TaxTMI 
TaxTMI 
2018 (7) TMI 1223
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....0/- crore. The Adjudicating Authority shall also decide all other pleas raised by the appellant in her pleadings. 12. In the light of the above, the impugned order is set aside and the matter is remanded back to the Adjudicating Authority for deciding the matter afresh by way of a speaking order which shall disclose findings on all the issues raised by the appellant including the one mentioned in para above. Parties to appear before the Adjudicating Authority on 28.07.2017 who shall deliver the order within 3-4 months from date of our order after hearing the parties. In view of serious issues involved, we direct that the bench of Adjudicating Authority shall consist of Chairman and two Members including Member (Legal). 13. As far as appeal no. FPA-PMLA-588/BNG/2014, wherein it was challenged the issue of notice without assigning any reason, the appellant is allowed to raise the said issue also before the Adjudicating Authority which shall be considered on merit." 3. The facts are recorded in para-3A(i) to (x) in our order dated 22.06.2017, the same are reproduced hereunder:- (i) That, the Appellant herein was the erstwhile Director of one company called M/s Kapila Manjush....
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....nd order dated 24.02.2014. (viii) That, the appellant had filed her reply before the Adjudicating Authority and argued the matter both on merit of the case as well as on the show cause notice issued by the Adjudicating Authority. (ix) That, the appellant has also preferred an appeal bearing no. 588/2014 before this Tribunal challenging the order dated 24.02.2014 as well as the show cause notice issued to her and the same is pending. (x) That, in the meantime Adjudicating Authority pronounced the order in OC No. 263 Of 2014 on 31.07.2014 confirming the PAO bearing no. 1 of 2014 attaching Rs. 70 lakh in the account of appellant in Federal Bank, RT Nagar Branch, Bangalore, which is impugned, in the present appeal. 4. The main grounds taken in the said appeal no. 588/2015 in para - 3B(i)(viii), the same are reproduced hereunder:- (i) that the Adjudicating Authority has not complied with the requirement of section 8(1) of the PMLA and there is gross violation of Article 14 of the constitution and the principal of natural justice. (ii) That, this case does not come within the schedule offence in regard to section 2(y)(ii) of the said Act. (iii) That, PAO does not satisfy the....
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....on 60." 6. We have heard learned counsel for both parties. 7. The appellant name was not arrayed in the FIR nor any chargesheet is filed against her under the scheduled offence. 8. The alleged Accused No. 1 and Accused No. 8 in FIR 57/2010 resulting in the charge sheet numbered as SPL CC 135/2011, i.e. Mr. Katta Subramanaya Naidu and M. Gopi who challenged FIR 57/2010resulting in charge sheet numbered as SPL CC 135/2011 before the Hon'ble High Court of Karnataka in Criminal RP 432/2013 and CrIP 2313/2016 respectively. The Hon'ble High Court of Karnataka by a common order dt. 03.11.2016 allowed Criminal RP 432/2013 and CrlP 2313/2016 and quashed FIR 57/2010 resulting in charge sheet numbered as SPL CC 135/2011, as against Mr. Katta Subramanaya Naidu and M. Gopi. The prosecution has challenged the order of the Hon'ble Court of Karnataka in Criminal RP 432/2013 and CrlP 2313/2016 before the Hon'ble Supreme Court in SLP (Crl) 1192- 1193/2017. Notice is ordered in the said matters. She is not or party in the said proceedings. 9. Admittedly in paragraph 3.4 and 4 of the impugned order the Adjudicating Authority has recorded that as per the complaint filed by the Respondent herein on....
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....sued by the Adjudicating Authority has given a complete go bye to the procedure as contemplated under the Act and for the same is highly illegal without authority of law and is liable to be set-aside. 15. It is submitted that the language of the order dt: 24/02/2014 produced at ANNEXURE 'A-9' and the notice produced at ANNEXURE 'A-3' issued by the Adjudicating Authority is not in confirmity with the requirement stipulated under section 8(1) of the Act and pre-suppose the guilt of the Appellant. The Adjudicating Authority has refused to furnish reasons, even after the Appellant conformed to the Adjudicating Authority's authority by appearing before it and requesting it for providing reasons for issuance of the notice under section 8 (1), demonstrates the lack of judicial accountability by the Adjudicating Authority and is against the principles of audi alteram partem. 16. Before passing the provisional attachment orders on 11.11.2013, the appellant statement under Section 50(2) of PMLA was recorded, the same are reproduced below:- 3.5.4. Defendant Smt. Shobha Karandlaje in her statement dated 11.11.2013 recorded under the provisions of Section 50(2) of PMLA, Confirmed the rec....
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....o arrange for funds for her company and in that regards she was making enquiries with her colleagues and friends. At that point of time Sri. Katta Subramanya Naidu, who was acquainted with the Appellant offered to help the Appellant and handed over to the Appellant a cheque for Rs. 70 lakhs dt: 31/05/2007 drawn from the account of M/s Indu Builders in Karnataka Bank, Indiranagar, Branch, Bangalore. The said cheque was given by Sri Katta Subramanya Naidu stating that the same was issued from his son Katta Jagadish company's account. 20. The said cheque was enchased by the Appellant into her account in Federal Bank, RT Nagar Branch, Bangalore bearing No. 14720100008074 on 01/06/2007. Subsequent to the encashment of the said cheque the Appellant paid a sum of Rs. 64,56,000/- to M/s Aravind Fashions on behalf of her company on 04/06/2007 and advanced a sum of Rs. 5,00,000/- to her company on 07/06/2007. 21. In the meantime M/s Kapila Manjushri Apparels Pvt Ltd had applied to SBI, Indiranagar branch, Bangalore for working capital loan to a tune of Rs. 80 lakhs and an overdraft account was sanctioned by SBI on 16/07/2007 with a limit of Rs. 80 lakhs. Pursuant to sanction of the overdra....
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.... the fact that Sri. B.L Venkataiah @ Venkaiah's in his statement dt: 09/06/2014 has stated that Rs. 70 lakhs went to the Appellant from Rs. 104,18,55,950/- crore in the account of M/s Indu Builders and even according to the allegations in the complaint a sum of approximately 19 crore in the account of M/s Indu Builders would constitute clean money. 29. The adjudicating authority has not given any reasons as to how it arrived at the conclusion that Rs. 70 lakhs received by the Appellant herein from the account of M/s Indu Builders as loan from Sri. Katta Subramanya Naidu has not come from clean and legitimate source and has come from Rs. 85,28,63,700/- classified as proceeds of crime in para 6(c) of the complaint. 30. There is no clear and cogent evidence is available on record even prima facie about the allegations against the Appellant of receiving proceeds of crime is not made out and requirement of section 5(1) of PMLA was not satisfied. (I) The first requirement of the section 5(1) is regarding being in possession of proceeds of crime on the date of the provisional attachment, i.e. 24/01/2014. 31. As already mentioned, the appellant is not arrayed as an accused in FIR, no cri....