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2014 (3) TMI 1118 - AT - FEMADirections to summon the documents mentioned in the application and to give liberty to the appellant to file a detailed reply after the due examination of the said documents - Held that - In the circumstances, it is not appropriate for the Appellant to contend that he is not entitled to file the reply to the notice issued by respondent under section 8(1) of PMLA till he gets the copies of documents. Appellant could not be permitted to delay the proceedings pertaining to provisional attachment order in the facts and circumstances before the Adjudicating Authority. Consideration of another fact in the facts and circumstances shall be relevant which is that if the Hon ble Supreme Court has not stayed the order of Hon ble Gujarat High Court regarding the right of the Appellant to get the copies of some of the documents on payment of charges, then what steps had been taken by the Appellant and M/s. Neptune Overseas Limited from 9th February, 2012 up till the order of Hon ble Supreme Court on 22nd March, 2012 was passed or even thereafter as according to the learned counsel for the appellant the said order regarding getting the copies of the documents has not been stayed. Perusal of documents whose summoning or production is prayed by the appellant also reveals that the particulars given are not complete and on the basis of the information given by the appellant neither it could be inferred that they are relevant nor they can be summon easily nor the direction could be given by the Adjudicating Authority to concern authorities to produce the documents whose production is sought by the appellant. The prayer of the Appellant is liable to be declined also on this ground. For reason to believe the respondent s belief must be in good faith and it should not be a mere pretence and it would be open to examine whether reasons for believe have a rational connection or a relevant bearing to the formation of the belief. On consideration of section 5 and section 8 of the Act, it is apparent that section 5 contemplates and requires that respondent not only to have reasons to believe , but the reasons for such beliefs have to be recorded in writing. Whereas section 8 requires that on receipt of complaint, if Adjudicating Authority has reason to believe, it can issue a show cause notice, but it does not require that these reasons are to be recorded in writing by Adjudicating Authority. The satisfaction of the adjudicating authority for having the reasons to believe is formed on the basis of complaint sent by the enforcement directorate under section 5(5) of the Act, including copy of the provisional attachment order, copy of charge sheet and other material. In the circumstances, the appellant cannot deny that he cannot be completely absolved of illegality alleged against him and the company. The plea raised by the appellant in his defense that in respect of FIR for the commission of offence, further investigation has been ordered by the learned Magistrate would also not entitle him to summon the documents as alleged by him. Whatsoever is the relevance of such further investigation has to be canvassed before Adjudicating Authority. The Appellant, however, could not contend that he would not file the reply to the notice under section 8(1) of PMLA unless he gets the copies of the documents whose production was sought in the application under section 11 of PMLA. In the present case this will only be for the academic purpose because admittedly 180 days have not yet expired. Whether the time of 180 days can be extended or the time taken by the Adjudicating Authority in summoning the record or to do anything in discharge of its power under section 11 of PMLA is to be excluded or not, is not to be decided in the present appeal in the facts and circumstances because the time shall be expiring on 16th April, 2014 and the arguments have been completed before the Adjudicating Authority who has been stayed from passing the final order. It is not necessary to implead every person or company or legal entity from whom the record is to be summoned or to whom the directions are to be issued for production of the documents nor such parties are to be impleaded for the purpose of production of documents. The Adjudicating Authority and this Tribunal under the relevant provisions can summon any record and can take steps as contemplated under section 11 and/or under section 35 of the Act and such powers cannot be restricted on the ground as has been alleged by the learned counsel for the respondent. This plea on behalf of the respondent is therefore, repelled. This Tribunal is not inclined to grant any relief sought by the appellant in this appeal.
Issues Involved:
1. Dismissal of the appellant's application for summoning documents. 2. Allegations of financial irregularities and money laundering. 3. Compliance with procedural rules for filing appeals. 4. Relevance and necessity of the requested documents. 5. Authority and jurisdiction of the Adjudicating Authority and the Appellate Tribunal. Issue-wise Detailed Analysis: 1. Dismissal of the appellant's application for summoning documents: The appellant challenged the dismissal of his application dated 23.01.2014, seeking directions to summon specific documents and to allow him to file a detailed reply after examining these documents. The appellant alleged that the Adjudicating Authority dismissed the application orally without providing a written order. The tribunal emphasized that the appellant should have inspected the record or applied for a certified copy of the order as per the regulations, which he failed to do. The tribunal stated that the appellant's failure to follow the prescribed procedure rendered the appeal unsustainable. 2. Allegations of financial irregularities and money laundering: An FIR was lodged on 26.04.2012 against the appellant and others for various offenses under the Indian Penal Code, including cheating and defrauding to the tune of Rs. 28.80 crores. The respondent registered a case for money laundering on 30.01.2013. The Forward Markets Commission (FMC) conducted an inquiry and issued a show cause notice to the appellant, alleging several acts of omissions and commissions. The FMC's final order dated 23.07.2011 held the appellant liable for systematically defrauding and misusing NMCE's properties. The tribunal noted that the appellant was accused of transferring funds from NMCE to other companies controlled by him and his family. 3. Compliance with procedural rules for filing appeals: The tribunal highlighted that the appeal must be filed in accordance with the Prevention of Money Laundering (Appeal) Rules, 2005, which require the filing of a copy of the order appealed against. The appellant neither filed the copy of the order nor followed the procedure to obtain it. The tribunal emphasized that the appellant's failure to comply with the regulations, such as inspecting the record or applying for a certified copy, showed an attempt to delay the proceedings. 4. Relevance and necessity of the requested documents: The tribunal examined the appellant's request for summoning documents and found that the appellant failed to specify the exact particulars and relevance of the documents. The tribunal noted that the attachment proceedings under the PMLA are preliminary in nature and do not contemplate a full trial. The appellant's generic and vague allegations were insufficient to invoke the jurisdiction of the Adjudicating Authority to summon the documents. The tribunal also noted that the appellant's demand for documents appeared to be an attempt to delay the adjudication of the provisional attachment order. 5. Authority and jurisdiction of the Adjudicating Authority and the Appellate Tribunal: The tribunal affirmed that the Adjudicating Authority has the power under Section 11 of the PMLA to summon records and examine witnesses. However, the appellant must demonstrate the relevance of the requested documents. The tribunal also noted that the appellant's failure to include M/s. Neptune Overseas Limited, the company whose shares were attached, as a party in the appeal rendered the appeal incompetent. The tribunal emphasized that the appellant cannot claim relief on behalf of the company without proper authorization. Conclusion: The tribunal dismissed the appeal on multiple grounds, including the appellant's failure to comply with procedural rules, lack of specific and relevant details in the request for documents, and the absence of M/s. Neptune Overseas Limited as a party in the appeal. The tribunal also imposed a cost of Rs. 20,000 on the appellant for the respondent.
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