TaxTMI 
TaxTMI 
2019 (1) TMI 189
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....ubstances Act, 1985), Jalandhar in respect of FIR No.18 dated 4.6.2009 registered under Sections 21 and 25 of Narcotic Drugs and Psychotropic Substances Act, 1985 (hereinafter referred to as 'the NDPS Act') wherein it was alleged that Navdeep Singh and Pal Singh (since deceased) had been found in illegal possession of 95 grams of 'heroin' which was recovered from the vehicle in which they were travelling together on 4.6.2009. An amount of Rs. 9 lacs was also recovered from underneath the rear seat of the vehicle, which had been kept in a bag. However, the third accused accompanying Navdeep Singh and Pal Singh managed to escape from the spot. 3. On the next day i.e. on 5.6.2009, the third accused namely Sarabjit Singh, who had run away from the spot, was arrested on the basis of secret information and who upon interrogation disclosed that he had kept concealed 'heroin' and led the police party to the disclosed place from where 4 kgs. of 'heroin' was recovered. The learned Special Court, Jalandhar vide its judgment dated 12.6.2018, sentenced Navdeep Singh to undergo rigorous imprisonment for one year and to pay fine amounting to Rs. 25,000/- while attributing recovery of 95 grams ....
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....etitioner Navdeep Singh and Sarabjit Singh in the Court of Special Judge (PMLA), Jalandhar with a prayer for trying the accused for having committed offence under Section 3 of the PMLA punishable under Section 4 of the PMLA and also for confiscation of the amount of Rs. 9 lacs, which stood attached. The learned Special Judge (PMLA), Jalandhar, upon finding that a prima facie case was made out against both the accused for offence under Section 3 punishable under Section 4 of the PMLA, summoned the accused vide impugned order dated 16.1.2017 (Annexure P-8). 6. The learned counsel for the petitioner, while assailing the compaint as well as the summoning order, has submitted that the Directorate of Enforcement has proceeded against the petitioner in a hurried manner by filing the complaint, which is solely based on attachment order dated 18.3.2016 (Annexure P-4) and confirmation order dated 8.7.2016 (Annexure P-5), which infact have not attained finality inasmuch as appeal against the said confirmation order is still pending before the Appellate Authority. The learned counsel has also submitted that the complaint had been filed while concealing the aforesaid material fact regarding ....
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....th the "proceeds of crime" whether concealment, possession, use etc. shall be guilty of offence of money laundering. Before proceeding further, it is apposite to refer to some of the relevant provisions of PMLA, which read as follows:- "2(u):- "Proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property (or where such property is taken or held outside the country, then the property equivalent in value held within the country)." 3. Offence of money-laundering:- Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the (proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming) it as untainted property shall be guilty of offence of money-laundering. 4. Punishment for money-laundering:- Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and sh....
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....r attachment under sub-section (1), forward a copy of the order, alongwith the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed. (3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation. For the purposes of this sub-section, person interested, in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority....
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....etention or freezing of the seized or frozen property or record shall (a) continue during the pendency of the proceedings relating to any offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and (b) become final after an order of confiscation is passed under sub-section (5) or sub-section (7) of section 8 or section 58 B or sub-section (2A) of section 60 by the Special Court (4) Where the provisional order of attachment made under sub-section (1) of section 5 has been confirmed under sub-section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the property attached under section 5 or frozen under sub-section (1A) of section 17, in such manner as may be prescribed: Provided that if it is not practicable to take possession of a property frozen under sub-section (1A) of section 17, the order of confiscation shall have the same effect as if the property had been taken possession of. (5) Where on conclusion of a trial of an offence under this Act, the Special Court fi....
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.... (ii) The provisional order of attachment is forwarded to 'Adjudicating Authority' for confirmation. (iii) Simultaneously, a complaint is also required to be filed in terms of provisions of section 5(5) of PMLA before the 'Adjudicating Authority' within 30 days of passing of order of provisional attachment. (iv) The Adjudicating Authority, on receipt of complaint under Sub- Section (5) of Section 5 of PMLA, if having reason to believe that any person has committed an offence under Section 3 of the PMLA or is in possession of proceeds of crime, is required to issue notice on the said complaint calling upon such person to indicate his sources of his income, earning or assets to justify his possession of attached property, and to show as to why, the property in issue ought not to be declared as one involved in money-laundering and be not confiscated. (v) If the Adjudicating Authority comes to a conclusion that the property in issue is involved in money-laundering, he is required to confirm the provisional attachment in terms of provisions of Section 8(3) of PMLA. (vi) Upon passing of order u/s 8(3) for confirmation of attachment, ....
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.... concealed, transferred or dealt with in any manner which may result in frustrating proceedings relating to confiscation of 'proceeds of crime', he may proceed to attach the property in question. In fact it is in anticipation of prosecution that attachment proceedings are initiated. 16. The second proviso to Section 5(1), when read alongwith first proviso, would itself make it clear that attachmant or pendency of attachment proceedings would not affect filing of a complaint under PMLA. While the first proviso to Section 5(1) envisages the provisional attachment being made simultaneously with the filing of the challan in the criminal Court for offences under Sections 3 and 4 of PMLA, the second proviso carves out an exception by providing that in case the Director or any other authorised officer has reason to believe that if such property involved in moneylaundering is not attached immediately the non-attachment of the property is likely to frustrate any proceeding under this Act, the attachment may be made prior to initiation of criminal proceedings. 17. While proceedings under Sections 5 and 8 of PMLA are conducted by Enforcement Authorities, a complaint for offence ....
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....itioner and the complaint can not be quashed at the threshold on the basis of the aforesaid defence. 21. Although, it has been vehemently argued by learned counsel for the petitioner that the complaint dated 16.1.2017 (Annexure P-7) is based solely on the order of attachment and order of confirmation but a perusal of the complaint shows that it is not solely on the basis of the attachment order that the complaint has been filed but the entire facts have been noticed in complaint. So much so, even the statement of the petitioner Navdeep Singh recorded in terms of Section 50 of the PMLA Act on 10.12.2015, 23.12.2015 and 13.1.2016 and also of the co-accused Sarabjit Singh on 8.3.2016 and 10.3.2016 have been referred to apart from the documents furnished by the accused in the shape of bank statements and Income Tax Returns (ITRs). 22. As regards the judgment cited by the learned counsel for the petitioner i.e. Devinderpal Singh Bhullar's case(supra), there is certainly no dispute as regards the proposition of law laid therein to the effect that if initial action is not in consonance with law all subsequent and consequential proceedings would be non-est. However, the present case ....