TaxTMI 
TaxTMI 
2022 (8) TMI 543
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....on that the funds lying in the said accounts shall not be transferred or otherwise dealt with except with the prior permission of the ED. 2. Learned counsel appearing for the petitioners places the factual genesis of the matter from 2012 to the date on which the freezing orders were issued and decisions of Single and Division Benches of this Court as well as by the Supreme Court with reference to an ECIR case filed against the petitioner no. 1 in 2012. Counsel submits that orders were passed by which leave to file charge-sheets against the petitioner no. 1 was refused and proceedings against the petitioner no. 1 were stayed by the Supreme Court. Counsel also places relevant provisions of The PMLA with reference to action initiated under Sections 17 and 17(1-A) of The PMLA. 3. Learned counsel appearing for the ED submits that the impugned orders were passed upon incriminating material being found in three premises of the petitioner no. 1 in a search made in the said three premises. Counsel submits that all the statutory formalities for conducting the search and seizure were complied with and further submits that the ED is entitled to investigate in the affairs of the petitione....
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.... filed by the first petitioner against an order of the Division Bench dated 24.12.2014 by which the Division Bench rejected the challenge to the 2009 Circular on the ground that the Railway Board has the jurisdiction to issue the said Circular. The Union of India also filed a civil suit being CS No. 311/2014 before this Court. Both these proceedings find specific mention in the order passed by the Supreme Court on 14th December, 2015 staying all further proceedings in all of such cases until further orders. The cases mentioned in the order of the Supreme Court include both the review petition being RVW 44/2015 as well as CS No. 311/2014 being the suit filed by the Union of India against the petitioner no. 1. This Court has not been made aware of any further orders passed in the Transfer Petition after 14th December, 2015. The stay of the proceedings stated above is admittedly subsisting as on date. 7. The above facts therefore begs the question as to the basis on which the ED proceeded to initiate action under Sections 17 and 17(1-A) of The PMLA for freezing the bank accounts of the petitioner no. 1. The ECIR case of 2012 shows that the impugned orders can be traced to th....
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.... the four pre-requisites stated above. The pre-requisites not only indicate that the authorised officer must have reason to believe (reduced to writing) on the information in his possession but also that the person in relation to the premises is guilty of an offence defined in Section 3 of The PMLA - "money-laundering". 12. Section 3 entails a separate set of requirements and evidence including that the person who is found guilty of the offence of money-laundering has knowingly indulged or assisted in the commission of an activity connected with "proceeds of crime" and has concealed, possessed, acquired or used the same. The term "proceeds of crime" has been defined in Section 2(1)(u) as any property derived directly or indirectly by any person as a result of criminal activity related to a scheduled offence as well as any property which is used in the commission of an offence under The PMLA or any of the scheduled offences. Besides, commission of an offence would only qualify as money-laundering if the offence generates proceeds of crime and tainted property (Vijay Madanlal Choudhary vs. Union of India; 2022 SCC OnLine SC 929). 13. Therefore, the search and seizure under Sect....
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.... enter and search the premises on a reason to believe (based on material in his possession) that the proceeds of crime/documents may be located in the place of search. Second, the finding must also include the apprehension of resistance on the part of the person whose place is proposed to be entered into and searched. This would be evident from Section 17(1)(b) which includes forcible entry into the premises and breaking open of the receptacle for exercising the power conferred by Section 17(1-A). 16. These factors were taken into consideration by a Division Bench of the Allahabad High Court in Motilal vs. Preventive Intelligence Officer, Central Excise and Customs, Agra; (1971) 80 ITR 418 where Section 132(3) of the Income Tax (IT) Act, 1961 was under consideration. Section 132(3) of the IT Act is similar in import and purpose to Section 17(1-A) of The PMLA. The conclusions of the Allahabad High Court were relied upon in Commissioner of Income Tax, Haryana, Himachal Pradesh and Delhi vs. Tarsem Kumar; (1986) 3 SCC 489. A Division Bench of the Delhi High Court in Shri L.R. Gupta vs. Union of India; 1992 (22) DRJ 1 also opined that facts and circumstances must exist on the basis ....
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.... of stay of criminal investigation in Siddharth Mukesh Bhandari vs. The State of Gujarat passed on 2nd August, 2022, relying upon Neeharika Infrastructure Pvt. Ltd. vs. State of Maharashtra; (2021) SCC OnLine SC 315 was in light of the Gujarat High Court granting the very same interim relief which was earlier set aside by the Supreme Court. In the recent judgment of a 3-Judge Bench of Supreme Court in Vijay Madanlal Choudhary vs. Union of India the expression "proceeds of crime", is described as the core of the offence of money-laundering and has been defined as a portion or whole of the property derived by any person as a result of criminal activity relating to a stated scheduled offence. The Supreme Court drew a distinction between possession of unaccounted property acquired by legal means which may otherwise be actionable for tax violation but may not be regarded as proceeds of crime unless the concerned tax legislation prescribes such violation as an offence in the Schedule to The PMLA. The Supreme Court also cautioned that the authorities under The PMLA cannot resort to action against any person for money-laundering on an assumption that the property recovered by them must be ....