TaxTMI 
TaxTMI 
2024 (12) TMI 1308
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.... 1988 was added subsequently. An ECIR was thereupon recorded by the Directorate of Enforcement under Prevention of Money Laundering Act, 2002 was initiated. 4. It was alleged that various accused persons including the Appellant Sh. Dinesh Pratap Singh, who was the Special Land Acquisition Officer (SLAO)/Competent Authority of Land Acquisition (CALA) in connivance with other revenue officers/middlemen etc. distributed exorbitant and unjustified compensation to farmers with the intention of getting monetary benefits, misappropriated government funds by way of granting compensation on acquisition of land at non-agricultural rate for the agricultural land which resulted into loss of Rs. 215.11 crores to Government. The investigation conducted by the Directorate of Enforcement and thereupon Prosecution Complaint was filed before Ld. Special Judge (PMLA), Dehradun, Uttarakhand. 5. The properties of present Appellant namely Sh. Dinesh Pratap Singh and his wife Smt. Alka Singh were provisionally attached under Section 5(1) of PMLA, 2002 and subsequently Original Complainant no. 1229/2019 was filed before Ld. Adjudicating Authority which has confirmed PAO. The counsel for the appellan....
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....rectorate of Enforcement vs Union of India, 2022 SCC online Cal 3959 has taken the same view. (iii) Hence, in terms of aforesaid judgments and law enunciated by the High Court, the impugned attachment order passed by Ld. Adjudicating Authority is liable to be quashed and set aside. B. NO SCHEDULED OFFENCE AND OFFENCE OF MONEY LAUNDERING IS MADE OUT IN THE LIGHT OF THE OBSERVATION OF LD. SPECIAL JUDGE (PMLA), DEHRADUN, UTTARAKHAND (i) It was submitted that in terms of Vijay Madanlal Choudhary vs Union of India, 2022 SCC online 929 it is trite principle of law that the offence under Section 3 of PMLA, 2002 depends on the fulcrum of the scheduled offence and offence of money laundering does not stand alone without the predicate offence. It is the case of the prosecution that the Appellant Dinesh Pratap Singh was involved in generating so called "proceeds of crime" by giving exorbitant compensation on the basis of back date orders of conversion of land u/s 143 of Uttar Pradesh Zamidari Abolition & Land Reforms Act, 1950 to the farmers of the Kashipur whose land was acquired for widening of NH-74. The appellant was posted as Special Land Acquisition Officer (SLAO)/Competent Aut....
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.... bears a great significance on the case built up by the Directorate of Enforcement. The view taken by the Ld. Special Judge (PMLA) has judicial binding on the order passed by the Ld. Adjudicating Authority. The order clearly suggest that instant case would not result into conviction and the properties are confiscated only when the accused is convicted under Section 3 & 4 of PMLA, 2002. It is trite principle of law that though adjudication proceedings and criminal proceedings are independent to each other but the material for commission of offence recorded by the authorities may be relevant. Reliance was placed on a judgment of the Supreme Court in the case of Radheshyam Kejriwal vs State of West Bengal (2011) 3 SCC 581 which enunciates the said proposition. In terms of said judgment, the impugned attachment order is liable to be quashed. (vi) The order passed by Ld. Special Court is evident and sufficient to rebut the presumption under Section 24 of PMLA, 2002 and therefore the Directorate of Enforcement was not entitled to take benefit of Section 24 of PMLA, 2002. The Directorate of Enforcement despite of its exhaustive investigation was not able to connect the present Appellan....
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....considered by High Court of Andhra Pradesh and Hon'ble High Court of Patna and same view was taken by those courts in the case of Kumar Pappu Singh vs Union of India, 2021 SCC OnLine AP 983 and HDFC Bank Limited vs Govt. of India, Ministry of Finance, 2021 SCC OnLine Pat 4222. (iv) Details of properties provisionally attached by the Directorate of Enforcement and later on confirmed by Ld. Adjudicating Authority qua Appellant Sh. Dinesh Pratap Singh are as follows:- (v) PROPERTY DETAILS 1. Village- Bahubana, Tehsil- Maholi, District- Sitapur, Gata No. 44, Area 0.963 hectare 2. Village- Maharaj Nagar, Tehsil- Maholi, District- Sitapur, Gata No. 192, 284 & 289, Area- 0.465 hectare and land at Gata No. 125, Area- 0.482 hectare, Total Area - 0.947 hectare 3. Village- Baddapur, Tehsil- Maholi, District- Sitapur Gata No. 128, 183, 32, 229, Area 1.0502 hectare (vi) It is submitted that properties provisionally attached by the Directorate of Enforcement and later on confirmed by the Ld. Adjudicating Authority are ancestral properties of Appellant Dinesh Pratap Singh and the same has been transferred in the name of Appellant by the virtue of gift deeds....
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....the properties in question were acquired from the bona fide sources and in terms of judgment of High Court of Andhra Pradesh in B. Rama Raju vs Union of India, 2011 SCC Online AP 152, the impugned attachment order is liable to be quashed and set aside. (xi) The financial credential of Sh. Dinesh Pratap Singh was deeply scrutinized and examined by the Income Tax Department during the assessment and given clean chit to the Appellant and therefore it is evident that the funds transferred to the Appellant Smt. Alka Singh by her husband Sh. Dinesh Pratap Singh was legitimate and untainted money and therefore the attachment of property by the Directorate of Enforcement on the assumption that the property held by the Smt. Alka Singh is from the proceeds of crime is contrary and inconsistent to law and therefore the impugned attachment is liable to be set-aside. (xii) It can be ascertained that Rs. 30,00,000/- (Rupees Thirty Lacs Only) was paid by Sh. Dinesh Pratap Singh to her wife Smt. Alka Singh from his legitimate income which had nothing to do with alleged "proceeds of crime" and another sum of Rs. 15,10,000/- (Rupees Fifteen Lacs Ten Thousand Only) has already been returned by ....
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....ue application of mind and even the contentions raised by the Appellants herein has not been considered. The order was passed with templates. The order under challenge has been passed on similar lining and on templates without appreciating the contentions of the Appellants herein even out rightly ignored. (ii) The High Court of Delhi in Kankipati Rajesh vs Adjudicating Authority gave warning and directions to Ld. Adjudicating Authority to refrain itself from using template paragraphs and disconcerted language in its order. (iii) In other similar matters, High Court of Delhi has remanded the matters back for fresh consideration for the reason that the grounds taken by Petitioners therein were not considered and the order was passed by the Adjudicating Authority in mechanical manner that too on format and templates. Even the impugned order has been passed by using the technology of "cut-copy-paste" without appreciating the material on record. The order has been passed in very causal and cryptic manner. The said practice has been reprimanded and depreciated by Hon'ble Supreme Court of India in Union Public Service Commission vs Bibhu Prasad Sarangi, (2021) 4 SCC 516. 8. I....
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....culture, causing loss to the Government. It was found that after the notification for the acquisition of land disclosing the nature of the land to be the agricultural, the compensation was determined at a high rate, treating it to be non- agricultural. This was done despite the fact that no objection was raised by the land owners for seeking higher rate of compensation. Thereby, not only the accused, Dinesh Pratap Singh, but others in connivance with each other manipulated the record for conversion of land from agricultural to non-agricultural in the back date and granted excess amount of compensation. 13. After registration of the FIR, the ECIR was recorded on 05.06.2018. The investigation was conducted under the Act of 2002. It revealed that apart from the main accused, there are many other officers involved which includes the public servants, the farmers and the middle man for grant and receipt of the compensation of the land at the rate of 'non agricultural land' which was much higher to the rate for 'agricultural land'. 14. The statement of the accused and others were recorded under section 50 of the Act of 2002. After a detailed investigation and considering the documen....
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....03.2020 rather 15.03.2020 till 28.02.2022 has been excluded by the Apex Court for termination of proceeding in Suo Moto Writ Petition (C) No. 3 of 2020 by order dated 10.01.2022. It is not only for the purpose of taking remedy by the litigants but even termination of the proceedings if period has been provided under the statute. The issue in reference to the lapse of the provisional attachment after expiry of 180 days was before the Telangana High Court in the case of Hygro Chemicals Pharmtek Pvt. Limited Vs. Union of India & Ors [MANU/TL/1003/2023] where elaborate Judgement has been given and would cover first issue raised by the appellant. 19. The relevant paras of the judgement are quoted thus:- "15. Issue No. 3: Whether the period from 15.03.2020 to 28.02.2022 which was excluded by the Apex Court in computation of limitation vide In re: Limitation (supra) is applicable to orders confirming provisional attachment within 180 days? i) The Petitioner in W.P. No. 34238 of 2022 contends that the provisional attachment order i.e., PAO No. 04 of 2022 dated 03.02.2022 could not have been confirmed by the Adjudicating Authority vide order dated 22.08.2022 as the same....
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....special laws (both Central and/or State). 2. To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective courts/tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or special laws whether condonable or not shall stand extended w.e.f. 15-3-2020 till further order(s) to be passed by this Court in present proceedings. v) Subsequently, the limitation period was extended vide In re: Cognizance for Extension of Limitation MANU/SC/0108/2022: (2022) 3 SCC 117 (hereinafter 'In re: Limitation, 2022') till 28.02.2022. The Apex Court vide the said order clarified that where any statute provides an outer limit of limitation period within which the proceedings are to be completed, the period between 15.03.2020 to 28.02.2022 shall be excluded in computing such period. The relevant paragraphs of In re: Limitation, 2022 (supra) are extracted below: 5.1. The order dated 23-3-2020 [Cognizance for Extension of Limitation, In re, MANU/SC/0505/2020 : (2020) 19....
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.... to compute the period of 3 months. Therefore, In re: Limitation, 2022 (supra) states that wherever a statute prescribes a maximum period within which proceedings have to be completed, the period from 15.03.2020 to 28.02.2022 shall be excluded to compute such maximum period. vii) To decide the applicability of In re: Limitation (supra) in computation of 180 days for confirming the provisional attachment of property, it is apposite to discuss the nature of time frame prescribed under Section 5 of the PMLA. For the sake of convenience, Section 5 is extracted below: 5. Attachment of property involved in money-laundering.-29[(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 (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are 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 th....
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....nterested 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. viii) Section 5(1) of the PMLA provides that the authorized officer can provisionally attach properties for a period not exceeding 180 days. The third proviso to Section 5(1) of the PMLA states that if the proceedings initiated under the PMLA are stayed by the High Court, then such period during which the stay operates shall be excluded in computing the 180-day period. Further, Section 5(3) of the PMLA states that a provisional attachment order passed under Section 5(1) of the PMLA shall cease to have effect after the expiry of 180 days from the date of provisional attachment. ix) A conjoint reading of Sections....
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....ver, it is made clear that the petitioners herein shall not seek further extension of time and they shall submit explanation/reply within the said extended period of two months by keeping in view the object and legislative intent of Section 8 of the Act, that the adjudicating process is time bound. It is relevant to note that for the purpose of computing the period of 180 days, the period which was extended by this Court for submitting reply is excluded as per third proviso to Section 5(1) of the Act. xi) The decision in Karvy Realty (supra) confirmed by a division bench of this Court vide order dated 13.02.2023 in W.A. No. 194 of 2023. xii) According to this Court, in appropriate cases, certain period can be excluded while computing the 180 day period under Section 5(3) of the PMLA. It is important to note exclusion of certain period is different from extending the period. In the present case, the Apex Court exercising its inherent powers under Article 142 of the Constitution of India excluded the period from 15.03.2020 to 28.02.2022 in computation of limitation. Therefore, the period from 15.03.2020 to 28.02.2022 shall be excluded while computing the period of 1....
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....erty of a person. The right of prosecution to file a charge-sheet even after a period of 60 days/90 days is not barred. The prosecution can very well file a charge- sheet after 60 days/90 days but without filing a charge-sheet they cannot detain an accused beyond a said period when the accused prays to the court to set him at liberty due to non-filing of the charge-sheet within the period prescribed. The right of prosecution to carry on investigation and submit a charge-sheet is not akin to right of liberty of a person enshrined under Article 21 and reflected in other statutes including Section 167 CrPC. 28. We, thus, are of the clear opinion that the learned Single Judge in the impugned judgment [S. Kasi v. State, MANU/TN/7730/2020] erred in holding that the Lockdown announced by the Government of India is akin to the proclamation of Emergency. The view of the learned Single Judge that the restrictions, which have been imposed during the period of Lockdown by the Government of India should not give right to an accused to pray for grant of default bail even though charge-sheet has not been filed within the time prescribed under Section 167(2) of the Code of Criminal Proced....
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....a High Court [Mohd. Ali v. State of Kerala, MANU/KE/1171/2020], the Rajasthan High Court [Pankaj v. State, MANU/RH/0309/2020] and the Uttarakhand High Court [Vivek Sharma v. State of Uttarakhand First Bail Application No. 511 of 2020, order dated 12-5-2020 (Utt)] noticed above. xv) Relying on the decision in S. Kasi (supra), a learned single judge of the Delhi High Court in Vikas WSP Ltd. (supra) held that provisional attachment of properties deprives a party of his right to property. Therefore, In re: Limitation (supra) does not extend to PMLA proceedings in computation of 180 days within which provisional attachment of properties has to be confirmed by the Adjudicating Authority. The Court therein also held no period of limitation is prescribed under Section 5(1) & 5(3) of the PMLA and after the lapse of 180 days, the Adjudicating Authority becomes functus officio. Further, had the legislature or the Government thought it fit, they would have expressly extended the period within which provisional attachment of properties could have been confirmed. However, the Court left the question regarding the applicability of In re: Limitation (supra) in computation of 180 days open....
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....o do something required under a Statute or the period of validity of an order, as in the present case. Realizing such difference, the Supreme Court extended the period to pass an Arbitral Award under Section 29A and for completion of pleadings under Section 23(4) of the Arbitration and Conciliation Act, 1996 as also for completing the process of compulsory pre-litigation, mediation and settlement under Section 12A of the Commercial Courts Act, 2015, however, refused to extend the period of validity of a cheque. This itself shows that the orders of the Supreme Court are not a universal extension of time across the board, be it limitation or period prescribed for doing a particular thing, or as in the present case, the period of validity of an order. 32. The above distinction is also apparent to the Government of India as it promulgated The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 on 31.03.2020, extending the time limit for completion of any proceedings or passing of any order etc. specified in the Acts specified therein. However, the Prevention of Money Laundering Act, 2002 is not one of the "specified Acts" under the Ordinance. Therefore, ....
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....on the expiry of validity of the said provisional attachment order after 180 days under Section 5 (3) of the aforesaid Act, the same would be deemed to have been extended automatically by virtue of the aforesaid order of the Hon'ble Supreme Court when he was not required to pass any formal order of extension of the same under Section 8 (3) of the aforesaid Act. I am of the considered opinion that such stand of the Respondent No. 2 is legally not sustainable since the impugned order of provisional attachment of bank accounts and postal accounts in question of the petitioner, dated 11th December, 2019, which has expired its validity on 9th June, 2021, has no force after expiry of 180 days from the date of passing of such order in view of not passing any formal order under Section 8 (3) of the said Act extending the validity of the same by the Respondent No. 2 and the action of Respondent No. 3 in not allowing the petitioner to operate its bank and postal accounts in question after the expiry of the period validity of 180 days from the date of the order passed under Section 5 (1) of the aforesaid Act, such action of the Respondent Enforcement authority, is arbitrary and illegal. ....
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....de 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 be equated to institution of a suit or filing of a petition/application which is a starting point of litigation for a ....
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....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 not applicable in computing 180 days under Section 5(3) of the PMLA. In S. Kasi (supra), In re: Limitation (....
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....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 2013, and also regarding restoration of confiscated property in 2019. Suffice it to observe that direction unde....
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....022 [Cognizance for Extension of Limitation, In re, MANU/SC/0108/2022 : (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, MANU/SC/0505/2020: (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, MANU/SC/0491/2020 : (2021) 12 SCC 1] , this Court also noticed that a coordinate Bench of the same High Court had already held [Settu v. State, MANU/TN/3790/2020] that the said order dated 23-3-2020 [Cognizance for Extension of Limitation, In re, MANU/SC/0505/2020 : (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] did not cover the offences for which Section 167 CrPC was applicable but, in the order [S. Kasi v. State, MANU/....
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....bunal. 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 protec....
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.... Court in Suo-moto petition eliminating the period from 15.03.2020 till 28.02.2022 for termination of proceedings, we do not find that the attachment would lapse in the present case because the period subsequent to 15.03.2020 is to be eliminated for determination of the period of 180 days and in that case, the impugned order of attachment would not lapse. 23. The learned counsel for the appellant cited to the judgement of Kolkata High Court in the case of Hiren Panchal and even referred to the relevant para. The special appeal against the said order has been dismissed. 24. With utmost respect, we find that the direction of the Apex Court in the suo moto petition (supra) was not referred by the counsel before the High Court to show exclusion of the period of Covid-19 even for termination of the proceedings and was more persuaded by section 5(1) (b) and 5 (3) of the Act of 2002, whereas the judgement of the Apex Court in suo moto petition covers the issue entirely and elaborate judgement on it has been given by the Telangana High Court in the case referred to above. 25. The counsel for the appellant has further referred to the judgement of the Division bench of Kolkata High ....
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.... otherwise while deciding the bail application, the court cannot draw final conclusions in regard to the involvement of the accused for commission of crime. It can record only prima facie opinion. Otherwise, if any observation in the bail order is taken to be final, then there would remain nothing in the trial. The reference of bail order has been given while the judgement in the petition filed with the appellant by the High Court has been suppressed and therefore it would be necessary to not only refer to the judgement of the High Court in the case of the appellant but to quote relevant paras, which are as under:- 4. The National Highways Authority of India ("NHAI") had acquired land for widening of NH-74. A notification under Section 3 D of National Highways Act, 1956 ("the NH Act") was issued. Different rates were fixed for 'Agricultural' and 'Non Agricultural' land proposed to be acquired. It is a case of causing huge loss to the tune of Rs. 500 crores (approximately) to the Government Treasury by the petitioners and others by forgery, manipulation of Government records, preparing back dated orders so that compensation may be granted at a much higher ra....
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....ere respondent has stated that "it is a matter of record". (ii) According to the respondent, the acts that make out an offence against the petitioner is given in paras 9.6, 9.8, 9.9 and 9.10 of the counter affidavit filed by the respondent. But, whatever is stated in those paragraphs does not make out a prima facie case against the petitioner. (iii) In para 9.6 of its counter affidavit, the respondent has stated that despite the knowledge that the nature of land has already been notified in the notification issued under Section 3D of the NH Act, the petitioner sought an information regarding the nature of land and disbursed excess compensation. It is argued that under Section 3G of the NH Act, it was incumbent upon the petitioner, as a competent authority, to determine the market value of the land proposed to be acquired and for that purpose seeking information was mandatory or else the petitioner would have been blamed for dereliction of duties. (iv) The petitioner simply proposed the compensation, which was submitted to the National Highways Authority of India and in the note sheet of the National Highways Authority of India, this fact is mentioned that....
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....to the nature of land, the objections could be considered while determining the compensation at the stage of Section 3G of the NH Act. 53. Learned counsel for the petitioners Arpan Kumar, Sanjay Kumar Chauhan, Vikas Kumar and Jagdish Arora would adopt the arguments as advanced on behalf of the petitioner Dinesh Pratap Singh. Learned counsel would also submit that the money which the petitioner Arpan Kumar had received, it was in lieu of a family settlement; he got Rs. 50 Lakhs and Rs. 50 Lakhs was received by his father and Rs. 5 Lakhs was received by his brother. It is also submitted that the petitioner Sanjay Kumar Chauhan and Vikas Kumar were employees of Revenue Department. They followed the orders of their superiors; they have not made any back dated entries. 56. Learned counsel for the petitioners Ramesh Kumar and Om Prakash also adopts the arguments as advanced on behalf of the petitioner Dinesh Pratap Singh. 58. Learned Senior Counsel would also raise the following points in his submission:- (i) At the stage of determining compensation under Section 3G of the NH Act, the competent authority is not empowered to re-examine the nature of lan....
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.... also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence;" 70. The offence of "money laundering" has been defined under Section 3 of the PML Act, which is punishable under Section 4 of it. Section 3 of the PML Act reads as hereunder:- "3. Offence of money-laundering.- 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 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. Explanation.- For the removal of doubts, it is hereby clarified that,- (i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:- (a) concealment; or (b) possession; or (c) acquisition; or ....
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....iew that the expression "and" occurring in Section 3 has to be construed as "or", to give full play to the said provision so as to include "every" process or activity indulged into by anyone. Projecting or claiming the property as untainted property would constitute an offence of money-laundering on its own, being an independent process or activity. (c) ...... (d) The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money-laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money- laundering against him or any one claiming such prop....
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....terial regarding grave involvement of the person to be summoned. 76. In the case of Martin Burn Ltd. Vs. R.N. Bangerjee, AIR 1958 SC 79, the Hon'ble Supreme Court in some other context discussed the concept of a prima facie case and observed that "a prima facie case does not mean a case proved to the hilt but a case which can be said to be established if the evidence which is led in support of the same were believed. While determining whether a prima facie case had been made out the relevant consideration is whether on the evidence led it was possible to arrive at the conclusion in question and not whether that was the only conclusion which could be arrived at on that evidence." SPECIAL SESSIONS TRIAL NO.14 OF 2022 77. In this case, cognizance has been taken on 06.09.2022 against the petitioners Dinesh Pratap Singh, Arpan Kumar, Barinder Singh, Vikas Kumar, Bhole Lal, Jagdish Arora and others. It is not the case of exercise of excessive jurisdiction by the petitioner Dinesh Pratap Singh and others. But, it is the case of the complainant that in order to give an undue advantage to the farmers, under a conspiracy, back dated orders under Section 143 of ....
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....ed with Registrar Kanungo, Tehsil Jaspur). Shri Chandrapal Singh, the then Registrar Kanungo and Anil Kumar, the then Sangrah Amin inter alia stated that the said facts in their statement recorded u/s 50(3) of the PMLA, 2002. (g) that, as per Police charge sheet mentioned above, Jagdish Kumar Singh, in connivance with Dinesh Pratap Singh (the then CALA/SLAO, Udham Singh Nagar/Nainital), Bhole Lal (the then Naib Tehsildar, Tehsil Jaspur), Vikash Chauhan (Reader/Peshkar in SDM Court Jaspur), Anil Kumar (Sangrah Amin attached with Registrar Kanungo, Tehsil Jaspur) & Middlemen and others managed to get the compensation at non-agricultural rate on the basis of back dated order. (h) that Dinesh Pratap Singh, the then CALA/SLAO passed an award No. 10/2016 dated 17-05-2016 (Annexure-33) duly amended vide compensation order No. 21/2016 dated 15.07.2016 (Annexure situated in Garhi Hussain, Jaspur, Udham Singh Nagar at non-agricultural rate; Jagdish Arora managed to get compensation of Rs. 8,22,46,232/- on 06.09.2016 fraudulently at non-agriculture rate for his land acquired for four-laning/widening of NH-74; that the compensation amount was credited, after deducting TDS, in....
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....r/round tripping the amount received in his account from the petitioner Jagdish Arora in order to layer and integrate the 'Proceeds of Crime'. (para 9.2 of the complaint) 82. According to the complainant, Arpan Kumar played an important role in facilitating the farmers in getting compensation fraudulently on a higher rate. He and his family members received huge amount. By layering and integrating the amount by way of withdrawing in cash to hide criminal intention, according to the complaint, the petitioner Arpan Kumar projected the tainted money generated out of criminal activities as untainted by way of projecting the amount received as a help given by the petitioner Jagdish Arora. (para 9.3 of the complaint) 83. It is the case against the petitioner Dinesh Pratap Singh that he was actively involved in the process of activities connected with generation of 'Proceeds of Crime' generated through criminal activities related to a scheduled offence. (para 9.4 of the complaint) 84. The petitioner Bhole Lal was working as a Naib Tehsildar at the relevant time. According to the complaint, he had prepared and submitted back dated reports of Secti....
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....ir land for agriculture for the livelihood of their family. The said information has been received from the office of the Special Land Acquisition Officer, Udham Singh Nagar/Nainital vide letter dated 29.06.2021 (Annexure B- 28). (d) That the NHAI conducted Joint Measuring Survey (JMS) for the said lands which were being acquired for the widening/four laning of NH-74; that the said lands were also mentioned as agriculture as per Joint Measuring Survey (JMS) Report as per information received from the office of Project Director, Nazibabad, NHAI vide letter dated 11.08.2021 (Annexure B-29). (e) That Shri Dayanand Saraswati, the then SDM Kashipur submitted an enquiry report dated 17.03.2017 (Annexure B-14) to the then Kumaon Commissioner regarding the discrepancies found in the record of the said lands in revenue documents of SDM Court and Tehsil. (f) That in the statement of Sh. Rakesh Pradhan dated 27.07.2021, he inter alia stated that when he was posted as Rajaswa Ahlmad at S.D.M. Court, Kashipur during that time cases only upto No. 22/516 were registered in Misilband Panjika of revenue year 2009- 10; that Case No. 22/517 (2009-10) Balwant Singh, Village ....
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....of NH Act, 1956, passed an award No. 6/2016 dated 11-05-2016 (Annexure B-58) duly amended vide compensation order No. 20/2016 dated 15.07.2016 (Annexure B-59) for the land at Khasra No. 163, 164, & 198 situated in village Banskheda Kala, Kashipur, Udham Singh Nagar at non-agriculture rate. (j) that Balwant Singh received total compensation of Rs. 34,05,61,008/- (Rs. 13,94,14,495/- on 24.08.2016, Rs. 7,21,98,045/- & Rs. 12,89,48,468/- on 14.06.2016) fraudulently at non-agriculture rate for his lands acquired for four-laning/widening of NH-74 by NHAI; that the compensation amount was credited, after deducting TDS, in the joint Account No. 913010041809666 (Annexure B-30) maintained at Axis Bank, Kashipur, Udham Singh Nagar, Uttarakhand held in the name of Balwant Singh & Barinder Singh. (k) The above said facts clearly proves the malafide intentions of Balwant Singh, Barinder Singh, Dinesh Pratap Singh (the then CALA/SLAO, Udham Singh Nagar/Nainital), Bhagat Singh Fonia (the then SDM, Kashipur/Jaspur), Sanjay Kumar Chauhan (the then Reader at SDM Court, Kashipur), Madan Mohan Palia (the then Naib Tehsildar Kashipur) attached with Registrar Kanungo, Tehsil, Jaspur) of....
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....the court of SDM, Kashipur at the relevant time. It is alleged that he had entered forged back dated orders under Section 143 of the ZA Act, 1950. He was actively involved in the process of activities connected with generation of 'Proceeds of Crime' generated through criminal activities related to scheduled offence. (Para 9.8 of the compliant) 94. The petitioner Madan Mohan Padaliya was working as a Naib Tehsildar at the relevant time. He had prepared and submitted back dated reports of Section 143 of the ZA Act, 1950. He was actively involved in the process of activities connected with generation of 'Proceeds of Crime' generated through criminal activities related to scheduled offence. (Para 9.9 of the complaint) 95. The averments as made in the complaint definitely make out a prima facie case against all these petitioners. The cognizance and summoning order passed on 06.09.2022 is quite in detail. The court below has taken into consideration the material placed before it. Having considered the material, cognizance was taken and the petitioners and others have been summoned. This Court does not see any illegality in the summoning order. Therefore,....
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....ered by Anil Kumar, the then Sangrah Amin (attached with Registrar Kanungo, Tehsil Jaspur). Shri Chandrapal Singh, the then Registrar Kanungo and Anil Kumar, the then Sangrah Amin inter-alia stated the said facts in their statement recorded u/s 50(3) of the PMLA, 2002. Further as there was no space available for making back dated entry in the R-6 register of village Garhi Hussain, Anil Kumar entered the same in the R-6 register of village Amka of Jaspur Tehsil. (g) The above said fact clearly proves that the said land of Charan Singh was clearly agriculture in nature at the time of land acquisition for widening of the National Highway. (h) That, Charan Singh, in connivance with Dinesh Pratap Singh (the then Naib Tehsildar, Tehsil Jaspur), Vikas Chauhan (Reader/Peshkar in SDM Court Jaspur), Anil Kumar (Sangrah Amin attached with Registrar Kanungo, Tehsil Jaspur) & middlemen and others illegally managed to get the forged back dated order u/s 143 of the UP ZA & LR Act, 1950 passed and its subsequent entries in the revenue records and thereafter got the compensation at non-agriculture rate on the basis of the said back dated order. (i) That Dinesh Pratap Sing....
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....izance and summoning order passed on 06.09.2022 is quite in detail. The court below has taken into consideration the material placed before it. Having considered the material, cognizance was taken and the petitioners and others have been summoned. This Court does not see any illegality in the summoning order. Therefore, there is no reason to interfere in the cognizance and summoning order dated 06.09.2022 passed in SST No. 16 of 2022. SPECIAL SESSIONS TRIAL No. 17 of 2022 99. In this case, cognizance and summoning order has been passed on 14.10.2022 against the petitioners Dinesh Pratap Singh, Arpan Kumar, Vikas Kumar, Bhole Lal, Ramesh Kumar (farmer) and Om Prakash (farmer). The complaint is a part of Annexure 15. In para 8.2.3 of it, the case against the petitioners in nutshell has been stated as follows: "8.2.3. That during the course of investigation under PMLA so far, it is revealed. (a) that the lands of Om Prakash and Pamesh Kumar s/o Chaudhary Ram were acquired by the NHAI for the four- laning/widening of NH-74 (Haridwar to Kashipur Section). The said lands were located at Khasra No.188 and 190 in village Garhi Hussain, Jaspur, Udham Sing....
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....Pratap Singh (the then CALA/SLAO, Udham Singh Nagar/Nainital), Bhole Lal (the then Naib Tehsildar, Tehsil Jaspur), Vikas Chauhan (Reader/Peshkar in SDM Court Jaspur), Anil Kumar (Sangrah Amin attached with Registrar Kanungo, Tehsil Jaspur) & middlemen and others managed to get the compensation at non- agriculture rate on the basis of forged back dated orders and entries. (i) that Dinesh Pratap Singh, the then CALA/SLAO passed an award No.10/2016 dated 17.05.2016 (Annexure B-40) duly amended vide compensation order No.21/2016 dated 15.07.2016 (Annexure B-41) for the land at Khasra No.188 and 190 situated in Garhi Hussain, Jaspur, Udham Singh Nagar at non-agriculture rate; that Om Prakash and Ramesh Kumar managed to get compensation of Rs. 5,91,62,429/- on 01.09.2016 and Rs. 2,57,73,403/- on 07.09.2016 respectively, fraudulently at non-agriculture rate for their lands acquired for four-laning/widening of NH-74 (Haridwar to Kashipur Section); that the compensation amount was credited, after deducting the TDS, in the joint A/c No. 4485000100007348 of Ramesh Kumar & Om Prakash maintained with PNB Jaspur, Udham Singh Nagar, Uttarakhand. (j) that the above said fact clea....
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....e of appellant himself, the second argument alleging non commission of crime under section 3 of the Act of 2002 would not be made out. Issue C 30. The learned counsel for the appellant submitted that no nexus could be disclosed between the scheduled offence and the properties attached by the respondents even if principle of "value thereof" is applied. It is submitted that the sources to acquire the property was disclosed in detail but has been ignored by the Adjudicating Authority. The definition of "proceeds of crime" given under section 1(2)(1)U was referred apart from the judgement in the case of Seema Garg (supra). It was held that the properties derived from legitimate sources cannot be attached on the ground that properties derived from scheduled offence is not available. We find that the judgement of Seema Garg (supra) was discussed subsequently by many other High Courts and they did not approve the ratio, rather proper view was taken and for which we make reference of the judgement of the Delhi High Court in the case of Enforcement Directorate v. Axis Bank reported in 2019 SCC Online Del 7854 31. The relevant paras of the said judgment are quoted hereunder:- ....
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.... of Vijay Madan Lal (supra) where the similar argument raised by the counsel for the parties was not accepted. 33. Para 68 of the said judgment is quoted hereunder:- 68. It was also urged before us that the attachment of property must be equivalent in value of the proceeds of crime only if the proceeds of crime are situated outside India. This argument, in our opinion, is tenuous. For, the definition of "proceeds of crime" is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property. If the property is taken or held outside the country, even in such a case, the property equivalent in value held within the country or abroad can be proceeded with. The definition of "property" as in Section 2(1)(v) is equally wide enough to encompass the value of the property of proceeds of crime. Such interpretation would further the legislative intent in recovery of the proceeds of crime and vesting it in the Central Government for effective prevention of money-laundering. 34. The judgement aforesaid covers the issue and otherwise Delhi High Court in the case of Prakash....
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....ct or indirect, with property derived or obtained from commission of a scheduled offence. The Court observes that Section 2(1)(u) clearly and in unambiguous terms includes not only property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence but also the value of any such property. Seema Garg thus seems to gloss over the statutory imperatives underlying the deployment of the phrase ―or the value of any such property‖ and the concept of deemed tainted properties enunciated in Axis Bank. On a plain textual interpretation of Section 2(1)(u) as well as in the backdrop of the amendatory history of that provision, this Court finds itself unable to agree with the line of reasoning adopted in Seema Garg. As held hereinbefore, affirmation of Seema Garg would amount to virtually deleting the phrase ―or the value of any such property from Section 2(1)(u). That would not only violate the well settled tenets of statutory construction but would clearly amount to the Court rewriting the provision itself in a manner that it stands deprived of vital and purposive content. The Court further notes that Axis Bank had enunciated ....
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....ainted property that they can take the statutory recourse to move against properties which may fall within the ambit of ―value of any such property or ―property equivalent in value held within the country or abroad. To the aforesaid limited extent, properties purchased prior to 01 July 2005 may also become vulnerable and subject to action under the Act. However, enforcement action against such properties would have to satisfy the tests and safeguards as propounded in Axis Bank with the learned Judge observing that in such a situation it would have to be established that the person accused of money laundering had an interest in such property at least till the time that he indulged in the proscribed criminal activity. The learned Judge further observed that bona fide rights acquired by third parties prior to the commission of the predicate offense would stand saved. 36. The counsel for the appellant has made a reference of the judgement of Andhra Pradesh and Patna High Court in the case of Kumar Pappu Singh (supra) and HDFC Bank limited (supra) in which the proportion laid down by the Punjab High Court in the case of Seema Garg (supra) has been retreated. We find that ....
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....money for purchase of the property other than the so-called loans from the relatives and her husband without producing document or with disclosure of the source of the person advanced the loan to the appellant Alka Singh and source for repayment. In fact by putting cash amount in the bank and thereupon making payment for purchase of the property or repayment through cheque would not mean disclosure of source of income so as to justify the purchase of property and that too during the crucial and relevant period of commission of crime. 41. The appellant has further referred to the Assessment Order to show financial credential of Dinesh Pratap Singh. It is even in reference to the transaction between him and his wife without realizing that assessment of the income by the Income Tax Department is made as per the provisions of the Act of 1961 which are altogether different than the provisions of the Act of 2002. Under the Income Tax Act, even the undisclosed income can be added to the income with the imposition of penalty whereas, if there remains undisclosed income though may have disclosed for the purpose of assessment, it would not nullify the rigor of the Act of 2002. 42. The ....