TaxTMI 
TaxTMI 
2019 (9) TMI 424
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....ed by the respondent. 3. FPA-PMLA-2817/2019 & 2818/2019 pertain to 65,00,000 shares sold through BSE (Respondent No.2) on 12.02.2018, sale proceeds of INR.386,10,00,261/- was frozen by Directorate of Enforcement on 13.02.2018 u/s 102 Cr PC, then on 23.03.2018 Directorate of Enforcement instructed BSE to remit INR.386,10,00,261/- (approx USD 60 million equivalent of 64,94,891 shares) to USA to purchaser (M/s PabraiInvestment Fund) andallowed remaining shares to be sold for INR.30,35,006.90 through BSE. 4. The total shares of 1,43,38,330 [78,38,330 + 65,00,000]were subscribed by the Appellants in November, 2003 by foreign inward remittances from Saudi Arabia to India through State Bank of India, Overseas Branch, New-Delhi. Approval of the Reserve Bank of India was obtained and is on record. These shares were held uninterrupted from 2003 to 2018 Jan/Feb. The PML Act, 2002 was notified on 01.07.2005. 5. The brief facts of the present matter are as follows: a) The Appellants are the foreign nationals and are residing in Saudi Arabia. b) They are importer of rice in Saudi Arabia from India for more than three decades. The imports of rice from India directly is ....
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....he Appellants are the shareholders of KRBL Ltd. since the date of the said allotment. The shareholding of the Appellantshave been duly disclosed in the annual audited accounts of KRBL Ltd. submitted every year to all the government authorities particularly because KRBL Ltd. is a listed company in the Bombay Stock Exchange and National Stock Exchange. g) The equity shares allotted to the Appellants were also listed on the trading portal of Bombay Stock Exchange as per order dated 12.10.2004 of the Stock Exchange. Copy of the order dated 12.10.2004 of the Bombay Stock Exchange is filed as Annexure M. 6. It is contended on behalf of appellants that the Enforcement Directorate after issuing instructions dated 13.02.2018 to BSE to restrain them (BSE) not to give effect to a concluded transaction No. 1718218 of 65 Lacs shares sold on 12.02.2018, thereby depriving the Appellants funds worth approx.. Rs. 386 crores and it is alleged that the said act on the part of ED was illegal. 7. On 23.03.2018, Enforcement Directorate further issued another instructions to BSE to remit these funds to the tune of Rs. 386 Croresto M/s.Pabrai Investment Fund, USA. The BSE has compiled the s....
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....that on 13.02.2018 at 5:37 pm, the Deputy Director of the Enforcement Directorate sent a communication stopping the transaction pertaining to the sale of the said shares. The said letter is relevant and is set out below: 'F.No. ECIR/15/DLZO-1/2014 Dated 13.02.2018 To, Sh. Poonam Chand BSE Ltd. (Stock Exchange) 101 , 1st Floor, Aggarwal Corporate Tower Plot No. 23, District Center, Rajendra Place, New Delhi - 110 008 Sub: Seizure/freezing of Shares of M/s KRBL Limited u/s 102 Cr.P.C. r/w section 65 r/w Sec. 2(na) of PMLA. Sir, This Directorate is conducting investigation against M/s KRBL Limited in AgustaWestland Helicopter Scam and Embraer case under the Prevention of Money Laundering Act. Investigation reveals that M/s Rawasi Al Khaleej General Trading, UAE which is controlled by promoters of M/s KRBL Limited, received Agusta kickbacks through M/s Abdulla Ali Obeid Balsharaf& Omar Ali Obeid Balasharaf. These payments were routed through shell companies. Investigation reveals that the above mentioned kickbacks (proceeds of crime) were further layered through M/s KRBL....
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....rs and 64,94,891 equity shares of KRBL Ltd. which were to be delivered to 'The Pabrai Investment Fund II LP" securities. The said email is relevant and is set out below:- 'Dear Sir, As per your telecom, we would like to inform you that, Exchange have withheld the funds and securities of the following entities for their trades executed in the scrip KRBL Ltd. (530813) on trade date 12/02/2018. Buyer Client Securities to be withheld Seller Client Funds to be withheld The Pabrai Investment Fund II LP 64,94,891 shares Abdullah Ali Balsharaf Omar Ali Obaid Balsharaf Rs. 3,86,10,00,261.00 80. It is apparent from the aforesaid email that securities due to M/s Pabrai Investment Fund and the amount due to the petitioners had been withheld. This also clearly indicates that as far as the said entities are concerned, the said transaction of sale and purchase is complete. 82. Clearly, the Deputy Director of the Enforcement Directorate had no authority whatsoever to freeze the shares, which were to be delivered in settlement to the purchaser. There was no allegation or any iota of suspicion against the purchaser who had purchased the sha....
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.... to the said securities. The petitioners were entitled to the consideration paid by M/s Pabrai Investment Fund. By directing BSE to release funds to M/s Pabrai Investment Fund, the Deputy Director of the Enforcement Directorate had proceeded further; he had interdicted the BSE from effecting the clearing and, by the letter dated 23.03.2018, the Assistant Director of the Enforcement Directorate had nullified the sale transaction that was complete. No authority for such actions can be found in section 102 Cr. PC. A police officer cannot set aside a transaction of sale and purchase of shares under the provisions of Section 102 Cr.PC. This Court pointedly asked Mr Singh, the learned counsel for the respondents as to under which authority did the Assistant Director, PMLA issue the communication dated 23.03.2018. Apart from contending that such action was bonafide, there was no explanation forthcoming as to under which provision of law, this direction had been issued. 87. Curiously, the said officer permitted BSE to let the transaction relating to 5109 equity shares go through. On 15.02.2018 the said officer sent an email to the BSE, which reads as under: ....
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....Ltd. has fallen to half the value at which they were transacted. Thus, as of today, about 190 crores of the petitioners' value in the said shares stands eroded. Thus, even if it is accepted that the respondents are ultimately entitled to confiscate the value of the amount equal to the value of proceeds of crime which are alleged to have been received by the petitioners overseas, the officers of the Enforcement Directorate by their action have effectively reduced the assets which may have been available for such seizure. 93. It is seen that orders under Section 17 of the PMLA freezing the said shares and the amount released in the bank account of the petitioners has since been passed and, the petitioners have preferred an appeal before the Appellate Tribunal. Keeping this in view, no further orders are being passed and it would be open for the petitioners to seek appropriate remedy including compensation for any loss suffered by them on account of the illegal actions on the part of the respondents. Whether the provisions of the PMLA apply to the shares of KRBL Ltd. that were acquired prior its enactment. 94. The next question to be examined is whe....
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....ector alleges to be proceeds of crime. In compliance with the aforesaid order, the Enforcement Directorate had filed an affidavit affirming the following: 'A. M/s. Agusta Westland transferred Euro 24.37 million to M/s. IDS Tunisia between 2008 to 2013. B. Further, M/s. IDS Tunisia transferred Euro 12.4 million to the accounts of M/s. Interstellar Technologies Limited, Mauritius between 2009 to2012. C. M/s. Interstellar Technologies Limited transferred USD 2,749,948 to M/s. Rawasi Al Khaleej General Trading LLC (RAKGT) in its HSBC bank account between11.10.08 to 27.01.2010. D. M/s. Interstellar Technologies Limited transferred Euro 1 million and USD 1 million to M/s. Windsor Group Holding Limited between 2009 to 2012. Out of which, USD 830,000 were transferred to M/s RAKGT between 03.02.2010 to 13.02.2010. E. M/s. Interstellar Technologies Limited transferred USD 10,000 to the accounts of M/s. Carisma Investment Limited in 2010. Whereas, USD 419,980 were transferred to M/s RAKGT between 18.04.2009 to27.02.2010 by M/s. Carisma Investment Limited. F. M/s. Interstellar Technologies Limited transferred USD 200,000 to the accounts of ....
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.... is not necessary for this Court to delve into this issue any further as the petitioners have already challenged the orders passed by the Adjudicating Authority allowing the application filed under Section 17(4) of the PMLA and extending the orders passed under Section 17(1A) of the PMLA, before the Appellate Tribunal. 104. The limited question to be addressed at this stage is whether the provisions of the PMLA are applicable to the shares in question. Mr. Bhattacharya had contended that the PMLA was enacted after the shares were purchased, therefore, the PMLA would be inapplicable to those shares." "105. This Court is of the view that the question whether the provisions of PMLA would apply would depend on the allegation made against the petitioners." 106. The expression 'proceeds of crime" has been defined under Section 2(1)(u) of PMLA as under: 'Section 2(1) (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 equivale....
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....n'ble Division Bench of the Hon'ble High Court. That is why Bombay Stock Exchange (Respondent no. 2 herein) is a necessary party before this Tribunal. The Respondent no. 1 - Directorate of Enforcement had on 13.02.2018instructed Bombay Stock Exchange (Respondent no. 2 herein) to withhold about Rs. 386 Crores of Appellants' funds and then again on 23.03.2018 instructed Bombay Stock Exchange (Respondent no. 2 herein) to part with Appellants' funds of about INR.386 Crores abroad, in violation of FEMA, 1999 and PML Act, 2002. 15. The Bombay Stock Exchange (Respondent no. 2 herein) is a necessary party in the present appeals also as reflected from averments made by Bombay Stock Exchange (Respondent no. 2 herein) in these Appeals which read, inter-alia, as follows:- Para 6 (iii). 'In the present case, the Exchange received directions dated 13.2.2018 from the Enforcement Directorate, New Delhi ('ED"), directing the Enchange in exercise of powers conferred upon Section 102 of the Code of Criminal Procedure, 1973, read with Sections 65 and 2 (na) of the Prevention of Money-Laundering Act, 2002, to withhold the pay-out of funds/securities in the scrip of KRBL Ltd for tra....
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....ime and it was ex facie erroneous. Hon'ble Court has also recorded that now ED had contended that the proceeds of crime have been received overseas, therefore, the orders freezing property in India. In fact, the ED has admitted after changing its stand before the High Court had confirmed that it is no longer shares acquired from proceed of crime. 20. The first and foremost issue in the present case is to whether 1,43,38,330 shares (78,38,330 + 65,00,000) subscribed in 2003 by foreign remittances through State Bank of India are 'proceeds of crime" under section 2(1)(u) (notified on 1.7.2005). 21. It is the admitted position that Mr. D.P. Singh, learned counsel appearing on behalf of Directorate of Enforcement has conceded before the Hon'bleSingle Judge of Delhi High Court that the shares are not proceeds of crime (para 77 of the judgment). Directorate of Enforcement now in fact shifted its earlier stand that these were acquired from proceed of crime and contended that theshares are 'equivalent" to proceeds of crime, therefore, seizure and frozen of any movable and immovable property is permissible in law as per amendment carried out in the Act. 22. It was observed by the Hi....
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....o believe that several other investors are also in a similar position of not having access to their money or having received securities. If there is any suspicion regarding the seller's bona fides, it is respectfully submitted that the buyers of shares on the floor of the exchanges should not be made to suffer and we should either be entitled to our funds or to the securities which we sought to buy. We do not simply focus on staying within the law. We strongly believe in conducting all our affairs with the highest ethical standards. On this front, I am happy to speak with or meet with anyone from the Enforcement Directorate or any other regulatory or enforcement body to provide any information transparently. I am in Mumbai until Wednesday, February 28, 2018. My India mobile is +91.97179.00029 and my email address is [email protected]. Please feel free to contact me if I can be of any service. 26. It is stated on behalf of appellants that 1,43,38,330 shares are neither 'proceeds of crime', nor equivalent to proceeds of crime u/s 2 (1) (u) of PMLA. Hence Directorate of Enforcement's action to freeze them as proceeds of crime is contrary to law on the date o....
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....rom 14.05.2015 (date of Presidential assent of the new law) these cannot become 'proceeds of crime" as that would contravene Article 20 (1) of the Constitution. 31. Mr. D.P. Singh appearing on behalf of respondent has referred the pleadings and material available on record. It is submitted by him that the investigation has revealed that proceeds of crime amounting to approx. Rs. 111 croreswere parked in the books of accounts of M/s. Rawasi Al Khaleej General Trading LLC, Dubai (RAKGT) under the head OAB-GK. The investigation has revealed that 65 transactions were made by different entities including either direct payments from M/s. Interstellar or routing by M/s. Interstellar to different entities. It is revealed that the accounts involved were used by GautamKhaitan to transfer proceeds of crime linked to the Augusta Westland helicopter case. The chart explaining the flow of money is shown by Mr. D.P. Singh. 32. It is also stated by him that the appellants in their WP (Civil) 3531/18 have taken a stand that the amount was advanced to RAKGT through the assistance of GautamKhaitan, a renowned international solicitor for purchase of rice and other material from RAGKT. However....
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.... a criminal court in connection with the offence." b) The learned Single Judge of the High Court of Delhi in 'Deputy Director Directorate of Enforcement Delhi v. Axis Bank and Others, 2019 SCC OnLine Del 7854'held the following: '171. [...] The process of attachment (leading to confiscation) of proceeds of crime under PMLA is in the nature of civil sanction which runs parallel to investigation and criminal action vis-a-vis the offence of money laundering." Thus, no question of any violation of Article 20 (1) arises in the instant case. 37. Mr. D.P. Singh hasalso referred to the following provision of Section 2(1)(u) in support of his argument: 'Proceeds of crime', as defined u/s 2(1)(u) PMLA means: a. any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence, or b. the value of any such property, or c. where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad. 38. It is stated by him that 'value of any such property' as mentioned in section 2 (1)(u) means: ....
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.... 86, 92 of the judgement dated 9.1.2019. 44. It is argued that under the direction of Directorate of Enforcement who was having knowledge about the concluded transaction directed BSE (Bombay Stock Exchange) to remit Appellant's money [about INR.386,10,00,261/-]abroad to the purchaser [Pabrai, USA]of 64,94,891 shares. The said appellants' funds to the tune of about INR.386,10,00,261/- wrongly remitted as per the direction of ED. The said instructions to remit funds abroad in flagrant violation of FEMA, 1999 and PMLA, 2002 and without any jurisdiction. The concluded transaction cannot be frustrated in this manner as these 64,94,891 shares belonged to the Purchaser [M/s Pabrai Investment Fund]. 45. The Hon'ble High Court of Delhi, at New Delhi in para-80 of the judgement passed by the Hon'ble Delhi High Court, it was observed that it was decided that the transaction between the appellant and PabraiInvestment Fund who had purchased the shares was complete contract and at the best as observed in para-82 that the officer of ED could have frozen the money which were to be paid to the appellants by BSE. It has also been noticed by the High Court that on 25.02.2019, M/s. Pabrai Invest....
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....of an offence. If the argument of the appellants i.e nonapplicability of the section 102 Cr.P.C. is to be accepted by ignoring the provisions of section 65 PMLA, it would not only encourage the deliberate failure of the appellants to join the investigations, but also frustrate the proceedings under PMLA. It is stated by the counsel that non-bailable warrants have been issued by the Special Judge, PMLA against the appellants vide order dated 04.05.2019. 52. The Directorate of Enforcement on the basis of apprehension and reason to believe is alleging that there is ledger entry in the name of Balsharafs. However, the Hon'ble High Court of Delhi has held that the Ledger entry is not property [as held by Hon'ble Single Judge of Hon'ble High Court of Delhi in para 98] and cannot be 'proceeds of crime" u/s 2 (1)(u) of PMLA. 53. The Hon'ble High Court has held that the respondent has wrongly exercised powers u/s 102 (1) Cr PC without referring them forthwith to a Magistrate u/s 102 (3), who has illegally annulled a concluded contract, and incorrected directed remittance USD 60 million abroad in violation of Section 3 (b) of FEMA, 1999, and in contravention of PML Act, 2002 without an....
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....vessel, vehicle or aircraft. 59. It is relevant to note that an order of provisional attachment or an order of seizure is not an end in itself and does not stand in isolation. The said orders are passed in aid of the provisions to confiscate properties, which are found to be proceeds of crime. 60. The scheme of seizure made under Section 102 of the Cr.P.C. is materially different. Section 102 of Cr.P.C. is set out below:- "102. Power of police officer to seize certain property. (1) Any police officer, may seize any property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offence. (2) Such police officer, if subordinate to the officer in charge of a police station, shall forthwith report the seizure to that officer. (3) Every police officer acting under sub- section (1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such 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....
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....r to provisionally attach or seize or freeze a property can be exercised only (a) if the specified officer has material in his possession, which provides him reason to believe that the property sought to be attached or seized is proceeds of crime or related to a crime; and (b) after recording the reasons in writing. 65. In the aforesaid view, the reliance placed on provisions of Section 65 of the PMLA is misplaced. By virtue of Section 65, the provisions of Cr.P.C. apply only insofar as they are not inconsistent with the provisions of the PMLA. There can be little doubt that scheme of seizure under Section 102,Cr.P.C. is inconsistent with the provisions relating to attachment and seizure of property under the PMLA. 66. What is sought to be canvassed on behalf of the Enforcement Directorate is a devised scheme under which the Enforcement Directorate refers to the provisions of Section 102(1) of Cr.P.C. for drawing the power to issue orders for immediately seizing the property on mere suspicion but at 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 w....
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....ate law is inconsistent andrepugnant, even though obedience to both laws is possible, because so long as the State law is referable to the same subject-matter as the Parliamentary law to any extent, it must give way. One test of seeing whether the subject-matter of the Parliamentary law is encroached upon is to find out whether the Parliamentary statute has adopted a plan or scheme which will be hindered and/or obstructed by giving effect to the State law. It can then be said that the State law trenches upon the Parliamentary statute. Negatively put, where Parliamentary legislation does not purport to be exhaustive or unqualified, but itself permits or recognises other laws restricting or qualifying the general provisions made in it, there can be said to be no repugnancy." 69. As is clear from the above, one of the tests for determining whether there is repugnancy between two statutes is to find out where one of the statutes has adopted a plan or a scheme, which will be hindered or obstructed 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 aforesai....
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....d inParesha G. Shah v. State of Gujarat and Ors. (supra). An order offreezing under Section 102 of Cr.P.C. cannot be considered to be in aid of order of provisional attachment passed under Section 5(1) of the PMLA or an order of seizure and/or freezing of property under Section 17(1A) of the PMLA. Both the orders under Section 5(1) and under Section 17 of the PMLA are orders of interim nature and are operative for a limited period till pending adjudication under Section 8 of the Act and further confiscation of the property. Orders of freezing of property passed under section 17(1A) of the PMLA or provisional attachment are by their nature provisional orders that require confirmation. Such powers are exercised in emergent situations warranting passing such orders. The contention that an order of provisional freezing is in aid of provisional attachment is plainly unpersuasive. 72. It is possible that prior to acquiring any material providing the Enforcement Directorate any reason to believe that 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 ....
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.... alleged to have received the alleged proceed of crime and it is unclear on what basis it is alleged that the appellants are the recipient of proceed of crime and it was held that merely on the basis of ledger entry, the same is not a property and cannot be the proceed of crime. 57. It is correct that the present proceedings are of civil nature, but culmination of these proceedings involve the party concerned to criminal liabilities as per Section-4 of PML Act, 2002, which speaks for itself. The same is reproduced below: 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 shall also be liable to fine which may extend to five lakh rupees: Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words "which may extend to seven years", the words "which may extend to ten years" had been substituted." Retrospective effect 58. It is matter ....
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....sets of the Appellants by making out a case of equivalent in value thereof. The same is endorsed by the Adjudicating Authority. For making out such a case, the ED, first of all, has to prime facie establish that the appellants have committed the offences and they have a nexus or a link in relation to criminal activities which is constituting proceeds of crime and the property constituting the value of any such property. The attached property being 'value of such property', has to have a link or nexus with the actual property derived from criminal activity and it cannot merely be a 'property equivalent in value', attachment of which is only permissible if the proceeds of crime is taken or held outside India. Such conditions are missing from the facts of the present case, nor it is the case of respondent as nothing has been even prima facie established that the appellants are involved in the money laundering. There is no material on record to show that they are ever investigated for the last many years at their Saudi Arabia. It appears that the respondent is rather insisting that they should come to India and clarify certain things. However, they have already denied all allegations a....
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.... support existing rights. 67. In the Queen v. The Inhabitants of St. Mary, Whitechapel (1848) 12 QB 120, the Court pointed out that 'The Statue which in its direct operation of prospective cannot be properly called a retrospective statute because a part of the requisites for that action is drawn from the time antecedent to its passing". 68. The fundamental rule of interpretation of statutes. Following case laws are cited:- a) Monnet Ispat and Energy Limited Versus Union of India and Others (2012) 11 SCC at page 90 paras 153 & 154 held that: '153. Having carefully considered Section 17-A, I have no hesitation in holding that the said provision is prospective. There is no indication in Section 17-A or in terms of the amending Act that by insertion of Section 17-A Parliament intended to alter the pre-existing state of affairs. Parliament does not seem to have intended by bringing in Section 17-A to undo the reservation of any mining area made by the State Government earlier thereto for exploitation in public sector. Parliament has no doubt plenary power of legislation within the field assigned to it to legislate prospectively as well as retrospectively. As earl....
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......." c) MahadeolalKanodia Versus Administrator, General of West Bengal, AIR 1960 SC 936 - para 8 [3 Judge Bench of Hon'ble Supreme Court], held that: '8. The principles that have to be applied for interpretation of statutory provisions of this nature are well-established. The first of these is that statutory provisions creating substantive rights or taking away substantive rights are ordinarily prospective; they are retrospective only if by express words or by necessary implication the legislature has made them retrospective; and the retrospective operation will be limited only to the extent to which it has been so made by express words, or necessary implication. The second rule is that the intention of the legislature has always to be gathered from the words used by it, giving to the words their plain, normal, grammatical meaning. The third rule is that if in any legislation, the general object of which is to benefit a particular class of persons, any provision is ambiguous so that it is capable of two meanings, one which would preserve the benefit and another which would take it away, the meaning which preserves it should be adopted. The fourth rule is that if t....
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....tive effect or not depends primarily on the language in which it is couched. If the language is clear and unambiguous effect will have to be given to the provision in question in accordance with its. (32) It would appear from the case law considered above that the rule of construction or interpretation is very well settled and well established that laws generally are prospective in character more particularly, law affecting vested or substantive rights or laws creating new liabilities or imposing new disabilities, unless there are express words in the statute affecting the existing rights of unless there is clear manifestation of the intention of the Legislative on the basis of which it can be said that the law is retrospective in character, and even vested rights have been taken away or new liabilities have been created or new disabilities have been imposed. There are laws and law's and cases, the real question of application of the cardinal rule of construction which is propounded and considered above. It is also well established that there is a presumption against retrospectivity and this presumption can only be rebutted by express words in the Statute or by necessary i....
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.... acquired from proceeds of crime.Thus the question of freezing the shares even equivalent in value does not arise.Even there is no material or evidence available prima facie as of today about the involvement of appellants. 74. In order to satisfy my conscious, this Tribunal,despite of above, wanted to proceed with the matter on merit of the case, though it is settled law that if the criminal liabilities of any law is involved, the sameis always perspective. There is no saving clause about the retrospective effect in the Act or the amendment carried out in year 2015. 75. 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-s....
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....ity Rule 5 of Attachment Rules, 2005: Acknowledgment of Order by the Adjudicating Authority 5. S.20(1): Outer limit of 180 days S.5(1): Outer limit of 180 days 6. S.8(3): Order by the Adjudicating Authority S. 8(3): Order by the Adjudicating Authority 7. S.8(3)(a): Retention restricted to 90 days during investigation. S.8(3)(a): Attachment restricted to 90 days during investigation. 79. Mr.D.P.Singhhas confirmed that no FIR for the alleged offence is pending against the appellants nor they are charged under the schedule offence. The appellants are not charged for an offence by any court. No prosecution complaint is filed against the appellants. The statutory period of 90 days for investigation is already expired for filing the prosecution complaint under section 8(3) (a) from the date of passing the impugned order for retention of shares. The said provisions read as under:- 'continue during investigation for a period not exceeding ninety days or the pendency of the proceedings relating to any offence under this Act before a Court under the corresponding law of any other country, before the competent Court of criminal jurisdiction outside....
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....eing held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property. (2) The Adjudicating Authority shall, after- (a) considering the reply, if any, to the notice issued under 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 subsection (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 t....
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....said action is sustainable subject to conditions stipulated in the proviso of Section 17(1) of the Act, which says that the search and seizure shall not 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 schedule 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 authorized to investigate a scheduled offence to an officer not below the rank of Additional Secretary to the Government of India or equivalent being head of the office or Ministry or Department or unit, as the case may be, or any other officer who may be authorised by the Central Government, by notification, for this purpose. In the present case, no report against the appellants has been forwarded to the Magistrate. No complaint against the appell....
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....oncerned has material in his possession who has a reason to believe that property sought to be attached or seized is proceed of crime or related to the crime irrespective as to whether complaint under the schedule offence and prosecution complaint under PMLA is filed or not against the party who has in his possession of proceeds of crime. 90. But, the situation where the investigation was being done on the basis of a mere suspicion against the party where the statute provides prescribed period of time and mandates the condition that it would continue during investigation for a period not exceeding ninety days. Having in possession of proceed of crime and period of investigation on the basis of suspicion are two different situations. 91. The law laid down earlier where the time limit was not provided may not be applicable because of change of situation by virtue of amendment which was carried on 19.4.2018, the specific period is prescribed in the Act for the purpose of investigation. 92. Earlier, no specific timeline was set to complete the investigation and to file the prosecution complaint. The mandates now is changed whereby it is mandated that the retention shall con....
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.... to receive the entire amount with interest or difference of amount as the value of the shares have gone down. Now, the question before this Tribunal is as to whether a decree for such amount can be passed in the present set of appeals. 98. One of the prayers '(A)' read as under - 'Award a decree of INR.386,10,00,261/- in favour of Appellants against Directorate of Enforcement and BSE jointly and severally, with interest @ 18% from 15.02.2018 till the date of payment" It is true that in para-86 of Hon'ble High Court judgement dated 9.1.2018 upheld by Hon'ble Division Bench of the Hon'ble High Court held that the appellants were entitled to the sale consideration paid by M/s. Pabrai Investment Fund. Learned counsel appearing on behalf of appellants argues that under Section 35(3) an order made by this Tribunal shall be executable as a decree of civil court and the Tribunal shall have all the powers of a civil court. 99. Learned senior counsel appearing on behalf of appellants argues that under Section 35(3) an order made by this Tribunal shall be executable as a decree of civil court and the Tribunal shall have all the powers of a civil court. 78. Before dealing....
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.... possession of proceed of crime, the party has not concealed the proceed of crime or has not acquired or use or projecting as untainted property and claiming thereof. Then, under these circumstances, the question of continuing offence does not arise and the retrospective effect shall apply. 105. In the facts of the present case, there is no material to show that there is any offence committed by the appellants or they are already guilty of any offence and they are keeping on contravention alive day to day. No such even prima facie averments are available, either in the reason to believe or in the pleading of the respondent. Rather, on behalf of respondent, it was submitted that let the appellants may join the investigation and they may or may not be involved in the money laundering. The appellants are foreign citizens, this Tribunal cannot observe anything on this aspect, however, one thing is that it was the duty of respondent to investigate the matter and collect the evidence. Ninety day period prescribed under Section 8(3)(a) of the Act has already expired. 106. Here is not the case where the respondent can allege that property is derived or obtained from the scheduled off....