Dayanand Narvekar vs Deputy Director Directorate Of Enforcement, Goa

By this order, we proposed to decide the appeal filed by the appellant u /s 26 of Prevention of Money Laundering Act (PMLA), 2002 challenging

the order dated 13.09.2018 passed by the ld. Adjudicating Authority in the matter of Provisional Attachment Order no. (P.A.O.) 02/2018 dated

26.03.2018 in O.C. no. 935/2018 filed by the Enforcement Directorate (ED), Goa against the appellant and another. In the said O.C., the appellant is

arrayed is defendant no. 1.

The allegation against the appellant is that, the Economic Offences Cell, Panji, registered an FIR 75/2016 dated 2.06.2016 against Sh. Chetan Desai

and 2 others for violation of sections 408,409,419,463,464,468,471,420 and 120B of I.P.C. for criminal conspiracy, impersonation, misappropriation and

cheating Goa Cricket Association to the tune of Rs. 2.87 crores. Chargsheet bearing no. 6/2016 has been filed against the said persons and the

present appellant.

Another FIR no. 142/2016 dated 20.12.2016 registered against the present appellant and others for violation of sections 408,409,,464,468,471,420

and 120B of I.P.C. for criminal conspiracy, criminal breach of trust, used of forged documents as genuine and cheating Goa Cricket Association to the

tune of Rs. 1 crore.

On the basis of above, ECIR was registered by ED on 12.09.2016 in which the present appellant was not named. After the investigation, the

Enforcement Directorate attached the immovable property in question of the appellant i.e. “Flat bearing no. 1/SE-1-2, admeasuring 324 sqr. mtr. of

super built area on the 7th floor of building no. 1 of “Models Marine Vistas†alongwith proportionate undivided share of land corresponding to the

said flat and the same was brought for a total consideration of Rs. 4.15 Crores vide deed of sale executed on 18.02.2016. In terms of Section 2(1) (u)

of PMLA, 2002 the said property to the extent of Rs. 122.75 lakhs constitute value of the proceeds of crime and hence, the said property to the extent

of Rs. 122.75 lakhs qualifies to be proceeds of crime.

The Enforcement Directorate filed the O.C. before the ld. Adjudicating Authority for confirmation of the attachment order of the aforesaid

property. The ld. Adjudicating Authority vide the impugned order dated 13.09.2018 has allowed the O.C. by confirming the attachment of aforesaid

property.

It is the same order which is challenged before us. During the course of hearing, the ld. Counsel for the appellant submits that no prosecution

complaint has been filed against the appellant under PMLA, 2002 within the statutory period as prescribed in u/s 8(3)(a) of the PMLA-2002 than

existed. The statutory period for filing the appeal under the aforesaid provisions was 90 days before the latest amendment through which the 90 days

period has been amended to 365 days. He further submitted that Honâ€ble High Court has not stayed the implementation of the adjudication order

against the present appellant as he was not a party to the proceedings in W.P (C) 8356/2018 before the Honâ€​ble High Court, Delhi filed by Sh. Vinod

Phadke and Ors.. The said writ petition was dismissed as withdrawn vide order dated 05.02.2019. During the course of present proceedings, the

appellant had offered alternate property for continuation of attachment but the Respondent has not agreed to that.

On the other hand, it is the contention of the respondent that the prosecution complaint could not be filed as there was stay order dated 10.08.2018

passed by Honâ€ble High Court Delhi, on the implementation of the order of ld. Adjudication Authority. It is further contended by ld. Counsel for the

respondent that the final order in the W.P. was passed on 05.02.2019 and they have filed the prosecution complaint on 03.05.2018 before the Special

Court, (PMLA), Mapusa, Goa.

It is also the contention of the ld. Counsel for the respondent that the order of the Honâ€ble High Court staying the implementation of the order of

Adjudicating Authority also cover the present appellant and his property attached herein, therefore no action could be taken for filing prosecution

complaint against the present appellant within 90 days from the date of passing of the impugned order. The ld. Counsel for the respondent has

contended through reply that the respondent is not agreeing for attachment of the alternate property on the ground mention therein.

In the present case, the pleadings are complete. Heard ld. counsels for both the parties, gone through replies filed by the respondent and peruse the

materials placed in the record. The main and the only contention raises by the ld. counsel for the appellant is that as the prosecution complaint has not

been filed within 90 days from the date of passing of the impugned order so the attachment lapses and the appeal is liable to be allowed on this ground

alone.

In the present case, the impugned order was passed on 13.09.2018, the prosecution complaint has been filed on 03.05.2019. The 90 days period for

filing prosecution complaint from the date of impugned order has expired in the month of December, 2018 which is before the amendment of

extending the period for filing the prosecution complaint to 365 days. A legal right has accrued to the appellant in view of the section 8(3)(a) of

PMLA-2002 when the prosecution complaint was not filed within 90 days.

Section 8(3) read with 8(3)(a) of the PMLA provide as follows:

“8(3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money-laundering, he shall, be an

order in writing confirm that attachment of property made under sub-section (1) of Section 5 or retention of property or [record seized or

frozen under section 17 or section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized

or frozen property] or record shall-

(a) Continue during [investigation for a period not exceeding ninety days or] the pendency of the proceedings relating to any [offence

under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction

outside India, as the case may be; and]â€​

The aforesaid provision clearly provides that the attachment order of Adjudicating Authority shall continue during investigation for a period not

exceeding of 90 days or pendency of proceedings relating to any offence under this act before a court. Admittedly, in the present case, there was no

pendency of any proceedings relating to any offence under this act before a court within 90 days from the date impugned order.

One Shri Vinod Phadke and another filed a writ petition before honâ€ble High Court, Delhi vide W.P. (C) no. 8356/2018 against the respondent.

Vide interim order dated 10.08.2018 the Honâ€ble High Court allowed the proceedings before the Adjudicating Authority to continue with further

direction that, orders, if any, shall not be implemented and that the provisional attachment shall continue to be operative. No where in the aforesaid

order the Honâ€ble high court has prohibited the Enforcement Directorate not to file the prosecution complaint against the appellant. The appellant

was also not a party to the proceedings before the Honâ€ble High Court. Therefore in the circumstances, we do not agree with the ld. Counsel for the

respondent that they did not file the prosecution complaint within 90 days because of the order of Honâ€​ble High Court.

In the giving facts and circumstances of the case, due to the reasons stated above, the attachment of the property in question has been lapsed and

therefore the impugned order of attachment with respect to the property in question is set aside. Consequently, the P.A.O. is also set aside.

It is clarified that we have not gone into the merits of the appeal.

If the property in question is part of the prosecution complaint then the appellant has to move the special court for appropriate order.

The appeal is allowed accordingly.

No cost.