TaxTMI 
TaxTMI 
2018 (3) TMI 276
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.... 2. First Appeal No.785 of 2015 is filed by the appellant / original defendant No.3 challenging - (i) Provisional Attachment Order : 24/2013 dated 20.12.2013 passed by the Deputy Director, Directorate of Enforcement, Prevention of Money Laundering Act, Mumbai; (ii) Adjudication Order dated 22.05.2014 passed by the Adjudicating Authority; and (iii) Judgment and order dated 10.03.2015 passed by the Appellate Tribunal. 3. By order dated 20.12.2013, the Deputy Director in exercise of powers under Section 5(1) of the Prevention of Money Laundering Act, 2002 (for short 'Act') provisionally attached Rs. 2.5 crores being balance proceeds of crime lying in Current A/c. No.01105021947 of M/s. Skylark Buildcon Pvt. Ltd. maintained with ICICI Bank, S.V.Road, Andheri (W), Mumbai Branch. By order dated 22.05.2014, the Adjudicating Authority confirmed the provisional attachment order. Aggrieved by this decision, defendant No.3 preferred appeal under Section 26 of the Act before the Appellate Tribunal, which was dismissed on 10.03.2015. It is against these orders, defendant No.3 has instituted the appeal under Section 42 of the Act. Civil Application No.372 of 2016 is taken ou....
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.... against Shishir P. Dharkar (Ex-Director of Space and then President of the Bank); Gulraihna Oomer (wife of Shishir P. Dharkar); Prem Kumar Sharma, ExDirector of Bank, Rahul Bhomavat (defendant No.3), Ex-Additional Director of Space and others under Section 420 read with Section 120-B I.P.C. for offence of criminal conspiracy to cheat M.S.T.C.in business of export of gold jewellery during 2008-09. 8. M.S.T.C. (a Government of India Enterprise under the Ministry of Steel, New Delhi is a trading Corporation involved in Imports and Exports and is also a nominated agency for Gold Exports under Foreign Trade Policy) entered into Memorandum of Agreement (MoA) on 16.10.2007 with six associate suppliers (exporters) namely, A) M/s. Ushma Jewellery and Packaging Exports Pvt. Ltd., B) M/s. Space Mercantile Co. Pvt. Ltd., C) M/s. K. A. Malle Pharmaceutical Pvt. Ltd., D) M/s. Joshi Bullion and Gems & Jewellery Pvt. Ltd., E) M/s. Bond Gems Pvt. Ltd. F) M/s. Indo Bonito Multinational. 9. MOA provided that the associate suppliers were required to procure gold jewellery like gold chains from local suppliers and arrange for their exports, to identify buyers of gold jewellery ....
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....The Tribunal dismissed the appeal mainly on the ground that defendant No.3 has no locus to challenge the orders of attaching Rs. 2.50 crores. It is against these orders, defendant No.3 has instituted the present Appeal. 11. In support of this Appeal, Mr. Sethna strenuously contended that the impugned orders are perverse. He submitted that the impugned orders did not consider the fact that the relevant date for the purpose of the commission of offence under the Act is the date on which the alleged act of money laundering took place. In the present case, the alleged act of money laundering took place in the year 2007-08, which is admittedly prior to 01.06.2009 that is the date of introduction of Schedule of Offences under the Act. In other words, the offences punishable under Section 120-B read with Section 420 I.P.C. were not included in the Schedule of Offences under the Act and they were introduced after 01.06.2009. As the alleged act of money laundering took place in the year 2007-08, defendant No.3 cannot be prosecuted for commission of these alleged offences. 12. Mr. Sethna submitted that the Appellate Tribunal dismissed the appeal mainly on the ground that defendant No.3....
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....sub-section (7) of Section 8 or Section 58-B or sub-section 2A or Section 60 by the Adjudicating Authority. He has also taken us through the order passed by the Appellate Tribunal and in particular paragraph 8 onwards and submitted that the Appellate Tribunal has observed that defendant No.3 has preferred appeal against the observations made by the Adjudicating Authority. The Appellate Tribunal has abundantly made it clear that these prima facie observations will not impact the criminal trial in criminal cases. He submitted that basically, defendant No.3's property is not attached. By the impugned orders, Rs. 2.50 crores in the Current Account of M/s. Skylark Buildcon Private Limited is attached. The said entity has not challenged the impugned orders. He, therefore, submitted that the Authorities rightly came to the conclusion that the defendant No.3 has no locus to maintain the appeal. He, therefore, submitted that no case is made out for interfering with the impugned orders. 14. Mr. Chitale submitted that the applications taken out by the defendant No.3 in both the appeals for impleading M.S.T.C. as respondent No.5 are wholly misconceived. He submitted that M.S.T.C. was no....
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....r a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country: Provided further that, notwithstanding anything contained in first proviso, any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any ....
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....half 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 persons holding such property. (2) The Adjudicating Authority shall, after-- (a) considering the reply, if any, to the notice-issued under sub-section (1); (b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf; and (c) taking into account all relevant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are involved in money-laundering: Provided that 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. (3) Where the Adjudicating Authority decides under subsection (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of ....
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.... attached. 20. By order dated 20.12.2013, the Deputy Director, in exercise of powers under Section 5(1) attached Rs. 2.50 crores lying in the Current Account of Skylark Buildcon Pvt. Ltd. It is admitted position that M/s. Skylark or its Directors have not challenged the order of attachment. During the course of hearing, Mr. Sethna could not point out that any of the properties of defendant No.3 have been attached. It is an admitted position that properties of the defendant No.3 so far have not been attached. It is in that context one has to find out whether defendant No.3 has locus to challenge the impugned orders. The Tribunal has considered this aspect, in detail, from paragraph 8 onwards. The Tribunal observed that the prima facie observations made by the Adjudicating Authority cannot be challenged by the defendant No.3 under Section 26 of the Act. The orders passed under Chapter III are interlocutory in nature and such orders do not decide finally whether an offence has been committed under Section 3 of the Act. These orders also do not decide what punishment is to be imposed for money-laundering. The observations made while passing orders under Chapter III are not findings ....
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.... altered the law except for a marginal difference. In paragraphs 10 and 12, it was observed thus, "10. CPC Amendment of 1976 has not materially or substantially altered the law except for a marginal difference. Even under the amended Order 41 Rule 22 sub-rule (1) a party in whose favour the decree stands in its entirety is neither entitled nor obliged to prefer any cross objection. However, the insertion made in the text of sub-rule (1) makes it permissible to file a cross objection against a finding. The difference which has resulted we will shortly state. A respondent may defend himself without filing any cross objection to the extent to which decree is in his favour; however, if he proposes to attack any part of the decree he must take cross objection. The amendment inserted by 1976 amendment is clarificatory and also enabling and this may be made precise by analysing the provision. There may be three situations:- (i) The impugned decree is partly in favour of the appellant and partly in favour of the respondent; (ii) The decree is entirely in favour of the respondent though an issue has been decided against the respondent; (iii) The decree is entir....
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....n aggrieved to that extent. It follows as a necessary corollary from the abovesaid statement of law that in an appeal filed by the defendant laying challenge to the relief of compensation or refund of money or any other relief while decree for specific performance was denied to the plaintiff, the plaintiff as a respondent cannot seek the relief of specific performance of contract or modification of the impugned decree except by filing an appeal of his own or by taking cross-objection." 24. In view thereof, the Appellate Tribunal rightly came to the conclusion that defendant No.3 has no locus to maintain the appeal and that defendant No.3 has preferred appeal against the observations. In the light of the decision in Banarsi Das (supra), defendant No.3 cannot institute appeal only against the observations. 25. It is also not in dispute that charge-sheet has been filed by CBI:ACB, Mumbai against the defendant No.3 among others. It would be open to the defendant No.3 to consider filing discharge application, if so advised. However, at this stage, no case is made out for interfering with the impugned orders by which the authorities have attached the property of M/s. Skylark Buildc....
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....nce, illiteracy, inarticulation or poverty, are unable to approach the court, and a person, who has no personal agenda, or object, in relation to which, he can grind his own axe, approaches the court, then the court may examine the issue and in exceptional circumstances, even if his bonafides are doubted, but the issue raised by him, in the opinion of such court, requires consideration, the court may proceed suo motu in such respect. In our opinion, the said decision is really against defendant No.3. Defendant No.3 has not suffered any legal injury as his property is not attached. He has no right whatsoever to the property of Skylark Buildcon Pvt. Ltd., which is attached. 28. Mr. Sethna also relied upon the decision in Obulapuram Mining Company Pvt. Ltd. (supra). In that case, Writ Petition was instituted challenging the action of the authorities in lodging and enforcing of an Enforcement Case Information Report dated 22.09.2010 as also the attachment order, both provisional and final, under the provisions of the Act. The Division Bench of Karnataka High Court held that the petitioner cannot be prosecuted for the offences under Sections 120-B, 420 and 471 I.P.C. as they were not....