TaxTMI 
TaxTMI 
2026 (4) TMI 1084
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....roperties 1. Agriculture land and residential plots 6,986.785 sq., ft., or 649.03 sq., mtrs and 8.515 hec., or 21.041 acres 1,59,69,000/- 2 Vehicles 4 Nos., 73,53,546/- 3 Gold Ornaments/Jewellery 3100 grams 81,65,115/- 4 Cash Seized 18,81,480/- TOTAL VALUE OF THE ATTACHED PROPERTIES - 3,33,69,141/- Facts in Brief 2. The relevant facts briefly are that an investigation was conducted by the of Madhya Pradesh State Police which revealed a well-organized network indulging in various kinds of malpractices in conduct of PMT Examination, 2013, including impersonation of candidates, organised cheating, and manipulation of vacancies as well as manipulation of the process of admission. Investigations revealed that Dr. Jagdeeh Sagar (one of the appellants herein), was the main person behind the conspiracy. Charges were framed in the case under section 420, 467, 468, 471 & 120- B of the erstwhile Indian Penal Code, 1860 (IPC) and sections 65 and 66 of the Information Technology Act, 2000. 3. Upon receipt of information regarding the case, the Enforcement Directorate (ED) reco....
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....d that principles of natural justice were violated. 7. In his response, Ld. Counsel for the respondent admitted that at the relevant time, Dr. Jagdeesh Sagar was in judicial custody. However, his wife Dr. Sunita Sagar was defending her case as well as that of Dr. Jagdeesh Sagar before the Ld. AA. Accordingly, he submitted that the plea that the appellant was in jail and was denied opportunity of being heard is not tenable. 8. After considering the submissions from both sides, a specific clarification was sought by the Bench from the respondent directorate regarding service of notice to Dr. Jagdeesh Sagar. In response, the Directorate, vide its submission dated 07.02.2026 has stated as follows: 16. That it is pertinent to mention that the Appellant Jagdeesh Sagar had duly signed a formal acknowledgment, stating that, through the jail authorities, he has received a Notice to Show Cause dated 30.04.2015 in O.C. No. 482/2015 from the Adjudicating Authority under the Prevention of Money Laundering Act, 2002, New Delhi, directing him to appear (personally or through a lawyer/representative) on 13.07.2015 at 11:00 AM in New Delhi, and that he has also received the certified....
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....ED for onward transmission to detenu. More so, there is no record which clearly indicates that along with notice to show cause the OC and document forming part of proceeding which laid to provisional attachment were provided to detenu. In such circumstances, the document proposed to be relied upon belatedly for no valid reason is an afterthought act. What prevented ED for 11 long years to withhold the secret acknowledgment from judicial authorities. Sans any plausible explanation as to who has withheld above crucial information from court, if at all the information existed then and as to whether in absent of these information the adjudicating authority can confirm an attachment, is sufficient to set aside the impugned order, is the submission. d. Constitutional Court has consistently taken a view that a person supplied with all document forming part of show cause notice there is no compliance of principal of natural justice, any order passed in violation thereof is vitiated. Reference is in connection may be held Natwar Singh v. Directorate of Enforcement & Ors 2010 13 SCC 255. **31. The concept of fairness may require the adjudicating authority to furnish copies ....
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....lty is to be met. In contradistinction, the opinion formed by the adjudicating authority whether an inquiry should be held into the allegations made in the complaint are not fraught with such grave consequences and therefore the minimum requirement of a show-cause notice and consideration of cause shown would meet the ends of justice. A proper hearing always include, no doubt, a fair opportunity to those who are parties in the controversy for correcting or contradicting anything prejudicial to their view***" e. Furthermore, if the documents relied upon by the ED as a discovery at the fag-end of the present proceeding is excluded, nothing turns on to sustain the impugned order. f. So is the case, where in respect of Ms. Sunita Sagar v. Directorate of Enforcement [PMLA Appeal No. 133 of 2024] where the service is stated to be effected to the Minor son of Appellant. it is surprising to note that the said acknowledgement does not indicate as to who has chosen to served through Dasti. Also, the fact that the person effecting service, in ordinary course, would be requiring a Major person to receive the same. if at all, an exception is carved out, it must bear a recital ....
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....ions. Even though no Vakalatnama was filed in favour of the Advocate, the written submission filed was duly considered and it was found that the same did not provided no replies to the issues raised in the show cause notice. 13. Under the circumstances, I find no merit in the appellants' contention regarding denial of opportunity and violation of the principles of natural justice in this regard. Issue No. 2: Properties were acquired prior to period of offence 14. The next contention raised on behalf of the appellants is that the properties attached were purchased between 2007 and 2010, whereas the allegations in the scheduled offence case pertain to 2013. No nexus or link between the alleged proceeds of crime and the subject properties has been brought out. He also submitted that the properties have been attached as direct proceeds of crime and not as 'value of such property'. 15. Ld. Counsel for the Respondent pointed out that in Para 5 on Page 9 of the impugned order it has been mentioned by the Ld. AA that an FIR was registered by the police in Gwalior for alleged malpractices in conduct of PMT 2008-09. Similarly, as per Page 8 of the impugned order wherein the state....
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.... the PAO, Complaint, relied upon documents, the investigations conducted by the ED and the statements recorded u/s 50 of the PMLA and on careful consideration of the arguments advanced on behalf of the Complainant and he defendants undersigned comes to the prima facie conclusion that the defendant have committed the Scheduled offences, generated proceeds of crime and laundered them. No doubt the properties attached are proceeds of crime or value thereof and are involved in money laundering.. Undersigned therefore orders confirmation of the above Provisional Attachment Order. This order shall continue during the pendency of the proceedings relating to any offence under this Act before court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India as the case may be and become final after an order of confiscation is passed under Sub-Section (5) to Sub-Section (7) of Section8 or Section 58B B or Sub-Section 2A or Section 60." [Emphasis Supplied] 18. From a mere reading of the above paragraphs of the impugned order, it is evident that the properties have been attached as 'proceeds of crime or the value thereof'. It may be....
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....sweep of Section 5(1) is not limited to the accused named in the scheduled offence. It would apply to any person (not necessarily being accused in the scheduled offence), if he is involved in any process or activity connected with the proceeds of crime. It has been so held by the Hon'ble Supreme Court in its landmark judgment in the case of Vijay Madanlal Choudhary, Special Leave Petition (Criminal) No. 4634 of 2014). In the said case, it was further held by the Apex Court that the objective of enacting the Act was the attachment and confiscation of proceeds of crime which is the quintessence, so as to combat the evil of money-laundering, by reaching the proceeds of crime in who soever's name they are kept or by whosoever they are held. 22. The above position has since been reiterated and followed in numerous cases decided by the by various High Courts and the Hon'ble Supreme Court. For instance, in Union of India v. J.P.Singh Criminal Appeal No.1102 of 2025 (Order dtd 05.03.2025) the Hon'ble Supreme Court has held that for attracting clause (a) of Section 8, it is enough if a complaint alleging commission of offence under Section 3 of the PMLA is pending. It is not necessary fo....