TaxTMI 
TaxTMI 
2021 (4) TMI 1221
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....0. Although, the scope of the instant application is very limited but, for proper appraisal of the grounds on which the order has been sought to be modified, the basic facts are stated hereinbelow: 1. On the basis of a complaint made on 14th January, 2015 by Sri Pranav Kumar, the then Zonal Head, UCO Bank, Zonal Office, Gariahat Branch, Kolkata,an FIR was registered by Central Bureau of Investigation(CBI, BS & FC), Kolkata. A charge-sheet bearing number 06/2016 dated 18th August, 2016 was filed before the competent Court against the petitioner no. 1 and its directors for offence under Sec. 120- B read with Sections 406 and 420 of the Indian Penal Code (in short 'IPC'). As Sections 120B, 406 and 420 of IPC are scheduled offence as defined under Section 2 (1) (y) of the Prevention of Money Laundering Act, 2002 (in short 'PMLA') an investigation under PMLA was initiated by recording an Enforcement Case Information Report (in short ECIR) number KLZO/17/2016 on 2nd December, 2016 against the petitioner no. 1 and its Directors for alleged commission of offence under Section 3 which is punishable under Section 4 of PMLA. The directors of the petitioner no. 1 have, howev....
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....March, 2021, when an order was passed, the operative portion whereof is set out hereunder for convenience: "The petitioners thereafter wanted to withdraw the writ petition as, according to the petitioners, the order of provisional attachment dated 20th January, 2020 had lost its force on expiry of 180 days from the passing of the same in view of the provisions of Section 5(1)(b) of the Prevention of Money Laundering Act, 2002 (in short PMLA). The prayer for withdrawal of the writ petition was opposed by the respondent nos.2, 3, 4 and 13 on the ground that the order of provisional attachment dated 20th January, 2020, which the petitioners say to have lost its force, according to the said respondents, was in subsistence view of the order passed by this Court as also by the Hon'ble Supreme Court during the pandemic. The respondent nos.2, 3, 4 and 13 submitted that the petitioners are free to withdraw their writ petition simplicitor but no condition or leave or any observation from this Court should not be attached to the leave to withdraw the writ petition. Faced with this situation, the petitioners do not intend to withdraw the writ petition. T....
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....no. 2, 3, 4 and 13 to proceed with the adjudication under Sections 8(1), 8(2) and 8(3) of PMLA. The portion of the order dated 26th March 2020 which the petitioners wants modification is set out hereunder: "Pendency of the writ petition will, however, not be an embargo on the respondents in proceeding with the complaint no. 1262 of 2020 made under the provisions of Section 5(5) of PMLA as the same will not amount to any coercive step in terms of the provisional order of attachment." 8. Petitioners' Submission:- (a) The petitioners say that the order of provisional attachment dated 20th January, 2020 passed under the provisions of Section 5(1) has in fact expired on or about 20th July, 2020 i.e., prior to the writ petition being filed. Once the order of provisional attachment has come to an end with the efflux of 180 days from the date of passing of the order, the Adjudicating Authority to whom an application had been made under Section 5(5) of PMLA has become functus officio and as such the question of proceeding for any adjudication in terms of the provisions of Sections 8(1), 8(2) and 8(3) of PMLA cannot and does not arise. If the order of provisional att....
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....omplaint case having Complaint No. 1262 of 2020 which is the source from where the Adjudicating Authority is purporting to derive its jurisdiction even after lapse of the order of provisional attachment should be stayed otherwise, the said Adjudicating Authority is bent upon to confirm the order of provisional attachment though the same has lapsed on expiry of 180 days from the passing of the same. 9. Submission of respondents no. 2, 3, 4 and 13:- (i) On behalf of the respondent nos. 2, 3, 4 and 13, the order dated 8th March, 2021 passed in (In re:: Cognizance of Extension of Limitation) is relied upon and in particular paragraph 3 thereof to contend that the outer limit of 180 days for the order of provisional attachment has stood extended in view of the said order dated 8th March, 2021 passed by the Hon'ble Supreme Court. The time available to the Adjudicating Authority for confirming the order of provisional attachment under Section 8(3) by terminating the proceeding shall also stand extended in view of the said order. The Adjudicating Authority is therefore, free to proceed with the matter and pass necessary orders under Sec. 8(3) of PMLA by bringing the adjudic....
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....The respondent nos. 2, 3, 4 and 13 further submitted that the order of the Learned Single Bench of the High Court at Delhi dated 8th November, 2020, does not take into consideration the order passed by the Hon'ble Supreme Court on 8th March, 2020. That apart and in any event, the said judgement and order dated 8th November, 2020 has been stayed by the Division Bench of the High at Delhi by an order dated 8th January, 2020 in LPA 362/2020 & C.M. APPL. 30675/2020 (Stay) (Directorate of Enforcement and Anr. vs. M/s Vikas WSP Limited & Ors). The respondent no. 2, 3, 4 and 13 have also taken a point that the petitioners in the garb of an application for modification is in effect seeking a review of the order dated 26th March, 2021. This is impermissible in law and on this context, the said respondents cite a judgement reported in 2014 12 SCC 713 (Ram Chandra Singh vs. Savitri Devi & Ors.) 10. Since the scope of the application is very limited and adjudication thereof is dependent only on interpretation of the legal provisions by consent of parties, I proceed to deal with the same without calling for affidavits. 11. Findings: (i) On a plain reading of Section 2(1)(y) a....
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....duled offence connected thereto and have provided for the Court wherein such offence has to be tried. Authorities under PMLA have been specified in Section 48. The jurisdiction, powers of the authorities and other officers are provided in Chapter VIII of the PMLA. On a plain reading of Section 54 of PMLA, it is also clear that the legislature wanted to include officers from other departments and/or agencies for fruitful assistance in the inquiry. (v) The first proviso to Section 5(1) provides that "no such order of attachment" shall be made unless in relation to the scheduled offence, report has been forwarded to a Magistrate under Section 173 of Cr.P.C. Section 3 of Cr.P.C. provides for the manner in which a "Magistrate" shall be construed. Section 173 (2) (i) of Cr.P.C. speaks about a "Magistrate" empowered to take cognizance of the offence on a police report. Since, Section 45(1-A) as by implication eliminate a police officer from investigating an offence under PMLA, therefore, the police report under Section 173 (2) (i) of Cr.P.C. to the Magistrate under ordinary course, has to be submitted by the Director or an officer not below the rank of Deputy Director under PMLA ....
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....als in his possession, may provisionally attach a property. The use of word "may" gives a discretion upon the Director or an officer not below the rank of Deputy Director to either provisionally attach a property or not to do so depending upon his perception on the basis of materials available with him. The second proviso to Section 5(1) further clarifies the reasons for which a provisional attachment is required to be made ─ "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 proceeding under this Act". The second proviso to Section 5(1) of PMLA also authorises the officer concerned to pass an order of provisional attachment even without first complying with the provisions of the first proviso to Section 5(1) of PMLA. The difference of wording of the first and the second proviso also makes it clear that the first proviso relates to the property of a person charged of having committed a scheduled offence while the second proviso relates to property of any other person not necessarily charged of having committed a scheduled offence. It therefore, appears that pending invest....
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....money laundering and confiscated by the Central Government. The Adjudicating Authority, therefor, declares whether a property is involved in money laundering. The procedure to be followed for the adjudication is specified under Section 8(2) of PMLA. After completion of the adjudication process as envisaged under Section 8(2) of PMLA the Adjudicating Authority has to record a finding whether all or any of the properties referred to in the notice issued under Section 8(1) are involved in money laundering. Once this finding is arrived at and it is declared by the Adjudicating Authority that the property/properties are involved in money laundering, the Adjudicating Authority shall confirm the order of attachment under Section 5(1) of PMLA i.e., the order provisionally attaching the property. The Adjudicating Authority after conclusion of hearing under Section 8 (2) of PMLA, therefor can either declare that the property or properties are involved in money-laundering or hold that they are not so. The adjudication process, by the Adjudicating Authority is thus not dependent on the order of provisional attachment being in force, though the initiation of adjudication under Section 8(1) of P....
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.... of PMLA on 19th February, 2020 upon the petitioner no. 1 and its Directors calling upon them to indicate the source of income, earnings or assets out of which or by means of which the property attached under the provisions of Section 5(1) of PMLA was acquired. It is an admitted position that immediately upon expiry of the minimum 30 days' notice period for show cause under Section 8(1) was over, the country went into a national lockdown. As a natural consequence, the matter being fixed on 4th May, 2020 before the Adjudicating Authority for a hearing under Section 8(2) could not take place. The petitioner no. 1 also did not file any reply as required under Section 8(2) of PMLA. Before the adjudication under Section 8(2) was over, the 180 days time period from the date of passing of the provisional order of attachment had expired. (xii) It appears from Section 8(2) of PMLA that there is no time limit for completing the adjudication. The stipulation in Section 5(3) on a conjoint reading of the said section along with Section-8(2) also does not indicate any timeframe. However, on expiry of 180 days the order of provisional attachment losses its validity unless confirmed p....