TaxTMI 
TaxTMI 
2017 (8) TMI 965
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.... (b) Rs. 57,00,000/- (Rupees fifty seven lacs only) in cash lying with ICICI Bank, Cuddapah Branch, Andhra Pradesh. (c) Gold ornaments worth Rs. 1,25,000/- (Rupees one lac twenty five thousand only) in custody of the police in cae Fir No. 291/2011 U/s. 420.409, 468, 471 IPC registered at Police Station Kadapa (Andhra Pradesh). 2. The brief facts are that the Appellant is a private sector bank who offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels. 3. On 22.12.2011, a complaint was filed by the cluster branch manager (Tirupati Cluster) of ICICI Bank with the Inspector of Police of the Cuddapah Police Station (Andhra Pradesh). In the said complaint, it was alleged that Mr. Arun Kumar Kajjayam who was working with the Appellant from 2008-2011 had during the course of his employment siphoned/misappropriated a sum of approximately Rs. 1,30,00,000/- (Rupees one crore thirty lacs only) from the Appellant. Consequently FIR No. 291/2011 was registered U/s. 420/409 IPC at Police Station Kadapa. The money siphoned/embezzeled by Sh. Arun Kumar Kajjayam was part of the money earmarked for replenishing....
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....fficer, Directorate of Enforcement, Hyderabad, requesting the Branch Manager to provide information relating to the release of the cash amounting to Rs. 57,00,000/- and property in Cr. No. 291/2011 which had been in custody of the Court. 11. On 26.02.2016, the Joint Director, Directorate of Enforcement, Hyderabad (hereinafter referred to as the "Complainant") passed a Provisional Attachment Order No. 01/2016 in ECIR/01/HZO/2013/353 by which the following properties were provisionally attached: (a) 242 Square Yards plot at Survey No. 601/1 at Chemmumiapet Village, Kadapa registered vide document no. 335/2012 by SRO Kadapa (Rural), having value of Rs. 40,00,000/- (Rupees forty lacs only). (b) Rs. 57,00,000/- (Rupees fifty seven lacs only) in cash lying with ICICI Bank, Cuddapah Branch, Andhra Pradesh. (c) Gold ornaments worth Rs. 1,25,000/- (Rupees one lac twenty five thousand only) in custody of the police in case Fir No. 291/2011 U/s. 420,409, 468, 471 IPC registered at Police Station Kadapa (Andhra Pradesh). 12. On 22.03.2016, the Deputy Director, Directorate of Enforcement, Hyderabad filed a complaint U/s. 5(5) of PMLA before the Ld. Adjudicating Authority, Hyderab....
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.... order confirming the same. The Adjudicating Authority failed to appreciate that had the cash in question been in the custody or possession of Mr. Arun Kumar Kajjayam then it could have been argued that the first ingredient of S. 5(1) (a) of PMLA was satisfied. 17. As the custody of the said cash had been awarded by the Court itself, by no stretch of imagination can it be said that the money was likely to be concealed or transferred or dealt with in any manner which would frustrate the confiscation proceedings. Therefore as even the ingredients of S. 5(1) (b) PMLA were not satisfied, no question of attachment of the said sum of Rs. 57,00,000/- (Rupees fifty seven lacs only) can arise. 18. Admittedly, the money in question is case property before the Ld. Magistrate in FIR No. 291/2011 and has been released to the Appellant only pursuant to giving of a bond, thereby acknowledging that the said money can now not be concealed or transferred or dealt with any manner which would frustrate the confiscation proceedings and yet the order of confirmation of order of provisional attachment was passed. The pre-condition for passing an order U/s, 8(1) of PMLA is that there must be "rea....
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....alid and cogent and clear reasons in writing of "reason to believe" as to why he is passing the order of provisional attachment. At the same time, it is also an onerous duty of Adjudicating Authority to consider all aspects before confirming the provisional attachment. Merely giving the reason that the Adjudicating Authority is satisfied that it is case of money laundering and proceed of crime involved is not enough as the Hon'ble Supreme Court and various Hon'ble High Courts have time and again held that ""reason to believe" is not the same thing as suspicion or doubt and merely seeing also cannot be equated to believing."Reason to believe" is a higher level of state of mind. A person must have reason to believe if the circumstances are such that a reasonable man would, by probable reasoning, conclude or infer regarding the nature of the thing concerned. 24. In the present case, the Adjudicating Authority did not understand the implication of the Order dated 04.02.2012 passed by the Ld. Ist Additional Judicial First Class Magistrate, Kadapa whereby the Ld. Court handed over custody of the money to the Appellant. The Ld. Adjudicating Authority erred in holding that "...T....