TMI Blog2022 (8) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... ith 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. Admittedly, the original complaint and its annexures were voluminous running into almost 5000 pages and it needs time to peruse the voluminous documents served upon them and to comprehend them and to ascertain the facts in accordance with the internal records and collate the supporting documents for preparation of reply. Any inadequate reply would affect the defence of petitioners. Therefore, not granting extension of time period to reply to the impugned show-cause notice would be depriving them of their right to put forth defense against the provisional attachment order and to present evidence in support of their defense. The same was in violation of principles of natural justice violating the opportunity of providing a fair hearing. It is considered fit to direct the 1st respondent to grant extension of time for one (01) month to the petitioners to prepare a proper response to the impugned show-cause notice. For the purpose of computing the period of (180) days, the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arising out of Original Complaint No.1680/2022) provisionally attached the properties belonging to the petitioners and their group companies; on 06.04.2022, 2nd respondent filed a complaint providing the details of the attachment before the 1st respondent under Section 5(5) of the PMLA Act, 2002; vide letter dated 22.04.2022, the petitioners and their group companies received the show-cause notice issued by 1st respondent under Section 8(1) of the PMLA Act to indicate the source of income, earnings or assets out of which petitioners had acquired the movable and immovable assets, bank balance, fixed deposits, term deposits, intangible assets, etc., which were specified in the provisional attachment order and to show-cause why the PAO in respect of the properties should not be confirmed as representing proceeds of crime being value of properties involved in money laundering. 7. The show-cause notice served on the petitioners along with the original complaint and annexures was voluminous and running into 5000 pages; petitioners received the show-cause notice on 09.05.2022; the 1st respondent, without taking into consideration the fact that 6th petitioner was in jail and the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners clearly explained the reasons stated above and sought for extension of time for two (02) months. However, 1st respondent did not respond / extend the time period as sought for by the petitioners; that the reply to the show-cause notice was important for the petitioners as it would be necessary for comprehensive adjudication by 1st respondent with respect to attachment of assets of the petitioners and any insufficiency / inadequate / improper reply would put the petitioners to irreparable injury; the reply to the show-cause notice was also significant for the group of companies whose assets had also been attached by way of provisional attachment order; that there were no authorized signatories in the said group companies of 1st petitioner, and as such, they were unable to file the necessary applications to seek extension of time; and therefore contended that not granting extension of time period to reply to the show-cause notice was in violation of principles of natural justice and in violation of Articles 14 and 21 of the Constitution of India, and prayed for allowing the Writ Petition. 8. On the other hand, learned Standing Counsel for 2nd respondent contended tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional time to file reply to the show-cause notice issued by the adjudicating authority; that the grounds raised by him were with an ulterior motive to derail the adjudication proceedings pending before the adjudicating authority knowing well that these proceedings were time-bound and order was required to be passed within (180) days of issuance of provisional attachment order; 6th petitioner was served with the hard copies of the Original Complaint and the documents relied upon on 10.05.2022 itself; therefore, the contention of the 6th petitioner that he was not provided with access to the documents was incorrect; the further contention of the petitioners that they were not provided with effective consultation of 6th petitioner for preparation of effective reply was also not correct as the petitioners had been representing themselves before various judicial fora even though 6th petitioner was in judicial custody; petitioners were claiming frivolous grounds to de-rail the adjudication proceedings before the Adjudication Authority (PMLA), New Delhi; the Karvy Group was a large corporate group consisting of around 30 companies and had access to services of whole-time directors, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report complaint has been made or filed under the corresponding law of any other country : Provided further that, notwithstanding anything contained in [first proviso], any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act.] [Provided also that for the purposes of computing the period of one hundred and eighty days, the period during w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment : Provided that where a notice under this subsection 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 served to all persons holding such property. (2) The Adjudicating Authority shall, after (a) considering the reply, if any, to the notice issued under sub-section (1); (b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf; and (c) taking into account all relevant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are involved in money-laundering : Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering. (3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Authority granted an additional time of two (02) weeks to file their reply on or before 20.06.2022. As 6th petitioner was not released on bail and considering the representation of petitioners that he was the only person to have full and complete knowledge with respect to the allegations made in the impugned showcause notice, and he was not been provided with opportunity to access to the data which was required for preparation of a comprehensive and effective defence to the show-cause notice on his behalf and its subsidiaries and associated offices, petitioner made an application on 17.06.2022 seeking extension of time for a period of two (02) months. As there was no response from 1st respondent for extending the time period, petitioners filed the present Writ Petition. 15. The respondents also admitted that 6th petitioner was released from judicial custody only on 25.06.2022. Admittedly, the original complaint and its annexures were voluminous running into almost 5000 pages and it needs time to peruse the voluminous documents served upon them and to comprehend them and to ascertain the facts in accordance with the internal records and collate the supporting documents for prep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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