TMI Blog2023 (1) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 17 (1) of PML Act, issued Search Warrant/Authorisation to the Deputy Director to conduct search and seizure of the premises of the petitioners and thereafter the Deputy Director recorded reasons to believe without any date and time. The Hon ble Apex Court in OPTO CIRCUIT INDIA LTD. VERSUS AXIS BANK OTHERS [ 2021 (2) TMI 117 - SUPREME COURT] , held that the authorised Officer is vested with sufficient power and such power is circumscribed by a procedure laid down under the statute, as such the power is to be exercised in that manner alone, failing which it would fall foul of the requirement of complying due process under law. Thus, the action of the respondents in conducting search and seizure at the premises of the petitioner No.1-company and the residences of petitioners 2 to 4 and seizing of all the cash, jewellery and other articles in pursuance to the search warrant/authorization dated 17.10.2022 is contrary to the Section 17 of Prevention of Money Laundering Act, 2002 and accordingly the same is hereby set aside. The respondents are directed to release all the jewellery, cash and other articles seized in pursuance to the search warrant/authorization ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and signatures were forcefully taken and the petitioners could not read the contents of the search warrant. The respondents failed to provide the details of the date and time for the recording of the reasons to believe as per the Section 17 (1) of PMLA, 2002 and also failed to provide the contents of the reasons and further the respondents also failed to provide the dispatch details of the postal acknowledgment through which the reasons were communicated and failed to meet the mandatory provisions of Secton-17 of PML Act. The Writ Petition is maintainable under Article 226 by virtue of the full bench judgment of Hon ble Apex Court. 6. The learned Senior Counsel for the petitioners submits that the petitioners are attacking the impugned action of the respondents, mainly two grounds viz., (i) the reasons are to be recorded in writing before issuing search warrant and (ii) the reasons are to be communicated immediately after the search and seizure. 7. The learned Senior Counsel for the petitioners, in support of his contention, relied upon the following judgements: 1. Opto Circuit India Limited Vs. Axis bank and others (2021) 6 SCC 707 2. M/s Rashmi Metaliks Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivate Ltd., and M/s. MBS Impex Pvt Ltd., during the relevant period when the offences of defrauding MMTC had taken place. 11. The learned Additional Solicitor General further submits that the search action dated 17.10.2022 under Sections 17 and 18 of PMLA, 2002 had been conducted on the basis of Reasons to believe , duly recorded in writing. The petitioner No.2 had himself acknowledged by signing on the Authorization/Warrant along with the independent panchas/witnesses. The petitioners will have an opportunity of being heard and present their case before the Adjudicating Authrotty, New Delhi in terms of Section 8 of PMLA, 2002. 12. The learned Additional Solicitor General further submits that the respondents are duty to collect evidence and summons were issued to record the statements and collect documents from the witnesses and suspects. The statements were recorded in a professional manner and under Section 50 of PMLA, 2002 and Section 50 (2) of PMLA, 2002 empowers the authorities to summon any person whose attendance considers necessary whether to give evidence or to produce any records during the course of any investigation proceedings under the Act. The petitioners were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Copy of Reasons to Beleive forwarded to Adjudicating Authority (PMLA) 7 Authorization/Warrant for Search and Seizure in Form No.I 8 Forwarding letter and Index signed for forwarding reasons to believe 9 1 10 Acknowledgment slip in Form No.IV (reasons to believe) 11 Dak Dispatch Register 12 Acknowledgment Slip Register 13 Retention of property order dated 07.11.2022 14 Acknowledgment Slip in Form No. I (Retention Order) 15 Acknowledgemnt Slip in Form No.II (Retention order) 17. The records submitted by the respondents in sealed covers reveals that on 17.10.2022 one Mr.Dinesh Paruchuri, Additional Director, Enforcement Directorate, had reasons to believe that viz., M/s. Musaddilal Gems and Jewels (India) Private Limited has committed an act which constitutes money l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows: 17. Section Search and seizure. - (1) Where [the Director or any other officer not below the rank of Deputy Director authorized by him for the purposes of this section,] on the basis of information in his possession, has reason to believe (the reason for such belief to be recorded in writing) that any person- (i) has committed any act which constitutes money-laundering, or (ii) is in possession of any proceeds of crime involved in money-laundering, or (iii) is in possession of any records relating to money-laundering, (iv) is in possession of any property related to crime. then, subject to the rules made in this behalf, he may authorize any officer subordinate to him to- (a) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such records or proceeds of crime are kept; (b) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not available; (c) seize any record or property found as a result of such search; (d) place marks of identification on such record or (prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents in two (2) sealed covers this Court is of considered view that the Additional Director of the Enforcement Directorate without recording the reasons to believe issued search warrant/authorisation to his subordinates and the Deputy Director of the Enforcement recorded the reasons to believe without any date and time, which clearly shows that without following the requirements under Section 17 (1) of PML Act conducted search and seizure and seized jewellery, cash and other articles belonging to the petitioners. 22. The judgments relied on by the learned Senior Counsel for the petitioners in respect of Section 17 of PML Act apply to the instant case. The Hon ble Apex Court in Opto India Axis Bank and Others (supra 1), at para No.14 and 15, held as follows : 14. This Court has time and again emphasized that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner alone and in no other manner. Among others, in a matter relating to the presentation of an Election Petition, as per the procedure prescribed under the Patna High Court Rules, this Court had an occasion to consider the Rules to find out as to what would be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to compliance of the required procedure afresh, as contemplated in law . 23. The High Court of Calcutta, in M/s. Rashmi Metaliks Limited and Another Vs. Enforcement Directorate others (supra 2), at para No.13 and 18 held as follows: 13. Therefore, the search and seizure under Section 17(1) must also satisfy the defining characteristic of money-laundering and proceeds of crime as well as their respective procedural requirements as separately stipulated in the PMLA. In other words, the power to enter and search any place or to seize any record or property must be predicated by the satisfaction of all the requirements under Section 17(1) which should find a particularized statement in the written reason to believe component by the authorised officer under Section 17(1). It is only on the fulfilment of the conditions stipulated under Section 17(1) together with the satisfaction of the conditions of Sections 2(1)(u) and 3 that the power to search and seize is crystallized. xxx xxx 18. The singular absence of statements of reasons or the basis of an apprehension, factual or otherwise, for freezing the properties of the petitioners is apparent f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eizure of the premises of the petitioners and thereafter the Deputy Director recorded reasons to believe without any date and time. 26. The Hon ble Apex Court in Opto Circuit India Ltd. Vs. Axis Bank (supra1.), held that the authorised Officer is vested with sufficient power and such power is circumscribed by a procedure laid down under the statute, as such the power is to be exercised in that manner alone, failing which it would fall foul of the requirement of complying due process under law. 27. In view of the same, the action of the respondents in conducting search and seizure at the premises of the petitioner No.1-company and the residences of petitioners 2 to 4 and seizing of all the cash, jewellery and other articles in pursuance to the search warrant/authorization dated 17.10.2022 is contrary to the Section 17 of Prevention of Money Laundering Act, 2002 and accordingly the same is hereby set aside. The respondents are directed to release all the jewellery, cash and other articles seized in pursuance to the search warrant/authorization dated 17.10.2022. It is left open to the respondents to take any action, subject to compliance of the required procedure afresh, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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