TMI Blog2018 (2) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... d 180 days from the day on which such property was seized.It is apparent that the statutory requirement as to entertainment of reasonable belief in relation to section 17 of PMLA does not exist in the present case. Thus orders passed agaisnt assessee set aside and the lockers of the appellant is de-freezed accordingly by allowing the appeal. - MP-PMLA-3679/DLI/2017 (Stay) & FPA-PMLA-1868/DLI/2017 - - - Dated:- 6-2-2018 - Justice Manmohan Singh And Chairman Shri G. C. Mishra Member For the Appellant : Dr. Shamsuddin, Advocate Shri Sujeet Natwal, Advocate Ms. Smriti, Advocate For the Respondent : Shri Nitesh Rana, Advocate JUDGEMENT FPA-PMLA-1868/DLI/2017 1. The present appeal is filed under Section 26 of the Prevention of Money Laundering Act, 2002 (hereinafter to be referred as PMLA ) against the order dated 05.06.2017 passed by Respondent No. 2 in original application no. 64/2017 (for short OA ). The impugned order was received by the appellant on 04.07.2017 and the appeal is therefore filed within the limitation period. 2. The subject matter of the appeal is in respect of the appellant s movable property (the jewellery and ornaments) found in the Loc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the locker being her personal property ( stridhan ) which was purchase many year prior to thedate of demonetization i.e. 8th November, 2016. No recovery of any currency either new or old recovered from the said locker. 9. The appellant is claiming absolute owner of the same, it is denied that cannot be termed as Proceeds of crime being her Stridhan which by acquired by her at the time of her marriage as well as by way of gift much prior to November, 2016. In this regard, reliance is placed on the following judgments: (i) Pratibha Rani Vs. Suraj Kumar (1985) 2 SCC 370 [Paras 6 7] Para 6 Manu enumerated six kinds of stridhana: 1. Gifts made before the nuptial fire, explained by Katyayana to mean gifts made at the time of marriage before the fire which is the witness of the nuptial (adhyagni). 2. Gifts made at the bridal procession, that is, says Katyayana, while the bride is being led from the residence of her parents to that of her husband (adhyavanhanika). 3. Gifts made in token of love, that is, says katyayana, those made through affection by her father-in-law and mother-in-law (pritidatta), and those made at the time of her making obeisance at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is explained by the Supreme Court in its decision Pratibha Rani Vs. Suraj Kumar (Supra) as under: a Hindu married woman is the absolute owner of her Streedhan property and can deal with it in any manner she likes and, even if it is placed in the custody of her husband or her in-laws they would be deemed to be trustees and bound to return the same if and when demanded by her . 10... the petitioner s explanation is justified and reasonable. Like in Ashok Chadha (supra), her contention that the gold jewellery was acquired through gifts made by relatives and other family members over a long period of time, is in keeping with prevailing customs and habits. The obdurate refusal of the respondents to release the jewellery constitutes deprivation of property without lawful authority and is contrary to Article 300-A of the Constitution of India. The petition has to succeed; a direction is issued to the respondents to release the jewellery within two weeks and in that regard intimate to the petitioner the time and place where she (or her representative) can receive it. The respondents shall also pay costs quantified at ₹ 30,000/- to the petitioner, within four weeks, dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he part of the competent authority is imperative before a show cause notice is issued. Section 68-H of the Act provides for two statutory requirements on the part of the authority viz: (i) he has to form an opinion in regard to his Rs. reason to believe'; and (ii) he must record reasons therefor. Both the statutory elements, namely, Rs. reason to believe' and Rs. recording of reasons' must be premised on the materials produced before him. Such materials must have been gathered during the investigation carried out in terms of Section 68-E or otherwise. Indisputably therefore, he must have some materials before him. If no such material had been placed before him, he cannot initiate a proceeding. He cannot issue a show cause notice on his own ipse dixit. A roving enquiry is not contemplated under the said Act as properties sought to be forfeited must have a direct nexus with the properties illegally acquired. 29. It is now a trite law that whenever a statute provides for Rs. reason to believe', either the reasons should appear on the face of the notice or they must be available on the materials which had been placed before him. We have noticed hereinbefore that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power. e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations. f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. g. Reasons facilitate the process of judicial review by superior Courts. h. The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice. i. Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system. j. Insistence on reason is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 132 of the Income Tax Act, 1962, wherein the reasons for retention were required to be recorded in writing, but nowhere required to communicate those reasons to the aggrieved person, as in the case of Section 17 of PMLA, there is no express requirement for communicating the reasons so recorded, the Hon'ble Supreme Court held that irrespective of there being no such requirement in the statute, the concerned officer is bound to communicate the said reasons, as the failure to communicate shall materially prejudice the person so searched under the provisions of Section 132 of the aforesaid Act. The relevant extract from the judgment is as under: 4. ...On a plain reading of the aforesaid provisions it will he clear that ordinarily the books of account or other documents that may be seized under an authorisation issued under Sub- sections (1) of Section 132 can be retained by the authorised officer or the concerned Income-fax Officer for a period of one hundred and eighty days from the date of seizure, where after the person from whose custody such books or documents have been seized or the person to whom such books or documents belong becomes entitled to the retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the passing of the order or is not accompanied by the reasons recorded in writing. It may be permissible to record reasons separately but the order would be an incomplete order unless either the reasons are incorporated therein or are served separately along with the order on the affected party. Reasons for the order must be communicated to the affected party. This decision has been followed in various judgments by various Courts, including the Hon'ble Supreme Court of India. 13. The Hon'ble Supreme Court, in the case of M. P. Industries Ltd. v. IPO, [(1970) 2 SCC 32], while dealing with the powers under Section 34(1) of the Income Tax, 1922, which required the officer to have 'reason to believe', has held that the expression 'reason to believe' in Section 3 does not mean purely subjective satisfaction on the part of the Income Tax Officer and that the belief must be held in good faith and it cannot be merely a pretence. It was further held by the Supreme Court that it is open to the Court to examine whether the reasons for the believe have a rational connection or an element bearing to the formation of the belief and are not extraneous or irreleva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there are no reason to believe that the valuables in the Lockers are involved her in money laundering. 19. Section 20(1) of PMLA absolutely bars and prohibits retention of the seized property beyond 180 days from the day on which such property was seized. In this regard, reliance is placed on sub-section (1) of section 20 of PMLA which is reproduced as under:- (1) Where any property has been seized under section 17 or section 18 or frozen under sub-section (1A) of section 17 and the officer authorised by the Director in this behalf has , on the basis of material in his possession, reason to believe (the reason for such belief to be recorded by him in writing) that such property is required to be retained for the purposes of adjudication under section 8, such property may, if seized, be retained or if frozen, may continue to remain frozen, for a period not exceeding one hundred and eighty days from the day on which such property was seized or frozen, as the case may be. 20. The respondent counsel has admitted that no proceedings against the appellant u/s 5 and 8 are initiated nor any complaint under section 3 has been filed against the appellant. 21. It is app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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