TaxTMI 
TaxTMI 
2020 (11) TMI 667
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....PM informed this Tribunal about the aforesaid order/direction of the Hon‟ble Patna High Court. On getting the same, on 25.06.2020, the Registry of this Tribunal was directed to issue notice to both the parties to remain present on 10.07.2020 for hearing of the appeals. None appeared for the appellants on 10.07.2020 but a letter seeking adjournment was received from the learned counsel for the appellants and on his request the matters got adjourned time-to-time on 07.08.2020, 01.09.2020 & 07.09.2020 on the grounds reflected in the respective orders. The appeals were posted on 14.09.2020 for physical hearing on the request of the learned counsel for the appellants. The physical hearing of the appeals could not be taken up on 14.09.2020 as there was no Coram due to the fact that one of the personal staff attached to the Acting Chairman tested Covid-19 positive and the matter was adjourned to 28.09.2020 on which date the appeals were heard on merit. These appeals have been filed against the order dated 30.05.2018 passed by the Adjudicating Authority, PMLA, in O.C. No.873/2018 confirming the Provisional Attachment Order (PAO) No.01/2018 dated 01.01.2018 issued under Section 5(1....
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....otal amounting to Rs. 1,84,154/-. (iv) Khata No.(not mentioned), Plot No.4446, Thana No.14, Tauzi No.2724, Sheet No.42, Ward No.13, Holding No.74/81, Jamabandi No.196, Area 1.404 Dismal alongwith house & wall, District Registry Office-Munger, Bihar purchased vide Sale Deed No.3444 dated 11.11.2011 for a consideration amount of Rs. 7,51,000/- with charges of Stamp Duty-Rs. 60,180/- Reg. & other fees-Rs. 16,142/-, total amounting to Rs. 8,27,322/-. (v) Plot No.8949, Thana No.25, Jagdishpur Tauzi No.2618, Sheet No.81, Area 1.20 Dismal alongwith house, District Registry Office-Munger, Bihar purchased vide Sale Deed No.1242 dated 31.03.2013 for a consideration amount of Rs. 6,00,000/- with charges of Stamp Duty-Rs. 1,15,760/- Reg. & other fees- Rs. 30,362/-, total amounting to Rs. 7,46,122/-. (vi) Khata No.91, Khesra No.1250, Tauzi No.445, Jamabandi No.91, Mouza-Bariyarpur, Thana No.93, Area 12.93 Dismal, District Registry Office-Munger, Bihar purchased vide Sale Deed No.2965 dated 24.08.2015 for a consideration amount of Rs. 10,25,000/- with charges of Stamp Duty-Rs. 2,28,123/- Reg. & other fees-Rs. 76,891/-, total amounting to Rs. 13,30,014/-. (vii)....
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....f Rs. 58,35,000/- with charges of Stamp Duty-Rs. 4,66,900/- Reg. & other fees-Rs. 1,17,822/-, total amounting to Rs. 64,19,722/-. (iii) Part of Town Plan Plot No.902-A, Jamabandi No.128/ 3290, 318/3290 Mauza-Shyamganj Mohalla-Caistairs Town, Deoghar Nagar Nigam Ward No.34, Thana No.413, Area 1988 Sq.ft. alongwith three storied building, District Registry Office- Deoghar, Jharkhand purchased vide Sale Deed No.835 dated 24.08.2012 for a consideration amount of Rs. 54,87,000/- with charges of Stamp Duty-Rs. 2,20,000/- Reg. & other fees- Rs. 1,65,000/-, total amounting to Rs. 58,72,000/-. (iv) Tauzi No.7641, Thana No.14, Jamabandi No.11, Mouza- Jamalpur, Nagarpalika-Jamalpur, Ward No.12 (Old-13), Holding No.124, Sheet No.42, Plot No.4397 ABCDEFG Minzumle, Area 18.75 Dismal alongwith old construction on 6952 Sq.ft., District Registry Office-Munger, Bihar purchased vide Sale Deed No.74 dated 08.01.2016 for a consideration amount of Rs. 12,00,000/- with charges of Stamp Duty- Rs. 19,69,197/- Reg. & other fees-Rs. 4,87,509/-, total amounting to Rs. 36,56,706/-. C. Movable Assets - 6 LIC Policies of total premium paid Rs. 29,08,988/- D. Balance lying in 8....
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....t Yadav was acquitted much prior to the date of coming into force of the PMLA on 01.07.2005. The appellant no.1 has given the details of the status of the cases alleged to have been registered against him, in his appeal memo. It is seen from the said list that the appellant no.1 has been acquitted in 22 criminal cases out of 27. In one of the acquittal case i.e. FIR No.227/2010 out of aforesaid 22 criminal cases the appellant no.1 was acquitted on 08.05.2018 during the pendency of proceedings before the Adjudicating Authority. In another acquittal case i.e. FIR No.121/10 has also resulted in acquittal by Special Court, Munger vide order dated 11.06.2013 and that out of the remaining 5 FIRs it is contended that there was no FIR No.195/88 as no such case was registered in that relevant year and that the last case registered was 139/88 and that in FIR No.72/90 the appellant no.1 never made an accused and same is the case in FIRs No(s).78/90 & 8/99 and lastly that in FIR No.50/98 the appeal is still pending and that the criminal cases against the appellants were politically motivated and also on the ground of non-fulfilling of illegal demands of their political rivals. During the co....
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....ty relating to a scheduled offence by either the persons accused or any other person linked to them would also not hold good and, therefore, any proceeding initiated under the PMLA may be terminated and the amendments to the provisions in section 8(3)(b) of PMLA, 2002 w.e.f.15.02.2013 are prospective in nature and amended provisions of PMLA, 2002 are only applicable to the cases which are registered/initiated/booked on or after 15.02.2013 and the alleged scheduled offences in the present cases are of 2010 and to substantiate the above mentioned arguments, the appellants have relied on the following judgments: (i) M/s. Mahanivesh Oils & Foods Pvt. Ltd. Vs. Directorate of Enforcement, AIR 2016, Delhi 54 on the point that once the appellant has been acquitted by the court of competent jurisdiction, no proceeding under PMLA would lie and this judgment was challenged in LPA No.144/2016 and Hon‟ble Delhi High Court has passed the order dated 30.11.2016 to the effect that opinion rendered in the said judgment shall not be binding and conclusive and this Tribunal is free to exercise its discretion and form its own opinion in the matter and (ii) this was the reason i....
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....boo Construction and M/s. Rani Constructions and that they are involved in retail sale of license liquor which is always sold in cash and that the acquisition of immovable properties is out of theses legitimate sources of income and that neither the immovable nor the movable properties are derived from proceeds of crime. The appellant no.1, in his appeal memo, has made properties wise explanations including movable properties and the premium paid towards LIC policies. The said explanations are not repeated here. He has also in the appeal memo, inter-alia, stated about the details of Income Tax Returns, Cash Deposits in the accounts, issuance of two PAN Cards, the details of liquor licenses and that the total valuation made by the respondent is imaginary and not sustainable. With regard to the ITRs, it is submitted that ITRs were not analysed properly to determine the net income/immovable assets of the appellants and the firms in which they were partners and no efforts were made to call for the relevant information and the Auditor‟s Report, Balance Sheet from the Income Tax Department which could show actual income of the appellants. On the grounds mentioned above the....
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....the Hotel White House. v) Some of the properties are purchased prior to alleged crime. vi) Source of acquiring the properties have been satisfactorily explained. vii) No reason to believe. viii) As it is a penal act, PMLA can‟t be applied retrospectively in view of Article 20(1). ix) No proceeds of crime have been generated out of the alleged criminal activities in respect of these 2 FIRs on the basis of which the present PMLA proceedings are initiated. x) Loan has been taken from banks and the respondent has not considered the same. xi) The cases are politically motivated. xii) Liquor sales are through cash only. xiii) The sales registers are with the Bihar State Beverage Corporation Ltd. (BSBCL). The respondent has not called for the same from the BSBCL. xiv) Income Tax Refund amounts has not been considered by the respondent. It is also submitted by the learned counsel for the appellants that the judgments cited by the respondent have no application to the present facts and circumstances of the appeals. On the basis of aforesaid submissions the learned counsel for the appellants pr....
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....h various bank accounts held in the name of appellants and finally integrated into main stream of economy by acquisition of immovable assets and huge amount of cash has been deposited in the bank accounts of appellants which is not in line with the Income Tax Returns (ITRs) filed by the appellants and by the statements recorded under section 50 of PMLA the appellant no.2, appellant no.3 & Dharamraj Kumar Singh have admitted that their ITRs were filed by appellant no.1 and the ITRs of M/s. Jay Maa Kali construction, M/s. Khusboo construction and M/s. Rani construction are without basis in absence of proper books of account which shows that Bharat Yadav has laundered his illicit wealth in the name of appellant no.2, appellant no.3 and Dharamraj Kumar Singh and in the name of firms operated by him and further to that appellant no.3 has illegally obtained two PAN in his name and he has entered into transaction to the tune of Rs. 1,73,11,057/- through two bank accounts maintained at State Bank of India, Jamalpur and Axis Bank, Munger during the assessment year 2012-13 and that Bharat Yadav has acquired benami liquor shops in the name of his employee Dharamraj Kumar Singh which shows his....
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....g it untainted." Further, it is submitted that the predicate offence and the offence of money laundering are two distinct and separate set of statutes/offences and that during statement recorded under section 50 of PMLA, 2002 on 27.11.2017, Shri Bharat Yadav has admitted that at present there is no outstanding loan except KCC loan of Rs. 4.00 lakhs. Hence, the contention of appellant no.1 regarding the loan from LIC is misleading and that the Income Tax Returns filed in the name of the appellants are without basis. Further, it is submitted that the Income Tax Act, 1961 and the PMLA, 2002 are two different sets of legislation. The aims and objectives of the said legislations are quite different and distinct. While on the one hand, Income Tax Act is primarily mandated to collect the tax on income to augment the Government Revenues, on the other hand, the PMLA, 2002 is directed towards the investigation with regard to legality and legitimacy of the income. If the income is found to be not from any licit sources, the PMLA is mandated to confiscate the same and dry up the sources of such income which would most likely be further used in criminal activities, funding of terror outfi....
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....comes to Rs. 38,66,773/- whereas, income of appellant no.2, who is the wife of appellant no.1 comes to Rs. 49,60,718/- and income of appellant no.3, who is the brother of appellant no.1 comes to Rs. 12,11,750/-, whereas valuation of properties in their possession is far more than said income. Huge deposits were found to be made in their bank accounts and total cash deposit made by appellants were found to be Rs. 16,66,48,823/- which is far in excess of their income declared in their income tax return. (e) Appellant no.1 also has business of trading in liquor with licences in the name of his wife and brother as appellant no(s).2 &d 3 and as such appellant no.1 has invested his illegal money into liquor trading in the name of his wife, brother and another employee to legalize his tainted money generated from proceeds of crime. Appellant no.1 also runs a benami liquor shop in the name of his employee to legalise his proceeds of crime. A. Acquisition of Properties Bharat Yadav had acquired various immovable and movable properties after 01.07.2005 (i.e. after P.M.L.A. came into force) from criminal activities relating to the scheduled offences in his name and in the name ....
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....arat Yadav was operating his accounts and he has no separate income. (ii) Why Vishwa Raj minor son of Bharat Yadav is not made defendant through Bharat Yadav The reason is that Vishwa Raj is minor and amount directly paid by Bharat Yadav in LIC. So it is only Bharat Yadav who has disclosed the source of money paid by him in LIC policy. This is not the case where cash was deposited in Vishwa Raj account and then the said amount was paid as LIC policy. Here directly Bharat Yadav has paid the LIC policy so from where that amount was paid, only Bharat Yadav was in position to explain and not Vishwa Raj, that is why it is legal/logical and correct that Vishwa Raj is not in position to disclose the source of said money. Shri Bharat Yadav is to explain the same and appellant Bharat Yadav was the defendant in Original Complaint No. 873/2018. (iii) Huge cash was deposited in the accounts of appellants Amit Yadav and Satyabati Devi within the relevant period The total cash deposited by Bharat Yadav in his account and in the account of Satyabati and Amit Kumar (no source is disclosed) was Rs. 16,66,48,823/- (internal pages of O.C. 35 to 39) (i) Income....
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....(1) of the constitutional bars ex-post facts penal laws. The submission is based on the judgment of Delhi High Court in the matter of M/s. Mahanivesh Oils and Food Private Limited. The said judgment is under challenge before the Division Bench of Hon‟ble High Court of Delhi and there is a stay granted respect of the Single Bench Judgment". (a) In "Pareena Swarup Vs. UOI AIR 2009 SC 38", it was pointed out that the functions of Adjudicating Authority are Civil in nature to the extent that it does not decide on the criminality of the offence nor does it have powers to levy penalties or imposed punishment. (b) In "Hari Narayan Rai Vs UOI, WP (CRI 320/2020) d/o 06.08.2010", Hon‟ble High Court of Jharkhand held that "It would be the date of laundering which would be relevant. The laundering as used in Section 3 comprises of involvement in any process or activity by which the illicit money is being projected as untainted. The court concluded that thus, the relevant date is not date of acquisition of illicit money but the dates on which such money is being processed for projecting it as untainted. Therefore, the fundamental right of the peti....
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....7/2010 against appellant no.1 Shri Bharat Yadav & others. So far as the FIR No.121/2010 dated 20.10.2010 (registered at Jamalpur P.S.) is concerned the alleged offences committed by him was under Section 302/34 of IPC, 1860, Section 302 IPC is a schedule offence under PMLA, 2002 whereas with regards to the other FIR i.e. FIR No.227/2010 dated 28.05.2010 (registered at Kotwali Munger P.S.) the alleged offences committed by the appellant no.1 & others were under Sections 120B, 414, 420, 465, 467, 468 and 471 of IPC, 1860. Out of these, Sections 120B, 414, 420, 467 and 471 were the schedule offences under PMLA, 2002, so ECIR was registered by respondent vide ECIR No.PTZO/07/2014 dated 07.01.2014 on receipt of letter from SP, Munger. In the said letter there was mention of various other FIRs against the appellant no.1. It has been pleaded by the appellant no.1 that in all the criminal cases registered against him have either been ended in acquittal or discharge except in one case i.e. FIR No.50/98 against which appeal is pending. It is also pleaded by the appellant no.1 that the FIR No.121/2010 and 227/2010 as aforesaid have also ended in acquittal. The appellant no.1 has filed the ....
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.... for the respondent has relied on the judgment passed by Hon‟ble High Court of Judicature at Madras (D.B.) in the matter of M/s. VGN Developers P. Ltd. & Ors. Vs. Deputy Director, ED. I have perused the said judgment. In Para No.8 of this judgment their Lordships has observed as follows: "8. As we do not have any quibble over the facts narrated, let us go into the issue raised. As rightly submitted by the learned Additional Solicitor General, the definition of "proceeds of crime" under Section (u) of the Act is very exhaustive and elaborate. It speaks of any property derived or obtained, directly or indirectly, by any person. It is no doubt true that the complaint has been made by the respondent only in pursuant to the scheduled offence. However, the object, rationale and the scope enshrined under the Prevention of Money Laundering Act, 2002, being a special statute is distinct and different from one enshrined under the Indian Penal Code and the Prevention of Corruption Act. Though the facts may be overlapping the nature of investigation differs. Therefore, it cannot be stated that a mere closure by the Central Bureau of Investigation would provide a death k....
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....asis of correct appreciation of facts and must be recorded in writing and must not be a mere mechanical exercise and that the expression "reason to believe" under Section 26 IPC is understood in the sense of sufficient cause to believe that thing but not otherwise. The Deputy Director has passed the order of Provisional Attachments taking into account the letter of Superintendent of Police, Economic Offences Unit, Patna, and other materials and information collected/received by him during investigation and after passing the order of Provisional Attachment filed Complaint before the Adjudicating Authority for confirmation of order of Provisional Attachment and that the Adjudicating Authority has held that he has gone through the Original Complaint, Provisional Attachment Order and relied upon documents carefully and prima facie has reasons to believe that appellants have committed an offence of money laundering and they are in possession of proceeds of crime. Heard both sides on this issue and have also gone through the materials placed on record including the judgments cited by the appellants. Except what is stated above, the respondent has not filed any judgment in suppor....
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....ion 5(1) of the PMLA is its alleged manifest arbitrariness. The Court is, however, not persuaded to agree with the above submission of the Petitioners for more than one reason. First, as rightly pointed out by the learned counsel for the Union of India, the mere possibility that a provision may be abused is not a ground to strike it down under Article 14 of the Constitution. The law in this regard has been explained in a number of decisions. Illustratively, reference may be made to Sushil Kumar Sharma v. Union of India (supra) where it was observed as under: "In Mafatlal Industries Ltd. and Ors. v. Union of India and Ors., [1997] 5 SCC 536, a Bench of 9 Judges observed that mere possibility of abuse of a provision by those in charge of administering it cannot be a ground for holding a provision procedurally or substantively unreasonable. In Collector of Customs v. Nathella Sampathu Chetty, [1962] 3 SCR 786 this Court observed: "The possibility of abuse of a statute otherwise valid does not impart to it any element of invalidity." It was said in State of Rajasthan v. Union of India, [1977] 3 SCC 592 "it must be remembered that merely because power may sometimes be ....
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....Sons Ltd. v. Asst. Commissioner of Sales Tax AIR 1955 SC 765(2); Thompson v. Dibdin (1912) AC 533; Rex v. Dibdin 1910 Pro Div 57 (4) and Tahsildar Singh v. State of U.P AIR 1959 SC 1012. The law is trite. A proviso must be limited to the subject matter of the enacting clause. It is a settled rule of construction that a proviso must prima facie be read and considered in relation to the principal matter to which it is a proviso. It is not a separate or independent enactment. 'Words are dependent on the principal enacting words, to which they are tacked as a proviso. They cannot be read as divorced from their context". (Thompson v. Dibdin). If the rule of construction is that prima facie a proviso should be limited in its operation to the subject matter of the enacting clause, the stand we have taken is sound. To expand the` enacting clause, inflated by the proviso, sins against the fundamental rule of construction that a proviso must be considered in relation to the principal matter to which it stands as a proviso. A proviso ordinarily is but a proviso, although the golden rule is to read the whole section, inclusive of the proviso, in such manner that they mutually throw light o....
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....agree and not confirm the provisional attachment, in which case under Section 8(6) PMLA, the property will be released to the person who is entitled to receive it. 66. This again is by an order in writing. Therefore, the first level of safeguard by way of judicial review of an order of provisional attachment under Section 5(1) PMLA is the proceeding before the AA under Section 8 PMLA. This is the further reason why it cannot be said that the powers under Section 5(1) read with the second proviso thereto are so wide and uncanalised or arbitrary as to warrant its striking down under Article 14 of the Constitution. 67. The Court is unable to agree that there is any manifest arbitrariness vitiating the second proviso to Section 5(1) PMLA, as contended by the Petitioners. As explained in Shayara Bano v. Union of India (supra): "Manifest arbitrariness, therefore, must be something done by the legislature capriciously, irrationally and/or without adequate determining principle. Also, when something is done which is excessive and disproportionate, such legislation would be manifestly arbitrary. We are, therefore, of the view that arbitrariness in the sense of man....
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....a show cause notice is issued. Section 68-H of the Act provides for two statutory requirements on the part of the authority viz: (i) he has to form an opinion in regard to his `reason to believe'; and (ii) he must record reasons therefor. Both the statutory elements, namely, `reason to believe' and `recording of reasons' must be premised on the materials produced before him. Such materials must have been gathered during the investigation carried out in terms of Section 68-E or otherwise. Indisputably therefore, he must have some materials before him. If no such material had been placed before him, he cannot initiate a proceeding. He cannot issue a show cause notice on his own ipse dixit. A roving enquiry is not contemplated under the said Act as properties sought to be forfeited must have a direct nexus with the properties illegally acquired. 29. It is now a trite law that whenever a statute provides for `reason to believe', either the reasons should appear on the face of the notice or they must be available on the materials which had been placed before him. We have noticed hereinbefore that when the authority was called upon to disclose the reason....
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....udicial or even administrative power. e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations. f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. g. Reasons facilitate the process of judicial review by superior Courts. h. The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice. i. Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system. j. Insistence on reason is a requirement for both judicial accounta....
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....ecorded at the stage of passing the order of provisional attachment under Section 5(1) PMLA may not be forthwith at that stage communicated to the person adversely affected thereby, the reasons as recorded in the file have to accompany the complaint filed by such officer within 30 days before the AA under Section 5(5) PMLA. (iv) A copy of such complaint accompanied by the reasons, as found in the file, must be served by the AA upon the person affected by such attachment after the AA adds its own reasons why he prima facie thinks that the provisional attachment should continue. Summary of conclusions 87. This Court summarizes its conclusions as under: (i) The second proviso to Section 5(1) PMLA is not violative of Article 14 of the Constitution of India; the challenge in that regard in these petitions is hereby negatived. (ii) The expression "reasons to believe‟ has to meet the safeguards inbuilt in the second proviso to Section 5(1) PMLA read with Section 5(1) PMLA. (iii) The expression "reasons to believe‟ in Section 8(1) PMLA again has to satisfy the requirement of law as explained in this decision. (iv) T....
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.... 237 is to safeguard the interests of those dealing with a company by providing for an investigation where the management is so conducted as to jeopardize those interests or where a company is floated for a fraudulent or an unlawful object. Clause (a) does not create any difficulty as investigation is instituted either at the wishes of the company itself expressed through a special resolution or through an order of the court where a judicial process intervenes. Clause (b), on the other hand, leaves directing an investigation to the subjective opinion of the government or the Board. Since the legislature enacted S. 637 (i) (a) it knew that government would entrust to the Board its power under S. 237 (b). Could the legislature have left without any restraints or limitations the entire power of ordering an investigation to the subjective decision of the Government or the Board? There is no doubt that the formation of opinion by the Central Government is a purely subjective process. There can also be no doubt that since the legislature has provided for the opinion of the government and not of the court such an opinion is not subject to a challenge on the ground of propriety, reasonable....
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....bclauses (i), (ii) or (iii). If it is shown that the circumstances do not exist or that they are such that it is impossible for any one to form an opinion therefrom suggestive of the aforesaid things, the opinion is challengeable on the ground of non-application of mind or perversity or on the ground that it was formed on collateral grounds and was beyond the scope of the statute. " [Emphasis supplied] In Income-tax Officer, Calcutta and Ors. Vs Lakhmani Mewal Das AIR 1976 SC 1753, the Supreme Court construed the expression "reason to believe" employed in Section 147 of the Income-Tax Act, 1961 and observed that the reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully or truly all material facts. It is not any or every material, howsoever vague and indefinite or dista....
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....asic principles in this regard are clearly expressed and explained by Prof. Sir William Wade in Administrative Law (Ninth Edn.) in the chapter entitled 'abuse of discretion' and under the general heading the principle of reasonableness' which read as under: The common theme of all the authorities so far mentioned is that the notion of absolute or unfettered discretion is rejected. Statutory power conferred for public purposes is conferred as it were upon trust, not absolutely - that is to say, it can validly be used only in the right and proper way which Parliament when conferring it is presumed to have intended. Although the Crown's lawyers have argued in numerous cases that unrestricted permissive language confers unfettered discretion, the truth is that, in a system based on the rule of law, unfettered governmental discretion is a contradiction in terms. The real question is whether the discretion is wide or narrow, and where the legal line is to be drawn. For this purpose everything depends upon the true intent and meaning of the empowering Act. The powers of public authorities are therefore essentially different from those of private persons. ....
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....he Appellant contended that property in question was admittedly purchased in 1991 and since 2009 is lying mortgaged with bank, thus there was no question of transfer or sale of said property. The alleged offence was committed in 2013 whereas property was attached on 13.12.2017. There was nothing on record to show that if property is not attached, the proceedings of confiscation would be frustrated. The authorities are bound to be specific and cannot simply reiterate words and phrases used in the Section which is source of power. The Respondent in the present case while passing provisional attachment order has simply held that properties 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 and matter is under investigation. We are at one with counsel for the Appellant on the question that authorities under the Act are bound to be specific while exercising power conferred under Section 5 of the PMLA. Words used in the order cannot be verbatim replica of words used in Section 5 of the PMLA. The Respondent in the present case while passing attachment order dated 13....
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....whereas attachment order was passed in December‟ 2017. There is nothing on record to show that Appellants after 2009 or 2013 attempted to dispose of property in question which prompted the Respondent to pass attachment order. The Respondent has simply taken wording of Section 5(1) of the PMLA and reiteration of these words would not constitute recording of reasons that if property is not attached, it may result in frustrating any proceedings of confiscation. The Respondent was bound to record the reasons on the basis of material in his possession that property is likely to be concealed or transferred or dealt with in any manner. Use of all the words i.e. concealed, transferred or dealt with in any manner shows that Respondent was not specific with respect to possibility of action of Appellant which would have frustrated proceedings of confiscation. It further shows that there was no application of mind and Respondent simply picked up words from Section 5 of the PMLA and inserted in the order. Accordingly, we hold that Respondent has passed attachment order without recording the reasons on the basis of material in his possession that property in question was likely to....
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.... 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 the 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 believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proce....
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.... "2. I had gone through the Original Complaint, Provisional Attachment Order and Relied upon Documents carefully and prima facie I had reasons to believe that Defendants have committed an offence of money laundering u/s 3 of PMLA and they are in possession of crime. Notices were issued to Defendants asking them to file their written submissions. Written reply filed by them will be discussed little later." From the above it appears that the Ld. Adjudicating Authority has not examined whether the satisfaction of the Complainant regarding reasons to believe is in accordance with law. Since, there is no such examination, the aforesaid observation in Para No.2 of the impugned order is also contrary to Section 8(1) of the PMLA. On perusal of the PAO, it is seen that the Deputy Director has only mention the verbatim of Section 5(1)(b) of the PMLA, 2002. In view of the above, the appeals are allowed. The impugned order dated 31.05.2018 is set aside and remanded to the Adjudicating Authority for re-adjudication of the case against the appellants within 180 days from the date of receipt of this order or from the date of the order when either of the parties brings it to the knowle....