TaxTMI 
TaxTMI 
2025 (11) TMI 1707
X X X X Extracts X X X X
X X X X Extracts X X X X
....sionally attached in the ignorance of the Income Tax Return (ITR) placed on record showing independent income of the appellant out of salary and other investments, thus, having sources for the aforesaid amount found in the bank account and has been provisionally attached. The learned counsel for the appellant further submits that the Impugned Order was passed after expiry of 180 days from the date of provisional attachment order and thus should have been declared to have been lapsed as per Section 5(3) of the Act of 2002. It is with the further statement that the Impugned Order could not have been confirmed by the Adjudicating Authority merely based on statement of the appellant under Section 50(2) of the Act of 2002. The prayer was accordingly made to cause interference in the Impugned Order and provisional attachment order for the amount of Rs. 12,44,159/-. The counsel for the appellant did not raise any other issue than referred to. The counsel for the respondent contested the appeal and made elaborate arguments. It would be referred while recording findings to the arguments raised by the counsel for the appellant to avoid repetition of the same facts and for the sake o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y Director Directorate of Enforcement, Mumbai in Appeal No. FPA-PMLA-4462/MUM/2022 is reproduced hereunder: "16. The counsel for the appellant company further submitted that the Adjudicating Authority failed to confirm the order of attachment within the period of 180 days from the date of the order of attachment and, therefore, it ceased to exist as per Section 5 (3) of the Act of 2002. The issue aforesaid has already been settled by this Tribunal in reference to the order of the Apex Court in Suo Motu Writ Petition No.03/2020 decided by the order dated 10.01.2022. The operative portion of the said judgment is quoted hereunder: "5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions: I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purpose of limitation as m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t in the case of S. Kasi v. State Criminal Appeal No. 452 of 2020 decided on 19.06.2020, it has been argued on behalf of the Respondent that a 3-Judge Bench of this Court has specifically ruled that the said order dated 23.03.2020 in SMWP No. 3 of 2020 is not applicable to all the applications; and benefit of the order of extension of limitation cannot be taken by police while filing chargesheet Under Section 167(2) of the Code of Criminal Procedure, 19736. Further, with reference to the decision in the case of Sagufa Ahmed (supra), it has been argued that what was extended in SMWP No. 3 of 2020 was only the period of limitation and not the period upto which delay could be condoned in exercise of discretion conferred by the statute. The learned Counsel would also submit with reference to the decision of this Court in SCG Contracts (supra) that where a Defendant fails to file the written statement within permissible time, it is beyond the Court's power to condone the delay. 11. In his rejoinder submissions, the learned Senior Counsel for the Appellant has contended that S. Kasi's case (supra) related to the fundamental right of liberty, referable to Article 21 of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....surge in COVID cases in Delhi and how difficult it has become for the Advocates- on-Record and the litigants to institute cases in Supreme Court and other courts in Delhi. Consequently, restoration of the order dated 23rd March, 2020 has been prayed for. We have heard Mr. Shivaji M. Jadhav, President SCAORA in support of the prayer made in this application. Learned Attorney General and Learned Solicitor General have also given their valuable suggestions. We also take judicial notice of the fact that the steep rise in COVID-19 Virus cases is not limited to Delhi alone but it has engulfed the entire nation. The extraordinary situation caused by the sudden and second outburst of COVID-19 Virus, thus, requires extraordinary measures to minimize the hardship of litigant-public in all the states. We, therefore, restore the order dated 23rd March, 2020 and in continuation of the order dated 8th March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders. It is further clarified that the pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot elaborating on other directions issued by this Court but, when read as a whole, it is but clear that the anxiety of this Court had been to obviate the hardships likely to be suffered by the litigants during the onslaughts of this pandemic. Hence, the legal effect and coverage of the orders passed by this Court in SMWP No. 3 of 2020 cannot be unnecessarily narrowed and rather, having regard to their purpose and object, full effect is required to be given to such orders and directions". After the judgment aforesaid, an elaborate judgment was given by Telangana High Court in the case of Hygro Chemicals Pharmtek Pvt. Limited Vs. Union of India & Ors. reported in MANU/TL/1003/2023. Detail finding on the issue has been given and for that relevant part of Para 15 of the said judgment is 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.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... proceedings within the period of limitation prescribed under the general law of limitation or under 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 (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 Exte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2022 shall be excluded 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 pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the person interested 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. xvii) Similarly, the Calcutta High Court in Hiren Panchal (supra) held that vide orders in In re: Limitation (supra), the Apex Court extended the period of limitation to safeguard the right of litigants to institute proceedings. The Court held that computation of 180 days to confirm provisional attachment of properties under Section 8(3) of the PMLA cannot be equated to initiation/institution of proceedings. The Court also held that prescription of 180 days is in the form of a protection against deprivation of right to property. The relevant paragraphs are extracted below: 15. It is further relev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 31st March, 2022. By its inaction and failure to act in terms of Section 5(1)(b) or the other conditions of the said section, the ED has made itself vulnerable to Section 5(3) of the PMLA. The petitioner in turn has been given the breather of exhaustion of the 180 days window from 1st April, 2022 and the ED cannot now revive the proceedings after more than 80 days have passed from the end point of the 180 days period. 21. In Gobindo Das, the Appeal Court disagreed with the view of the Adjudicating Authority being a "non-litigant". The Division Bench was also disturbed by the fact that the bank accounts of the writ petitioners have been debited leaving the balance at zero despite the order of attachment. Prakash Corporates dealt with the prescribed statutory time period for filing of the written statement under Order VIII Rule 1 of The Code of Civil Procedure, as amended by the Commercial Courts Act. Prakash Corporates also recognised the fact that the decision in S. Kasi was concerned with filing of the charge sheet under Section 167(2) of The Code of Criminal Procedure (Cr.P.C.) and hence would not apply to filing of written statements beyond the prescribed time-limit. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sionally attached. Further, under Section 5(4) of the PMLA, the person whose property is provisionally attached can still enjoy such property till the same is confiscated. Even in cases of confirmation of provisional attachment, a person can still enjoy such property till the same is confiscated. xx) In Vijay Madanlal Choudhary (supra), the Apex Court held that provisionally attached properties which are confirmed can still be enjoyed by a party till a confiscation order is passed. xxi) Therefore, provisions prescribing timelines and which deal with police investigation upon which a person's liberty is dependent has to be strictly construed. On the other hand, where timeline is prescribed for attachment of properties and due to unforeseen circumstances like Covid-19 such attachment was not confirmed, benefit can be granted in favour of the Adjudicating Authority by excluding the period as prescribed under In re: Limitation (supra), a fortiori when the property can still be enjoyed. xxii) It is relevant to note that the Supreme Court in Prakash Corporates v. Dee Vee Projects Ltd. dealt with the application of In re: Limitation (supra) in relation to filing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e other learned Single Judge of the same High Court took a view contrary to the earlier decision of the coordinate Bench; and that was found to be entirely impermissible. In any case, the said decision, concerning the matter of personal liberty referable to Article 21 of the Constitution of India and then, relating to the proceedings to be undertaken by an investigating officer, cannot be applied to the present case relating to the matter of filing written statement by the defendant in a civil suit. xxiii) Further, a Division Bench of Madras High Court in S. Prasanna v. The Deputy Director, Directorate of Enforcement, Government of India47 held that the decision in S. Kasi (supra) is not applicable to compute the period of 180 days under Section 5(3) of the PMLA. The Court also disagreed with the view adopted in Vikas WSP Ltd. (supra), and Hiren Panchal (supra). The relevant paragraphs are extracted below: 12. Insofar as the judgment of the Calcutta High Court that was brought to our notice, we find that the Calcutta High Court had mainly relied upon the judgment of the Apex Court in S. Kasi case. With utmost respect to the learned Single Judge of the Calcutta Hig....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and not proceedings which were already initiated cannot be accepted in light of the decision in Prakash Corporates (supra) which held that In re: Limitation (supra) cannot be narrowly applied. xxvii) Lastly, the decisions in S. Kasi (supra),Vikas WSP Ltd. (supra), Gobindo Das (supra) and Hiren Panchal (supra) cannot be applied for the simple reason that In re: Limitation (supra) was further clarified in In re: Limitation 2022 (supra) wherein the Court at Para 5.4 (extracted supra) held that where time period is prescribed for termination of proceedings, the period from 15.03.2020 to 28.02.2022 shall be excluded. In the present case, Section 5(3) of the PMLA states that provisional attachment of properties will cease to have effect after a lapse of 180 days from the date of provisional attachment. That would mean that attachment proceedings shall terminate if the same are not confirmed within a period of 180 days. Therefore, while calculating/computing the 180 days period, the period from15 .03.2022 to 28.02.2022 shall be excluded. xxviii) To answer Issue No. 3, this Court holds that the decision in In re: Limitation (supra) and subsequent extensions vide In re: L....