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TMI Blog2023 (11) TMI 1295X X X X Extracts X X X X X X X X Extracts X X X X ..... ority on 29.09.2023. By the impugned order, four applications preferred by the appellant have been decided. 2. The learned counsel for the appellant submitted that thirteen F.I.Rs were registered in the year 2013 to 2020 by certain allottees of two separate residential projects undertaken by the company namely M/s IREO Private Limited and M/s IREO Fire River Private Limited. The appellant was not named in the FIR. The respondent, Enforcement Directorate recorded ECIR on 15.06.2021 in reference to those 13 FIRs, where also appellant was not named as an accused. 3. The prosecution complaint was also filed. The appellant was not shown to be an accused therein. However, in pursuance to the authorization under section 17 (1) of the Prevention Of Money Laundering Act, 2002, herein called Act officers of the Enforcement Directorate conducted search at several places. They seized several documents, records and the property of the appellant without verifying the source of acquisition of properties. The appellant accordingly filed a Criminal Writ Petition bearing no. 1751 of 2023 before Delhi High Court against the search operation and consequent seizure/ freezing of the properties. The sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extension of time for filing of reply was not allowed as the reply to show cause notice was already filed. We do not find any error in the order of the Adjudicating Authority. 11. If the record was required to be inspected before filing reply, prayer for it should have been made at the earliest so that a reply is filed after inspection of record. However, in the instant case, the reply to the show cause notice was filed by the appellant and it is only thereafter that he sought inspection of record with extension of time to file reply. The inspection was permitted but there was no question of extension of time for filing reply when reply had already been filed. It is to be noted that the proceedings before the Adjudicating Authority has to be completed within 180 days of the issuance of provisional attachment order and that too after serving a Show Cause Notice, after recording of reasons to believe, as envisaged under section 8 (1) of the Act of 2002. 12. The notice therein has to be of not less than 30 days on the person calling upon him to indicate the source of his income, earning or assets, out of which or by means of which he acquired the property. The persons receiving not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me judgement on the other issue. Thus, one and the same judgement was relied by the Adjudicating Authority on one issue while denying its application on the other issue. 19. We have considered the submission made by the learned counsel for the appellant and find that the issue raised by the appellant has already been settled by Delhi High Court in the case of Gold Craft Properties Pvt. Ltd. V/s Directorate of Enforcement 2023 DHC 6887 DB. 20. The Division Bench of the High Court found that even one Member of the Adjudicating Authority is competent to pass the order. 21. The Delhi High Court in the case of Aprajita Kumari and Another Vs. Joint Director, Enforcement Directorate and Another in WP (C ) 3008/2016 decided the same issue. It was even in the case of K. Rethinam Versus Union of India and Ors. in WP No. 8115/2017. It was held that Single Member can pass an order and it is not necessary that said member should be from the Judicial side. It can be an Administrative Member as well. 22. The same view was taken by Karnataka High Court in the case of Dyani Antony Paul V/s Union of India WP No. 38642/2016 date 11.12.2020 . 23. In view of the above, we do not find any illegalit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital records) is under process which shall take time to complete and that the relevance of the documents seized has to be checked and decided. Then on what basis, the Ld. Deputy Director came to the conclusion for retention of the seized documents/records (including digital records)? 4.4 How the Ld. Deputy Director reached the conclusion that there exists a prima facie case showing connivance and involvement of the Applicants/Respondent No. 1 & 2 and other Respondents with IREO group and Lalit Goyal for Money laundering for diversion of funds as stated in para7 of the instant OA? 4.4.1 What tangible and credible evidence indicative of involvement of the respondents in any process or activity connected with the 'proceeds of crime' has come on record in terms of para 284 of the judgment titled Vijay Madanlal Choudhary v. Union of India, 2022 SCC Online SC 929? 4.4.2 Why Retention orders and the Authorizations are not attached tothe RUDs? 4.4.3 How unconnected transactions were considered to be connected with the alleged proceeds of crime? B. In respect Sh. K.P. Prajapat, Assistant Director ED. (a) What was the mandate scope of conduct of search & seizure operations? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether he knew Mr. Sumit Upadhyay, the ED official who had called him inrespect of Panchnama dated 04.06.2023 beforehand? d) When and how was he contacted by the above officials? e) Where was he located, when he was contacted by the above official? f) As per the address mentioned in the Panchnama dated 01.06.2023, he is resident of West Bengal and no local address has been mentioned in the Panchnama. Whether he came all the way from West Bengal? g) In the Panchnama dated 04.06.2023, address of Gurugram has been mentioned,why different addresses are mentioned in two panchnamas? h) How much time did it take for him to reach the place of search? i) Whether he was told the purpose as to why he was being called by the aboveED official? j) Whether he was aware of his role as Pancha and he understood the process ofsearch or seizure and why it was being done? k) Whether he was given any sets of instructions by the above ED official whocalled him to witness such search, seizure? l) Were there any factors that might have influenced his observation during theprocess as recorded in the Panchnama? F. In respect of Shri Hakim Singh, Pancha/ Witness. a) Which ED o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would deal with the issue after considering the rival submissions. 28. Before we address the issue, it would be relevant to refer that proceedings under section 8 of the Act of 2002 are summary in nature. Once the order of provisional attachment of the properties is issued by the Enforcement Directorate, copy of it is to be sent to the Adjudicating Authority for passing order within 180 days from the date of the order of provisional attachment. 29. The Adjudicating Authority, before proceeding further in reference to the provisional attachment order, is to draw a show cause notice. It should contain reasons to believe and thereupon to be served to the person whose properties have been attached. It is to seek his reply and the period for it has been given under the Regulation. Thus, the proceedings by the Adjudicating Authority is to be completed within time-frame and for ready reference, Section 5 of the Act of 2002 is quoted here under:- Section 5 in The Prevention of Money-Laundering Act, 2002 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 him for the purposes of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation.- For the purposes of this sub-section "person interested", in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any other officer 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. (i) Paragraph 1 of Part A and Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or (ii) Paragraph 2 of Part A of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub-section (1) of section 36 of the Narcotic Drugs and Psychotropic Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector of Customs & Others reported in 1972 SC 2136 Para 12 of judgement is quoted here under:- 12. We may first deal with the question of breach of natural justice. On the material on record, in our opinion, there has been no such breach. In the showcause notice issued on August 21, 1961, all the material on which the Customs Authorities have relied was set out and it was then for the appellant to give a suitable explanation. The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them. In our-opinion, the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed lo be cross-examined by them on the statements made before the Customs Authorities. Accordingly we hold that there is no force in the third contention of the appellant. 35. The judgement of the Apex Court in Kanungo & Company (Supra) was relied by the Apex Court in the case of Telestar Travels Private Ltd V/s Enforcement Directorate 2013 9 SCC 549. Delhi High Court also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity of cross examination has caused any prejudice to the appellant. It is for the reason that statements of the persons sought to be cross examined were not recorded so as to rely their testimony. 37. It is apart from the fact that the Regulation does not provide for cross examination of a person whose statement or the testimony was not recorded at any time and specifically during the course of investigation. The appellant has cited many judgements on the principle of natural justice and we agree with the proposition of Law, but cross examination in summary proceedings cannot be claimed as rule. 38. In the light of the aforesaid, there was no reason to allow cross examination of the persons who can otherwise be cross examined by the appellant in the Criminal Trial, if prosecution produced them as witness and their statement are recorded in the Court. For all the reasons given above, we do not find any illegality in the order of the Adjudicating Authority to deny cross examination of the persons named by the appellant. 39. The appeal No. 6683/23. For supply of the copy of reasons to believe The last issue raised by the appellant is in reference to denial to serve a cop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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