TaxTMI 
TaxTMI 
2019 (6) TMI 842
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....unt no.501000161891914 with HDFC Bank Ltd, Vasant Square Mall, Delhi. 2. The case of the appellant on merits is that, the appellant‟s husband, Sh. Ranjit Malik joind Delhi Nagrik Sahkari Bank Ltd. as Driver, and drew a salary of Rs. 30,352/-(Rupees Thirty Thousand Three Hundred and Fifty Two Only) per month. The appellant‟s husband worked with Delhi Nagrik Sahkari Bank Ltd. till May 2015, but his services officially ended in May 2017. 3. In November 2012, the appellant married Sh. Ranjit Malik. In the year 2015, the Appellant‟s husband commenced working under Sh. Gagan Dhawan and continued to be employed with him till August 2017. It is alleged that her husband job was for carrying and delivering printing material against a monthly remuneration. 4. On 30.08.2017, the Central Bureau of Investigation (CBI) registered FIR being RC No. 08(A)/2017-AC III, for the alleged commission of offences u/s 13(2) r/w 13(1)(d). The same was purportedly based on search operations carried out by the Income Tax Department on 28.06.2011 at various premises of M/s Sterling Biotech Limited. Admittedly, neither the Appellant nor her husband were named as accused in the FI....
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....sband before a Magistrate within 24 hours of arrest and it shows the malafide with which the Enforcement Directorate has been operating, whose sole attempt has been to harass the Appellants family. 10. It is also alleged by the appellant in the grounds of appeal that during the illegal custody of the Appellant‟s husband by the Enforcement Directorate, he was asked to explain the sources of his income vis a vis his and the Appellant‟s Bank accounts. The appellant‟s husband requested the officials of the Enforcement Directorate for some time to furnish the same and that he would furnish the some time to furnish the same and that he would furnish the same upon his release on bail, as the Bank accounts relate to a period of 6 years and it would be impossible for him to give exact details of the same immediately. It is further alleged that the Appellant‟s husband was at that point of time in no state of mind to immediately recapitulate exact details of the Accounts, as he feared for his life and safety, having been illegally detained by the Officials of the Enforcement Directorate. It is also stated that the appellant was not called to the office of the Enforc....
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....(c) seize any record or property found as a result of such search; (d) place marks of identification on such record or [property, if required or] make or cause to be made extracts or copies therefrom; (e) make a note or an inventory of such record or property; (f) examine on oath any person, who is found to be in possession or control of any record or property, in respect of all matters relevant for the purposes of any investigation under this Act: [Provided that no search shall be conducted unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 157 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or in cases where such report is not required to be forwarded, a similar report of information received or otherwise has been submitted by an officer authorised to investigate a scheduled offence to an officer not below the rank of Additional Secretary to the Government of India or equivalent being h....
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....on for such belief to be recorded in writing) that any person has secreted about his person or in anything under his possession, ownership or control, any record or proceeds of crime which may be useful for or relevant to any proceedings under this Act, he may search that person and seize such record or property which may be useful for or relevant to any proceedings under this Act: [Provided that no search of any person shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be.] (2) The authority, who has been authorised under sub-section (1) shall, immediately after search and seizure, forward a copy of the reasons so recorded along with 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 reasons and materi....
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.... 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 retained for the purposes of adjudication under section 8, such property may, if seized be retained or if frozen, may continue to remain frozen, for a period not exceeding one hundred and eighty days from the day on which such property was seized or frozen, as the case may be. (2) The officer authorized by the Director shall, immediately after he has passed an order for retention or continuation of freezing of the property for purposes of adjudication under section 8, forward a copy of the order along with the material in his possession, referred to in sub-section (1), to the Adjudicating Authority, in a sealed cover, 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) On the expiry of the period specified in sub-section (1), the property shall be returned to the person from whom such property was seized or whose property was ordered to be frozen unless the Adjudicating Authority permits retention or continuation o....
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....n concerned/aggrieved party of such order, is entitled to file the appeal under Section 26 of the Act. The same shall be heard and after giving an opportunity of being heard, the appellant Tribunal shall pass the order either to confirm the order of retention or to modify or setting aside the same. 21. Where the Adjudicating Authority decides by an order confirm the retention under Sub-section (1) of Section 17 or Section 18 for the purpose of continuation during investigation for a period not exceeding ninety days under this Act before the Competent Court, or under the corresponding law of any other countries as the case may be under Subsection (3) (a) of Section 8 may take necessary action within the time prescribed. In failure to do so under this Act, all the proceedings, seizures/frozen under Section 17 would be lapsed ipso facto. 22. Section 8 of the PMLA provides for procedure for adjudication by the Adjudicating Authority. The relevant extract of Section 8 of the PMLA is set out below:- "8. Adjudication.- (1) On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub-section (10) of Secti....
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....ings 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 (2-A) of section 60 by the Special Court. 23. The Hon‟ble High of Delhi in its Order dated 9th January, 2019 has rendered the detailed judgement in the case of "Omar Ali Obaid etc. vs. ED‟ has discussed the entire scheme of seizure made under Section- 102 of Cr. P.C. The relevant paras 58 to 74 are read as under:- '58. In terms of Section 73 of the PMLA, the Central Government is empowered to make rules for carrying out the provisions of the PMLA. In exercise of such powers, the Central Government has notified the Prevention of Money- Laundering (Forms, Search and Seizure or Freezing and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the Period of Retention) Rules, 2005. Rule 4 of the said Rules also provides for the procedure related to f....
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.... the delivery of such property to the person entitled to the possession thereof. In cases where such person cannot be ascertained, the Magistrate can pass orders in respect of the custody and production of such property. 63. It is at once clear that scheme of seizure, including the checks and balances in exercise of such power, as contemplated under the Cr.P.C. is wholly inconsistent with the scheme of the provisions under the PMLA. 64. Powers of seizure of properties is a draconian power. Grant of such authoritarian and drastic powers, without commensurate checks and balances, would militate against the principle of rule of law engrafted in the constitution of India. A police officer does not possess unfettered rights to freeze any asset without the same being reported immediately to a Magistrate. The party aggrieved, thus, has immediate recourse in respect of the said action of freezing the property. As observed above, the scheme of provisional attachment or seizure of a property, as contemplated under the provisions of the PMLA is materially different. The PMLA has separate checks and balances to ensure that such powers are exercised in aid of the obje....
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....oventive Industries Ltd. v. ICICI Bank and Anr.: (2018) 1 SCC 407, the Supreme Court had examined the question of repugnancy between two enactments, namely, the Maharashtra Relief Undertakings (Special Provisions Act), 1958 and the Insolvency and Bankruptcy Code, 2016 in the perspective of the Constitution of India. The Supreme Court had referred to various decisions and culled out the principles with regard to repugnancy between two enactments. Although the decision was rendered in an altogether different context - whether the provisions of the central legislation would override a state enactment - the principles of inconsistency between two enactments as noticed by the Supreme Court would be equally applicable to determine whether the provisions of Section 102 Cr.P.C. are inconsistent with the provisions of the PMLA. In that case, the Supreme Court has referred to various decisions to set out the principles on the anvil of which the question whether two enactments are inconsistent are to be tested. In the aforesaid context, the Supreme Court had, inter alia, observed as under:- "51.7. Though there may be no direct conflict, a State law may be inoperative because....
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....y him) is required to file a complaint by seeking extension of the period of retention from the adjudicating authority within a period of thirty days from passing such order. However, this safeguard would also be rendered meaningless if the Enforcement Directorate‟s contention is to be accepted; the Directorate could - as has been done in this case - freeze the assets without recording reasons and without making any application or complaint to the Adjudicating Authority. This Court is unable to accept that even in cases where the Director of the Enforcement Directorate has reasons to believe that the property is proceeds of crime, he can provisionally attach the same only for a period of one hundred and eighty days, but in cases where he has mere suspicion that the property in question is proceeds of crime, he can without recording any reasons, without issuance of any notice and without any obligation to make a complaint/ application in this regard to the Adjudicating Authority, pass an order freezing the property for an indeterminate period. This interpretation would militate against the scheme of the PMLA as enacted by the Parliament. 71. With much respect....
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....t repelled the said contention and held that under Section 7(2) of the Act, the Central Board had the power to provide for service conditions of the bank staff by issuing administrative circulars as long as they did not impinge upon the Regulations made under Section 58 of the said Act. The power of an employer to fix service conditions cannot be equated to police powers. 74. In view of the above, the contention that officers of the Enforcement Directorate could issue orders of freezing under Section of Cr.P.C. is rejected and the communications issued by the Enforcement Directorate to BSE are, plainly, without authority of law." 24. Scheme of Section 8(3) of PMLA a) Section 8(3)(a) of PMLA, originally provided that confirmation of attachment by Adjudicating Authority would continue during the pendency of proceedings relating to scheduled offence before a court and becomes final after guilt of person is proved in the trial court in the said scheduled offence. Thus, finality of attachment even after confirmation by Adjudicating Authority was dependent upon the pendency of proceedings relating to scheduled offence and achieving finality of judgement in s....