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TMI Blog2023 (1) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a case against one Mr.Sukesh Guptha and the officials of MMTC for defrauding M/s MMTC Limited in purchase bullion under buyer's credit scheme in F.I.R.No.RC01/(A)/2013 dared 03.01.2013 and also filed charge sheet No.25/2014 dated 27.11.2014. The petitioner No.1 being independent company, neither the petitioner No.1-company nor its directors are related to the alleged offences registered against Mr.Sukesh Guptha and others. The respondents assuming that there was connection between the petitioners and the above offences, have conducted search in the year 2019 at the premises of the petitioner No.1 company and even at the residence of petitioners No.2 to 4 and has not found any relevant documents and also has not seized any cash, gold or jewellery. 4. The learned Senior Counsel for the petitioners further submits that the petitioner No.1 Company is an independent company and the father of the petitioner No.2 i.e. Mr.Anurag Gupta is never the Director of the petitioner No.1 Company. The petitioner No.1 company is not the benami entity of Mr.Anurag Gupta. The Central Bureau of Investigation after due process and investigation did not make Mr.Anurag Gupta as accused in the offences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, instead of approaching this Court, as such the Writ Petition is not maintainable. 9. The learned Additional Solicitor General further submits that an FIR No.RC01(A)/2013 dated 03.01.2013 and charge sheet No.25/2014 dated 27.11.2014 was filed by the CBI, Hyderabad against Mr.Sukesh Gupta and officials of MMTC for defrauding M/s MMTC Limited in purchase of gold bullion under Buyer's Credit Scheme and during the course of investigation it was revealed that MMTC Limited imports bullion from Foreign Suppliers on consignment basis and sells to local customers through its billion centres located at Regional/Sub-Regional Offices including office at Hyderabad. A Provisional Attachment Order (PAO) bearing No.07/2021 dated 26.08.2021 was issued in the subject case under Section 5 (1) of PMLA, 2022 and Enforcement Directorate has provisionally attached movable and immovable properties belonging to MBS Group of companies. 10. The Learned Additional Solicitor General submits that father of the petitioner No.2 Mr.Anurag Gupta is a director of M/s.Shroff Apparels Private Limited which is a shell company and Mr.Anurag Gupta was also Director in M/s. MBS Jewellers Private Limited. The said comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Senior Counsel appearing for the petitioners, this Court directed the respondents to produce all the relevant records. Accordingly, the respondents have shown the original record to the Court and submitted photo copies of the said record in two (2) sealed covers to the Court. The index of photo copies of the record in two (2) sealed covers are as follows: 1 Panchanama drawn at M/s MBS Jewellers Private Limited, Secunderabad 2 Panchanama drawn at M/s Musaddilal Gems and Jewels India Pvt. Ltd., 6-3-563, Banjara Hills Main Road, Erramanjil Colony, Venkataraman Colony, Khairatabad, Hyderabad 3 Panchanama drawn at Residence of Shri Anurag Gupta, Ex-Director of M/s MBS Jewellers Pvt. Ltd., 3-5-784/B & C, 1st Floor, Musaddilal House, King Koti, Basheerbagh, Hyderabad 4 Panchanama drawn at MBS Jewellers Pvt. Ltd., D.no.3-5-886/1 to 4A, 5th Floor, Ward No.3, Old MLA Quarters Road, Himayathnagar, Hyderabad - 500 029 5 Panchanama drawn at M/s MBS Jewellers Pvt Ltd., Show Room, 40-1-40, Dutta Plaza, MG Road, Labbipet, Vijayawada, Andhra Pradesh - 520 010 6 Copy of "Reasons to Beleive" forwarded to Adjudicating Authority (PMLA) 7 Authorization/Warrant for Search a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudicating Authority, Impounding and Custody of Records and Period of Retention) Rule, 2005. Given under my hand and seal this 17th Day of October, Two Thousand and Twenty. SCHEDULE OF PREMISES Xxxx xx xx Sd/- Dinesh Paruchuri, Addl. Director --- 19. This Court has gone through the entire record produced by the respondents. Mr. Dinesh Paruchuri, Additional Director, has not recorded the 'reasons to believe', but Mr.Rahul Singhania, who was authorized to conduct search and seizure recorded 'reasons to believe" without any date and time. 20. Section 17 of the Prevention of Money Laundering Act, reads 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 prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be required for search under this sub-section. (4) The authority, seizing any record or property under sub-section (1) or freezing any record or property under sub-section (1-A) shall, within a period of thirty days from such seizure, as the case may be, file an application, requesting for retention of such record or property seized under sub-section (1) or for continuation of the order of freezing served under subsection (1-A), before the Adjudicating Authority. 21. After hearing both the sides and after perusing the records submitted by the respondents 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents No.1 to 3 to defreeze the respective accounts and clear the cheques issued by the appellant, drawn in favour of the Competent Authority towards the ITDS, PF, ESI, Professional Tax, Gratuity and LIC employees' deductions, subject to availability of the funds in the account concerned. Needless to mention that if any further amount is available in the account after payment of the statutory dues and with regard to the same any action is to be taken by the respondent No.4 within a reasonable time, it would open to them to do so 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) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is unlike the provision in the 1973 Code where any police officer including the Head Constable can proceed to search and seize records or property merely on the basis of allegation or suspicion of commission of a scheduled offence" 25. In the instant case the record reveals that the Additional Director of Enforcement Directorate without recording the 'reasons to believe' as contemplated under 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. 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 o ..... 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