TaxTMI 
TaxTMI 
2019 (6) TMI 1074
X X X X Extracts X X X X
X X X X Extracts X X X X
....dred Only). On merit the case of the appellant is that the appellant had withdrawn the sum of about Rs. 15,000,00/- (Rupee Fifteen Lakh) in the month of September and October in 2017 from the bank. No prosecution complaint has been filed against the appellant by the respondent under section 8(3)(a) of the Act. It is admitted that no prosecution complaint is pending against the appellant nor the charge sheet has been filed. Let the written synopsis be filed by the respondent. Both the parties are allowed to file the written synopsis within two weeks from today. The learned counsel for the Chandrakant Patel states that money seized from Shri Ashok Patel does not belong to him. Order reserved. " 3. The facts of the case are that the Anti Corruption Branch of Central Bureau of Investigation (CBI), Mumbai registered a case dated 16.02.2017 against Sh. Ashok Kumar Dhabhai, Dy. General Manager, Regional Office, Union Bank of India, Samachar Marg, Opp. Stock Exchange, Mumbai, Shiva Shankara Rao, Astt. General Manager & Branch Manager, Union Bank of India, Zaveri Bazar Branch, Mumbai, Sh. Rakesh Natrwarlal Patel, Prop. Of M/s Pihu Gold, Zaveri Bazar, Mumbai, Shri Deepak....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d hidden the incriminating documents pertaining to the sale of fold bullion as well as cash at room No. 9, Building No.19, 3rd Phopalwadi, Bhuleshwar Road, Bhuleshwar, Mumbai- 400002. 9. The said premise was searched on 13.10.2017 under section 17 of the PMLA, 2002 under the reasonable belief that the said premises is in possession of records relating to proceedings of case pertaining to money laundering under PMLA, 2002. 10. During the course of search of the premise, where it found that one Angadia/Courier firm by Name P. Vijaykumar & Co. was functioning from the said premise. Further during the search India Currency amounting to Rs. 14,75,200/- was seized under reasonable belief that the said property is involved in money laundering. Mr. Jignesh Patel who is one of the partner of M/s P. Vijay Kumar & Co. and was present during the search, could not give any satisfactory explanation regarding the source of the said Indian Currency. 11. Further the statement of other partner Mr. Ashok Patel of M/s P. Vijaykuamr & co. was recorded on 16.10.2017, wherein it is alleged that he is in the business of transfer of money through un-official channels, without reflecting bank accou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....herefore, earlier orders passed before amendment have no application. 19. The relevant provisions are reproduced in order to understand the issued in hand: 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 exercisin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Adjudicating Authority in a sealed envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such 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.]. 20. Section 18 of PMLA, 2002 reads as under: "18. Search of persons. - (1) If an authority, authorised in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earch, forthwith discharge such person but otherwise shall direct that search be made. (6) Before making the search under subsection (1) or sub-section (5) the authority shall call upon two or more persons to attend 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. 21. 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 un....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (4) The Adjudicating Authority, before authorising the retention or continuation of freezing of such records beyond the period specified in sub-section (1), shall satisfy himself that the records are required for the purposes of adjudication under section 8. (5) After passing of an order of confiscation [or 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. ] 23. It is clear from the reading of Sections 17 to 21 that outer limit upto the date for deciding the application for retention of property within the meaning of sub-section 4 of Section 21 is 180 days from th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Authority shall, after- (a) considering the reply, if any, to the notice issued u nder sub-section (1); (b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf; and (c) taking into account all relevant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are involved in money-laundering: Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money laundering. (3) Where the Adjudicating Authority decides under subsection (2) that any property is involved in moneylaundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of Section 5 or retention of property or record seized or frozen under Section 17 or Section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property or record shall- (a) c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h that it cannot be conveniently transported to the Court, he may give custody thereof to any person on his executing a bond undertaking to produce the property before the Court as and when required and to give effect to the further orders of the Court as to the disposal of the same." 61. It is clear from the plain reading of Section 102 Cr.P.C. that any police officer may seize the property, which may be alleged or suspected to have been stolen or which is found in circumstances which create suspicion of the commission of any offence. However, the said order of seizure is only a temporary order and in terms of subsection (3) of Section 102 of Cr.P.C., the police officer seizing any property on the grounds of suspicion of an offence is required to forthwith report the seizure to the Magistrate having jurisdiction. 62. The said property seized is required to be produced before a Court and/or reported to a Magistrate. In such cases, the court would have the power to pass necessary orders with regard to the said property. In terms of Section 457 of the Cr.P.C., whenever a property is seized by any police officer and is reported to the Magistrate, the Magistrate is em....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the same time ignores the provisions of Section 102(3) of Cr.PC which requires such seizure to be reported to a Magistrate. There is clearly no principle of law that would permit such interpretation, where officers can draw the power under a statute and yet not be accountable for the checks and balances enacted therein. 67. Mr Singh had contended on behalf of the Enforcement Directorate that the PMLA does not contain any provision regarding seizure on mere suspicion, therefore the power to make such seizure can be drawn from Section 102 of Cr.P.C. He contended that the provisions of Section 102(1) of Cr.P.C. are, therefore, not inconsistent with the provisions of the PMLA with regard to seizure of property. The said contention is unmerited. The question whether an enactment is repugnant to another is not determined on whether two provisions can be simultaneously obeyed but is determined in the context of the scheme of the legislative enactment. The question to be asked is whether the schemes of the two enactments can subsist and be implemented simultaneously. It is apparent that the scheme of effecting provisional attachment and seizure of property under the PML....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tructed by giving effect to the other statute. This principle to determine whether there is repugnancy between two enactments is of universal application. If one applies the aforesaid test, it is at once clear that the PMLA has set out a separate scheme with a separate set of safeguards for ensuring that properties of parties are not attached or seized without the authorities effecting such actions having reason to believe that such properties are proceeds of crime or are related to a crime. 70. If the contention as advanced on behalf of the Enforcement Directorate is accepted, it would mean that whereas the property cannot be provisionally attached under Section 5(1) of the PMLA and/or seized or frozen under Section 17 of the PMLA without (a) the Director having a reason to believe, on the basis of material available with him, that the properties are proceeds of crime and (b) recording such reasons in writing; the same officer can on mere suspicion pass orders for freezing the properties without recording reasons. Further, there are strict timelines provided under the PMLA. The orders of provisional attachment and/or seizure and/or freezing cannot extend beyond the period....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at any property is a proceed of crime, the concerned officers may entertain a suspicion that property in question represents proceeds of crime; but that does not entitle them to freeze the property, interdict transactions and perhaps bring a person's business to a standstill. The nature of the power of seizure contemplated under the provisions of Cr.P.C. is drastic and exercise of such powers is likely to have severe adverse effects on the person concerned; thus, the parliament in its wisdom did not confer upon the Enforcement Directorate, any powers to attach or freeze assets on a mere suspicion. 73. The learned counsel appearing for the Enforcement Directorate has also referred to the decision of the Supreme Court in V.T. Khanzode and Ors. v. Reserve Bank of India and Anr.: (1982) 2 SCC The said decision has no application in the facts of the present case. In that case, the petitioners had challenged the circular issued by the Reserve Bank of India whereby it had decided to combine the seniority of all officers. The petitioners had contended that such conditions of service could not be framed by administrative circulars but necessitated framing Regulations under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....herefore, criminal complaint before court for punishing offence u/s 3 & 4 of PMLA has to be by way of a complaint in writing by the Director or any other officer authorized by the Central/State Government. g) Section 44(1)(b) of PMLA underwent an amendment where the words "upon perusal of police report of the case(s) which constitute an offence" was deleted and thus by deletion, it is clear that cognizance of offence u/s 3 PMLA can be taken only upon a complaint in writing and not on a Police report, i.e. charge sheet filed by Police u/s 173(5) Cr.PC. PMLA does not define "complaint" but "complaint" is defined under Section 2(d) Cr.PC as allegation made orally or written to be Magistrate for taking action against the persons who have committed the offence. 29. PMLA is a Special Act. The provisions of the said Act are mandatory. They have to be applied as it. Being an independent Act, no different meaning can be given. They have to be interpreted as it is. 30. It is correct that the power to attach or seize or freeze a property can be exercised only if the officer concerned has material in his possession who has a reason to believe that property sought to be attached ....