TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 223
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....TS - Valued at Rs. 91,21,627/-), Gold Jewellery & Coins (8233.400 gms Net Wt - Valued at Rs. 2,06,08,396/-), Documents and Pen-drive. 3. The Respondent issued Summons dated 11th August, 2017, 18th August, 2017 and 29th August, 2017 to Mr. Iqbal Mubarak seeking various details from him, some of which pertained to the Appellant. These summons were addressed to Mr. Iqbal Mubarak, a shareholder holding less than 1% shares of the Appellant Company and served at the address of the Appellant. It is stated by the Appellant that as Mr. Iqbal Mubarak, is only a minor shareholder in the Appellant Company with a shareholding of less than 1% and is an NRI residing in Dubai, he is not at all conversant with the day-to-day affairs of the Appellant and had no access to and/or communication with the Directors of the Appellant as well as the Appellant's financials/accounts. He was, therefore, in no position to comply with the aforesaid summons, as well as to furnish relevant particulars in relation to the Appellant or the seized goods. It is submitted on his behalf that the aforesaid summons were issued under the erroneous belief that the said Mr. Iqbal Mubarak is a director of the Appellant, while....
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....'s shop "Ahmed Joo" situated at 13 Ormiston Road, Apollo Bundar, Colaba, Mumbai (hereinafter referred to as "the said Shop"). b) At the outset, it is pertinent to note that there is neither any allegation against the Company nor any case is made out against the Company, to whom the said Goods belong. Mr. Iqbal Mubarak is neither a Director of the Company nor is he running the said Shop. As may be clearly inferred from the aforesaid, investigations have been initiated against Mr. Iqbal Mubarak's relative Mr. Mohammad Hussain on the basis that Mr. Mohammad Hussain helped one Hassan Ali Khan to handle certain financial transactions and that Mr. Mohammed Hussain used to visit the said Shop of the Company. c) Apparently the said Goods have been seized on an erroneous basis that Mr. Iqbal Mubarak is a Director of the Company and he is running the said Shop, which he is not. Mr. Iqbal Mubarak is an ordinary shareholder of the Company more than 5% share herein. The Company's records duly supported by records maintained by the MCA evidence that the Company has only two Directors viz., Mr. Habib Ullah Khanyari and Mr. Mohammad Rafiq Hakim. d) Further, admittedly the said Goods ....
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....continues to cause grave prejudice to the business and revenues of the Company. Accordingly, it is submitted that the further retention of the said Goods as sought vide the Application will cause serious prejudice to the Company on account of its stock-in-trade being seized, more so when no justification for the 'further' retention thereof has been given anywhere in the said Application. i) Moreover, it bears mentioning that on the basis of the seizure, none of the Directors/Shareholders were present at the said shop premises of the Company. In so far as this Application is concerned, there is no charge or allegation against any of the two Directors of the Company. Thus, the allegation proceeds purely on the wrongful basis of Mr. Iqbal Mubarak being a Director of the Company and his relationship with his estranged brother-inlaw. It is humbly submitted that such misconceived and erroneous grounds do not entitle the concerned authorities to carry out a seizure owing to the lack of legitimacy in their 'reasons to believe'. j) In support of the above, reliance is placed on the judgement of the Hon'ble Supreme Court in the case of Aslam Mohammad Merchant V. Competent Authority (20....
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.... (hereinafter referred to as "the Rules") stipulate that a seizure memo has to be issued in the prescribed format prior to seizing any property under Section 17 of the PMLA. I further submit that the Schedule to the Seizure Memo annexed at page 18 of the Application does not include any of the items of jewellery and precious stones that were seized. I respectfully submit that a seizure made in contravention of the procedure as postulated under the PMLA read with the Rules applicable thereto stands invalid. Accordingly, the question of further retention of seized goods does not arise at all in view of the invalidity of the seizure at the outset. o) In view of the above, it is humbly prayed that the Application dated 08.09.2017, in so far as it seeks to further retain the said Goods owned by the Company, be dismissed and the said Goods owned by the Company, be ordered to be released forthwith as each day of delay is causing grave harm, loss and injury to the Company. All pleas raised in the reply have not been dealt in the impugned order. On the basis of apprehension, the retaining was continued. 6. The Appellant denies all the allegations and contentions in the Reply. Mr. Iqbal ....