TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 962
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.... and fixed deposits; (ii) to defreeze debit transactions in the Fixed Deposits accounts ; and (iii) to defreeze debit transactions in the current account held in the name of 'Kodai Woodhouse - A unit of Advantage Strategic Consulting Private Limited'. 2.1 The petitioner filed W.P. No. 29506 of 2018 laying challenge to the Provisional Attachment Order No. 9/2018 having Ref. No. ECIR/07/HIU/2017, dated 10-10-2018 passed by the second respondent under Section 5(1) of the Prevention of Money Laundering Act, 2002, attaching their assets worth Rs. 31.55 Crores on the ground of lack of jurisdiction, illegal and vitiated by the vice of mala fides and perversity. 2.2 W.P. No. 32558 of 2018 has been instituted praying to quash the Complaint dated 26-10-2018 in Provisional Attachment Order No. 09/2018, dated 10-10-2018 in ECIR/07/HIU/2017 filed before the second respondent by the first respondent in exercise of powers conferred under Section 5(5) of the Prevention of Money Laundering Act, 2002 (PMLA) seeking an order for confirmation of the said Provisional Attachment Order under Section 8(3) of the said Act, wherein, a direction was issued to the....
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.... approval and the said fallacious proposal was favourably considered and approved by the then Finance Minister. The FIR points Mr. Karti P. Chidambaram and INX Media Private Limited as the conspirators to scuttle the probe by the Income Tax Department. (v) It is also alleged that for the services rendered to INX Group by Mr. Karti, the petitioner raised invoices approximately for an amount of Rs. 3.5 crores, as Mr. Karti had sustainable interest in the petitioner company, which he controls indirectly. A sum of Rs. 10,00,000/- was paid by the INX Media favouring the petitioner for the consultancy charges towards FIPB notification and clarification, which, according to the FIR, is the illegal gratification payable to Mr. Karti. (vi) Based on the said FIR registered by the CBI, on 18-5-2017 the ED registered an Enforcement Case Information Report (ECIR) No. ECIR/07/HIU/2017 alleging commission of offence under Section 3 of the PMLA punishable under Section 4 of the said Act. During the course of investigation, ED recorded a statement under Section 50 of the PMLA from one Indrani Mukherjea, who had deposed that Mr. Karti demanded 1 Million US Dol....
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....t to permit debit transactions, which were subsequently clarified to permit all types of transactions in savings and current accounts and restriction was imposed only with regard to the fixed deposit accounts. 4.3 The letters sent by the Directorate of Enforcement is only not to permit the petitioner to debit any money from the account without obtaining prior permission of the respondent, as the investigation, including through digital evidence, revealed the relationship between the petitioner and Mr. Karti. Even those letters got merged with the subsequent PAO. 4.4 It is stated that the Money Laundering is a continuous offence. 4.5 It is denied that the statement of Mrs. Indrani is the basis of passing the PAO order and on the other hand, it is stated that the attachment order has been passed on the basis of the investigation conducted by the ED authorities. A few of the facts revealed during the course of investigation and the materials came to light have been narrated in those counters. 4.6 The PAO is valid for a period of 180 days and within a period of 30 days of passing such order, the concerned authority has to forward the complaint under Section 5(5....
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....eds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed : Provided that no such order of attachment 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 that Schedule, before a Magistrate or Court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country : Provided further that, notwithstanding anything contained in clause (b), any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believ....
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....crores, whereas, the value of the property attached is only Rs. 54.03 crores. Admittedly, a show cause notice was also issued in Section 8 proceedings by the Adjudicating Authority. 11. It is the contention of the Learned Counsel for the petitioner that the authority contemplated under the Act, namely, the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, should conduct a search, as mandated under Section 17 of the PMLA, and also should have "reason to believe" that the person whose premises is subjected to search is involved in money laundering, which should be recorded in writing, to pass an order freezing the accounts. According to the Learned Counsel for the petitioner, the absence of search and failure to furnish such reasons to the affected persons are procedural irregularities, which would only render the order freezing the accounts illegal. 12. The further contention of the Learned Counsel for the petitioner is that at the time of the alleged commission of the offences under Sections 120B and 420 IPC in the year 2008, those offences were not included in the schedule to the PMLA and they were i....
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....e ED authorities have deliberately deleted certain contradictory portions in the evidence of one Chand Ratan Agarwal, which were mentioned in the PAO dated 10-10-2018, while making the complaint under Section 8(1) of the PMLA to the Adjudicating Authority and such conduct shows the mala fide exercise of power warranting interference from this Court at this stage itself. 16. At this juncture, it is reliably learnt that pursuant to the complaint filed under Section 5(5) of the PMLA, the PAO has been confirmed by the Adjudicating Authority. Thus, the PAO having been confirmed by the Adjudicating Authority on 29-3-2019, the same has to be challenged before the Appellate Tribunal. 17. Though the expression 'continuing offence' is not defined in the PMLA, whether a particular offence is a continuing one or not depends upon the nature of offence and the purpose intended to be achieved. The concept of continuing offence is keeping the offence alive day by day without wiping the original guilt. Thus, there is an ingredient of continuance of the offence in continuing offence. Therefore, the contention of the petitioner that the second proviso to Section 5(1) is only prospective a....