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TMI Blog2017 (8) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... the vendor. The appellant would also be entitled to raise its plea under section 5(3) of the Act, which shall be also considered by the Adjudicating Authority and decide the same as per law. X X X X Extracts X X X X X X X X Extracts X X X X ..... ashtra had in connivance with other concerned officials of PWD fraudulently obtained sanction for the said project from Maharashtra Government in favour of M/s. K.S. Chamankar Enterprises. 4. As Sectionl3 of Prevention of Corruption Act, 1988, and Sections 120(B), 420, 467 and 471 of the Indian Penal Code, 1860, are mentioned in the Schedule to the PMLA, an ECIR has been registered against Shri Chhagan Bhujbal; his relatives, M/s. K. S. Chamankar Enterprises, its partners, PWD officials and others and the case was taken up for investigation under the provisions of the said Act. 5. A chargesheet has been filed on 24.02.2016 by ACB, Mumbai before the Hon'ble Sessions Judge, Special Court, Mumbai in respect of FIR No. 35 of 2015 invoking Sections 13(1) (c), 13(l), 13(1)(d) read with 13(2) of Prevention of Corruption Act, 1988 and Sections 406, 420,465,468,471,120- B, 109 read with 34 of Indian Penal Code. The said chargesheet is filed against (i) S/Shri Chhagan Bhujbal, (ii) PankajBhujbal, son of Shri Chhagan Bhujbal, (iii) Sameer Bhujbal, nephew of Shri Chhagan Bhujbal, (iv) Shri Krishna Shantaram Chamankar, partner of M/s. K.S. Chamankar Enterprises, (v) Smt. Pravina Prasann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Details of property Purchaser POC Value (in Rs) 1. Non Agricultural Land CTS No- 570/1/2(2), Plot No. 1 (B) A, admeasuring 1260.38 sq. Meters, Nasik, Tal & District-Nasik Growth Infrastructure Pvt. Ltd. 14500000/- 2 Land bearing CTS No-6697 A admeasuring 1039.67 sq Meters together with structure standing thereon in Tah and District-Nasik Growth Infrastructure Pvt. Ltd. 3,50,00,000 3. Tenancy Rights of Shops numbered 4, 5, 6, 8, 9 & 10 admeasuring 2500 sq. ft. built up on ground floor of the building named "Saikunj" , Plot No.- 214, Dadar Matunga Estate, Dr Ambedkar Road, Dadar (East) Mumbai- 400014. Growth Infrastructure Private Limited 2,40,000,00 4. Non Agricultural Land bearing old Survey No.- 19/1B and 19/1C New Gut No.- 19/2 admeasuring 111H-89R equivalent to 189000 Sq meters Village- Shirdi, Tal Rahata, District- Ahmadnagar Growth Infrastructure Private Limited 6,00,000,00 5. Plot No.- 74 Area 12144 Square Meters Satpur MIDC, Nashik Armstrong Energy Pvt. Ltd. 7,01,10,000 6. Survey No. 791/A+707/2/A/16 Plot No. 16 Area 321.30 Square Meters, Nashik M/s Parvesh Construction Ltd. 25,50,000/- 7. Gat No.- 277/1-3 H+54 R Area Gat N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior to the date of passing the Provisional Attachment order. As a matter of fact, it is clear mentioned in the impugned order passed by the Adjudicating Authority in para 19 of the impugned order. "19. I further say that the property at Sr. No. 1 of provisional attachment order No. 15 of 2016 dated 11.08.2016 was sold to M/s. Heena Trading Company and the same on 7/12 extracts stands mutated in the name of M/s. Heena Trading Company." 9. The sale deed registered on 14th July, 2016 in favour of appellant contains the details of the payment received by the vendor from the vendee i.e. appellant herein, the details of the said cheques are given as under: (i) Cheques for a sum of ₹ 50,00,000 bearing No. 259901 dated 14.07.2016 drawn on Union Bank of India, Kalba Devi, Mumbai Branch; (ii) Cheques for a sum of ₹ 50,00,000 bearing No. 259902 dated 27.07.2016 drawn on Union Bank of India, Kalba Devi, Mumbai Branch; (iii) Cheques for a sum of ₹ 50,00,000 bearing No. 259903 dated 03.08.2016 drawn on Union Bank of India, Kalba Devi, Mumbai Branch; (iv) Cheques for a sum of ₹ 50,00,000 bearing No. 259904 dated 10.08.2016 drawn on Union Bank of India, Kalba Devi, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also necessary to first refer to the section 5 of the Act in order to understand the scheme of the provisions which reads as under:- "5 Attachment of property involved in money-laundering. - (1) Where the Director, or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty had already been purchased by the appellant before passing the Provisional Attachment Order. It is apparent that mandatory provisions of section 8(1) and proviso to section 8(2) have not been complied with. No opportunity was granted to the appellant to explain its stand before the Adjudicating Authority. No valid explanation on behalf of the respondent was placed before us except the statement made that the matter is remanded back to the Adjudicating Authority (by setting aside the impugned order) for re-hearing after giving the opportunity to the appellant and decide the matter again on merits. 14. It is the admitted position that the appellant has not been involved either in the complaint pending under schedule offence or in the complaint filed under the PMLA, 2002. 15. Mr. Saurav Kirpal, learned counsel appearing on behalf of the appellant, upon instruction submitted that his client is not agreeable to the said suggestion for remanding back the matter rather he submitted that the provisional attachment order was passed on 11th August, 2016 was bad under mandatory requires under section 5(1). There was no proper investigation. Even at the time of passing the impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision causes serious prejudice to those for whose benefit it is enacted and at the same time who have no control over the performance of the duty, such provisions should be treated as a directory one. Where however, a provision of law prescribes that a certain act has to be done in a particular manner by a person in order to acquire a right and it is coupled with another provision which confers an immunity on another when such act is not done in that manner, the former has to be regarded as a mandatory one. A procedural rule ordinarily should not be construed as mandatory if the defect in the act done in pursuance of it can be cured by permitting appropriate rectification to be carried out at a subsequent stage unless by according such permission to rectify the error later on, another rule would be contravened. Whenever a statute prescribes that a particular act is to be done in a particular act is to be done in a particular manner and also lays down that a failure to comply with the said requirement leads to a specific consequence, it would be difficult to hold that the requirement is not mandatory and the specified consequence should not follow." 18. Under these circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uled offence or the value of any such property. Thus, in terms of the said section, either the property derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence or the value of any such property would be considered as proceeds of crime. Therefore, if any such property is purchased and/or acquired out of lawful earnings or assets and with a bonafide intention as well as at the fair market value, then, in terms of the said provision the value paid for such acquisition or purchase of the property would not constitute 'proceeds of crime' involved in money laundering. 24. It is stated by Mr. Kirpal that the provisions of Act do not empower the authorities to trace and chase property purchased by bonafide buyers like the appellant in the present case instead of the consideration thereof which is passed on to the seller of the same i.e. value thereof. By provisionally attaching the property of a bonafide buyer and its confirmation thereafter, as has been done in the present case, such a buyer, for no fault on his part would be deprived of possession of property till criminal proceedings against some third party are concluded under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of provisional attachment order. The mandatory notice under section 8 has not been issued to the appellant. Thus, the impugned order is not sustainable and impugned order dated 20th January, 2017 is set aside only in relation to the property no. 1 which has been purchased by the appellant prior to the date of passing the provisional order. 30. The appellant is granted four weeks time to file reply to the notice. The Adjudicating Authority, thereafter, shall decide the matter after considering all the pleas raised by the appellant including the plea of the appellant claiming itself as a bonafide purchaser and no tainted money was paid to the vendor. The appellant would also be entitled to raise its plea under section 5(3) of the Act, which shall be also considered by the Adjudicating Authority and decide the same as per law. 31. As an important question of law is involved in the matter, we are of the view that the hearing be conducted before the members which must consist of Member (legal). 32. The appeal is allowed. The impugned order is set-aside to the extent referred above. We may mention here that we have not expressed our final opinion about the merits of the case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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