TaxTMI 
TaxTMI 
2014 (3) TMI 1118
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....39;NMCE') against suspected persons including the appellant. Sections 420, 467, 471 read with 120(B) of IPC being scheduled offences in terms of Section 2(y) of the PMLA, the respondent registered a case No. ECIR/02/AZO/2013 on 30.01.2013 for further enquiry in the suspected offence of money laundering in terms of PMLA, 2002. It had been revealed that the appellant had committed gross financial irregularities while being at the helm of affairs of NMCE by cheating and defrauding to the tune of Rs. 28.80 crores. 3. Thereafter, a charge sheet under Section 173 of Cr.P.C. No. 19/2013 dated 24.06.2013 has also been filed before the Court of Addl. Chief Metropolitan Magistrate, Ghee Kanta, Ahmedabad City by the Police authorities charging nine accused including Appellant under Sections 406, 409, 420, 467, 468, 471, 477(A), read with 120(B) of IPC. 4. The respondent also contended that Forward Markets Commission (in short "FMC") had also conducted an enquiry on the basis of a complaint dated 28.11.2010 into the allegation of trading irregularities and abuse of position in the NMCE by M/s. Neptune Overseas Ltd. (in short "NOL") having its office at 1, 4th Floor, H.K. House, Ashra....
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....rs of ATSPL. Shri Yogesh Vinod Chandra Shah was the Director of ATSPL who resigned w.e.f. 19.11.2007. He is an employee of NMCE. Shri Vijay Mohan Mehrishi, Shri Samar Hemant Kumar Dave and Smt. Preetika Godiwala are the present surviving Directors of ATSPL. Smt. Prakashba Chudasama and Smt. Ushaben Goswami are the wives of the employees of NMCE, who have been inducted as joint shareholders with Shri Samar Dave and Smt. Preetika Godiwala respectively. NMCE is a Commodities Futures Exchange which is an association recognized under Section 6 of the Forward Contracts (Regulations) Act, 1952 and registered with and regulated by the Forward Markets Commission (in short "the FMC"), Govt. of India. M/s. Neptune Overseas Ltd. (in short "NOL") having its office at 1, 4th Floor, H.K. House, Ashram Road, Ahmedabad-380 009 is the anchor promoter of NMCE and the Appellant was the Managing Director and Chairman of NOL. 6. The main accused of the case Mr. Kailash Ramkishan Gupta/Appellant was the MD and CEO in the said company from the year 2003 to May 2010 and later on EVC till 26.02.2011 as well as holding another company named M/s. NOL. The allegation is that he was transferring the money fr....
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....hall be in the Form as appended to these rules and the appeal shall be in quadruplicate and accompanied by four copies of the order appealed against. (2) At the time of filing, every appeal shall be accompanied with an amount of fee as given in the Table below, in the form of demand draft payable in favor of the Registrar, Appellate Tribunal, New Delhi. The appeal is to be filed with the copy of the order appealed against. The copy of the order appealed against has not been filed. If an oral order was passed by the Adjudicating Authority, still it was incumbent upon the appellant to write down the alleged order and to file the copy of the same, as the rule contemplates filing a copy of the order appealed from. In the appeal it is alleged that the application has been rejected by an oral order, but it has not even been stated as to what 'word' or 'words' or 'sentence' was used by the learned Adjudicating Authority. This has not been denied that when the order was passed on the application of the appellant, his counsel was present. An application can be rejected by stating 'rejected'; 'dismissed'; 'not maintainable'; 'de....
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.... officer authorized by the Chairperson of the Adjudicating Authority. (c) The officers supervising inspection may, at any time, prohibit further inspection if in his opinion any of the records are likely to be damaged in the process of inspection. The Appellant has not inspected the record of the Adjudicating Authority. In order to allege that no written order has been passed by the Adjudicating Authority, the Appellant should have inspected the record. If a procedure has been prescribed by the statutory Rules or Regulations, the Appellant cannot be allowed to circumvent the rules and adopt his own procedure. 12. Similarly, for obtaining a certified copy of the order passed by the Adjudicating Authority, regulation in Chapter VIII lays down a categorical and specific procedure. For obtaining a certified copy, an application is to be filed in the prescribed Form No. 10 by the party along with the required copying fee in the form of demand draft drawn in favor of Administrative Officer payable at the place of the Bench of the Authority. The relevant Regulation 26 and 27 are as under: 26. An application for a copy shall be filed in the prescribed Form No. 10 by....
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....ation despite the categorical regulations for obtaining the certified copy and not doing the inspection of the record shows that the whole attempt of the Appellant is to blame the Adjudicating Authority and to delay the disposal of the proceedings under section 8 of Prevention of Money Laundering Act, 2002 which proceedings are to be decided within time prescribed in the Act. Therefore an appeal filed by the Appellant without the certified copy of the impugned order, without applying for the same, cannot be entertained and such an appeal filed by the Appellant is liable to be dismissed. The procedure adopted by the appellant, in the circumstances, is not sustainable in law. A new procedure has been devised and adopted by the appellant which is contrary to the regulations and the rules for filing the appeal before the Appellate Tribunal. In these circumstances, the appeal is liable to be dismissed. 16. The learned counsel for the respondent has alleged that an appeal against an order dismissing the application under section 11 of PMLA shall not be maintainable under section 26 of the Act. He has placed reliance on Rule 2 (g) of The Prevention of Money Laundering (Appeal) Rules, 2....
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....iberty to raise this grievance in the event it is aggrieved by the final order to be passed by Adjudicating Authority under PMLA. With the aforesaid observations, present writ petition and applications are disposed of. 6....... 7....... 8. We have however invited the attention of the senior counsel for the appellant to Cooper Engineering Ltd. Vs. P.P. Mundhe (1975) 2 SCC 661 laying down that there is no justification for a party to stall the final adjudication of the dispute by questioning the decision on preliminary issues and to S.K. Verma Vs. Mahesh Chandra (1983) 4 SCC 214 deprecating the practice of raising preliminary issues/objections, to delay and defeat adjudication on merits and to D.P. Maheshwari Vs. Delhi Administration (1983) 4 SCC 293 also laying down that all issues whether preliminary or otherwise should be decided together so as to rule out the possibility of any litigation at interlocutory stage. Attention of the senior counsel for the appellants is also invited to National Council for Cement & Building Materials Vs. State of Haryana (1996) 3 SCC 206 noticing the appalling situation created due to challenge to the decision on pr....
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....on 11 of the Act as in case this Tribunal holds that the Appellant is not entitled to summon the record, in that case this order shall be binding on the Adjudicating Authority and the appellant shall not be entitled for any relief in this regard. The counsel for the Appellant had however, contended that the Appellant shall take his chance and in these circumstances, this Tribunal while holding that the appeal is liable to be dismissed on the grounds as enumerated hereinabove, has proceeded to decide whether the appellant is entitled for the relief as sought in his application under section 11 of the Act. 21. Though the proceedings for attachment are preliminary in nature, however, the power has been given to the Adjudicating Authority under section 11 and to this Tribunal under section 35 of the Act to summon the records and examine the witnesses. At the same time it is to be remembered that the attachment proceedings are not final proceedings as contemplated under section 3 & 4 of the Act, pursuant to which an accused can be convicted for laundering of money and his properties can also be forfeited. Section 11 of the Act grants power to the Adjudicating Authority for summoning,....
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..... The appellant may have some rights in M/s. Neptune Overseas Limited but it has not been shown as to how the appellant can claim release of attachment of the shares of the company M/s. Neptune Overseas Limited. Nothing has been produced by the appellant to show that he has been authorized by M/s. Neptune Overseas Limited to contest and plead the case on behalf of said company or challenge the attachment of shares or to challenge alleged order of Adjudicating Authority dated 27th January, 2014 allegedly declining the request to summon the record. 23. This is not disputed that pursuant to order dated 18th October, 2013 an original complaint being 225 of 2013 was filed by the respondent not only against the appellant but also against M/s. Neptune Overseas Limited. In the present appeal M/s. Neptune Overseas Limited has not been impleaded as a party. If a complaint has been filed by respondent, Enforcement Directorate against the appellant and another independent entity which is another defendant, whether another defendant M/s. Neptune Overseas Limited will be a necessary party or not and in the absence of the necessary party, whether this appeal can succeed or the appellant will b....
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....at is to be seen is whether in the absence of such a person, there is a possibility of conflicting orders being passed by the Authorities. The only reason which makes it necessary to make a person or legal entity a party to a proceeding is that he should be bound by the result of the action and the question to be settled. The question to be settled must be a question in the action which cannot be effectually and completely settled unless such a person or legal entity is a party. A line has been drawn on a wider construction of the rights of the parties and their direct interest or the legal interest and commercial interest. It is, therefore, necessary that the person or legal entity must be directly or legally interested in the action, i.e., he can say that the litigation may lead to a result which will affect him legally that is by curtailing his legal rights. Applying these principles, it is inevitable to infer that the Company whose shares have been attached and which is a defendant in the complaint pending before the Adjudicating Authority, is a necessary party and in its absence the Appeal will not be competent. Any finding by this Tribunal whether the appellant is entitled to....
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....d file the appeal through the person authorized. However, the person authorized cannot file the appeal in his name claiming himself to be the managing director or authorized representative of the company. 28. Perusal of the application filed before the Adjudicating Authority also reveals that though the title discloses the name of M/s. Neptune Overseas Limited, however, the application is categorically on behalf of Shri Kailash Ramkishan Gupta/Appellant. The application is also signed only by the counsel for the applicant. The allegations made in the application have neither been verified or supported by any affidavit of authorized person. Thus perusal of the application under section 11 of the PMLA reveals that it was filed by Shri Kailash Ramkishan Gupta/Appellant and not by M/s. Neptune Overseas Limited whose shares have been attached. The annexure which has been annexed with the application allegedly state about the documents which are to be summoned without giving the exact particulars of the documents and specifying the relevancy of those documents except making generic averments. The applicant was required to be specific before invoking the jurisdiction of the Adjudicatin....
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....al (Civil) No. 7497 of 2012 titled as Anil Kumar Mishra Vs. M/s. Neptune Overseas Limited & another holding that the operation of the High Court order dated 9th February, 2012 shall remain stayed and the order dated 23rd July, 2011 passed by Forward Markets Commission will be restored. However, any decision or action shall be subject to final decision of the special leave petition. Consequently, the order of Division Bench of Hon'ble Gujarat High Court that the M/s. Neptune Overseas Limited shall be entitled for some of the documents subject to payment of usual charges has also been stayed. An order which has been stayed by the Hon'ble Supreme Court cannot be allowed to be circumvented by filing the application by appellant before the Adjudicating Authority seeking production of same documents. The learned counsel for the appellant Mr. V. Datar, Advocate though very emphatically contended that order dated 9th February, 2012 has not been stayed in totality by Hon'ble Supreme Court as the order regarding the supply of the copies of some the documents was a consent order. To buttress his point, the learned counsel has produced the copy of SLP No. 10225-10227 of 2012 and re....
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....nces, the appellant cannot be permitted to seek production of all the documents as has been alleged in the annexure annexed with the application. The documents whose production has been sought by the appellant before the Adjudicating Authority in his application shown in Annexure A areas under: ANNEXURE-A List of Documents to be summoned From various departments/entities Note A: Annexures referred to in the letter of Anil Mishra, MD & CEO of NMCE dated 30.01.2013 (Page 18 SCN) not attached with the SCN. 34. In the application and the annexures annexed with the application seeking summoning and production of documents, the applicant/Appellant has not even mentioned about the documents which admittedly had been received by him which fact had not been disputed by the appellant before the Hon'ble Gujrat High Court. 35. The plea raised by the learned counsel for the Appellant, Mr. V. Datar, Advocate that the order of Hon'ble Division Bench of Gujarat High Court dated 9th February, 2012 regarding getting the copies of the documents has not been stayed by Hon'ble Supreme Court is contrary to the plea taken by the appellant in his lette....
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.... Court on 22nd March, 2012 was passed or even thereafter as according to the learned counsel for the appellant the said order regarding getting the copies of the documents has not been stayed. 37. Perusal of documents whose summoning or production is prayed by the appellant also reveals that the particulars given are not complete and on the basis of the information given by the appellant neither it could be inferred that they are relevant nor they can be summon easily nor the direction could be given by the Adjudicating Authority to concern authorities to produce the documents whose production is sought by the appellant. The prayer of the Appellant is liable to be declined also on this ground. 38. The learned counsel for the appellant in our opinion has also not been able to show as to how these documents whose summoning/production has been sought will be relevant to show the source of investment for acquiring the shares by M/s. Neptune Overseas Limited which have been attached. Since the appellant and others have been accused of scheduled offence and the respondent has 'Reasons to believe' and the Adjudicating Authority also has reasons to believe before issuing noti....
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....y the appellant in his defense that in respect of FIR for the commission of offence, further investigation has been ordered by the learned Magistrate would also not entitle him to summon the documents as alleged by him. Whatsoever is the relevance of such further investigation has to be canvassed before Adjudicating Authority. The Appellant, however, could not contend that he would not file the reply to the notice under section 8(1) of PMLA unless he gets the copies of the documents whose production was sought in the application under section 11 of PMLA. 40. The learned counsel for the respondent had very vehemently argued that if the record sought to be summoned and produced by the appellant is allowed, the proceedings may not be completed within 180 days leading to the lapse of provisional attachment order. The point which may arise for consideration in such circumstances is whether this time can be extended or not. In the present case this will only be for the academic purpose because admittedly 180 days have not yet expired. Whether the time of 180 days can be extended or the time taken by the Adjudicating Authority in summoning the record or to do anything in discharge of i....
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....y of payments/2002 - Invoices of Mantissa from 2011 NMCE as well as ATSPL Parties who are signatories to the balance sheets and annual reports Observations in due diligence reports Whether the decisions regarding inquiry and interim orders were made by then Chairman FMC Mr. Khatua unilaterally or by all three members of the commission collectively? Payments were recd by Mantissa from ATSPL also. (ED / NMCE) 5. Details of invoices /2002- payments to Netlink from 2011 NMCE and from ATSPL (NMCE) 6. All correspondences from NMCE to ED from March 2014 7. 8. 9. 2013 onwards as well as dispatch register (ED / NMCE) Original copy of the allegedly forged Agreements pertaining to software development (ED) 2013- a. Agenda notes, action 2001 - taken report and minutes 2013 of the board meetings as well as subcommittee meetings of NMCE b. Notices and minutes of the Annual General Meeting (AGM) and Extraordinary General Meeting (EGM) of NMCE c. Attendance registers of a. and b. above (ED/NMCE) Minutes of the b....