TaxTMI 
TaxTMI 
2016 (1) TMI 1343
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....are being disposed of by this common order. 2. In brief, the facts of the case are that an FIR No. RCBSK 2009 E0001, dated 16-1-2009 was registered by Central Bureau of Investigation, Bank Securities & Frauds Cell, Salt Lake City, Kolkata alleging commission of fraud on Indian Overseas Bank. After investigation, CBI filed Charge Sheet No. 2/2010, dated 17-5-2010 alleging commission of offences under Sections 120B read with 419, 420, 467, 468, 471 of IPC and Sections 11, 12, 13(2) read with 13(1)(d) of Prevention of Corruption Act. It is alleged that a fraud on Indian Overseas Bank has been perpetrated by Shri Iltush Ahammed, Smt. Taijunnehar Bibi, Shri Noor Jamal, Shri Aynal Haque and Shri Prabir Karmakar with active facilitation by Shri Atanu Mitra, Former Branch Manager, Indian Overseas Bank, Berhampore Branch during the period from 13-6-2005 to 16-5-2007; that the aforesaid persons are alleged to be guilty of violating the provisions of various sections of IPC and PC Act which included Section 120B r/w Sections 419, 420, 467, 468, 471 of IPC and Sections 11, 12 & 13(2) of PC Act, 1988; that the amount involved is Rs. 5.24 crores as reported by the concerned bank in their c....
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....hat Shri Atanu Kumar Mitra asked for Rs. 75 lakhs as loan, which he promised to return to Shri Iltush Ahammed along with interest after one month; that Shri Mitra also arranged for temporary overdraft of Rs. 75 lakhs to Shri Iltush Ahammed to facilitate payment to Shri Atanu Kumar Mitra; that however ever after passing of several months he did not return the loan and eventually he got transferred from Indian Overseas Bank, Berhampore without repaying the amount to him (Shri Iltush Ahammed). 4. It is alleged by the respondent that the allegation of Shri Iltush Ahammed that he paid Rs. 75 lakhs to Shri Atanu Kumar Mitra, is strengthened by the revelations made by Shri Iltush Ahammed in his statement dated 21-7-2011 wherein he stated inter alia that he sourced Rs. 75 lakhs from the Current Account of M/s. Raunak Motors held in Punjab National Bank, Berhampore; that term loans granted by Indian Overseas Bank in favour of (1) Shri Iltush Ahammed - Rs. 35 lakhs, (2) Smt. Taijunnehar Bibi - Rs. 35 lakhs, (3) Shri Noor Jamal - Rs. 40 lakhs, (4) Shri Aynal Haque - Rs. 40 lakhs; that the loans were obtained purportedly to purchase trucks; that instead of purchasing trucks, the loan amo....
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....d jointly except some KVPs which have been mortgaged with Oriental Bank of Commerce. 6. It is alleged by the respondent that the fraud on the bank was perpetrated during the period June, 2005 to May 2007; that the transactions in various banks were quite high and there had been substantial cash withdrawals even in the year 2007; that Shri Iltush Ahammed had submitted false balance sheets in respect of his companies, his associates to avail increased credit limits from the banks; that in a number of cases, the loans were secured by Shri Iltush Ahammed either in his own name or in the name of his associates by mortgaging landed securities forging the signatures of their rightful owners; that the term loans etc. whenever granted to the accused persons, were used to be immediately withdrawn and deposited in some other bank accounts; that Shri Atanu Kumar Mitra in his capacity as Senior Manager, Indian Overseas Bank, Berhampore has sanctioned the loans accepting the false balance sheets and landed properties as securities as stated above; that Shri Atanu Kumar Mitra was also instrumental in causing huge loss to Indian Overseas Bank; that Shri Iltush Ahammed had a sham company, nam....
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.... various properties held by accused persons in their own name or in the name of their family member, friends etc. were provisionally attached vide Provisional Attachment Order dated 3-4-2014 and Original Complaint No. 320/2014, dated 29-4-2014 was filed seeking confirmation of the provisional attachment of properties and such provisional attachment of properties in the hands of appellants was confirmed by the Adjudicating Authority vide order dated 29-8-2014 which is being contested in the present appeals. 8. The learned counsel for appellants submitted that show cause notice u/s 8(1) of PMLA dated 30-4-2014 fixing date of hearing on 10-7-2014 at 2.30 pm was served on appellants through respondent's letter dated 20-5-2014. He submitted that in compliance to notice, the appellants duly appeared before the Adjudicating Authority on 10-7-2014 and contested the Provisional Attachment Order and Original Complaint and filed written objections dated 10-7-2014 to the said complaint. He drew our attention to the written objections and pointed out that the appellants have taken various objections on facts as well as law and also denied and disputed that the attached properties are acqu....
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....h the help of his wife Smt. Taijunenahr Bibi, his cousin brother Shri Noor Jamal, his brothe-in-law Sri Aynal Haque, and some others with the active facilitation by Sri Atanu Kumar Mitra, Senior Manager of Indian Overseas Bank, Berhampore Branch and the above said accused are alleged to be guilty of violating the provisions of various sections of IPC and PC Act which included Section 120B read with Sections 419, 420, 467, 468, 471 of IPC and Sections 11, 12 and 13(2) of PC Act, 1988. The amount involved is Rs. 524.07 lakhs as reported by the concerned bank in their complaint for lodging an FIR with CBI, BS&FC, Kolkata, which appears to be proceeds of crime i.e. tainted money earned out of contravention of the Sections 120B, 420 & 467 of IPC which is a Scheduled Offence as defined under Section 2(1)(y) of PMLA, 2002 (as amended). Sri Iltush Ahmed placed a part of the proceeds in purchasing of immovable property in the name of himself and his wife Smt. Taijunnehar Bibi, who was a house wife. Properties suspected to acquire through proceeds of crime is listed in the para 5 of the O.C. 320 of 2014. F. The defendants have averred that the Section 2(1)(y) o....
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..... It is, therefore, prayed that the Provisional Attachment Order should be confirmed in light of the above and also in light of the fact that already the proceedings were frustrated by the Defendants herein who never informed the correct facts and tried to dodge the investigation by giving contradictory statements. It is also submitted that the proceeds of crime being the property involved in the offence of money laundering is liable to be attached in hands of any person as per the provisions of PMLA. These written submissions are in addition to the arguments done by the counsel for the complainant on the dates of hearings." 11. The learned counsel for appellants submitted that the Adjudicating Authority has considered the rejoinder dated 4-8-2014 filed on behalf of the respondent after the hearing of complaint was concluded on 22-7-2014 and order was reserved. He submitted that respondent was granted opportunity to file rejoinder on 10-7-2014 and date of compliance was fixed for 22-7-2014. As no rejoinder was filed, the hearing of complaint was concluded by the Adjudicating Authority and order was reserved. He submitted....
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....dering the material on record and submissions made by both parties and after extending sufficient opportunity to the appellants and after considering the rejoinder filed by the respondent passed the order dated 29-8-2014 whereby Provisional Attachment Order in respect of properties of appellants was confirmed. 14. The learned counsel for respondent made counter arguments on other pleas and contentions raised on behalf of the appellants which are not being detailed herein. The learned counsel submitted that the appellants have filed some additional documents in the appeal without seeking leave of this Tribunal. He submitted that the appellants have suppressed the fact of filing additional documents and have not come to the Tribunal with clean hands. He vehemently contended that on this ground only the appeals should be dismissed with heavy cost. 15. We have heard the arguments made on behalf of both the parties. Admittedly the hearing of complaint was concluded on 22-7-2014 and rejoinder dated 4-8-2014 was filed by the respondent after conclusion of the hearing of complaint by the Adjudicating Authority. Careful consideration of rejoinder dated 4-8-2014 reveals that the ....
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....ral justice'. The principles of natural justice developed over a period of time and which is still in vogue and valid even today were : (i) rule against bias, i.e. nemo iudex in causa sua; and (ii) opportunity of being heard to the concerned party, i.e. audi alteram partem. These are known as principles of natural justice. To these principles a third principle is added, which is of recent origin. It is duty to give reasons in support of decision, namely, passing of a 'reasoned order'. 18. Though the aforesaid principles of natural justice are known to have their origin in Common Law, even in India the principle is prevalent from ancient times, which was even invoked in Kautilya's 'Arthashastra'. Hon'ble Supreme Court in the case of Mohinder Singh Gill and Anr. v. The Chief Election Commissioner, New Delhi and Ors. - MANU/SC/0209/1977 : (1978) 1 SCC 405 explained the Indian origin of these principles in the following words : "Indeed, natural justice is a pervasive facet of secular law where a spiritual touch enlivens legislation, administration and adjudication, to make fairness a creed of life. It has many colours and shades, many forms and shapes and, save where valid law e....
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....ial good is to that extent diminished. The rule of procedure is to see that the law is applied accurately and, as a consequence, that the social good is realised. For taking this view, Prof. Galligan took support from Bentham, who wrote at length about the need to follow such principles of natural justice in civil and criminal trials and insisted that the said theory developed by Bentham can be transposed to other forms of decision making as well. This jurisprudence of advancing social good by adhering to the principles of natural justice and arriving at correct decisions is explained by Prof. Galligan in the following words : "On this approach, the value of legal procedures is judged according to their contribution to general social goals. The object is to advance certain social goals, whether through administrative processes, or through the civil or criminal trial. The law and its processes are simply instruments for achieving some social good as determined from time to time by the law makers of the society. Each case is an instance in achieving the general goal, and a mistaken decision, whether to the benefit or the detriment of a particular person, is simply a failure to achie....
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....alteram partem, have developed. It is for this reason that the Courts have consistently insisted that such procedural fairness has to be adhered to before a decision is made and infraction thereof has led to the quashing of decisions taken. In many statutes, provisions are made ensuring that a notice is given to a person against whom an order is likely to be passed before a decision is made, but there may be instances where though an authority is vested with the powers to pass such orders, which affect the liberty or property of an individual but the statute may not contain a provision for prior hearing. But what is important to be noted is that the applicability of principles of natural justice is not dependent upon any statutory provision. The principle has to be mandatorily applied irrespective of the fact as to whether there is any such statutory provision or not. 25. In Chairman, Board of Mining Examination v. Ramjee - MANU/SC/0061 /1977 : (1977) 2 SCC 256, the Hon'ble Supreme Court has observed that natural justice is not an unruly horse, no lurking landmine, nor a judicial cure-all. If fairness is shown by the decision-maker to the man proceeded against, the form, feat....
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.... which have been considered by the Adjudicating Authority for returning findings as per provisions of Section 8(2) of PMLA without affording any opportunity of hearing to the appellants to answer/respond the averments made on behalf of the respondent vide rejoinder dated 4-8-2014, therefore, the impugned order dated 29-8-2014 is vitiated and has become bad in law, has considerable force. In our opinion the Adjudicating Authority has not proceeded fairly by not affording any opportunity to the appellants on receipt of rejoinder dated 4-8-2014 making factual averments as well as raising legal pleas some of which appears to have been raised only in the rejoinder. It would be a futile exercise to speculate what could have been the consequences or change in the final outcome if the appellants were granted an opportunity to respond to the rejoinder. 28. In the light of above facts and circumstances, we are of the considered opinion that there is an infraction of principles of natural justice on the part of Adjudicating Authority as argued on behalf of the appellants. 29. Consequently, the impugned order dated 29-8-2014 to the extent of confirming provisional attachment of the....