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2020 (12) TMI 1097 - HC - Money LaunderingSeeking Interim restoration of the attached property for using the same for the purpose of marriage - Whether the property attached under Section 5 of PMLA and as confirmed under Section 8 of PMLA can be de-sealed/released on interim basis by the Appellate Tribunal during pendency of the proceedings? HELD THAT - A perusal of Section 3 of PMLA as well as explanation thereof shows that in case any person, directly or indirectly, has enjoyed the proceeds of crime by way of concealment or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner, said person is prohibited from enjoying the proceeds of the crime. As per the provisions of Section 5 of PMLA, the Director or any other officer not below the rank of Deputy Director, so authorised by him, is competent to provisionally attach the property. Thereafter, he shall take the possession of that property so attached under Section 5 of PMLA. On perusal of the relevant record, it is apparent that the stand of respondent No.2 is contrary to the record while saying that no notice was ever issued to him, whereas respondent No.2 was issued as many as 17 notices in total w.e.f. 29.11.2011 to 14.02.2020 and he also filed as many as 10 replies to the notices. He was also issued summons, which are annexed as Annexures A-4 to A-29. It shows that respondent No.2 was well aware about the pendency of proceedings but still he did not opt to file any appeal before the Tribunal. The arguments raised by learned Senior counsel is also contrary to the record that there was no partition of the property, whereas in the affidavit dated 17.01.2005 filed by respondent No.1 before the Returning Officer during Assembly Election held in the year 2005, he himself had declared his share as 50% in the residential house constructed over the land bearing Khewat No.97/98/99 and 104 in village Teja Khera, Tehsil Dabwali, Distt. Sirsa, which has been provisionally attached vide order dated 13.04.2019 which was subsequently confirmed on 25.04.2019 by the Adjudicating Authority - there is no provision in PMLA as well as Rules 2013 which allows de-sealing/release of the attached property temporarily for the use of the accused persons. As per the order passed by this Court, both the parties were directed to appear before the Appellate Tribunal on 18.11.2020. The case was fixed only for appearance of the parties. The case should have been adjourned for any other date for arguments and for production of record but the impugned order was passed on that very day without going through the record and without giving opportunity of hearing to the parties as well. The order passed by the Appellate Tribunal has been relied upon by learned counsel for the respondents, which is not binding upon this Court as the order passed by the Appellate Tribunal is under challenge before this Court. Accordingly, the same is misconceived - it is also apparent that only the provisions of PMLA and Rules 2013 have been mentioned/reproduced but there is no appreciation of the same. Meaning thereby, the impugned order dated 18.11.2020 is contrary to the provisions of PMLA and Rules 2013 as well as the observations made by this Court in the earlier writ petition. In spite of specific directions issued by this Court still stereotype order has been passed. Meaning thereby there is no compliance of the order passed by this Court. No reason, whatsoever, with regard to non-compliance of the specific provisions of the statute by the Enforcement Directorate has been made in the impugned order. There is no finding as to how, when and where there has been non-compliance or violation of the statutory procedural and mandatory provisions of law. The impugned order is not only bad in law but contrary to the provisions of PMLA and Rules 2013. The Appellate Tribunal has not applied its judicious mind while passing the impugned order - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Validity of the interim restoration of attached property under the Prevention of Money Laundering Act (PMLA). 2. Compliance with statutory provisions of PMLA and the Prevention of Money-laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013 (Rules 2013). 3. Jurisdiction and powers of the Appellate Tribunal under PMLA. 4. Adequacy of notice and opportunity for hearing provided to the parties. Issue-wise Detailed Analysis: 1. Validity of the interim restoration of attached property under PMLA: The core issue before the court was whether the property attached under Section 5 of PMLA and confirmed under Section 8 of PMLA can be de-sealed/released on an interim basis by the Appellate Tribunal during the pendency of the proceedings. The court noted that there is no provision in PMLA or Rules 2013 that allows for the temporary de-sealing or interim release of attached property for use by the accused. The court emphasized that the statutory framework does not support such interim relief, and the Appellate Tribunal's order allowing the interim restoration was contrary to the law. 2. Compliance with statutory provisions of PMLA and Rules 2013: The appellant argued that the impugned order violated the statutory provisions of PMLA and Rules 2013, as there is no provision for temporarily de-sealing the property during the pendency of proceedings. The court agreed with the appellant, noting that the Appellate Tribunal had not appreciated or discussed the relevant provisions of PMLA and Rules 2013 in its order. The court found that the Tribunal's order was passed without proper consideration of the statutory requirements and was thus legally unsustainable. 3. Jurisdiction and powers of the Appellate Tribunal under PMLA: The respondents contended that the Appellate Tribunal has the jurisdiction to pass interim orders and that there is no specific bar against such orders. However, the court clarified that while the Tribunal has the power to pass orders under Section 26(4) of PMLA, such orders must be made after giving both parties an opportunity for a hearing. In this case, the Tribunal did not provide adequate opportunity for the appellant to present relevant records, rendering the order procedurally flawed. 4. Adequacy of notice and opportunity for hearing provided to the parties: The appellant argued that the Tribunal's order was passed without giving sufficient opportunity to produce relevant records or rebut the respondents' contentions. The court observed that respondent No.2 had been issued 17 notices and had filed 10 replies, indicating awareness of the proceedings. Despite this, the Tribunal passed the impugned order on the same day the parties were directed to appear, without adjourning for arguments or record production. This lack of procedural fairness contributed to the court's decision to set aside the Tribunal's order. Conclusion: The court concluded that the Appellate Tribunal's order dated 18.11.2020 was not only contrary to the provisions of PMLA and Rules 2013 but also procedurally flawed due to the lack of adequate notice and opportunity for hearing. The appeal filed by the appellant was allowed, and the impugned order was set aside. The court emphasized the necessity of compliance with statutory provisions and procedural fairness in such cases.
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