TaxTMI 
TaxTMI 
2021 (1) TMI 182
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....o time directing status quo of the properties of the appellant and extending the same. The maintainability point is that the appellant, Deputy Director, ED, Kolkata, had no power to file the appeal before the appellate tribunal in question. He submits that his point had been raised but not dealt with in the said interim orders. We have heard Mr. Banerjee for the Ed, who apprised us of the gravity of the issues involved in this appeal. We have also learnt that because of the situation created by the COVID-19 virus, the appeal, although ready for hearing, could not be taken up. However, we have been shown an order of the tribunal dated 1st July 2020 made during this period, which satisfies us that the tribunal is functional. The interim order made on 21st February 2020 records that the appeal would be taken up on 13th July 2020. We think the interest of justice would be sub-served if we direct the Tribunal to hear out the appeal as expeditiously as possible, preferably with three months from the date by video link or any other mode. We order accordingly. The maintainability point shall be formally raised by the appellant by filing....
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....12.2020, 14.12.2020 and concluded on 16.12.2020 from both sides. During the course of hearing, during the period September, 2020 to December, 2020, Sh. S.A. Saud, ld. counsel for respondent no. 2 assured this Tribunal that they have moved the Hon'ble High Court of Calcutta for extension of stipulated time. This Tribunal is functioning with only one member and during the Covid-19 period this tribunal has been hearing only the urgent matters such as hearing on eviction notices etc., issued by ED under PMLA, 2002, demand notices issued, by ED under FEMA,1999 and by Income Tax Authority under PBPT Act, 1988 and by Competent Authority under SAFEMA, 1976 and NDPS Act,1985 through virtual hearing. This Tribunal, at present not hearing any appeal on merits due to the Covid- 19 situation except the matters under the directions of the High Courts. In the supplementary affidavit, the respondent no. 2 Sh. Nilesh Parekh has raised several points but chosen the arguments restricted to the issue of maintainability on the ground that the Assistant Director is not competent to file appeal before this Tribunal. Similarly, the respondent no. 14 has also raised the issue of maintainability of....
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.... attachment order under section 5(1) of the said Act and that under the said Act an officer not below the rank of Deputy Director could have been authorized to sign either provisional attachment order or to file an appeal before this Tribunal because the word used in the section 26(1) is 'the Director' and that whether under the said Act a Special Director or an Additional Director, or a Joint Director can authorize an Assistant Director to pass a provisional attachment order? and that this goes to the root of the case and that under law, Assistant Director could not have been authorized. He has referred to reply, to the supplementary affidavit, on behalf of Enforcement Directorate, Kolkata wherein the appellant has stated that the "Assistant Director was duly authorized on 22.11.2019". By referring to the above the ld. counsel for the respondent no. 2 submitted that this 'duly authorized' could not have been done under law that has been under challenged and the submission made by the appellant in the said reply to the supplementary affidavit that under section 48 of the PMLA, Assistant Director is also one of the authority, is incorrect particularly when there is a specific bar un....
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....bargo has been prescribed in sections 5(5) & 8(2)(b) of the said Act. The respondent no. 14 has filed reply to the appeal on dtd. 10.11.2020 where in the issue of maintainability was taken. Mr. Arun Kumar Agarwal, ld. counsel for the respondent no. 14, during the course of his arguments, in addition to aforesaid sections referred to sections 17(1), 48, 49, 51 of the said Act and submitted that the appeal is not maintainable. The ld. counsel for the respondent no. 14 through his written submission filed on 14. 12.2020 referred to sections 5(1), 16(1), 17(1), 18(1), 19(1), 20(1), 21(1), 26(1), 39(2), 48, 49(1), 49(3), 50(2), 51(1), 66(1) of the PMLA, 2002. The ld. counsel for the respondent no. 14 submits that the appeal u/s 26(1) of PMLA challenging the order of the Adjudicating Authority has been filed by the Assistant Director titled as "Enforcement Directorate, Kolkata through Assistant Director". The appeal, applications, affidavits in support of appeal/applications, Vakalatnama are signed by the Assistant Director. As per section 26(1) of PMLA which provides as follows: "26 Appeals to Appellate Tribunal-(1) Save as otherwise provided in sub-section (3), the Di....
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....4: "43 Accepting the submission of Ms. Indira Jaising would run counter to the well known maxim delegates non protest delegare (or delegari). The principle is summed up in "Judicial Review of Administrative Action "De Smith, Woolf and Jowell (Fifth Edition) as follow:- "The rule against delegation A discretionary power must, in general, be exercised only by the authority to which it has been committed. It is a well known principle of law that when a power has been confided to a person in circumstances indicating that trust is being placed in his individual judgment and discretion, he must exercise that power personally unless he has been expressly empowered to delegate it to another." The same principle has been described in "Administrative Law" H.W.R. Wade & C.F. Forsyth (Ninth Edition), Chapter 10, as follows:- "Inalienable discretionary power An element which is essential to the lawful exercise of power is that it should be exercised by the authority upon whom it is conferred, and by no one else. The principle is strictly applied, when where it causes administrative inconvenience, except in cases where it may reasonably be in....
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....a ports, ejectment notices issued by Land Manager was challenged on the plea that he is not competent to do so, and the same being without jurisdiction. Power of termination of lease was delegated by Board of the Kolkata Port in the Chairman and he was also authorised to issue ejectment notices. The Chairman vide an office order delegated issue of ejectment notices in subordinate officers in respect of leases determined by him. Hon'ble Supreme Court rejected the appeal after noting that "4. Regarding delegation of nonlegislative/ administrative powers on a person or a body to do certain things, whether the delegate himself is to perform or a body to do certain things, whether the delegate himself is to perform such functions or whether after taking decision as per the terms of delegation, the said agency can authorize the implementation of the same on somebody else, is the question to be considered. Once the power is conferred, after exercising the said power, how to implement the decision taken in the process, is a matter of procedure. The Legislature may, after laying down the legislative policy, confer discretion on an administrative agency as to the execution of the policy and ....
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....DA. On the contrary, he made a report to the Additional Chief Secretary and asked for permission to proceed under TADA. "Allowing the appeal, it held that "This is a case of power conferred upon one authority being really exercised by another. If a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If the discretion is exercised under the direction or in compliance with some higher authority's instruction, then it will be a case of failure to exercise discretion altogether. In other words, the discretion vested in the DSP in this case by Section 20A (1) was not exercised by the DSP at all." v. Dhahdda Exports v Income Tax Officer Rajasthan High Court (2015) 58 taxmann. Com 176 and Yum Restaurants Asia Pte Ltd. vs. Deputy Director of Income-tax- Delhi High [2018] 99 taxmann.com 423 relied. On the aforesaid grounds and citing/replying aforesaid judgments, the ld. counsel for the respondent no. 14 sought dismissal of appeal on non-maintainability. The ld. counsel appearing for respondent no. 17 has adopted the submissions made on behalf of Respondent no. 2 and 14. On the other hand ld. counsel for the appella....
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....ed that this is a misstatement by the respondent no. 14. The averment made in para 2 of the reply is qua appeal. The ld. counsel for the appellant has submitted that the filing of appeal is a procedural aspect only. The Assistant Director has not taken any order on rights and liabilities or anything of any person. This is an appeal against the impugned order and the appeal is a substantive right of the Department and that after due application of mind decision was taken by the Competent Authority and the appeal has been filed. During the course of hearing, a statement has been made by the ld. counsel for the appellant that Enforcement Directorate has taken a decision to file the present appeal by the Joint Director (the zonal head) with the approval of the Special Director (the Regional Head) and he referred to the copy of the internal note dated 22.11.2019 of the Department to show that the decision has been taken at the level of Special Director (ER) to depute the Assistant Director to file the appeal and stay application as per approved draft. The filing of appeal is only a procedural matter and the Assistant Director has been authorised to file the appeal and that there i....
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....dhartha Sarawgi Vs Board of Trustee for the Port Trust of Kolkata & Ors., wherein the Hon'ble Supreme Court of India has held, regarding delegation of non legislative administrative power, that: Para5:- Regarding delegation of non-legislative/administrative powers on a person or a body to do certain things, whether the delegate himself is to perform such functions or whether after taking decision as per the terms of the delegation, the said agency can authorize the implementation of the same on somebody else, is the question to be considered. Once the power is conferred, after exercising the said power, how to implement the decision taken in the process, is a matter of procedure. The Legislature may, after laying down the legislative policy, confer discretion on an administrative agency as to the execution of the policy and leave it to the agency to work out the details within the framework of that policy[3]. So long as the essential functions of decision making is performed by the delegate, the burden of performing the ancillary and clerical task need not be shouldered by the primary delegate. It is not necessary that the primary delegate himself should perform the minist....
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.... times. The Judges are already overburdened with the task of performing judicial functions and the constraints on their time and energy are so demanding that it is in public interest to allow them to devote time and energy as much as possible in discharging their judicial functions, relieving them of the need for diverting their limited resources of time and energy to such administrative or ministerial functions, which, on any principle of propriety, logic, or necessity are not required necessarily to be performed by the Judges. Receiving a cause or a document and making it presentable to a Judge for the purpose of hearing or trial and many a functions post- decision, which functions are administrative and ministerial in nature, can be and are generally entrusted or made over to be discharged by the staff of the High Court, often by making a provision in the Rules or under the orders of the Chief Justice or by issuing practice directions, and at times, in the absence of rules, by sheer practice. The practice gathers the strength of law and the older the practice the greater is the strength" "Para 16. Practical necessities or exigencies of administration require that the de....
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....eld that:- "Para 8. The plaint is not properly drafted in as much as in the memo of parties, the Plaintiff is described as Varun Pahwa through Director of Siddharth Garments Pvt. Ltd. though it should have been Siddharth Garments Pvt. Ltd. through its Director Varun Pahwa. Thus, it is a case of mistake of the counsel, may be on account of lack of understanding as to how a Private Limited Company is to sue in a suit for recovery of the amount advanced" Para9.................................................................................... .......................................................................................... ............. Para 10. In Uday Shankar Triyar v. Ram Kalewar Prasad Singh and Another5, this Court held that procedural defects and irregularities which are curable should not be allowed to defeat substantive rights or to cause injustice. Procedure should never be made a tool to deny justice or perpetuate injustice by any oppressive or punitive use. The Court held as under: - 17. Non-compliance with any procedural requirement relating to a pleading, memorandum of appeal or application or petition for relief should not ent....
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....is regard he has referred judgment dated 13.10.2020 passed by Hon'ble Division Bench of Hon'ble Supreme Court in the following matter: "In Sugandhi (Dead) by Lrs. vs P. Rajkumar Rep. By Power Agent, the Hon'ble Supreme Court of India held that: "Para9. It is often said that procedure is the handmaid of justice. Procedural and technical hurdles shall not be allowed to come in the way of the court while doing substantial justice. If the procedural violation does not seriously cause prejudice to the adversary party, courts must lean towards doing substantial justice rather than relying upon procedural and technical violation. We should not forget the fact that litigation is nothing but a journey towards truth which is the foundation of justice and the court is required to take appropriate steps to thrash out the underlying truth in every dispute. Therefore, the court should take a lenient view when an application is made for production of the documents under sub−rule (3)" During the course of hearing, the ld. counsel for the appellant submitted that the respondents have raised the maintainability issue at a belated stage so that cannot be considered as the T....
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....o the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest. The High Court was therefore altogether unjustified in rejecting the application made by the learned Assistant Public Prosecutor invoking the powers of the Court under Section 391 of the CrPC. We are of the opinion that the application should have been granted in the facts and circumstances of the case with the end in view to do full and true justice. The application made by the learned Assistant Public Prosecutor is therefore granted. The High Court will issue appropriate directions for the recording of the evidence to prove the report of the Mint Master under Section 391 Cr.P.C. when the matter goes back to High Court and is listed for directions. The appeal is therefore allowed. The order of acquittal is set aside. The matter is remitted to the High Court for proceeding further in accordance with law in....
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.... to the Director of Enforcement Directorate given under the PMLA are to be exercised by him only not by any other authority. In the event any other authority has exercised his power than that would be contrary to law. By referring to para 6 of his written submission, he submitted that the director can neither subFPA- delegate this essential function of decision making involving application of mind nor he can abdicate the statutory duty u/s 26(1), entrusted by the legislature. By referring to section 17(1) pre amended and post amended provisions the ld. counsel for the respondent no. 14 has submitted the following: " From plain reading of original provision of section 17(1), it is clear that the Director alone was conferred power to form the belief and authorize any officer subordinate to him to conduct search. As neither legislature conferred power of formation of belief u/s 17(1) on Additional/Joint/ Deputy Director nor the Director was empowered to sub-delegate the power of formation of belief u/s 17(1), this led to administrative difficulty of exercise of power of search u/s 17 of PMLA. Appreciating the above position of law u/s 17 of PMLA, to overcome the difficulty....
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....1) of the said Act as such the appeal is not maintainable. During the course of argument, the ld. counsel for the respondent no. 2 has referred to sections 2(1)(c), 2(1)(j), 2(1)(K), 5(1), second proviso to section 5(1), 5(2), 8(2)(b) & 26(1) of the said Act and submitted that an appeal u/s 26(1) can not be filed by an officer not below the rank of the Deputy Director. During the course of argument Sh. S.A. Saud, ld. counsel for the respondent no. 2 by referring to para 2 of the affidavit to the memo of appeal submitted that the Assistant Director who has filed the appeal ought not to have stated that he is competent to file the affidavit. He has further submitted that in view of the specific bar u/s 26 (1) he is not competent to file the affidavit appended to memo of appeal. In furtherance to the aforesaid submission, the ld. counsel for the respondent nos. 2 relied on the judgment passed by Hon'ble Supreme Court in the matter of M.P. Wakf Board vs Subhan Shah (D) By Lrs. & Ors passed by the Hon'ble Supreme Court of India on 31.10.2006 by relying on this judgment it is submitted that the authority which is empowered to exercise to certain functions that authority must exerci....
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.... referred to the cause title and the first para of the appeal which read as follows:- "1. The appellant Department is seriously aggrieved by the erroneous order dated 09.10.2019 passed by the ld. Adjudicating Authority without application of judicial mind in O.C. no. 1146/2019 in P.A.O. dated 16.04.2019, whereby the properties of the respondents provisionally attached, where held to be not involved in money laundering and further not confirming the P.A.O." The ld. counsel for the appellant has made alternative submission to allow the appellant to rectify the mistake, if it is held that the filing of appeal by the Assistant Director is not maintainable. While making the aforesaid submissions, he relied on the judgment mentioned above. The references have been made by the parties to the following sections of the said Act which are reproduced below:- 2(1)(c) "Assistant Director" means an Assistant Director appointed under subsection (1) of Section 49; 2(1)(j) "Deputy Director" means a Deputy Director appointed under sub-section (1) of Section 49; 2(1)(k) "Director" or Additional Director" or "Joint Director" means a Director or Additional Director o....
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.... be counted.] 5(2). The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed. 5(5). The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority. 8(2)(b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf, and. 26(1) Save as otherwise provided in sub-section (3), the Director or any person aggrieved by an order made by the Adjudicating Authority under this Act, may prefer an appeal to the Appellate Tribunal. "48. Authorities under the Act.-There shall be the following classes of authorities for the purposes of this Act, namely:- (a) Di....
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....dditional Director or Joint Director have been put under the same class in sub clause (a) whereas the Deputy Director, and Assistant Director have been placed under sub-clause (b) and (c) of the section 48 of the said Act. If the section 2(1)(k) is read with section 48(a) of the said Act, it is clear that the Director, Additional Director and Joint Director are put in the same classes of authority for the purpose of this Act, so the decision taken by the Joint Director with the approval of the Special Director (Special Director is higher in rank than Additional Director in the hierarchy of the Enforcement Directorate) to file appeal is not contrary to the provisions of PMLA, 2002. It is not that for each and every case to file appeal before this Appellate Tribunal the Director who is the head of Enforcement Directorate is to take a decision to file appeal. If any of the officers in the same class of officer (section 48(a) of the said Act) has taken a decision to file an appeal then in my considered view there is no illegality. In this particular appeal, it is the department who is aggrieved and who has filed the appeal. Since, the decision has been taken at the level of Special ....
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.... 8. As far as the present case is concerned, the cause title reads "Union of India through Directorate of Enforcement" as appellant. The memorandum of appeal is supported by the affidavit of Shri S.K. Poddar, Assistant Director, Enforcement Directorate. Nevertheless, unlike the appeal before the High Court in Mohtesham Mohd. Ismail which was not filed by the Enforcement Directorate on behalf of the Central Government, it is plain that the present appeal has been filed by the Central Government represented by the Directorate of Enforcement. Merely because it is filed through the Enforcement Directorate, it cannot be said that the Central Government has itself not filed the appeal. The decision in Mohtesham Mohd. Ismail does not suggest that that on the facts of the present case, the appeal is not maintainable at the behest of the Central Government. Para 9. The preliminary objection as to the maintainability of the appeal is accordingly overruled." In the aforesaid case, his lordship of Hon'ble High Court of Delhi has dealt with an issue akin to the present issue of maintainability. In the aforesaid case, the Enforcement Directorate had filed the appeal on behalf of the ....
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....was aware of proceedings of Adjudication in the present case. In view of the above this judgment is not applicable in the present facts and circumstance of the case. The other judgments, which are on the issue of delegation of power, relied on by the respondent no. 14 are not applicable to the present appeal on the issue of maintainability. The appellant has relied on the case of the judgment passed by Hon'ble Supreme Court in the matter of Sugandhi (Dead) by Lrs. and Ors. Vs. P. Rajkumar decided on 13.10.2020 wherein their lordship have observed that "It is often said that procedure is the handmaid of justice. Procedural and technical hurdles shall not be allowed to come in the way of the court while doing substantial justice. If the procedural violation does not seriously cause prejudice to the adversary party, courts must lean towards doing substantial justice rather than relying upon procedural and technical violation. We should not forget the fact that litigation is nothing but a journey towards truth which is the foundation of justice and the court is required to take appropriate steps to thrash out the underlying truth in every dispute. Therefore, the court should take....