TMI Blog2018 (2) TMI 1570X X X X Extracts X X X X X X X X Extracts X X X X ..... loose its validity. The involvement of her brother cannot be attributed to her as nothing indiscriminating material was either alleged or recovered from her and from the locker. Both sisters are married sister. Section 20(1) of PMLA bars and prohibits retention of the seized property beyond 180 days from the day on which such property was seized.The prohibition of the lockers of the appellant is lifted accordingly by allowing the appeal. - FPA-PMLA-1917/DLI/2017 - - - Dated:- 15-2-2018 - Justice Manmohan Singh , Chairman Shri G. C. Mishra, Member For the Appellant : Shri Gaurav Duggal, Advocate Shri M.T. Reddy, Advocate For the Respondent : Shri Nitesh Rana, Advocate JUDGEMENT FPA-PMLA-1917/DLI/2017 1. The present appeal has been filed against the order dated 21st July, 2017 whereby the application filed by the Respondent u/s 17(4) PML Act, 2002 was allowed. 2. Facts of the matter are that during the search of office premises i.e. R-89, Greater Kailash-I, New Delhi of T T Law Firm (belongs to one Mr. Rohit Tondon) on 10.12.2016 by Income Tax and Delhi Police, Crime Branch Team ₹ 13.62 Crores were recovered that included ₹ 2.62 Crores o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Smt. Kusum Nahata, sister of the appellant and Locker No. 652 in the name of Smt. Bhanwari Devi Lodha and Smt. Kumud Mitra (appellant) . 8. Thereafter, the application was filed by Assistant Director, Directorate of Enforcement, Delhi before this Adjudicating Authority under Section 17(4) of Prevention of Money Laundering Act, 2002 (PMLA) against Smt. Kumud Mitra of Kolkata seeking retention of seized documents/properties in the search conducted consisting of gold/stone studded jewellery and gold coin from two lockers No. 475 and 652 of Indian Overseas Bank, Ballygunge, Kolkata of Respondent. The respondent also averred in the application that it was felt that proceedings under PMLA may be initiated against the person who are involved in the money laundering. Notice was issued to the Respondent and reply was filed. 9. In nutshell, it was the apprehension on the part of R-1, at the time searching lockers that the valuables may form the part of Proceeds of Crime in the case and the same may be attached under Section 5(1) of PMLA in due course, therefore in the application filed to retain the said jewellery terms of section 17(4) of the PMLA, 2002. However, no proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... searched by the Income Tax Department on 23.08.2016 and finding every item contained in the lockers were duly explained, the contents were released by them and the restrain order was revoked on the same day. 14. The contents of the valuation report prepared by Income Tax Department on 23.08.2016 match with the valuation report prepared on 17.04.2017, as per details below:- Item No. of valuation Item No. of valuation Report of ED Report of ITD 1 1 2 2 3 3 4 4 5 5 6 (A, B, C, D) 6 7 7 15. Smt. Bhanwari Devi Lodha, mother of the Appellant expired on 07.03.2017. Smt. Kusum Nahata is the sister of Kumud Mitra residing in U.S.A. Admittedly, no intimation about the restrictions imposed on the operation of the aforesaid Bank Locker was given to the Appellant. Smt. Kusum Nahata vide her let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are maintained in the same bank by family members of Paras Mal Lodha, therefore, there was sufficient reasons to believe to search the aforesaid lockers as there were strong suspicions that there would be some incriminating documents and new monetised currency in the above mentioned lockers. Copy of the reason to believe was not served to the Appellant. 22. Counsel for Appellant argued that there is no reason whatsoever to retain the property once the Income Tax Department, already released the same prior raids of Rohit Tandon and Parasmal Lodha. The date of FIR is also of subsequent date against accuse. He says that the bad luck of two sisters is only that they are sisters of Parasmal Lodha. He submits that the Respondent has suppressed the fact of the explanation placed on record in respect of the contents of the aforesaid Bank Lockers. Which are same contents the counsel states that there is absolutely no justification for the applicant to seek retention of the contents of the aforesaid Bank Lockers. It was stated by the counsel that whosoever are involved in the activity of monetizing the demonetized currency on commission basis, the action may be taken as per law, ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant. 30. The OA do not indicate or establish any nexus or link with the jewellery and ornaments of the appellant or their involvement in money laundering. It is not the case of respondent that the jewellery and ornaments were purchased by the appellant. 31. Law on reasons to believe In the recent case decided by the Division Bench of Delhi High Court in batch of matters in the W.P. (c) 5320/2017 J. Sekar Vs. Union of India and ors. as well as in the other writ-petitions, decided on 11.01.2018 the Hon ble Division Bench in celebrated judgment has dealt with the issue of reason to believe and held that there must be reasons of believes in writing and simple assumption and presumption of the language of Section mentioning does not serve any purpose. Para 70-73 of the Judgment reads as under:- 70. The expression reasons to believe under Section 26 IPC is understood in the sense of sufficient cause to believe that thing but not otherwise . In Phool Chand Bajrang Lal v. ITO [1993] 203 ITR 456 (SC), the Supreme Court in the context of the Income Tax Act, 1961 explained the expression as under: Since, the belief is that of the Income-tax Officer, the sufficiency of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t all the reasons were contained in the show cause notices themselves. They, however, in our opinion, do not contain any reason so as to satisfy the requirements of sub-section (1) of Section 68H of the Act. 72. Reasons to believe cannot be a rubber stamping of the opinion already formed by someone else. The officer who is supposed to write down his reasons to believe has to independently apply his mind. Further, and more importantly, it cannot be a mechanical reproduction of the words in the statute. When an authority judicially reviewing such a decision peruses such reasons to believe, it must be apparent to the reviewing authority that the officer penning the reasons has applied his mind to the materials available on record and has, on that basis, arrived at his reasons to believe. The process of thinking of the officer must be discernible. The reasons have to be made explicit. It is only the reasons that can enable the reviewing authority to discern how the officer formed his reasons to believe. As explained in Oriental Insurance Company v. Commissioner of Income Tax [2015] 378 ITR 421 (Delhi), the prima facie formation of belief should be rational, coherent and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or `rubber-stamp reasons' is not to be equated with a valid decision making process. m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harvard Law Review 731-737). n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya vs. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, adequate and intelligent reasons mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the existence of a certain thing or an alleged fact is suspicion. After suspecting the existence of a thing, condition or a statement of fact, you collect information and then examine that information and come to a final conclusion on the basis of that information, that such a thing, condition or statement of a fact exists. All these ingredients are prerequisite for forming any opinion based on Reason to Believe . 35. In the present case there are no allegation against her involving in the schedule offence or under the PML Act, 2002. More than 180 days period already expired. No proceedings are initiated against the appellant. Only on the basis of apprehension jewellery ornaments are attached. No document and currency was recovered in the locker when it was search. So the reasons of believe on the face of it loose its validity 36. The involvement of her brother cannot be attributed to her as nothing indiscriminating material was either alleged or recovered from her and from the locker. Both sisters are married sister. 37. Section 20(1) of PMLA bars and prohibits retention of the seized property beyond 180 days from the day on which such property was seized. In this regar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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