AI Structured Summary
Not yet generated for this judgment
Judgment
Addition/Invest ment made by Smt.
Shyamal Sharma",Profit (as on 01.04.2009,Tax,"Net amount to be paid
(Total
ProfitTax+Investment)
11.01.2008 Rs. 1,00,000/-","R s . 20253223.55
(14578.53+157640.09+
635561.10+1245443.83","R s . 282955
(66769 +
216186)","Rs. 18,70,268.55
As the appellant was in jail, the appellant was not in a position to point out to the learned Adjudicating Authority that the prosecution has been misusing",,,
witnesses to create evidence which otherwise it does not exist. A glaring and open example of the same is the different stand taken by Mr. Sunil,,,
Millak at different points in time regarding the same subject matter. Copies of the different statements recorded of Mr. Sunil Millak by the Gujarat,,,
Police as well as the Enforcement Directorate are filed herewith for the perusal of the Hon. Tribunal which would show that the different statements,,,
suggest that Mr. Sunil Millak is a person completely in the hands of the respondent authorities and is ready to say anything that suits the respondent,,,
authority. The documents as suited to the prosecution have been produced by Mr. Sunil Millak before the respondent herein, wherein the said Mr.",,,
Sunil Millak has filed different documents before other statutory authorities. This goes to show the falsity in the story of the respondent authority,,,
against the appellant. Therefore, the impugned order of the learned Adjudicating Authority is required to be quashed and set aside.",,,
It is specially mentioned in the ground of appeal that the appellant is ready and willing to disclose the sources of funds utilised in acquiring the,,,
properties attached by way of the impugned order. The impugned proceedings are an extended attempt of the authorities to ensure that the appellant is,,,
not in a position to enjoy the only residential property owned by the appellant and that the appellant is made to run from pillar to post even for his basic,,,
necessity of a residential home.,,,
On merits, it is submitted on behalf of the appellant that a mere reading of the provisions of section 5 and section 2(1)(u) of the PMLA makes it",,,
clear that the primary requirement for the purpose of issuing an order of attachment under Section 5 of PMLA is that the person ought to be in,,,
possession of any “proceeds of crime†i.e. any property “derived†or “obtained†directly or indirectly as a result of criminal activity of a,,,
scheduled offence or the value of such property. And in the present case, the impugned property cannot be termed as a “proceeds of crime†by",,,
any stretch of imagination. It is stated that the impugned order is contrary to the evidence on record and does not take into consideration the material,,,
facts presented before the Ld. Adjudicating Authority. The property does not satisfy the requirements of being a “proceed of crime†because:,,,
a. The respondent authority has collected evidence that has been created to suit the prosecution case. The documents attached hereto clearly suggests,,,
that the respondent authority has maliciously procured and relied upon false information with the sole objective of being able to establish its case. A,,,
bare perusal of the returns of the partnership firm filed with the Income Tax Department show that the reliance of the respondent authority on the,,,
statement and information provided by Mr. Sunil Millak is false. The amount paid to the wife of the appellant by the firm was legitimate share of profit,,,
earned by the firm and hence, the amount of Rs. 22 lakhs transferred into the account of the wife of the appellant cannot be termed to be any",,,
outcome of any criminal activity.,,,
Therefore, the Ld. Adjudicating Authority materially erred in confirming the provisional attachment order.",,,
It is matter of fact that Deputy Director of the Directorate of Enforcement has during the pendency of the present appeal, passed another order in",,,
connection to the remaining portion of the same property being the residential bungalow of the appellant. The earlier Provisional Attachment order,,,
was passed in connection with 35% of the said property and the new order has been passed in connection with the remaining 65% of the same,,,
property being Provisional Attachment Order No. 1 of 2016 dated 26.09.2016. Also, the cases which are the basis of the earlier attachment order are",,,
also included in the list of cases which are considered while passing the new order. Further, the original complaint in that regard is also filed before the",,,
Ld. Adjudicating Authority being O.C. No. 647 of 2016 and the matter had been fixed for first hearing on 05.12.2016.,,,
The said matter in connection with the remaining arguments in regard to 65% properties is pending before the Adjudicating Authority and the next,,,
date of hearing was fixed in the second week of January, 2017 as informed by the counsel for the parties. In view of such circumstances and",,,
subsequent events, the learned counsel for the appellant has made his submissions and it is contended by him that principles of natural justice has not",,,
been complied by the respondent which deprived the right of the appellant to defend the case in a matter in which his residential house was being,,,
attached. It is submitted that there was sufficient time available to the Adjudicating Authority to grant one more opportunity to the appellant to file the,,,
reply and to hear the matter on merits. However the Adjudicating Authority in arbitrary and whimsical manner exercised his powers to pass the order,,,
without granting the final opportunity to file the reply and to hear the appellant despite of the fact that on the date of passing the order, the appellant",,,
was in judicial custody. Since his right to defend himself has been curtailed by the respondent in the impugned order, this is against the provisions of 14",,,
of the Constitution of India.,,,
It is further submitted on behalf of the appellant that even otherwise no prejudice would be caused to the respondent in case the impugned order is set,,,
aside and the present proceedings be remanded back to the Adjudicating Authority who is hearing the matter now in connection with the remaining,,,
65% of the same property being provisional attachment order No. 1 of 2016 dated 26.09.2016.,,,
Both the counsels have only argued the matter on the aspect of rules of natural justice. The contentions of the appellant are that principle of,,,
natural justice has not been complied by the Adjudicating Authority and the appellant was deprived of the right to file the reply and to be heard in the,,,
matter on merits. On the other hand the counsel for the respondent submits that opportunity was granted to the appellant to file the reply. Even the,,,
matter was adjourned for 12th January, 2015 at the request of the appellant. Once he was on bail for the period of 1st January, 2015 to 5th January,",,,
2015 he could have very easily given the instructions to his counsel to make the draft and file reply before the Adjudicating Authority when the matter,,,
was fixed for hearing on 12th January, 2015. Since the reply was not filed; none appeared on behalf of the appellant. The Adjudicating Authority had",,,
no alternative but to pass the order. No arguments have addressed on behalf of both the parties on merits.,,,
No doubt the Adjudicating Authority is not bound by the procedure laid down by the court of Civil Procedure 1908 under the provisions of 6(1)(15),,,
of the PMLA. However in the said provision it is stipulated that the Adjudicating Authority shall be guided by the principles of natural justice and,,,
subject to other provisions of the Act. The relevant provision of section 5 of the PMLA reads as under:,,,
Attachment of property involved in money-laundering. â€",,,
(1) Where the Director, or any other officer not below the rank of Deputy Director authorised by the Director for the purpose of this",,,
section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, thatâ€"",,,
(a) any person is in possession of any proceeds of crime;,,,
(b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any",,,
proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such",,,
property for a period not exceeding 9 [one hundred and eighty days] from the date of the order, in such manner as may be prescribed:",,,
Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a",,,
Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorized to",,,
investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case",,,
may be, or a similar report or complaint has been made or filed under the corresponding law of any other country:",,,
Provided further that, notwithstanding anything contained in clause (b), any property of any person may be attached under this section if",,,
the Director or any other officer not below the rank of Deputy Director authorized by him for the purposes of this section has reason to,,,
believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in",,,
money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding",,,
under this Act.,,,
(2) The Director, or any other officer not below the rank off Deputy Director, shall, immediately after attachment under sub-section (1),",,,
forward a copy of the order, along with the material in his possession , referred to in that sub-section, to the Adjudicating Authority, in a",,,
sealed envelope, in the matter as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as",,,
may be prescribed.,,,
(3) Every order of the attachment made under sub-section (1) shall 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 immoveable property attached under sub-section (1),,,
from such enjoyment.,,,
Explanation- for the purposes of this sub-section “person interestedâ€, in relation to any immoveable property, includes all person",,,
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.",,,
15.1 Further, Section 8(1) of the Act also reads as under:-",,,
“On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub-",,,
section (10) of section 18, if the Adjudicating Authority has reason to believe that any person has committed an [offence under section 3 or",,,
is in possession of proceeds of crime], he may serve a notice of not less than thirty days on such person calling upon him to indicate the",,,
sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of",,,
section 5, or, seized under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to",,,
show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by,,,
the Central Government.,,,
Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy",,,
of such notice shall also be served upon such other person.,,,
Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such",,,
property.,,,
(2) The Adjudicating Authority shall, after-",,,
(a) considering the reply, if any, to the notice issued under sub-section (1)",,,
(b) hearing the aggrieved person and the Director or any other officer authorized by him in this behalf, and",,,
(c) taking into account all relevant materials placed on record before him,,,
by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section-(1) are involved in",,,
money-laundering:,,,
Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be",,,
given an opportunity of being heard to prove that the property is not involved in money-laundering.,,,
(3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money-laundering, he shall, by an order",,,
in writing, confirm the attachment of the property made under sub-section (1) of section 5 of 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 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]",,,
(b) become final after an order of confiscation is passed under sub-section (5) or sub-section (7) of section 8 or section 58B or sub-section,,,
(2A)of section 60 by the Adjudicating Authority],,,
(4) Where the provisional order of attachment made under sub-section,,,
(1) of section 5 has been confirmed under sub-section(3), the Director or any other officer authorized by him in this behalf shall forthwith",,,
take the [possession of the property attached under section 5 or frozen under sub-section (1A) of section 17, in such manner as may be",,,
prescribed:,,,
(5) Where on conclusion of a trial of an offence under this Act, the Special Courts finds that the offence of money-laundering has been",,,
committed, it shall order that such property involved in the money-laundering or which has been used for commission of the offence of",,,
money-laundering shall stand confiscated to the Central Government.],,,
(6) Where on conclusion of a trial under this Act, the Special Court finds that the offence of money-laundering has not taken place or the",,,
property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it.",,,
(7) Where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a proclaimed,,,
offender or for any reason or having commenced but could not be concluded, the Special Court shall, on an application moved by the",,,
Director or a person claiming to be entitled to possession of a property in respect of which an order has been passed under sub-section (3),,,
of section 8, pass appropriate orders regarding confiscation or release of the property, as the case may be, involved in the offence of",,,
money-laundering after having regard to the material before it.,,,
It is not in dispute that the appellant was in custody during the proceedings initiated against him except between 1st to 5th January, 2015 when he",,,
was on interim bail on the ground of serious illness of his mother. It is also not disputed that dispute pertaining to the present appeal is in connection,,,
with the 35% of the property which is residential property of the appellant and new order has been passed in connection with the remaining 65% of,,,
the same property where the proceedings are pending before the Adjudicating Authority for confirmation and the next date of hearing is fixed for 10th,,,
January, 2017. It is also not in dispute that when the order was passed, the Adjudicating Authority has still 74 days period of time to pass the",,,
confirmation order. However, the hearing officer has chosen not to grant any further adjournment in the matter and ultimately passed the order on",,,
merits against the appellant without granting the opportunity to file the reply and hear the counsel for the appellant.,,,
The letter written by the appellant who was then in jail to the respondent requesting for an adjournment is reproduced here-under:,,,
“Pradeep Sharma IAS,,,
Palara Jail,,,
Bhuj. Dist. Kutch,,,
Gujarat,,,
Shri Mukesh Kumar,",,,
Adjudicating Authority,",,,
Court No. 2, Room No.-20",,,
Jeevandeep Building, Parliament Street,",,,
New Delhi-110001.,,,
Subject: OC/No./368/2014,,,
Sir,",,,
Vide my letter dated 3/12/14, I had requested your kind self that as I was in judicial custody since 30/9/2014. I would not be in a position to",,,
either present or appoint an advocate to represent my case before your Learned Authority.,,,
I was granted 7 days interim bail to attend to my 84 year old ailing mother, as she was diagnosed with Cervical Cancer. During this period I",,,
have received intimation from the ld. Authorities that the date for hearing on my matter scheduled on 12th January, 2015 but condition",,,
imposed upon me restrict my movement outside the boundaries of Gujarat and stipulate my visits to nearby Police Station to mark my,,,
attendance. Given this situation I have not been able to travel to Delhi to appoint an Advocate for the aforesaid matter. I once again,,,
reiterate the fact that the case is made out by ED needs an advocate with adequate skills and specialization to handle such cases.,,,
My petition for seeking bail is on and I am hopeful to come to know about the outcome during the month of January.,,,
I therefore implore the authority that keeping in mind the “Principles of Natural Justice†to grant a final adjournment for a month,,,
during which time I will be able to ensure adequate representation to defend my case.,,,
Thanking You,,,
(Pradeep Sharma)â€,,,
It is not denied on behalf of respondent that the matter pertaining to the 65% portion of same property is pending before the Adjudicating Authority,,,
and he would pass the order one way or other and at the same time the appellant is able to defend the matter by producing relevant documents before,,,
the Adjudicating Authority in connection with the source of income for procuring the entire property in question and, therefore, it is appropriate that the",,,
entire property can be decided by the Adjudicating Authority.,,,
We are of the view that if no opportunity is granted to the appellant to defend his case in connection with the property for 35% of the property,,,
attached earlier the appellant would suffer irreparable loss and injury and the Competent Authority is likely to take the similar view pertaining to 65%,,,
remaining of the same property, and the order of the confirmation is to be passed as already taken in the earlier order passed on 35% of the same",,,
vary property and therefore opportunity is to be given to the appellant to defend the case before the Adjudicating Authority.,,,
On the other hand the learned counsel for the respondent has argued that there is no doubt there is a falsehood in the submission made on behalf,,,
of the appellant in ground B and the appellant has not made the correct statement. The respondent has also filed the additional reply on 19th,,,
December, 2016. In the additional reply it was submitted that the appellant was served in person on 18th November, 2014. The hearing was fixed on",,,
31st December, 2014 and the matter was adjourned to 12th January, 2015. It is also stated by the learned counsel for the respondent that the office of",,,
the respondent had served the letter about the date of hearing on 12th January, 2015 upon the appellant at his residential premises when he was on",,,
interim bail for five days for the period of 1st January, 2015 to 5th January, 2015. During that period he could engage the service of the Advocate to",,,
file the reply before the Adjudicating Authority and argue the matter on his behalf. It is argued by the counsel that in the ground of appeal it is,,,
incorrectly mentioned by the appellant that during the entire period of the proceedings before the Adjudicating Authority he was in judicial custody.,,,
The counsel submitted that as a matter of fact he was granted interim bail between 1st January, 2015 to 5th January, 2015. The appellant could have",,,
authorized the counsel to file the reply and argue the matter before the Adjudicating Authority. The said statement in ground (B) is apparently,,,
incorrect. The appeal should be dismissed on this ground itself.,,,
We have considered the arguments on behalf of the respondent but the fact remains that when the hearing of the matter was kept for 31st,,,
December, 2014 for the first time by the Adjudicating Authority, the appellant was in judicial custody. The same was adjourned to 12th January, 2015.",,,
The appellant has admitted that on 1st January, 2015, letter for hearing fixed on 12th January, 2015 was served. The appellant was on interim bail",,,
between 1st January, 2015 to 5th January, 2015. He was to attend his mother who was suffering from cancer and at the same time he was also to",,,
appear before the police station everyday. In such circumstances within five days he was not able to give the instructions to his advocate to file the,,,
reply and to argue the matter before the Adjudicating Authority on 12th January, 2015. No doubt normally as per the statute he was supposed to give",,,
30 days time to defend this case. We have not been able to understand when the Adjudicating Authority was having 74 days left before the statutory,,,
deadline under section 5 of the Act, atleast one final opportunity ought to have been granted to the appellant to defend his case. It is also not in dispute",,,
that on 12th January, 2015, the appellant was in judicial custody. Even the order was passed on the next date i.e. 13th January, 2015. As per the",,,
settled law, the accused person is entitled to raise his defence within the reasonable time. It is also a matter of fact that by the impugned order, the",,,
attachment of the property of the appellant is to be confirmed and further under section 8(4) thereof the possession is to be taken. No harm would be,,,
caused to the respondent if the opportunity is granted to the appellant to defend his case pertaining to 35% of the property which was already attached,,,
and for remaining 65% of the property the matter is coming up before the Adjudicating Authority during the 2nd week of January, 2017 for hearing.",,,
Under these circumstances we are of the view that the order passed by the Adjudicating Authority is in haste and without following the principles of,,,
natural justice particularly when 74 days was still left before the statutory deadline. The impugned order is set aside the appellant is allowed to file the,,,
reply before the Adjudicating Authority within three weeks from today irrespective of the fact that he is in judicial custody. He could given the,,,
instructions as already given in the fresh matter to his counsel so that both the matters may be decided together. We also agree that the submissions of,,,
the learned counsel for the respondent that in ground (B) that the appellant has not made the correct statement that during the entire tenure of the,,,
proceedings before the Adjudicating Authority he was in judicial custody. As a matter of fact he was on bail between 1st January, 2015 to 5th",,,
January, 2015. It might have happened due to oversight as alleged by the counsel but all the appeal, papers were signed by him. He is warned to be",,,
careful in future. To balance the case of the two sides, cost of Rs. 10,000/- is imposed on the appellant which shall be deposited by him with the",,,
Adjudicating Authority within four weeks from today. Under these circumstances, the present appeal is allowed and the matter is remanded back to",,,
the Adjudicating Authority accordingly for decision afresh in accordance with law and as per the observations in this order.,,,
Copy of the order be given “dasti†to both sides.,,,