TaxTMI 
TaxTMI 
2016 (1) TMI 1349
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.... by Shri Madhu Koda, Shri Binod Kumar Sinha and others. Another PIL was filed by one Shri Aman Munda against Shri Madhu Koda, Shri Sanjay Kumar Chaudhary, Shri Binod Sinha and some other persons. In the aforesaid PILs the charges of corruption were made against the aforementioned persons that they have amassed wealth by corrupt or illegal means disproportionate to their known sources of income and had acquired huge properties both immovable and movable. 3. During the course of PIL proceedings before the Hon'ble High Court, Jharkhand at Ranchi, a FIR bearing No. 9/9, dated 2-7-2009 was registered at Police Station Nigrani, District Ranchi against Shri Madhu Koda and others for violation of Sections 409, 420, 423, 424, 465, 120B of the Indian Penal Code and Sections 7, 10, 11 and 13 of Prevention of Corruption Act, 1988. The said FIR was filed on the basis of complaint filed by one Shri Rajiv Sharma vide complaint No. 1/9, dated 1-7-2009. This case was taken up for investigation by the Vigilance Department of Ranchi Police as per order of the ld. Special Judge (Vigilance), Ranchi on 1-7-2009 under Section 156(3) of the Code of Criminal Procedure, 1973. 4. The State Vi....
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...., dated 10-11-2010 was issued by the respondent directing the appellant company not to transfer, dispose of, part with or otherwise deal with in any manner whatsoever with the share capital of Rs. 54,15,300/- and assets of Rs. 1,20,99,491/- as on 31-3-2009 unless specifically permitted to do so by the respondent. 9. Thereafter, based upon the aforesaid Provisional Attachment Order, an Original Compliant No. 76 of 2010 was filed by the respondent on or around 7-12-2010 under the provisions of Section 5(5) of the PMLA before the Adjudicating Authority praying that the order of provisional attachment dated 10-11-2010 may be confirmed and the appellant company be directed to hand over the attached assets. 10. The Adjudicating Authority after adjudication under Section 8 of PMLA confirmed provisional attachment of properties of the appellant company to the tune of Rs. 1.21 crore vide order dated 6-4-2011. However, the Adjudicating Authority declined to confirm the attachment of share capital of the appellant as the respondent did not press for the confirmation of the same. The order dated 6th April, 2011 of the Adjudicating Authority confirming the provisional attachment....
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....r and reasonable opportunity of proper representation and personal hearing to the appellant's counsel. 14. The counsel submitted that on receipt of O.C. No. 76/2010 seeking confirmation of Provisional Attachment Order No. 4/2010, dated 10th November, 2010, the Adjudicating Authority issued show cause notice under Section 8(1), dated 9th December, 2010 fixing date of hearing on 28th January, 2011 which was not served to the appellant. He drew our attention to the copy of order sheet dated 28th January, 2011 passed by the Adjudicating Authority which is filed in the appeal papers and pointed out that the counsel for respondent/ED on 28th January, 2011 before the Adjudicating Authority had admitted that in respect of some of the defendants, show cause notice under Section 8(1) were not yet served. Consequently, the Adjudicating Authority directed the complainant (the present respondent) to ensure proper service of show cause notice u/s 8(1) of PMLA on all the defendants by 6th February, 2011 and the hearing of the case was fixed starting from 9th March, 2011 as per the schedule drawn by the Adjudicating Authority as there were a large number of defendants. The relevant portion....
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....'s Kolkata office to the Deputy Director, Delhi Zonal Office, New Delhi for service of notice on 3rd February, 2011 which is reproduced as follows: "F. No. : PMLA/AML/-CELL/ED-KZO/2011/     date : 3-2-2011 To The Deputy Director, Directorate of Enforcement, Delhi Zonal Office, NEW DELHI Sir, Sub : Service of notice to Show Cause No. 76/2010 along with documents (Vol. I to Vol. V) to M/s. Shivans Steel Pvt. Ltd., Kolkata in the case of Shri Madhu Koda and others - reg. Please refer to your letter No. ECIR/2/PAT/2009, dated 31-1-2011 on the subject. 2. An officer was deputed for the purpose of service of subject documents.The said documents were served upon Shri Tanusree Sankar Tafadar of M/s. S.K. Naredi & C., 21, Hemanta Basu Sarani, Suit No. 204, 2nd Floor, Kolkata - 700001 for and on behalf of M/s. Shivans Steel Pvt. Ltd., which is reported to have shifted its office to some unknown place, details of which could not be furnished by them. The original acknowledgement is enclosed for your needful....." 16. The learned counsel for the appellant submitted that the appellant has shifted its registered office from 25th....
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....ice under Section 8(1) of PMLA by way of substituted service i.e. through newspaper. He contended that in the absence of any specific order by Adjudicating Authority, the respondent could not have served the appellant through newspapers and such service of notice is bad in law and void. The learned counsel drew our attention to Rule 12(b) and (d) of the Adjudicating Authority Regulations, 2005 (in short Regulations) and submitted that the Regulations provide that notice shall be sent by registered post, acknowledgement due. He submitted that in the ordinary course the notice is to be sent only by registered post and it is only when the Adjudicating Authority is satisfied that there is any reason to believe that the defendant is keeping out of the way for the purpose of avoiding service or that for any other reason the notice cannot be served in the ordinary way, the Adjudicating Authority shall order service by way of an advertisement in daily newspaper. He submitted that perusal of order sheet dated 28th January, 2011 passed by the Adjudicating Authority clearly reveals that neither the Adjudicating Authority recorded its satisfaction as required under sub-rule (d) of Regulation 1....
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....hi O.C.76/2010 Sh. Prabhakant               ......Complainant Dy. Director Directorate of Enforcement Lucknow Zonal Office 57-a, Meera Bal Marg Lucknow-2260001 Uttar Pradesh Versus M/s. Shivansa Steel Pvt. Ltd.         .......Defendant Suit No. 204, 2nd Floor Center Point 21 Hemant Basu Sarani Kolkata-700001 Above named complaint has filed a complaint under sub-section (5) of Section 5 against you. You are called upon to indicate the source of your incoming earning or assets out of which or by means of which you have acquired the property provisionally attached under sub-section (1) of Section 5 of the Prevention of Money-laundering Act, evidence on which you rely and other relevant information and particulars and to show cause why all or any of such property should not be declared to be the properties involved in money laundering and confiscated by the Central Government. You are directed to appear before Adjudicating Authority at Jeevan Deep Building, 4th Floor, Room no. 25, Parliament Street, New Delhi in person o....
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.... He submitted that the appellant had to file a reply before the Adjudicating Authority in the absence of original complaint and relied upon documents. He submitted that the appellant was not afforded a fair opportunity in an effective and purposeful manner to present its case on the allegations made in the Original Complaint and all the adjudication proceedings were conducted in a highly unfair manner and in violation of well established principles of natural justice. He prayed that the impugned order be set aside and remanded to the Adjudicating Authority for readjudication. No other arguments were advanced on behalf of the appellant. 23. The learned counsel for the respondent vehemently contested the pleas and contentions raised on behalf of the appellant. He submitted that the Provisional Attachment Order dated 10th November, 2010 was served in person to Shri Subhik Chattopadhaya for M/s. Shivans Steel Pvt. Ltd. on 24th November, 2010. He submitted that show cause notice u/s 8(1) of PMLA along with Original Complaint and relied upon documents was sent to the appellant through Blue Dart courier on 22nd December, 2010 which was received back with the comment "refused" and ....
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....ary, 2011, the respondent/ED was granted preliminary hearing on 9th March, 2011 to present the complaint. He submitted that during preliminary hearing on complaint the Adjudicating Authority is merely apprised on the facts and allegations as stated in the Original Complaint and no arguments are advanced, therefore, it is not necessary that the appellant be provided an opportunity of hearing during that time. He submitted that there is no provision under PMLA to grant opportunity of hearing to appellant at that time. He submitted that by not granting an opportunity of hearing to the appellant at the time of going through the complaint by the respondent, no prejudice was caused to the appellant as it was granted full opportunity to file its response by way of written submissions, personal hearing and to make its arguments before Adjudicating Authority in its defense. 28. He submitted that the appellant was required to answer the show cause notice on the basis of Original Complaint. The respondent/ED only took Adjudicating Authority through the complaint at the time of preliminary submissions on 9th March, 2011. The learned counsel submitted that the provisions of Section 8(1)....
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....yush Kumar, Advocate and Reena Rawat for defendant No. 11. Mr. Vaibhav Mishra, Advocate for defendant No. 20. Dr. Prabhat Kumar, Advocate for defendant No. 10. Mr. S.K. Poddar, Advocate for defendant No. 14, 19, 21, & 22. The following ld. Counsels made their oral submissions for their clients as mentioned below : Advocate for the Defendant Defendant No. Mr. Manoj Def. No. 12, 15, 16, 17 and 18. Mr. Pyiush Kumar Def. No. 11 Mr. Gaurav Agrawal (as instructed by Sh. S.K. Poddar) Def. No. 13 Mr. S.K. Poddar Def. No. 14, 19, 21 and 22 Dr. Prabhat Kumar Def. no. 10 For Defendant No. 1 to 9, no one appeared by the scheduled time of hearing i.e. 11:00 am today. However, when the bench was rising for lunch for around 1:45 pm, Mr. Rajeev Singh, Advocate, Shivansh Singh, Advocate, Alok Shukla, Advocate appeared on behalf of Defendant No. 1, 2, 3, 4, 5, 7, 8 and 9 requested for adjournment by ten (10) days. This was rejected by the Bench. However, they were permitted to make their submissions at the end of the schedule of hearing drawn up as on 28-1-2011. For Defendant No. 6, Mr. S.K. Srivastava, Advocate, Mr. Mareesh P. Shay, Advocate app....
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.... were not served, however, no prejudice whatsoever was caused to the appellant. He submitted that the appellant has failed to show how it was prejudiced and it has failed to demonstrate prejudice caused on account of non-supply of Original Complaint and relied upon documents. The learned counsel submitted that the appellant in appeal memo has made false statement that large number of relied upon documents were not legible but later as an afterthought, it has been argued in adjudication proceedings that copy of the Original Complaint was not supplied to the appellant. 32. He submitted that the provisions of Civil Procedure Code do not apply to the adjudication proceedings under Section 8 of PMLA. He drew our attention to provisions of Section 6(15) of PMLA and submitted that Adjudicating Authority is not bound by the procedure laid down by the Code of Civil Procedure, 1908 but shall be guided by the principles of natural justice. The counsel submitted that the show cause notice was to show legitimate source of properties attached. He drew our attention to the copy of reply/written submissions filed by the appellant before the Adjudicating Authority and pleaded that the conte....
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....monstrate that Sh. Madhu Koda indulged in corrupt practices and accepted illegal consideration, inter alia, for allotment of mines. Such statements also establish a close nexus with Sh. Binod Sinha, who was actively involved in the process of soliciting bribes on behalf of Shri Madhu Koda and collecting the bribe money and also investing such monies. Further, the evidence on record establishes that cash amounts traceable to Shri Binod Sinha and Shri Vikas Sinha were projected as untainted through the mechanism of accommodation entries made in the books of companies controlled by Shri Binod Sinha, Shri Vikas Sinha, Shri Vijay Joshi and other associates of Sh. Madhu Koda, without there being any legitimate and/or actual underlying commercial transaction. Therefore, having established a nexus between Shri Binod Sinha and the monies illegally obtained by Sh. Madhu Koda, and the complicity of Sh. Vijay Joshi in a number of transactions, and having also demonstrated an elaborate modus operandi wherein cash amounts were utilized to make accommodation entries, where such monies were projected as share application monies or loan amounts, thereby projecting the tainted property as "untainted....
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....e of natural justice including right to a fair hearing and held that there was a requirement of issuance of show cause notice by the Deputy Commissioner before passing the order of recovery, irrespective of the fact whether Section 11A of the Act is attracted in the instant case or not. He submitted that the Hon'ble Supreme Court noted that "Even if it is found by the court that there is a violation of principles of natural justice, the courts have held that it may not be necessary to strike down the action and refer the matter back to the authorities to take fresh decision after complying with the procedural requirement in those cases where non-grant of hearing has not caused any prejudice to the person against whom the action is taken. Therefore, every violation of a facet of natural justice may not lead to the conclusion that the order passed is always null and void. The validity of the order has to be decided on the touchstone of "prejudice". The ultimate test is always the same viz. the test of prejudice or the test of fair hearing." The Hon'ble Supreme Court observed that "even when we find that there is an infraction of principles of natural justice, we have addressed a case....
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....e under Section 11A of the Excise Act, which is mandatory? (c) Whether there is a conflict between the three Judge Bench judgment in J.K. Cotton (supra) and R.C. Tobacco (supra)? First issue is the basis for the judgment of the High Court. 10. For answering this issue, it would be necessary to take into account the complete implication thereof with reference to the nature of recovery orders passed by Respondent No. 1, challenge thereto before the Commissioner (Appeals) and interim order of pre-deposit passed by the Commissioner (Appeals) on March 31, 2004 as also the nature of challenge which was laid by the Appellant against the said order of pre-deposit in the writ petitions filed in the High Court, which were dismissed by the learned Single Judge on May 18, 2004. 11. By virtue of notification dated July 8, 1999, the Appellant was granted refund of the duty deposited in cash up to February, 2001. After the enactment of Section 154 of the Act of 2003, recovery order dated June 3, 2003 was passed for recovery of the aforesaid amount which had been refunded to the Appellant. Simultaneously, another order dated June 6, 2003 was issued asking the Appellant t....
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.... the core issue, namely, whether the direction of the Commissioner (Appeals) directing the Appellant to make deposit of the amount as a pre-condition for hearing of the appeal was sustainable or not. The writ petition was dismissed affirming the said order. Therefore, any observations made by the learned Single Judge, which were tentative in nature, could not be taken into consideration by the Division Bench in the impugned judgment, thereby dismissing the Reference, invoking the principle of res judicata. The order of the learned Single Judge dismissing the writ petition was challenged before the Division Bench and the Division Bench passed interim orders in the writ appeals not to dismiss the appeals preferred by the Appellant for non-deposit of the duty. In this backdrop, appeals were heard and Appellant even partly succeeded. After the order of the Commissioner (Appeals) dated June 15, 2005 deciding the appeals partly in favour of the Appellant, the writ appeals which were pending before the Division Bench had become infructuous and disposed of as such without going into the merit of the order passed by the learned Single Judge. This is yet another reason to hold that the order....
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....law, we find substance and force in the aforesaid submission of Mr. Sorabjee. No doubt, the Department was seeking to recover the amount paid by virtue of Section 154 of the Act of 2003 which was enacted retrospectively and the constitutional validity of the said Section had already been upheld by this Court in R.C. Tobacco (supra) at the time of issuance of notice for recovery. Further, no doubt, the effect of the said amendment retrospectively was to take away the benefit which was granted earlier. However, the question is whether before passing such an order of recovery, whether it was necessary to comply with the requirement of show cause notice? The Appellant wanted to contend that Section 11A of the Excise Act was applicable, which requires this procedure to be followed. Even if that provision is not applicable, it is fundamental that before taking any adverse action against a person, requirement of principles of natural justice is to be fulfilled. This Court in Collector of Central Excise, Patna and Ors. v. I.T.C. Limited and Anr. - MANU/SC/0602/1995 : (1995) 2 SCC 38 has held that show cause and personal hearing is necessary before saddling an Assessee with additional deman....
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.... recent origin. It is duty to give reasons in support of decision, namely, passing of a 'reasoned order'. 20. 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'. This 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 : AIR 1978 SC 851 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 excludes, it applies when people are affected by acts of authority. It is the bone of healthy government, recognised from earliest times and not a mystic testament of judge-made law. Indeed from the legendary days of Adam-and of Kautilya's Arthashastra-the rule of law has had this stamp of natural justice, which makes it social justice. We need not go into these deeps for t....
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....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 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 achieve the general good in that case. At this level of understanding, judgments of fairness have no place, for all that matters is whether the social good, as expressed through laws, is effectively achieved. Galligan also takes the idea of fair treatment to a second level of understanding, namely, pursuit of common good involves the distribution of benefits and burdens, adv....
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.... 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. De Smith captures the essence thus - "Where a statute authorises interference with properties or other rights and is silent on the question of hearing, the courts would apply rule of universal application and founded on plainest principles of natural justice". Wade also emphasizes that principles of natural justice operate as implied mandatory requirements, non-observance of which invalidates the exercise of power. In Cooper v. Sandworth Board of Works - (1863) 14 GB (NS) the Court laid down that: '...although there is no positive word in the statute requiring that the party shall be heard, yet justice of common law would supply the omission of Legislature". Exhaustive commentary explaining the ....
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....no breach of natural justice can be complained of. Unnatural expansion of natural justice, without reference to the administrative realities and other factors of a given case, can be exasperating. The Courts cannot look at law in the abstract or natural justice as mere artifact. Nor can they fit into a rigid mould the concept of reasonable opportunity. If the totality of circumstances satisfies the Court that the party visited with adverse order has not suffered from denial of reasonable opportunity, the Court will decline to be punctilious or fanatical as if the rules of natural justice were sacred scriptures. 22. In Institute of Chartered Accountants of India v. L.K. Ratna - MANU/SC/0083/1986 : (1986) 4 SCC 537, Charan Lal Sahu v. Union of India - MANU/SC/0285/1990 : (1990) 1 SCC 613 (Bhopal Gas Leak Disaster Case) and C.B. Gautam v. Union of India - MANU/SC/0673/1992 : (1993) 1 SCC 78, the doctrine that the principles of natural justice must be applied in the unoccupied interstices of the statute unless there is a clear mandate to the contrary, is reiterated. In his separate opinion, concurring on this fundamental issue, Justice K. Ramaswamy echoed the aforesaid senti....
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....ak's case (supra) that if the purpose of rules of natural justice is to prevent miscarriage of justice, one fails to see how these rules should not be made available to administrative inquiries. In the case of Maneka Gandhi v. Union of India and Anr. - ANU/SC/0133/1978 : (1978) 1 SCC 248 also the application of principle of natural justice was extended to the administrative action of the State and its authorities. It is, thus, clear that before taking an action, service of notice and giving of hearing to the noticee is required. In Maharashtra State Financial Corporation v. Suvarna Board Mills and Anr. - MANU/SC/0527/1994 : (1994) 5 SCC 566, this aspect was explained in the following manner: 3. It has been contended before us by the learned Counsel for the Appellant that principles of natural justice were satisfied before taking action under Section 29, assuming that it was necessary to do so. Let it be seen whether it was so. It is well settled that natural justice cannot be placed in a straight-jacket; its rules are not embodied and they do vary from case to case and from one fact-situation to another. All that has to be seen is that no adverse civil consequences are allo....
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....ses is treated as necessary concomitant of the principles of natural justice. Likewise, in service matters relating to major punishment by way of disciplinary action, the requirement is very strict and full-fledged opportunity is envisaged under the statutory rules as well. On the other hand, in those cases where there is an admission of charge, even when no such formal inquiry is held, the punishment based on such admission is upheld. It is for this reason, in certain circumstances, even post-decisional hearing is held to be permissible. Further, the Courts have held that under certain circumstances principles of natural justice may even be excluded by reason of diverse factors like time, place, the apprehended danger and so on. 31. We are not concerned with these aspects in the present case as the issue relates to giving of notice before taking action. While emphasizing that the principles of natural justice cannot be applied in straight-jacket formula, the aforesaid instances are given. We have highlighted the jurisprudential basis of adhering to the principles of natural justice which are grounded on the doctrine of procedural fairness, accuracy of outcome leading to ge....
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....t question to be answered is what is the effect on the order of punishment when the report of the enquiry officer is not furnished to the employee and what relief should be granted to him in such cases. The answer to this question has to be relative to the punishment awarded. When the employee is dismissed or removed from service and the inquiry is set aside because the report is not furnished to him, in some cases the non-furnishing of the report may have prejudiced him gravely while in other cases it may have made no difference to the ultimate punishment awarded to him. Hence to direct reinstatement of the employee with back-wages in all cases is to reduce the rules of justice to a mechanical ritual. The theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. They are not incantations to be invoked nor rites to be performed on all and sundry occasions. Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each case. Where, therefore, even after the fur....
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.... enunciation of law, Mr. Sorabjee may also be right in his submission that it was not open for the authority to dispense with the requirement of principles of natural justice on the presumption that no prejudice is going to be caused to the Appellant since judgment in R.C. Tobacco (supra) had closed all the windows for the Appellant. 35. At the same time, it cannot be denied that as far as Courts are concerned, they are empowered to consider as to whether any purpose would be served in remanding the case keeping in mind whether any prejudice is caused to the person against whom the action is taken. This was so clarified in the case of Managing Director, ECIL (supra) itself in the following words : 31. Hence, in all cases where the enquiry officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the Courts and Tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it before coming to the Court/Tribunal and given the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the Court/Tribunal com....
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....eless formality theory'. 38. In Escorts Farms Ltd. [Previously known as Escorts Farms (Ramgarh) Ltd.] v. Commissioner, Kumaon Division, Nainital, U.P. and Ors. - MANU/SC/0144/2004 : (2004) 4 SCC 281, this Court, while reiterating the position that rules of natural justice are to be followed for doing substantial justice, held that, at the same time, it would be of no use if it amounts to completing a mere ritual of hearing without possibility of any change in the decision of the case on merits. It was so explained in the following terms : 64. Right of hearing to a necessary party is a valuable right. Denial of such right is serious breach of statutory procedure prescribed and violation of rules of natural justice. In these appeals preferred by the holder of lands and some other transferees, we have found that the terms of government grant did not permit transfers of land without permission of the State as grantor. Remand of cases of a group of transferees who were not heard, would, therefore, be of no legal consequence, more so, when on this legal question all affected parties have got full opportunity of hearing before the High Court and in this appeal before this ....
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....ty and appeal containing copy of Original Complaint, it is clear that the appellant had access to complete copy of Original Complaint at the time of adjudication and thereafter. A perusal of order sheet dated 10-3-2011 reveals that the appellant did not make any submissions regarding non-supply of complete copy of Original Complaint whereas some other defendants have demanded the same which is duly recorded in the order sheet. As pointed out by the learned counsel for respondent from the appeal memo at para 10, the appellant itself has stated that the reply dated 23-3-2011 filed before the Adjudicating Authority was prepared on the basis of Provisional Attachment Order and Original Complaint which is adverted to as follows : "10. The counsel for the Appellant was left with no option and filed reply/written statement dated 23-3-2011 merely on bare perusal of the PAO and the complaint wherein it was stated that the fixed assets sought to be attached have been acquired through the appellant's capital/loan/business income which have been declared in the Income Tax Returns; ........" 39. A perusal of the appeal also reveals that the appellant has filed copy of Orig....
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....same was rejected. It is necessary to point out here that no documents were received by the Appellant Company as a result of which proper reply could not be prepared. Ld. Adjudicating Authority in sheer violation of principles of natural justice did not even give time to the Appellant for filing its response and hence the Appellant was forced to file its reply without receipt of proper documents. This is a gross violation of natural justice and the entire order sheet of the Authority points out to the fact that the authority seemed to be in great hurry to conclude the proceedings without even following the basic principles of natural justice. A true typed copy of the order dated 10-3-2011 passed by the Adjudicating Authority is annexed herewith and marked as Annexure A6." 42. From careful consideration of the above facts disclosed by the appellant in its appeal memo and application, it is clear that the appellant changed its stand on supply of relied upon documents to allege violation of principles of natural justice. The contradiction in the facts alleged by the appellant clearly show that these allegations are merely an afterthought and as already discussed in earlier par....
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....f PMLA stated inter alia that he had taken the cases of Shri Madhu Koda, Shri Binod Sinha and Shri Vikas Sinha since the year 2006; that Shri Bhud Narayan Gupta was an employee of his firm (S.K. Naredi and Company) since the last 7-8 years; that around 30-35 persons were employed in the offices of the firm; that Shri Budh Narayan Gupta was assigned to prepare data entries, audit and company law matters and also to carry out the work of Shri Binod Sinha and Shri Vikas Sinha, for this he (Budh Narayan Gupta) had to travel to Kolkata also; that the disclosures made in the statement by Shri Budh Narayan Gupta under the provisions of Income-tax Act during the course of searches of his firm were confirmed by him (S.K. Naredi); that following were the companies based at Kolkata to whom cash belonging to Shri Binod Sinha and Shri Vikas Sinha was handed over for the accommodation entries : 1. Arihant Tracom Pvt. Ltd. 2. Basudeo Trading Co. Pvt. Ltd. 3. Doyen Marketing Pvt. Ltd. 4. Sumit Credit Co. Pvt. Ltd. 5. Lucky Projects Pvt. Ltd. 6. Creative Fiscal Services Ltd. 7. Ekanta Emporium Pvt. Ltd....
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....books of account in the form of Share Capital/Unsecured Loan. These CA/entry operators are approached. Cash is given by the business concern/beneficiary to these CA/entry operators and in return they issue cheque/DD in the name of the beneficiary to these CA/entry operators and in return they issue cheque/DD in the name of the beneficiary from one of such paper/investment companies in which balance is available. The cash so received by these CA/entry operators are generally routed in their paper/investment companies through banking channels. As a result the beneficiary is able to induct his undisclosed income in his regular books of account as share capital/unsecured loan in the name of these paper/investment companies. The CA/entry operator received commission/service charges in return which generally varies between 2 to 4 per cent. of the cheque amount. 48. Thus in the Provisional Attachment Order and Original Complaint, it is alleged that Shri S.K. Naredi deposed inter alia in his statement before the income-tax authorities on 2-11-2009 and 25-12-2009 that he provided accommodation entries to Shri Binod Sinha and group through the following companies i. M/s. Ekanta Em....
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....stakes for getting Kolkata entries in their respective books of account that in the last three years approx. Rs. 40 crores had been sent to Kolkata for the companies and family members of Binod Kumar Sinha through him. 50. It is alleged that similarly Shri Chandra Bhushan Jha of Kolkata in his statement dated 25-12-2009 stated that he had provided accommodation entries under the cover of share capital money or unsecured loan to Shri Binod Sinha and group in lieu of cash received and against service charges of 2% to 4%. It is alleged that similarly Shri Mridul Bhowmick in his statement dated 25-12-2009 stated that he had provided accommodation entries under the cover of share capital money or unsecured loan to Shri Binod Sinha and group in lieu of cash received and against service charges of 2% to 4%. It is alleged that similarly Shri Vivek Kumar Goenka of Kolkata in his statement dated 25-12-2009 stated that he had provided accommodation entries under the cover of share capital money or unsecured loan to Shri Binod Sinha and group in lieu of cash received and against service charges of 2% to 4%. It is alleged that similarly Shri Pradeep Kumar Paramsukha in his statement dat....
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....rcated as 2.5% to Shri Madhu Koda then holding the charge of Power Ministry and 0.50% of the tender amount to Chairman of JSEB and other senior officials; that he (D.K. Srivastava) along with Shri Ashok Reddy, Director of IVRCL and Shri A.P. Srivastava, Project Manager of IVRCL at Ranchi met Shri Madhu Koda in the year 2007; that a total amount of Rs. 11.40 crore was paid to Shri Madhu Koda through Shri Binod Sinha against 2.5% commission towards getting the tenders in Jharkhand during the period 7-6-2007 to 24-12-2007; that Shri Binod Sinha was the representative of Shri Madhu Koda for the payment of commission; that the printout of the data source impounded by income-tax authorities at Ranchi office of IVRCL on 23-12-2009 was the printout of payments by Ranchi office of IVRCL prepared at the instruction of Shri A.P. Srivastava, project manager for the approval of the excess expenses incurred over and above Rs. 9.30 crores provided by the Head Office to meet the expenditure towards payment and commission to Chief Minister and other officials of JSEB and others. 53. Further, Shri Arun Kumar Srivastava, personal secretary of Shri Madhu Koda in his statement dated 5-11-2009 b....
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....n made against it are unsustainable/incorrect and the investments in the appellant company are out of legitimate sources. The appellant is completely silent about the alleged accommodation entries in the form of share capital money and unsecured loans pumped by Shri Binod Sinha and associates by laundering proceeds of crime generated by Shri Madhu Koda. Even at the stage of adjudication of present appeal, the appellant has neither filed any additional material to refute the allegations made by the respondent against it nor sought any opportunity to do so. Their main attack on impugned order is on technical grounds involving violation of principles of natural justice premised on the plea of not serving the show cause notice in accordance with the provisions of PMLA and Adjudicating Authority Regulations, on account of not supplying the copy of Original Complaint and for not giving fair opportunity i.e. hearing the respondent on 9-3-2011 in his absence. But the appellant has completely failed to demonstrate before us if any prejudice is caused to him on account of these infractions. 56. In the light of above facts and circumstances and in view of the judgment of Hon'ble Supre....