Sanjeev Tyagi vs Deputy Director, Directorate Of Enforcement, Delhi

FPA-PMLA-1287/DLI/2016, FPA-PMLA-1310/DLI/2016, FPA-PMLA-1316/DLI/2016 & FPA-PMLA-1311/DLI/2016

In the above said appeals, the appellants have challenged the order dated 8th March, 2016. The written submissions have been filed by the

appellants.

Mr. Manav Gupta, Counsel appearing on behalf of the appellant has raised the preliminary submission that the properties in question were attached

contrary to the provision of section 5 of the Act. He submits that in the present case the attachment of property involve in the Money Laundering

could not have been attached be attached as firstly the report is forwarded to Magistrate under section 173 of Code of Criminal Procedure 1973 has

provided in the first proviso. Secondly with regard to second proviso no valid reasons are given in the provisional attachment order which is mandatory

in view of amended proviso wherein it provides that if the property is not attached immediately, non-attachment of the property is likely to frustrate the

proceeding. He says that there were mentioned on record to show that the appellants were disposing of the properties in question.

Mr. Garg, Advocate submits that the report under section 173 has now been filed. We agreed with the submissions of Mr. Manav Gupta, Advocate

as far as filing of the report the court is concerned and the relevant date is always/the date of passing the provisional attachment order. Admittedly on

the date of the filing of the provisional attachment order such report was not filed, therefore, no advantage can be derived by the respondent of the

first proviso. With regard to the second proviso, we have gone through the provisional attachment order. The Para-26 of the provisional order reads as

under:

And whereas, from the above, it was abundantly clear that tyagi borthers (S/Shri Sanjeev Tyagi, Dr. Rajiv Tyagi, Sandeep Tyagi), have

received Euro 10,50,000.00/- (equivalent to Rs. 6,12,00,000/-approximately) from Mr. Carlo Gerosa and Mr. Guido Haschke or their

Companies M/s Gordian Services, Sarl, Tunisia (including payments received in cash as stated by Mr. Guido Haschke before the Italian

Court during his examination on the seized documents as well as his conversation with Mr. Carlo Gerosa, recorded by Italian Authorities)

as proceeds of crime, out of 28 million Euro kick back received in these companies from M/s Agusta Westland, which the Tyagi brothers

firstly made fixed deposit in their various banks and thereafter invested the same in the purchase of above immovable properties. As such,

immovable properties acquired in the name of Shri Sanjeev Tyagi, his mentioned above, being the value of proceeds of crime, as envisaged

in Section 2(1)(u) of PMLA, are required to be attached u/s 5(1) of PMLA, 2002, otherwise, apprehension to frustrate with these properties,

having interest on the same, may not be ruled out.

Prima-facie after having gone through the P.A.O, it appears to us that reasons are mentioned in the PAO. Those may be valid or not, the said issue

is to be considered date- the time of disposal of appeal. After hearing of appeals on merit, the said submission would also be considered alongwith

other grounds raised by the appellant.

Mr. Manav Gupta, Advocate has referred the decision of the Madras High Court in the matter of A. Kamarunnisa Ghori, Appellant Vs. The

Chairperson, Prevention of Money Laundering, Union of India, New Delhi & Ors. Para 15 which read as under:

The first two writ petitioners also raise one more ground viz., that by virtue of the first proviso under Section 5(1) of the Act, a provisional

order of attachment can be made only if a report had been forwarded to a Magistrate under Section 173 of the Code of Criminal

Procedure. But the provisional order of attachment dated 23.6.2010 merely relies upon the first information report registered by the City

Crime Branch and the statements of several persons. There is no indication in the provisional order of attachment that a final report had

already been filed. Even in the complaint filed by the Director before the Adjudicating Authority for confirmation of the provisional order

of attachment, there is no indication of any final report having been filed under Section 173 Cr.P.C. Therefore, it is contended that the

order under Section 5(1) itself was vitiated.

We have gone through the facts of that case and we are of the view that finding arrive in the said judgment are correct. However, the said

judgment has no bearing in the present case and do not help the case of the appellants as the amendment was carried out in the provision of Section 5

after passing the said judgment referred. The un-amended provision of Section 5 read as under:

(1). Where the Director, or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, has

reason to believe (the reason for such belie to be recorded in writing), on the basis of material in his possession, that-

(a) any person is in possession of any proceeds of crime;

(b) such person has been charged of having committed a schedule offence; and

(c) 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 [one hundred and fifty days] from the date of the

order, in the manner provided in the Second Schedule to the Income-tax Act, 1961 (43 of 1961) and the Director or the other officer so

authorised by him, as the case may be, shall be deemed to be an officer under sub-rule (e) of rule 1 of the Schedule:

[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 , authorised

to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the

case may be:

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 authorised 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 â€"laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any

proceeding under this Act.â€​

The finding arrive para-15 is apparently correct. However, the same does not help the case of the appellant after the amendment.

In view of above said we are not expressing any opinion on merit of the case at this stage, the appellant is at liberty to raise all issues mentioned in

the grounds of appeal at the time of final hearing.

One final opportunity is granted to the counsel for the respondent to file the written submissions within four weeks.

List these appeal on 15th February, 2018.

Interim order already passed shall continue however, attachment order pertaining to the properties in question will also continue.