TaxTMI 
TaxTMI 
2022 (8) TMI 612
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....ssets, etc., which were specified in the Provisional Attachment Order (PAO) No.06/2022 dated 08.03.2022 in File No.ECIR/HYZO/14/2021 against the petitioners; and to show-cause why the PAO in respect of the property should not be confirmed as representing proceeds of crime being value of properties involved in money laundering. 4. It is the contention of the learned counsel for the petitioners that the Central Crime Station, Hyderabad had registered certain FIRs against 1st petitioner and its directors, as such, an investigation under PMLA Act was initiated by the Enforcement Directorate, Hyderabad Zonal Office vide File No.ECIR/HYZO/14/2021 dated 19.05.2021. 5. During the course of investigation against 1st petitioner with respect to various crimes registered on the basis of complaints given by various banks, the Central Crime Station, Hyderabad arrested Mr. C. Parthsarathy, Chairman and Managing Director of 1st petitioner, who is the 6th petitioner herein and he is in judicial custody since 19.08.2021 at Chanchalguda Jail, Hyderabad. 6. During the pendency of investigation, 2nd respondent by way of provisional attachment order (arising out of Original Complaint No.1680/2022) pr....
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....nd he continued to remain in judicial custody and due to his incarceration for over 300 days, they were not having an opportunity to access the data which was required for preparation of a comprehensive and effective defence to the show-cause notice on his behalf as well as on behalf of 1st petitioner and its subsidiary and associated companies which were named as the other petitioners in the show-cause notice; in order to establish the source of funds in respect of the alleged financial irregularities in the show-cause notice and to provide accurate responses, petitioners would require effective consultation and participation of 6th petitioner who continued to be incarcerated, and a thorough perusal of voluminous internal documents of 1st petitioner and its subsidiaries and associated companies; 6th petitioner did not have an opportunity to perform the above exercises and the other petitioners / authorized representatives were never provided an opportunity to consult the 6th petitioner who had full and complete knowledge about the alleged financial irregularities; in the application dated 17.06.2022, submitted to 1st respondent, petitioners clearly explained the reasons stated abo....
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....an Sessions Judge, Hyderabad; thereafter, he preferred Criminal Petition No.3786 of 2022 before this Court and vide order dated 17.05.2022 the said petition was allowed; 6th petitioner, basing on the above order of this court dated 17.05.2022, filed a fresh statutory bail petition and he was granted bail vide order of the Metropolitan Sessions Judge, dated 20.05.2022; according to bail conditions, 6th petitioner had to provide two sureties; that the two sureties were also furnished by him before the Metropolitan Sessions Judge, Hyderabad; however, one surety had withdrawn subsequently and therefore he did not avail the bail granted to him; that he apparently chose to stay in judicial custody for the reason best known to him and now the 6th petitioner was claiming that being in judicial custody he was unable to file an effective reply to the show-cause notice issued by the adjudicating authority, i.e., the PMLA, New Delhi on account of non-availability of various facilities as claimed by him; thus, the petitioner chose to remain in prison from 20.05.2022 and now he had sought various facilities and claimed that he should be given additional time to file reply to the show-cause notic....
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....f the Act. The said Act empowers the Director or Deputy Director authorized to provisionally attach a property for (180) days if he has reason to believe that it is pertaining to proceeds of crime. 12. Sections 5 and 8 of the PMLA, 2002 are extracted hereunder for better perusal, which are as under : "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 off....
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.... who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority." ... ... ... 8. Adjudication - (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 subsection (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 subsection specifies any property as being h....
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....rovisions of PMLA, 2002. For passing order under Section 8(3) in connection with provisional attachment order, the Act prescribes a statutory time limit that the same had to be passed within (180) days from the date of provisional attachment order. The Adjudicating Authority in the impugned show-cause notice provided a detailed note regarding the time limitation of the proceedings emphasising the necessity for adherence to the due dates prescribed. The 6th petitioner was in judicial custody since 19.08.2021 and was produced on P.T. warrant and was remanded to judicial custody in the E.D. case admittedly on 20.01.2022. The petitioners were served with show-cause notice under Section 8(1) of the PMLA Act on 22.04.2022 and the same was received by them on 09.05.2022. The original complaint and the documents relied upon were served on them on 10.05.2022. 14. The petitioners were directed to file their written replies on or before 05.06.2022. However, considering their representation sent through their counsel vide email dated 04.06.2022, the Adjudicating Authority granted an additional time of two (02) weeks to file their reply on or before 20.06.2022. As 6th petitioner was not releas....