TMI Blog2019 (9) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... osecution complaint under section 45(1) PMLA, 2002 was filed on 11.06.2018 which is within the time limit of 90 days prescribed by the amendment from the date it became effective. Section 8(3)(a) of the Prevention of Money Laundering Act, 2002 was amended through Section 207-208 of the Finance Act, 2018. As per Section 207 of the Finance Act, 2018, the Central Government was required to notify the date for coming in to force of Section 208 of the said Act. Notification bearing no. G.S.R.383(E) dated19.4.2018 issued by the Department of Revenue, Ministry of Finance, Government of India, appointed 19.04.2018 as the date for coming into force of Section 208 of the Finance Act,2018 which amended Section 8(3)(a) of the PMLA. Section 44(1)(b) of PMLA underwent an amendment where the words upon perusal of police report of the case(s) which constitute an offence was deleted and thus by deletion, it is clear that cognizance of offence u/s 3 PMLA can be taken only upon a complaint in writing and not on a Police report, i.e. charge sheet filed by Police u/s 173(5) Cr.PC. PMLA does not define complaint but complaint is defined under Section 2(d) CrPC as allegation made orally or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in, RC 21 (S)/2011- CBI/ACB/Cochin, RC 22(S)/2011-CBI/ACB/Cochin, RC 09 (S)/2011- CBI/ACB/TVPM for offences punishable under Sections 120B, 420 IPC, 1860 read with Sections 4(d), 4(f). 7(3), 9 of Lotteries (Regulation)Act, 1988 and 3 (5)m 4(5) of Lotteries (Regulation) Rules, 2010 against Shri. S. Martin and others. The case has now been numbered by the Honourable Chief Judicial Magistrate s Court, Ernakulam as CC no. 218/2015. The accused persons are Shri. S. Martin (A-1), Managing Director of Future Gaming Solutions (India) Pvt. Ltd. (Formerly Martin Lottery Agencies Ltd. and presently Future Gaming and Hotel Service Pvt. Ltd.) Shri P. John Britto, (A-2) Director, Future Gaming Solutions (India) Pvt. Ltd., represented by Shri. S. Martin (A-3), Shri John Kennedy (A-4), Shri N. Jayamurugan (A-5), Shri A. Sakthivel (A-6) and Shri. V. Selvaraj (A-7). The charges pertains to non-remittance of sale proceeds to the Sikkim Government, non-remittance of unclaimed/undisbursed prize money back to the Sikkim Government, printing of Sikkim Lottery tickets from a nonsecurity press not empanelled by RBI/IBA, not returning the unsold tickets back to the Sikkim Government, not ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Directorate of Enforcement Cochin commenced an investigation under PMLA, 2002 by virtue of the powers conferred under section 48 and 49 of the Act read with Government of India Notification No. GSR 441 (E) dated 01.07.2005 against the petitioner and other persons on the basis of Final Report filed by CBI, Cochin under section 173 (2) CrPc, 1973 as no. DV1/04 dated 03.02.2014 before the Hon ble Chief Judicial Magistrate, Ernakulam for committing the offences punishable under section 120B, 420 IPC r/w Section 4(d), 4(f), 7(3), 9 of Lotteries (Regulation) Act. 1998 (in short LR Act) and 3(5), 4(5) of Lotteries (Regulation) Rules, 2010. The Hon ble Chief judicial Magistrate, Ernakulam has taken cognizance and has numbered the case as CC No. 218/2015 PMLA investigation 5. On the basis of investigation under PMLA, 2002 provisional attachment order no. 02/2016 dated 31.03.2016 was issued by the respondent. The appellant Santiago Martin filed the WP(C) No. 22327/2016 before the Hon ble High Court of Kerala with prayer to quash provisional attachment order passed under section 5(1) and original complaint under section 5(5) and notice issued un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kim subject to the set off in respect of the prize money up to ₹ 5000/- paid to the prize winner directly by the sole distributor or other entities below him in the marketing chain. 5.4 The clean chit said to have been given by the Sikkim government to its sole distributor is apparently without being aware of the manipulations in prize winning tickets done at M.J. Associates. With regard to the averment in paragraph 16 and 20 it is submitted that as per charge no. 1 of the CBI charge sheet filed before the Chief Judicial Magistrate, Ernakulam in CC No. 218/2015 the accused persons A1-A7 including the petitioner, by way of non-remittance of sales proceeds of Sikkim government, non-remittance of unclaimed/undisbursed prize money back to the Sikkim Government printing of Sikkim Lottery Tickets from a nonsecurity press not empanelled by RBI/IBA, not returning the unsold tickets back to the Sikkim Government, not returning undisbursed prize amounts to the Sikkim Government and showing unsold the prize-winning tickets as sold and claiming the same from Sikkim Government, and cheating the government of Sikkim by entering into an agreement containing covenants contrar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and these were accounted as Prize-Winning Tickets. He also admitted that he was maintained 2 ledgers for prize-Winning Tickets and they named as Prize-Winning Tickets-1 and Prize and Prize-Winning Tickets 2. He also stated that the amount paid in cash was being accounted as prize-winning tickets in the ledger Prize-Winning Tickets.-2. The statement of Shri Jayakumar has been corroborated by the sub stockists of J.K. Enterprises. They have stated before the investigating officer that they were paying cash which was accounted as prize-winning tickets. Apart from this, an employee of M.J. Associates Smt. Indra Gupta in her statement had stated that the Stockists settled the Bill by making bank transfers, cash payments and prize-winning tickets. The payment section verifies this and sent it to audit section and after the audit, the settlement statement is given to them for date entry. The stockists are informed in advance as to how much money is to be paid in cash. In the settlement statement, the details given are cash, Prize Winning Ticket-1 and Prize Winning Ticket-2. The Prize Winning Ticket-1 is the actual prize-winning tickets and Prize Winning Ticket-2 s the payment made in cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eries through a tender process. The following chart explains the selling chain of the Sikkim Lotteries in the State of Kerala: Govt. of Sikkim Future Graming Hotel Service Private Limited (Sole Purchaser) Megha Distributors (Promoters of Kerala) M.J. Associates (Super Stockiest for Kerala) (Partnership firm of S.Martin and N Jayamurgan) Stockists Sub-Stockist Retailers v) Appellant's Company continues to be a Distributor of the Sikkim Lotteries. vi) 31 FIRs were filed of which 24 were closed. Remaining 7 FIRs were all filed by Officers of the State of Kerala. Each of the FIRs allege non-compliance of the Lotteries Act and its Rules by the State of Sikkim. The Complainants do not allege any misfeasance qua the State of Kerala but allege that the State of Sikkim has been cheated. vii) The State of Sikkim is not the Complainant. Section 420 IPC cannot be invoked unless the person deceived , comes forward. viii) The State of Sikkim has iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f) is attracted. This court is to the firm opinion that Section 4(/) has no application since there was no complaint from the Government of Sikkim and Buttan as against the petitioner that accused No.5 had misappropriated the unclaimed prize money or prize money covered by lottery tickets that were not sold or distributed. Here also the head of Lottery Monetary Cell, Kerala State has no cause of action on this point. 40. As far as Rule 4 (5) is concerned, distributors or selling agents shall return the unsold tickets to the Organising State with full accounts along with the challans of the money deposited in the Public ledger Account or in the Consolidated Fund of the Organising State through the sale of tickets. In the instant case, I reiterate here that the Government of Sikkim or Buttan has no complaint as against the petitioner stating that he failed to return unsold tickets to them nor submitted fully account as contemplated under Rule 4(5). x. Under S. 25 of the Partnership Act, 1932, the reasoning of Ld. CJM shall equally apply to the Appellant is the invocation of PMLA against the Appellant and N. Jayamurugan as Partners of M.J. Associate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, while passing orders under S. 8(2) of the Act. xv. It is submitted that the Adjudicating Authority was obligated to decided jurisdiction. But, the Ld. Adjudicating Authority has left the reasons to believe as stated in the following paragraph of the Impugned Judgment: though there is no material brought on record regarding prosecution launched under section 3 of FMLA against the Defendants as of now. The fact remains that a reasonable belief is entertained that Defendants have committed an offence under section 3 of PMLA or are in possession of proceeds of crime. xvi. The proof of rubber stamping the Provisional Attachment is the non-consideration of the following: a. While the allegation is as regards sale in State of Kerala, all India revenues have been treated as proceeds of crime. b. No complaint by Sikkim. c. All prizes disbursed as per Sikkim Lottery Rules which are statutory. d. Prizes disbursed on Super and Special tickets ignored. e. Arbitrary fixation of prize disbursal. f. Mala fide nature of the complaints of the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot lie as against the appellant Martin. But the Chief Judicial Magistrate, Ernakulam by the order held that the appellant should stand trial with regard to Section 9 read with Section, 7(3) of the lotteries (Regulation) Act and Rule 3(5) of the Lotteries (Regulation ) Rules, 2010 and Section 120(B) of IPC. CBI has filed revision petition against the said order in CMP No. 2201/2016 in CC 218/2015 dated 20.01.2018 before the Hon ble District and Sessions Court Ernakulam with prayer to set aside the said order dated 20.01.2018 of the Hon ble CJM, Ernakulam and issued appropriate order in accordance with law . the revision petitions till under consideration of Hon ble session Court, Ernakulam. (d) It is submitted that the calculation of amount of prizewinning tickets illegally claimed for setting off the bills raised by the Government of Sikkim is not a theoretical calculation. This calculation has been made after the investigation unearthed evidence that the lottery stockiest while settling their bills raised by M.J. Associates, a partnership firm comprising of the petitioner and Sri Jayamurugan, had paid money in cash apart from cheques/bank transfers and the money pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odology adopted in calculation of proceeds of crime is based on the principles of averages. (h) In the peculiarity of this case were the generation of proceeds of crime is on account of wrongful claim of crores of lottery tickets claimed to have been prize winning tickets and was handled and destroyed by the firm partnered by the petitioner. Calculation can be done only through certain formula. The principles adopted for calculation is also on the basis of the testimony of the lottery stockists on the average maximum prize winning. The respondent need to adduce proof beyond reasonable doubt only during the trial of offence of money laundering. (i) The respondent has submitted that the Martin is also accused of committing an offence under section 420 IPC along with section 120(b) IPC and various provisions of Lotteries Regulation Act Rules. It is submitted that Lotteries Regulations Act, 1998 not being a schedule offence under PMLA does not affect the registration of money laundering case. There is no requirement that all the offences alleged in the charges pressed by law enforcement agency should be a schedule offence. It is clear from the charge s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allegations of short revenue also the revenue receivable by the Government of Sikkim. 9. It is submitted that any case to be made out under the provisions of Prevention of Money Laundering Act, 2002, it can be done only as per the offences or classification of offences as detailed in the Schedule therein (hereinafter Scheduled Offences). Wherein the Lotteries (Regulation) Act and Rules are not under the purview of Scheduled Offences, any allegation with respect to the same can be initiated only by the respective Organizing Government or the Central Government and no other State is empowered do otherwise unless its own tickets are involved or it has suffered any loss. The case in hand is clear case in nature as the Lottery tickets are belong to Government of Sikkim who has not suffered any revenue as supported by the documents as well as settled in law. No due process of law or procedures as prescribed was followed in this case before making a conclusion by the Adjudicating Authority. Cheating is an offence but where does it come from and the whole cause of action is purported to come from Lotteries Act and Rules against which no investigation can be carried out und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government of Sikkim. The tickets are the exclusive properties of the Government of Sikkim and any revenue generated through it will be the revenue of Government of Sikkim and no share of revenue or responsibility was casted upon Government of Kerala. The Distributor/Kerala Promoter is liable to pay only draw charges (Levy of Tax) to the Government of Kerala against which no default was alleged by the Government of Kerala as the Distributor has paid the same appropriately right from the beginning. The entire allegation as raised by the Government of Kerala is only for barricading the other State Lotteries in the guise of default to the third person who is factually having no such allegation at all. 12.2 It is submitted on behalf of appellant that right from the lottery buyers, winners till the State of Sikkim, there is no complaint of non-payment of any prizes admittedly. There is no complaint of the State of Sikkim of any breach of any agreement and the intermediate agreements between the various links in the above chain have also not been alleged to have been breached. Thus, no complaint under Section 420 was filed since no person was deceived. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Directorate are not mere technical or venial breaches. The lack of complaint from the part of State of Sikkim is not an issue in the proceedings under PMLA. This PMLA investigation was started on the basis of the CBI chargesheet that the accused therein including the petitioner had caused wrongful loss to the government of Sikkim. This charge sheet is pending trial before the Chief Judicial Magistrate, Ernakulam. As to why The State of Sikkim is not aggrieved is only a matter of speculation. 14. It is alleged, under these circumstances that the case in PMLA cannot be made out in absence of a crime and accordingly, when the Claimant to such proceeds of crime itself has clarified that such proceeds have no relationship to the alleged crime, the Respondent could not have unilaterally considered the same to be a proceeds of crime . 15. On behalf of appellants, it is also submitted that even in case of non-payment of loans to banks, the Hon ble Supreme Court of India has held in the case of Satishchandra Ratanlal Shah vs State of Gujarat and Another, 2019 SCC Online SC 196, that the mere inability of the borrower to return the loan amount cannot gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv) Prize amount includes Super and Special ticket prize amount. v) Types of Prizes in each rank, namely, normal prize, super ticket prize and special ticket prize. vi) Prize pool i.e., the total amount which would be ultimately distributed as prizes from the sale proceeds of the tickets. It is stated that for example, the Appellant has produced before the Adjudicating Authority various notifications of the Government of Sikkim notifying the above during the subject period which have not been taken into consideration. The most important feature relevant for the present case was the prize pool as notified in the notifications prescribing a prize pool of 76.63% to 79.69%. 19. It is stated on behalf of appellant, the prize pool is on the basis as if all tickets have been ultimately sold to the general public. It being a lottery business there can be a situation that the sale proceeds from the sale of lotteries is lesser than the prizes distributed, thus, resulting in loss. However, in case, all the tickets are sold and the tickets containing the prize, the prizes are distributed, then only amount then remaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad admittedly submitted that, the entire sale of Kerala including the other State have also been taken into account for arriving to their calculation. In such a case, the Adjudicating Authority on their own surmises and conjectures have arrived to the conclusion without application of mind as accounting other state Sale will ultimately inflate the sale of a particular State i.e. State of Kerala which should only be the concern and the case we have in our hand. Entire allegation is with respect to the sale only in the State of Kerala during the subject period thus the sale of in other States cannot be brought into the picture. The Adjudicating Authority has not considered the Super and Special ticket prize amount while admittedly accounting the sales done in other State and arrived to the presumptive outcome which alone have inflated the liability. 22. The Appellant submits that the above statement destroys the entire case of the Respondent because the Notification of the State of Sikkim propagating the lottery scheme contains the above prizes, and the State of Sikkim not having complained as regards non-payment of above prizes, assumptions made by the Respondent can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e field. Section 8(3)(a) provided that a confirmation order would continue only during the pendency of proceedings under the Prevention of Money Laundering Act, 2002. The relevant portion of the same is excerpted below for ready reference: (3) Where the Adjudicating Authority decides under subsection (2) that any property is involved in moneylaundering, 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 [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 the pendency of the proceedings relating to any offence under this Act before a 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 26. Mr. Mukul Rohtagi, ld. counsel appearing on behalf of appellants has submitted that the above Section 8(3)(a) of the Prevention of Money Laundering Act, 2002 has been the subject matter of interpre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28. It is argued by both senior counsels that in the present case, as on the date of the passing of the Impugned Order i.e.22.09.2016, since no Complaint had been filed or was pending, the provision of Section 8(3)(a), remained unsatisfied and therefore the attachment was non est in law and without any effect Thus the continuation of the attachment by impugned order dated 22.09.2016 was a dead letter, and the right to confirm the provisional attachment stood extinguished. Admittedly, the complaint has been filed more than a year and eight months. It is stated by Mr. Mukul Rohtagi, Senior Advocate that on the date of confirmation of attachment, no charge-sheet under PMLA was filed/pending. It is also stated by Mr. Rohtagi that the respondent wishes to continue the attachment on that day but no proceedings under PMLA by the respondent were pending, therefore, it is apparent that the respondent has forgotten to file the charge-sheet since criminal liabilities are involved at the culminated of the proceedings. The said serious lapses cannot be condoned. 29. It is argued that through the subsequent Amendment of 2018, a substantive amendment was made to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it could not be revived by tire subsequent amendment which extended the period of limitation. The right to issue a notice under the earlier Act came to an end before the new Act came into force. There was undoubtedly no determinable point of time between the expiry of the earlier Act and the commencement of the new Act; but that would not, in our judgment, affect the application of this rule. 31. It is always the case of the respondent that PMLA is Special Act and all the provisions and rules are to be complied strictly. It is also claimed by the respondent that they have their own independent mechanism regarding the investigation as well as for all investigations. As far as the mandatory provisions are concerned, it is settled law that the scheme of the Act has to be taken into consideration while interpreting the statute and different words should not be construed in isolation of the other sections of the statute, as well as the scheme of the statute. The Appellant has relied upon the following cases in support of its submissions. Since, it is a jurisdictional issue; the objection of Mr. N.K. Matta has no force. Mr. N.K. Matta has been given full opportunity to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring or lending of any foreign exchange. Once it is shown that the person of the category mentioned in the section has acquired foreign exchange not from the authorised dealer, then as the width and amplitude of the section stands, the only defence available is the previous general or special permission of the Reserve Bank. d) State of Maharashtra vs. Mahesh Mehta (1983(1) Bom C R 600), 12. On proper analysis it would be clear that the absence of permission, either general or special, from the Reserve Bank is the foundation of the contravention indicated therein. The further restrictions are put on any person resident of India except the authorised dealer while a more generalised category is carved out which would include by any person, who may or may not be a resident of India, but who is not an authorised dealer. This, therefore, relates to the capacity of the person concerned. The third clause relates to the various modes which are annexed to the foreign exchange which can be tagged with the said person. The restriction suggests that any purchase or borrowing or selling or lending or otherwise transferring are various modes of contravention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provisional Attachment Order (Section 5(1) PMLA) 3. 22.09.2016 Confirmation of attachment order (Section 8 PMLA) by Adjudicating Authority 4. 11.06.2018 Complaint filed under Section 45 of PMLA. 34. Admittedly, in the present case, charge sheet was filed by the CBI on 3.2.2014 and the ED, Cochin Zonal Office in file no. ECIL/4/KCZO/2014 registered the ECIR in 2014 itself. After conducting the investigation for about two years, the Provisional Attachment was passed on 31.03.2016 and the same was confirmed by the impugned order dated 22.09.2016. Admittedly, the prosecution complaint/chargesheet under section 45 of PMLA in the above said matter has been filed on 11.06.2018, which is more than one year, eight months and twenty days after the date of passing the confirmation order. The appellant in the above said matter challenged the order of the Adjudicating Authority dated 22.09.2016 by filing of the appeal in November, 2016 under section 26 of the PMLA, 2002. Reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in the absence of non-filing of the charge-sheet at the time of passing the confirmation order before the Adjudicating Authority. As already mentioned that the impugned order in the above said matter was passed on 22.9.2016 and the charge-sheet was filed on 11.6.2018. 37. It is admitted position that various amendments have been made inter-alia in the provision of Section 8(3)(a) of the Act. a) In the provision of the Prevention of Money Laundering Act, 2002 (15 of 2003) as amended by The Prevention of Money- Laundering Act, 2009 (21 of 2009), w.e.f. 01.06.2009, the language of the Section 8(3)(a) reads as under:- (3) Where the Adjudicating Authority decides under sub-section (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 l[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 the pendency of the proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmation order, there must be pending proceedings either under the scheduled offence as provided in the Act of 21 of 2009 and under Act of 28/2016 (PMLA proceedings) if the attachment proceedings are to be continued. Admittedly, in the present case, there were no pending proceedings under PMLA by the respondent. c) Yet, another amendment in the provision of Section 8(3)(a) of the Act as amended by The Finance Act, 2018 (13 of 2018), where the same reads as under:- (3) Where the Adjudicating Authority decides under sub-section (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 [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 (investigation for a period not exceeding ninety days or) the pendency of the proceedings relating to any [offence under this Act before a court or under the corresponding law of any other country, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er investigation is conducted before passing the provisional attachment order. In a way by virtue of the new amendment, 365 days period further granted for investigation even without filing the charge-sheet. The said period is granted apart from the investigation already conducted by the respondent before passing the PAO. However, by reading of this provision, it is clear that after the expiry of 365 days, the charge-sheet is to be filed from the date of confirmation of order by the Adjudicating Authority. 38. It is admitted on behalf of respondent in its written-submission that the amendment dated 19.04.2018 amending section 8(3) of PMLA, 2002 brings into the effect that order confirming the attachment passed under section 8(3) would only subsist during the period of investigation for a period not exceeding 90 days. In other words prosecution complaint shall be filed under 45(1) PMLA, 2002 within 90 days of confirmation of provisional attachment order. This amendment is prospective in nature and not retrospective. Following the amendment, prosecution complaint under section 45(1) PMLA, 2002 was filed on 11.06.2018 which is within the time limit of 90 days prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally or written to be Magistrate for taking action against the persons who have committed the offence. 42. Applicabilities of Police Investigation The counsel for the respondent does not dispute that the proceedings of PMLA are independent proceedings. It is a Special Act. ED has its own mechanism who investigate the matter other than the investigation conducted by the Police, CBI and other agencies. It is always the stand of ED that even if the accused is acquitted or discharged from the schedule offence, PMLA proceedings will still continue as the respondent has its own procedure of investigation and recoding the evidence. It is also not denied that Section 8(3)(a) has prescribed period of time to complete the investigating and to file the prosecution complaint. 43. Even otherwise, after hearing ED and other agencies, the Hon ble Delhi High Court has dealt with the same issue recently in the case of Omar Ali Obaid Balsharaf v/s. ED wherein it is held that the investigation under schedule offence is independent. The paras 56 to 74 of the judgement where the said issues were discussed and decided, are reproduced below:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in property. (1) Any police officer, may seize any property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offence. (2) Such police officer, if subordinate to the officer in charge of a police station, shall forthwith report the seizure to that officer. (3) Every police officer acting under sub- section (1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it cannot be conveniently transported to the Court, he may give custody thereof to any person on his executing a bond undertaking to produce the property before the Court as and when required and to give effect to the further orders of the Court as to the disposal of the same. 61. It is clear from the plain reading of Section 102 Cr.P.C. that any police officer may seize the property, which may be alleged or suspected to have been stolen or which is found in circumstances which create suspicion of the commission of any offence. However, the said order of seizure is only a temporary order and in te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. By virtue of Section 65, the provisions of Cr.P.C. apply only insofar as they are not inconsistent with the provisions of the PMLA. There can be little doubt that scheme of seizure under Section 102, Cr.P.C. is inconsistent with the provisions relating to attachment and seizure of property under the PMLA. 66. What is sought to be canvassed on behalf of the Enforcement Directorate is a devised scheme under which the Enforcement Directorate refers to the provisions of Section 102(1) of Cr.P.C. for drawing the power to issue orders for immediately seizing the property on mere suspicion but at the same time ignores the provisions of Section 102(3) of Cr.PC which requires such seizure to be reported to a Magistrate. There is clearly no principle of law that would permit such interpretation, where officers can draw the power under a statute and yet not be accountable for the checks and balances enacted therein. 67. Mr Singh had contended on behalf of the Enforcement Directorate that the PMLA does not contain any provision regarding seizure on mere suspicion, therefore the power to make such seizure can be drawn from Section 102 of Cr.P.C. He contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a plan or scheme which will be hindered and/or obstructed by giving effect to the State law. It can then be said that the State law trenches upon the Parliamentary statute. Negatively put, where Parliamentary legislation does not purport to be exhaustive or unqualified, but itself permits or recognises other laws restricting or qualifying the general provisions made in it, there can be said to be no repugnancy. 69. As is clear from the above, one of the tests for determining whether there is repugnancy between two statutes is to find out where one of the statutes has adopted a plan or a scheme, which will be hindered or obstructed by giving effect to the other statute. This principle to determine whether there is repugnancy between two enactments is of universal application. If one applies the aforesaid test, it is at once clear that the PMLA has set out a separate scheme with a separate set of safeguards for ensuring that properties of parties are not attached or seized without the authorities effecting such actions having reason to believe that such properties are proceeds of crime or are related to a crime. 70. If the contention as advanced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 17 of the PMLA are orders of interim nature and are operative for a limited period till pending adjudication under Section 8 of the Act and further confiscation of the property. Orders of freezing of property passed under section 17(1A) of the PMLA or provisional attachment are by their nature provisional orders that require confirmation. Such powers are exercised in emergent situations warranting passing such orders. The contention that an order of provisional freezing is in aid of provisional attachment is plainly unpersuasive. 72. It is possible that prior to acquiring any material providing the Enforcement Directorate any reason to believe that any property is a proceed of crime, the concerned officers may entertain a suspicion that property in question represents proceeds of crime; but that does not entitle them to freeze the property, interdict transactions and perhapsbring a person s business to a standstill. The nature of the power of seizure contemplated under the provisions of Cr.P.C. is drastic and exercise of such powers is likely to have severe adverse effects on the person concerned; thus, the parliament in its wisdom did not confer upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that the said amendments were prospective in nature. 47. In the context of the Prevention of Money Laundering Act, 2002, it has been held by the Honourable High Court of Telangana and Andhra Pradesh in Satyam Computer Services Limited v. Directorate of Enforcement (W.P. No. 37487of 2012) that since the Prevention of Money Laundering Act, 2002 is an Act which affects substantive rights of parties, amendments thereto would have to be ordinarily construed as having prospective effective. In these circumstances the amendments must be construed as having only prospective effect and thus not impacting the impugned order dated 22.09.2016. 48. Since the charge-sheet/prosecution complaint has not been filed under the provision of Section 8(3)(a) of the Act within the prescribed period of time, the attachments stand lapsed, thus, the same are released. Therefore, there is no need to go into the merit of the case. 49. The appeals are allowed accordingly. It is cleared that the proceedings pending under the schedule offence shall continue as per law. No opinion is expressed. The same will be decided without any influence of this order. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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