TaxTMI 
TaxTMI 
2018 (4) TMI 600
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....in the OC. At the time of passing of the provisional attachment order, the respondent was aware that the appellant was claiming owner of the property by virtue of sale deed party who had purchased the property from third party but despite having knowledge no notice was issued by the Adjudicating Authority. No opportunity was given to the appellant to file reply, who was also not heard at the same of confirmation despite mandatory provisions. The prescribed period of 180 days under Section 5 of the Act has already expired. There is no provision in the act of review of the impugned order or the order of provisional attachment order. There is no provision in the PML Act, 2002 for extension of time after the expiry of 180 days. The present dispute in the appeal is only pertaining to above referred property. 3. It is true that if the ED and Adjudicating Authority were having no knowledge about the claim of owner of the property in question which was purchased by the appellant then no notice was required and the situation would have been different. But in the present case both authorities were fully aware all this facts and supporting documents executed in favour of the appellant but ....
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....-laundering. 5. The appellant is claiming ownership and thus an aggrieved party as the impugned order was passed against the appellant in relation to the property in question, therefore, the appeal has been filed, otherwise the respondent would take incase the possession under Section 8(4) of the Act is taken by the respondent, the appellant would be left with no remedy. The interim order in favour of appellant has already been passed in favour of the appellant. In the present appeal both parties do not dispute that with regard to other attached property. The operation of order would continue against the accuse party. 6. Facts of the Case The facts of the matter is that the Central Bureau of Investigation, New Delhi took up the investigation and registered 8 FIRs bearing Nos. RC BDI 2009 E 0001, 0002, 0005, 0006, 0008, 0009, 0010, and 0013, for commission of offences punishable under Section 120-B, r/w 420, 460 & 471 of IPC, 1860 and Section 13 of PC Act 1988 for which charge sheets have been filed under Section under Section 173 of Cr. PC 1988 against H.B. Chaturvedi, Chairman-cum-Managing Director, Amit Chaturvedi, Joint Managing Director, Sanjay Chaturvedi, Director, Su....
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.... Chaturvedi 97-D, Eastern Avenue Sainik Farms, New Delhi-110062 a. One Box marked A11 containing 25 jewellery worth Rs. 36,41,088/- as per Annexure J 36,41,088 23.06.2014 b. One Gold watch of Rolex make 22,05,000 31.07.2014 c. Innova-Reg. No. DL3CBX0843 5,54,500 05.07.2016 d. Scorpio-Reg. No. DL3CAS4213 7,07,400 -do- e. Elantra - Reg. No. DL3CBP8137 8,42,550 -do- 3. Mrs. Maharani Chaturvedi w/o Shri H.B. Chaturvedi, Mrs. Neelima Chaturved w/o Shri Amit Chaturvedi 98, Eastern Avenue Sainik Farms, New Delhi 110062 43,96,12,800 4. Sh. Sohit Chaturvedi s/o Shri Sanjay Chaturvedi, Shri Eshan Chaturvedi s/o Shri Amit Chaturvedi 97-D, Eastern Avenue Sainik Farms, New Delhi 110062 5. Shamken Cotsyn Limited (SCL) a. A/c No. 20342000000359 HDFC Bank, B 6/3, Safdarjung Enclave, New Delhi-59 8,23,893.35 02.04.2016 b. A/c No. 05032320000593 9,715.03 05.05.2016 6. Shamken Multifab Ltd. Shamken House, B-1/A-20, Mohan Coop....
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....w Delhi 78,905 06.05.2016 C A/c No. 18250310018606 of UCO Bank, Ferozeshah Road, New Delhi 1,51,900 06.05.2016 D A/c No. 18250310018637 of UCO Bank, Ferozeshah Road, New Delhi 1,55,702 06.05.2016 E A/c No. 18250310018651 of UCO Bank, Ferozeshah Road, New Delhi 1,38,206 06.05.2016 F A/c No. 18250310026496 of UCO Bank, Ferozeshah Road, New Delhi 74,092 06.05.2016 G A/c No. 18250310026502 of UCO Bank, Ferozeshah Road, New Delhi 74,095 06.05.2016 H A/c No. 18250310026519 of UCO Bank, Ferozeshah Road, New Delhi 74,094 06.05.2016 I A/c No. 18250310026526 of UCO Bank, Ferozeshah Road, New Delhi 74,093 06.05.2016 J A/c No. 18250310026533 of UCO Bank, Ferozeshah Road, New Delhi 74,095 06.05.2016 K A/c No. 18250310026540 of UCO Bank, Ferozeshah Road, New Delhi 74,092 06.05.2016 L A/c No. 18250310026557 of UCO Bank, Ferozeshah Road, New Delhi 74,095 06.05.2016 ....
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....t of the said property has been passed without even affording an opportunity of hearing to the appellant. 10. The Adjudicating Authority by impugned order has affirmed the order of provisional attachment bearing No. 7/2016 dated 15.09.2016, passed by the Directorate of Enforcement. The appellant is aggrieved by the said orders to the extent about the attachment of property bearing No. B-1/A-20 Mohan Cooperative Industrial Estate, Mathura Road, New Delhi- 110 044 (hereinafter referred to as "the said property") which property was purchased for valuable consideration. The challenge in the present appeal is limited to only that extent. 11. It is alleged by the appellant that the Ld. Adjudicating Authority has erred in passing of the impugned order and the same is in violation of the principles of natural justice as the same has been passed without affording an opportunity of being heard to the appellant, whose rights are adversely affected by the said impugned order. The said impugned order is thus liable to be set aside to the extent it adversely affects the rights of the appellant. 12. It is not denied by the respondent that the factum of the sale of the said property ha....
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.... also handed over to M/s. Arindam Sekhar Garments Marketing Pvt. Ltd. by virtue of the said Agreement to Sell. Copy of the registered Agreement to Sell dated 05.09.2011 has been filed as ANNEXURE-A6 alongwith the appeal. 15. Thereafter, M/s. Shamken Multifab Ltd. got converted the leasehold rights in respect of the said property into freehold in its own name, from the President of India, through Delhi Development Authority, vide Conveyance Deed dated 30.10.2012, duly registered as Document No. 22100, in Addl. Book No. I, Volume No. 4575, on pages 128 to 130, on 31.10.2012, in the office of the sub-Registrar-VII, New Delhi. Copy of the Conveyance Deed dated 30.10.2012 is filed as ANNEXURE-A7. 16. After the conversion of the said property from leasehold to freehold was communicated by M/s. Shamken Multifab Ltd. to M/s. Arindam Sekhar Garments Marketing Pvt. Ltd. with whom the registered Agreement to Sell dated 01.09.2011 had been executed. On receipt of the said information, M/s. Arindam Sekhar Garments Marketing Pvt. Ltd. approached the Appellant herein for the sale of the said property as pleaded. 17. It is the case of the appellant that prior to entering into the Sale Dee....
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....rty which was owned by M/s. Shamken Multifab Ltd. 20. The appellant, on visiting the sub-Registrar‟s office after a couple of days to collect the original of the registered sale deed, they refused to provide the same. On making enquiries, the Appellant was informed that the sub-Registrar‟s office has received a letter dated 10.10.2013 from the office of the Directorate of Enforcement informing the sub-Registrar that the said property was the subject matter of investigation under the provisions of the Act and it was requested to not register any document pertaining to transfer of the said property. Copy of the letter dated 10.10.2013 is filed as ANNEXURE-A10. 21. It is alleged by the appellant that the sub-Registrar refused to give the copy of the registered sale deed to the Appellant and informed it that the same would be provided only pursuant to receipt of a clearance from the office of the Directorate of Enforcement. The appellant thereafter visited the office of the Directorate of Enforcement and made enquiries. The appellant was informed that an investigation against Shamken Group of Companies and its Directors was underway and the said property in questio....
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....firmation of order, it was learn that an order dated 15/09/2016 was passed by the Deputy Director, Directorate of Enforcement under Section 5 of the PMLA directing provisional attachment of the said property. copy of the said order dated 15.09.2016 passed by the Deputy Director, Directorate of Enforcement. 24. After passing the impugned order dated 17.02.2017, the Directorate of Enforcement calling upon M/s. Shamken Multifab Ltd. to vacate and handover possession of the said property to the Directorate of Enforcement within a period of 10 days of the said notice. The said notice along with the impugned order and order dated 15.09.2016 came to the knowledge of the appellant only on 01.03.2017 and thereafter aggrieved by the said impugned order and notice under Section 8(4), the appellant has filed the present appeal before us. 25. In order to understand that the brief chronological description of the transfer of the title of the said property over the years is as under:- 04.05.1978 A perpetual lease dated 04.05.1978 was executed in favour of Mr. O.P. Gupta with respect to the said property. 04.11.1992 Vide a GPA dated 04.11.1992 the said property was purchase....
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.... letter was issued to sub-Registrar not to register sale deed in favour of the appellant and on the other hand, no notice was issued to the appellant which was mandatory under the law. 27. Counsel for the respondent has not denied the fact about the nonissuance of notice under Section 8(1) of the PML Act, 2002. He says that it was not necessary to issue the same as the appellant was not the legal owner/joint owner of the said property. 28. He admits that the prescribed period of 180 days are already expired under Section 5 of the Act. It was not denied by him that M/s. Shamken Multifab Ltd. had originally purchased the property in 1992 when the present Act was not in extentance. Even no notice under Section 8(1) was issued to Arindam Sekhar Garment who purchased the property at the first instant from Shamken on 05.09.2011. When the documents were confronted to him, it is admitted by him that ED and Adjudicating Authority were fully aware about the transfer of title of the property but no notice was issued as it was not required. It is also not denied by the counsel that the amount paid by the appellant was tainted. It is not denied by him that there is no provision of review ....
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....In the present matter, the appellant had the interest in the matter, who had paid the entire consideration in legal means. The appellant has no relation directly or indirectly with Shamken. The appellant is not involved in any complaint and under the schedule offence nor under the PML Act, 2002. The property in question was purchased by the Shamken in 1992. There are no allegation by the respondent that when it was purchased, it was from proceed of crime. The schedule offence was added on 01.06.2009. When the Shamken purchased the property in 1992, the Act does not exist. ED and Adjudicating Authority were fully aware about the statement recorded under Section 50 of the Act which would indicate that the appellant had claimed the ownership of the property. The first proviso of Section 8(1) is a mandatory provision as the property in question was held by the appellant at the time of passing the provisional attachment as well as at the time of confirmation of order. However, no notice was issued. No opportunity of being heard was given to the Appellant under Section 8(2) of the PMLA even though the property in question has been duly purchased by the Appellant. This fact was brou....
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....s 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). 37. The provisions of Section 8, (1), (2) & 3 have to be read harmoniously and a holistic view has to be taken to interpret these provisions correctly. While Section 8(1) speaks of issue of show cause notice to the persons alleged to have committed an offence under Section (3) and to joint holders of the property and on whose behalf the property is held by some other person, Section 8(2) read with its proviso speaks of Principles of Natural Justice to be followed in the form of considering the reply to the show cause notice, hearing the aggrieved persons and the complainant and also hearing any person other than a person to whom the notice has been issued, who claims a right in the property and Section 3 provides for passing an order in writing regarding confirmation of attachment. 38. This scheme of law has no scope for segregating the proviso of Section 8(1) and Section 8(2). The noticees as well as any other person who claims a right in the property has to be heard before a final....
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....ng committed alleged financial frauds by having availed bank loans and having utilized the funds for purposes other than those for which the said loans had been availed during the period 1998 - 2003. However while appreciating the above facts the Ld. Adjudicating Authority failed to understand that it is evident from the GPA dated 04.11.1992 that the said property was transferred to M/s Shamken Multifab Ltd. in the year 1992 which evidently is not only much prior to the alleged transactions but is even prior to the PMLA Act being enacted and therefore, the said property cannot be said to a "proceed of crime" by any stretch of imagination. 42. It is mandatory that the property sought to be attached is one, which the concerned officer has reason to believe is the proceeds of a scheduled crime. Secondly, a provisional attachment under Section 5 is only in aid of adjudication under Section 8(2) of the Act, which may result in the Adjudicating Authority recording a finding that the property concerned is involved in money-laundering; therefore, it is also necessary that an offence of money-laundering is believed to have been committed and the same bears a live link with the property s....