TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 862
X X X X Extracts X X X X
X X X X Extracts X X X X
....30. In the result, there is justification in the submissions and prayers made by the Enforcement Directorate for retention of the seized documents/properties. It is well justified that the said documents/properties are required for the purpose of Adjudication, the same being involved in money-laundering. 31. From the contents of Application and material produced before this Authority, I am satisfied that the seized records are required for the purpose of Adjudication u/s 8. I am also satisfied that the properties are involved in money laundering. Hence retention of property or record seized u/s 17 is necessary and is required to be confirmed and is confirmed hereby. The retention of record seized u/s 17 shall continue during the pendency of the proceedings relating to any offence under this Act, before the concerned Court and shall become final after an order of confiscation is passed in accordance with the provisions of PMLA. 32. Hence the Application as filed by the Enforcement Directorate is allowed in respect of the Respondents No. 1 to 11 and the documents/properties/computer hardwares are permitted to be retained by the Enforcement Directorate, Delhi Zonal Office, Delhi." ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant. It further appears that besides the averments made in the aforesaid applications the appellant/respondent No. 2 did not raise any other grounds before the Adjudicating Authority. 6. It transpires from the papers that an ECIR vide No. JPZO/5/2013 was registered in Jaipur Zone. The predicate offence vide FIR/RC No. RBD1/2014/E/2004 dated 19.02.2014 is pending investigation with BS&FC wing of CBI, New Delhi, against M/s PGF Ltd.- Sh. Nirmal Singh Bangoo (MD) and M/s PACL its MD Sh. Sukhdev Singh (related of Nirmal Singh Bangoo). It is alleged therein that these two companies along with their directors have cheated in respect of money to the tune of Rs. 49,000 crores. 7. It further transpires that investigation under PMLA was initiated on the basis of FIR/RC No. 197 dated 13.12.2011 u/s 420 of IPC and Sections 4, 5 and 6 of Prize chits and Money Circulation Scheme (Banning) Act, 1987, PS Sanjay circle (Rajasthan) against M/s PACL limited through its manager Sh. Rakesh Chittora, alleging therein fraudulent activities for collecting money from public under its different scheme for allotting plots to them in any part of the country or on maturity with option to take back their ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ult of such search; d) place marks of identification on such record or [property, if required or] make or cause to be made extracts or copies there from; e) make a note or an inventory of such record or property; f) examine on oath any person, who is found to be in possession or control of any record or property, in respect of all matters relevant for the purposes of any investigation under this Act: Provided that...........................for this purpose: 1(A) where it is.............................. concerned: Provided that.............................. may seize such property. 2) The authority, who has been authorised under sub- section (1) shall, immediately after search and seizure [or upon issuance of a freezing order], forward a copy of the reasons so recorded along with 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 reasons and material for such period, as may be prescribed. 3) Where an authority, upon information obtained during survey under section 16, is satisfied that any evidence shall be or is likely to be conce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction (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], it 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 [or frozen] 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 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 person holding such property. (2) The Adjudicating Authority shall, after- a) considering the reply, if any, to the notice issued under sub-section (1)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....retention of documents; that the Adjudicating Authority ought to have decided the preliminary issues raised by the appellant; that no opportunity was giving to the appellant to file its reply; that Adjudicating Authority has failed to appreciate that refusal to file reply to first application tantamount to admission of the averments made therein; that show cause notice shows that no case is made out against the appellant and that the retention order is abuse of process of the court in as much as the onus was on the respondent to justify the rationale for requiring the documents seized which it did not. 14. It is seen from the record made available to this Tribunal that the learned Adjudicating Authority i.e. Member (Law) has examined the papers, considered the materials placed on record and also taken into consideration the submissions made by both parties in the said OA and has passed the impugned order allowing the OA in terms of the prayer made by the Enforcement Directorate. 15. On going through the impugned order we are convinced that there is due compliance of the provisions prescribed under law for retention of the documents/properties. The relevant portion of the impugned....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be returned to R-2. 19. The Counsels for the Respondents have contended that non-furnishing of documents sought, amounts to violation of the principles of natural justice. The said submission is not acceptable, as the object of investigation is collection of evidence and there cannot be any right in favour of the Respondents to control or interfere with the manner in which the evidence is to be collected. At present the Respondents are required to show cause as to why the retention of the documents lawfully seized should not be allowed to carry on the investigation further. The order sought does not affect any right of the Respondents, as the retention of the documents is sought only for the purpose of continuation of the investigation and collection of evidence. The Respondents are being not deprived of their liberty or their property, at this crucial juncture. No such consequences have arisen. If investigation indicates and implicates the Respondents, the consequences would follow and due opportunities shall be given to the Respondents. The Respondents are already furnished with the other documents which forms the part of the Application submitted. It cannot be, therefore said ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ie shown that pursuant to the registration of the scheduled offence and consequent registration of ECIR, the investigation from the point of view money laundering is in progress. It is to facilitate the investigation, the property/documents are required to be retained. In the course of investigation, it may become necessary to use the said material for recording of the statements and / or for confrontation of suspect. 25. The investigating agency at this juncture is required to show that the investigation is in progress and that the property/record are required to be retained for the purpose of investigation. The record attached to the application prima facie satisfies both the aspect. It is, therefore, not necessary for the investigating agencies to expose all the material which may be sensitive for the purpose of investigation, to be attached to the application. Application has elaborated the allegations of the schedule offences and asserted the satisfaction of the investigating agencies. 28. The allegations are of serious nature. It is alleged that M/s PGF limited -Sh. Nirmal Singh Bangoo (MD) and M/s PACL - its Managing Director Sh. Sukhdev Singh (relevant of Nirmal Singh Ban....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cused and there upon such person from whom the documents /properties are seized can claim back the seized documents/properties, if not required as evidence against any other person." 16. From the above, it is evident that learned Adjudicating Authority has expressed its satisfaction and provided reasons to support his decision to retain the documents, required under the law, as prescribed in PMLA. 17. While passing the impugned order, the learned Adjudicating Authority, has examined as to whether there is any violation of Principle of Natural Justice. The learned Adjudicating Authority considered this aspect and cited the judgment of Hon‟ble Supreme Court delivered in the matter of Union of India & Ors. V/s WN Chadha (1993 CRLJ 859 SC) while passing the impugned order. 18. The ground of non-compliance of section 5(1) raised by the appellant before this Tribunal is not acceptable as section 5 deals with attachment of property involved in money laundering. It does not deal with the search and seizure of properties/documents. The present OA is not an application under Section 5(5) of PMLA. It is also seen that the appellant raised certain objection which are trivial in nature....