TaxTMI 
TaxTMI 
2017 (4) TMI 415
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....o.2 to permit the petitioners to operate their 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....
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....a valid license for the purpose of such business. The learned senior counsel would submit 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....
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.... PARTICULAR AMOUNT SALES 106433638 PURCHASE 106530435 VAT TAX PAID 94790 INCOME TAX 955941 F.Y.2015-16 PARTICULAR AMOUNT SALES 175363910 PURCHASE 181190680 VAT TAX PAID 348594 INCOME TAX 1744685 SAI ENTERPRISE F.Y.2014-15 PARTICULAR AMOUNT SALES 254385234 PURCHASE 271002205 VAT TAX PAID 132008 INCOME TAX 2582307 F.Y.2015-16 PARTICULAR AMOUNT SALES 623908689 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 ....
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....ggling and hence was booked under Section 13 (1) (d) of the PC Act, 1988 and Section 120 (B) of IPC and was arrested. Further, the investigation revealed the inveolvement of a person Mr. Ramesh Jagubhai Patel alias Michael alongwith his wife Mrs Bhanuben Rameshbhai Patel, residents of Daman (UT) as the main supplier of the IMFL, who also owns & operates wine shops in Daman (UT), from where the said IMFL was sup1ed in bulk quantity. They also own other establishments viz. Bar and Restaurant and other businesses which were suspected to be used for depositing the money earned 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 Ja....
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....e petitioners own 11 Bank accounts in four different banks. However, it is possible that they may be having other accounts which are yet to be located and identified. Therefore, to ensure that such proceeds of crime 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, the debits from the respective bank accounts were disallowed. Further, the scrutiny of the respective bank accounts is in progress and requires time to ascertain the veracity with 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 ....
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....ectorate on 14.02.2017 for investigating the matter under PMLA,2002, and the investigations have been initiated. Hence the averments that the ban imposed from withdrawal of cash is premature, pending the investigation. 17. With regard to contents of paragraph no. 8, it is submitted that conduct of the petitioners is culled out from the number of cases registered by the various police stations in Gujarat by the Police authorities for the smuggling of IMFL into Gujarat which leads to conclude the illegitimate activities of the petitioners. The investigation by this office was initiated 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....
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....isional attachment under Section 5 of the PMLA is maximum upto 150 days." 11. The questions referred to above were answered accordingly as under; "The Prevention of Money Laundering Act, 2002, was enacted in pursuance of the Political Declaration adopted by the Special Session of the United Nations General Assembly held in June 1998, calling upon the member States to adopt National Money Laundering Legislation and Program, primarily with a view to meet out the serious threat posed by money laundering to the financial systems of countries and to their integrity and sovereignty. If we have a look 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 als....
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.... 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 that 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 laundering is not ....
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....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 authorised 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 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 Secti....
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.... attached under Section 5(1). However, the Second Proviso to Section 5(1), which contains a non abstante clause, enables the concerned Officer to attach "any property of any person", if such property is believed to be involved in money laundering and the non-attachment of the same is likely to frustrate the proceedings under the Act. It is only by virtue of the Second Proviso inserted by way of amendment under Amendment Act 21 of 2009 that the Director derives his powers, even to attach the property standing in the name of any person other than those charged of having committed a scheduled offence. Keeping the above in mind, let me now turn on to Section 8 of the PMLA. The Officer who passes the order of attachment under 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 pe....
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....m the provisions of Section 5(1) of the PMLA that five conditions are prerequisite for attaching the proceeds of crime provisionally without issuing notice prior to the attachment. They are : i. The Director, or any other officer, who provisionally attaches any property, shall have reasons to believe on the basis of materials in his possession; ii. The person, against whom proceedings under P.M.L.A., 2002 has been initiated, must be in possession of any proceeds of crime; iii. Such person must be charged of having committed any scheduled offence; iv.Such proceeds of crime are likely to be concealed, transferred or dealt with in any manner; and v. If the provisional attachment is not ordered immediately such concealment or transfer 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 arres....
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....sed the words reason to believe. The second requirement is that the reason for such belief has to be recorded in writing on the basis of the material in the possession of the authority. On the other hand, Section 102 of the Code speaks only about suspicion. Section 102 of the Code is much different than Section 5 of the PMLA. The expression reason to believe is not defined under the Act. Section 26 of the Indian Penal Code explains the term. Accordingly, a person is said to have reason to believe a thing, if he has sufficient cause to believe that thing but not otherwise. The reason to believe must be tangible in law and if the material in hand has no nexus with the belief or there is no material or tangible information for the formation of the belief, then in such a case, the whole process 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 invest....
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....ty. - (1) Any police officer may seize any property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offence. (2)Such police officer, if subordinate to the officer in charge of a police station shall forthwith report the seizure to that officer. (3) Every Police Officer acting under sub-sec.(1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it cannot be conveniently transported to the Court, he may give custody thereof to any person on his executing a bond undertaking to produce the property before the Court as and when required and to give effect to the further orders of the Court as to the disposal of the same." 6. A plain reading of sub-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- cond....
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....#39; used in Section 102 Cr.P.C. means actual taking possession in pursuance of a legal process and, therefore, in exercise of the said power, a bank cannot be prohibited not to pay any amount out of the account of the accused to the accused nor can the accused be prohibited from taking away any property from the locker, as such an order would not be a `seizure' within the meaning of Section 102 of the Criminal Procedure Code. The learned Single Judge agreed with the view taken by Allahabad High Court in the case of Textile Traders Syndicate Ltd., Bulandshahr vs. The State of U.P., AIR 1960 Allahabad 405 (Vol.47). In the Allahabad Case on which Gauhati High Court relied upon (AIR 1960 Allahabad 405), what was decided by the Court is, once money passes on from the accused to some other person or to the 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 Procedur....
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....usion that the expression `property' would include the money in the bank account of the accused and there cannot be any fetter on the powers of the police officer in issuing prohibitory orders from operating the bank account of the accused when the police officer reaches the conclusion that the amount in the bank is the outcome of commission of offence by the accused. The Court considered the fact as to how in modern days, commission of white collar crimes and bank frauds are very much on the increase and banking facilities have been extended to the remotest rural areas and, therefore the expression `property' may not be interpreted in a manner so as to exclude the money in a bank which in turn would have the effect of placing legal hurdles, in the process of investigation into the crimes. According 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 r....
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.... Bharat Overseas Bank Ltd. vs. Mrs.Prema Ramalingam, 1991 Madras Law Weekly (Criminal) 353, wherein the learned Judge agreeing with Padmini Jesudurai, J in Bharat Overseas Bank's case came to hold that money in bank account is `property' within the meaning of Section 102 of the Criminal Procedure Code, which could be seized by prohibiting order. In the aforesaid case, the learned Judge has also noticed the fact that the Judgment of Padmini Jesudurai, J, in 1988 LW(Crl.)106, was upheld by the Division Bench subsequently. 11. In the case of Dr. Gurcharan Singh vs. The State of Punjab, 1978(80) Punjab Law Reporter, 514, a Division Bench of the Punjab & Haryana High Court differing with the view taken by the Allahabad High Court in AIR 1960 Allahabad 405, came to hold that the bank account would be `property' 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), ....
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....nk account or could not have issued any direction to the bank officer, prohibiting the account of the accused from being operated upon. Though we have laid down the law, but so far as the present case is concerned, the order impugned has already been given effect to and the accused has been operating upon his account, and so, we do not interfere with the same. At this stage, it deserves to be noted that the Supreme Court considered a Division Bench decision of the Delhi High Court in the case of Swaran Sabharwal v. Commissioner of Police, 1988 Cri.L.J. 241 (Del).The Division Bench of the Delhi High Court took the view that the suspicion of an offence did not arise on account of discovery of the property (bank account). There were no circumstances attendant upon the bank account or its operation that had led the 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....
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....al assurance without positive knowledge or absolute certainty; ..................................... conviction of the mind founded on evidence that a fact exists that an act was done, that a statement is true". In K. J. Aiyer's 'Manual of Law Terms and Phrases' at page 510 the phrase 'reason to believe' is explained thus: "A person is said to have "reason to believe" a thing if he has sufficient cause to believe that thing but not otherwise". Similarly in Prem's "Judicial Dictionary" the meaning given to the phrase "reason to believe" which is found at page 1377 is: "A person "has reason to believe" under Section 26, I. P. C. if he has sufficient cause to believe the thing but not otherwise". From the meanings attributed to the words "suspect" and "reason to believe", it is evident that the 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 a....
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.... to be provisional attachment of the properties where prosecution is intended. Conjoint reading of Sections 5 and 8 clearly indicates their purpose being the prevention of money-laundering activity if such case is made out, by confiscating properties involved in Money-Laundering Act, either during pendency of prosecution or at the conclusion of the trial. Similarly, conjoint reading of Sections 17 and 8 would indicate that its main purpose is to search and seize incriminating material in cases where prosecution is intended and even in cases where it is not immediately intended. Thus, where the prosecution is not immediately intended, compliance with Section 157 of Cr.P.C. or lodgment of the complaint is not mandatory. Under Section 8 various acts undertaken under Sections 5, 17 and 18 with which Adjudicating Authority or the Court is authorized 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 ....
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.... the respondents in pursuant to the lodgment of two FIRs, it appears that the respondents intend to inquire into the fact as to whether properties in question or the petitioners herein are involved in either offence of money-laundering or are connected with such an offence or proceeds of crime or are in possession of such proceeds. Pertinently, in view of Section 65 of P.M.L. Act, the powers to search, seizure, attach, confiscate, investigate and all other proceedings under the Act can be performed with the assistance of the provisions made in the Cr.P.C. The respondents have frozen the accounts of the petitioners. Considering the fact that the Cr.P.C. is applicable as above at this stage, it cannot be said that an act of freezing the account is illegal. As noticed hereinabove, proviso to Section 17(1) indicates that the report under Section 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 (s....
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....er, in the given circumstances when directions are issued to the concerned authorities viz. the letter dated 12.07.2011 issued by the respondent No.2 to respondent No.3 in the instant case, the rationale behind such orders being the property would otherwise might change hands frustrating the objectives of the Act. I also find force in the averments of the respondents that the power of the authorities under PMLA to issue such directions is ingrained in the powers of conducting investigation as defined in the PMLA which includes all proceedings under the Act. On the contrary, if the plea of the petitioners in regard to the statutory scheme under the PMLA is accepted, it will cause violence to the spirit and the objects of the Act. 34. Assuming that Sections 5 and 17 can be interpreted as canvassed by the learned counsel for the petitioners, pertinent 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. Coll....
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.... 8 of the Act. To enable such trial, the investigation and inquiry with the assistance of the provisions of Cr.P.C. is permissible. Looking to the fact that the petitioners are not arrayed as accused, it appears that they are sought to be interrogated to ascertain their complicity in the offence if any. Such action cannot be thwarted at a preliminary stage where only summons have been issued after freezing the accounts of the petitioners. Even if the argument of the petitioners that freezing of the accounts was not permissible that Sections 5 and 17 of P.M.L.A. Act were applicable at this stage is accepted, as noticed in a greater detail, acts under Sections 5 and 17 are only provisional and subject to confirmation by the Adjudicating Authority. Before such adjudication, a notice to the interested person is contemplated under Section 8 of P.M.L. Act and therefore, by convincing the Adjudicating 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 t....
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.... provided in sub-section 4 of Section 8 of the PMLA. I have made a reference of Section 5(4) to fortify my view that the order or instructions of attachment/freezing of the bank account should not remain for an indefinite period of time like in the present case. In the present case, the instructions were issued to the bank to freeze the account of the petitioner way back in the month of August 2014. Indisputably, till this date, the authority has not been able to pass any order of provisional attachment under Section 5 of the Act. This would suggest two things : (i) there is no sufficient material collected by the authority so that the authority can record its reasons to believe that if the account is not freezed, then the non freezing of the property would frustrate the proceeding under the PMLA, and (ii) the authority does not intend to file any complaint against such person whose account has been ordered to be freezed. 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....
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.... Rose Velly Real Estate & Constructions Ltd. & Anr. vs. Union of India & Ors., 2015 Crl. L.J., 4850. "Coming to the other issue as to lack of inherent jurisdiction to make request to the appellant's bankers for prohibition/freezing of withdrawal from the accounts maintained by the appellant's group of Companies without restoring to section 5(attachment) or section 7(seizure) of the Act, let us examine the same in the light of the various provisions of the Act. Section 2(na) defines "investigation". The definition is an inclusive one and therefore would empower investigating agency to take recourse to not only proceedings under the Act but also to all incidental and consequential acts that may be necessary for effectively pursuing such proceedings to ensure collection of evidence. The prime object of an investigation for an offence of money laundering is that the investigating agency must be empowered to take immediate steps so that monies credited in suspicious accounts 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) ....
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.... render such statutory power a dead letter of law. In V.T. Khanzode & Ors. Vs. Reserve Bank of India & Anr., (1982)2 SCC 7, the Apex Court held :‐ ".....The doctrine of ultra vires in relation to the powers of a statutory corporation has to be understood reasonably and so understood, "whatever may fairly be regard as incidental to, or consequential upon, those things which the legislature has authorized ought not (unless expressly prohibited) to be held by judicial construction, to be ultra vires". (See Attorney‐General Vs. Great Easter Rly. Co., (1880)5 AC 473 (HL)." Similar view was reiterated in Khargram Panchayat Samiti & Anr. Vs. State of West Bengal & Ors., (1987)3 SCC 82. "4. It is well‐accepted that the conferral of statutory powers on these local authorities must be construed as impliedly authorising everything which could fairly and reasonably be regarded as incidental or consequential to the power itself. See: De Smithʹs Judicial Review of Administrative 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; Ba....
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....e undertaken in contemplation of and in aid to the initiation of proceeding of seizure and attachment under the Act. In such view of the matter, ratio in Rohtas Industries Ltd. Vs. S.D. Agarwal & Anr., AIR 1969 SC 707 which deals with existence of reasonable belief for exercise of statutory powers of investigation under the Companies Act is of no help to the appellant. Respondents banks being "reporting entities" under the Act are duty bound to act upon a request made by the authorities under section 54 of the Act. PML Act, 2002 empowers the authorities to initiate all proceedings under the Act for collection of evidence. Attachment or seizure of properties which are reasonably believed to be proceeds of crimes or connected therewith are contemplated under section 5 or 7 of the Act. All incidental and consequential acts like temporary prohibition of withdrawal from accounts of an accused pending investigation for giving effect to such powers of seizure and attachment are, therefore, to be inferred for 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 s....
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....ffect in conformity with or according to the intent and purpose of this Act." It appears that the impugned letter was issued in exercise of powers of investigation as defined under section 2(na) of the Act and has been done for the purpose of enforcement of the Act. Furthermore, records produced during hearing show that appellant is accused of commission of other "scheduled offences" under the Act and is being investigated by CBI on that score. Hence, mere absence of reference to other "scheduled offences" in the impugned letter cannot be a ground to invalid the impugned notice under the Act. In view of the saving clause engrafted in section 68 (supra) and the materials emanating from records of investigation, we are of the view Chandre Singh (supra) is inapplicable to the facts of the case. It is also argued on behalf of the respondents relying on Chandra Singh & Ors. Vs. State of Rajasthan & Anr., (2003)6 SCC 545 the Court in exercise of discretionary jurisdiction under Article 226 may not interfere with an illegal 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) a....
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....scheduled offence as long as the following ingredient is found: he has reason to believe, based on the material in his possession, that a person is in possession of proceeds of crime and, such proceeds, are likely to be concealed, transferred or dealt with in any manner which may result in frustrating the proceedings relating to confiscation of proceeds of crime. 16. Therefore, the contention advanced on behalf of the writ applicants that no order of attachment could have been passed unless in relation to the scheduled offence, a report was forwarded to the Magistrate under Section 173 of the Cr.PC is, according to me completely untenable. The first proviso applies if at all to the persons who are charged with the scheduled offence. It has no applicability to the persons other than those charged with the scheduled offence. The first proviso, however, has another exception carved out in the form of the second proviso to Section 5(1) of the PMLA. Thus, in effect, even vis-a-vis persons against whom proceedings are taken out qua scheduled offence, the power of provisional attachment can be exercised provided the conditions stipulated in the second proviso are fulfilled. The reason ....
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....ot ordered, it would frustrate proceedings under the Act. [See: Commissioner of Sales Tax, UP Vs. Bhagwan Industries, Lucknow, 1973 (3) 3 SCC 265]. 20. The scheme of the Act, however, is such that the provisional order of attachment passed under Sub-Section (1) of Section 5 of the PMLA even though valid for 180 days requires the designated / authorised officer to file a complaint before the adjudicating authority within a period of 30 days from the date, when the attachment is ordered. 21. The adjudicating authority thereafter, on receipt of complaint under Sub-Section (5) of Section 5 of PMLA, is required to issue notice on the said complaint if, he has reason to believe that any person has committed an offence under Section 3 of the PMLA or is in possession of proceeds of crime. The period of notice cannot be less than 30 days. By this notice, the adjudicating authority calls upon the addressee to indicate sources of his income, earning or assets, out of which or by means of which he acquired the property attached under Sub-Section (1) of Section 5 of the PMLA and other evidence, relevant information and particulars, which, he would want to rely upon; and demonstrate as to ....