that the Court should quash and set aside the actions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 and in her preliminary statement under Section 131 of the Act. 13.3 The Department states that her AR submitted that ₹ 2 crores were received as a personal loan from EFERL. However, this was not supported by any documents like a Loan Agreement etc. The confirmation on behalf of EFERL was signed by Mr. Praveen Pandey as AR. The Directors of EFERL were Ms. Padmavathy and Mr. Jadaun. Mr. Jadaun had in his statement on 30th January, 2017 denied signing any GPA in favour of Mr. Pandey. The confirmation of having given the loan to her was signed by Mr. Pandey. Since the source of money lying in the account of EFERL, PFHIPL and EFPL could not be satisfactorily explained by those companies, the money was seized; and the money lying in Ms. Singh s account was nothing but part of the unexplained money in the above accounts. These companies were controlled by Mr. Mukkar and that is how her account was also seized. Rejoinder of Ms. Veena Singh 14.1 A rejoinder affidavit has been filed by Veena Singh where there is a broad general denial of what has been stated in the counter-affidavit filed by the Department. She seeks to explain amounts found in her bank account as ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o with Mr. Mohnish Mohan Mukkar. 16. Mr. Kaushik also referred to the fact that the statement of Mr. Jadaun and Mr. Pachauri denying that they had signed a GPA authorising Mr. Pandey raised serious doubts whether Mr. Pandey could have sworn to the affidavit in support of the petition. He pointed out that it was now sought to be projected that Mr. Praveen Pandey was authorised by the GPA dated 18th January, 2017 and a board resolution dated 8th February, 2017. Although the stamp paper is dated 19th May, 2017, the document has been signed by Mr. Jadaun on 18th May, 2017. 17. A reference was made by Mr. Kaushik to Section 85 of the Evidence Act, 1872 ( EA ) under which the Court presumes that every document pertaining to a PoA is genuine if it has been executed before and authenticated by a Notary Public. The GPA was signed on 18thJanuary, 2017 on a stamp paper of 19thJanuary, 2017 and attested both on 19th January and on 19th May, 2017 with the executants not being identified by anyone and there being no witnesses. Therefore, this could not be a valid GPA. He also pointed out that the signatures of Mr. Jadaun in the board resolution, in the Aadhar Card and GPA are all different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uspa Ranjan Sahoo v. Assistant Director of Income Tax (2012) 252 CTR 113 (Orissa) to urge that during the course of the search there could not be an attachment of the assets of a person other than the searched person much less any direction issued that the money lying in any bank account should be transferred to the Department. Unless the tax liability is finally quantified, an Assessing Officer ( AO ) could only retain in his capacity such assets as in his opinion would satisfy the amounts referred to in Clauses 2and 3 of Section 132. He submitted that the said provision did not confer any authority to release assets and to convert them into cash. 22. Mr. Lakshmikumaran, learned counsel appearing for Ms. Veena Singh, reiterated the stand taken by her in the writ petition and in her rejoinder. He sought to urge the fact that Ms. Singh mentioning nothing at all in the petition in the first instance about being an associate of Mr. Mukkar cannot be construed as suppression of a material fact. In the factual submissions tendered on 26th May, 2017, apart from stating that she renders professional services to EFPL, Ms. Singh admitted that she was also an authorised signatory of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce as per the requirements of the Bank, a minor could not be described as a beneficial owner, the Bank suo motu added the names of Mrs. Kiran Shiv Mohan and/or Mr. Mohnish Mukkar as beneficial owners, as per the e-mail trail. A reference is made to some exchanges of SMS between one Mr. Anuj Mehra, a representative of RBL and Mr. Mohnish Mohan Mukkar about Master Jeh Mohnish Mukkar being the beneficial owner. 26. The attempt in this note of factual submissions is to show that the bank accounts of the Petitioners cannot be regarded as benami of Mr. Mukkar and that each of these companies has a separate legal existence and that Mr. Mukkar has no personal ownership interest nor is he in charge of the affairs of the Petitioners in a fiduciary or advisory capacity. It is stated that he has not conducted any affairs of the Petitioners in his personal capacity. An alternative prayer is made that at least the funds of EFERL which are the proceeds of the joint venture for debt restructuring with Religare Finvest Ltd. should be released as that is causing irreparable financial harm to the Petitioners. Suppression of material facts by the Petitioners 27.The first issue that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the said entities have no relation to Mr. Mohnish Mohan Mukkar in his personal capacity, and Mr. Mukkar is neither a shareholder nor a Director in the said companies . The Petitioners presumed they were being clever by using the words personal capacity and adding that Mr. Mukkar was neither a shareholder nor a Director in their companies. That these disclaimers were made with a view to mislead the Court into believing that the Petitioner had nothing to do with Mr. Mukkar is apparent in light of the details provided by RBL to the Department which show that in the nine accounts maintained with RBL of these 8 companies, Mr. Mukkar is Beneficial Owner No.1 in eight of them and his mother in the ninth account. 32. Even after the Department pointed this out and set out the details in Table 5 and annexed the actual document provided by RBL as Annexure R9 to its counter-affidavit, the Petitioners glibly maintained in their rejoinder that the table merely depicts the cash balance and is in fact misleading as it portrays Mr. Mohnish Mohan Mukkar as the beneficial owner and which is factually incorrect in terms of Rule 9-A(l) of the Prevention of Money Laundering (Maintenance of Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... davit on more than one occasion in these proceedings. 36. The brazenness of the conduct of the Petitioners in W.P. (C) No. 1180 of 2017 is even more evident when they pose the query in their rejoinder Without prejudice, and assuming that to be so, the question is then what? If this is the understanding of a litigant of the duty they owe to the Court, then they require to be reminded that there is no excuse for a litigant not to be utterly truthful and place before it all the facts within their knowledge. This attempt by the Petitioners to obtain interim orders by speaking halftruths and misleading the Court about material facts simply cannot be countenanced. 37. As already noticed hereinbefore, there is not even an attempt by the Petitioners to deal with, leave alone deny, the averments in the Department's counter-affidavit about Mr. Jadaun s and Mr. Pachauri s recorded statements which throw serious doubts on whether Mr. Praveen Pandey, the deponent of the affidavits, was in support of each of the pleadings of the Petitioners (be it the petition or the rejoinder or the replies to the additional affidavit). The Department has pointed out how the petition makes it appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bank accounts of all 8 companies with RBL. And in these bank accounts, Mr. Mukkar is Beneficial Owner No.1. The suppression of these material facts, which were within her knowledge, in her petition is, therefore, not excusable. 42. It is sought to be suggested by Mr. Chidambaram that the writ petitions were drafted in a hurry. However, if that were true then in the rejoinder affidavits filed by both sets of Petitioners some attempt ought to have been made to justify their missing out the material facts in the main petition. On the contrary, both rejoinders only serve to confirm the deliberate suppression of material facts by both sets of Petitioners. 43. The suppression of material facts by both Petitioners in W.P. (C) 1180 of 2017 and 2375 of 2017 cannot but be viewed as deliberate. The Court is satisfied that the Petitioners have not come to Court with clean hands and do not deserve to be granted any of the reliefs prayed for by them. 44. The Court exercises extraordinary jurisdiction under Article 226 of the Constitution. Unless there are extenuating circumstances that render the statutory remedies illusory or inefficacious or ineffective for various reasons, the Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter. 48. In the present case, both Petitioners not only suppressed material facts in their petitions in the first place, but after this was pointed out in the Department s counter-affidavit, the Petitioners were most casual in their response thereto making no attempt to justify the suppression of such material facts. In fact, the length of the respective rejoinders in both petitions only serves to demonstrate the extent to which material facts within the knowledge of the Petitioners were not placed before the Court in the first instance. 49. The above findings by themselves are sufficient to dismiss both petitions with exemplary costs. Nevertheless, since the issue regarding the powers of the Department to require RBL to prepare DDs for the amounts in the accounts that were frozen has been argued at length, the Court proceeds to discuss the issue. Validity of the impugned orders 50. The main argument on merits by both Petitioners is that without a search warrant in their respective names, and without there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be on the expression any money and other valuable article or thing . The context in which these words occur cannot possibly exclude money in a bank account. The contention that this could only mean cash and not money in a bank account may be an attractive argument but not in the context in which the above expression occurs. It is certainly a valuable thing. In other words, a sum in a bank account is not outside the ambit of Section 132(1) of the Act and can be subject to search and seizure. 54. As already noticed, a person could be in possession of undisclosed income not only in his or her own account but in someone else's account. In the context of the present petitions, therefore, when pursuant to the search warrant, the Department proceeded to search and seize not only valuable things etc. found in the premises of Mr. Mukkar but also those in the accounts of the 8 Petitioner companies as well as that of Ms. Veena Singh, they could do so as long as they were satisfied that what constitutes Mr. Mukkar's undisclosed income was in the accounts of the 8 companies and Ms. Veena Singh. 55. The second proviso to Section 132(1) read with Section 132(3) permits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the further proceedings in the matter including the assessment proceedings and thereafter. Those will be decided on merits uninfluenced by the above prima facie observations. Conclusion 60. For the aforementioned reasons, the interim order dated 9th February, 2017 passed by this Court in Writ Petition (Civil) No. 1180 of 2017 and the interim order dated 14th March, 2017 in Writ Petition (Civil) No. 2375 of 2017 which have continued thereafter are hereby vacated. Both these writ petitions are dismissed with costs of ₹ 1 lakh each which will be paid by the Petitioners to the Department within four weeks from today. Proceedings under Section 340 Cr PC 61. The Court is satisfied that the conditions exist for initiation of action under Section 340 of the Code of Criminal Procedure, 1973 ( Cr PC ) against both sets of Petitioners. In other words, the Court is satisfied that: (i) Both sets of Petitioners i.e., the 8 companies who are Petitioners in W.P. (C) 1180 of 2017 as well as their authorised representative, Mr. Praveen Pandey, who is the deponent in support of the petitions and rejoinders and replies filed by them, and Ms. Veena Singh, the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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