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2019 (8) TMI 680

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..... ave priority over all other debts and all revenues, taxes, cesses and other rates due to the Central Government, State Government or local authority. On the other hand, in PMLA there are no dues, debts, revenues, taxes, cesses and other rates which is payable to the Central Government, State Government or local authorities. Properties are attached under PMLA, they being proceeds of crime - So the powers of confiscation or release of the attached property is only vested with the Special Courts and this Appellate Tribunal does not have any such powers. Hence exercise of the powers of confiscation or release of the attached property by this Appellate Tribunal is beyond the scope of activities of this Tribunal and would be grossly illegal. Moreover as per Section 8(8) even the powers of restoration of such confiscated property or thereof to a claimant with a legitimate interest in the property vests with the Special Court. Section 8(8) was amended by the Finance Act, 2018, introducing a separate proviso to reinforce this point giving the court further powers to allow such restoration even during the course of the trial. Usurping this power by the Appellate Tribunal would be a blatant v .....

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..... Jaldhara Exports, Ludhiana had fraudulently claimed a VAT refund of ₹ 1.64 crores from the State Government vide its application dated 11.02.2013 (although they were granted ₹ 1.56 crore as refund). On the basis of above, the Police registered a FIR No. 126 of 26.07.2013. Since the refund was filed on 11.02.2013, the offences under Section 420, 467 and 471 of IPC did not form part of Part B of the Schedule of the PML Act. Vide amendment made to the PMLA w.e.f. 15.02.2013 offences under Section 420, 467 and 471 were notified under Para 1 of Part A of the Schedule. Hence, from 01.06.2009 to 14.02.2013, the offences under Section 420, 467 and 471 were not covered either in Part A or Part B of the Schedule and since the refund application is dated 11.02.2013, the PMLA does not apply to them as the alleged offence was not a scheduled offence at the time of the commission of the same. ii. That Shri Raman Kumar Garg in his statement dated 23.10.2017 has disclosed the details and trail of the refund money which he again reiterated on 25.10.2017. However, this statement nowhere mentioned anything about the appellants. iii. That it was undisputed that the two plots measuring 511. .....

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..... 5.2018. 4. Arguing on behalf of M/s. Peagsus Reconstruction Pvt. Ltd., the learned counsel for the petitioner stated that loans were taken from the Allahabad Bank with regard to the two properties in Plot No. 800 Street No. 2, Baba Gajja Jain Colony, Moti Nagar, Ludhiana. That they vide deed of assignment dated 27.09.2013 duly executed between them and Allahabad Bank and registered on 30.04.2014 took over assignment of debt of M/s. Jaldhara Exports. That as per SARFAESI Act, 2002 every asset reconstruction company on such acquisition would be deemed to be the lender and all the rights of such bank shall vest on such company in relation to such financial asset. That as per the registered deed of assignment, the appellant in appeal No. 2419 i.e. Smt. Seema Garg and the appellant in appeal No. 2421 i.e. Mrs. Sangeeta Garg, both mortgaged their immoveable properties bearing Plot No. 800 at 511.11 sq. yd. and 488.88 sq. yd. as mentioned at para 3(iii)-supra, with Allahabad Bank. As the above properties presently stand mortgaged with them, they are entitled to recover amounts in the above loan accounts through sale or otherwise. The asset reconstruction company is therefore the right cla .....

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..... of crime includes value of such property the adjudicating authority has rightly attached the values of both these properties. v. With regard to the judgment cited, he stated that the facts in each of these cases was entirely different and hence cannot be taken as having precedent value. 6. I have carefully examined the documents and records of the appeal and also heard the parties at length. The first contention of the appellant that since the predicate offences were not schedule offences on the day they filed their refund application with the State Government i.e. 11.03.2013, therefore the impugned order is illegal, appears to be a too stretched out argument. In the present case, the Assistant Excise and Taxation Commissioner, Ludhiana, lodged a complaint on 18.07.2013 with regard to the fraudulent refund. Thereafter, the FIR was lodged on 26.07.2013 and the ECIR was filed on 14.08.2013 under the PMLA. By the appellants own admission, the PMLA had undergone an amendment w.e.f. 15.03.2013 when these offences became schedule offences. Hence, there cannot be any dispute that the said offences were scheduled offences when the ECIR was filed. 7. In the grounds of appeal, they have acc .....

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..... ve been provided in the impugned order with regard to the others which is depicted in the flow chart as below: 9. The appellants have not controverted the above and not disputed any of the details in the flow chart as above. In this background, it can be concluded that the refund money received fraudulently has been disbursed/used by the appellants or their companies and therefore, stands the test of money laundering as defined under the PMLA. The appellants stating that the properties pertaining to 511.22 sq. yd. and 488.88 sq. yd. of Plot No. 800, Moti Nagar, Ludhiana were purchased in 1991 and cannot be proceeds of crime as it was much prior to the date when the schedule offence was committed does not seem to be a sound argument. The adjudicating authority relying on his earlier order has stated though ordinarily the Director attaches properties acquired subsequent to generation of proceeds of crime………..it is not out of bonds for him to attach properties that came into existence before generation of proceeds of crime……… The Director cannot be faulted as long as the value of the properties attached does not exceed the quantum of crime. Th .....

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..... ss. 11. Hence, the decision of the Hon ble Delhi High Court which was a remand order, does not unequivocally support the claim of M/s. Peagsus Reconstruction Pvt. Ltd., although it does recognize its claim under SARFAESI as long as it does not override the actions under PMLA. The Hon ble Supreme Court in the case of KSL and Industries Ltd. vs. Arihant Threads Ltd. & ors. [(2015) 1 SCC, 166] decided by three- Member Bench at para 41 stated Indeed, the question as to which Act shall prevail must be considered with respect to the purpose of the too enactments; which of the two Acts is the general or special; which is later. It must also be considered whether they can be harmoniously construed (emphasis laid) At para 42, it further quoted from its earlier judgment in Ram Narain vs. Simla Banking & Industrial Co. Ltd. [AIR 1956 SC 614] as follows: 7. ….. It is, therefore, desirable to determine the overriding effect of one or the other of the relevant provisions in these two Acts, in a given case, on much broader considerations of the purpose and policy underlying the two Acts and the clear intendment conveyed by the language of the relevant provisions therein. It had con .....

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..... and the DRT Act deal with debts due to any secured creditor which shall have priority over all other debts and all revenues, taxes, cesses and other rates due to the Central Government, State Government or local authority. On the other hand, in PMLA there are no dues, debts, revenues, taxes, cesses and other rates which is payable to the Central Government, State Government or local authorities. Properties are attached under PMLA, they being proceeds of crime. They therefore do not fall under the above category as mentioned in the SARFAESI Act or the DRT Act and hence are mutually exclusive. 13. An important point of law needs to be brought out at this stage. Section 8(3) of PML Act, 2002 reads as under: (3) Where the Adjudicating Authority decides under subsection (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of section 5 or retention of property or 3 [record seized or frozen under section 17 or section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property] or record shall- (a) continue during [investiga .....

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..... R 2004 SC 778 had observed:- Court should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid s theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In Ambica Quarry Works v. State of Gujarat and Ors. MANU/SC/0049/1986 the Supreme Court observed:- The ratio of any decision must be understood in the background of the facts of that case. It has been said long time ago that a case is only an authority for what it actually decides, and not what logically follows from it. 15. On the basis of the above discussions and findings and .....

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