TaxTMI 
TaxTMI 
2024 (11) TMI 831
X X X X Extracts X X X X
X X X X Extracts X X X X
....th Floor, Mani Bhawan, 45 Swasthik Society, N.S. Road No.3, JVPD Scheme, Vile Parle (W), Mumbai (total area admeasuring 2957 Sq. Ft.) 11,82,80,000/- As per Govt. approved valuer M/s V.K. & Associates Report dated 14.10.2020. This property is acquired through Development Right Agreement between Ashok Ambalal Patel &Ors. and Shailesh Mulchand Salva on 25.09.2000. 02 Shailesh M Savla C-101, Ist Floor, Wing - C, Innova Building, Lower Parel (W), Mumbai. (total area admeasuring 6646 Sq. Ft.) 22,28,13,796/- Present Market Value as per 99 acres.com as on 12.05.2021 @ Rs. 33526/-. 03 M/s S. Savla Construction Flat No.1102 of Anchor Victorian Building, Parel, Mumbai. Rs. 3,00,00,000/- Sold to Pranay Mahendra Prasad and he paid only Rs. 55 Lakhs. 04. M/s Kunal Builders and Developers Flat No. 3802 of Anchor Victorian Building, Parcel, Mumbai. Rs. 3,33,00,000/- Sold to Chandresh Damji Dedhia and he paid only Rs. 30 Lakhs. 05. M/s S. Savla Construction Flat No. 4401 of Anchor Victorian Building, Parcel, Mumbai. Rs. 4,53,00,000/- Sold to Chetan Kheraj Dedhia and he paid only Rs. 30 Lakhs. Total Rs. 44,96....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the second FIR was of Rs. 101.50 crores while it was of Rs. 11 Crores in the first FIR. 7. The second FIR was registered by Shri Chintan Nitin Vohra, who was undertaking the work of development/re-development of property through his company named M/s Chintan Life Spaces LLP. He was approached by the appellant, who informed him that his company M/s Kunal Builders and Developers is developing SRA Development Project in the name of Juhu-Taj C.H.S at Juhu, Vile Parle. The appellant further informed Shri Chintan Nitin Vohra about the construction of one building for rehabilitation of the tenants in the said SRA project and another building consisting of 13 floors of the free sale component being constructed in the name of Akshar Residency in the said project. The information aforesaid was given to seek financial assistance of Rs. 117 crores and if M/s Chintan Life Spaces LLP will provide the financial assistance, then the appellant will obtain OC of the re-developed building. It was with further information that 30 flatswere sold earlier by the appellant, however, he will buy-back the same from the holders and would provide complete building to the complainant for development. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s not made out against the appellant. It was submitted that when the complainant entered into the agreement, then any issue or dispute arising out of it can be settled in the Civil Suit. The FIR could not have been registered and otherwise the complainant did not pay the entire amount of consideration because out of Rs. 117 Crores, Rs. 101.50 crores was paid. Accordingly, the prayer was made to set aside the order passed by the Adjudicating Authority. The appellant relied upon the judgment of the Punjab and Haryana High Court in the case of Seema Garg Vs. The Deputy Director, Directorate of Enforcement reported in 2020 SCC OnLine P&H738PMLA No.1 of 2019. However, he did not press his argument in reference to it, rather restricted his argument only on facts. 11. Accordingly, we invited the respondent to argue the appeal. 12. The learned counsel for the respondent submitted that after recording of two FIRs against the appellant, one ECIR was recorded in reference to it. The facts of the case have been given and are sufficient to show how the scheduled offence has been committed by the appellant and accordingly a case of money laundering was found. 13. The learned counsel sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Rs. 11 Crore. 18. The EOW after investigation in the said case filed the Charge Sheet having CC No. 161/PW/2008 on 08.02.2008 before the Additional Chief Metropolitan Magistrate, Mumbai for the offence under Section 465, 467,468,471,420,204 and 120(B) of IPC, 1860 for criminal conspiracy, cheating, forgery, etc. 19. The Charge Sheet revealed that, Home Department, Government of Maharashtra asked EOW, Mumbai Police to conduct inquiry into irregularities in allotment of residential rooms/shops under Slum Rehabilitation Scheme implemented at Garib Mazdoor Sangh Zopadpatti (GMSZ) later on known as Juhu Taj SRA Housing Society to the persons not connected to the said Zopadpatti). Accordingly, it was revealed that, many persons, who were not connected to the Zopadpatti, were allotted residential rooms/shops in the said scheme on the basis of forged documents such as affidavits showing purchase/conveyance of zopdas/rooms, ration-cards, electricity bills and so on. 20. The appellant submitted inflated additional number of huts/persons proposals of SR Scheme to the SRA Authority and got it approved from the government authorities by fraudulent means. The fabricated/forged related ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e the Provisional Attachment Order was issued by the respondent on 18.06.2021. As per Section 5(3) of the Prevention of Money Laundering Act, 2002 (in short `the Act of 2002'), the currency of the order of provisional attachment remains for 180 days unless confirmed by the Adjudicating Authority. 27. In the instant case, the notices were issued by the Adjudicating Authority on 04.08.2021 which was replied by the appellant on 16.09.2021. The rejoinder was filed on 30.09.2021 and thereupon the notice was issued by the Adjudicating Authority on 04.10.2021 for final arguments. Finally, arguments were made on 26.10.2021 followed by written arguments on 03.11.2021. The appellant submitted counter to written arguments of the respondent on 15.11.2021 while the impugned order was passed on 29.03.2022. The sequence of events are relevant for the lapse of the order of attachment. In fact, Section 5(1) of the Act of 2002 gives life to the attachment order for a period of 180 days and it would lapse if it is not confirmed within a period given above. Thus, the confirmation order has to be passed before 180 days. In this case, it was passed beyond 180 days. Thus, the prayer was made to set as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....i) In W.P. No. 34627 of 2022, the provisional attachment order therein i.e., PAO No. 01 of 2021 was passed on 01.02.2021. Pursuant to which an original complaint under Section 5(5) of the PMLA was filed on 19.02.2021 and show cause notice under Section 8(1) of the PMLA was issued by the Adjudicating Authority on 03.03.2021. A hearing under Section 8(2) of the PMLA was conducted on 05.07.2021 and 06.07.2021. However, no confirmation order was passed 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....C 231 : 2021 SCC OnLine SC 373] and 23-9-2021 [Cognizance for Extension of Limitation, In re, 2021 SCC OnLine SC 947], it is directed that the period from 15-3-2020 till 28-2-2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. 5.2. Consequently, the 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cific statutes mentioned by the Supreme Court, it will be seen that all these statutes prescribed provide for specific time frame for instituting a suit, filing a claim/counter claim or an application in furtherance of a remedy provided under the statute. The intention was hence to preserve the right of a litigant to seek a remedy under the Act and not to deprive a litigant of such right of remedy where the litigant has not been able to physically come to the Court or to the Tribunal to file the proceeding in aid of the right. 16. The right thus conferred by the Supreme Court is in relation to the prescribed period of limitation in instituting a proceeding. **** 18. Section 5(3) is a clear embargo on the order of attachment continuing to have effect after the expiry of 180 days. Section 5(1) designates the authority and the steps to be taken for proceeding against any person who is in possession of any proceeds of crime. The section is hence concerned with the procedure to be undertaken for provisional attachment of a property subject to the fulfillment of the other conditions in Section 5. A prescribed procedure after the same has been initiated cannot b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts and extension of time for filing of a chargesheet by the police as contemplated under Section 167(2) of the Cr.P.C. The Court also noted the element of personal liberty of a person which was required to be protected. Although, the right of the petitioners before the Court is more to do with the right not to be deprived of property save by authority of law - Article 300A, the petitioners have established a case where such right is under threat by the action of the ED. The litigants have been conferred a benefit under Section 5(1)(b) and 5(3) of the PMLA on the failure of the Authority to take action within the specified time frame. If the Authority does fail to take requisite steps, the right to relief arises immediately after exhaustion of the 180 days window and once such right is given to a litigant, it cannot be taken away. This Court respectfully disagrees with the views expressed in Vikas WSP Ltd. (supra), Gobindo Das (supra) and Hiren Panchal (supra) in relation to applicability of In re: Limitation (supra). xviii) According to this Court, the decision in S. Kasi (supra) cannot be relied upon by the Petitioners to contend that In re: Limitation (supra) is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arise only for giving effect to the order of confiscation. This is also because sub-section (6) of Section 8 postulates that where on conclusion of a trial under the 2002 Act which is obviously in respect of offence of money- laundering, 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. Once the possession of the property is taken in terms of sub-section (4) and the finding in favour of the person is rendered by the Special Court thereafter and during the interregnum if the property changes hands and title vest in some third party, it would result in civil consequences even to third party. That is certainly avoidable unless it is absolutely necessary in the peculiar facts of a particular case so as to invoke the option available under sub- section (4) of Section 8. 305. Indisputably, statutory Rules have been framed by the Central Government in exercise of powers under Section 73 of the 2002 Act regarding the manner of taking possession of attached or frozen properties confirmed by the Adjudicating Authority in 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... an application bearing No. 21 of 2022; and by the order dated 10-1-2022 [Cognizance for Extension of Limitation, In re, (2022) 3 SCC 117 : (2022) 2 SCC (Civ) 46 : (2022) 1 SCC (Cri) 580 : (2022) 1 SCC (L&S) 501], this Court again restored the principal order dated 23-3- 2020 [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] and in continuation of the previous orders, has further directed that the period from 15-3- 2020 till 28-2-2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. Be that as it may, the fresh order in SMWP No. 3 of 2020 need not be elaborated for the present purpose.] **** 32.2. In fact, in S. Kasi case [S. Kasi v. State, (2021) 12 SCC 1 : 2020 SCC OnLine SC 529], this Court also noticed that a coordinate Bench of the same High Court had already held [Settu v. State, 2020 SCC OnLine Mad 1026] that the said order dated 23-3-2020 [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] did not cover the offences for which Section 167 CrPC was applicable but, i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....late Tribunal. xxiv) This Court also disagrees with the view adopted in Vikas WSP Ltd. (supra), Gobindo Das (supra) and Hiren Panchal (supra). The decision in Vikas WSP Ltd. (supra) was stayed by a Division Bench of the Delhi High Court vide order dated 08.01.2021 in LPA 362/2020. In any case, the question regarding the application of In re: Limitation (supra) was left open. xxv) As far as Gobindo Das (supra), is concerned, though it is true that Adjudicating Authority is not a litigant, the authorized officer representing the ED is a litigant to the proceedings initiated under PMLA and for the purpose of application of In re: Limitation (supra). Therefore, where the ED has been diligent in provisionally attaching the property and filing the original complaint within 30 days under Section 5 of the PMLA, prejudice cannot be caused to it by not excluding the period from 15.03.2020 to 28.02.2022. One litigant's interests cannot be protected at the cost of another. This Court would further like to stress that the provisionally attached properties can still be enjoyed under Section 5(4) of the PMLA. xxvi) The reasoning in Hiren Panchal (supra) that what was pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... otherwise the attachment would lapse but there was extra-ordinary situation during the period Covid-19 and, therefore, the Apex Court has provided safeguard to the litigants and others for termination of proceedings and illustratively reference of few provisions like Arbitration Act was given. It was with clarity that it would apply to other statutes also. The appellant seems to be ignorant of the aforesaid and even has not gone through the judgment of the Telangana High Court where it has even taken note of the judgment of the Calcutta High Court deciding the issue on the same pretext as has been taken by the appellant. The view of the Calcutta High Court was not accepted being contrary to the judgment of the Apex Court. In any case, we are unable to accept the argument of the appellant to lapse the proceedings despite the period for termination of proceedings which was excluded from 15.03.2020 till 20.08.2022. If the aforesaid period is excluded, left out period in this case is hardly of 26 days i.e. less than 180 days. 31. The judgment of the Apex Court cannot be brushed aside in reference to the facts of this case when Apex Court has excluded period from 15.03.2020 to 20.02....