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Judgment
Date,Particulars
22.01.2019,"FIR   bearing   RC   No.  Â
BD1/2019/E/0001Â Â Â dated 22.01.2019 u/s 120-B & 420 IPC
and Section 7 & 13(2) r/w 13(1)(d) of the PC Act, 1988 registered
by the CBI against M/s. Videocon International Electronics Ltd. &
others (Name of the Appellant does not figure in the RC)
31.01.2019,"ECIR  No.  ECIR/02/HIU/2019  under Â
PMLA,  2002
recorded on 31.01.2019 pursuant to registration of the
above mentioned FIR ( Copy of ECIR) notÂ
supplied to the Appellant).
01.03.2019,"Search conducted by the Assistant Director, Directorate of
Enforcement at the registered office of the Appellant on  Â
01.03.2019.       Various   documents  Â
two   files containing pages 1 to 578 and 1Â
to 46 respectively seized from the office of theÂ
appellant without even mentioning as to what these files areÂ
about and what
papers/documents do these files contain.
28.03.2019,"OA dated 28.03.2019 under Section 17(4) ofÂ
PMLA related to the searches conducted at theÂ
premises of the appellant bearing OA No. 294/2019Â
filed by the
Assistant Director, Directorate of Enforcement.
Undated,"Adjudicating Authority passed the impugned undated
order recording satisfaction in terms of Section 8(1) of PMLA, 2002.
10.04.2019,"Pursuant to the above mentioned undated order, the
Adjudicating Authority issued Show Cause Notice to
the appellant in terms of Section 17(4) of PMLA, 2002.
10.04.2019,"On the very same day, the Adjudicating Authority
passed another order, thereby preponing the date of
hearing to 15.05.2019.
considered as order appealable u/s 26(1) even when the Adjudicating Authority can pass order only u/s 8(4). It is prayed that this Tribunal must decide,
the basic question before taking up the case for further orders.,
Along with the written submission, Mr. Nitesh Rana also filed the proof of service of the notice issued under section 8(1). It appears that the",
appellants were served with the notices on 24.04.2019, 26.04.2019 and 30.04.2019. The next date was mentioned to appear on 15.05.2019. As far",
as these notices are concerned, admittedly, thirty days notice was not issued by the respondent as prescribed in the provision",
of Section 8(1) of the Act.,
With regard to reason to believe, two orders for reason to believe have been passed which are available at page no. 49 and 79 of the paper book in",
appeal no. 3045/2019. The extract of the same are read as under:-,
OA 294/2019 - (page no. 49),
“ I had gone through the Original Complaint, Provisional Attachment Order and relied upon documents carefully and",
there are reasons to believe that an offence of money laundering u/s 3 of PMLA has been committed. Issue notice to Defendant asking him,
to file his written reply and appear before me on 20.05.2019 at 12:15 PM.,
Sd/-,
OA 294/2019 - (page no. 79),
“I had gone through the Original Complaint, Provisional Attachment Order and relied upon documents carefully and there are reasons",
to believe that an offence of money laundering u/s 3 of PMLA has been committed. Issue notice to Defendant asking him to file his written,
reply and appear before me on,
15.05.2019 at 12:15 PM.â€,
Sd/-,
10.04.2019â€,
The main contention of the appellants counsel is that the impugned notice was issued on the basis of recording of reason to believe. Both reason to,
believe and notice issued are non- application of mind. The reasons to believe which were recorded second time is 10.4.2019, would show about the",
seizure of records on 1.3.2019, were not even perused, otherwise notice could not have been issued and it is done as the authorised officer was",
dealing with the proceedings under Section-5 of the Act under Chapter III of the Act though admittedly the present proceedings are relating to,
Chapter-V of the Act. It is also stated by him that the file no. l and file no. 2 do not have index and details of the seizure documents in the prescribed,
manner of seizure memo (inventory of items of Form II under sub-rule (2) of Rule-5). The proper list of documents has not been supplied to his,
clients. Thus, no-one is aware about the contents of these documents which were seized.",
The other submission of the learned counsel for the appellants is that the appellants are not named as accused in the FIR/RC, copy of reasons to",
believe were not served, thus, even the seizure memo prepared at the time of search and seizure is contrary to Rule 3(3)(A) read with Rule 5 ofÂ",
the PMLA(Forms, Search & Seizure, Etc.) Rules, 2005 read with Section 65 of PMLA and Section 100 Cr. PC.",
Mr. Rana admits that there are certain discrepancies while recording the reason to believe. He also admits thirty days notice was not given (as,
stipulated in section 8(1) of the Act). However, his submission is that the said discrepancies and defect can be cured under section 68 of PMLA and",
even time of 30 days can be given to the appellants to file reply which is main purpose of issuance of notice.,
The learned counsel for the appellants has filed the written submission, Para-2 of the written submission reads as under:",
“a. An undated impugned order is passed by the Ld. Adjudicating Authority, in which order, the Ld. Adjudicating Authority has perused",
the Original Complaint and the Provisional Attachment Order, though the case is that of Original Application and Panchnama/Seizure.",
b. Thereafter, another order is passed for preponement of the date of hearing, however, the earlier order is again passed, as if being",
passed for the very first time, wherein however, it is stated that the Original Application and the Provisional Attachment Order has been",
gone through, though in the earlier undated order, Original Complaint and POA was gone through.",
c. The Ld. Adjudicating Authority has not even perused the contents of the documents seized. In fact, even loose documents were stated to",
have been seized, however, without even knowing the contents of the same, the SCN was ordered to be issued.",
d. The Ld. Adjudicating Authority has not even seen that the Appellant was not an Accused in the scheduled offence, however, an",
observation of prima facie offence under Section 3 PMLA, 2002 has been made in the impugned order.",
e. The Ld. Adjudicating Authority has further not seen that no Authorization for seizure was granted by the senior officers of the ED but,
only authorization for search was granted.,
f. The fact that the Ld. Adjudicating Authority did not apply its judicial mind is further clear from the fact that the impugned order was,
passed on an one paragraph Application.,
g. The Appellant was required to be provided with a minimum time-period of 30 days after the issuance of the SCN, however, only notice",
was served initially without any documents, which task was delegated on the ED and the ED served the Original Application along with the",
documents at a later period, thereafter, no effective notice of 30 days was served upon the Appellant.",
However, despite the same, the Respondent/ED is challenging the maintainability of the present Appeal, which objection is in the form of perpetuating",
an unsustainable order; which should no be countenanced.,
In reply to the argument of the respondent with regard to the reference of section 68 of the Act, it is stated on behalf of appellants that in the present",
matter, it is not mistake or defect or omission in the said notice, rather the appellant filed the present appeals mainly on the reason about the non-",
application of mind by the adjudicating authority in passing the order under section 8(1) of PMLA.,
Counsel for the respondent in support of his argument has submitted that the appeal is not maintainable, the following",
judgements are referred â€" Arun Kumar Mishra â€" MANU/DE/0344/2014 ED vs. Md. Ghulam Ghouse & Ors. Adarsh Chaudhary â€",
MANU/DE/1184/2002 Order of M/s. Balasore Alloys Ltd. UOI vs. Kunisetty Satya Narayna â€" MANU/SC/5137/2006,
After hearing, the order was reserved. Let me now first deal with the objection of maintainability of appeal.",
The provision of Section 26 of PMLA, 2002 reads as under:-",
“26. Appeals to Appellate Tribunal.â€",
(1) Save as otherwise provided in sub-section (3), the Director or any person aggrieved by an order made by the Adjudicating Authority",
under this Act, may prefer an appeal to the Appellate Tribunal.",
(2) xxx xxx xxx (3) xxx xxx,
(4) On receipt of an appeal under sub-section (1), or sub-section (2), the Appellate Tribunal may, after giving the parties to the appeal an",
opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.",
(5) xxx xxx xxx (6) xxx xxx xxxâ€,
Section 26 of the Prevention of Money Laundering Act, 2002 clearly provides that an aggrieved person can prefer an Appeal before the Appellate",
Tribunal and upon consideration of the matter, the Appellate Tribunal can pass such orders thereon as it thinks fit, confirming, modifying or setting",
aside the order appealed against.,
a) The Honâ€ble High Court of Delhi in Farida Begum Biswas Vs. Union of India & Ors. 2015 SCC OnLine Del 11834 has held as under:,
“12. Any person aggrieved by an order made by the Adjudicating Authority under Section 8 of PMLA can avail the remedy of appeal,
under Section 26 of PMLA to the Appellate Tribunal, whereby again the accused person is given an ample amount of opportunity of being",
heard, before any orders are passed. It is only when a person is aggrieved by the decision or order of the Appellate Tribunal that he may",
file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him.,
The remedy of appeal under Section 42 of PMLA is in the nature of second appeal.â€,
(emphasis supplied),
b) In other matter, the Hon'ble High Court of Madras in Dr. P. Vijayan Vs. Adjudicating Authority & Ors. Writ Petition Nos.20639 and 20640 of 2015",
decided on 09.07.2015 had granted liberty to the Petitioner therein to approach the Appellate Tribunal against the issuance of the SCN. The relevant,
portion of the same is as under:,
Admittedly, the petitioners made a challenge to the Provisional Order of Attachment dated 12.3.2015, by filing W.P.No.8831/2015 and",
the same has been entertained and it is pending adjudication. The petitioners challenging the correctness of the notice issued by the,
Adjudicating Authority under Section 8(1) of PMLA, had filed W.P.Nos.15305 and 15306/2015 respectively, and the same were closed on",
28.5.2015, granting liberty to the petitioners to work out their remedy in accordance with law. Therefore, the first and foremost point now",
urged by the learned Senior Counsel appearing for the petitioners, that the notice under Section 8(1) of PMLA is not in consonance with the",
provisions of PMLA, cannot be gone into by this Court at this stage, as the petitioners were granted liberty to approach the Appellate",
Authority.,
(emphasis supplied),
It is argued on behalf of the appellants that a similar situation arose under the Protection of Women from Domestic Violence Act, 2005, it was",
held that the appeal is maintainable. Section 29 of the said Act reads as under:,
Appeal.â€"There shall lie an appeal to the Court of Session within thirty days from the date on which the order made by the Magistrate,
is served on the aggrieved person or the respondent, as the case may be, whichever is later.",
The language used in Section 29 of the DV Act, no doubt, is similar to Section 26 of the PMLA, 2002. The Appellants place reliance on the judgments",
passed therein.,
a) The Honâ€ble High Court of Delhi in Maya Devi v. State of N.C.T. of Delhi, 2007 SCC OnLine Del 1349 had held as under:",
Section 29 of the Act provides for appeal to the Court of Session within thirty days from the date on which the order made by the,
Magistrate is served on the aggrieved person or the respondent.,
When specific remedy by way of appeal or by way of alteration, modification or revocation of any order, has been provided under the",
Act, prima facie, the present petition under Article 227 of the Constitution of India, or section 482, Cr. P.C. is not maintainable before this",
Court.,
b) In Ajay Kant & Ors. Vs. Smt. Alka Sharma 2008 (1) JCC 174, it was held as under:",
It is submitted that the judgment of the Honâ€ble High Court of Delhi in Deputy Director Directorate Of Enforcement Vs. M/s Balasore Alloys,
Ltd. in Crl. A. 616/2018 decided on 21.08.2018 is not applicable to the facts of the case, as the same is a consent order. It was specifically observed",
in the said judgment, as under:-",
Learned counsel for the petitioner states that this order of consent, on instructions from the competent authority, may not be treated as a precedent",
and is on the peculiar facts of this case. It is clarified that since the parties consented to the adjudicating authority hearing the jurisdictional issues in,
the first instance this Court has not given any finding on merits or the questions raised by the parties in the present appeal or the appeal before the,
Tribunal.,
It is argued on behalf of Appellants that due to non compliance of mandatory Sections and Rules, the continuation present proceedings against the",
Appellants are not sustainable, thus, the notices issued to the appellants are liable to be quashed.",
In case all the judgements referred by the learned counsel of the appellants as well as respondent are read together, there is no ambiguity in my",
mind that Writ Petition and PIL may or may not be maintainable. However, it is evident that the appeal under section 26 may be maintainable. This",
Tribunal is of the view that the same may only be maintainable in exceptional circumstances where there is a great hardship and is case of abuse of,
law, injustice, irreparable loss and great prejudice if (party concerned) would suffer on the face of the record and material available and if the appeal",
is not entertained, it does not mean that the appeal against any issuance of notice under section 8(1) in every case is maintainable where exception",
is not created. Thus, this Tribunal is of the view that it depends upon case to case basis and nature of the hardships at this stage.",
In the present cases, the respondent has merely seized two files containing papers. The appellants at the appropriate time is entitled to receive the",
copies thereof under sub section 2 of Section 21 of the Act. This Tribunal is of the view that no exception in the present appeals has been created by,
the appellants.,
The arguments on behalf of respondent is that the appellants, if so required, may raise all objections before Adjudicating Authority in their reply",
and the said objections will be decided on merit.,
In the present appeals, having considered the nature of the seizure at present this tribunal is of the view that there is hardly any hardship if the",
objections raised by the appellants be decided by the Adjudicating Authority within time-bound manner. The Appellants inter-alia have challenged the,
validity of recording the reasons to believe, issuances of notice under Section 8(1) of the Act and seizure memos.",
As far as objections raised by the appellants are concerned, no doubt, prima facie, there is some substance in the arguments of the counsel for the",
appellants. However, in my view, the same can be raised before the Adjudicating Authority who will have to consider and decide the same. It is",
clarified that objection and contention if raised by the appellants before the adjudicating authority and same are not decided as per law, the appellants",
have always remedy to challenge the same in appeal after the retention order under section 17(4) is passed.,
With regards to other submission of the appellants that the discrepancies are so glaring, the same hearing officer may not be able to go against his",
own finding as the reason to believe orders passed by him on the face of record are defective and the notice under section 8(1) has been issued on the,
basis of the said defective reason to believe which would show that while issuing the notice, even the authorised officer has not cared to see the",
materials which were seized, otherwise such a mistake would not have happened.",
In the interest of justice, equity and fair play, this tribunal directs that after filing the reply, the hearing shall be conducted by other Honâ€ble",
Member(Law), who shall consider all the contentions of the appellants and decide the same on merit.",
In the light of these directions, the present appeals and all pending applications are disposed of. The Adjudicating Authority is at liberty to fix the",
matters for further proceedings.,
The period spent in filing and disposing the present appeals is excluded from 180 days as provided under Section 5 of the Act. The Adjudicating,
Authority shall pass the order on merit without any influence of this order.,
No costs.,
Copy of order be given “Dasti†to the counsel for the parties.,