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TMI Blog2023 (9) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 25.04.2017 issued under Section 5 (1) of the PMLA. In the prayer portion, apart from a prayer for setting aside the aforesaid order dated 25.04.2017, it has also been prayed for quashing the complaint lodged under Section 5 (5) of the Act. 3. In the second writ petition, there are 15 numbers of petitioners which includes the 4 petitioners in the earlier case. The challenge in this petition is with regard to the provisional attachment order dated 30.1.2011 issued under Section 5 (1) of the PMLA relating to ECIR No. 02/GWZO/PMLA/2014 dated 07.07.2014 and also against the original complaint No. OC 1591/2021. In this petition, while the petitioner nos. 1 and 2 are the CMJ University and the CMJ Foundation, the rest of the petitioners are either officers of the petitioner nos. 1 and 2 or are connected to the same. 4. Before going to the issue which has arisen for determination, it would be convenient if the facts of the case are narrated in brief. The reference to the petitioner numbers would, however, be in the context of the second writ petition. 5. The petitioner no. 1-University came into being through a statute of the State of Meghalaya which was enacted in the year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Consequently, the petitioner no. 3 and certain other officials of the University were arrested and subsequently enlarged on bail. It was followed by an order dated 30.04.2013 by the Visitor stating therewith that many irregularities were committed by the University and therefore, fresh admissions were barred. On 07.05.2013, there was seizure of the documents by the police. 8. The aforesaid order dated 30.04.2013 was the subject matter of a writ proceedings before the Hon'ble Meghalaya High Court in WP(C) No. (SH)/106/2013 which was, however, dismissed vide judgment and order dated 16.05.2013 and against the said dismissal WA No. 16 (SH)/2013 was preferred which was also dismissed on 31.05.2013. The aforesaid judgment was challenged in the Hon'ble Supreme Court by filing SLP (Civil) No. 19617/2013. 9. In the meantime, on 12.06.2013, the Visitor had recommended the State Government to consider dissolution of the University. Accordingly, the said order was brought to the notice of the Hon'ble Supreme Court and an order was passed on 13.09.2013 disposing the SLP with a direction to the State Government to take appropriate action under Section 48 of the Act. 10. Pursuant to such dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said application, the said High Court vide order dated 13.10.2015 had directed release of an amount of Rs. 15.62 crores (approx) out of the total frozen amount of Rs. 43.29 crores (approx). Against the aforesaid order, the State of Meghalaya had filed SLP (Crl.) No.9552/2015 in which, the Hon'ble Supreme Court vide order dated 08.04.2016 had granted liberty to the petitioners to move the trial court seeking disbursement of funds from the frozen accounts subject to depositing any funds withdrawn from the frozen accounts pursuant to the order of the High Court. 15. In the meantime, the State had issued a notice dated 21.07.2016 restricting the petitioners from getting new enrollment of students for the academic year 2016-2017. The said notice was, however, the subject matter of Cont. Cas(C)/19/2016. Thereafter, it is claimed that the State vide a subsequent notice dated 05.09.2016 had withdrawn the earlier notice. At the same time, the State of Meghalaya filed SLP (Crl.) No. 6395 of 2016 against the judgment of the learned Single Judge in Crl. Pet. No.32 of 2014, dated 12.08.2015 which, however, was dismissed vide order dated 26.10.2016. It is the case of the petitioners that in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 22.06.2017 in WP(C)/3665/2017, the same was extended from time to time. 21. On 07.08.2018, the learned Addl. Sessions Judge, Shillong had passed an order dated 07.08.2018 directing an inquiry with the Punjab National Bank so as to verify the stand of the CID. The Punjab National Bank, vide reply dated 19.09.2018 confirmed that the petitioner Foundation had made deposit by means of FDR for an amount of Rs. 15.10 crores. In the meantime, the Hon'ble Supreme Court vide order dated 13.08.2018 had transferred the writ appeal to this Court to be disposed of within a year and till such time, it was directed that the stay order will continue. 22. When the matter was listed before this Court on 28.09.2018, it was observed that the proceeding for provisional attachment under Section 5 (1) of the PMLA was already concluded and a next stage of the proceeding was under Section 8 of the PMLA before the adjudicating authority. 23. On 24.10.2018, the learned Addl. Sessions Judge allowed the Foundation to withdraw an amount of Rs. 15.10 crores by taking into consideration the letter issued by the Punjab National Bank with the stipulation that the same would be subject to final outcome of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PMLA to term such degrees as fake. It is also averred that the fees received from the students which were deposited in the bank accounts cannot be treated as proceeds of crime and therefore, the attachment of the bank accounts could not have been done. 25. On 30.11.2021, fresh provisional attachment Order No. 1 of 2021 was issued for attaching various bank accounts and immovable properties of the petitioners concerning a huge amount of Rs. 13.54 crores (approx). This was followed by registration of a fresh Original Complaint No. 1591 of 2021 under Section 5 (5) of the PMLA in which, show cause notices have been issued on 17.01.2022. The petitioners claim to have submitted detailed reply on 24.02.2022. 26. It is the action of initiation of the fresh proceeding under the PMLA by means of provisional attachment Order No. 1/2021 involving attachment of various bank accounts and immovable properties of the petitioners vide order dated 30.11.2021 which is the subject matter of the second writ petition. 27. I have heard Ms. VD Makhija, learned Senior Counsel assisted by Shri AP Singh and Shri J Singh, learned counsel for the petitioners whereas the respondents are represented by Shri R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble Gujarat High Court in R/Special Civil Application No. 19387/2022, dated 17.02.2023 (Welspun Steel Resources Pvt. Ltd. Vs. Union of India). With regard to the expression "reason to believe", it is submitted that there has to be a factual and tangible basis to come to the said conclusion, which is absent in the present case. 32. The learned Senior Counsel has also assailed the proceeding by submitting that when the cases in the predicate offence were stayed, the proceedings under the PMLA are required to be kept in abeyance. In this regard, reliance has been placed upon the case of Hon'ble Karnataka High Court in WP(C)/19337/2022, decided of on 14.12.2022 (Ms. C Uma Reddy Vs. Directorate of Enforcement & Ors.) In the said case, certain courses were suggested which include keeping in abeyance the provisional order, furnishing of adequate security and continuation of the interim order. It is pointed out that the Hon'ble High Court of Meghalaya vide order dated 10.08.2022 has stayed the predicate offence. Reference is also made to the order dated 15.06.2022 of the learned Trial Court. 33. It is submitted that till date, no documents pertaining to degree has been seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing vide order dated 22.06.2017 coupled with the fact that it is the same materials which are being sought to be relied upon as was in the first order of attachment, the second order is wholly without jurisdiction. 39. It is, accordingly submitted that the proceedings under the PMLA are required to be kept in abeyance and the order of attachment be directed to be vacated and the bank accounts be de-freezed. It is further prayed that the securities offered by the petitioners may be directed to be accepted. It may be mentioned that the petitioners have deposited Title Deeds of certain plots of land and also an Indemnity Bond. 40. Per contra, Shri RKD Choudhury, learned Deputy Solicitor General, Union of India has opposed the writ petition tooth and nail. He has submitted that apart from the aspect of incorrect projection of facts on behalf of the petitioners, even the interpretation made are not tenable and therefore, liable to be rejected. 41. Shri Deb Choudhury, learned Dy. SGI has submitted that under Section 4(2) of the CMJ University Act, the University was started. However, degrees were awarded from the first year itself. He submits that the records would reveal that 20,570 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is accordingly submitted that the conduct of the petitioners does not justify any indulgence by this Court under the equitable jurisdiction. 45. As regards the proceeding before the learned CJM, Shillong, the learned Dy. SGI has submitted that the petitioners had not only withdrawn an amount of Rs. 15.10 crores but had also withdrawn Rs. 12.79 crores (approx.) out of the amount of Rs. 27.66 crores attached by the E.D. it is submitted that the order dated 03.05.2017 of the learned CJM, Shillong was grossly misused. 46. With regard to the Hon'ble Supreme Court's order, the petitioner Foundation had deposited an amount of Rs. 15.10 crores as FDs in the Bank between 09.03.2017 to 24.03.2017 which was in violation of the direction of the Hon'ble Supreme Court that the amounts were to be deposited back to the same accounts from which they had withdrawn. However, all the accounts amounting to Rs. 15.10 crores were closed on 05.05.2017 and rather, the Foundation had taken loans to part finance the said FDs and the loan accounts were also closed on 05.05.2017 by closing the FDs. In this connection, the State had filed a contempt petition in the Hon'ble Supreme Court as its orders were v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oudhury, learned Dy. SGI also submits that the Act itself provides for an alternative remedy and therefore, the writ petition itself is not maintainable. He has also referred to an order dated 27.09.2022 passed by the Hon'ble Meghalaya High Court in WP(C)/81/2019 and submits that the matter is similarly pending before the adjudicating authority under Section 8 of the Act. He submits that due opportunity would be granted to the petitioners by issuance of show cause notices whereafter the parties would be heard. Further, Section 26 provides for an appeal. 52. The learned Dy. SGI has submitted that at each and every stage, the petitioners are attempting to circumvent the Court proceedings. He has raised the following specific points in this connection: (i) The Chancellor was self appointed without the approval of the Visitor of the University. (ii) The Endowment Account was opened and immediately closed to show compliance to the Act. It is submitted that a University cannot run without an endowment account. (iii) The petitioners had even misled the Hon'ble Supreme Court by projecting that Fixed Deposits were created in the Punjab National Bank, New Delhi. (iv) The petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard, he refers to page 3011 of Volume-VII of the pleadings. He has also submitted that the Hon'ble Allahabad High Court vide order dated 16.03.2023 has held the degrees to be valid. 57. With regard to the functioning of the University, it is submitted that the University is a UGC recognized University in the State of Meghalaya. He further submits that when the validity of the degrees are subject matters which are sub judice, it would be prejudicial to presume that everything are proceeds of crime. Additionally, he submits that the original Title Deeds of the 52 acres of land have already been placed on record, the value of which would be more than the entire amount involved. He has also referred to the Google map to contend that the campus of the petitioner University has indeed been constructed and the same being functional, interest of justice would require interference by this Court. He has also submitted that the requirement of approval of the Visitor cannot be construed to mean a prior approval. 58. The rival submissions made by the learned counsel for the parties have been duly considered and the materials placed before this Court have been carefully examined. 59. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truly all material facts necessary for his assessment for that year". It postulates a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. What facts are material, and necessary for assessment will differ from case to case. In every assessment proceeding, the assessing authority will, for the purpose of computing or determining the proper tax due from an assessee, require to know all the facts which help him in coming to the correct conclusion. From the primary facts in his possession, whether on disclosure by the assessee, or discovered by him on the basis of the facts disclosed, or otherwise - the assessing authority has to draw inferences as regards certain other facts; and ultimately, from the primary facts and the further facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable. Thus, when a question arises whether certain income received by an assessee is capital receipt, or revenue receipt, the assessing authority has to find out what primary facts have been proved, what other facts can be inferred from them, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graduation degrees from the petitioner-University and the issue was as to whether the degrees of graduation awarded by the petitioner-University were valid or not. 65. The learned Single Judge of the Hon'ble Allahabad High Court in the judgment dated 19.11.2013 had taken into consideration the observation of a Committee constituted by the UGC which had given a report dated 01.08.2013. The said observations and recommendations have been extracted in the judgment which is also quoted hereinbelow: "On receiving the Visitor's decision, the Chairman, UGC constituted a Committee Chaired by Prof. Mihir K. Chaudhari, Vice-Chancellor, Tezpur University, Tezpur and eight Members of imminence and repute to visit the University and make on the spot assessment of fulfilment of criteria in terms of programmes, faculty, infrastructural facilities, financial viability etc. The said Committee submitted its report dated 1.8.2013. The observations of the Committee as also its recommendations as contained in the report are produced below: Observation of the Committee (i) The University appears to have functioned from a hired building being shared with several commercial agencies. The inne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n at its 495" meeting held on 1 October, 2013 The Commission considered the report and approved the same. A copy of the report as submitted by the UGC Expert Committee along with the observations of the Committee on the information submitted by CMJ University to UGC is enclosed for your perusal and further necessary action at your end. You are requested to take appropriate action against CMJ University as per the provisions of the University Act or any other law as the Hon'ble Govenor's Secretariat deems fit. You are also requested to take a decision about the validity of degrees already awarded by the CMJ University in the past keeping in view that only those degrees can be termed as valid for which courses were conducted by CMJ University in regular mode at its main campus and that too with the prior approval of Statutory Council(s) concerned, wherever required. Further, Ph.D. can be conducted by any University in regular mode at the main campus and as per the provisions contained in the UGC M.Phil/Ph.D. Regulations, 2009. Decision taken by the Secretariat may kindly be informed as the UGC is receiving lot of queries about CMJ University and validity of degrees alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , no fault can be found with the order of the learned Single Judge declining te grant the relief as prayed for commanding the State to appoint the appellant on the post of Anudeshak in the subjects of Arts and Physical Education. The appellants have no vested right to claim such an appointment and the writ Court while considering such a plea must, above all, be guided fry the grave danger in imposing on the whole body of students, teachers who dam to be recipients of degrees of a University which is under a serious cloud bath in regard to its credibility and integrity. The jurisdiction under Article 226 of the Constitution has to be guided by the need to render substantial justice and the claim of the appellants in this case was seriously outweighed by the public interest in ensuring that the students whom the appellants claim an entitlement to teach are not left in the lurch by persons who have obtained degrees ostensibly in pursuit of courses granted by such a University." 68. This Court is of the view that when the challenge to the action of the respondent authority in declaring the degrees awarded by the petitioner- University was negated, there may not remain much scope for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verification of both the above student is compete according to the records of the university and the degree of both the above students is valid." 72. What intrigues this Court is that the RTI reply is given by the petitioner- University whose entire action is under cloud and is rather, part of criminal cases with allegations of huge misappropriation of public money leading to registration of PMLA proceedings. Secondly, the Hon'ble Allahabad High Court while being apprised of the judgment of the learned Single Judge of the Hon'ble Meghalaya High Court dated 16.07.2015, the order of the Division Bench of the Hon'ble Meghalaya High Court dated 06.05.2021 in WA/14/2017 which was preferred against the said judgment dated 16.07.2015 was suppressed. The said judgment has been annexed as Annexure-20 in the affidavit of the respondents filed on 20.02.2023 in WP(C)/2723/2022. It may be mentioned that the said writ appeal preferred by State of Meghalaya was allowed and the impugned judgment dated 16.07.2015 passed in WP(C)/177/2014 was set aside. This Court has also noticed that the earlier judgments of the Hon'ble Allahabad High Court, namely, that by the learned Single Judge dated 19.11. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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