TaxTMI 
TaxTMI 
TaxTMI 
2017 (4) TMI 415
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....ir Bank Accounts which are mentioned in the communication at Annexure-A; (D) Your Lordships may be pleased to grant such other and further relief/s that may be deemed fit and proper in the interest of justice." 2. The case of the writ applicants may be summarized as under; 2.1 The writ applicants are the residents of Daman falling within the union territory. They are into the business of sale of liquor. They are carrying on business in the name of Damaniya Enterprise, Sai Wines, Sai Bar & Restaurant and Sai Enterprise. It is the case of the applicants that they hold a valid license for the purpose of the business of sale of wine including distributorship. They have, in all, the following Bank Accounts; "(1) HDFC Bank Account No.01303630000115 (2) Goa State Co-operative Bank Account No.00251010000748 (3) Bank of Baroda Account No.25580500004060 (4) Sai Bar and Restaurant with the Goa Co-operative Bank bearing account No.00251010000802 as well as the Bank of Baroda Account No.25580500001384. (5) The Damaniya Enterprise holds a Bank Account with the Bank of Baroda bearing Account No.25580500004020, State Bank of India Account No.35807890407 as well as the Goa State Co-operat....
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....it that Daman falls within the union territory, and the Gujarat Prohibition Act has no applicability in Daman. It is submitted that all the transactions in each of the accounts are audited and through cheques. Mr. Marshal placed reliance on the following details; Damaniya Enterprise Bank Account Detail Sr. No. Bank Name Account No. Last 3 year credit detail 1 Bank of Baroda, Somnath Branch 25580500004020 55,75,000 2 The Goa State Cooperative Bank Ltd., Bhimpore branch 00 251010000779 1,11,35,000 3 HDFC Bank 0 130862000090 - 4 State bank of India 35807890407 5,21,000 GRAND TOTAL 1,71,31,000 Sai Bar and Restaurant Sr. No. Bank Name Account No. Last 3 year credit detail 1 Bank of Baroda, Somnath Branch 25580500001384 23,04,25,000 2 The Goa State Cooperative Bank Ltd., Bhimpore branch 00 251010000802 37,78,00,000 GRAND TOTAL 60,82,25,000 Sai Wines Sr. No. Bank Name Account No. Last 3 year credit detail 1 Bank of Baroda, Somnath Branch 25580500004060 - 2 The Goa State Cooperative Bank Ltd., Bhimpore branch 00 251010000748 5,62,45,000 3 HDFC Nani Daman bank 0 1307630000115 3,12,47,200 ....
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....PURCHASE 634599443 VAT TAX PAID 4720656 INCOME TAX 6776350 5. Mr. Marshal vehemently submitted that but for one particular offence registered under the Prevention of Corruption Act, 1988, and that too, because of the involvement of one police officer, his clients have not been charged for any scheduled offence and, therefore, the bank accounts could not have been freezed. Mr. Marshal submits that if his clients are not permitted to operate the accounts, the same would destroy the entire business as many legal liabilities are to be discharged. The writ applicants will not be in a position to even pay the income tax, excise duty etc. 6. In such circumstances referred to above, Mr. Marshal prays that his clients may be permitted to operate the accounts subject to certain reasonable terms and conditions. Mr. Marshal suggested that his clients may be permitted to operate the accounts only by way of cheques, and that too, with prior intimation to the authority concerned so that the authority concerned can keep a watch over the transactions. 7. On the other hand, this writ application has been vehemently opposed by Mr. Devang Vyas, the learned Assistant Solicitor General o....
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.... from such illegal supply of IMFL to Gujarat. The details of the Bank accounts indicate deposits of Rs. 223.47 crores, in cash, over a period. of 3 years. The offences under section 13(1) (d) of the PC Act, 1988 and Section 120(B) of the IPC are the scheduled offence. The Section 12GB of IPC envisages the offence of criminal conspiracy which in the subject case is committed by way of illicit supply smuggling of the IMFL into Gujarat. The accused persons. have conspired to bring Indian Made Foreign Liquor (IMFL) from Daman (UT) and sell at high price in Gujarat to earn high profit. The petitioners, Mr. Ramesh Jagubhai Patel @ Michael and his wife Mrs. Bhanuben Patel, both accused in the charge sheet are holding the business in Daman, in the name of (1) Sai Wine Shop (2) Sai Enterprise (3) Sai Bar and Restaurant (4) Damania Enterprise Wine Shop. IMFL of different batches were smuggled into Gujarat from M /s Sai Wine Shop, Daman. On comparing the batch numbers of the seized consignment, it as noticed by LEA, that some of the batch numbers of IMFL was matching with the supplies made from M/s. Sai Wine shop. The IMFL supplied by the distilleries to the wine shops owners in Daman is for ....
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.... regard to the transactions of the sales and purchase since inspection of the entities vis-a-vis to achieve the objective of the money laundering. 12. With regard to contents of paragraph no. 6 & 8, it is submitted that the averments made are not correct and misleading. The cash deposits amounting to Rs. 223.00 crore are seen in the accounts. M/s Damania Enterprises & M/s Sai Wines hold the wholesellers licence and M/s. Sai Bar & Restaurant & M/s. Sai Enterprises holds the Retailers License. The claim that the cash deposits are made only in the accounts of M/s. Sai Bar & Restaurant is far from truth, as in all the accounts significant cash deposits are noticed. The verification of the accounts is in progress; hence, at this juncture the veracity claimed by the petitioners cannot be acceded to. Moreover, the cases registered by the various police stations in Gujarat by the Police authorities for the smuggling of IMFL into Gujarat against the petitioners does not support the claim put forth. The payment of Excise duty is made by the petitioners to the Distilleries from whom the IMFL/ CL is purchased and the element of VAT is also recovered by the distilleries at the time of effecti....
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....ated after the occurrence of the scheduled offence in terms of Section 2 (1) (y) of the PMLA,2002. The directions for disallowing the debits is a part of investigation to ensure that such proceeds of crime, if any, may not be concealed, transferred or dealt with in any manner, by the petitioners, resulting in frustrating the ongoing proceedings relating to the confiscation of the proceeds of crime. 19. With regard to contents of paragraph no. 15, it is submitted that in view of the foregoing submissions, it is once again reiterated that to achieve the objectives of money laundering, the directions for disallowing the debits were issued and are a part of the ongoing investigation to ensure that such proceeds of crime, if any, may not be concealed, transferred or dealt with in any manner, by the petitioners, resulting in frustrating the ongoing proceedings relating to the confiscation of the proceeds of Crime. Hence, it is prayed that the prayer put forth by the petitioners may not be acceded to and the present petition deserves to be dismissed." 8. Mr. Vyas would submit that the department is not concerned with the difficulties that the writ applicants are likely to face so far ....
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....ook at the statement of objects and reasons and also trace the historical basis for the Political Declaration and Global Program of Action adopted by the General Assembly, it could be seen that the concern of the global community which led to the above resolutions, was about the illicit traffic in narcotic drugs and the huge amount of money generated from the same. The original object of the Declaration of the General Assembly and the 2002 Act, was not to deal with the normal crimes such as robbery, dacoity, fraud etc. but in course of time, the Prevention of Money Laundering Act, 2002 also appears to have fallen into the same kind of disuse/misuse as other enactments of similar nature, by first targeting the local criminals then their international counter parts. Section 2(d) of the PMLA defines attachment as under : attachment mean prohibition of transfer, conversion, disposition or movement of property by an order issued under Chapter III. Section 2(na) defines the term investigation as under : investigation includes all the proceedings under this Act conducted by the Director or by an authority authorised by the Central Government under this Act for the collection of evidenc....
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....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 laundering is not attached immediately under this Chapter, the nonattachment of the property is likely to frustrate any proceeding under this Act. (2) The Director, or any other Officer not below the rank of 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 manner 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 attachment made under subsection (1) shall cease to have ef....
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....der sub-section (1) are involved in moneylaundering: 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 or retention of property or record seized under Section 17 or Section 18 and record a finding to that effect, such attachment or retention of the seized property or record shall-- (a) continue during the pendency of the proceedings relating to any scheduled offence before a Court; and b) become final after the guilt of the person is proved in the trial Court and order of such trial Court becomes final. (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 authorised by him in this behalf shall forthwith take the possession of the attached property. (5) Where ....
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....der Section 5(1) is obliged to file a complaint within 30 days under Section 5(5) before the Adjudicating Authority. Upon receipt of the said complaint, the Adjudicating Authority is obliged to serve a notice upon the person against whom the complaint is made, calling upon him to indicate the sources of his income, earning or assets, out of which he had acquired the property. After such person gives a reply, the Adjudicating Authority should hear the aggrieved person as well as the Director, take into account all relevant materials and pass an order thereafter, recording a finding whether the property in question was involved in money laundering. While sub-section (1) of Section 8 deals with the service of notice by the Adjudicating Authority on the person against whom the complaint is made, sub-section (2) deals with the manner in which the Authority should deal with the complaint, reply and evidence and the manner in which the Authority shall record a finding. Under sub-section (3) of Section 8, the Adjudicating Authority should pass an order "confirming the provisional attachment" if he decides under sub-section (2) that the property is involved in money laundering. While orde....
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....ransfer of such proceeds of crime may result in frustrating the proceedings relating to confiscation of such proceeds of crime. I shall now look into Section 65 of the PMLA. Section 65 reads as under : 65. Code of Criminal Procedure, 1973 to apply.- The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply, in so far as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under this Act. Section 65 of the PMLA seeks to provide that the provisions of the Code of Criminal Procedure, 1973 shall apply in so far as it is not inconsistent with the provisions of this Act to arrest, searches, seizures, attachments, confiscations, investigations, prosecution and all other proceedings under the proposed Act. Section 4 of the Criminal Procedure Code declares that all offences under any law other than the Indian Penal Code shall be investigated, inquired into, tried and otherwise dealt with according to the provisions of the Code, but subject to any enactment for the time being in force regulating the manner of place of investigation, inquiring into, t....
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....ess would get vitiated. It may happen that initially the authority may not be in a position to collect adequate material sufficient enough to record the reasons for such belief for the purpose of passing a provisional order of attachment. He may be in possession of some material which may create some doubt or suspicion, and in such circumstances, the authority may have to carry out some investigation before he could proceed to pass a provisional order of attachment under Section 5 of the PMLA. It is at that stage that the authority is empowered to issue appropriate directions of attachment/freezing of the bank account in exercise of the powers under Section 102 of the Code by virtue of Section 65 of the PMLA. Like any other property a bank account is freezable. Freezing the account is an act in investigation. Like any other act, it commands and behoves secrecy to preserve the evidence. It does not deprive any person of his liberty or his property. It is necessarily temporary i.e. till the adequate material is collected. . It clothes the authority with the power to preserve a property suspected to have been used in the commission of the offence in any manner. The property, therefor....
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....b-section(1) of Section 102 indicates that the Police Officer has the power to seize any property which may be found under circumstances creating suspicion of the commission of any offence. The legislature having used the expression "any property" and "any offence" have made the applicability of the provisions wide enough to cover offences created under any Act. But the two pre- conditions for applicability of Section 102(1) are that it must be `property' and secondly, in respect of the said property there must have suspicion of commission of any offence. In this view of the matter the two further questions that arise for consideration are whether the bank account of an accused or of his relation can be said to be `property' within the meaning of subsection( 1) of Section 102 of the Cr.P.C. and secondly, whether circumstances exist, creating suspicion of commission of any offence in relation to the same. Different High Courts in the country have taken divergent views in this regard. In the case of Ms. Swaran Sabharwal vs. Commissioner of Police, reported in 1988 Criminal Law Journal(Vol. 94) 241, a Division Bench of Delhi High Court examined the question whether bank accoun....
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....he bank, money itself becomes unidentifiable and, therefore, there cannot be any question of seizure of the same by the Police Officer. 7. In the case of M/s Malnad Construction Co., Shimoga and Ors. vs. State of Karnataka and Ors., 1994 Criminal Law Journal(Vol.100) 645, a learned Single Judge of Karnataka High Court examined the provisions of Section 102 of the Criminal Procedure Code and relying upon the Gauhati High Court's decision, referred to supra, came to hold that the `seizure' in Section 102 would mean taking actual physical possession of the property and such a prohibitory order to the banker of the accused not to operate the account is not contemplated under the Code and consequently, the police has no power to issue such order. Thus the High Courts of Karnataka, Allahabad, Gauhati and Delhi have taken the view that the provisions of Section 102 of the Criminal Procedure Code cannot be invoked by the Police Officer in course of investigation to issue any prohibitory order to the banker or the accused from operating the bank account. 8. In P.K. Parmar and ors. vs. Union of India and anr., 1992 Criminal Law Journal 2499 (Vol.98), a learned Single Judge of Del....
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....g to the learned Judge, such literal interpretation of the expression `property' could not have been the intent of the framers of the Criminal Procedure Code. In paragraph 11 of the said judgment, the learned Judge referred to the object behind investing the police with powers of seizure. It will be appropriate to extract the same in extenso: "It would now be useful to refer to the object behind investing the police with powers of seizure. Seizure and production in court of any property, including those regarding which an offence appears to have been committed or which appears to have been used for the commission of any offence or any other property will have a two-fold effect. Production of the above property may be necessary as evidence of the commission of the crime. Seizure may also have to be necessary, in order to preserve the property, for the purpose of enabling the Court, to pass suitable orders under S.452 of the Criminal Procedure Code at the conclusion of the trial. This order would include destruction of the property, confiscation of the property or delivery of the property to any person claiming to be entitled to possession thereto. It cannot be contended that....
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....perty' and as such would be capable of being seized under Section 102 of the Code of Criminal Procedure. 12. Having considered the divergent views taken by different High Courts with regard to the power of seizure under Section 102 of the Code of Criminal Procedure, and whether the bank account can be held to be `property' within the meaning of said Section 102(1), we see no justification to give any narrow interpretation to the provisions of the Criminal Procedure Code. It is well known that corruption in public offices has become so rampant that it has become difficult to cope up with the same. Then again the time consumed by the Courts in concluding the trials is another factor which should be borne in mind in interpreting the provisions of Section 102 of the Criminal Procedure Code and the underlying object engrafted therein, inasmuch as if there can be no order of seizure of the bank account of the accused then the entire money deposited in a bank which is ultimately held in the trial to be the outcome of the illegal gratification, could be withdrawn by the accused and the Courts would be powerless to get the said money which has any direct link with the commission o....
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....he officer to suspect that some offence had been committed somewhere. The discovery of the bank account was a sequel to the discovery of the commission of the offence. The police suspected that some of the proceeds realized by the sale of official secrets had been passed on to the petitioner by her husband. The Division Bench of the Delhi High Court finally concluded that it was not sufficient to attract 102 of the Code as it could not be said that the bank account had been traced or discovered in circumstances which had made the police aware of the commission of an offence. According to Mr.Raju, the Supreme Court in the case of Tapas D.Neogy (supra), did approve the line of reasoning adopted by the Division Bench of the Delhi High Court and, therefore, in the present case also the authority could not have invoked Section 102 of the Code since it was not the discovery of the bank account of the petitioners account that created suspicion but the bank account was a sequel to the discovery of the commission of offence, for which a complaint has also been lodged and so far as the other accused are concerned, there has been a provisional order of attachment of their properties under Se....
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.... initial stage for believing the existence of a certain thing or an alleged fact is suspicion. After suspecting the existence of a thing, condition or a statement of fact, you collect information and then examine that information and come to a final conclusion on the basis of that information that the thing, condition a statement or a fact exists. If I accept the submission of the learned counsel appearing for the petitioner, then it will frustrate the very object with which the PMLA came to be enacted. Any person who indulges in money laundering would transfer the proceeds of the crime to the account of any other person which may include his own family members, friends or any other person. The whole object of the Act is to prevent money laundering. If the proceeds of crime are suspected to have been transferred in a bank account of some one else against whom no complaint is lodged and if the authority is precluded or prohibited from proceeding against such person with a view to see that the proceeds of crime are not further transferred, then that will lead to a situation of absurdity. Therefore, although the discovery of the bank account of the petitioner may be a sequel to the c....
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....horized to deal with can be confirmed by the Adjudicating Authority or by the Special Court on conclusion of the trial. 31. In light of the aforementioned scheme of several provisions of P.M.L. Act, the question as to whether the proceedings under Sections 5, 8 and 17 are civil proceedings or criminal is required to be addressed. The argument is that unless a report or the complaint as contemplated under first proviso to Section 5 and also as contemplated in the proviso to sub-section (1) of Section 17 is made, the proceedings are not sustainable. As noticed in greater detail, the ultimate object of Section 5 is provisional attachment of the property. The object appears to prevent destruction of the evidence which may be produced in the proposed criminal proceedings or to take in possession the property involved in the money-laundering, though the proceedings can be initiated on the basis of the reports or complaint, etc., as contemplated in the first proviso to Section 5. In view of second proviso, proceedings can be initiated under Section 5 even in absence of compliance of first proviso. Various safeguards impose fetters upon the attaching officer obliging him to immediately s....
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....n 157 of Cr.P.C. may not be necessary and therefore, freezing of accounts under Section 17(1-A) without such report is prima facie permissible. However, in view of the preliminary stage of the proceedings initiated against the petitioners, no final verdict can be pronounced on that aspect. However, in this context, FFR Software Private Limited (supra) explains in detail the authority vested in the Directorate of Enforcement to freeze the properties preceding the provisional attachment under Section 5 of P.M.L. Act. Paragraphs-5 and 6 of the said case can be quoted herein for convenience: 5. Having heard learned counsels for the parties and on perusal of the record of the case, I find substance in the contention of the respondents that the given statutory mandate under the PML Act makes it imperative for the authorities in the course of investigation i.e. collection of facts to establish specific details of the suspected properties from the concerned authorities prior to issuance of the provisional attachment order under section 5 of the Act. As such, it has to be issued with abundant caution. It is therefore necessary that the requisite information/details are ascertained from t....
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....observations made in FFR Software Private Limited (supra) in Paragraphs- 8 & 9 are thus: 8. It is trite that Article 226 is not meant to short circuit or circumvent statutory procedures. The court must have good and sufficient reasons to bypass the alternative remedies provided by the statute. In the case of Asstt. Collector of Central Excise, Chandan Nagar, West Bengal Vs. Dunlop India Ltd. and others (1985 SCC(1) 260), the Apex court has held that where the statute itself provided the petitioners with an efficacious alternative remedy by way of an appeal to the Prescribed Authority, a second appeal to the tribunal and thereafter to have the cases stated to the High Court, it was not for the High Court to exercise its extra ordinary jurisdiction under Art. 226 of the Constitution ignoring as it were, the complete statutory machinery. 9. In yet another case of Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement & Another Civil Appeal No. 3221 of 2010 Date of judgment 12.04.2010 the Honble Supreme Court has observed that : .... The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact,....
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....g Authority that no offence under Section 3 is committed by the petitioners, the orders defreezing their accounts can be obtained from the such authority. In the facts and circumstances discussed hereinabove, it is difficult to accept the contention that initiation of the proceedings against the petitioners are illegal.. I am also not impressed by the submission of the learned counsel appearing for the petitioner regarding the noncompliance of the provisions of Section 102(3) of the Code. I may only say that the procedure that has been followed by the authority under the PML is one under the provisions of the PMLA. When seizure or any search or any attachment is by officers under the PMLA other than the police, non-compliance with Section 102(3) would not vitiate the proceedings. However, at the same time, I am of the view that an order or instructions of attachment/freezing of bank account passed or issued by the authority under the PMLA in exercise of his powers under Section 102 of the Code read with Section 65 of the PMLA should not continue or remain in operation for an indefinite period of time. Section 5(4) of the PMLA provides for the enjoyment of the immovable property....
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.... For the aforesaid reasons, although the judgment was reserved CAV, this matter was once again notified on 8th June 2015 only with a view to ascertain from the learned Assistant Solicitor General of India, whether in the mean time the authority had passed any order of provisional attachment under Section 5 of the Act or whether it intended to pass such order in the near future if adequate material has been collected during the course of the investigation carried out so far. The learned Assistant Solicitor General of India, after taking instructions from the officer of the Department present in the Court, made a statement that the authority has been able to collect sufficient material on the basis of which the authority now intends to pass an appropriate order of provisional attachment under Section 5 of the PMLA. On one hand if an order of provisional attachment is passed under Section 5 of the PMLA, the life of it is 150 days subject to the further orders that may be passed by the adjudicating authority, whereas if an order of attachment is passed under Section 102 of the Code read with Section 65 of the PMLA, then there is no time period prescribed so far as its operation is con....
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.... are not spirited away rendering the proceedings under the Act nugatore and otiose. It is true that existence of reasonable belief is the condition precedent for exercise of powers under section 5 (attachment) or section 7 (seizure of the property or asset) of an accused. However, existence of reasonable belief is not a condition precedent for commencement of investigation under the Act. Such investigation may be commenced on reasonable suspicion that "proceeds of crime" relating to "scheduled offences" are being dealt with in a manner defined in section 3 of the Act. In the course of such investigation, it may be necessary for the investigating agency to trace out suspicious transactions and/or the trail of monies in the accounts maintained by an accused who is being investigated for such offence. If during the course of such tracing, identification and verification, monies from such accounts are permitted to be withdrawn and/or siphoned off, the very purpose of investigation would be rendered futile and nugatory. To obviate such futility, investigating agency must be held to possess an enabling and/or incidental power to request a reporting entity, namely, a banking company to ....
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....inistrative Action. 4th edn., p. 95, HWR Wadeʹs Administrative Law, 5th edn., p. 217, Craies on Statute Law, 6th edn., p. 276, Attorney General v. Great Eastern Railway, LR (1880) 5 AC 473; Baroness Wenlock v. River Dee Co., LR (1885) 10 AC 354. De Smith in his celebrated work Judicial Review of Administrative Action, 5th edn. at p. 95 puts the law tersely in these words: The House of Lords has laid down the principle that ʺwhatever may fairly be regarded as incidental to, or consequent upon, those things which the Legislature has authorised, ought not (unless expressly prohibited) to be held, by judicial construction, to be ultra vires.ʺ This principle was enunciated by Lord Selborne in Attorney General v. Great Eastern Railway in these words: The doctrine of ultra vires ought to be reasonably and not unreasonably, understood and applied and whatever may be fairly regarded as incidental to or consequential upon, those things which the legislature has authorised ought not (unless expressly prohibited) to be held, by judicial construction, to be ultra vires. These words have been quoted by Professor Wade in his monumental work Administrative Law, 5th edn. at p, 21....
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....r effective enforcement of the Act. Failure to infer such power would result in siphoning off funds from accounts of accused persons pending investigation rendering powers of seizure/attachment under the Act otiose. Viewed from such perspective, the impugned letter is neither an unlawful invasion of right to property nor is the same bereft of statutory sanction. Any other interpretation would frustrate the object or purpose of the law which seeks to create an effective machinery for investigation and collective of evidence in money laundering cases and render the same an illusory one. In Bijaya Kumar Agarwala Vs. State of Orissa, (1996)5 SCC 1, the Apex Court was considering the interpretation of the word "storage" and held, the same would not include, "transportation." The ratio is, therefore, wholly inapplicable while interpreting the inclusive definition of the word "investigation" under the Act. Similarly, in Aslam Mohammad Merchant Vs. Competent Authority & Ors., (2008)14 SCC 186 show cause notice was quashed as the same was issued on the mere direction of competent authority without recording reasons and/or application of mind. The case is distinguishable on facts as in t....
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....order whereby substantial justice is being done. Reference has also been made by the respondents to B. Rama Raju Vs. Union of India, (2011)164 Com Cas 149 (AP) and unreported judgement dated 31.07.2013 of Gujarat High Court in Special Civil Application No. 4171 of 2012 with Special Civil Application No. 1059 of 2012, Alive Hospitality & Food Private Ltd. Vs. Union of India. None of the aforesaid cited cases deal with the issue raised in this appeal. In B. Rama Raju (supra) vires of the Act was under challenge whereas in Alive Hospitality & Food Pvt. Ltd. (supra) the Court was seized with a case of provisional attachment. A balance has to be struck between the right to property of an individual and the measures which may be required to be inferred by necessary implication in an investigating agency for effective enforcement of the proceedings under the Act. Impugned letter dated 19.09.2014 must be read as a temporary measure during investigation undertaken for preservation of evidence in contemplation of initiation of proceedings under the Act and for its enforcement. Such letter is not an end itself. While on the other hand, failure to resort to such measure may render the substan....
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....heduled offence, the power of provisional attachment can be exercised provided the conditions stipulated in the second proviso are fulfilled. The reason being that the second proviso is a non obstante provision which opens with the following words :- "..Provided further that, notwithstanding anything contained in clause (b), any property of any person may be attached under this section..." (emphasis supplied) 17. The words used in the opening part of the second proviso make it clear that it takes into account "any property" of "any person" who is in possession of the proceeds of crime. The limitation of attaching properties of persons who are charged with the scheduled offence or the limitation on attachment of properties, only when persons accused of having committed scheduled offences are charged, has been done away with. 18. The consequential question, which arises is: whether the concerned officer could have taken recourse to the second proviso to Sub-Section (1) of Section 5 in the instant case. In order to trigger the second proviso, the authorised officer (not below the rank of Dy. Director) should have reasons to believe on the basis of material in his possession that if....
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.... of Section 5 of the PMLA and other evidence, relevant information and particulars, which, he would want to rely upon; and demonstrate as to why, the property in issue ought not to be declared as one involved in money-laundering and therefore, be confiscated by the Central Government. 22. It is only after the adjudicating authority has : considered the reply of the person to whom notice is issued; heard him and, taken into account, all material supplied - that he can proceed to record a finding under Sub- Section (2) of Section 8 of the PMLA, whether all or any of the properties referred to in the notice, are involved in money-laundering. 23. Once the adjudicating authority comes to the conclusion that the property in issue is involved in money-laundering, he is required to confirm under Sub-Section (3) of Section 8, the attachment made Sub-Section (1) of Section 5, by an order, in writing. 24. Upon such finding being recorded, the attachment of the property in issue, will continue, during the pendency of proceedings relating to offence under the PMLA or, under corresponding law of any other country before a competent court of criminal jurisdiction outside India. 25 Under Sub-S....