TaxTMI 
TaxTMI 
2014 (1) TMI 1951
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....rder No. 5/2012 dated 26.09.2012 pursuant to ECIR No. 123/MZO/2010 under Section 5 of the PMLA. All the above appeals have arisen from an offence registered vide FIR No. 132/2009 dated 29.4.2009. On filing of charge-sheet CC No. 1521/PW/2010 on 6.7.2010 before the MM, Railway Mobile, Andheri East, Mumbai, the respondent passed above two attachment orders. As most of the facts and pleas & contentions raised by the appellants are similar, the above appeals are disposed of by this common judgment. Brief facts: The Appellant Munir Mohammed Ahmed Khan (hereinafter also referred to as Munir Khan) is proprietor of M/s. Health Reactive. Smt. Rukhsana Munir Khan is wife of Munir Khan. Munish Munir Khan and Sarosh Khan are sons of Munir Khan. 2. Munir Khan, who is main accused, in his statement before the respondent, stated that he had studied up to 12 standard from government college, Bundi, Rajasthan; that he was not very interested in the normal schooling and used to study books on different subjects including Vedas and longevity; that in the year 1983, he started civil contactor work for Western Railway, Kota, Rajasthan; that he was also doing research for making a medicine which coul....
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....annels capable of curing patients of any ailment by taking his so called panacea "Body Revival". He claimed in TV advertisements that his medicine could cure various incurable diseases 100% and if his medicine did not produce the desired effect, he would return the money. It is alleged that however, the patients were required to sign on a consent letter on which it was written that there was no guarantee that their ailment would be cured. The refund was restricted to the quantity of medicine left in the bottle. The report regarding the medicine, received from the FDA authorities stated that the medicine did not possess any medicinal properties; that the drug Yogiraj/Kukronda contained in the medicine were banned by the Forest Department and constituents of the medicine could not cure any incurable diseases as claimed. The Appellants thus cheated the patients and people. 4. Munir Mohammed Ahmed Khan formed a trust namely 'Munir Khan Cancer Trust' and got it registered with the charity commissioner on 17/07/2006. The trustees of the trust were Munir Khan, Mrs. Ruksana Munir Khan w/o Munir Khan and Feroz Noor Mohammed Khan. It is alleged that instead of carrying out the chari....
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....06.07.2010 before the Metropolitan Magistrate, Railway Mobile Court, Andheri East, Mumbai under sections 467, 468, 471, 419, 420, 406, 108 and 34 of Indian panel Code, under section 3(d) read with Schedule S. No. 6, 9, 50 & 39 and section 7 of Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 and under sections 33 and 36 of Maharashtra Medical Practitioners Act, 1961 against Munir Khan and 9 others. It is alleged that Munir Khan along with others connived and knowing that he is not a qualified doctor on the basis of degree of Doctor of Naturopathy held by him misrepresented to be a Doctor and the medicine "Body Revival" prescribed by him, does not contain any medicinal properties which is made up of ingredients like Yogiraj, Kukrenda which are banned by the Forest Department. He professed himself as a doctor in various TV channels and treated patients by prescribing a non-effective medicine and sold the said medicine knowing that the medicine sold by him will be ineffective. 8. Munir Khan and other thus cheated patients by professing Munir Khan to be a doctor and falsely claiming that the medicine invented by him could cure various incurable diseases and thereby ma....
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....r and sale he had a valid license number 583-AYU, issued by licensing authority, Ajmer, Rajasthan, which was in force from 16.04.2008 till 15.04.2011. The said license was duly obtained from the licensing authority under Drugs and Cosmetics Act, 1940 and rules made there under. It was thereafter, renewed before its expiry and renewal is valid from 07.01.2011 till 6.1.2016. The product was manufactured as per the terms of license and manufacturing certificate substantiates the same. 12. The counsel for appellants submitted that amongst various products manufactured by M/s. Health Reactive, which are about 26 in number, specific product approval of "Body Revival", product in question, was also obtained on 18.11.2008 from the licensing authority, Ajmer, Rajasthan. He contended that the authorities granted specific product approval, only after the product had been tried and tested by a competent authority with a number of persons and they were found to be fit. He submitted that the license number 583-AYU was cancelled on 01/12/2009 in an unauthorized manner which was subsequently revived/renewed. He submitted that the license for product 'Body Revival' was again suspended on 1....
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.... themselves so that police officials do not register cases against the appellants and their family. He submitted that as the illegal demand of Mr. Poddar had not been met, he proceeded against the appellants through FIR No. 116/2009 and also lodged a counterblast FIR No. 132/2009 on 29.4.2009 against appellants and others. The counsel submitted that as the police officials were involved therefore, proceedings in both the aforesaid cases were being conducted in a partial manner and the appellants approached the Bombay High Court for issue of appropriate and necessary directions to the police authorities. The Bombay High Court directed the Commissioner of police, Mumbai to ensure that both the cases are investigated independently and expeditiously in accordance with law. 16. The counsel submitted that pursuant to the aforesaid FIR No. 132/2009 dated 29.04.2009, chargesheet CC No. 1521/PW/2010 was filed on 6.7.2010 before the M.M., Railway Mobile, Andheri East, Mumbai, under sections 467, 468, 471, 419, 420, 406, 108 and 34 of Indian panel Code, under section 3(d) read with Schedule S. No. 6, 9, 50 & 39 and section 7 of Drugs and Magic Remedies (Objectionable Advertisements) Act, 195....
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....420 of IPC. The impugned order and the complaint as well as the provisional attachment order do not even disclose any forgery alleged to have been committed by the appellants or use of any forged documents except simply stating that charge-sheet has been filed for those concerned offences. 20. The counsel contended that PML Act is not applicable to offences that have been committed prior to the date of the enactment of the amending statute. The provisions of PMLA cannot be resorted to in respect of those offences under IPC which have been committed or alleged to have been committed prior to the date on which such offences were included within the purview of PMLA. He contended that there is no dispute that section 420 and 471 of IPC were added to the schedule of PMLA by way of amendment which came into force w.e.f. 1.6.2009. He submitted that FIR in respect of the alleged offences in the instant case was ledged on 29/04/2009. The entire complaint and impugned order contains finding against Munir Khan only in respect of offence under section 420 of IPC which allegedly was committed much prior to 01/06/2009. The complaint and the impugned order have no mention about Munir Khan having....
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....f Rs. 15,000/-, provisions of PMLA cannot be resorted to since the cumulative sum involved in the various offences of section 420 is much less than the prescribed threshold under the Act. 25. The counsel submitted that in the present case, the respondent's allegations are vague that Munir Khan had cheated and dishonestly induced innumerable persons to deliver Rs. 15,000/- each. The FIR No. 132/2009 however, is filed only by one person. The trial will consequently will only be to ascertain whether the offence under section 420 of IPC was committed qua such complainant or not. The counsel drew our attention to copy of FIR and pointed out that the total value of property involved in alleged crime is only Rs. 15,000/-. Therefore a single offence of cheating does not give jurisdiction to respondent under PMLA. 26. The counsel submitted that the charge sheet filed in the present case simply records that statements of 66 witnesses were taken and except two of these persons all others have stated that due to the medicines given by Munir Khan, condition of their relatives had worsened. Even if the total value of property involved in alleged offence is calculated for these 64 persons, ....
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....every case indiscriminately. Therefore, the very invocation of the powers of attachment in the instant case is bad in law and attachment orders are liable to be set aside. 30. He submitted that the sanctity of section 5(1)(c) is exemplified by consequence of attachment provided under section 8(4) of PMLA. Upon rightful invocation of the attachment powers, and subsequent to their confirmation, even the possession of the property can be taken by the PMLA authorities. It need be borne that the person is dispossessed of all the properties even before he is convicted. 31. The counsel submitted that the respondent has not recorded any circumstances on the basis of which he came to the conclusion that the properties may be transferred by the appellants. He submitted that after filing of charge sheet on July 2010, no amount was drawn or utilized from the bank accounts. After the statements were recorded by the respondent and till the provisional attachment order was passed, no amount was withdrawn/spent. Immovable properties were acquired from the sale proceeds of drug in the year 2008 and 2009 but no attempt has been made by the appellants to transfer any of the properties and therefore....
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....g the accused or other persons in the interregnum section 8(4) of PMLA should be read as discretionary, rather than being mandatory, to provide for dispossession. The word 'shall' used therein has to be read as 'may', and possession should be taken only in those cases where properties are capable of being tampered with which may frustrate the ultimate confiscation proceedings and there lies the possibility of the same e.g. in the cases of movable properties. 35. The counsel for appellants submitted that an application dated 12.10.2012 was filed before the Adjudicating Authority for seeking cross examination of the witnesses relied or referred to in the complaint filed u/s 5(5) of the PML Act. He submitted that the Adjudicating Authority did not dispose of the said application. The Adjudicating Authority neither allowed nor rejected the application and just did not dispose of the application. He submitted that the Adjudicating Authority has given an erroneous finding in the impugned order on page 50 which is adverted to as follows: As the proceedings before us are provisional and civil in nature, there is no room for cross examination. Truly speaking, the Ld. Coun....
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....tial material to start investigation under PMLA are FIR and charge sheet etc. If the accused is charged for the commission of an offence which is in the schedule, annexed to PMLA, the respondent has jurisdiction to begin investigation in the matter. He submitted that this Tribunal cannot go into the correctness of the charges for scheduled offence as the same is not within its jurisdiction. He submitted that section 467 of IPC was there in the statute even prior to 1.6.2009 and section 420 and 471 were added to the statute by the Prevention of Money Laundering (Amendment) Act, 2009 which came into force w.e.f. 1.6.2009. He contended that for the purpose of determining the applicability of the provisions of PMLA, it is the date on which charge sheet is filed which is relevant and in the present case charge sheet was filed on 6.7.2010 which is after 1.6.2009 and thus on the day the charge sheet was filed, offences under section 420 and 471 of IPC were already scheduled offence under PMLA. The counsel relied on the judgment of the Andhra Pradesh High Court in the writ petition in the case of V. Suryanarayanan Prabhakar Gupta v. Union of India where similar question was answered in the....
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....achment/confiscation. He further submitted that one of the important object of the PMLA is to deprive the perpetrators of the schedule offence from the enjoyment of the fruits of the crime. If the properties are not attached and appellants are allowed to enjoy the properties, the object of the PMLA will be defeated. The counsel pointed out that the documents of immovable properties have been seized by the Income Tax Department as confirmed by Munish Munir Khan in the statement recorded by respondent u/s 50 of the Act on 13.2.2012, therefore, appellants were not in a position to transfer the properties and there are transactions of withdrawals from bank account after the filing of charge sheet in July 2010 and therefore, the submissions made by appellants that there is no attempt to draw any money from bank account since filing of charge sheet is not correct. 43. The counsel for respondent submitted that there is no provision in PML Act for allowing cross examination of a person whose statement is recorded under section 50 of the Act. He drew our attention to section 8 of the PML Act and pointed out that Adjudicating Authority has no power to allow cross examination. He relied on t....
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....o allow cross examine witnesses was only a ploy of the appellants to delay the adjudication proceedings. He further submitted that the appellants never pressed the application for cross examination before the Adjudicating Authority and never sought disposal of the application knowing the law laid down by the Hon'ble Court. He contended that the order cannot be impugned in the facts and circumstances on this ground by the appellants. 44. The counsel for respondent submitted that it is not mandatory to record statement u/s 50 of a person before his property is provisionally attached and it has not caused any illegality or prejudice to the appellant Mr. Sarosh Munir Khan. He further submitted that as per the scheme of PMLA, it is not mandatory to hear the party and give an opportunity to a person whose property is sought to be provisionally attached as the same is followed by time bound adjudication proceedings by the Adjudicating Authority where he is given notice and provided full opportunity of filing a reply and documents he relies on and after hearing his pleas and contentions, an appropriate order is passed and therefore there is no violation of principles of natural justic....
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.... to check the patients' case history for the satisfaction of patients and to know the size of tumor in case of cancer or percentage of blockage in case of heart disease. He obtained a Naturopathy Certificate from Bharvin's Academy of Naturopathy, Mumbai within two months after studying from home and he did not attend any formal classes anywhere. 47. Perusal of charge sheet reveals that certain documents were seized from the clinic of Munir Khan which includes NOC/consent letter taken from patients on which it was stated that there was no guarantee that the medicine will have the desired effect and the money which could be sought as refund would be restricted to the amount of medicine remaining in the bottle, letter head of Health Reactive on which 9 prescriptions signed by the lady doctors without name and date etc. so that they can be used as prescription by putting name of patient and date were also recovered. It was alleged that though Munir Khan had claimed in his interview telecast over TV that his medicine could cure cancer, heart blockage, kidney etc. and if no improvement is noticed, he will refund all the money paid but copies of NOC/consent letter show that his c....
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....n was having license number 583-AYU to manufacture and sell medicines including "Body Revival" which was valid for the period from 16.4.2008 to 15.4.2011 and also filed copy of license in Form 25D which is placed on page 119 of the paper book. Perusal of the copy filed by appellants reveals that the same is not certified by the appellants to be true copy of the license. The said license authorizes M/s. Health Reactive to manufacture medicines as per the list appended with the license but the same has not been produced/filed by the appellants before this Tribunal. No cogent reasons have been given for non-production of the same. The license permits manufacture of medicine under the direction and supervision of the technical staff i.e. Sh. Kailash Dutt Sharma and Sh. Bhawani Shankar. Though it was submitted by the appellants that specific product approval for manufacture of "Body Revival" was received on 16.11.2008 but no such document was filed/brought to our notice by the counsel for appellants. The appellants have stated that the license number 583-AYU was cancelled on 01.12.2009 which was subsequently revived and which was again cancelled and recently revived on 09.04.2013 with a....
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.... in the schedule annexed to the PMLA and whether the charges will be sustainable ultimately in the Criminal Court is not to be adjudicated by this Tribunal. The appellants have also not approached any competent Court for quashing of charge sheets or the charges framed against them. 53. The contention of the appellants that provisions of PMLA are not attracted as the offences under section 420 and 471 of IPC were added in the Schedule of PMLA by the Prevention of Money Laundering (Amendment) Act 2009 which came into force w.e.f. 1st June, 2009 and FIR for predicate offences in the present case was lodged on 29.4.2009 and charges against Munir Khan are mainly in respect of offence u/s 420 of IPC is also not sustainable. After careful consideration of the facts of the case and FIR/charge sheet we are of the opinion that there is no doubt that Munir Khan and others have been charged for various offences inter-alia u/s 420, 467 and 471 of IPC. Offence u/s 467 of IPC was in the Schedule of PMLA even prior to 1.6.2009. Whether the charges will be sustainable ultimately in the Criminal Court is not to be adjudicated by this Tribunal. The appellants have also not approached any competent C....
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....h High Court dismissed the petition and had held that since charge was framed against 1st Petitioner by C.B.C.I.D., on file of Additional Chief Metropolitan Magistrate alleging him to have committed offences punishable under Section 120B r/w Section 420 of Indian Penal Code, on 22nd November 2009, therefore, after that date, proceeds of crime punishable under provisions of IPC, in hands of 1st Petitioner, could be subjected to action under Section 5 of 2002 Act. Moreover, provisional attachment order had been passed subsequent to 22nd November, 2009, therefore, action initiated under Section 5 of 2002 Act against 1st Petitioner could not be faulted. To hold so, the Hon'ble Andhra Pradesh High Court also referred to and relied upon the principals enunciated in judgment of division bench of that court in the case of B. Rama Raju and Ors. v. Union of India, Ministry of Finance, Department of Revenue, Rep. by its Secretary (Revenue), New Delhi and Others 2011 (3) ALT 443 (D.B.). Relevant extracts of the Andhra Pradesh High Court judgment in V. Suryanarayhana Prabhakara Gupta (supra) are adverted to as follows: 7. Before I proceed any further, it would be apt to remind oneself tha....
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..... 10. These recommendations have been updated regularly and periodically, of late, India has been facing, on a regular periodicity, terrorist attacks. Hence, it needs to arm itself with an appropriate toolkit for a rigorous law enforcement to track and tackle the funding behind such attacks. These efforts led to this enactment. 11. Chapter-II of the PML Act defined the offence of money laundering and provided the punishment therefore in Sections 3 and 4 incorporated in the said Chapter. Section 3 declares that, whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property, shall be guilty of offence of money-laundering. Section 4 declares that whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term, which shall not be less than three years, but which may extend to seven years and shall also be liable to fine, which may extend to five lakh rupees. From the definition of 'offence of money-laundering' contained in Section 3 of the PML Act, it becomes clear that, ....
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....th under the PML Act. 14. It will be appropriate at this stage to notice that Chapter-III of the PML Act dealt with the process of attachment, adjudication and confiscation of the proceeds of the crime. 15. As was noticed supra, the PML Act is not only intended to create and provide for prohibitive measures, but also intended to put in place regulatory mechanism, so as to arrest the impact of 'proceeds of crime' denting, in any manner, the fiscal and economic agenda of the State. If I may say so, the Act has provided for two distinct and separate branches of action. Chapter-II dealt with the conduct, which constitutes the offence and provided for the appropriate punishment therefore, while Chapter-III dealt with the regulatory aspects of the 'proceeds of the crime', enabling them to be subjected to attachment and adjudication and leading to their ultimate confiscation to the State. Therefore, if Chapter-II can be characterized as dealing with the criminal facets of the conduct, the provisions in Chapter-III are essentially intended to deal with the aspects to deny certain persons from deriving benefits either knowingly or unknowingly, arising from the 'proce....
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....y proceedings of their ultimate confiscation. 18. In the instant case, with effect from 01-06-2009 Sections 120-B and 420 Indian Penal Code have been incorporated in para 1 of Part A of the Schedule. Therefore, the proceeds of such crime are capable of being dealt with under Section 5, provided, of course, such person, who is in possession of the proceeds of crime, should have also been charged of having committed the said offence under Sections 120-B and 420 Indian Penal Code after 01-06-2009. As was already noticed, a charge was laid against the 1st Petitioner by the C.B.C.I.D., in C.C. No. 187 of 2009 on the file of the XIV Additional Chief Metropolitan Magistrate, Hyderabad, alleging him to have committed offences punishable under Section 120-B r/w Section420 Indian Penal Code, on 22-11-2009. Therefore, after 22-11-2009, the proceeds of crime punishable under Sections 120-B and 420 Indian Penal Code, in the hands of the 1st Petitioner herein, are capable of being subjected to action under Section 5 of the PML Act. As was already noticed, the provisional attachment order has been passed only on 21-10-2010, which is long subsequent to 22-11-2009. 55. In the present case also, ....
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....mmitted with different persons was to make them believe that the accused Munir Khan has a miracle medicine which can cure incurable disease and to tempt them to buy the purported medicine "Body Revival" and thus cheated them and generated proceeds of crime. Under section 24 of the Act, burden was on the appellants to prove that the properties provisionally attached were not acquired out of proceeds of crime generated from commission of schedule offence. There is no dispute that total amount of sale consideration received in the names of appellants for sale of "Body Revival" is much more than 30 lakhs. Thus, the provisions of PMLA are applicable in the present cases and the contention of the appellants that the total proceeds of crime not more than Rs. 30 lakhs is to be repelled. 57. As regards contention of the appellants that there are no reasons to believe u/s 5(1)(c) of PMLA that the properties were likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under the PMLA especially in view of the facts that no amount was drawn from the bank accounts and none of the immovable....
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....ns of PMLA and on attachment/confiscation such proceeds of crime will no longer be available to him for his/her enjoyment, then a reasonable person will undoubtedly have reasons to believe that such person will make an attempt to conceal, transfer or deal with the properties in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime. Therefore, considering the entire facts and circumstances of the case, we are of the opinion that there were sufficient reasons to believe by respondent u/s 5(1)(c) of PMLA. At this stage it is important to mention that though in his arguments the counsel for appellants contended that since the filing of charge sheet on 6.7.2010, no amount has been drawn from the bank accounts but copy of saving bank account No. 010510100009089 with Bank of India in the name of Munir Khan filed by the appellants with the appeal at page 751 discloses that there are various withdrawals from the account after the date 6.7.2010. Similarly bank account No. 01721000000073 with Development Credit Bank in the name of Munir Khan on page 878 and bank account No. 3041931713 with Central Bank of India in the name of Munir Khan ....
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....ed any affidavit contradicting the observation of the Adjudicating Authority. The appellants in such an eventuality ought to have sought review of the impugned judgments. The Hon'ble Supreme Court in Sukhpal Singh Vs. Kalyan Singh, (1963) 2 SCR 733 had held that appellant cannot just raise objections in his memorandum of appeal and leave it to the Appellate Court to give its decision after going through the record and determining the correctness thereof. It was held in para 5 of the said case as under: 5....Not unoften certain grounds of objection raised in the memorandum of appeal are not argued or pressed at the hearing and in that case such grounds cannot be taken to be the points for determination and are rightly not discussed in the judgment at all. It is for the appellant to raise the points against the judgment appealed from. He has to submit reasons against its correctness. He cannot just raise objections in his memorandum of appeal and leave it to the appellate court to give its decision on those points after going through the record and determining the correctness thereof. It is not for the appellate court itself to find out what the points for determination can be ....
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....transpired in court. We cannot allow the statement of the Judges to be contradicted by statements at the Bar or by affidavit and other evidence. If the Judges say in their judgment that something was done, said or admitted before them, that has to be the last word on the subject. The principle is well settled that statements of fact as to what transpired at the hearing, recorded in the judgment of the court, are conclusive of the facts so stated and no one can contradict such statements by affidavit or other evidence. If a party thinks that the happenings in court have been wrongly recorded in a judgment, it is incumbent upon the party, while the matter is still fresh in the minds of the Judges, to call the attention of the very Judges who have made the record to the fact that the statement made with regard to his conduct was a statement that had been made in error (Per Lord Buckmaster in Madhu Sudan Chowdhary v. Chandrabati Chowdhrain AIR 1917 PC 30.) That is the only way to have the record corrected. If no such step is taken, the matter must necessarily end there. Of course a party may resile and an appellate court may permit him in rare and appropriate cases to resile from a con....
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....ge 682 had held: 13. The final submission of Shri Ramamurthi was that several other questions were raised in the writ petition before the High Court but they were not considered. We attach no significance to this submission. It is not unusual for parties and Counsel to raise innumerable grounds in the petitions and memoranda of appeal etc. but, later, confine themselves, in the course of argument to a few only of those grounds, obviously because the rest of the grounds are considered even by them to be untenable. No party or Counsel is thereafter entitled to make a grievance that the grounds not argued were not considered. If indeed any ground which was argued was not considered it should be open to the party aggrieved to draw the attention of the court making the order to it by filing a proper application for review or clarification. The time of the superior courts is not to be wasted in enquiring into the question whether a certain ground to which no reference is found in the judgment of the subordinate court was argued before that court or not? Consequently the appeals cannot be allowed on the ground that the applications of the appellants for cross examination of witnesses h....
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.... of principles of natural justice opportunity to cross-examine should be given. In any case the decision of the Division Bench of the Hon'ble Delhi High Court has been stayed by the Hon'ble Supreme Court, as has been intimated by the counsel for the respondent which is not refuted by the counsel for the Appellants. It is to be notices that everything depends on the subject matter. In the application of the concept of fair play there has to be flexibility. The application of the principles of natural justice depends on the facts and circumstances of each case. 65. Further, the facts of the Shahid Balwa case are different from the facts of the present case. In the Shahid Balwa case, the petitioner was charged for the contravention of the provisions of section 42 of the Foreign Exchange Management Act, 1999 (in short FEMA) and proceedings could have resulted in imposing penalty. Further the provisions pertaining to adjudication proceedings under the FEMA are different from the adjudication proceedings under PML Act. Plain reading of Section 16(1) of FEMA and 8(1) of PML Act which is reproduced below shows that provisions contained in two enactments are not pari materia: FEM....
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.... it is not necessary for summoning, witnesses etc. except in special circumstances. 67. A case is only an authority for what it decides. As observed by the Supreme Court in State of Orissa v. Sudhansu Sekhar Misra :- A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it. On this topic this is what Earl of Halsbury, LC said in Quinn v. Leathem, 1901 AC 495: Now before discussing the case of Allen v. Flood (1898) AC 1 and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a pr....
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....provisional attachment order and thus respondent violated principles of natural justice it is apparent that recording of statement u/s 50 of PMLA of the person in whose name property has been acquired by the accused is not obligatory under the provisions of PMLA. The said appellant has not disclosed that by not recording his statement, what illegality or prejudice has been caused against him while provisionally attaching his properties and thereafter confirming the attachment order. As per scheme of the PMLA, provisional attachment is done with a view to prevent frustration of any proceedings relating to confiscation of proceeds of crime under the PML Act and also with the objective that the accused does not enjoy the proceeds of crime. The proceeds of crime are gradually laundered with a view to inject it in the economy as clean money. If proceeds of crime are detected and noticed, it is the first step required to be taken by the respondent so that such proceeds of crime are not concealed or transferred or wasted and remain available for their confiscation and they are also dealt with during the proceedings. The urgency of the situation, therefore, requires that the provisional at....
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.... may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, or, seized under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property. (2) The Adjudicating Authority shall, after- (a) considering the reply, if any, to the notice issued under sub-section (1); (b) hearing the aggrieved person and the Director or any other officer authorized by him in this behalf, and (c) taking into account all relevant materials placed on record befor....
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.... is laid down that where in an emergent situation on requiring immediate action, it is not practicable to give prior notice or opportunity to be heard, the preliminary action should be followed by a full remedial hearing. Such cases where owing to the compulsion of the fact situation or the necessity of taking speedy action no pre-decisional hearing is given but the action is followed soon by a full post-decisional hearing to the person affected, do not, in reality, constitute an 'exception' to the AUDI ALTERAM PARTEM RULE. To call such cases an exception is a misnomer because they do not exclude 'fair play in action' but adapt it through the urgency of the situation by balancing the competing claims of hurry and hearing. In short the general principle - as distinguish from an absolute rule of uniform application - seems to be that where a statute does not, in terms, exclude this rule of prior hearing but contemplates a "POST DECISIONAL" hearing amounting to a full review of the original order on merits, then such a statute would be construed as excluding the audi alteram partem rule at the pre-decisional state. 15. It is with a view to prevent frustration of any ....
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....e may be. Section 8 of the Act provides for issuing notice to the affected person, to be followed by consideration of the reply that may be filed, opportunity to adducing evidence and of hearing the aggrieved person as provided under section 8. A complete hearing is thus provided, which is required to be given prior to confirming, finalizing or vacating the provisional attachment. 16. In view of such provisions in section 8 of the Act and looking at the object of the Act and purpose of section 5 of the Act, the post decisional opportunity provided after provisional attachment having been made, is sufficient compliance of principles of natural justice. In the present case, in view of the full length opportunity of hearing having been provided by the Adjudicating Authority within the stipulated time limit, the requirement of hearing need not be read into the provisions of Sec 5 of the Act. In our opinion no prejudice has been caused to the Appellant and full length hearing given by the Adjudicating Authority prior to confirmation of the provisional attachment order is sufficient compliance of the principles of natural justice. 70. Madras High Court in M. Saraswathi & R. Devadass v....
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....harged of having committed a schedule offence are covered under the provisions of section 3 of the Act. Now coming to section 5, from sub section (1)(a) which says any proceeds of crime, read with sub section 1(c) which says such proceeds of crime, we have no doubt that all the proceeds of crime are to be attached. In our opinion, if the contention of the appellant, as regard provisions of section 5(1)(a) and (b) of the Act, that property of only such person can be attached who has been charged of having committed a schedule offence is accepted it will lead to absurdity/advance the mischief and a person who is in possession of proceeds of crime but not charged of having committed a schedule offence, though covered within the definition of section 3 r/w section 2(u) of the Act, will be free to transfer, conceal or deal with such property in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under the Act and the provisions of the Act will become otiose. It is true that all the penal statutes should be construed strictly and the court must see that the thing charged is within the plain meaning of the words used, but it must a....
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.... crime, which property, is derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence or value of any such property until the criminal action for the scheduled offence is taken to its logical end against the accused named therein. The proceeds of crime means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located - which has been derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence or the value of such property. The proceeds of crime may be or can be in possession of "any person". Be it a person charged of having committed a scheduled offence "or otherwise". In the case of any other person in possession of proceeds of crime, if it is also found that he has directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property, he shall be liable to be pro....
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....slative intent. Suffice it to observe that the term "person" appearing in clause (a) of the Section 5(1) of the Act cannot be limited to the person who has been charged of having committed a scheduled offence. If that was the intent of the legislature, there was no reason to insert clause (a). In that case, the Legislature would have simply provided for any person who has been charged of having committed a scheduled offence and in possession of any proceed of crime, such proceeds of crime can be attached and confiscated, subject to fulfillment of the specified conditions. Repelling similar contentions at the end of paragraph 13, the court held as follows:- Considering the above, we are of the considered opinion that there is no merit in the argument of the appellants that action under section 5 of the Act could not have proceeded against them, as they were not charged of having committed a scheduled offence. 73. In this context, it is also pointed out that the 2nd proviso introduced in section 5 by the Prevention of Money Laundering (Amendment) Act, 2009 and held to be clarificatory, clears any doubt in the interpretation of applicability of the PML Act. The second proviso to ....
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.... officer superseded stood in relation to records of others who were to be preferred. The facts of the above case are different from the present case. Proceedings in the above case are under a different piece of legislation where the intent and purpose are different from PMLA. Further, in the present case the respondent has recorded the reasons in writing before passing the provisional attachment order which are indicated in the provisional attachment order and original complaint. Rather, the appellants have argued that there was no material to have any reasons to believe that properties are likely to be concealed or transferred. Thus the above judgment is also of no help to the appellants. 76. The counsel for appellants also relied on Gurdial Singh Fijji v. State of Punjab and others AIR 1979 SC 1622 and contended that the respondent has only given conclusion and not reasons. The facts of this case also relate to service matters. Respondents who were government servants and junior to appellant Gurdial Singh in the seniority list were promoted to the selection grade ahead of the appellant and his name was not included in the select list for the purpose of promotion to the Indian Ad....
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....ersova, Andheri (West), Mumbai and possession of this property at the very least should not be taken away till the order of the Criminal trial court becomes final. 80. The counsel for respondent contended that the word "shall" in section 8(4) of PMLA has to be read as "shall" and the provisions are mandatory provisions. He submitted that one of the main objects is to deprive the accused person or his relatives/associates from possession/enjoyment of the proceeds of crime/properties involved in money laundering. 81. We have considered the arguments of the appellants as well the judgments relied upon and arguments of the respondent. Every order of Provisional attachment passed u/s 5(1) of the Act shall cease to have effect after the expiry of the period specified in sub section 5(1) or on the date of an order made under sub section (2) of section 8 whichever is earlier. Passing of order of provisional attachment is the first stage of the "Attachment, Adjudication and Confiscation" proceedings under the Act and at this stage the prima facie satisfaction that the property in question constitutes proceeds of crime as defined in the Act, is a satisfaction that the appropriate authority....
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....le of Court requires an act to be done 'forthwith,' it means that the act is to be done within a reasonable time having regard to the object of the provision and the circumstances of the case [Ex parte Lamb, (1881) 19 Ch D 169; 2 Chit. Arch. Prac., 14th Edn., 1435]. The expression 'forthwith' would mean 'as soon as may be', that the action should be performed by the authority with reasonable speed and expedition with a sense of urgency without any unavoidable delay. No hard and fast rule could be laid nor a particular period is prescribed. There should not be any indifference or callousness in consideration and disposal of the representation. It depends on the facts and circumstances of each case, Navalshankar Ishwarlal Dave v. State of Gujarat, AIR 1994 SC 1496 : (1993) Supp 3 SCC 754. The word 'forthwith' has been interpreted to mean "as soon as possible; without any delay", Gopal Mondal v. State of West Bengal, AIR 1975 SC 1807, MISA (26 of 1971), s. 3. 84. Provision of section 8(4) were challenged in writ petition before the Andhra Pradesh High Court in the case of B. Rama Raju v. Union of India (writ petition 10765 of 2010) on the ground that t....
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....Act on the one hand and the several degrees of rights of persons in possession of property that is believed to be proceeds of crime involved in money-laundering, on the other. In our analysis of the provisions of Sections 5 and 8, we have observed that the reason to believe that a property in possession of a person constitutes proceeds of crime involved in money-laundering, is a satisfaction that may legitimately be arrived at unilaterally and without a participatory process involving hearing or consideration of material that may be produced by, the person in the ownership, control or possession of the property, to disprove the assumption as to involvement of the property in money-laundering. The process of provisional attachment is also in the nature of an emergency prophylactic. An order of provisional attachment is passed where the authorized authority has reason to believe that if the property is not attached immediately, any proceedings under the Act may be frustrated. Having regard to the exigency of the public interest involved in attaching a property believed to be proceeds of crime involved in money-laundering, to prevent frustration of other proceedings under the Act, the....
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....eserve the integrity and value of the property till the stage of confiscation. Thus construed the provisions of Section 8(4) are neither arbitrary nor disproportionate to the object sought to be achieved by the provisions of the Act. The provisions of Section 8(4) are reasonable and unimpeachable. The challenge to Section 8 of the Act must therefore fail. 85. Hon'ble Karnataka High Court in P. Vijayalakshmi v. DD ED in WP No. 29626 of 2011 by order dated 10.8.2011 held that having noticed the provision contained in section 8(4), they are convinced that the possession also could be taken by the authorities. 86. In the present case, it is not in dispute that the properties attached have been acquired out of proceeds from sale of medicine "Body Revival". One of the objects of PMLA is that the perpetrators of scheduled crimes should not be allowed to enjoy the fruits of the money that passed under the activity and the enactment is intended to deprive them of the property which is related to the proceeds of specific crimes listed in the Schedule to the Act. 87. The Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Aut....