TaxTMI 
TaxTMI 
2026 (10) TMI 252
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....properties valued in all at Rs. 4,69,55,706/-. Facts in Brief 2. The brief facts of the case are that the District Crime Branch, Madurai registered an FIR No. 21/15 dated 31.01.2015 under Sections 379, 430, 447, 434, 304(ii) read with Section 511 of the Indian Penal Code, 1960 (IPC), Section 3(1) of Tamil Nadu Property (Prevention of Damage and Loss) Act, 1992 (TNPPDL Act) and Sections 3(a) and 4(a) of the Explosive Substances Act, 1908, against Sh. Mohamed Ibrahim Sait (appellant herein), Muruganandam, Hakeem Sait, Sethuraman, Natarajan, Devadoss and other persons. 3. The Melur Police Station, Madurai, had earlier registered FIR No. 619/12 dated 06.08.2012 Section 447 and 379 of IPC and Section 4(1), 4(2)(A), 4(3) and 21 (b)(5) of Mines & Mines Development and Regulation Act 1957 and 3(1) of TNPPDL Act against Shri. Mohamed Ibrahim Sait (appellant herein), S/o Mohammed Kasim and Shri. S.K.P. Murugan, Rajapalayam. Charge sheet was filed before the Hon'ble Judicial Magistrate, Melur in the said FIR u/s. 447, 379, 434, 420, 465, 467, 468, 471, 304(ii) IPC r/w 109, 114, 511 IPC and 3(1) TNPPDL Act and 3(a), 4(a) & 6 of Explosive Substances Act 1908 r/w 120B IPC. 4. Yet....
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....him Sait 11. Detailed submissions have been made on behalf of the appellant. The submissions are fact-intensive, and contain details of the properties, dates of their acquisition, consideration paid and other relevant facts. Since there is nothing to be gained by re-phrasing the detailed submissions made by the appellant which contain specific particulars of properties, including survey numbers, addresses, dimensions, Deed Nos., consideration amount, the stated sources out of which they are claimed to have been acquired etc., the same are reproduced below verbatim as made by the appellant: "1. It is respectfully submitted that the appellant initially entered into a unregistered lease agreement with his relatives (1) Mohamed Anifa, (2) Maimoon Beevi, and (3) Mamutha Beevi for quarrying an extent of 0.42.0 hectares of land in Survey Nos. 379/5A, 5B, SC, SD, 55. 5F, and 50 situated within the limits of Keelavalaru Village, Madurai District. Thereafter he purchased the properties in Survey Nos. 379/5A, 5C, SE and some other property through a registered sale deed in Doc Nos. 365/2000 dated 21.02.2000 and the properties in Survey Nos. 379/5G, 5D, through a registered sale de....
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....niorage fees for an amount of 61,600/- to obtain permit for 38.735 cubic meter, an amount of Rs. 5,000 and agriculture income of Rs. 67852, Interest on advances 46,525, cash on hand totaling an amount of Rs. 1,19,382/-out of the income, he purchased the above stated property for an amount of Rs. 71,040, further the same also reflected in the Income tax return filed by the appellant for the financial period of 2003-2004 and the property in Survey Nos. 537 through a registered sale deed in Doc No.3494/1995 dated 20.01.1995 from executing lease in his properties in survey nos.57/6,7,8,9,10,11,48/3 for valuable consideration for an amount of Rs. 2000 through a lease deed in Document No.2503/1995 dated 10.11.1995 and executing lease in his properties in survey nos.57/6,7,8,10,11 for a valuable consideration for an amount of Rs. 52,100/- totalling an amount of Rs. 54,100/- out of the income, he purchased the above stated property only for an amount of Rs. 13,800, further the same also reflected in the EC entries attached in page no.2-7, from the above said sale deed he purchased measuring an extent of 1.33.0 hectares of land in Survey Nos. 536/2. 536/3, and 537, situated within the limit....
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...., covering a total period of eight months. 3). It is submitted that, as per the No Mining Due Certificate issued by the District Collector, Madurai, the appellant had carried out quarrying operations in the leasehold area of Keelavalavu during the financial years 1999-2000, 2000-2001, 2001-2002, and 2002-2003, and had duly remitted a total amount of Rs. 10,43,185 towards seigniorage fee to the Government. Subsequently, after obtaining the requisite permits for the period 2004 to 2006, the appellant continued quarry operations. However, due to a significant decline in market value, no quarrying activity was carried out from 2007 to 2010. In the year 2011, transport permits were issued to the appellant by the competent Government authorities namely, the Assistant Geologist, Deputy Tahsildar and Surveyor after conducting inspections at the Keelavalavu quarry site These authorities verified and confirmed that the granite blocks proposed for transport had indeed been quarried from the appellant own leasehold area. During this period, the above-mentioned officials conducted 27 inspections at the Keelavalavu quarry site up to 31.05.2011 and issued transit receipts under Rule 36 o....
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....laint dated 06.08.2012 filed by Smt. Anuradha, Village Administrative Officer, Thiruvathavur Village, Madurai District and another case was registered in relation to alleged illegal quarrying operations. In this regard, FIR No. 619/2012, dated 06.08.2012, was registered against the appellant and 7 others for offences under Sections 447, 379, 434, 420, 465, 467, 468, 471, and 304(ii) of the Indian Penal Code, read with Sections 109, 114, 511, and 120B IPC, Section 3(1) of the TNPPDL Act, and Sections 3(a), 4(a) and 6 of the Explosive Substances Act, 1908. 6). It is submitted that the above offences in the above FIR are not scheduled offences under PML Act, 2002, However, based on the unsigned final report, which was not field before the Competent Court, reportedly prepared by the Superintendent of Police, Madurai, the contesting respondent registered ECIR/CEZO-II/16/2017 dated 12.12.2017 for conducting investigation under the provisions of PMLA, 2002, which is perse illegal and without any sanctity of law. 7. The aforesaid unsigned Final report prepared against the appellant and 5 others in Cr.No.21/2015 for the alleged offences under sec 379, 420, 447, 434, 304(ii....
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....r column shows, the attached properties were purchased by means of legal source and it is nothing to do with the proceeds of crime alleged by the respondent. [Table No.1] (The tables are not reproduced herein. However, the explanations given with regard to the sources of acquisition of the attached properties are discussed in paragraphs 66-68 (infra).) [Table No.2] [Table No.3] [Table No.4] Unfortunately, instead of giving the exact price of the properties, the Respondents have introduced their own imaginary value of the properties shown at column 9 and 10, under guise of present guideline value, which has nothing to do with the proceeds of crime as per the Prevention of Money laundering act, 2002. Item No.2, 3, 4, 5, 6, 7, 19, 20, 21, 22, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 35, 36, 37, 39, 40, 41, 42, 43 and 44 were already sold. Further item no.8 and 23 are the properties in which stone quarrying operation were done. Item No.45 is ancestral property. Further in that tabular there is an double entries regarding lease deed executed for mining operation as it is portrayed as higher value, further there is no money consideration for th....
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....ich is 63.67% of his legal earnings. Thus, from the details given in the complaint at paragraphs 17 at pages 14 to 21, the complainant himself admits that the appellant have accumulated assets only around 63.67% of his legal earnings through granite business as per the complaint. When such is the fact, the complaint making allegations that the appellant has purchased properties mentioned in the complaint through proceeds of crime, which amounts to money laundering punishable under the PMLA, 2002, is inherently improbable. 14. It is submitted that the petitioners state that section 3 of the offence of PML Act 2002 reads as follows: 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 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" The ingredients contemplated in the provision to attract Section 3 are that the person concerned should have a link with proceeds of crime. Thus, only when th....
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.... many of the properties owned by the appellant was purchased between the period from 1993 to 2010. This fact itself is enough to show that the appellant has purchased the properties much earlier to the so-called crime period, which is from January 2011 to August 2012. This shows that the Respondent has attached the property with bereft of accurate details and with non-application of mind 16. It is submitted that as per the contents of Paragraph 5.4 and 5.6 of the complaint itself, the appellant legal income would be of Rs. 7,37,47,200/- as per the complaint the value of the 45 properties is Rs. 4,69,55,706/- which are alleged to be acquired by appellant as "crime proceeds". It is impliedly admitted that the appellant has sufficient income as per the admission of prosecution in the attachment itself. Thus, the attachment is on conjectures and surmises and on the face of it is imaginary and fictitious. 17. It is submitted that the complaint is only on the basis of acquisition of assets with income through alleged "illicit quarrying". However, "illicit quarrying is not a schedule offence and hence, PML Act is not attracted. The appellant therefore prays that....
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.... the matter because the complainant is both the adjudicating officer and also the investigator under the provision. Therefore, where the preponderance of evidence indicates absence of culpability and complexity, the noticee should not be harassed by the Department by insisting that he should prove the negative. In the instant case, the offences under IPC have no legs to stand if the offences under the various mining laws are not established. Admittedly, the proceedings with reference to the fact whether there has been illegal mining activity or not are still pending and inconclusive. In these premises, it is wholly erroneous on the part of the complainant to have concluded to pass an order of provisional attachment under S.5 of PMLA. Reference is made to the decisions in Gee Vee Enterprises v. Addl. CIT, 1975 (99) ITR 375 Del, and Calcutta High Court's decision in Rajmandir Estates (P) Ltd v. Principal Commissioner, G.A.no.509 of 2016. It is contended that the power of attachment is limited to attaching "proceeds of crime" and therefore, the existence' of criminal activity relating to a scheduled office is the stratal condition for the existence of proceeds of crime and the app....
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.... the present complaint. The Authority u/s. 8 of PMLA ought to have satisfied itself for reasons to be recorded in writing to issue summons to the defendants. The ld. Adjudicating Authority has issued notice to show cause to the appellant's husband. The said show cause notice also does not mention the reasons of the Authority to reasonably believe that the Appellants have committed an offence u/s. 3 of PMLA or are in possession of the proceeds of crime. Till date, there has been no communication of the reasons of such issuance of show cause notice by the authority to the Appellants. This in itself is a clear violation of the provisions of the PMLA and thus the whole of the proceedings before the Authority is non-est and void ab initio. 21. It is submitted that the appellant, in the best interest of justice and as a law-abiding citizen of this country, responded to the show cause notice and filed their written submissions along with the voluminous documents running into several pages evidencing the licit sources of income of the appellant's husband and the details of the purchase of the various properties. The appellant and appellant's husband also filed their addition....
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....he value of the any property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence and where the Appellant' husband has by placing material and evidence having a probative value that his acquisition is bonafide, legitimate and for fair market value paid therefor then the AA must carefully consider the same. The order of the ld. AA does not display this at any part of the order. 25. It is also submitted that the ld. AA has failed to note that the provisional order of attachment has been passed after a substantial period of time. The Appellants have not dealt with the said properties during the said period. Some of the properties were mortgaged as security to the Banks and financial institutions and therefore the said Banks and financial institutions have a charge over the same and thus the same are not available to be freely dealt with by the 'Appellant. The properties herein are all immovable properties in the form of lands. There is very less liquid cash in the Bank accounts. Thus, in this premise it is not clear as to what is the apprehension on the part of the complainant to reasonably apprehend that the same would....
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.... view to careful examination'. The consideration of the aggrieved person representations cannot be skipped. Further the term consider is vividly explained by the Hon'ble Supreme Court in its judgment in the case of Bhikhubhai Vithlabhai Patel vs. State of Gujarat (2008) 4 SCC 144. The term 'consider' means to think over, it connotes that there should be active application of mind. In other words, the term 'consider' postulates the consideration of all the relevant aspects of the matter. It is also beneficial to refer to what the Apex Court has said in paragraph No. 15 of its judgment in the case of The Barium Chemicals Ltd. vs. A.J. Rana: AIR 1972 SC 591 which reads as below: "15. The words 'considers it necessary' postulate that the authority concerned has thought over the matter deliberately and with care and it has been found necessary as a result of such thinking to pass the order. The dictionary meaning of the word 'consider' is 'to view attentively, to survey, examine, inspect (arch), to look attentively, to contemplate mentally, to think over, meditate on, give heed to, take note of, to think deliberately, be think oneself....
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....only, after taking all the submissions of the accused and documents brought on record to establish the sources of his property so attached that the adjudicating authority takes a final decision on the same." The judgment in the case of G. Lakshmi Aruna Vs Deputy Director in W.P. Nos. 11440-11441 of 2016, dated 13.03.2017 passed by, the Hon'ble Division Bench held that: Para 15: "Mr. Sudhir Nandrajog, learned senior advocate, appearing in support of the writ petitioners, has taken a short point, contending that the allegation of theft or illegal mining is not a scheduled offence under the PML Act." Para 16: "As the offence of theft is not a scheduled offence under the PML Act, by applying the same principles as we have taken above, we find no merit in the initiation of proceedings against the petitioners in these writ petitions under the amended PML Act. Hence, the action taken against them under the said Act is, also, liable to be quashed." 31. It is further contended that the order impugned herein is a verbatim reproduction of the averments and pleadings of the parties and does not show any independent application of mind by the ld. AA as contempl....
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....granite totalling to 14625.18M³, thereby causing a loss to Exchequer/Government to the tune of Rs. 58.50 Crores; It is submitted that the appellant also had license for quarrying in Thiruvathavur Village in Survey Nos.536/2, 536/3 and 537 and that he had quarried granite worth Rs. 21 crores which are proceeds of crime within the meaning of PMLA, 2002. 37. As regards the averments made by the appellant regarding the alleged scheduled offences it is submitted by the Respondent that the issues are to be dealt by before the trial court where scheduled offence is being tried, and not by this Appellate Tribunal where the appeal is confined to provisional attachment of properties which are deemed to be proceeds of crime acquired out of the scheduled offence. The Respondent submits that by harping on the issues relating to amount of illegal quarrying of granites which is subject matter of trial, the appellant is trying to divert the attention against the possession of alleged proceeds of crime for which he has not come out with clean hands by revealing the source of acquisition. Provisional attachment is intended to protect the interest of the Government by placing the proceeds of ....
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....pport of agricultural income, also declared in Income Tax Returns for the source of purchase of attached properties. Agricultural income though exempt under Sec. 10 of the Income Tax Act 1961, is to be shown in I.T returns by an assessee for computation of slab rate of tax. Income from real estate is to be shown under head 'capital gains' for which also no evidence is filed. Hence the so-called source of income is imaginary claimed by the appellant are unsupported and uncorroborated. 41. With regard to the submission that as the scheduled offence is not adjudicated till date, the learned authority ought to have exonerated the appellant it is submitted that this ground goes against the scheme of the PMLA, especially Chapter III thereof. The provisional attachment is made under Sec.5 if the authority has reason to believe that (a) any person is in possession of any proceeds of crime (b) and such proceeds of crime are likely to be concealed, transferred, disposed of frustrating the confiscation proceedings under the Act, the properties (proceeds of crime) can be attached provisionally under Sec. 5(1) which has to be confirmed or otherwise, under Sec. 8(3) by the Ld. AA. Suc....
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....ve clearly recorded such 'reasons to believe' (recorded separately in PAO in Para 22 to 25) which formed the basis of attachment of the proceeds of crime in the form of immovable properties acquired by the appellant, which he was projecting as untainted, thereby also involved in the offence of money laundering. In the case of S. Narayanappa & Ors vs Commissioner of Income-Tax, 1967 AIR 523, 1967 SCR (1) 590, the Hon'ble Supreme Court held that the existence of the belief, and whether the reasons for the belief have a rational connection with or relevant bearing on, the formation of the belief, are open to examination by the court. Further in the case of Gautam Khaitan Vs Union of India W.P.(C) 8970/2014 the Hon'ble High Court of Delhi in a matter relating to attachment proceedings under PMLA and the question of "reasonable belief in such action had held that " the reasonability of the grounds which lead to the formation of belief warranting provisional attachment is tested from the point of view of whether or not they are germane to the formation of belief that if, provisional attachment is not ordered, it could lead to frustration of proceedings under the Act. Therefore, i....
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....erms of the scheme of the Act and more particularly Sec. 5 there is no necessity to form a conclusive opinion or to file a proof at the time of provisional attachment. In fact, scope of Sec. 2(1)(u) is very wide to bring in to ambit any property obtained/derived by any person out of criminal activity relating to scheduled offence. The fact that the appellant is charged with scheduled offence is not in dispute. In the case of B. Rama Raju Vs. UOI & others 2011 SCC OnLine AP 152 it was held that Sec. 5 of the Act applies to property acquired even prior to coming into force the amended provisions (in 2009) and even in such an event it is not invalid for retrospective penalization. 47. The respondent has relied on the case of Narendra Mohan Singh and Anr. vs Directorate of Enforcement and Anr. (decided on 22 March, 2014), it was held that the date when one person is found involved in any process of activity connected with the proceeds of crime and projecting it as untainted property would be relevant for the purpose of prosecution under Sec 3 of the Act., and not the date when the scheduled offence was committed. 48. It is also argued that the averment of the appellant that some ....
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....ainant to prove the source of income. As per the scheme of present proceedings. It is incumbent on the appellant to come out with source of income for acquiring the properties valued at around 4.69 crores. The appellant has merely filed financial statements and IT returns before the learned adjudicating authority. From the same it is seen that the appellant has only declared agricultural income of Rs. 2,60,000/- (A/Y 2010-11) Rs. 2,74,000/- (A/Y 2014-15) Rs. 2,65,000/- (A/Y 2015-16) Rs. 2.65,000/- (A/Y 2016-17) etc. whereas the value of immovable properties acquired by him is valued at around 4.69 crores. It is submitted that the appellant has not furnished any tangible or documentary evidence to prove that the properties attached were acquired out of agricultural income (licit income). It is further noticed that every Assessment Year (A /Y) the Defendant is declaring meagre amount less than 3 lakhs which cannot be a source of acquisition of immovable property. Without prejudice it is submitted that even for the agricultural income reflected in the income tax returns, the appellant has not placed any documentary evidence before the ld. AA. 50. As regards the averment of appellan....
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....s pointed out that the ld. AA in the notice issued under Sec. 8(1) has clearly mentioned that on the basis of forming reasons to believe that the properties are proceeds of crime and involved in money laundering the adjudication process under Sec. 8 is taken up. It is for the appellant to apply for copy of the 'reasons to believe' recorded by the Adjudicating Authority, which he failed to do so. Having failed to obtain a copy of the reasons to believe recorded by the learned authority, for the reasons best known to him, the appellant cannot take shelter for the reason that the same is not supplied. As rightly pointed out by the learned Adjudicating authority that in terms of the judgment of the Mumbai High Court in the case of Radha Mohan Lakhotia Vs DoE, all that the learned authority is required to show is that there was sufficient and probable cause to form an opinion that property under attachment is proceeds of crime. 54. It is next stated that contrary to the claim of the appellants that the source of income it is again reiterated that no such evidence of voluminous nature was ever produced before the learned authority. The appellant only produced copies of account....
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....llant in Ground XI it is submitted that the PAO was passed after substantial period of time and there is no apprehension of disposing of property by appellant it is submitted that soon after registration of ECIR in December 2017 details of properties held by appellant and others were sought for from the Sub-Registrar, Madurai and also Inspector General of Registration, Chennai. This was followed up with further reminders and enquiry between July 2018 to December 2018 with state registration authority and also with income tax authorities. Summons were issued to appellant and his employees and after examination of them under oath in terms of Sec.50, investigation was complete when the reasons to believe that properties are involved in money laundering was formed. Therefore, the same were provisionally attached, and such attachment is well within the legislative mandate of 2nd Proviso to Sec.5 (1) of the Act. The appellant is taking different stands as regards the ownership of properties attached, as during investigation he affirmed that the properties were sold but EC is still in his name and only in appeal he has filed EC obtained during August 2019 to show that the properties are s....
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....s further submitted that the appellant without any basis and without any specific reference to any document by merely reproducing certain sale documents numbers, has contended that he has sold the properties in question. There is no correlation of the documents enclosed in Folder III of appeal paper book with the averments made in grounds. The appellant has not come out with clean hands and the documents enclosed appears to have been fabricated or manipulated to serve his needs. Before the PAO was issued the Respondent office has received EC from the concerned sub-registrar showing that the properties are in his name. Similarly, after PAO was issued the EC showed attachment of the Respondent as encumbrance in the respective title deeds. While the fact remains so, it is not known as to with what ulterior motive the appellant is making a sweeping averment of sale of properties and taking a ground that EC is in favour of purchasers. The main document/title deed still show the name of appellant with encumbrance created on behalf of the Respondent due to passing of PAO. Few sample EC obtained are furnished for kind perusal of the Hon'ble Tribunal (Copies enclosed) Since the appellan....
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....become waste and rejects. In this regard, studies by national and international bodies are cited. The agencies which booked the FIRs in the scheduled offences did so entirely on basis of unsubstantiated reports submitted by persons who were not qualified. 65. With regard to the above submissions, it is seen that in FIR No. 619/2012, a Charge sheet under section 173 (2) of Cr. P.C. 1973, stands filed before the Ld. Judicial Magistrate, Melur u/s. 447, 379, 434, 420, 465, 467, 468, 471, 304(ii) IPC r/w 109, 114, 511 IPC and 3(1) TNPPDL Act1992 and 3(a), 4(a) & 6 of Explosive Substances Act, 1908 r/w 120B IPC. Notably, sections 3, 4 of the Explosive Substances Act, 1908 are in the Schedule to PMLA (Paragraph 3) as also sections 120B, 420, 467, 471, 304 of the IPC. As such there is no substance in the contention of the appellant that there is no underlying scheduled offence in these cases. 66. The next contention put forward on behalf of the appellants is that the attached properties were acquired out of legitimate and explained sources. A detailed tabular chart has been filed showing the details of each property, including deed number and date, property details, cost of acquisit....
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....d be legitimately attached even if they were from fully explained sources, which is far from being the factual position of the present case. 69. It is next contended that some of the properties were acquired prior to the period of the alleged crime. The alleged period of commission of the offence was from January 2011 to August 2012, whereas many of the properties had been acquired between 1993 and 2010. Therefore, the appellant argues that such properties could not have been acquired from the alleged proceeds generated during 2011-2012. 70. With regard to the above, as already discussed, the properties in this case were attached as 'value of such property'. In such cases, the time of acquisition of the alternate property which is being attached in lieu of the proceeds derived directly or indirectly from the scheduled offence, i.e., whether such property was acquired prior to or after the alleged scheduled offence, is immaterial and of no consequence. 71. The underlying legal issue has been discussed in detail in the order dated 14.10.2024 of this Appellate Tribunal passed in the case entitled Sadanand Nayak v. Dy. Director, FPA-PMLA-5612/BBS/2023 (paragraphs 12 to 24) whe....
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....na High Court was not drawn to part 2(i) in HDFC Bank's case (supra). Similar is the position in M/s Himachal Emta Power Limited's case (supra). In this case, the attention of the Bench was not drawn to the second broader category of the definition. In Hemanshu Rajnikant Shah's case (supra) the Court relied upon Seema Garg's case (supra) and held that the properties acquired before the alleged crime and before the enforcement of the '2002 Act' cannot be attached. 3.9 On the other hand the judgments passed in Vijay Madanlal Chaudhary's case (supra), Axis Bank's case (supra) and Prakash Industries case (supra) completely answer the question in favour of ED. 3.10 The petitioner's counsel has also heavily relied upon Pavana Dibbur's case (supra). This Bench has carefully read the aforesaid judgment. The aforementioned case involved attachment of properly falling under the category of 'direct' or 'indirect' proceeds of crime. The complaint under Section 44-45 of 2002 Act was quashed by the Supreme Court. The Bench was never called upon to analyse the contentions based upon Section 2(i)(u) of 2002 Act, whereas, in Vijay Madanlal Chaudhary's case (supra) the Court direct....
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....istence of the 'reasons to believe', the legal position emerging from the judgements of higher judicial authorities, including the judgement of the Bombay Hon'ble High Court in Radha Mohan Lakhotiya and Brizo Realty etc. with regard to the level of proof required for purpose of attachment of the properties and the confirmation thereof by the AA. Having considered the detailed discussions occurring in these paragraphs of the order, I do not find any merit in the contention that the impugned order is non-speaking order passed without considering the submissions made on behalf of the appellants. As regards each of the individual issues on which the order is contested by the appellants, the same have been dealt with individually in this order. In light of the same, I do not find any merit in the general contention advanced on behalf of the appellants that the order is a non-speaking order and that the issues raised by the appellants were not considered. 75. That next issue raised on behalf of the appellants is that the ED has assigned incorrect values to the attached properties which is contrary to the provisions of the PMLA. It is contended that instead of giving the exact price of....
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.... with as the properties had been in the possession of the appellant for substantial period and some of the properties had been mortgaged as security to the banks also; there was no effort at placement, layering or integration of the property. 78. The respondents have contested the submission with a detailed response. 79. Having considered the rival contentions, I find that the reason to believe on the basis of which the authority acted under section 5(1) have been stated in para 22 to 25, which are as follows: " RECORDING REASONS TO BELIEVE u/s. 5(1) OF THE ACT 22. Shri. Mohammed Ibrahim Sait has directly indulged in criminal activities for which two FIRs and subsequent Charge sheet in one FIR was filed by the police authorities and committed scheduled offences u/s. 2(1)(x)&(y) of the PMLA and from the scheduled offences he generated proceeds of crime of Rs. 21 crores in FIR 619/12 and Rs. 58.5 crores in FIR 21/15 totalling to Rs. 79.5 crores. These properties purchased by Shri. Mohamad Ibrahim Sait, in his and his family member's names, is directly linked to both the crimes in FIR 619/12 and FIR 21/15 and therefore the properties mentioned in the Schedu....
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.... stage to have conclusive proof in order to provisionally attach properties as has been upheld in various cases decided by higher judicial authorities which have been cited on behalf of the respondent, including Brizo Reality Co. Pvt. Ltd, 1014 SCC Online Bom 804, Radha Mohan Lakhotia (supra) etc. 81. Insofar as the legal position is concerned, the Hon'ble Madras High Court, in G. Gopalakrishnan Vs. Deputy Director WP (MD)Nos. 11454, 14860 & 14894 to 14899 of 2018 (Order Dt. 03.01.2019) has held that section 5 nowhere stipulates that there should be communication of reasons in the form of show cause notice before ordering provisional attachment. The validity period of provisional attachment is only for a period of 180 days, and therefore, the initial order has all the characteristics of a show cause notice and no further requirement is contemplated in the statute. Further, it was also noted that the language used in section 8(1) of the Act is different from the one used in section 5(1). The AA is not required u/s. 8(1) to record reasons and on the basis of the complaint filed by the initial authority u/s. 5(5) can proceed with the process on the basis of subjective satisfaction.....