TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 1420
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....ion of Money Laundering Act, 2002 and accordingly the Writ Petition was transmitted to the Tribunal. The matter was listed before the Tribunal on 18th January, 2023 when a direction was given to the Appellant to pay the court fee and the Appeal was ordered to be listed on 20th January, 2023 looking to the fact that the Appeal is to be decided within two weeks from the first date of listing. The High Court has excluded the period of two weeks so as also the period till Writ Petition remain pending before it out of total period of 180 days given to the Adjudicating Authority for passing necessary order on provisional attachment of the property. In pursuance to the aforesaid, the Appeal was listed on 20th January, 2023. The Learned Counsel for the parties made arguments in part and prayed for another date to conclude their arguments and accordingly the Appeal was ordered to be listed on 23rd January, 2023. The Learned Counsel for the Appellant submitted that the Adjudicating Authority denied opportunity of cross-examination ignoring the fact that same is part of principle of natural justice. As per Section 6(15) of the Prevention of Money Laundering Act of 2002 ( in short Act of 20....
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....i v/s. State Bank of India & Ors (1984) 1 SCC 43, State of Madhya Pradesh v/s. Chintaman Sadashiva Waishampayan AIR 1961 SC 1623 and lastly Whirlpool Corporation v/s. Registrar of Trade Marks, Mumbai and Ors. (1998) 8 SCC 1. The Learned Counsel for the Appellant has even placed reliance on the judgment of Delhi High Court in the case of Deputy Director, Directorate of Enforcement v/s. Rajiv Saxena dated 08th June, 2020 passed in CRL. M.C. 1477/2020 to demonstrate that the Enforcement Directorate, in their affidavit, declared statement of Shri Rajiv Saxena to be untrustworthy. Contrary to the affidavit filed by them, they placed reliance on the statement of Shri Rajiv Saxena for passing Provisional Attachment order. This is in contradiction to the affidavit submitted by them before Delhi High Court in the Criminal Miscellaneous petition supra. If Shri Rajiv Saxena is not trust worthy then how his statement was relied for passing the Provisional Attachment order and in those circumstances also it was necessary for the Adjudicating Authority to allow cross-examination of that witness but ignoring the fact as well as the provisions of law, the Adjudicating Authority passed the impugne....
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....action of the statement was not sought on the ground that it was taken by putting any kind of pressure rather without assigning any reasons, thus retraction may not be accepted by the Income Tax Department. In any case, the respondent has relied on the documentary evidence to show involvement of the appellant in money laundering and for which a case was first registered by the CBI and thereupon ECIR was registered by the Enforcement Directorate. The prosecution complaint against Shri A.D. Singh has already been filed and investigation against the Appellant would be completed at the earliest. In the light of the aforesaid, a case is not made out to allow cross examination of the witnesses and it cannot be allowed for the sake of it. The learned Counsel for the Respondent further submitted that the affidavit filed by the E.D in the case of Shri Rajiv Saxena was not to show him to be untrustworthy, as stated by the Appellant. In fact Shri Rajiv Saxena failed to disclose all the relevant facts. It was to save his culpability and to shield other accused. The affidavit has been misquoted by the Appellant. The documents are otherwise sufficient to show involvement of appellant in the ca....
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....rms and companies registered in their names or in the names of Amol Awasthi and Anupam Awsthi, sons of Udai Shanker Awasthi and Vivek Gahlaut son of Parvinder Singh Gahlaut and that group companies of Rajiv Saxena were used for receipt of commission, (which was actually bribe money), from suppliers of fertilizers and related products to IFFCO and IPL. For justifying the receipt of so called commission, Consultancy agreements were made between group companies of Rajiv Saxena and M/s. Uralkali Trading Ltd. & other entities. Invoices for so called consultancy services were raised by Rajeev Saxena without providing any actual consultancy. Subsequently, the amounts were transferred to the Awasthi brothers and Vivek Gahlaut and others by group companies of Rajeev Saxena as per the instructions of middle man Pankaj Jain. For justifying such transfers, group companies of Rajiv Saxena made agreement with M/s Africa Strategic Advisory Services of Anupam Awasthi. Anupam Awasthi raised invoices on the companies of Rajeev Saxena for the so-called services. It has also been revealed that M/s. Catalyst Business Solution Pvt. Ltd., USA (company beneficially owned. by Amol Awasthi); M/s. Thorn Lock....
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.... given followed by an application to allow cross examination of three witnesses. The said application was referred by the Appellant during the course of arguments to show grounds for cross-examination. Para 6 of the application is quoted hereunder for ready reference:- "6. That the Applicant has gone through the relied upon documents and does not find any documentary evidence against the Defendants. The Complainant is relying solely on some hearsay statements of Rajiv Saxena, some retracted statement of A D Singh and some vague and irrelevant statement of Sushil kumar Pachisia. That the Defendant No. 1, therefore, intends to cross examine the following persons: (a) Sh. Rajiv Saxena (b) Sh. Amarendra Dhari Singh@A. D. Singh. (c) Sh. Sushil Kumar Pachisia The above-named persons are needed to be cross- examined on various aspects of the matter, more so, when the for issuing Provisional Attachment Order the statements of Sh. Rajiv Saxena, Sh. Amarendra Dhari Singh @ A. D. Singh and Sh.Sushil Kumar Pachisia have been relied upon by the Complainant and would be used against the Defendant No. 1 in the present proceedings, the usage of the said documents against the Defendants w....
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....t of the learned Counsel for the Appellant to that extent. It is however with the clarification that even if the application was filed at the earliest to seek cross examination, it cannot be accepted as a rule rather is to be analyzed on the facts of the case. In the opinion of the Tribunal, the Appellant has failed to give cogent reasons for cross examination of the witnesses who were not even examined before the Adjudicating Authority. In those circumstances, we could not persuade ourselves to accept the argument of the learned Counsel on the fact of this case. We would however deal with other arguments of the learned Counsel for the parties and analyze the judgments and record our opinion whether chance of cross examination should be given in all circumstances and can be denied in a given case. Thus we need to first analyze the provisions referred by the learned Counsel for the parties and thereafter would deal with other arguments. The Learned Counsel for the Appellant has relied on Section 6(15) and Regulation 21 of the Adjudicating Authority (Procedure) Regulations, 2013 which are quoted hereunder:- Section 6 (15) "The Adjudicating Authority shall not be bound by the pr....
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....nt, adjudication and confiscation of property involved in money-laundering. It is under Chapter III of Act, 2002. The attachment of property may result in confiscation in case of conviction but in case of acquittal of the accused, the attached property is to be released in view of the Section 8(6) of the Prevention of Money Laundering Act, 2002. Section 8(6) "Where on conclusion of a trial under this Act, the Special Court finds that the offence of money-laundering has not taken place or the property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it." The attachment of the property is mainly for the purpose of protecting it till the Trial is completed by the Special Court. The Provisional Attachment Order is passed after applying the procedure given under the Act of 2002 to protect the property. It can be confirmed by the Adjudicating Authority. The attached property can be confiscated by the Special Court in case of conviction. Thus attachment is mainly to protect the property during the intervening period of the Trial by the Special Court. In the background aforesaid, we need to analyze as to whether right of c....
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....here is no dispute as to the facts, or the weight to be attached on disputed facts but only an explanation of the acts, absence of opportunity to cross-examination does not create any prejudice in such cases." In the instant case, no witness has been examined before the Adjudicating Authority. If any witness would have been examined before the Adjudicating Authority, the prayer for cross examination of that witness could have been sought. Appellant is seeking cross examination of the witnesses who did not appear before the Adjudicating Authority for examination pursuant to the Regulation 21 of the Adjudicating Authority (Procedure) Regulation 2013. Thus the judgment cited by the learned Counsel for the Appellant would not be of any assistance in this case. It is more so when Appellant did not submit any explanation to the statements of Shri Rajeev Saxena and Shri Sushil Kumar Pachisia when he was asked about it before passing Provisional Attachment Order after furnishing copies of the statements. It was stated that he does not know them and is now asking for an opportunity of their cross examination. We may now make reference of the Judgments cited by the Learned Counsel for the ....
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....times described as subsidiary rules have developed, including a duty to give reasons in support of the decision. Nevertheless, time and again the courts have emphasized that the rules of natural justice are flexible and their application depends on facts of each case as well as the statutory provision, if applicable, nature of right affected and the consequences. In A.K. Kraipak and others v. Union of India and Others,7 the Constitutional Bench, dwelling on the role of the principles of natural justice under our Constitution, observed that as every organ of the State is controlled and regulated by the rule of law, there is a requirement to act justly and fairly and not arbitrarily or capriciously. The procedures which are considered inherent in the exercise of a quasi-judicial or administrative power are those which facilitate if not ensure a just and fair decision. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the frame work of law under which the enquiry is held and the constitution of the body of persons or tribunal appointed for that purpose. When a complaint is made that a princip....
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....ded as a lethal objection is that Board did not enquire of the respondent, independently of the one done by the Regional Inspector. Assuming it to be necessary, here the respondent has, in the form of an appeal against the report of the Regional Inspector, sent his explanation to the Chairman of the Board. He has thus been heard and compliance with Reg. 26, in the circumstances, is complete. Natural justice is no unruly horse, no lurking land mine, nor a judicial cure-all. If fairness is shown by the decision-maker to the man proceeded against, the form, features and the fundamentals of such essential processual propriety being conditioned by the facts and circumstances of each situation, no breach of natural justice can be complained of. 'Unnatural expansion of natural justice, without reference to the administrative realities and other factors of a given case, can be exasperating. We can neither be finical nor fanatical but should be flexible yet firm in this jurisdiction. No man shall be hit below the belt that is the conscience of the matter. 14. Shri Gambir, who appeared as amicus curiae and industriously helped the Court by citing several decisions bearing on natural ju....
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....e Appellant was provided all the material before seeking his statement. It is not that the material was used behind his back so seek cross examination of three persons now. We find all fairness in decision making while passing Provisional Attachment Order. The learned Counsel for the Respondent then referred to the judgment of the Apex Court in the case of State of Jammu and Kashmir & Ors. V/s. Bakshi Gulam Mohammad & Anr. AIR 1967 SC 122 and also the judgment of the Calcutta High Court in the case of Kishanlal Agarwalla V/s. the Collector of Land Customs & Ors. 1965 SCC OnLine Cal 141. The judgments referred to above are on the same issues and lay down same proposition of law as laid down in the other judgments cited by the Respondent. In the light of the judgment referred by the respective parties, we hold that chance of cross examination can be part of natural justice but cannot be claimed as a rule. It would rather depend on the facts and circumstances and also the nature of proceedings. The nature of proceedings involved herein has been analyzed by us earlier. It is not only summary in nature but is mainly for protection of property till trial is completed. It is to prevent ....
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....d that he did not have any knowledge of the same as they have been residing out of India for a very long time. (ii) In his statement dated 25.04.2022, he was shown statement dated 11.06.2021 (running into 132 pages), another statement dated 11.06.2021 (running into 5 pages) and statement dated 12.06.2021 (running into 83 pages) of Sh. Amarendra Dhari Singh@ A. D. Singh. He was asked to go through these statements running into 220 pages in all. He stated that he had been shown the statement dated 11.06.2021 (running into 132 pages), another statement dated 11.06.2021 (running into 5 pages) and statement dated 12.06.2021 (running into 83 pages) of Sh. Amarendra Dhari Singh@ A. D. Singh; that he had read pages 1 to 34 of statement dated 11.06.2021 and pages 133 to 137 of the Statement dated 11.06.2021 (running into 5 pages) and pages 138 to 140 of the statement dated 12.06.2021 (running into 83 pages) and have put his dated signatures on all these pages as a token of having read and understood the contents of these pages. He was once again asked that he had been shown three statements and was asked to go through all the pages of these statements. He stated that he had read the state....
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....(iii) In his statement dated 26.08.2022, he submitted the details of moveable assets in the form of Investments in Securities/ Mutual Funds/ Shares held by him as on 26.08.2022, running into eleven pages under his dated signatures. He stated that the details of moveable assets in the form of investments in Securities/ Mutual Funds/ Shares, as on March 31, 2022 in respect of his wife had been provided vide his earlier statement dated 22.04.2022 and that there was no further change in the investments held in the name of his wife Mrs. Rekha Awasthi. He also provided the detail of Bank Accounts maintained by his wife and himself. (iv) In his statement dated 05.09.2022, he inter-alia submitted details of investments held in physical form under his name as well under his wife's name as on 26.08.2022 alongwith copies of instruments. He also submitted amended details of moveable assets in the form of investments in Securities/ Mutual Funds/ Shares held him and by his wife." The paras quoted above show that the Appellant did not avail the opportunity to submit explanation to the documents provided to him before passing Provisional Attachment Order and now wants to cross examine the w....