AI Drafter 
TaxTMI 
TaxTMI 
2024 (10) TMI 227
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....ence under section 109 of IPC. The allegation against the appellant was for possession of assets, dis- proportionate to the known sources of income while he was in service of Steel Authority of India Ltd. 2. After registration of the FIR, the ECIR was recorded by the respondent and thereupon the investigation was conducted. The respondent thereupon attached the property belonging to the appellant finding it to be the proceeds of crime. The assets attached by the respondent is not only movable but immovable properties of the appellant and his family members. The provisional attachment order has been confirmed by the Adjudicating Authority. Thus, aggrieved by the order, this appeal has been preferred. The dis-proportionate assets to the known sources of income were quantified to Rs. 2,22,08,886/- which is said to be 139.97 % to the income. 3. The learned counsel for the appellant raised legal issues for challenge to the order dated 09.11.2021. It is submitted ground that after the provisional attachment order dated 23.12.2020, the order for its confirmation must be passed within 180 days, otherwise the attachment would lapse as per section 5 of the Act of 2002. 4. In the ins....
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..... 2,22,08,886/. 12. The appellant was called upon by the Adjudicating Authority to show sources of income to acquire the properties. It was by serving notice under section 5(1) of the Act. The appellant filed the reply but the Adjudicating Authority confirmed the order which has been challenged by the appellant only on two grounds leaving others raised in the appeal. The learned counsel for the appellant did not press any other grounds than raised and referred above. 13. Accordingly, we would analyse both the grounds. First ground. 14. The challenge to the order of the Adjudicating Authority has been made alleging it to be beyond 180 days from the date of the provisional attachment order. The provisional attachment order can continue for a period of 180 days and thereupon it would lapse unless confirmed by the Adjudicating Authority within the period of 180 days. 15. Specific reference of section 5 has been given and quoted hereunder: - 5. Attachment of property involved in money-laundering. (1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (....
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....ty shall keep such order and material for such period as may be prescribed. (3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub- section or on the date of an order made under 3 [sub-section (3)] of section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation. -For the purposes of this sub-section, "person interested", in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (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. 16. It is no doubt that if the provisional attachment order is not confirmed within 180 days, it would cease to have effect as per as per section 5 of the Act itself. However, there is a peculiarity in the case which arose due to Covid-19. The period....
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....ed till date. The Petitioner contends that as 180 days have lapsed since the passing of the provisional attachment order, the Adjudicating Authority cannot pass an order confirming the provisional attachment. iii) On the other hand, the ED in both W.P. Nos. 34238 of 2022 and 34627 of 2022 contends that due to Covid-19 pandemic the provisional attachment of properties could not have been confirmed within 180 days. However, in in re: Limitation (supra) the Apex Court extended the period limitation from 15.03.2020 to 28.02.2022. ED contends that the period from 15.03.2020 to 28.02.2022 shall be excluded from the date of provisional attachment till the date of passing of confirmation order to compute the period of 180 days. iv) It is relevant to note that the Apex Court in in re: Limitation (supra) took Suo moto cognizance of the Covid-19 pandemic situation and extended the period of limitation from 15.03.2020 for the purpose of filing petitions/applications/suits/ appeals/all other proceedings under any general or special law before any Court or Tribunal. The object of such extension was in recognition of the difficulties that might be faced by lawyers/litigants to f....
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....balance period of limitation remaining as on 3-10-2021, if any, shall become available with effect from 1-3- 2022. 5.3. In cases where the limitation would have expired during the period between 15-3-2020 till 28-2-2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 1-3-2022. In the event the actual balance period of limitation remaining, with effect from 1-3- 2022 is greater than 90 days, that longer period shall apply. 5.4. It is further clarified that the period from 15-3-2020 till 28-2-2022 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29-A of the Arbitration and Conciliation Act, 1996, Section 12-A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings. vi) For instance, Section 29A of the Arbitration & Conciliation Act, 1996 provides a time limit of 12 months within which an award has to be passe....
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....ing law of any other country: Provided further that, notwithstanding anything contained in first proviso, 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 proceeding under this Act. Provided also that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this section is stayed by the High Court, shall be excluded and a further period not exceeding thirty days from the date of order of vacation of such stay order shall be counted. (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 A....
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....n regarding the twin requirements referred to in sub-section (1), the authorised officer can proceed to issue order of provisional attachment of such proceeds of crime. Before issuing a formal order, the authorised officer has to form his opinion and delineate the reasons for such belief to be recorded in writing, which indeed is not on the basis of assumption, but on the basis of material in his possession. The order of provisional attachment is, thus, the outcome of such satisfaction already recorded by the authorised officer. Notably, the provisional order of attachment operates for a fixed duration not exceeding one hundred and eighty days from the date of the order. This is yet another safeguard provisioned in the 2002 Act itself. x) It is true that the period of 180 days within which the provisional attachment order under Section 5(1) of the PMLA has to be confirmed is mandatory. However, in appropriate cases the High Court can exclude certain period while computing the period of 180 days. For instance, this Court in Karvy Realty (India) Ltd. v. The Adjudicating Authority MANU/TL/2356/2022 noting that the Petitioner therein did not have sufficient time to effectively....
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....) could be denied on the ground that investigation was not completed and charge sheet was not filed due to Covid-19. The Court therein held that Section 167(2) of the CrPC envisages an indefeasible right to obtain statutory bail, if investigation is not completed within the prescribed time. The Court held that the decision in In re: Limitation (supra) is not applicable to Section 167(2) of the CrPC as personal liberty of an individual cannot be curtailed. The Court noted the decisions of other High Courts and held that the decision in in re: Limitation (supra) is not applicable to police investigations. In other words, time periods prescribed to complete police investigations and where individual liberty of the accused is in question, the benefit of extension of limitation in In re: Limitation (supra) cannot be taken. The relevant paragraphs are extracted below: 20. If the interpretation by the learned Single Judge in the impugned judgment [S. Kasi v. State, MANU/TN/7730/2020] is taken to its logical end, due to difficulties and due to present Pandemic, police may also not produce an accused within 24 hours before the Magistrate's Court as contemplated by Section 57CrP....
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....is Court dated 23-3-2020 [Cognizance for Extension of Limitation, In re, MANU/SC/0505/2020 : (2020) 19 SCC 10] . 34. The Rajasthan High Court had occasion to consider Section 167 as well as the order of this Court dated 23-3-2020 passed in Cognizance for Extension of Limitation, In re [Cognizance for Extension of Limitation, In re, MANU/SC/0505/2020 : (2020) 19 SCC 10] and the Rajasthan High Court has also come to the same conclusion that the order of this Court dated 23-3-2020 [Cognizance for Extension of Limitation, In re, MANU/SC/0505/2020 : (2020) 19 SCC 10] has no consequence on the right, which accrues to an accused on non-filing of charge-sheet within time as prescribed under Section 167CrPC. The Rajasthan High Court in Pankaj v. State [Pankaj v. State, MANU/RH/0309/2020] decided on 22-5-2020 has also followed the judgment of the learned Single Judge of the Madras High Court in Settu v. State [Settu v. State, MANU/TN/3790/2020] and has held that the accused was entitled for grant of the default bail. The Uttarakhand High Court in Vivek Sharma v. State of Uttarakhand [Vivek Sharma v. State of Uttarakhand First Bail Application No. 511 of 2020, order dated 12-5-2020 (....
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....rder being passed under Section 8(3) of the Act, the Provisional Attachment Order ceases to have effect and therefore, there is no order before the Adjudicating Authority to confirm under Section 8(3) of the Act. The Adjudicating Authority, therefore, becomes functus officio. 28. In view of the above dicta, the submission of the learned counsel for the respondents that as the delay in proceedings before the Adjudicating Authority cannot be blamed on the respondents, the respondents must not be penalized and the time period should be extended, cannot be accepted. It is not a question of penalization of the respondents for the delay, but of application of the mandate of law from which there is no escape. Equally, the principle of Actus Curiae Neminem Gravabit can also have no application. 30. Clearly, the above order extended the period of limitation. In the present case, Section 5(1) and 5(3) do not provide the period of limitation, but the period of validity of the Provisional Attachment Order. The same would not stand extended due to the above order of the Supreme Court. This becomes more evident from the order dated 06.05.2020 passed by the Supreme Court in I.A.....
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....tachment Order dated 13.11.2019 having expired without any order under Section 8(3) of the Act being passed by the Adjudicating Authority, it is held that the Adjudicating Authority has been rendered functus officio and cannot proceed with the Original Complaint, being O.C. No. 1228/2019 pending before it. The Notice/Summons dated 26.05.2020 is accordingly set aside. 38. In the present case I have intentionally refrained myself from making any comment on whether the period of total lockdown declared by the Central Government, that is from 24.03.2020 to 20.04.2020, can be excluded for computation of the 180 days, as it is not disputed that even on exclusion of this period, the 180 days would have expired on 16.06.2020, the returnable date of the notice issued by the Adjudicating Authority. xvi) Similarly, the Calcutta High Court in Gobindo Das (supra) held that Adjudicating Authority cannot be termed as a litigant for whose benefit In re: Limitation (supra) was passed. Therefore, In re: Limitation (supra) cannot be used to extend the 180 day period to pass orders confirming provisional attachment of properties. The relevant paragraphs are extracted below: ....
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.... expiry of its validity under Section 5 (3) of the said Act by taking the stand of automatic deemed extension/confirmation of the said order by virtue of the order of the Hon'ble Supreme Court in Suo moto Writ Petition (Civil) No. 3 of 2020 (supra) by claiming itself as a litigant or advocate or quasi-judicial authority when it was not required to approach physically any quasi-judicial or judicial authority to initiate any proceeding or to file any application/suit/appeal for the purpose of extension or confirmation of the order under Section 5 (1) of The Prevention of Money Laundering Act, 2002. xvii) Similarly, the Calcutta High Court in Hiren Panchal (supra) held that vide orders in In re: Limitation (supra), the Apex Court extended the period of limitation to safeguard the right of litigants to institute proceedings. The Court held that computation of 180 days to confirm provisional attachment of properties under Section 8(3) of the PMLA cannot be equated to initiation/institution of proceedings. The Court also held that prescription of 180 days is in the form of a protection against deprivation of right to property. The relevant paragraphs are extracted below: ....
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.... days period on 31st March, 2022. By its inaction and failure to act in terms of Section 5(1)(b) or the other conditions of the said section, the ED has made itself vulnerable to Section 5(3) of the PMLA. The petitioner in turn has been given the breather of exhaustion of the 180 days window from 1st April 2022 and the ED cannot now revive the proceedings after more than 80 days have passed from the end point of the 180 days period. 21. In Gobindo Das, the Appeal Court disagreed with the view of the Adjudicating Authority being a "non-litigant". The Division Bench was also disturbed by the fact that the bank accounts of the writ petitioners have been debited leaving the balance at zero despite the order of attachment. Prakash Corporates dealt with the prescribed statutory time for filing of the written statement under Order VIII Rule 1 of The Code of Civil Procedure, as amended by the Commercial Courts Act. Prakash Corporates also recognised the fact that the decision in S. Kasi was concerned with filing of the charge sheet under Section 167(2) of The Code of Criminal Procedure (C.D.C..) and hence would not apply to filing of written statements beyond the prescribed time-l....
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.... provisionally attached. Further, under Section 5(4) of the PMLA, the person whose property is provisionally attached can still enjoy such property till the same is confiscated. Even in cases of confirmation of provisional attachment, a person can still enjoy such property till the same is confiscated. xx) In Vijay Madanlal Choudhary (supra), the Apex Court held that provisionally attached properties which are confirmed can still be enjoyed by a party till a confiscation order is passed. The relevant paragraphs are extracted below: 304. The other grievance of the petitioners is in reference to the stipulation in sub-section (4) of Section 8 providing for taking possession of the property. This provision ought to be invoked only in exceptional situation keeping in mind the peculiar facts of the case. In that, merely because the provisional attachment order passed under Section 5(1) is confirmed, it does not follow that the property stands confiscated; and until an order of confiscation is formally passed, there is no reason to hasten the process of taking possession of such property. The principle set out in Section 5(4) of the 2002 Act needs to be extended even af....
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....reseen circumstances like Covid-19 such attachment was not confirmed, benefit can be granted in favour of the Adjudicating Authority by excluding the period as prescribed under in re: Limitation (supra), a fortiori when the property can still be enjoyed. xxii) It is relevant to note that the Supreme Court in Prakash Corporates v. Dee Vee Projects Ltd. MANU/SC/0180/2022: (2022) 5 SCC 112 dealt with the application of in re: Limitation (supra) in relation to filing of a written statement. The Court therein held that the scope of in re: Limitation (supra) cannot be unnecessarily narrowed and in relation to S. Kasi (supra) held that the same stands on different footing as it dealt with Article 21 of the Constitution of India. The relevant paragraphs are extracted below: 27.7. We are not elaborating on other directions issued by this Court but, when read as a whole, it is but clear that the anxiety of this Court had been to obviate the hardships likely to be suffered by the litigants during the onslaughts of this pandemic. Hence, the legal effect and coverage of the orders passed by this Court in SMWP No. 3 of 2020 cannot be unnecessarily narrowed and rather, having regard to t....
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....ble to compute the period of 180 days under Section 5(3) of the PMLA. The Court also disagreed with the view adopted in Vikas WSP Ltd. (supra), and Hiren Panchal (supra). The relevant paragraphs are extracted below: 12. Insofar as the judgment of the Calcutta High Court that was brought to our notice, we find that the Calcutta High Court had mainly relied upon the judgment of the Apex Court in S. Kasi case. With utmost respect to the learned Single Judge of the Calcutta High Court, we are not in agreement with the reasoning in the above judgment. The issue that was dealt with by the Apex Court in S. Kasi case pertains to the scope of Section 167(2) of C.D.C. which is directly referable to Article 21 of the Constitution of India viz., personal liberty of a person. The same cannot be equated while dealing with a property right under Article 300-A of the Constitution of India and the judgment of the Apex Court in S. Kasi case cannot be applied to a case involving property right of an individual or a corporate. 14. Our reasoning supra is also supported by the judgment of the Apex Court in Prakash Corporates v. Dee Vee Projects Limited [MANU/SC/0180/2022: (2022) 5 SCC ....
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....visional attachment of properties will cease to have effect after a lapse of 180 days from the date of provisional attachment. That would mean that attachment proceedings shall terminate if the same are not confirmed within a period of 180 days. Therefore, while calculating/computing the 180-day period, the period from15 .03.2022 to 28.02.2022 shall be excluded. xxviii) To answer Issue No. 3, this Court holds that the decision in in re: Limitation (supra) and subsequent extensions vide in re: Limitation 2022 (supra) are applicable to PMLA proceedings to compute the period of 180 days. While computing such period, the period from15.03.2020 to 28.02.2022 shall be excluded." The para quoted above deals with the issue and is applicable to the facts of this case. Since the period of Covid- 19 from 15.03.2020 till 28.02.2022 has been excluded by the Apex Court for termination of proceedings, the Telangana High Court took notice to it and held that if period of 180 days was falling during the period eliminated by the Apex Court for termination of proceeding, then the provisional attachment would not lapse. In the light of the detailed Judgement of the Telangana High Court, we ....