TaxTMI 
TaxTMI 
2025 (11) TMI 860
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....oposed to be disposed of. 2. Vide its order dated 08.03.2016, the Ld. Adjudicating Authority (AA) has confirmed the attachment of various properties made by the Directorate of Enforcement (ED) vide Provisional Attachment Order (PAO) dated 29.09.2015. The said order of the Ld. AA confirming the attachment of the properties has been contested by the appellants in the appeals which are currently pending before this Appellate Tribunal. In the present applications, the applicants/appellants have prayed, that without prejudice to the outcome of the main appeal, that the properties in respect of which the present applications have been filed, may be allowed to be substituted with an equivalent security in the form of a bank guarantee or Fixed Deposit Receipts (FDRs). MP-PMLA-3577/DLI/2024 filed in FPA-PMLA-1287/DLI/2016 & MP-PMLA-3578/DLI/2024 filed in FPA-PMLA-1316/DLI/2016 3. These two applications have been by Sh. Sanjeev Tyagi and Smt. Sangeeta Tyagi respectively. A property jointly owned by them, namely, Flat No. 042E, ICON Apartment, DLF Phase V, Gurgaon is sought by the applicants/appellants to be substituted with bank guarantees/FDRs amounting to Rs. 1,53,95,002/-. 4. ....
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....LA, 2002 and is bound by the provisions of the said Act and the rules framed thereunder. The same do not contain any provision for substitution of attached properties, except in specified situations as provided in the rules which do not exist in the instant cases. At the time of final arguments, he prayed for, and was allowed the opportunity to file copies of the case laws in support of his submissions which have since been filed by the counsel. The case laws relied upon by the respondent are the following: (1) Hetero Drugs Ltd. v. Dy. Director, Directorate of Enforcement, Delhi, 2017 (354) E.L.T. 369 (ATPMLA) [order dated 09.07.2015] (2) ARA Properties & Ors. v. The Deputy Director, Directorate of Enforcement, Mumbai, Order dated 25.07.2024 in MP-PMLA- 12802/MUM/2024 (Misc.). 6. I have considered the material on record and the rival contentions of the parties. Coming to the case laws cited on behalf of the appellant, firstly, I find that the order passed by the Hon'ble Delhi High Court in Directorate of Enforcement Vs. Mahender Kumar Khandelwal was a consensual order wherein the Ld. ASG, appearing for the Directorate, expressed willingness to release of jewell....
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....Corporate Deposits and investment in equity shares/preference shares/debentures/mutual funds. The 170,00,168 shares of JSPL having book value of Rs. 3,11,05,588 lying with the petitioner and attached not as proceeds of crime but being equivalent value of proceeds of crime cannot remain under provisional attachment in pursuance of impugned Provisional Attachment Order. Accordingly present application is allowed and 170,00,168 shares of JSPL are ordered to be released in favour of the petitioner on furnishing interest bearing FDR amounting to Rs. 3,11,05,588 in name the of the petitioner and shall be deposited with the respondent no 1 who shall be having lien over said FDR. If the respondents succeed in the present petition then the respondent no 1 shall be at liberty to encash the FDR. The petitioner is also directed to submit an undertaking by way of affidavit that the petitioner shall not create any interest in favour of any other person or entity in respect of said FD. FDR shall be renewed from time to time in accordance with Rules and Regulations and Law. The arguments advanced by the CGSC are considered in right perspective but in context of present application are not providin....
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....have been attached by the respondent instead of four immovable properties as attached which would have served the purpose of attachment. Rather the plea of the respondent that he has attached assets of the applicant on 4-10-2012 on the basis of the statement of the director of applicant company u/s 50 of PMLA and other material/detail of assets as available after investigation till then was not even disputed by the applicant. 29. For the foregoing reasons and in the facts and circumstances of the case, the application cannot be allowed being devoid of merits and therefore it is dismissed. The parties are however left to bear their own cost." 10. In the other case law cited by the Ld. Counsel for the respondent, i.e., Ara Properties and Ors, v. Dy. Director, Directorate of Enforcement, FPA- PMLA-4711/MUM/2022 the Appellate Tribunal, vide its order dated 25.07.2024, has held as below: "5. We have considered the rival submissions of the parties and perused the record. 6. It is a case where the order of provisional attachment and its confirmation has been challenged in the appeal and the appeal thereupon has been allowed on account of discharge of the appe....
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.... Act of 2002, the Special Court can order for release of property. It can be even after the trial acquitting the accused with the finding that the offence of money laundering has not taken place. 8. Under sub-section (7) of Section 8, the Special Court has been clothed with the power to pass order for release of the property on an application moved by the Directorate or person claiming right in the property. The issue can be decided by the Special Court in a given circumstance specified under sub-section (7) of Section (8). Sub-section (8) of Section 8 deals with the situation where the property is confiscated and this would be when the accused is convicted. The reference of all the three provisions quoted above has been given to indicate that power to release the property lies with the Special Court. No such power has been given to the Appellate Tribunal and in absence of it, we would not be usurping or exercising the power vested with the Special Court. It cannot be even under Section 35 of the Act of 2002 which empowers the Tribunal only to lay down its own procedure and cannot be enlarged to exercise the power not vested in it or when power is vested in other authority....
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....f sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or copy of such record or document from any office; (e) issuing commissions for the examination of witnesses or documents; (f) reviewing its decisions; (g) dismissing a representation for default or deciding it ex- parte; (h) setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and (i) any other matter, which may be, prescribed by the Central Government. (3) An order made by the Appellate Tribunal under this Act shall be executable by the Appellate Tribunal as a decree of civil court and, for this purpose, the Appellate Tribunal shall have all the powers of a civil court. (4) Notwithstanding anything contained in sub-section (3), the Appellate Tribunal may transmit any order made by it to a civil court having local jurisdiction and such civil court shall execute the order as if it were a decree made by that court. (5) All proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of sections 193 and 22....
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....ls have placed reliance. Rule 4 has been referred by both the Counsels and quoted hereunder:- "4. Manner of taking possession of movable property (1) Where the attached property confirmed under sub-section (3) of section 8 of the Act is a movable property, the authorized officer shall take physical possession of such property and deposit it in a warehouse or a storage place. (2) Where the attached property confirmed by the Adjudicating Authority, is liable to speedy and natural decay or the expense of maintenance is likely to exceed its value, the authorized officer shall sell such property with the leave of the concerned Special Court or Adjudicating Authority, as the case may be, and deposit the sale proceeds in the nearest Government Treasury or branch of the State Bank of India or its subsidiaries or in any nationalized bank in fixed deposit and retain the receipt thereof: Provided that where the owner of the property furnishes the fixed deposit receipt of a nationalized bank equivalent to the value of property in the name of Director of Enforcement, the authorised officer may accept and retain such fixed deposit receipt as security and send a report ....
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....n is liable to be kept in the locker and there is no provision for its substitution by Fixed Deposit or any other arrangement which otherwise exist for the property liable to decay etc. The Learned Counsel for the Appellant has failed to refer to any other provisions which may permit substitution of the property otherwise if we guide ourself by Rule 4 of Rules of 2013, it would apply to the property attached and not to the seized property. The Rule does not exist for substitution of the seized property but for attached property in a given case thus for all the reasons given above, we are unable to accept the application. It is accordingly dismissed." 12. Admittedly, none of the three cases mentioned above wherein substitution of property was not allowed by this Appellate Tribunal took into account the judgment of the Hon'ble Delhi High Court in Gagan Infraenergy Ltd. or Revati Cements Pvt. Ltd., 2024 SCC OnLine Del 4020 which is on similar lines as Gagan Infraenergy. While the order in Hetero Drugs was passed by this Appellate Tribunal as early as in 2015 and could not possibly have considered the aforementioned two judgments of the Hon'ble Delhi High Court which were p....
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....operty which is the subject matter of attachment and is sought to be substituted, is jointly owned by the two applicants/appellants herein, namely, Shri Sanjeev Tyagi with his wife, Smt. Sangeeta Tyagi. 16. The above-mentioned two issues have been considered carefully. Coming to the second issue first, namely, the applicability of Rule 5(5) which provides for substitution of property under joint ownership by accepting equivalent value of fixed deposits to the extent of value of the share of the concerned person in the property estimated by the authorised officer to be involved in the money laundering, it is noted that in the present case the property is jointly owned by the two applicants herein, who were both defendants before the AA and are the applicants/appellants before us. In such a case, pending outcome of the main appeal, it will have to be presumed that the entire property is prima-facie involved in money laundering and, therefore, the question of accepting equivalent fixed deposits for a part of the value of the property would not arise. 17. As regards the question whether this Appellate Tribunal can allow substitution of the property, I find that in none of the cas....