Appeals allowed, impugned orders set aside as seizure lapsed after statutory period. Seized properties defreezed.

The Tribunal allowed the appeals, setting aside the impugned orders dated 08.02.2018 and 13.02.2018, as the seizure lapsed after the expiry of the statutory period of ninety days. The seized properties were ordered to be defreezed, with no costs awarded.

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Issues Involved:
1. Jurisdictional fact and proceeds of crime.
2. Reasons to believe under Section 8 and 17(1) PMLA.
3. Connection of appellants with the alleged offences.
4. Allegations against the appellants.
5. Application of mind by the Adjudicating Authority.
6. Seizure and retention of property.

Issue-wise Detailed Analysis:

1. Jurisdictional Fact and Proceeds of Crime:
The appellants argued that there was no averment or evidence of proceeds of crime, which is a fundamental jurisdictional requirement for the Directorate of Enforcement to conduct an investigation. The Tribunal noted that the respondent failed to produce any material linking the appellants to the Sterling Biotech Ltd. or any proceeds of crime. The Original Application lacked any mention of proceeds of crime being generated or possessed by the appellants, essential to establish the offence of money laundering.

2. Reasons to Believe under Section 8 and 17(1) PMLA:
The appellants contended that the reasons to believe under Section 8 and 17(1) PMLA were never provided to them, despite requests. The impugned order incorrectly recorded that the requirement of reasons to believe had been exhausted. The Tribunal highlighted that Section 17 mandates the Investigating Agency to record its reasons to believe in writing, which was not done or forwarded to the Adjudicating Authority or provided to the appellants.

3. Connection of Appellants with the Alleged Offences:
The appellants were neither accused in the FIR No. RC.08(A)/2017-AC.III nor in the ECIR No. HQRS/15/2017, and bore no connection with any offence allegedly committed by the accused persons in the said FIR and ECIR. The Tribunal observed that the respondent had not produced any material linking the appellants to the alleged offences, and the seized property had no connection with the transactions mentioned in the FIR and ECIR.

4. Allegations Against the Appellants:
The allegations against the appellants included their services being used to transfer funds from Sandesara Group to public officials. However, the Tribunal found that there was no evidence or material supporting these allegations, and the statement of one Sh. Ajay Panchal, which allegedly mentioned the appellants, was not disclosed to them, violating principles of natural justice.

5. Application of Mind by the Adjudicating Authority:
The appellants argued that the impugned orders were passed without any application of mind and in a mechanical manner. The Tribunal agreed, noting that the impugned order vaguely stated that relevant records or material might exist, indicating money laundering activities, without any concrete evidence or material.

6. Seizure and Retention of Property:
The properties seized included daily diary entries, personal mobile phones, and cash. The Tribunal emphasized that Section 17 and 18 of PMLA require the Investigating Officer to record reasons to believe and forward them to the Adjudicating Authority. The outer limit for deciding the application for retention of property under Section 21 is 180 days from the date of seizure, which is non-extendable. The Tribunal noted that no prosecution complaint was filed against the appellants within the prescribed period, and the seized properties were retained beyond the statutory period, rendering the seizure invalid.

Conclusion:
The Tribunal allowed the appeals, setting aside the impugned orders dated 08.02.2018 and 13.02.2018, as the seizure lapsed after the expiry of the statutory period of ninety days. The seized properties were ordered to be defreezed, with no costs awarded.

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