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Judgment
,,,,
FPA-PMLA-2955/CHN/2019,,,,
The present appeal has been filed by the appellant against the order dated 16.01.2019 passed by the Adjudicating Authority confirming the,,,,
Provisional Attachment Order (P.A.O) no. 11/2018 dated 31.07.2018.,,,,
The facts in brief:,,,,
a. A criminal case was registered vide RC no. 08/E/2018-BS & FC/BLR on 24.03.2018 by CBI, BS & FC, Bangalore, against the",,,,
individuals/firms/Company named below for commission of offences of Criminal Conspiracy, Criminal Breach of Trust, Cheating, Forgery, using as",,,,
genuine a forged Document and Criminal misconduct by Public Servants on the basis of a written complaint dated 23.03.2018 from Shri G.D.,,,,
Chandrashekhar, General Manager, (MC-1), Mid Corporate Regional Office-I, State Bank of India, Chennai Region against M/s. Nathella Sampath",,,,
Jewelry Private Limited, Chennai & Ors. for offences under Section 120B read with Section 409, 420, 467, 468 & 471 of Indian Penal Code, 1860 and",,,,
Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 in the said FIR.",,,,
i. M/s. Nathella Sampath Jewelry Private Limited. (M/s. NSJPL) (D-1),,,,
ii. Shri N. Ranganath Gupta, Promoter cum Managing Director (D-2). iii.Shri N. Prasanna Kumar, Director (D-3).",,,,
iv. Shri N. Prapanna Kumar, Director (D-4).",,,,
v. Shri Sohun C.J. Partner of M/s. Jeeravla & Co., Chartered Accountant, Kilpauk Chennai & Statutory Auditor of D-1 and unknown Public Servants",,,,
and unknown others.,,,,
b. It is revealed that during the period 2009 to 2017 M/s. NSJPL was enjoying financial assistance in the form of working capital credit limits with,,,,
IOB, ICICI, HDFC & Citi Bank to the tune of Rs.71 crores which was taken over by SBI during 2009 by sanctioning Rs.100 crores to M/s. NSJPL",,,,
and that the exposure of SBI was reduced from Rs.100 crores to Rs.70 crores during January, 2010, with an overall limit of Rs.112 crores and that",,,,
the limit of SBI subsequently increased during the period 2010 to 2012 to Rs. 210 crores and that in February, 2013, the erstwhile State Bank of",,,,
Travancore (e-SBT) sanctioned a limit of Rs.40 crores thus, the overall credit limits were Rs.305 crores and all the banks were brought under the",,,,
Consortium Agreement with SBI being the lead bank and that in 2015, Union Bank of India was inducted into the Consortium and the said bank",,,,
sanctioned a limit of Rs.50 crores and that financial facilities viz., option to avail CC (Hyp)/Metal Gold Loan were also permitted and M/s. NSJPL",,,,
purchased gold in the form of bullion either from the nominated banks in the Consortium or from the open market by utilizing the limits and that as on,,,,
31.03.2017, these banks that viz., SBI, HDFC & Union Bank of India were consortium members and the limits availed by M/s. NSJPL from the said",,,,
banks were Rs.250 crores, Rs.40 crores and Rs.50 crores respectively all totaling Rs.340 crores and that the credit limits were permitted based on the",,,,
drawing power available which was derived from the current assets as submitted by them from time to time.,,,,
c. That M/s. NSJPL submitted audited accounts signed by the Managing Director and Shri Sohum C.J. Partner (for financial year 01.04.2009 to,,,,
31.03.2016) of M/s. Jeeravla & Co., Chartered Accountant firm representing the statutory audit firm. The financial statements are reflected at",,,,
internal page 16 & 17 of the impugned order and that subsequently Yes Bank joined the Consortium which had sanctioned a limit of Rs. 30 crores,,,,
during March, 2017.",,,,
d. It is alleged that M/s. NSJPL started delaying the servicing of interest for April, 2017 for all the banks in the Consortium and that inspection was",,,,
carried and found that there was no activity and low level stocks at the showrooms and that subsequently verification of stocks were carried on and,,,,
sudden depletion of stocks and work-in-progress were noticed during audit.,,,,
e. That the Consortium decided to conduct forensic audit into the accounts of M/s. NSJPL, M/s. Deloitte Touche Tohmatsu India LLP conducted",,,,
forensic audit for the period April, 2010 to June, 2017 in the account of M/s. NSJPL and as per the report of the forensic audit firm dated 14.12.2017,",,,,
there were misrepresentation/falsification of records, diversion of funds etc., which resulted in loss to the banks to the tune of Rs. 379.75 crores",,,,
(outstanding as on 28.02.2018) plus accrued interest on 01.03.2018 to the above banks.,,,,
f. Since there was misrepresentation/falsification of the book of account/financial statements of the company, the aforesaid banks suffered loss to the",,,,
tune of Rs. 379.75 crores as on 28.02.2018.,,,,
g. That the account of M/s. NSJPL classified as NPA and recovery process initiated under SARFAESI.,,,,
h. Since Sections 120-B, 420, 467 and 471 of IPC, 1860 and Section 13(2) read with 13(1)(d) of Prevention of Corruption Act, 1988 are scheduled",,,,
offences under PMLA so the Enforcement Directorate registered ECIR on dated 09.04.2018.,,,,
i. That there is allegation of round tripping in the investment in the shares of M/s. NSJPL by the Promoters and that utilization of crime proceeds viz.,",,,,
NSJPL loan funds for settlement of loans in the name of trust in which the directors and promoters are trustees, for settlement of personal home loans",,,,
of Promoters/Directors.,,,,
j. That during the course of the investigation by Enforcement Directorate, into the allegations, they have identified and attached 37 immoveable",,,,
properties out of which following two properties are involved in the present appeal:-,,,,
i. Land measuring 1 Acre and 8 cents (47088 Sq.Feet) situated in the approved layout under LPDM/DTCP No.31870, 3/71 & 4/71 comprised in",,,,
Survey No.255/1 as per Patta No.1539, New Survey No.255/37, situated at No.1, Varadarajapuram Village, Sriperumbudur Taluk, Kanchipuram",,,,
District.,,,,
ii. Land @ survey No.51/1B, 2B2, 2B3, 1C, 1A, 2B1, 49/3 & 49/4 @ Koyambedu Village totally measuring 25098 Sq.Feet + Commercial Building in",,,,
the nature of Kalyana Mandapam functioning in the name and style of Nathela Sulochanamma Kalyana Mandapam comprising Ground + 2 Floors, at",,,,
106 Jawaharlal Nehru Salai, Koyambedu, Chennai.",,,,
The case of the appellant:,,,,
3.1. That the case of the appellant inter-alia is that:,,,,
Type of loan,Loan A/c. No.,"Loan Agreement
dated","Amount disbursed
(Rs.)",
Term Loan,0000080000389,31.03.2016,"40,00,00,000/-",
Line of Credit,0162101,31.03.2016,"5,00,00,000/-",
TOTAL AMOUNT,,,"45,00,00,000/-",
Company v. The Deputy Director, Directorate of Enforcement, Delhi & Ors. reported in MANU/ML/0094/2019, the present appellant being a victim",,,,
of fraud and cheating cannot be made to suffer further by denying its lawful remedies of recovering its due by sale of the properties mortgaged with,,,,
the appellant.,,,,
iii. That the Appellant has been arrayed as defendant in the Original complaint only due to the reason that aforesaid properties are mortgaged with the,,,,
Appellant. It is further submitted that neither the Criminal complaint registered by CBI nor ECIR as registered for investigation under PMLA levels,,,,
any allegation against the appellant or any of its officer.,,,,
iv. That the due diligence on the part of the appellant has never been disputed by the Respondent.,,,,
b. Appellant secured creditor being a bona fide third party had initiated actions against mortgaged properties under SARFAESI Act,",,,,
2002 and rules framed thereunder prior to the order of attachment under PMLA:,,,,
i. That indisputably the account of the Borrower was classified as NPA on 01.12.2017 and thereafter demand notice dated 08.12.2017 under Section,,,,
13(2) of the SARFAESI Act, 2002 was duly served upon the borrowers. Constructive/symbolic possession of the secured asset was taken by the",,,,
Appellant on 12.02.2018 and sale notice dated 21.02.2018 was also issued while the Provisional Attachment Order no.11/2018 has been passed on,,,,
31.07.2018 which makes it apparently clear that the appellant had initiated actions for enforcement of security interest in mortgaged properties under,,,,
SARFAESI Act, 2002 much prior to the order of the attachment under PMLA. Thus, as held by the Honâ€ble Delhi High Court in Deputy Director",,,,
Directorate of Enforcement Delhi and Ors. vs. Axis Bank & Ors., MANU/DE/1120/2019, in such a situation, the attachment under PMLA will take a",,,,
back-seat allowing the secured creditor bona fide third party to enforce its claim by disposal of the mortgaged property, the remainder of its value, if",,,,
any, thereafter to be made available for the purpose of PMLA.",,,,
ii. That the relevant observations of the Honâ€ble Delhi High Court in the case of Deputy Director Directorate of Enforcement, Delhi & Ors. vs. Axis",,,,
Bank and Ors., MANU/DE/1120/2019 are reproduced herein under-",,,,
“163. Having regard to the above scheme of the law in PMLA, it is clear that if a bonafide third party claimant had acquired interest in",,,,
the property which is being subjected to attachment at a time anterior to the commission of the criminal activity, the product whereof is",,,,
suspected as proceeds of crime, the acquisition of such interest in such property (otherwise assumably untainted) by such third party cannot",,,,
conceivably be on account of intent to defeat or frustrate this law. In this view, it can be concluded that the date or period of the",,,,
commission of criminal activity which is the basis of such action under PMLA can be safely treated as the cut-off. From this, it naturally",,,,
follows that an interest in the property of an accused, vesting in a third party acting bona fide, for lawful and adequate consideration,",,,,
acquired prior to the commission of the proscribed offence evincing illicit pecuniary benefit to the former, cannot be defeated or frustrated",,,,
by attachment of such property to such extent by the enforcement authority in exercise of its power under Section 8 PMLA.,,,,
…….,,,,
Situation may also arise, as seems to be the factual matrix of some of the cases at hand, wherein a secured creditor, it being a bonafide",,,,
third party claimant vis-a-vis the alternative attachable property (or deemed tainted property) has initiated action in accordance with law,,,,
for enforcement of such interest prior to the order of attachment under PMLA, the initiation of the latter action unwittingly having the effect",,,,
of frustrating the former. Since both actions are in accord with law, in order to co-exist and be in harmony with each other, following the",,,,
preceding prescription, it would be appropriate that the PMLA attachment, though remaining valid and operative, takes a back-seat",,,,
allowing the secured creditor bonafide third party claimant to enforce its claim by disposal of the subject property, the remainder of its",,,,
value, if any, thereafter to be made available for purposes of PMLA.â€",,,,
Further, reliance is also placed upon the judgment of this Honâ€ble Tribunal in Indian Overseas Bank & Ors. Vs. The Joint Director, Directorate of",,,,
Enforcement, New Delhi and Ors. reported in MANU/ML/002/2020 and Chief Manager, Syndicate Bank v. The Deputy Director, Directorate of",,,,
Enforcement, Delhi & Ors. reported in MANU/ML/0095/2019.",,,,
iii. It is a settled position of law that an interest in the property of an accused under PMLA, vesting in a third party acting bona fide, for lawful and",,,,
adequate consideration, acquired prior to the commission of prescribed offence evincing illicit pecuniary benefit to the former, cannot be defeated or",,,,
frustrated by attachment of such property to such extent by the enforcement authority in exercise of its power under Section 8 of PMLA.,,,,
c. Provisions of Prevention of Money Laundering Act, 2002 do not override the provisions of SARFAESI Act, 2002:",,,,
i. That the Prevention of Money Laundering Act, 2002 does not have an overriding effect over SARFAESI Act. Further the Delhi High Court in",,,,
Deputy Director Directorate of Enforcement Delhi and Ors. vs. Axis Bank and Ors. MANU/DE/1120/2019 at paragraph no. 147 has held that object,,,,
and reasons of the PMLA and SARFAESI Act are distinct and there exists no overlap.,,,,
ii. That the Adjudicating Authority has further failed to appreciate and consider that by virtue of Section 26E of the SARFAESI Act, 2002 after the",,,,
registration of security interest the dues of a secured creditors gets a priority, over all other debts and all revenues, taxes, cesses and other rates",,,,
payable to the Central Government or State Government or local authority.,,,,
iii. That the Honâ€ble Division Bench of the Punjab and Haryana High Court in Seema Garg & Ors. v. The Deputy Director, Directorate of",,,,
Enforcement reported in MANU/PH/0204/2020 has considered the judgment of the Honâ€ble Delhi High Court in Deputy Director Directorate of,,,,
Enforcement Delhi and Ors. vs. Axis Bank and Ors. MANU/DE/1120/2019 and has upheld the same in entirety except on a small issue where the,,,,
Honâ€ble Delhi High Court has declared/treated words “value of such property†and “property equivalent in value held within country†at,,,,
par.,,,,
iv. That the respondent in its reply at page no. 3 para 6(c) has wrongly stated that PMLA, 2002 is a criminal law as it provides for confiscation of",,,,
proceeds of crime or value thereof and entails punishment and since therefore, the criminal proceedings will override civil proceedings. In this regard,",,,,
reliance is again placed upon the judgment of Honâ€ble Delhi High Court in Deputy Director Directorate of Enforcement Delhi and Ors. vs. Axis,,,,
Bank and Ors. MANU/DE/1120/2019 at paragraph 171 (i) wherein it has been categorically held that the process of attachment (leading to,,,,
confiscation) of proceeds of crime under PMLA is in nature of civil sanction which runs parallel to investigation and criminal action vis-Ã -vis the,,,,
offence of money laundering. Further, it has also been held that attachment under PMLA will take a backseat in cases where proceedings for",,,,
enforcement of security interest under SARFAESI Act, 2002 have been initiated prior to the date of provisional attachment order.",,,,
d. Jurisdiction of this Appellate Tribunal under Section 26(4) to modify or set aside impugned order is not curtailed by second proviso,,,,
to Section 8(8) as alleged by the Respondent:,,,,
i. That the respondent in its reply at page no. 4 at para no. 6(f) have attempted to state that by virtue of second proviso to Section 8(8) of the PMLA,",,,,
2002, the jurisdiction of this Honâ€ble Tribunal is curtailed and therefore the appellant herein shall approach the Special Court seeking release of its",,,,
mortgaged properties.,,,,
ii. That this contention of the Respondent is contrary to Section 26(4) of the PMLA, 2002 and the judgments of this Honâ€ble Tribunal wherein it has",,,,
been clearly held that this Honâ€ble Tribunal possess requisite jurisdiction to modify or set aside the impugned order which has confirmed the,,,,
provisional attachment order. Reliance in this regard is placed upon the judgment of this Honâ€ble Tribunal in JM Financial Asset Reconstruction,,,,
Company v. The Deputy Director, Directorate of Enforcement, Delhi & Ors. reported in MANU/ML/0094/2019.",,,,
e. There is no material for the formation of ‘reason to believe’ u/s 5 (1) of PMLA, 2002.",,,,
i. That under the provisions of PMLA, the property can be provisionally attached by the Director or any other officer not below the rank of Deputy",,,,
Director “on the basis of material†and on the basis of such material the concerned officer must have “reason to believe†that-,,,,
a) any person is in possession of proceeds of crime; and,,,,
b) such proceeds are likely to be concealed, transferred, or dealt with any manner which would result in frustrating any proceedings relating to",,,,
confiscation of such proceeds of crime.,,,,
ii. That any and every material cannot be made the basis of the reason to believe, and it is only the material which has direct nexus or link with the",,,,
formation of the belief, can give jurisdiction to attach the property. It is submitted that the respondent has failed to show any such material in his",,,,
possession which can lay out the reason that the Appellant is in possession of proceeds of crime and such proceeds are likely to be concealed,",,,,
transferred, or dealt with any manner which would result in frustration of proceeding under PMLA. Reliance in this regard is placed upon the",,,,
judgment of the Honâ€ble Division Bench of the Punjab and Haryana High Court in Seema Garg & Ors. v. The Deputy Director, Directorate of",,,,
Enforcement reported in MANU/PH/0204/2020 (para 17).,,,,
iii. That this Honâ€ble Tribunal in JM Financial Asset Reconstruction Company v. The Deputy Director, Directorate of Enforcement, Delhi & Ors.",,,,
reported in MANU/ML/0094/2019 has also held that in absence of valid reasons the attachment notice and order are liable to be set aside. In the,,,,
instant case the reason to believe as recorded by the Respondent fails to establish that the mortgaged properties qua Appellant was either proceeds of,,,,
crime or was its by-product and same was likely to be transferred or dealt in any manner which may result in frustrating any proceeding under,,,,
PMLA.,,,,
iv. That the properties in question are already mortgaged with the Appellant and therefore the primary requirement of Section 5 that property is likely,,,,
to be transferred by the alleged accused persons is absences since in terms of the SARFAESI Act, 2002, only the Appellant can take actions against",,,,
those properties for enforcement of security interest in accordance with the provisions of the SARFAESI Act, 2002 and rules framed thereunder.",,,,
v. Therefore, the provisional attachment under Section 5 of PMLA by the Respondent is bad in law on this count also and therefore, liable to be set",,,,
aside.,,,,
f. Non-applicability of Section 3 of the PML Act, 2002 in the present matter.",,,,
i. That a holistic reading of the definition of “proceeds of Crime†and the penal provision under Section 3 of the PML Act which uses conjunctive,,,,
“andâ€, make it luminous that any persons concerned in any process or activity connected with such “proceeds of crime†relating to a",,,,
“scheduled offence†including its concealment, possession, acquisition or use can be guilty of money laundering, only if both of the two",,,,
prerequisites are satisfied i.e.,,,,
(i) Firstly, if he-",,,,
(a) directly or indirectly “attempts†to indulge,",,,,
(b) “knowingly†either assists or is a party, or",,,,
(c) is “actually involved†in such activity; and,,,,
(ii) Secondly, if he also projects or claims it as untainted property.",,,,
ii. That the Second of the two pre-requisites to attract Section 3 of PML Act, 2002 would be satisfied only if the person also projects or claims",,,,
“proceeds of crime†untainted property. For making such claim or to project “proceeds of crime†as of tainted nature i.e. the property being,,,,
“proceeds of crime†derived or obtained directly or indirectly, as a result of criminal activity relating to scheduled offence, would be utmost",,,,
necessary, which however is lacking in the instant case. If there is no direct/indirect involvement of any person or property with the “proceeds of",,,,
crime†nor there is any aspect of knowledge in any person with respect to involvement or assistance nor the said person is party to the said,,,,
transaction, then it cannot be said that the said person is connected with any activity or process with the “proceeds of crimeâ€. Thus, Section 3",,,,
finds no application in the present case as neither there is any involvement of “proceeds of crime†nor there is any involvement of Appellant,,,,
warranting the application of Section 3. Reliance placed on the Judgment of Gujarat High Court in case of Jafar Mohammmed Hasanfatta and Ors.,,,,
vs. Deputy Director and Ors. MANU/GJ/0219/2017.,,,,
3.3. During the course of argument, the learned counsel for the appellant submitted that this Tribunal is bound by the judgment of the Honâ€ble Delhi",,,,
High Court, rather than the judgment passed by other High Courts as this Tribunal is situated and functioning within the territorial jurisdiction of the",,,,
Honâ€ble Delhi High Court. He has relied on the following judgment:,,,,
a) J. Sekar v. Union of India & Ors. 2018 SCC OnLine Del 6523 Paras 38-41.,,,,
b) Sita Ram Khemka v. K. K. Banerji & Ors. MANU/UP/0038/1958 Para 8,,,,
c) Astik Dyestuff (P) Limited v. Commissioner of Central Excise & Customs, MANU/GJ/1062/2013 Para 4",,,,
Sl.No,Name of the Bank,Nature of limit,Share,"Amount (Rs. In
Crores)
1.,SBI,Working Capital,73.52,250.00
2.,HDFC,Working Capital,11.76,40.00
3.,Union Bank of India,Working Capital,14.72,50.00
Total,,,100.00,340.00
disclosed commission of offences punishable under 120-B, 420, 467 & 471, r/w Section 13(2) r/w 13(1) (d) of the Prevention of Corruption Act, 1988,",,,,
which are the Scheduled Offences under the Prevention of Money Laundering Act, 2002 and as a prima-facie case for an offence of money",,,,
laundering (Section 3 of the Prevention of Money Laundering Act, 2002) punishable under Section 4 of the said Act, appears to have been made out, a",,,,
case was therefore recorded against M/s. NSJPL & Others and investigation under the provisions of the Prevention of Money Laundering Act, 2002",,,,
and the Rules framed there under were initiated under ECIR/CEZO-I/09/2018 dated 09.04.2018.,,,,
4.3. That during the course of the investigation under PMLA, 2002, various records were resumed from the consortium of Banks including SBI, Union",,,,
Bank of India and HDFC and also from other financial institutions in which M/s. NSJPL had reportedly maintaining accounts outside the consortium.,,,,
The records resumed included the Statement of Account. Similarly, during the investigation under PMLA, 2002 various persons were examined under",,,,
the provisions of Section 50 of PMLA, 2002 and their voluntary statements obtained. The persons examined included the promoters and Directors of",,,,
M/s. NSJPL viz., S/Shri Ranganatha Gupta, Prapanna Kumar and Prasanna Kumar. The Auditors who had conducted the Stock & Receivables",,,,
Audit, the auditors who had conducted the Forensic Audit and the Statutory Auditor who had finalized the books of accounts of M/s. NSJPL for the",,,,
year 2017-18 were also examined under PMLA, 2002 and their statements recorded.",,,,
4.4. That the investigation under PMLA, 2002 led to the identification of “proceeds of crimeâ€, the properties involved in the money laundering etc.",,,,
The investigation also led to the round tripping in the investment of the Shares of M/s. NSJPL by its promoters, utilization of crime proceeds for",,,,
acquisition of immovable property in the name of M/s. NSJPL and in the name of individuals related to M/s. NSJPL, utilization of the crime proceeds",,,,
in the activities of Trusts held by the promoters of M/s. NSJPL including settlement of loans in the name such Trusts, utilization of the crime proceeds",,,,
for settlement of personal home loans of the Directors and for settlement of existing loans, re-organization of ownership of properties and",,,,
accommodative transactions, multiple layering of the crime proceeds, funding to the guarantor to enable her acquire a property in her name etc. From",,,,
the investigation under PMLA, 2002 it was thus noticed that M/s. NSJPL, the Appellant herein and its Promoters/Directors viz., S/Shri Ranganatha",,,,
Gupta, Prapanna Kumar & Prasanna Kumar, Directors of M/s. NSJPL and also accused in the FIR of CBI, have committed the Scheduled Offences",,,,
as alleged in the FIR No. RC 08/2018 dated 24.03.2018 registered by CBI, BS & FC, Bangalore, caused wrongful loss to the Banks in Consortium,",,,,
which is estimated to the tune of Rs. Rs.379.75 Crores (Outstanding as on 28.02.2018) plus accrued interest from 01.03.2018 and derived,,,,
corresponding wrongful gain to themselves, during the period between 2009 and 2017. The investigation also confirmed the deriving of the",,,,
“proceeds of crime†out of the said criminal activity and the commission of the offence of money laundering by M/s. NSJPL and its promoters,,,,
and others and in all 37 immovable properties valued at Rs.328.44 Crores (Approximately) were identified as “proceeds of crime†as defined,,,,
under Section 2(1)(u) of PMLA, 2002 and involved in the offence of money laundering as defined under Section 3 of PMLA, 2002. Out of the 37",,,,
immovable properties, the money trail clearly established that 12 immovable properties (Detailed in Schedule 1 of Para 43 of OC No.1015/2018) were",,,,
acquired directly out of the “proceeds of crime†during the crime period i.e. from 2009 onwards.,,,,
4.5. That, accordingly in exercise of the powers conferred under Sub-Section (1) of Section 5 of the Act the Deputy Director, Directorate of",,,,
Enforcement, Chennai provisionally attached the identified 37 immovable properties valued at Rs.328.44 Crores (Approximately) for a period of 180",,,,
days vide Provisional Attachment Order in PAO No.11/2018 dated 31.07.2018. In continuation of the above, in-terms of Section 5(5) of PMLA, 2002",,,,
the said authority filed a Complaint before the Adjudicating Authority, PMLA, New Delhi seeking confirmation of the attachment and the same was",,,,
allotted OC No.1015/2018. The Adjudicating Authority upon receipt of the said Complaint, on the reason to believe that M/s. NSJPL and Defendants",,,,
1 to 15 named in the Original Complaint have committed an offence under Section 3 of PMLA, 2002 and are in possession of proceeds of crime,",,,,
served a Notice under Section 8(1) of PMLA, 2002 to Defendants 1 to 15 including the Appellant herein. The Adjudicating Authority in terms of",,,,
Proviso to Section 8(1) of PMLA, 2002, also issued Notice to Defendants 16 to 22.",,,,
4.6. It is further submitted by the learned counsel for the respondent that during the investigation under PMLA, 2002 it was noticed that the promoters",,,,
of M/s. NSJPL herein in addition to the Scheduled Offence investigated by CBI, BS&FC, Bengaluru is also involved in a case of cheating the General",,,,
Public in collecting Deposits from them and the Economic Offences Wing of the Chennai Police have also registered an FIR against the promoters of,,,,
M/s. NSJPL vide Crime No.11/2017 for offences under Section 409, 420 of IPC read with the TNPID Act. Two Directors were also reportedly",,,,
arrested by the TN Police. The information provided by the EOW of TN Police to the Respondent authorities reveal that so far, 3241 Complaints have",,,,
been received by them for the defaulted amount of Rs.42.99 Crores. It is further submitted that after the attachment of the property in the instant,,,,
case, several depositors have also approached the Respondent authority seeking to cause investigation against the Appellant and also seeking refund.",,,,
Thus, the investigation under PMLA, 2002 has been further extended to cover the above mentioned Scheduled Offence also. In other words, it is",,,,
humbly submitted that M/s. NSJPL and its promoters has not only caused wrongful loss to the Consortium of Banks by indulging in criminal offences,",,,,
but also cheated the General Public by collecting Deposits and failing to repay them.,,,,
4.7. It is submitted that 37 immovable properties (identified to be the proceeds of crime and involved in money laundering and attached vide PAO,,,,
No.11/2018) includes the aforesaid two properties which are the subject matters concerned with the Appellant & Others. The appellant in respect of,,,,
the above said two properties, challenging the attachments made and praying to set aside the PAO No.11/2018 dated 31.07.2018 on the ground that",,,,
the said two properties have been offered to them as security in respect of a Term Loan and a Line Of Credit offered to the Borrowers.,,,,
4.8. That the results of the investigation conducted with regard to the said two properties in respect of M/s. NSJPL and others revealed that the,,,,
Property @ Sl.No.(a) above, was acquired vide an agreement dated 02.03.2015 entered in the name of Paramartha Bhooshanam Shri Nathella",,,,
Sampathu Charities and two individuals viz., Smt. Alli and Shri Arockiadass, wherein the later agreed to sell an immovable property measuring 1 Acre",,,,
and 8 Cents (47088 Sq.Feet) situated at Survey No.255/1, as per Patta No.1539, New Survey No.255/37, situated at No.111 Varadarajapuram",,,,
Village, Sriperumbudur Taluk, Kancheepuram District under the jurisdiction of SRO Padappai for a consideration of Rs.4.61 Crores. The seller",,,,
received an amount of Rs.25 lakhs vide two cheques viz., Cheque No.868361/22.5.2015 & 868360 dated 22.05.2015, each of Rs.12.50 lakhs. The said",,,,
cheques were issued from the Bank account No.6122981854 of M/s. Paramartha Bhooshanam Sri Nathella Sampathu Chetty Charities with Indian,,,,
Bank viz. Perusal of the relevant statement of account revealed that the funds for facilitating the said payment were made by way of transfers from,,,,
the account of M/s. NSC & Co. with Indian bank viz., 858891046 and further perusal of the said Statement of account of M/s. NSC & Co. reveal that",,,,
funds were transferred from the loan account of M/s. NSJPL to M/s. NSC & Co. Thus, it is clearly evident that towards payment of the said advance",,,,
of Rs.25 lakhs, the funds originated from the account of M/s. NSJPL and through the account of M/s. NSC & Co. and the account of M/s.",,,,
Paramartha Bhooshanam Sri Nathella Sampathu Chetty Charities, the same was paid as advance to the sellers.",,,,
4.9. That prior to the said advance of Rs.25 lakhs, an initial advance of Rs.11,00,000/- was paid to the sellers vide Cheque Nos.121725 & 121726",,,,
dated 02.03.2015 and here again the funds originated from the account of M/s. NSJPL and through the account of M/s. NSC & Co. and the account,,,,
of M/s. Paramartha Bhooshanam Sri Nathella Sampathu Chetty Charities, the same was paid as advance to the sellers. Further to the above advances",,,,
totaling Rs.36 lakhs, the next round of advances totaling Rs.30 lakhs was paid to the sellers vide two cheques viz. Cheque Nos. 868426 & 868427",,,,
dated 24.06.2015 & 26.06.2015 respectively. It is noticed here again that the funds originated from the account of M/s. NSJPL and through the,,,,
account of M/s. NSC & Co. and the account of M/s. Paramartha Bhooshanam Sri Nathella Sampathu Chetty Charities, the same was paid as",,,,
advance to the sellers. The sellers were again paid advances totaling Rs.34 lakhs on 14.09.2015 and the same modus of routing funds of M/s. NSJPL,,,,
was followed. However, at the time of registration of the said property vide Sale Deed No.2371/2016 dated 6.5.2016, the property was registered in",,,,
ACCOUNT NO.409000443075,,,,
NATHELLA SAMPATHU CHETTY AND CO.,,,,
DATE,"VALUE
DATE",PARTICULARS,CREDIT,
03.05.2016,03.05.2016,"RTGS/HDFCH16124192858/ADITYABIRLA
FINANCELTD471/HDF",151700000.00,
03.05.2016,03.05.2016,"RTGS/HDFCH16124191572/ADITYABIRLA
FINANCELTD900835/",50000000.00,
11.05.2016,11.05.2016,"RTGS/HDFCH16132300330/ADITYABIRLA
FINANCELTD900835/",49960948.00,
M/s. NSC and Co. to facilitate the repayment of the loan amount. The UTR Numbers of the RTGS transactions evidences that most of the transfers,,,,
were from the loan accounts of the consortium banks. The EMI dates and the credit dates match on most of the occasions. Further, at the time of the",,,,
release of the above said loan, an amount of Rs.51,52,729/- was payable by the borrower M/s. NSC & Co. This amount was paid from the Indian",,,,
Bank account of M/s. NSC & Co. to the credit of the appellant on 31.3.2016 by way of RTGS vide UTR No.IDIBR52016033112557254. On perusal,,,,
of the Indian bank account of M/s. NSC & Co. to identify the source of the said payment, it is noticed that to facilitate the said payment to the",,,,
Defendant 19 herein, on 31.03.2016, an amount of Rs.52,00,000/- was transferred from the account of M/s. NSJPL to M/s. NSC & Co. Thus, it is",,,,
clearly evident that the Kalyana Mandapam Property which belonged M/s. NSCT, is involved in the money laundering activities of M/s. NSJPL and",,,,
the Trustees have dealt with the property as though belonging to them in their personal capacity and has been rightfully attached vide PAO,,,,
No.11/2018.,,,,
4.14.(a). That thus it is clear that the properties attached through PAO are the proceeds of crime.,,,,
(b). That the appellant did not pay due diligence and care while entering into the transaction with the borrower / defendants.,,,,
(c). That the Honâ€ble Punjab and Haryana High Count at Chandigarh (D.B.) has held in the matter of Deputy Director Versus PNB Housing,,,,
Finance Ltd. [CRA-S-3916 SB-2017 (OSM] that PMLA would prevail over the SARFAESI Act.,,,,
(d). That the Honâ€ble Delhi High Court in the matter “The Deputy Director, DOE Vs. AXIS Bank & Ors.â€, also laid down the law that being",,,,
purpose of RDBA, SARFAESI Act and Insolvency Code, the latter three legislations do not prevail over the former.",,,,
(e). That the trial of the case against the accused persons for the offence under Section 4 PMLA has commenced, hence the appellant here in should",,,,
have approached the special court, instead of the Honâ€ble Appellate Tribunal, for consideration of the matter.",,,,
On the basis of aforesaid grounds, the learned counsel for the respondent prayed for dismissal of the appeal.",,,,
Discussion and Findings:,,,,
Heard both sides and perused the materials available on record and also peruse the judgements cited by learned counsels for both the parties.,,,,
5.1. That the appellant did not dispute of taking loans by its borrowers from the Consortium of the banks led by State Bank of India. There is also no,,,,
dispute by the appellant that Rs.379.75 crores is the outstanding balance against its borrowers as on 28.02.2018 owed to consortium of banks. It is also,,,,
not denied that part of the proceeds of crime have been utilised in the properties mentioned above and that the property at Serial no.(a) above has,,,,
been acquired vide an agreement dated 02.03.2015 entered in the name of Paramartha Bhoosanam Shri Nathella Sampathu Charities and two,,,,
individuals viz., Smt. Alli and Shri Arockiadass and sale deed was executed on 06.05.2016 vide Sale Deed No.2371/2016.",,,,
5.2.(i). That the main contention of the appellant is that after due diligence it has sanctioned term loans and a line of credit to the borrowers for a sum,,,,
totalling Rs.45 crores through loan account no. 0000080000389 and loan account no. 0162101 of Rs.40,00,00,000/- and Rs.5,00,00,00/- were disbursed",,,,
on dated 31.03.2016 respectively.,,,,
5.2.(ii). That the loan became NPA on 01.12.2017 and thereafter demand notice under Section 13(2) of SARFAESI Act, 2002 dated 08.12.2017 were",,,,
initiated and after sixty days the appellant in exercise of its right under Section 13(4) of SARFAESI Act, 2002 issued possession notice dated",,,,
12.02.2018 and subsequently, appellant issued auction sale notice dated 21.02.2018 to borrowers.",,,,
5.2.(iii). That the fact of mortgage of aforesaid two properties, issue of possession notice under Section 13 (4) of SARFAESI Act, 2002 and issue of",,,,
auction sale notice dated 21.02.2018 to the borrowers have not been denied by the respondent.,,,,
5.3. This Tribunal is to see whether the impugned order is legally correct or not. In this regard, it is seen from the record that the borrowers of the",,,,
appellant took various loans from different banks and Consortium of Banks led by State Bank of India during the period 2009-2017. There are serious,,,,
allegations of falsification of records and diversion of funds etc. against the borrowers of the appellant and that part of the aforesaid funds have been,,,,
used to acquire/utilized in the aforesaid properties. It is not the case of the appellant that proceeds of crime has not been travelled to the properties.,,,,
Rather, it is the case of the appellant is that they are bona fide third party who has advanced Cash Credit and Line of Credit loans to the borrowers",,,,
named above and to secure the said loans they have taken the properties in question on mortgage and that they have followed due diligence before,,,,
granting loans and since they are secured creditor, they have got priority or claim over others including the respondent and that the provisions of",,,,
PMLA do not override the provisions of SARFAESI Act and that jurisdiction of Appellate Tribunal under Section 26(4) to modify or set aside,,,,
impugned order is not curtailed by second proviso to Section 8(8) of the PMLA and that there is no material for the formation of “reason to,,,,
believe†and that Section 3 of PML Act is not applicable.,,,,
5.3.(i). So far as the first legal submission is concerned, it was submitted by the learned counsel for the appellant that the appellant is a bona fide third",,,,
party and has acquired interest in the properties in question at a time anterior to commission of alleged schedule offences. During the course of,,,,
hearing, it is submitted by the learned counsel for the appellant that the appellant sanctioned the loan in the month of March, 2016 whereas the loan",,,,
granted by other banks became NPA in the year 2017 so there was no occasion for the appellant to know that the borrowers are defaulter and that,,,,
the appellant had granted loan bonafidely and that the appellant is a bona fide third party who sanctioned the loan against the security of the aforesaid,,,,
properties.,,,,
This submission of the appellant has been negated by the fact that the borrowers of the appellant took different type of loans from Consortium of,,,,
Banks during the period 2009 to 2017 and has prima facie made various payments during the period 2015 to May, 2016 to acquire the property at",,,,
Serial no.(a) above and part of the proceeds of crime has also travelled to property at Serial no.(b) above out of the loans taken from Consortium of,,,,
Banks and those loans were taken by falsifying the stocks etc., and diverted the funds for the purpose other than the purpose for which the loans were",,,,
taken as narrated by the respondent in its written submission dated 03.11.2020 filed on 06.11.2020 on the basis of investigation under PMLA.,,,,
Thereby, it is prima facie clear, for the purpose of attachment, that the properties in question have been acquired out of/utilized the proceeds of crime",,,,
and prior to the loans granted by the appellant in the year 2016 and those properties have been mortgaged as a security for the loan from the appellant,,,,
by the borrowers of the appellant.,,,,
The appellant has referred and relied on para 163 and 165 of the judgment passed in the batch matters by Honâ€ble Delhi High Court in the matter of,,,,
Deputy Director, Directorate of Enforcement & Ors. Vs. Axis Bank & Ors.(supra) The judgment is not applicable, as in the present case, the",,,,
proceeds of crime alleged to have travelled/utilized in acquiring the properties in question in the year 2015 to May, 2016. In other words, the alleged",,,,
commission of offence was prior to the sanction of loans granted by the appellant. The second judgment relied on by the appellant is a judgment,,,,
passed by this Tribunal in the matter of JM Financial Reconstruction Company Vs. Deputy Director, Directorate of Enforcement, Delhi & Ors.(supra)",,,,
This judgment is also not applicable as the appellant has not acquired the properties involved herein by way of any assignment but in the present case,,,,
there is a prima facie clear allegation of involvement of proceeds of crime in acquiring/utilization of in the questioned properties. Admittedly, neither",,,,
the appellant nor any of its officials have been named in the FIR or ECIR but that does not mean that the property attached would be released in,,,,
favour of the appellant, in view of the allegations of the respondent that the properties in question are involved in proceeds of crime. The appellant has",,,,
not been named may be because of the fact that the appellant is not involved in commission of the crime. The appellant has filed certain documents on,,,,
27.11.2020, in support of his contention that due diligence was followed, which includes (a) copy of legal verification report, (b) copy of CIBIL reports",,,,
of the borrowers, (c) copy of valuation reports of secured assets and (d) copy of memorandum submitted to credit committee for approval of loan to",,,,
borrowers.,,,,
Even though, the appellant has shown some diligence before sanction of the loan but the attachment under consideration cannot be lifted as any",,,,
release of attachment from the questioned properties in favour of the present appellant is tantamount to depriving the Consortium of Banks of their,,,,
money and jeopardizing their interest.,,,,
The learned counsel for the respondent has referred para 161 of the judgment of Hon’ble Delhi High Court in the matter of Axis Bank’s case,,,,
(supra) and submitted that in the present case, the observation of the Honâ€ble Court is directly applicable. The contents of para 161 are reproduced",,,,
below:,,,,
“161. The law conceives of possibility of third party interest in property of a person accused of money-laundering being created,,,,
legitimately or, conversely, with ulterior motive ""to frustrate"" or ""to defeat"" the objective of law against money-laundering. In case of",,,,
tainted asset - that is to say a property acquired or obtained as a result of criminal activity - the interest acquired by a third party from,,,,
person accused of money-laundering, even if bona fide, for lawful and adequate consideration, cannot result in the same being released",,,,
from attachment, or escaping confiscation, since the law intends it to ""vest absolutely in the Central Government free from all",,,,
encumbrances"", the right of such third party being restricted to sue the wrong-doer for damages, the encumbrance, if created with the",,,,
objective of defeating the law, being treated as void (Section 9).â€",,,,
In view of the above, even if the appellant is considered as a bona fide third party then also the order of attachment cannot be set aside or modified",,,,
due to the fact that prima facie allegation is that the proceeds of crime have been travelled to acquire of property at serial no.(a) above and utilization,,,,
of the part of the said loans in the property at serial no.(b) as stated by the respondent in its pleading. Therefore, in view of above discussion, this legal",,,,
submission is not acceptable.,,,,
5.3.(ii). The second legal submission made by the appellant that it is a secured creditor being a bona fide third party had initiated actions against,,,,
mortgaged properties under SARFAESI Act, 2002, and rules framed thereunder prior to the order of attachments under PMLA. Much thrust has",,,,
been given by the appellant that it has initiated action under SARFAESI Act and rules prior to the order of attachment under PMLA. While dealing,,,,
with first legal submission, it is already held that the properties in question, prima facie appears to have been acquired out of the proceeds of crime and",,,,
merely because the provisional attachment order was passed subsequent to the initiation of proceedings under SARFAESI Act that does not ipso,,,,
facto create a right in favour of the appellant to claim priority of right over the properties in question particularly in the present facts and,,,,
circumstances of the case where proceeds of crime has been used to acquire/ utilized in the properties in question. The judgments in the matter of,,,,
Deputy Director, Directorate of Enforcement & Ors. Vs. Axis Bank & Ors. (para 163 & 165 of the judgment referred by the appellant), Indian",,,,
Overseas Bank & Ors. Vs. Joint Director, Directorate of Enforcement, New Delhi & Ors., and Chief Manager, Syndicate Bank Vs. Deputy",,,,
Director, Directorate of Enforcement, Delhi & Ors. are not applicable to the present facts and circumstances of the case as the loan/funds of",,,,
Consortium of Banks are stated to have been used to purchase the said properties by falsifying stocks etc., and by diverting the funds of the",,,,
Consortium of Banks.,,,,
In view of the above, it is held that this legal submission is also not acceptable.",,,,
5.3.(iii). The third legal submission of the appellant is that the provisions of Prevention of Money Laundering Act, 2002 do not override the provisions",,,,
of SARFAESI Act, 2002. The learned counsel for the appellant has relied on the judgment of Honâ€ble High Court in Deputy Director, Directorate of",,,,
Enforcement & Ors. Vs. Axis Bank & Ors. (supra) (referred to para 147). Para 147 of the judgment is as follows-,,,,
“To sum of on the issue, the objective of the legislation in the PMLA be distinct from the purposes of the three other enactments viz.,",,,,
RDBA, SARFAESI Act and Insolvency Code, the later cannot prevail over the former. There is no inconsistency. The purpose, the text and",,,,
context are different. This Court thus rejects the argument of prevalence of the said laws over PMLA.â€,,,,
The aforesaid finding of Honâ€ble High Court goes against the submission of the appellant. The Honâ€ble Court has clearly held that the RDBA,",,,,
SARFAESI Act and Insolvency Code canâ€t prevail over PMLA. Rather, his lordship has observed that all these laws must co-exist with harmony.",,,,
The learned counsel for the appellant has also relied on the judgment of Honâ€ble Punjab & Haryana High Court in Seema Garg & Ors. Vs. The,,,,
Deputy Director, Directorate of Enforcement on this legal issue. This judgment is perused, the question of priority or overriding effect of other laws",,,,
over PMLA and vice versa appears to be not an issue before the Honâ€ble High Court and there appears to be no findings on that except on the,,,,
question of status of attachment of properties as value equivalent to proceeds of crime. In the appeal before us, the properties have not been attached",,,,
as value equivalent to the proceeds of crime so this judgment is of no help to the appellant.,,,,
Further, recently the Division Bench of Honâ€ble High Court of Punjab & Haryana passed a judgment in the matter of CRS-S-4326-SB-2017(O&M)",,,,
titled as Deputy Director Vs. PNB Housing Finance Ltd., CRA-S-3916-SB-2017 (O&M) titled as Deputy Director Vs. ICICI Bank Ltd. & Ors.",,,,
wherein their lordship have held that PMLA would prevail over SARFAESI Act. This judgment is also binding on this Tribunal. The learned counsel,,,,
for the appellant, during the course of argument submitted that this Tribunal is bound by the judgment of the Honâ€ble High Court having territorial",,,,
jurisdiction in the event any conflict in the judgment of two High Courts on the same issue. In my view, there is no conflict in the judgment passed by",,,,
the Division Bench of the Honâ€ble High Court (supra), PNB Housing Finance case and the judgment of Honâ€ble High Court of Delhi passed by",,,,
Single Bench in Axis Bank case (supra) so the jurisdictional question raised by the appellant does not apply to the present facts and circumstances of,,,,
the case.,,,,
5.3.(iv). The fourth legal issue raised by the learned counsel for the appellant that the jurisdiction of this Appellate Tribunal under Section 26(4) of the,,,,
PMLA to modify or set aside the impugned order is not curtailed by second proviso to Section 8(8) as alleged by the respondent. This legal issue has,,,,
arisen in view of the submissions made by the learned counsel for the respondent that the prosecution complaint has already been filed before the,,,,
Special Court and cognizance has already been taken and in view of that the appellant should approach the Special Court to lay its claims for release,,,,
of the properties. According to the learned counsel for the respondent, once the cognizance is taken, it amounts to beginning of criminal trial in the",,,,
court. I do not agree with the submission made by the learned counsel for the respondent that this Tribunal has no jurisdiction to pass any order on the,,,,
legality of attachment order passed by the respondent and confirmed by the Adjudicating Authority. In this regard, his lordship in the matter of Deputy",,,,
Director, Directorate of Enforcement & Ors. Vs. Axis Bank & Ors. (supra) in para no. 167 to 170 has held that:",,,,
“167. As has been highlighted earlier, the provisional order of attachment is subject to confirmation by the adjudicating authority. The",,,,
order of the adjudicating authority, in turn, is amenable to appeal to the appellate tribunal. The said forum (i.e. the appellate tribunal) may",,,,
pass such orders as it thinks fit ""confirming, modifying or setting aside the order appealed against"" [Section 26(4)]. Undoubtedly, an",,,,
aggrieved party is entitled in law to invoke the said jurisdiction of the appellate tribunal to bring a challenge to the orders of attachment (as,,,,
confirmed) but, the law in PMLA, at the same time, also confers jurisdiction on the special court to entertain such claim for purposes of",,,,
restoration of the property during the trial of the case [Section 8]. The jurisdiction to entertain objections to attachment conferred on the,,,,
appellate tribunal on one hand and, on the special court, on the other, thus, may be co-ordinate, to an extent.",,,,
An argument, however, was raised, by the appellants that the respondents herein should have approached the special court, instead of",,,,
the appellate tribunal, for consideration of their respective claims.",,,,
In view of above-noted legislative scheme, it must be clarified that if the order confirming the attachment has attained finality, or if the",,,,
order of confiscation has been passed or, further if the trial of a case for the offence under Section 4 PMLA has commenced, the claim of a",,,,
party asserting to have acted bonafide or having legitimate interest will have to be inquired into and adjudicated upon only by the special,,,,
court.,,,,
But, the above exception cannot be applied to all cases of bona fide third party claimants so as to confer a general right to seek",,,,
release of such property as last mentioned above from attachment even in cases where the encumbrance is created or interest acquired at a,,,,
time around or after the date or period of criminal activity. In this category of cases, the third party will have the additional burden to prove",,,,
that it had exercised due diligence having ""taken all reasonable precautions"" at the time of acquisition of such interest or creation of such",,,,
charge, the jurisdiction to entertain and inquire into such claim and grant relief of release after order of attachment has attainted finality,",,,,
or of restoration after order of confiscation, vesting only in the special court under Section 8(7) & (8) PMLA. The due diligence is to be",,,,
tested amongst others, on the touchstone of questions as to whether the party had indulged in transaction after due inquiry about untainted",,,,
status of the asset or legitimacy of its acquisition.â€,,,,
In view of the aforesaid discussion, I do not agree with the contention of the learned counsel for the respondent that this Tribunal has no jurisdiction to",,,,
pass an order or on impugned order confirming/setting aside or modifying the attachment particularly when the charges are yet to be framed and the,,,,
trial is yet to begin.,,,,
5.3.(v). The fifth legal submission made by the learned counsel for the appellant that there is no material for the formation of “reason to believeâ€,,,,
under Section 5(1) of PMLA, 2002.",,,,
While making submission on this legal issue, the learned counsel for the appellant submitted that every material cannot be made the basis of the reason",,,,
to believe and it is only the material which has direct nexus or link with the formation of the belief, can give jurisdiction to attach the property and that",,,,
the respondent has failed to show such material in his possession that the appellant is in possession of the proceeds of crime and such proceeds are,,,,
likely to be concealed, transferred or dealt with in any manner which would result in frustration of proceeding under PMLA. The learned counsel has",,,,
relied on the judgments passed by Division Bench Honâ€ble High Court of Punjab & Haryana in Seema Garg & Ors. Vs. The Deputy Director,",,,,
Directorate of Enforcement (supra) and JM Financial Asset Reconstruction Company v. The Deputy Director, Directorate of Enforcement, Delhi &",,,,
Ors. (supra).,,,,
In the present case, neither party has filed the copy of the provisional attachment order or the copy of the O.C. But on perusal of para 3 to 26 of the",,,,
impugned order, the details have been mentioned about how the proceeds of crime have been used to acquire the properties and utilization of part of",,,,
proceeds of crime in property mentioned above at serial no.(b) and para no. 27 to 29 of the impugned order are the conclusions arrived at by the,,,,
complainant on reason to believe. Therefore, it appears that there is compliance with regards to the reason to believe. In the present case admittedly",,,,
the appellant was about to auction the mortgaged properties.,,,,
In the light of above discussions, I do not find any merit in these legal submissions of the appellant.",,,,
5.3.(vi). The last legal submission made by the appellant is that Section 3 of the PML Act, 2002 is not applicable in the present matter.",,,,
This legal submission is considered. The appellant is admittedly neither an accused in the FIR nor in the ECIR nor there is any material on record that,,,,
the present appellant is arrayed as an accused in the prosecution complaint in which the properties involved herein are part of the prosecution,,,,
complaint. The proceedings before this Tribunal is to examine the legality or infirmity in the impugned order passed by the Adjudicating Authority not,,,,
of the persons who alleged to have committed the offence of money laundering. Therefore, it is felt that there is no necessity to record any finding on",,,,
this legal issue.,,,,
5.4. In the light of aforesaid discussion, findings and observations I do not find any illegality or impropriety in the impugned order passed by the",,,,
Adjudicating Authority and it is held that the appeal has no merit.,,,,
Therefore, the appeal is dismissed.",,,,
In the circumstances no order as to costs.,,,,