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TMI Blog2017 (8) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... hment of the properties under Sec. 8(4) of PML, 2002 and Rule 7 of the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties confirmed by the Adjudicating Authority) Rules, 2013 are not according to the above provisions and cannot be sustained. The Respondent without following the above (correct) procedure directly took possession of the property from the concerned Banks and even without producing the original fixed deposit receipts, which were in the name of the Principal Special Judges for CBI Cases, Chennai, had transferred the same in the name of the Directorate of Enforcement. - MP-PMLA-1902/CHN/2015 (Misc.) FPA-PMLA-724/CHN/2014, FPA-PMLA-723/CHN/2014, FPA-PMLA-731/CHN/2014 - - - Dated:- 27-4-2017 - Justice Manmohan Singh Chairman And Shri Anand Kishore Member For the Appellant : Shri M. Ambalagan, Advocate Ms. V. Pramila, Advocate For the Respondent : Shri S.A. Saud, Advocate JUDGEMENT FPA-PMLA-724/CHN/2014, FPA-PMLA-723/CHN/2014, FPA-PMLA- 731/CHN/2014 1. By this order we propose to decide above mentioned three appeals which are pending since 2014. 2. Brief facts of the matter are that one Shri K. Anwar Hussain, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of India on 21.07.2009 by operating the lockers in the presence of the appellant and his wife. 8. Total amount seized by CBI, ACB, Chennai from Appellant‟s residence, Bank Lockers and Office were of an extent of ₹ 1,21,55,900/-. (Rs. 65,57,900 deposited in FD with syndicate Bank, Egmore Branch and remaining 55,98,000 deposited with Indian Bank, Velachery Branch) both in the name of Principal Special Judge for CBI Cases. Assistant Commissioner of CBI had also seized sum of ₹ 13 Lakhs from one Mr. D. Ravinder Babu. 9. No amount has been seized by the CBI/ACB from R. Sekar neither from his office nor his residence during the search conducted by the official supra. 10. In the year 2011 the CBI/ACB has filed the final report vide Charge Sheet No. 20 dated 6.7.2011 against this Appellant and others and the same was pending before the Principal Sessions Judge for CBI Cases, VIII Additional City Civil Court, Chennai in C.C. No. 36 of 2011. 11. The alleged charge against R. Sekar is that he amassed the above mentioned amounts through third persons while he was working as Protector of Emigrants (PoE) during 2007 to 2009. 12. On the request of CBI, the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014 communication dated 15.06.2014. 19. The Adjudicating Authority confirmed the Attachment order vide order dated 22.08.2014 observing that the seized properties were in custody of CBI. The statement of the appellant was earlier recorded on 27.07.2012. 20. On 22.08.2014, the Adjudicating Authority passed combined order confirming the provisional attachment orders holding the seized movable properties as proceeds of crime. In reply dated 30.08.2014 the appellant submitted stating the money seized is not tainted. 21. Subsequently, admittedly without seeking any permission from the CBI Court, the ED based on the above adjudication order directed the Banks to transfer the seized property to their accounts by letter dated 11.09.2014. 22. The Adjudicating Authority dispute of the movable seizing the amount by the CBI/ACB and were in the custody of the Special Court for CBI Cases, Chennai from 2009 where is the question of frustration arises as contemplated under Sec. 5(1) of PMLA, 2002 for the Respondent to make a Provisional Attachment in the year 2014 of the same very property/amount. 23. The said demand was immediately adhered to by the Bank officials. It was only at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o such Court seeking relief. In the case on hand, the authorised officer under the said Act, attached the property while the same was in the custody of this Court and thereafter realized the said property namely proceeds of the Fixed Deposit accounts without bringing to the knowledge of this Court and without observing procedures established under law. The petitioner after receiving the proceeds of the Fixed Deposit accounts standing in the name of this Court, has come forward with this petition with the prayer mentioned supra and therefore, this Court is of the considered view that this petition is not maintainable before this Court at this stage and therefore, the same is liable to be rejected. 24. Since it has been concluded that this petition is not maintainable before this Court at this stage and the same is liable to be rejected, necessary directions are to be given directing the petitioner to repay the proceeds of the Fixed Deposit accounts mentioned supra to the respective Banks. Further the respective Bank authorities are to be directed to issue renewed Fixed Deposit Receipts as if those accounts were not at all closed. If the concerned Bank authorities and the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/2015 was filed once again seeking release of the property kept in the custody of the CB1 Court. However, once again the said petition was dismissed as not maintainable. 29. It is argued on behalf of the appellant that the ED was wrong in provisional attachment of the property, when the CBI was in legal possession of the said amounts. The ED thus lacked any authority whatsoever, to attach the property. The ED provisionally attached the properties in the year 2014, which were already under seizure from the year 2009 in the custody of CBI. It was also argued on behalf of all the appellants that the attachment confirmed by the adjudicating authority also is not valid and deserves to be set aside as not maintainable with consequential relief to the appellants herein. 30. It is a matter of fact that while the present appeal is pending before the Hon'ble Tribunal, the ED has filed two criminal miscellaneous applications seeking release under the relevant provisions of PMLA. However, both have been dismissed as not maintainable. As a result, the ED has no powers to attach the property which is already in the custody of a competent court. 31. It is not denied on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following the principles laid down by Supreme Court in the case of Kanhaiyalal V. Dr. D.R. banaji and others [1959 SCR 333: AIR 1958 SC 725]. It is settled law that proceedings taken in respect of a property which is in the possession and management of a Receiver appointed by Court under Order 40, rule 1 of the Code of Civil Procedure without leave of that Court are illegal in the sense that the party proceeding against the property without the leave of the Court concerned, is liable to be committed for contempt of the Court, and that the proceedings so held do not affect the interest in the hands of the Receiver who holds the property for the benefit of the party who, ultimately, may be adjudged by the Court to be entitled to the same. The proposition canvassed are appropriately considered in rendering the findings. It is also settled law that proceedings taken in respect of a property which is in the possession and management of a Receiver appointed by Court under Order 40, Rule 1 of the Code of Civil Procedure, without the leave of that Court, are illegal in the sense that the party proceeding against the property without the leave of the Court concerned, is liable to be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the administration of justice and a possible conflict of jurisdiction. The Courts represent the majesty of law, and naturally, therefore, would not do anything to weaken the rule of law, or to permit any proceedings which may have the effect of putting any party in jeopardy for contempt of court for taking recourse to unauthorised legal proceedings. It is on that very sound principle that the rule is based. Of course, if any Court which is holding the property in custodia legis through a Receiver or otherwise, is moved to grant permission for taking legal proceedings in respect of that property, the Court ordinarily would grant such permission if considerations of justice require it. Courts of justice, therefore, would not be a party to any interference with that sound rule. On the other hand, all Courts of justice would be only too anxious to see that: property in custodia legis is not subjected to uncontrolled attack, while, at the same time, protecting the rights of all persons who may have claims to the property. 39. There is no provision in the said Act which authorizes the ED to attach the movable property which is in the custody of CBI Special Court. It is settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in nature and the same cannot be ignored after the decision of the Supreme Court attaining finality. Para 11-15 reads as under:- 11. We have heard the learned counsel at length and have also considered the submissions made, the judgments relied upon by the counsel, the earlier judgment delivered by this Court in South Central Railway Employees Coop. Credit Society Employees' Union v. Registrar of Coop. Societies and the impugned judgment. In our opinion, the High Court has committed a grave error by taking a different view than the one which had been taken by this Court in South Central Railway Employees Coop. Credit Society Employees‟ Union v. Registrar of Coop. Societies, especially when the rules governing the promotion policy had not been amended after the aforestated judgment was delivered by this Court. It is pertinent to note that a review application had been filed in the aforestated South Central Railway Employees Coop. Credit Society Employees‟ Union v. Registrar of Coop. Societies and the same had been rejected and therefore, the judgment delivered by this Court in South Central Railway Employees Coop. Credit Society Employees‟ Union v. Regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent before the Adjudicating Authority under Sec. 5(5) of PMLA, 2002 is for a presumptive Attachment order and not for actual Attachment order as contemplated under Section 5(1) of PMLA, 2002. 45. The entire process right from the Provisional attachment under Sec. 5(1) by the respondent dated 10.03.2014, subsequently filing complaint under Sec. 5(5) before the Adjudicating Authority, issuance of notice to the parties concerned by the Adjudicating Authority under Sec. 8(1) and passing of the Confirmation Order under Sect. 8(3) and attachment of the properties under Sec. 8(4) of PML, 2002 and Rule 7 of the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties confirmed by the Adjudicating Authority) Rules, 2013 are not according to the above provisions and cannot be sustained. 46. The Respondent without following the above (correct) procedure directly took possession of the property from the concerned Banks and even without producing the original fixed deposit receipts, which were in the name of the Principal Special Judges for CBI Cases, Chennai, had transferred the same in the name of the Directorate of Enforcement. 47. For the above said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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