TaxTMI 
TaxTMI 
2022 (11) TMI 1488
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....istrict by furnishing security in the form of fixed deposit for the value of Rs.1,36,91,285.00 during pendency of the related appeal being C.M.S.A.No.15 of 2019. 4. I.A.No.2 of 2021 has been filed by the applicant Smt. Y.S.Bharathi Reddy to allow her to substitute the amount sought to be attached and recovered from her with respect to the movable property i.e., 61,38,937 equity shares of Rs.10 each of M/s.Sandur Power Company Private Limited by furnishing security in the form of fixed deposit for the value of Rs.6,13,89,370.00 pending disposal of C.M.S.A.No.15 of 2019. 5. The third interlocutory application being I.A.No.3 of 2021 has been filed by the applicant Smt. Y.S.Bharathi Reddy for vacating the interim order dated 18.11.2019 passed by this Court in I.A.No.2 of 2019 in C.M.S.A.No.15 of 2019 and for directing the respondent to remit back the amount of Rs.14.29 crores to the applicant along with interest. 6. Opposite party in the three interlocutory applications who is also the appellant in C.M.S.A.No.15 of 2019 i.e., Deputy Director, Directorate of Enforcement, Government of India, Hyderabad, has filed three separate but identical counter affidavits to the three inter....
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....inafter as 'the subject immovable property'). The value of the said property was estimated at Rs.1,36,91,285.00 with name of the party shown as Smt. Y.S.Bharathi Reddy. 8.2. Insofar the movable properties are concerned those were mentioned in para 16.2. At Sl.No.11, property of the applicant was described as 6897 shares of Rs.100.00 each of M/s.Cairn India Limited, the amount being Rs.5,10,11,403.00 with name of the party shown as Smt. Y.S.Bharathi Reddy. In addition, at Sl.Nos.23 to 30, the following properties in the form of fixed deposits were shown: 23 FD No.8263031012745 50,00,000 Smt. Y.S.Bharathi Reddy (Maintained with Oriental Bank of Commerce, Yelhanka Branch, Bangalore) 24 FD No.8263031012752 50,00,000 25 FD No.8263031012769 50,00,000 26 FD No.8263031012875 60,00,000 27 FD No.8263031012882 65,00,000 28 FD No.11183811041168 82,45,000 Smt. Y.S.Bharathi Reddy (Maintained with Oriental Bank of Commerce, Koramangala Branch, Bangalore) 29 FD No.11183811032333 3,02,40,000 30 FD No.11183811036874 9,25,00,000 9. As per requirement of Section 5(5) of PMLA, Joint Director, Directorate ....
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....i Y.S.Jagan Mohan Reddy and BCCL was without any substance as the appointment of the applicant as Director of BCCL was done in a legal manner and in accordance with the provisions of the Companies Act, 1956; so also her remunerations. Appellate Tribunal further held that no allegations of any such appointment and remuneration paid to the applicant being wrongful was raised either by the Central Bureau of Investigation (CBI) in their investigation nor was it the subject matter of any enquiry or proceedings under the Income Tax Act, 1961. Holding that income derived by a person working in a post can never be termed as proceeds of crime, Appellate Tribunal noted that applicant was serving BCCL as its Director and Chairperson and BCCL was generating surplus and profits to the satisfaction of its shareholders. It was a professionally managed company, the balance sheets and financial results of BCCL being subjected to audit. Investments made into BCCL by foreign shareholders and the manner of functioning of BCCL has not been the subject of any enquiry. Majority shareholding in BCCL came to be by PARFICIM, SAS, France, a multi-national company. Sri Y.S.Jagan Mohan Reddy and his associates....
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.... It is also brought to our notice that this Court in similar matters had taken note of the fact that the orders of attachment passed by the Deputy Director of Enforcement, which have been confirmed by the Appellate Authority have been in force since 2012 and that status quo with regard to the same is directed to continue until further orders. In view of the same, status quo as on today shall be maintained until further orders. 13. It is for the modification/vacation of this order that the present interlocutory applications have been filed. 14. In the counter affidavits filed, opposite party/appellant has contended that relief sought for in the interlocutory applications cannot be granted as no such provision exists in PMLA. It is stated that after due investigation following registration of ECIR/09/HZO/ 2011, proceeds of crime were ascertained, whereafter provisional attachment order was passed attaching various movable and immovable properties including that of the applicant/respondent. Thereafter, adjudicating authority confirmed the order of provisional attachment. When this was challenged in appeal by the applicant/respondent, Appellate Tribun....
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....being on account of equivalent value of proceeds of crime, the Court can certainly allow substitution of such attached property. As a matter of fact, this is allowed by the Appellate Tribunal, he submits. He has also referred to Rule 5(5) of the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by Adjudicating Authority) Rules, 2013. 16. On the other hand, Mr. T.Surya Karan Reddy, learned Additional Solicitor General while opposing such prayer submits that in stead of considering modification of the status quo order, the Court may finally decide the appeal one way or the other. 17. We have heard learned counsel for the parties and perused the materials on record. 18. Let us first deal with the case laws cited at the bar. 19. Hetero Drugs Limited v. Deputy Director, Directorate of Enforcement, Delhi MANU/ML/0032/2015 is a decision of the Appellate Tribunal. An application was filed by the appellant seeking a direction to the Enforcement Directorate to accept fixed deposit and in lieu thereof to release the immovable properties covered by the provisional attachment order. Appellate Tribunal held that there is no provision under t....
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.... 2018 SCC OnLine ATPMLA 23. In that decision, Appellate Tribunal referred to Section 35(1) of PMLA, which empowers the Appellate Tribunal to regulate its own procedure. Appellate Tribunal observed that though it is true that there is no specific provision under PMLA for substitution of property provisionally attached by the Enforcement Directorate and thereafter confirmed by the adjudicating authority, there is also no provision that the said power cannot be exercised by the Appellate Tribunal under Section 35(1) of PMLA. In the facts of that case, prayer of the appellant for releasing the attached property was allowed by accepting the alternative property offered by the appellant. However, we may point out that even this decision was rendered by the Appellate Tribunal when appellate proceedings were pending before the Appellate Tribunal with the provisional attachment order and confirmation order still holding the field. 23. Before we advert to the order of the Appellate Tribunal insofar the related appeal is concerned, we may mention about Rule 5(5) of the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority....