TaxTMI 
TaxTMI 
2017 (8) TMI 1140
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....dent No. 2 is one of the accused persons against whom Case No. ECIR/10/MZO/2012 under the PMLA was registered by the Respondent No. 1. 3. The Appellants have filed the present Appeal challenging the Confirmation Order dated 16th September, 2013 and taking of actual physical possession and/or attachment in consequent to the seizure by the Respondent No.1 of land admeasuring about 102 sq. mts. situated, lying and being at S. V. Road, Khar Gaothan, Khar, Mumbai bearing survey No. F/195-A Original Plot No.118 and Final Plot No.118 of TPS III, Bandra and bearing corresponding CTS No. F/195-A Taluka Andheri in the Registration District and Sub-District of Bombay City and Bombay Suburban together with building/structure comprising of ground and one upper floor known as "Fifty Fifty" standing thereon including the Appellant premises being rooms in the ground floor of the Building as per case of the appellants and facts mentioned in the appeal. 4. The Appellants claim that they are co-owners/Joint owner of the Building and the Subject Property by virtue of having about 50% undivided share, right, title and interest therein as reflected in the property card. In order to establish their....
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....late Uncle Lewis Fonseca, with the intention of harassing and coercing the Appellants late father into parting away with his share in the Subject Premises and the Subject Property. The Appellants late Uncle Lewis Fonseca refused to accept the Appellants late father's contribution towards the property and other taxes in respect of the Subject Property and the Subject Premises. 4.5. In or around 12th February 1982 Rose Maria Fonseca died intestate without any issue. 4.6. In or around 26th April 1986, Alfred Anthony Fonseca died intestate leaving behind him surviving his wife Charlotte Mary Fonseca (the Appellants deceased mother) and two children, the Appellants herein, as his only heirs and legal representatives. The Appellant No.1 and his mother were since in exclusive occupation of the Subject Premises. 4.7. On or about March 1989, the Appellants late Uncle Lewis Felix Fonseca together with his two sons began interfering and affecting the Appellant No. l enjoyment of the Subject Premises, forcefully locked some rooms of the Subject Premises preventing and depriving the Appellant No. 1's use thereof and erected two huge iron gates in the compound of the Subject Propert....
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....ectify the Conveyance Deed dated 9th October 1992 so as to fraudulently include the names of the Appellants and their deceased mother as confirming parties thereto on the basis of forged and fabricated power of attorneys of the Appellants and their late mother. Subsequently, in or around 5th January 2001 on basis of fraudulent documents, the name of Mr. Rashmikant Mansukhlal Shah was incorrectly added as sole owner of the Subject Property in the property card and the names of the Appellants and their late mother were deleted therefrom. 4.13. In or around May 2003, Charlotte Mary Fonseca died intestate leaving behind her surviving the Appellants namely Lucian Louis Fonseca and Heather Clarke as her only heirs and legal representatives. The Appellants each became entitled to about 25% undivided share, right, title and interest in the Subject Property. 4.14 On or about May 2006, the Appellant No.1 upon learning of addition of the name of Mr. Rashmikant Mansukhlal Shah as sole owner of the Subject Property in the property card, promptly challenged the same before the Court of the City Survey Officer, Mumbai Suburban District, Bandra, Mumbai whereupon after detailed hearing and fu....
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.... between the Mr. Rashmlkant Mansukhlal Shah and the Respondent No.2, obtained by the Appellants through the Respondent No.1 in Writ Petition filed by the Appellants. The appellants submit that the Agreement for Sale was not legal, valid and binding on the Appellants in respect of and to the extent of their share, right, title and interest in the Subject Property. The appellant had no reason to apprehend the purported sale/transaction of the Appellant's proportionate share, right, title and interest in the Subject Property in favour of the Respondent No.2 prior to the attachment by the Respondent No.1. 6. Thereafter, the Appellant No.1 addressed letter dated 11th July 2014 to the Respondent No.1 seeking copies of papers and proceedings and information pertaining to Case No. ECIR/10/MZO/2012 as also copies of the Provisional Order and the Confirmation Order. The Appellant No.1 was informed by the Respondent No.1 that Appeal No.53 of 2013 in 0. C. No.197 of 2013 in POA No.8/2013 in ECIR No.10/MZO/2012 was pending before the Appellate Tribunal, New Delhi and that information and documents sought for will not be provided unless the Appellants were made parties therein. 7. In view ....
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....8(1) has not been given. The Act does not prescribe any limitation for giving hearing to a person who has a right in the property who has to be heard under proviso to section 8 (2) and who has not been given any notice u/s 8(1) of the Act and who is not a party to the complaint filed by the Enforcement Directorate. 28. The words of statute proviso to section 8 (2) of the Act are clear and unambiguous and are reasonably susceptible to one meaning only. If that be so it cannot be construed to mean that the person who has not been given notice under section 8(1) of the Act and whose property is sought to be attached or has been attached and attachment order has been confirmed will be entitled for hearing only if he had approached the Adjudicating Authority before the order of attachment is challenged in an appeal and in case an appeal has been filed then the remedy of such a person will be only to approach the Appellate Tribunal for intervention. 29. Entertaining the application of the interveners in the appeal, though they have a statutory right to approach the Adjudicating Authority seeking a right of hearing under proviso to section 8 (2) of the Act, provided they are able to....
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....they so desire and opt to do, is to approach the Adjudicating Authority and first establish prima facie that they have independent rights in the property. If they establish their rights, then it will be for the Adjudicating Authority to give them such hearing as may be permissible in the facts and circumstances." 10. It is stated by the Appellants state that they came to learn of the purported fraudulent sale of the entire Subject Property i.e. including the Appellants share, right, title and interest therein by Mr. Rashmikant Mansukhlal Shah to the Respondent No.2 through Agreement for Sale dated 1st June 2010 without having any authority, right, power and/or title to do so, only in or around July 2014, and upon coming across the undated Notice. It is alleged by the appellant that the Agreement for Sale is evidently not legal, valid and binding on the Appellants in respect of and to the extent of their share, right, title and interest in the Subject Property as the same was prepared and executed by Mr. Rashmikant Mansukhlal Shah on the false and fraudulent assumption that the Appellants share in the Subject Property was vested with him and the said Agreement for Sale fraudulent....
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....therwise acting in connection with the Subject Property and the Subject Premises, which is pending. 15. The Writ Petition No. 8296 of 2014 earlier filed by the appellant was disposed of vide Order dated 19th March, 2015 passed by the Hon'ble Mr. Justice A. S. Oka and the Hon'ble Mr. Justice A. P. Bhangale of the Hon'ble Bombay High Court by keeping the remedy of the Appellants of preferring an appeal under sub-section 1 of Section 26 of the PMLA and all contentions on merits expressly open. 16. The Writ Petition No. 8296 of 2014 earlier filed by the appellant was disposed of vide Order dated 19th March, 2015 passed by the Hon'ble Mr. Justice A. S. Oka and the Hon'ble Mr. Justice A. P. Bhangale of the Hon'ble Bombay High Court by keeping the remedy of the Appellants of preferring an appeal under sub-section 1 of Section 26 of the PMLA and all contentions on merits expressly open. 17. Reply to the Appeal was filed by the respondent no. 1. It is stated by the Advocate on behalf of the appellants that despite of service of respondent no. 2. no one appeared on his behalf or any reply was filed. It is alleged by the respondent no. 1 that the immovable pro....
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....r under this Act''. 18. It is also stated on behalf of the respondent that Provisional Attachment Order (PAO) was issued on 28.03.2013 under the provisions of sub-section (1) of Section 5 of the Prevention of the Money Laundering Act, 2002 (PMLA, 2002). Under the provisions of the Section 5 (3) of the PMLA, 2002, every order of attachment made under sub-section (1) shall cease to have effect after expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 8, whichever is earlier. 19. It is also stated on behalf of the respondent that Prevention of Money Laundering Act, 2002 read with the Prevention of Money Laundering (Appeal) Rules, 2005 allows the aggrieved person only to file an appeal. The said Shri Lucian Louis Fonseca was stranger to the Adjudication proceedings. Therefore no notice was required to be served. 20. The argument of learned counsel for the respondent no. 1 is also that the present appeal is not maintainable. This Hon'ble Tribunal had, vide a detailed order, dismissed the application filed by Lucian Louis Fonseca and Heather Clarke for intervention in the appeal filed by Ajit Bapu Satam against ....
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....ter title than the deceased does not arise and the subject premises and the undivided share, right, title and interest of late father and the Appellant No.2 in the Subject Property devolved upon by her late father and the Appellant No.2 by virtue of the laws of intestate succession and were never acquired by the Respondent No.2. It is alleged on behalf of the appellant that the Respondent No.1 is attempting to mislead this Tribunal as the Appellant No.2 and his late father do not have any relationship or connection or association with the Respondent No.2 or Mr. Rashmikant Mansukhlal Shah. No notice as mandated under section 8, PMLA was issued to the Appellants or his late father prior to attachment, in total non-compliance and contravention of the PMLA, thus the order and attachment of the Subject Property is in breach of the principles of natural justice. 22. It is not denied on behalf of respondent no. 1 that one of the recitals of the Deed of Conveyance dated 01.06.2010 conclusively stipulates that the appellant was an illegal occupant/trespasser in the subject property and that his suit against the owner had been dismissed by the Bombay City Civil Court on 27.02.1992. The....
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.... the Directorate had taken the possession of the said properties vide Panchanama dated 02.07.2014. At the time of taking of possession of the said property, no one was residing in the disputed portion of the premises. In view of the order of the Tribunal on 17.07.2015, the appellant on 15.09.2015 was allowed to take out the movable items which were not under attachment. Shri Lyle Carl Fonseca (authorized person of late Lucian Fonseca) after inspecting the said disputed portion, decided that he would not take away anything from the small room on the ground floor of the attached property. Further Shri Lyle Carl Fonseca was also given an opportunity to take his motor cycle MH02AS 4457 lying inside the compound wall of said premises and which was not attached, but Shri Lyle Carl Fonseca decided that he would not take away the said motor cycle. The Operation Report dated 15.09.2015 was submitted before this Tribunal. It is stated that a perusal of Aadhar Cards Shri Lyle Carl Fonseca and his family members wherein the address is mentioned as '4B/3, Sangeeta apartments, Juhu Road, Juhu Mumbai'. Thus, it is clear that neither Shri Lyle Carl Fonseca nor his family members are the residents ....
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....ould not have passed the order dated 16.09.2013 confirming the provisional attachment order dated 28.03.2013 and even said fact was not brought to the notice of this Tribunal at the time of filing the appeal by the Ajit Bapu Satam, the accused person (Respondent R-2 herein). Thus, the order passed on 16.09.2013 is liable to be reviewed as subsequent to the said order, the High Court, Bombay has allowed the appellants to file the present appeal. . 29. After having considered the entire gamut of the matter, we are of the view that this Tribunal has no domain to decide the Civil rights of the parties, the same have to be finally determined in the civil remedy. We are also not inclined to comment with regard to the percentage of share claimed by the appellant nor we have the jurisdiction to decide the legal rights of the appellants to claim their right, title and interest in the property in question. At this stage of the appeal we are only concerned with the question as to whether, the property forfeited by the respondent no. 1 consists of any part or portion of the property that was in the possession of the appellant who has no role in the alleged crime as associated with the accus....
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....ard of the property of C.S. No. 195A, of City Survey Bandra, Taluka Andheri, District Mumbai Suburban and the names of Frank Thomas Fonseca and Alfred Anthony Fonseca has been deleted vide the same entry, since they were expired. Vide entry dated 31.1.1991, again, as Alfred Anthony Fonseca is expired, the names of Smt. Sharlet Mary Fonseca, Hedar Ann Clark and Lusiyan (Luis) Fonseca have been entered by succession on the property card. Therefore, before the entry of 5.1.2001 on the property card, the four names of Lusiyan Felix Fonseca and Smt. Sarelet MaryFonseca, Heder Ann Clark and Lusian (Luis) Fonseca were alive as the holder. But, vide the Registered Sale Deed No. 519/92, Luis Felix Fonseca, and on behalf of Lili Agnel Kabrel and five others, sold the entire are of 102 sq. m. of C.S. No. 195A, to Rashmikant Mansukhlal Shah. But, in the said Deed, the consent of Smt. Sharlet, Heder Colark and Lusian Fonseca has not been taken. Similarly, vide the Rectification Deed No. 4254/2000, there is mention of the entire property and the Rectification Deed has been made and given by Shri Rashmikant M. Shah, the Power of Attorney holder on behalf of Sharlet Fonseca, Lusian Fonseca, Hedar ....
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....ed by the Hon'ble Bombay City Civil Court, on 27.02.1992". The said Conveyance deed dated 01.06.2010 also records the fact that the vendor therein sold, transferred and assigned right, title and interest subject to claim of late Lucian Louis Fonseca [Para 2 of page 218-219 of the Appeal] and also records late Lucian Louis Fonseca as occupant of the subject premises. The same para no. 2 reads as under:- "2. The said Lucian Louis Fonseca occupant/trespasser had filed a suit in the Hon'ble City Civil Court at Bombay being S.C. Suit No. 7587 of 1990 against Mr. Luwis Felix Fonseca in respect of one room together with toilet facilities, and the said suit was dismissed. The Vendor is transferring, selling, assigning the right, title and interest in the said property subject to the claim of the said Lucian Louis Fonseca in respect of the said room with toilet facility." ( emphasis supplied ) It is apparent from the said agreement for Sale dated 1st June, 2010 that the vendor therein sold, transferred and assigned right, title and interest subject to the claim of late Lucian Louis Fonseca in respect of the said room with toilet facility. 33. No notice as contemplated u/s 8(1....
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....rty made under sub-section (1) of section 5 or retention of property or [record seized or frozen under section 17 or section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property] or record shall- (a) continue during the pendency of the proceedings relating to any [offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and] [(b) become final after an order of confiscation is passed under sub-section (5) or sub-section (7) of section 8 or section 58B or sub-section (2A) of section 60 by the [Special Court].]" 34. The possession of the subject Attached property was taken over by the respondent on 2nd July, 2014 on the assumption that Subject Property and Subject Premises exclusively owned by the Respondent No. 2. Appellants are out of possession of the Subject Property and Subject Premises for the last more than 2 years. 35. It is not denied by the respondent no. 1 that the appellants have no connection/relation/association with the Respondent no. 2 and have no criminal complaint ag....
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....184 to hold that a co-owner of a property is an owner of the property, till the property is partitioned. The relevant paragraphs of FGP Ltd. Vs. Saleh Hooseini Doctor &Anr. [Civil Appeal no. 6257/2009 in SLP (Civil) No. 30374 of 2008 Supreme Court] are reproduced below: "47. In Sri Ram Pasricha Vs. Jagannath and Ors. - (1976) 4SCC 184, it has been held that a co-owner is as much an owner of the entire property as any sole owner. In coming to the said finding, the learned Judges relied on the proposition laid down in Salmond on Jurisprudence (13th edition). The relevant principles in Salmondon Jurisprudence are set out herein below: "..It is an undivided unity, which is vested at the same time in more than one person....The several ownership of a part is a different thing from the co- ownership of the whole. So soon as each of two coowners begins to own a part of the thing instead of the whole of it, the co-ownership has been dissolved into sole ownership by the process known as partition. Co- ownership involves the undivided integrity of what is owned. 48. Further relying upon Sri Ram which relied upon the Pasricha (supra) held as under: "Jurisprudentially it is not cor....
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....sed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fair play. The concept has gained significance and shades with time..." The Hon'ble Apex Court further held that "Natural Justice is the essence of fair adjudication, deeply rooted in tradition and conscience, to be ranked as fundamental. The purpose of following the principles of natural justice is the prevention of miscarriage of justice." 41. The Hon'ble Apex Court in Aslam Mohd. Merchant Vs. Competent Authority & Ors. (Criminal Appeal no. 1053/2003) held that "... when stringent laws become applicable as a result whereof some persons are to be deprived of his/her right in property, scrupulous compliance of statutory requirements is imperative." 42. There is no force in the submission of the respondent that the present proceedings are neither contemplated nor permissible under PMLA. It is a matter of record that the said objection was considered and overruled in Writ Petition 8296 of 2014 of the appellants filed before th....
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....und floor has not been sold by the uncle of the appellant. It is also a matter of fact that neither the vendee nor vendor has initiated any proceedings of eviction or to take the possession of said portion against the appellant. 46. With regard to argument that the appeal is in fructuous as Criminal Complaint against respondent no. 2 is pending before the Special Court under PMLA and the appeal of respondent no. 2 was already dismissed, there is no bar, express or otherwise under the PMLA or any other Act to not consider appeal of other aggrieved person(s) in such situation. Dismissal of the independent appeal filed by the respondent no. 2 before this Hon'ble Tribunal has no bearing and is of no consequence or relevance to the present appeal which stands on its own footing. Even otherwise in the present case, the Hon'ble Bombay High Court has passed the order allowing the appellant to proceed with the remedy under Section 26 of the Act and in terms of which the present appeal is filed. 47. It is not correct to allege by the respondent no. 1 that the possession of subject property was taken by due process of law. It is a matter of record and uncontroverted that no notice as ma....
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....provision is SARFAESI Act conferring jurisdiction upon DRT or Appellate Authority to pass decree of partition or separate possession of property and that therefore it cannot be said that the jurisdiction of civil court to entertain and try suit claiming reliefs as prayed for is barred by Section 34 of the SARFAESI Act. 51. Similarly, there are no provisions under the PMLA, 2002 granting powers to the Adjudicating Authority or the Appellate Authority to pass decree of partition or separate possession of property or order of declaration cancelling or rescinding agreements. The scope of the Adjudicating Authority under the PMLA, 2002 is to confirm the attachment of the property that it has reason to believe is involved in money laundering. It is also incorrect to allege that that consideration of the present appeal will lead to multiplicity of proceedings If the said contentions against maintainability of the instant appeal and dismissal of reliefs in the notice of motion the Short Cause Suit no. 360/2015, are considered and accepted, it will render the appellants virtually remediless, denuded and deprived of their property. Further, the appeal and the Short Cause Suit no. 360/2015....
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....attachment and taking over possession of the subject premises in the subject property has the effect of placing the appellants alongside the accused in the proceedings relating to the subject property under the PMLA. 54. Under these circumstances, and as far as the present appeal under the PMLA in relation to the subject premises (as per Exhibit 'B' to the Appeal) and in the subject property (as per Exhibit 'A' thereto) is concerned, we are of the view that the appellants have made out a prima facie case of ownership and lawful possession of the subject premises since 1953. As they have not been given the statutory notice as required under Section 8(1) of the Act to determine the involvement of such property in money laundering or otherwise, we consider that during such process viz. issue of notice under Section 8(1) of the Act as aforesaid and determination of the said matter, it will be just and proper that while the provisional attachment of the subject premises and property, to the extent of the appellant's undivided shares, right, title and interest in the subject property is continued, the possession of the same (as per Exhibit 'B' to the Appeal is required to be restored ....
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....ys down 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. It is this proviso which casts a responsibility on the Adjudicating Authority to afford a opportunity of hearing to any person who has not been issued a notice under section 8(1) but claims a right in the property in question. 12. The main question is whether this obligation has to be discharged before the order under Section 8(3) is passed or a post-decisional hearing would suffice to meet the requirements of law. In the case of Central Bank of India (Supra) this Tribunal has taken a view that the proviso to sub-Section 2 of Section 8 speaks of only affording a opportunity of being heard to a person claiming right in the property but the timing of such hearing need not necessarily be prior to passing of the order under Section 8(3). 13. In the light of said provisions, we would like to differ with the view taken by the Tribunal in the Central Bank of India as such a view would in fact lead to review of its own orders by the Adjudicating Authority ei....
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....t under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:- a) Discovery and inspection; b) Enforcing the attendance of any person, including any officer of a banking company or a financial institution or a company, and examining him on oath; c) Compelling the production of records; d) Receiving evidence on affidavits; e) Issuing commissions for examination of witnesses and documents, and f) Any other matter which may be prescribed. 1. All the persons so summoned shall be bound to attend in person or through authorized agents, as the Adjudicating Authority may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required. 2. Every proceeding under this section shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860)." 16. The above section do not entrust the Adjudicating Authority with any powers of review of its own orders. Such a power cannot be enjoyed and exercised by the Adjudicating Authority unless it is specificall....
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.... the PMLA. But the Appellate Tribunal can exercise its power of review as per scheme of the Act. 23. In view of the above, we are of the view that the order dated 12.12.2014 of this Tribunal allowing the applicant to invoke his remedy before the Adjudicating Authority as contemplated under proviso to section 8(2) of PMLA needs to be reviewed. 24. Therefore, in terms of the powers vested in this Tribunal under section 35(2) of the PMLA we review the order dated 12.12.2014 of this Tribunal and pass the following order: I. Order of confirmation dated 31.03.2014 in OC No. 228/2013 in so far as it pertains to house No. D-5/5 DLF Phase-I, Gurgaon, Haryana is set aside and the matter is remanded back to the Adjudicating Authority for deciding the matter afresh after giving an opportunity of being heard to the applicant in terms of proviso to section 8(2) and also the other defendants in OC No. 228/2013. II. The Adjudicating Authority shall fix a date of hearing not beyond 45 days from the date of receipt of this order. The applicant and the defendants in OC No. 228/2013 shall appear before the Adjudicating Authority on the date fixed by the Adjudicating Authority for hearing. ....