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TMI Blog2017 (8) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said Rule on the particular issue under consideration, the submission of the Ld. Counsel for the Respondent that even when the possession of a property is in the custody of the Court, the possession can be taken over in terms of the provisions of the PMLA without leave of the court is without any merit and is rejected. The impugned order as far as taking over possession of the subject flats are concerned, unconditionally. It is directed that till the appeals are finally decided, action for taking over possession of Flat No. 302, Shri Sai Nirmala Building, Bhavani Shankar Road, Dadar, Mumbai, Flat no. 303 and Flat No. 304, Jacob Apartment, Baburao Parulkar Marg, Bhawani Shankar Road, Dadar, Mumbai-400024 in pursuance of the impugned order and the notices under Section 8(4) of PMLA (if issued) shall remain stayed. X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant, being appeal no. FPA-PMLA-658/MUM/2014 and the Application No. MP-PMLA-1569/MUM/2015 in the said appeal. Alongwith the stay application, the prayer is also made for condonation of delay in filing the appeal, in the application being MP-PMLA- 1583/MUM/2015. 3.2. The fifth application being MP-PMLA-1385/MUM/2015 in FPA-PMLA- 675/MUM/2014 was filed on behalf of Shri Sudhakar Vitthal Narvekar seeking the stay of impugned order and directions to the respondent to restrain from taking the possession of flat no. 303, Jacob Apartment, Baburao Parulkar Marg, Bhawani Shankar Road, Dadar, Mumbai - 400 024 and Flat no. 304, Jacob Apartment, Baburao Parulkar Marg, Bhawani Shankar Road, Dadar, Mumbai - 400 024. In the said application, the interim order was passed on 28th May, 2015 whereby subject to deposit of charges of use and occupation of the premises @ ₹ 30,000/- per month (as interim measure). All the above said applications have not been disposed of. 4. On the basis of submissions made by the learned counsel for both parties and material placed on record, we are inclined to dispose the applications by this common order. The main appeals on merit will be taken up lat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he police investigations, it is revealed that the appellant namely Dilip Bhaskar Bhingarde and Sudhakar Vithal Narvekar alongwith some others have started a trust by the name of Sarvadharma Manav Seva Charitable Trust, duly registered under the provisions of the Bombay Public Trust Act, 1950 (for short SDMSCT) and the co-accused had opened a current account No. 01000005341 in the State Bank of India, Wagle Estate Branch, Thane, Maharashtra. 5.2. As per the charge-sheet, by resorting to cheating and forgery the appellants obtained two cheques for ₹ 1 Crore each from the Charity Commissioner's Office, Worli, Mumbai, one cheque for ₹ 3 Crore and another cheque for ₹ 7 Crore from the office of Slum Redevelopment Authority, Bandra, Mumbai and deposited these cheques in the account of SDMSCT at State Bank of India, Wagle Estate, Thane. Thereafter, the accused persons withdrew the said amount from the account and utilized the same/part thereof for personal purposes including purchase of the attached properties. The said charge sheet is alive and trial is pending. 6. On the basis of the said Charge Sheet no. 1-113/2006 dated 26.05.2006 filed against 18 accused persons i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Shri Sudhakar Vithal Narvekar. Vide the Tribunal's order dated 17th October, 2014, Shri Dilip Bhaskar Bhingarde and Shri Sudhakar Vithal Narvekar were allowed to withdraw from the appeal and the said appeal no. FPA-PMLA-658/MUM/2014) was treated as appeal on behalf of the Ms. Dipali Bhaskar Bhingarde. Subsequently, Shri Sudhakar Vithal Narevekar filed an Appeal No. 675/MUM/2014 and Dilip Bhaskar Bhingarde filed appeal no. FPA-PMLA-810/MUM/2015. Miscellaneous applications seeking stay of the impugned order was filed in all the three appeals besides an application for condonation of delay in FPA-PMLA-810/MUM/2015 and another for amending memo of appeal in FPA-PMLA-658/MUM/2014. 9. It is the admitted position that before the case was registered under the PMLA and the properties attached under PMLA, 2002, these were already attached by the Police in the criminal case and these were in the custody of the Court. The respondent admittedly made an application dated 21.03.2013 before the Chief Judicial Magistrate, First Class, 13th Court, Thane requesting the Court not to release any of the attached property and to permit the Directorate to intervene in the matter and to pass and serve t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted them under the Income Tax Act for tax evasion and not under the PMLA. It shows wrong observation by the Ld. Adjudicating Authority and hence the order passed by the Ld. Adjudicating required to be quashed and set aside. 12. It is stated by all the appellants that they have never received any money from "SDMSCT" by way of cheque, D.D. or any Banking transactions. Thus, they made an application in the Court of Thane for possession of the flats which was given to the applicants on signing of the bond. The appellants submit that infect the properties which are provisionally attached by the Enforcement Directorates under PMLA were attached before the Court at Thane and were released on bond and certain conditions on 03.11.2007. The main purpose of attachment from this department is to stop appellants from alienating, selling or creating third party interest in the property, which is already done by J.M.F.C. Court, Thane by taking conditional bond from the appellants. 13. Admittedly, the custody of the attached properties in question is still with the court. It is also a matter of record that in 2007, the Police Authority before the Special court, had opposed the request of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural produce in the possession of the judgment-debtor. It says that the attachment of such properties shall be made by the actual seizure, and the attaching officer shall keep the attached property in his own custody or in the custody of one of his sub-ordinates & shall be responsible for the due custody thereof. The relevant rule framed by the Allahabad High Court is R. 116, which reads, "Live stock which has been attached in execution of a decree shall ordinarily be left at the place where the attachment is made either in custody of the judgment-debtor on his furnishing security, or in that of some land-holder or other respectable person willing to undertake the responsibility of its custody and to produce it when required by the Court." The aforesaid rule also empowers the attaching officer to keep the animals attached in the custody of a sapurdar or any other respectable person. Attachment by actual seizure involves a change of possession from the judgment-debtor to the court, and the rule deals only with the liability of the attaching officer to the court. Whether the amin keeps the buffaloes in his custody or entrusts them to a sapurdar, the possession of the amin or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 50 of PMLA on 25.02.2013 and them again on 23.12.2013 but they did not respond to the same. The appellants were also not cooperating with the department in the investigation. This led to the formation of belief on part of the Deputy Director, that if the immovable property in question are not attached provisionally, the same would have been transferred or disposed of which would have resulted in the frustration of the proceedings relating to the confiscation of the property under the Said Act. 18. He also submitted that his client is entitled to take possession of the properties irrespective of the fact whether the property in question is with the Court, and that such possession can be taken even without obtaining the leave of Court. It is also submitted by him that as far as conditional stay granted by the Tribunal is concerned, he is not sure as to whether the appellant have complied with the orders or not. 18.1 With regard to his argument of it being permissible to proceed in a case under the PMLA in a case where the property is in the possession of the court, Shri Saud has referred the judgment dated 29th September, 2011 of the Hon'ble Bombay High Court in firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the PMLA, which, as aforesaid, is a special enactment. The effect of provisional attachment under the PMLA is that the property can be finally confiscated with the Central Government, in the event the accused person is found guilty by the Court of competent jurisdiction trying the Scheduled Offence. Such provisional attachment is imperative, as that would not only facilitate the confiscation of that property, but also secure the availability of that property for confiscation at the end of the trial against the accused persons relating to Scheduled Offence." 18.2 He further submitted that in case the binding precedent exists about the interpretation of provisions of the Act, and upon the question raised on that statute itself, the same question cannot be held to be otherwise, ignoring the binding precedent, holding that the said binding precedent, does not refer to judgments of higher courts, of statutes pari materia. In support of this argument, he has referred the decision in the case of State of Punjab V/s. Okara Grain Buyers Syndicate Ltd., (1964) 5 SCR 387: AIR SC 669, the relevant portion of which reads as follows: "34. We are clearly of the view that this arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evention of Money Laundering Act Amendment Act, 2009 which came into the effect from 1st June, 2009, whereas the period of offence committed is admittedly 2005 and 2006. The issue raised by the appellant that on the date of alleged offence, the offences in question were not schedule offence. The same is to be considered at the time of hearing of the main appeal as to whether the amendment of 2009 the Act could be applied to the present case. 20. It is strongly argued on behalf of the appellant that the material stated in the Provision of Attachment order was 8 years old as the charge sheet was filed on 26th May, 2006. As per plea taken by the appellants, there was no new material gathered or collected after that to substantiate clause (c ) of section 5 (1) and the provisional attachment order passed by the Deputy Director is mechanical, stale, suffers from non application of mind and based on irrelevant considerations. Though this argument has been contested by the learned counsel for the respondent on the ground that investigation had taken place during 2010 to 2014 and the statements recorded of accused person during this period were relied on in the PAO and in the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered while deciding the appeal on merits. 23. It is further observed that on the question of proceedings in the case of property under custody of the court, the Hon'ble Supreme Court in the case of Kanhaiyalal V. Dr. D.R. Balaji and others, [1959 SCR 333: AIR 1958 SC 725] has laid down the principles of law on this aspect. It was held in the said decision 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 relevant extract of the same are read as under:- "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 Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to permit proceedings to go on independently of the Court which has placed the custody of the property in the hands of the Receiver, there was a likelihood of confusion 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 un-controlled attack, while, at the same time, protecting the rights of all persons who may have claims to the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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