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TMI Blog2017 (8) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... c.) FPA-PMLA-886/KOL/2015 FPA-PMLA-871/KOL/2015, MP-PMLA-3119/KOL/2017 (Misc.) FPA-PMLA-866/KOL/2015 Justice Manmohan Singh Chairman For the Appellant : Shri Shakeel Ahmed, Advocate For the Respondent : Shri N.K. Matta, Advocate JUDGEMENT FPA-PMLA-1184/KOL/2016, FPA-PMLA-863/KOL/2015, FPA-PMLA- 869/KOL/2015, FPA-PMLA-886/KOL/2015, FPA-PMLA- 871/KOL/2015 FPA-PMLA-866/KOL/2015 1. The appellant as shown as serial no. 1 has filed the appeal against the order dated 1st December, 2015 passed by the Adjudicating Authority in O.C. No. 409/2015. The appeal referred in serial no. 2 to 6 are filed against the order dated 3rd March, 2015 passed by the Adjudicating Authority in O.C. No. 381/2014. I propose to decide these appeals with the single order as the allegations and cause of action against in both O.C. No. 409 and O.C. No. 381/2014 substantially similar. 2. When the matter is taken up today, the learned counsel for all the appellants in the have referred the final judgment dated 22nd September, 2015 passed by the Hon ble High Court Sikkim, Gangtok in Criminal Writ Petition No. 02/2015 as well as our earlier order passed on 9th March, 2017. They submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int being OC No. 409 of 2015 pending before the Learned Adjudicating Authority. 5.1. The Hon ble High Court of Sikkim issued the notice dated 2.4.2015 and directed that in the meanwhile, the respondents shall not take any further steps in pursuance of notice to show cause dated 3.2.2015 . On 14.05.2015 when the matter was listed before the Learned Adjudicating Authority, who adjourned the matter sine die in view of the orders passed by the Hon ble High Court of Sikkim. 5.2 On 05.06.2015 when the Writ Petition (Criminal) No. 2 of 2015 came before the Hon ble High Court of Sikkim, the counsel appearing for the respondent in the said proceedings requested the Hon ble High Court of Sikkim to clarify the interim orders dated 02.04.2015 with regard as other defendants (who are the appellants herein). The Hon ble Court of Sikkim clarified that the order dated 02.04.2015 was to apply only to the writ petitioner there i.e. EIILM University the defendants no. 1 in the matter and appellant herein. 5.3. On the same day i.e. 05.06.2015, in the e-mail sent by Assistant Director, Enforcement Directorate, intimating to all the appellants i.e. Jharkhand Rai University, Rai Technology Univ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating Authority on 15.06.2015. 5.8. On the same day i.e. 05.06.2015, in the e-mail sent by Assistant Director, Enforcement Directorate, intimating to all the appellants i.e. Jharkhand Rai University, Rai Technology University, Malvika Foundation, Integrated Institute of Excellence Society, Eastern Institute for Integrated Learning in Management that the hearing of the complaint was scheduled and fixed on 8.6.2015. In the said mail the other defendants were directed to appear for the hearing of the said complaint, failing which the complaint would be heard and decided in their absence. The mail was sent by the Respondent on 06.06.2015, which happened to be a Saturday, at 10:10 PM on the official e-mail of the Appellants University. The counsel of other defendants did not get the e-mail sent by the Registrar, Adjudicating Authority, PMLA due to some problems at the end of the office of the Registrar, Adjudicating Authority. 6. By order dated 15.06.2015, the Adjudicating Authority confirmed the provisional attachment order passed in O.C. No. 409/2015. 7. The said other defendants in the same O.C. No.-409/2015 thereafter filed appeals FPA-PMLA-943/KOL/2015, FPA-PMLA- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of coram non judice raised by the appellant and not insisted in proceeding with the matter on merits and such a procedure is also contrary to settled principles of law as the issue regarding lack of jurisdiction of an authority goes to the root of the matter and unless and until the authority has jurisdiction in law to adjudicate on a matter, it should not have proceeded to decide upon the merits of the matter. The act of the adjudicating authority was whimsical even no time was granted to inspect the record of the adjudicating authority. (e) The Learned Adjudicating Authority failed to appreciate that the action of the respondent in attaching the land sold by the sponsoring body of the Appellant as well as the consideration received by it and invested in the endowment fund of the Appellants amounts to double attachment of properties which is not contemplated under the provisions of the act and violates the provisions of law and violates the fundamental rights of the appellant. The Learned Adjudicating Authority has failed to appreciate that the action of entering into an agreement to sell does not constitute a crime falling within the ambit of scheduled offences under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice upon the Petitioner-University and the Petitioner- University shall appear before the Bench and place before it all grievances expressed in the Petition; and (iv) Since the proceedings before the Adjudicating Authority was stayed by this Court by order dated 02-04-2015, the period of attachment prescribed under Sub-Section (1) of Section 5 shall exclude the period spent during the pendency of the case before this Court . 12. The impugned order dated 01.12.2015 was passed by the Chairman and Member (Legal). None of them was/is Judicial Member. The Chairman who heard the matter is not a Judicial Member and other officer was appointed as Member (legal) on 07.09.2015 two weeks prior to the judgment delivered by the Hon ble High Court. 13. The Hon ble High Court in the criminal writ petition after hearing the 7-14 have discussed the facts in the matte as well as law on the subject. It is necessary to reproduce the said paras:- 7. On a bare reading of Section 6 and Sub-Sections thereunder, I find substance in the submission of the Learned Central Government Counsel that there is no mandate that a Bench to be constituted by the Chairperson of the Adjudicating Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the very words used in Clause (b) of Sub-Section (5) of Section 6 whereby it provides that a Bench may be constituted as the Chairperson of the Adjudicating Authority may deem fit . This provision, in my view, is quite distinct from Sub-Section (3) of Section 6 as it is quite obviously an omnibus provision prescribing the composition of the Adjudicating Authority . 10. In Tamil Nadu Generation and Distribution Corporation Limited (supra) in which reliance was placed Upon Kihoto Hollohan VS. Zachillhu and Others I 1992 Supp (2) see 651, it has been held as under:- 59. In view of the aforesaid categorical statement of law, we would accept the submission of Mr Nariman that the tribunal such as the State Commission in deciding a lis, between the appellant and the respondent discharges judicial functions and exercises judicial power to the State. It exercises judicial functions of far-reaching effect. Therefore, in our opinion, Mr Nariman is correct in his submission that it must have essential trapping of the court. This can only be achieved by the presence of one or more judicial members in the State Commission which is called upon to decide complicated contractu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... primary basis of the theory pursuant to which they have been constituted. Since the Selection Committee is now headed by a Judge of the Supreme Court, nominated by the Chief Justice of India, we have reason to believe that the Committee would take care to ensure that Administrative Members are chosen from amongst those who have some background to deal with such cases. 13. In my considered opinion, what emerges from the above with certainty is that in a case where serious questions of law and fact arise, as in the present case, it is essential that one of the Members of the Bench constituted under Clause (b) of Sub- Section (5) of Section 6 of PMLA by the Chairperson of the Adjudicating Authority should be a Judicial Member as he with his judicial experience would, by virtue of his specialised knowledge, would be better equipped to dispense with speedy and efficient justice . This appears to be import of the words as the Chairperson of the Adjudicating Authority may deem fit . 14. It is an admitted position that the post of a Judicial Member under Respondent No.3 is still lying vacant and that the impugned show cause notice was issued and the order under challenge p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order passed by the Hon ble High Court of Sikkim reads as under: 17. However, in order to allay the apprehensions expressed by the Petitioner-University, it would be sufficient to direct the Respondent No. 1 to first take up with the appropriate Ministry for appointment of a Judicial member under Clause (a) of Sub-Section (3) of Section 6. As expressed in Tamil Nadu Generation and Distribution Corporation Ltd. (supra), the matters need to be considered with grave urgency by the appropriate Central Authority. 19. At present this tribunal does not wish to give any opinion with regard to argument addressed by the Counsel for the respondent that the member as per the scheme of the Act was/is empowered to hear the matter on behalf of Adjudicating Authority. Infact the same issue has been raised in many appeals pending before this Tribunal and the same would be considered as and when the said pending appeals are heard. 20. It appears that the impugned order dated 1st December, 2015 the same has not been passed by the Judicial Member. The learned counsel for the appellants submit that even as of today the Judicial Member has not been appointed except after filing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady passed on 9th March, 2017 in appeal no. FPA-PMLA- 943/KOL/2015, FPA-PMLA-997/KOL/2015 FPA-PMLA-995/KOL/2015, FPA-PMLA-991/KOL/2015 FPA-PMLA-999/KOL/2015 the impugned order dated 3rd March, 2016 passed by Single Member who is neither the Judicial Member or Judicial Legal is set-aside as the same principles would apply in all set of appeals. 26. For sake of repetition, the following directions were passed by the High Court:- (i) The Respondent No.l shall take appropriate steps with the concerned authorities of the Central Government for appointment of the Judicial Member of the Adjudicating Authority urgently within a period of 3 (three) months and not later than that; (ii) On appointment of the Judicial Member, the Chairman of the Adjudicating Authority shall constitute the Bench consisting of a Judicial Member keeping in view the observations made above having regard to the nature of the lis and the anxiety expressed by the Petitioner- University. (iii) Soon after it is constituted, the Bench shall then issue notice upon the Petitioner-University and the Petitioner- University shall appear before the Bench and place before it all grievances expressed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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