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TMI Blog2017 (8) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... orcement Directorate to retain the documents is disallowed. Admittedly, the case is under investigations. Prima facie there are serious allegation of fraud and the investigation is at crucial stage. So in our considered view, the appellant has not made out any case to set aside the impugned order. There is due compliance of the provision under PMLA relating to retention of the records/documents. No infirmity or illegality in the impugned order. - FPA-PMLA-1425/DLI/2016 - - - Dated:- 2-2-2017 - Justice Manmohan Singh Chairman, Shri G. C. Mishra : Member And Shri B.K. Bansal Member For the Appellant : Shri Amarjit Singh Bedi, Advocate For the Respondent : Shri S.A. Saud, Advocate JUDGMENT Shri G. C. Mishra Member FPA-PMLA-1425/DLI/2016 1. The present appeal is directed against the impugned order dated 21.06.2016 passed by the Adjudicating Authority in OA No. 47/2016 filed by the Enforcement Directorate against M/s Pearls Agrotech Corporation Ltd. (PACL) and 10 Ors. in which the present appellant has been arrayed as Respondent No. 2. The said OA has been filed before the Adjudicating Authority under Section 17(4) of the Prevention of Money Laundering Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized during the Panchnama, corresponding to Respondent No. 2; and II. Amend the address of the Respondent No. 2 to 2nd floor, A-Wing, Statesman House Barakhamba Road, New Delhi from the current description 2nd, 3rd , 14th 15th Floor, A-wing, Statesman House Barakhamba Road, New Delhi; , III pass such other and further order(s) as this Hon‟ble Court may deem fit and proper in the facts, and circumstances of the case. inter alia on the following grounds: i. that error in the address of respondent No. 2 in the memo of parties; ii. that non-mentioning of any document being seized from PIPL (Appellant); iii. that non-reflection of its name in the Panchnama and iv. that the description of the documents seized under Panchnama 30.12.2015 is not clear and specific as to which of them pertains to the respondent No. 2. 5. It also appears that the appellant moved the Adjudicating Authority with another application on dated 27.05.2016 seeking; (a) deletion of its name from the array of parties in the proceeding; (b) release the documents seized vide seizure memo dated 30.12.2015; (c) pass such orders and further orders as may deem fit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 and one of such place was A-Wing, Statesmen Building, Barakhamba Road, New Delhi. It also appears that the Enforcement Directorate, during the search at 2nd, 3rd, 14th 15th floor of the said building, seized certain documents as mentioned in the seizure/panchnama list relating to the present appellant. 9. Having the aforesaid facts now we are to examine the relevant provisions relating to search, seizure and retention of documents under the PMLA. 10. Section 17 of the PMLA deals with search and seizure. The relevant portion is reproduced as under: 17(1) where the Director [or any other officer not below the rank of Deputy Director authorized by him for the purpose of this section], on the basis of information in his possession, has reason to believe (the reason for such belief to be recorded in writing) that any person- i. has committed money-laundering; or ii. is in possession money-laundering; or iii. is in possession of any records relating to money- laundering; or iv. is in possession of any property related to crime,] then, subject to the rules made in this behalf , he may authorize any officer subordinate to him to- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 17 or section 18 or frozen under sub-section (1A) of section 17 and the Investigating Officer or any other officer authorised by the Director in this behalf has reason to believe that any of such records are required to be retained for any inquiry under this Act, such records may if seized, be retained or if frozen, may continue to remain frozen, for a period not exceeding one hundred and eighty days from the day on which such records were seized or frozen, as the case may be. (2) The person, from whom records seized or frozen, shall be entitled to obtain copies of records. (3) On the expiry of the period specified under sub-section (1), the records shall be returned to the person from whom such records were seized or whose records were ordered to be frozen unless the Adjudicating Authority permits retention or continuation of freezing of such records beyond the said period. (4) The Adjudicating Authority, before authorising the retention or continuation of freezing of such records beyond the period specified in sub-section (1), shall satisfy himself that the records are required for the purposes of adjudication under section 8. (5) After passing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 5 or retention of property or [record seized or frozen under section 17 or section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property] or record shall- a) continue during the pendency of the proceedings relating to any [offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and] b) become final after an order of confiscation is passed under sub-section (5) or sub-section (7) of section 8 or section 58B or sub-section (2A) of section 60 by the [Special Court]. 13. The appellant, in its appeal, has made submissions which were urged before the learned Adjudicating Authority. Over and above the same it is pleaded by the appellant, that learned Adjudicating Authority has not recorded its satisfaction; that the authority has not recorded its findings as to the fact that the property so seized was involved in money- laundering and is required for adjudication; and that the learned Adjudicating Authority has erred by not appreciating that the respondent (Respondent No. 1) has mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or of the said building. It is Mr. Bidhu Shekhar Sr. DGM-Hr of M/s Pearl Infrastructure project limited of Respondent No. 2, who was present in the premises on second floor accompanied the officers to the premises on 3rd, 14th and 15th floor. It can be further seen that from the premises of second floor several documents are seized and taken over, they are specified in the annexure. These are the documents which require deeper scrutiny and analysis, wherefrom the aspect of money laundering and the carriage of proceeds of crime may be revealed. At present what is sought by the Applicant is only the retention of the documents for the purpose of investigation. As aforesaid it is only by analysis of the documents, the money trail can be unearthed. The submission, therefore, is to be considered in this light and hence there is no justification in dropping the R-2 from the Application for retention of the document seized from the second floor premises. No prejudice is being causes and the retention is justified for investigation. The contention that the Application fails to make any specific averment with regard to the Respondent No. 2 having any connection with money laundering itself i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permitted to have access to the details of investigation and to ask for records of the investigation proceeding or to ask for copies of the material gathered in the course of investigation. It cannot be ruled out that, furnishing or leaking of the information, details and material would not only scuttle the investigation but may even frustrate the entire investigation under PMLA, defeating the very object of the PMLA. 21. In view of the aforesaid dimension, the Respondents are not entitled to any further documents, save and except the documents which are supplied along with the application u/s 17(1) of the PMLA, filed by the Assistant Director, Enforcement Directorate, Delhi, and which are admittedly furnished to the Respondents. 22. The person from whom the said property/record is seized is entitled to obtain copies thereof as is provided in section 21(2) of the said Act. The demand for documents, which has been gathered in the course of investigation and are required for investigation, cannot be exposed to and be made available in the hands of the parties who are either interrogated, required to be interrogated or who may be suspect in the commission of offences of mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asthan so that the members would be constrained not to take possession and thereby forces to take back the money with interest at nominal rate. The said amount so earned is prima facie proceeds of crime and the necessary investigation thereto is required. The Enforcement Directorate have already registered the ECIR as aforesaid and have commenced the investigations. The said investigations are at a crucial stage. For effectively carrying out the further investigation, documents legitimately seized by the Enforcement Directorate are required to be in their hands for necessary interrogation and questioning of the suspected persons and / or persons who may be later on accused of being involved in the offence of money laundering under PMLA or who may be in possession of the proceeds of crime. In fact the documents seized themselves may be a crucial evidence to nail the Accused persons in the proceedings under PMLA and, therefore, the same may be required to be exhibited in the course of trial. In any event the said seized documents cannot be returned and/or handed over to the person from whom they are seized, at this stage. 29. Undisputabley, no person can be permitted to abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd out the truth of the allegations through the evidence collected by way of documents/records including digital records to come to a conclusion. Binding the hands of the Investigating Authority by refusing to retain the documents will not be in the interest of justice. The law has allowed the person from whom records seized or frozen to obtain the copies of record. The appellant has right under law that is section 21(2) PMLA to obtain the copies of records he required. We do not see any prejudice is caused to the appellant in retaining the documents/records seized, in the present case, from its possession. Rather it will obstruct the progress of investigation if the prayer of Enforcement Directorate to retain the documents is disallowed. Admittedly, the case is under investigations. Prima facie there are serious allegation of fraud and the investigation is at crucial stage. So in our considered view, the appellant has not made out any case to set aside the impugned order. There is due compliance of the provision under PMLA relating to retention of the records/documents. In view of above, we do not find any infirmity or illegality in the impugned order. Therefore it is held that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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