TaxTMI 
TaxTMI 
2019 (5) TMI 472
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....peal No. 2215/2016 filed by R.B. Prajapati. 4. The brief facts as per the appellant R.P. Prajapati are given as under: a) FIR No. RC. 08(A)/2017-AC. III was registered by CBI/ACCIII/ New Delhi on 30.08.2017 u/s 13(2) r/w section 13(1)(d) of Prevention of Corruption Act, 1988 and Section 120B of the Indian Penal Code, 1860. In the said FIR, allegations were raised against the Sterling Group of Companies comprising of M/s Sterling Biotech Limited, M/s Sterling International Enterprises Limited, M/s PMT Machine Tools Ltd., M/s Sterling Oil Resources Ltd., M/s Sterling Port Ltd. etc. and against Mr. Nitin Jayanti Lal Sandesara and his brother Mr. Chetan Jayanti Lal Sandesara being part of the promoters‟ group. b). In the FIR, Income Tax Department had on 28.06.2011, conducted searches u/s 132 of the Income Tax Act, 1961 covering 25 premises of the abovementioned group entities at Mumbai, Vadodara and Ooty. During the course of search, certain incriminating material including one diary of 2011 was found and seized. This diary contained certain transactions relating to the public servants for the period from 01.01.2011 to 28.06.2011. c). It was alleged in the FIR that Sandes....
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....op/hard disc till finalization of the case holding that: i) the OA has rightly been filed by the Joint Director as he had authorised the Assistant Director to search, ii) FIR and the OA prima facie reveal that the scheduled offences are committed and there is a laundering of proceeds of crime. Ongoing investigation is justified in view of the serious allegations leveled against the principal offenders. Hence, there is no justification in demanding back the seized documents and digital evidences. It is only upon scrutiny of material, it will be known as to whether material seized is in any way relevant to and connected with proceeds of crime. iii) as per the provisions of section 21(2), respondent is entitled to have copies of seized material including mirror/dummy images contained in the devices, iv) the nature of document and material as to whether those are of personal nature or otherwise, can be appreciated only after its complete scrutiny by DE, v) it is not in doubt that "Angadia Service" is a permissible activity, however it needs to be seen that such service is not exploited or misused for money laundering, vi) the proceeding at present is in the form of OA. As o....
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....that: a) There is no FIR against the appellant. b) No charge sheet c) No prosecution complaint even after expiry of prescribed period. 9. Section 17 of PMLA, 2002 reads as under: "17 Search and seizure. -(1) Where [the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section,] on the basis of information in his possession, has reason to believe (the reason for such belief to be recorded in writing) that any person - (i) has committed any act which constitutes money-laundering, or (ii) is in possession of any proceeds of crime involved in money-laundering, or (iii) is in possession of any records relating to money-laundering, (or) (iv) is in possession of any property related to crime] then, subject to the rules made in this behalf, he may authorize any officer subordinate to him to - (a) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such records or proceeds of crime are kept; (b) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not avail....
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.... reason and material for such period, as may be prescribed. (3) Where an authority upon information obtained during survey under section 16, is satisfied that an evidence shall be or is likely to be concealed or tampered with, he may, for reasons to be recorded in writing, enter and search the building or place where such evidence is located and seize that evidence. Provided that no authorization referred to in subsection (1) shall be required for search under this subsection. (4) The authority seizing any record or property under sub-Section (1) or freezing any record or property under sub-Section (1A) shall, within a period of thirty days from such seizure or freezing, as the case may be, file an application, requesting for retention of such record or property seized under sub-Section (1) or for continuation of the order of freezing served under sub- Section (1A), before the Adjudicating Authority.]. 10. Section 18 of PMLA, 2002 reads as under: "18. Search of persons. - (1) If an authority, authorised in this behalf by the Central Government by general or special order, has reason to believe (the reason for such belief to be recorded in writing) that any person has sec....
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....end and witness the search, and the search shall be made in the presence of such persons. (7) The authority shall prepare a list of record or property seized in the course of the search and obtain the signatures of the witnesses on the list. (8) No female shall be searched by any one except a female. (9) The Authority shall record the statement of the person searched under sub-section (1) or sub-section (5) in respect of the records or proceeds of crime found or seized in the course of the search:18 [***] (10) The authority seizing any record or property under sub-section (1) shall, within a period of thirty days from such seizure, file an application requesting for retention of such record or property, before the Adjudicating Authority. 11. Sub-section (1), (2) and (3) of Section 20 read as under:- 20. Retention of property.- (1) Where any property has been seized under section 17 or section 18 or frozen under sub-Section (1A) of Section 17 and the officer authorised by the Director in this behalf has, on the basis of material in his possession, reason to believe (the reason for such belief to be recorded by him in writing) that such property is required to be retaine....
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....r release under subsection (5) or sub-section (6) or sub-section (7) of section 8 or section 58B or sub-section (2A) of section 60] , the Adjudicating Authority shall direct the release of the records to the person from whom such records were seized. (6) Where an order releasing the records has been made by the Court [Adjudicating Authority under section (5) of section 21] the Director or any other officer authorised by him in this behalf may withhold the release of any such record for a period of ninety days from the date of (receipt of] such order, if he is of the opinion that such record is relevant for the appeal proceedings under this Act. ] 13. It is settled law that a particular thing is to be done in a particular manner, it must be done in that way and none other. Reliance in this regard is also placed on a judgements of Hon‟ble Supreme Court in the cases of Dipak Babaria and another vs. State of Gujarat 2014 (3) SCC 502 and J. Jayalalitha & Anr vs State of Karnataka & Ors 2014 (2) SCC 401. 14. Sub-section (1) of Section 17 provides that the authorised officer has to record the reason to believe in writing. In such reason to believe, he has also to record the basi....
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....officer authorised if where it is found that it is not practicable to seize such property, can make such order that the person concerned shall not transfer or deal with the said property prior to the permission of the officer authorised. A copy of the said order shall be served upon the person concerned. Section 17, Sub-section (2) stipulates that after search and seizure, the authorised officer shall immediately forward a copy of the reason so recorded along with the material in his possession to the Adjudicating Authority in a sealed cover. 18. The authorised officer is to follow the following steps after search and seizure or frozen of any property, any action taken under Section 17(2) or 17(1A) - i) the first one is that in case the authority seizes any record or material under sub-section (1) or sub-section (1A) of Section-17, the authorized officer shall within a period of thirty days from the date of seizure or frozen can file the application requesting for retention of such property. ii) Secondly, sub-section (1) of Section 20 mandates that where any property has been seized under Section 17 or Section 18 or frozen under sub-section (1A) of Section17, the officer aut....