TMI Blog2018 (3) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... ith First Appeal (ST.) No.24401 of 2015 With Civil Application No.3873 OF 2015 In F.A.(ST.) No.24401/15 - - - Dated:- 12-2-2018 - NARESH H. PATIL R.G. KETKAR, JJ. Mr. Advait M. Sethna a/w. Mr. D. P. Singh and Ms Ruju R. Thakkar i/b. Udaipuri Co. for Appellant/Applicant. Mr. Vijay Kantharia a/w. Mr. Dhanesh Shah a/w. Mr. Dushyant Kumar for Respondents No.1 to 4 (UOI). Mr. Aditya Chitale a/w. Mr. Prathamesh Bhosle a/w. Mr. Avinash Belge i/b. MNSQ Legal for Respondent No.5 in F.A.No.785 of 2015 and C.A.No.3873 of 2015 in F.A.(St.) No.24401 of 2015. JUDGMENT: [Per R.G. KETKAR, J.] Heard Mr. Sethna, learned Counsel for the appellant / applicant, Mr. Kantharia, learned Counsel for respondents No.1 to 4, Mr. Chitale, learned Counsel for respondent No.5 in both the Appeals at length. Admit. By consent of parties, heard finally. 2. First Appeal No.785 of 2015 is filed by the appellant / original defendant No.3 challenging - (i) Provisional Attachment Order : 24/2013 dated 20.12.2013 passed by the Deputy Director, Directorate of Enforcement, Prevention of Money Laundering Act, Mumbai; (ii) Adjudication Order dated 22.05.2014 passed by the Adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal No.785 of 2015 are taken into consideration. 7. CBI:ACB, Mumbai had registered F.I.R. on 26.10.2010 against Shishir Dharkar, Ex-Director, M/s. Space Mercantile Co. Pvt. Ltd. (for short 'Space') and Director, Pen Co-operative Urban Bank Ltd. (for short 'Bank') and his wife Gulraihna Oomer and Asif Sayeed, Ex-Directors of Space, Rakesh Kumar Gupta, Ex-Director of Space, Rahul Bhomavat (defendant No.3), Ex-additional Director of Space and others and unknown officials of the M.S.T.C. and unknown officials of Bank under Section 120-B read with 420, 467, 468 and 471 Indian Penal Code, 1860 (for short 'I.P.C.) and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988. After carrying out investigation, CBI:ACB filed charge-sheet bearing CBI Special Case No.22 of 2013 dated 08.03.2013 before the CBI Special Court at Mumbai against Shishir P. Dharkar (Ex-Director of Space and then President of the Bank); Gulraihna Oomer (wife of Shishir P. Dharkar); Prem Kumar Sharma, ExDirector of Bank, Rahul Bhomavat (defendant No.3), Ex-Additional Director of Space and others under Section 420 read with Section 120-B I.P.C. for offence of criminal co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 for aiding and abetting criminal intent to cheat M.S.T.C. thereby causing huge loss to the M.S.T.C. in the business of jewelery export. Before the Special Court for C.B.I. Cases, Greater Mumbai, statements were recorded under Section 50 of the Act as also documents were produced. 10. On the basis of the material placed on record, including the chargesheet, by order dated 20.12.2013, the Deputy Director, in exercise of powers under Section 5(1) of the Act, passed the Provisional Attachment Order attaching ₹ 2.50 crores lying in the Current Account of Skylark Buildcon Pvt. Ltd. maintained with ICICI Bank. The Adjudicating Authority, after hearing the parties, confirmed the Provisional Attachment Order on 22.05.2014. Defendant No.3 preferred appeal under Section 26 of the Act before the Appellate Tribunal. The Tribunal dismissed the appeal mainly on the ground that defendant No.3 has no locus to challenge the orders of attaching ₹ 2.50 crores. It is against these orders, defendant No.3 has instituted the present Appeal. 11. In support of this Appeal, Mr. Sethna strenuous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duled offences only with effect from 01.06.2009. The Enforcement Directorate could not have invoked provisions of the Act with retrospective effect. 13. On the other hand, Mr. Kantharia supported the impugned orders. He submitted that Section 3 of the Act deals with the offence of money laundering. Section 5 deals with attachment of property involved in money laundering. Section 8 provides for adjudication. He submitted that a perusal of the impugned orders shows that the Provisional Attachment Order dated 20.12.2013 was confirmed on 22.05.2014 by the Adjudicating Authority. The attachment order is to remain in force during the pendency of proceedings relating to any offence under the Act before Court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India as the case may be and become final after an order of confiscation is passed under subsection (5) or sub-section (7) of Section 8 or Section 58-B or sub-section 2A or Section 60 by the Adjudicating Authority. He has also taken us through the order passed by the Appellate Tribunal and in particular paragraph 8 onwards and submitted that the Appellate Tribunal has ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. 5. Attachment of property involved in money-laundering.-- (1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudication.-- (1) On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub-section (10) of section 18, if the Adjudicating Authority has reason to believe that any person has committed an offence under section 3 or is in possession of proceeds of crime it may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, or, seized or frozen under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided further that where such property is held jointly by more than one person, such notice shall be serve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 8, whichever is earlier. Sub-section (4) thereof lays down that nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation thereto lays down that for the purposes of this sub-section, person interested , in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. 19. A perusal of Section 8(6) shows that where on conclusion of a trial under this Act, the Special Court finds that the offence of money-laundering has not taken place or the property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it. In the present case, amount of ₹ 2.50 crores lying in the Current Account of M/s. Skylark Buildcon Pvt. Ltd. is attached. 20. By order dated 20.12.2013, the Deputy Director, in exercise of powers under Section 5(1) attached ₹ 2.50 crores lying in the Current Account of Skylark Buildcon Pvt. Ltd. It is admitted po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents did not prefer any appeal or file any cross-objections. The appellate Court, while dismissing the appeal, modified the decree passed by the trial Court. The learned District Judge decreed the Suit filed by the respondent for specific performance and dismissed the Suit filed by the appellants. The appellants preferred second appeals before the High Court. The second appeals came to be dismissed as they did not involve substantial questions of law. In paragraph 9, the Apex Court observed that a party who has succeeded in the Suit can and needs to neither prefer an appeal nor take any cross-objection though certain finding may be against him. Appeal and cross-objections, both are filed against decree and not against the judgment and certainly not against any finding recorded in the judgment. That was the well-settled position of law under the unamended C.P.C. 23. In paragraph 10, the Apex Court observed that the C.P.C. Amendment of 1976 has not materially or substantially altered the law except for a marginal difference. In paragraphs 10 and 12, it was observed thus, 10. CPC Amendment of 1976 has not materially or substantially altered the law except for a marginal d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef of specific performance. A plaintiff who files a suit for specific performance claiming compensation in lieu of or in addition to the relief of specific performance or any other relief including the refund of any money has a right to file an appeal against the original decree if the relief of specific performance is refused and other relief is granted. The plaintiff would be a person aggrieved by the decree in spite of one of the alternative reliefs having been allowed to him because what has been allowed to him is the smaller relief and the larger relief has been denied to him. A defendant against whom a suit for specific performance has been decreed may file an appeal seeking relief of specific performance being denied to the plaintiff and instead a decree of smaller relief such as that of compensation or refund of money or any other relief being granted to the plaintiff for the former is larger relief and the latter is smaller relief. The defendant would be the person aggrieved to that extent. It follows as a necessary corollary from the abovesaid statement of law that in an appeal filed by the defendant laying challenge to the relief of compensation or refund of money or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with law, as regards the complaint made by the 5th respondent. It is against that order, appellant had approached the Apex Court. From paragraph 7 onwards, the Apex Court considered whether respondent No.5 was person aggrieved . After considering various decisions, in paragraph 15, the law on the said point was summarized by observing that a person who raises a grievance must show how he has suffered legal injury. Generally, a stranger having no right whatsoever to any post or property, cannot be permitted to intervene in the affairs of others. 27. From paragraph 16 onwards, the Apex Court dealt with the locus standi of the 5th respondent. After considering various decisions, in paragraph 22, it was observed that under ordinary circumstances, a third person, having no concern with the case at hand, cannot claim to have an locus standi to raise any grievance whatsoever. However, in the exceptional circumstances if the actual persons aggrieved, because of ignorance, illiteracy, inarticulation or poverty, are unable to approach the court, and a person, who has no personal agenda, or object, in relation to which, he can grind his own axe, approaches the court, then th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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