TaxTMI 
TaxTMI 
2024 (12) TMI 1147
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....20/AD(HR)/581 issued by the Directorate of Enforcement called upon the appellant to vacate and hand over the peaceful possession of the attached properties within five days of its receipt, on the specific ground stated therein to the following effect: "The present case is shown to be a case of organized crime, we find that the exception exist to invoke Section 8 (4) to take possession of the property". In this background, the appellant had pleaded that there was no case of "organized crime" which was alleged or made out and even the notice of eviction was silent on the aspect of 'money laundering' being committed by the appellant. 2. We have heard learned Senior Counsel Mr. Aabad Ponda for the appellant and Mr Sandesh Patil for the respondent. Since at this stage, we are not concerned with the factual details, suffice it to note that on 21/09/2022, a provisional Attachment Order no.08/2022 was passed, which was confirmed by the Adjudicating Authority on 14/03/2023. On 12/04/2023, a notice for eviction was issued by the respondent and being aggrieved, the appellant preferred the Appeal before the Tribunal, praying for stay to the effect and implementation of the order....
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....ienced by the implementing agencies. 4. The Act of 2002 which punishes the offence of money laundering necessarily is criminal in nature, as Section 3 of the Act prescribe that whoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connecting with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money laundering. Section 4 prescribe the punishment for money-laundering and it reads thus: "4. Punishment for money-laundering.-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. Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words "which may extend to seven years", the words "which may extend to ten years" had been substituted. " 5. Se....
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....n aggrieved by any order made by an Adjudicating Authority under the Act, is permitted to prefer an Appeal to the Appellate Tribunal and upon such an Appeal being filed, the Appellate Tribunal shall endeavor to dispose off the Appeal within six months of the date of its filing. Section 42 provides a further Appeal to a person aggrieved by the decision of the Appellate Tribunal and this Appeal shall lie to the High Court, within whose jurisdiction the aggrieved party ordinarily resides or carries on business or personally works, and when the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent ordinarily resides or carries on business or personally work for gain. 7. Some other provisions in the statute must also be taken note of and this includes the power and procedure to be followed by Adjudicating Authority as well as the Appellate Authority. The Adjudicating Authority as well as the Appellate Authority, for the purpose of discharging its functions under the Act, are vested with the same powers which are available to the Civil Court under the Code of Civil Procedure, while trying a suit and in what matters the power of Civil....
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....ct. Another relevant provision which must be taken note of, is Section 67, which has created a bar of suits in civil courts. "67. Bar of suits in civil courts.-No suit shall be brought in any civil court to set aside or modify any proceeding taken or order made under this Act and no prosecution, suit or other proceeding shall lie against the Government or any officer of the Government for anything done or intended to be done in good faith under this Act." 11. A conjoint reading of Section 65 along with section 67 and Section 41 of the PMLA, which have clearly ousted the jurisdiction of civil court and have specifically debarred filing of a suit in civil court in regards to any proceeding, taken or order made under the PMLA, it is evidently clear that the attachment and confiscation of property as prescribed, in Section 65 of the Act, shall be governed by the Code of Criminal Procedure, 1973. Though the Adjudicating Authority and the Appellate Tribunal are vested with the powers of Civil Court, it is limited for the purpose that is provided in the two sections which confer the power upon them. Section 71 in the PMLA, provide for overriding effect, notwithstanding anythin....
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.... money-laundering and more so being a complaint procedure prescribed under the 2002 Act. Further, the authorities referred to in Section 48 of the 2002 Act alone are competent to file such complaint. It is a different matter that the materials/ evidence collected by the same authorities for the purpose of civil action of attachment of proceeds of crime and confiscation thereof may be used to prosecute the person involved in the process or activity connected with the proceeds of crime for offence of money-laundering. Considering the mechanism of inquiry/investigation for proceeding against the property (being proceeds of crime) under this Act by way of civil action (attachment and confiscation), there is no need to formally register an ECIR, unlike registration of an FIR by the jurisdictional police in respect of cognizable offence under the ordinary law. There is force in the stand taken by the ED that ECIR is an internal document created by the department before initiating penal action or prosecution against the person involved with process or activity connected with proceeds of crime. Thus, ECIR is not a statutory document, nor there is any provision in 2002 Act requiring Authori....
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....of such cases, for us, it is not the determinative factor, but it is upon the reading of the provisions in the PMLA, we emphasize our view that the proceedings for attachment which are governed by the Code of Criminal Procedure, they are essentially criminal in nature and the challenge to the orders passed by the Adjudicating Authority/ Appellate Tribunal shall lie on the criminal side of the High Court. 15. A very specific provision exist in the Bombay High Court (Appellate Side Rules) in form of Rule 3 which reads thus :- "3. All appeals from orders passed under any special statute other than Code of Criminal Procedure, which provides for an appeal to the High Court from an order of penalty or for confiscation or an order in the nature thereof passed under that statute shall be heard by a Division Bench hearing First Appeals." Since the order in the present Appeal is not an order of penalty or for confiscation, but it is an order refusing stay to the effect and implementation of the order dated 14/03/2023 passed by the Adjudicating Authority and notice of eviction dated 12/04/2023 issued by the respondent no. 1, pending hearing and final disposal of the Appeals und....
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....hown and the objection is made before the Designated Court, upon the Court issuing notice to the persons who are likely to claim any interest or title in the property of Financial Establishment, the Designated Court shall follow the procedure and exercise powers of a Court in hearing the Suit under the Code of Civil Procedure, 1908, and any person making an affidavit shall be required to adduce evidence to show that on the date of attachment, he had some interest in the property attached. However, the scheme of the said enactment being distinct from the present enactment, we do not find any reason to draw parlance therefrom. Even reliance upon the decision of the Bombay High Court in case of State of Maharashtra vs. Ishwar Kalpatri 2002 SCC OnLine Bom 245 and in specific, the following portion thereof, according to us, do not govern the present statute. "15. Considering the provisions of the said Ordinance and the applicability of various provisions of Civil Procedure Code relating to the attachment, disposal of the property so attached, the expression "District Judge" used therein, the definition of the said expression in the General Clauses Act and the decision of the....
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....e jurisdiction and the objection sought to be raised by the respondent in that regard is to be rejected being devoid of substance." 20. Further reliance upon the decision of the Delhi High Court in case of Deputy Director, Directorate of Enforcement, Vs. Axis Bank and Ors. 2019 SCC OnLine Del 7854 where the learned Judge has summarized the conclusion to the effect that the process of attachment (leading to confiscation) of proceeds of crime under PMLA is in the nature of civil sanction which runs parallel to investigation and criminal action vis-à-vis the offence of money laundering, do not determine the issue as to whether the Appeal should be entertained on criminal side or civil side. There can be no difference of opinion that while the proceedings of attachment are conducted by the Adjudicating Authority, in adjudicating the rights of the contesting parties, the Adjudicating Authority shall have the powers vested in a civil court under Code of Civil Procedure and the proceedings shall be deemed to be civil proceedings. However, upon the attachment of the property, when it vest in the Central Government under sub-section (5) or sub-section (7) of Section 8, it shall ve....