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TMI Blog2017 (8) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... y of personal hearing to all parties including the Respondent-1 herein. We may clarify that till the matter is decided by the Adjudicating Authority, the subject property to the extent indicated above shall remain attached in terms of the provisions of the PMLA till the completion of the proceedings as directed. Further, the appeal against the order dated 16th September, 2013 confirming the attachment of the remaining portion of the subject property already stands rejected by this Tribunal Order dated 25.01.2016. This Tribunal also directs that subject to the appellants furnishing an undertaking not to transfer, sell create any encumbrance or third party rights in the subject premises and the subject property to the extent of their undivided share, title and interest during the pendency of the proceedings as aforesaid, the Respondent No. 1 shall restore physical possession of the Subject Premises, more particularly described in Exhibit “B” to this Appeal, to the appellants within two weeks from furnishing such undertaking. The appellant no. 1 would be entitled to enjoy the possession of the premises in question to the extent of their claim and which was occupied by him at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Subject Premises since 1953. The said Rose Monica Fonseca died intestate on 19th May 1966 leaving behind her surviving five children (1) Anne Mary Fonseca (deceased), (ii) Francis Thomas Fonseca (deceased), (iii) Mary Isabella Cabral (deceased), (iv) Alfred Anthony Fonseca (deceased father of the Appellants) and (v) Lewis Felix Fonseca (deceased), as her only heirs and legal representatives. Anne Mary Fonseca (deceased) joined a religious order and became a nun and dedicated her life to religion. Isabella Cabral (deceased) was duly compensated for her respective share, right, title and interest in the Subject Property. Accordingly, Francis Thomas Fonseca (deceased), the Appellants deceased father and Lewis Felix Fonseca (deceased) each became entitled to undivided share, right, title and interest in the Subject Property. In or around 19th February 1966, the Appellant No.2 left the subject premises for her matrimonial home. 4.1. In or around 26th November 1967, Mary Isabella Cabral died intestate leaving behind her surviving seven children (i) Lily Agnes Cabral, (ii) Beryl Cabral, (ill) Ruby Fernandes, (iv) Trevor Albert Cabral, (v) Archie Cabral, (vi) Christopher Cabral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice of Motion No.5393 of 1990 therein at the Bombay City Civil Court at Bombay seeking inter alia order of Injunction restraining the Appellants late Uncle Lewis Felix Fonseca, his two sons and one Mr. Chandu from interfering with the Appellant No. l's possession of the Subject Premises and use of the toilet block on the ground floor of the Building in any manner whatsoever. Subsequently, by an order dated 15th April 1991 the Hon'ble Judge of Bombay City Civil Court, in the Notice of Motion No.5393 of 1990 granted the interim order restraining by temporary injunction from interfering with the Appellant No. l's possession of the Subject Premises and use of the toilet block in the ground floor of the Building In any manner whatsoever. 4.8 It is the case of the Appellant No.1 that he was indisputably in uninterrupted and continuous physical possession, use and occupation of the Subject Premises since 1953 manifest by large name plate of the Appellant No.1 affixed prominently at the entrance to the Subject Premises. The Appellant No.1 has been paying property tax and electricity bills in respect of the Subject Premises/Subject Property. 4.9 In or around 29'" April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir deceased mother to Mr. Rashmikant Mansukhlal Shah as purported to make the Rectification Deed dated 25th May 2000. The order dated 14th January 2009 of the City Survey Officer at Bandra and true English translation thereof, have been filed, the names of the Appellants were restored in the property card. 4.15. On or about August 2010, the Respondent No.2 who purchased the property from Rashmi Mansukh Shah started operating out of the rooms in the first floor of the Building which was earlier occupied by the Appellants late Uncle Lewis Felix Fonseca and Mr. Rashmikant Mansukhlal Shah. 5. It is alleged in the appeal by the appellants that on 2nd July 2014, upon a visit to the Subject Premises, the son of the Appellant No.1 could not access the same as it was attached by the Respondent No.1. The Appellant No. l's son came upon the undated Notice affixed on the gate of the Subject Property, by and through which the Appellants for the first time became aware that the Subject Property and the Subject Premises were actually seized, attached and taken possession of by the Respondent No. 1 vide the Provisional Order, pursuant to proceedings initiated against the Respondent No. 2 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings pertaining to Case No. ECIR/10/MZO/2012 and Confirmation Order and PAO. The Appellant No.1 also addressed letter dated 31st July 2014 to the Respondent No.1 setting out an inventory of movable properties lying in the Subject Premises at the time of attachment and seizure by Respondent No.1 and seeking copy of panchnama. The motorbike belonging to the son of the Appellant No.1 was also seized by the Respondent No.1. As far as the movable assets of the appellant are concerned, necessary orders were passed in favour of the appellant no. 1 for removal of the same in Appeal no. 530/2013. 8. The Appellants thereafter filed Writ Petition No.8296 of 2014 in or around 22nd August 2014 before the High Court of Judicature at Bombay, against the Union of India and others, seeking to inter alia challenge the Confirmation Order, the PAO and the undated notice and to obtain directions against the Respondent No. 1 to forthwith restore to the Appellant No. 1 physical possession of the Subject Premises, which reliefs are now being sought in this Appeal. In addition the Appellants also sought directions against the Respondent No. 1 to furnish the Appellants with copies of the PAO and Confirmat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave right in the property which cannot be attached, then the appellant and the respondent shall be deprived of their right of first appeal, as contemplated under section 26 of the Act and will be left only with invoking their right of second appeal as contemplated under section 42 of the Act. When an efficacious remedy is available to the interveners, then whether it will be appropriate to entertain their application in the appeal in the facts and circumstances, though they have a right to approach the Adjudicating Authority seeking a right of hearing under proviso to section 8 (2) of the Act. When an efficacious remedy is available to the appellant, then it will not be appropriate to entertain their application for intervention in the facts and circumstances. 29. Entertaining the application of the interveners in the appeal, though they have a statutory right to approach the Adjudicating Authority seeking a right of hearing under proviso to section 8 (2) of the Act, provided they are able to show prima facie some right in the property, can have serious consequences for other parties leading to deprivation of their right of first appeal. If this tribunal allows the application fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Rejoinder dated 24th October 2014 of the Respondent No.1 filed in Writ Petition No.8296 of 2014 and served on the Appellants Advocate on 7th November 2014. 11. It is a matter of fact that the Appellants through their Advocates issued notice dated 14th November 2014 to the Respondent No.2 setting out the above facts and calling upon him to cease and desist from selling and disposing of or transferring the Subject Property and to effect partition of the Subject Property and deliver to the Appellants shares. 12. In January 2015, the Appellants filed Suit No.360 of 2015 before the Hon'ble Bombay City Civil Court at Dindoshi seeking inter alia a declaration that the Appellants are co-owners of the Subject Property and each entitled to 25% undivided share, right, title and interest therein and absolute owners of and exclusively entitled to right, right tile and interest in the Subject Premises as also an order of cancellation of the Deed of Rectification dated 25th May 2000 and the Agreement for Sale dated 1st June 2010 in respect and to the extent of the 50% undivided share, right, title and interest of the Appellants in the subject property and appropriate injunctive reliefs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter is still pending before the Special Court against the main accused party i.e. Ajit Satam. The Appeal filed by Ajit Satam against the impugned order dated 16th September, 2013 being Appeal No. FPA-PMLA-530/MUM/2016 has already been dismissed by this Tribunal vide order dated 25.01.2016. The said order attained finality. The appeal filed by the appellant is not maintainable. The office premises called "Fifty-Fifty", built on a plot of land bearing Survey No. 195/A lying and being at S.V. Road, Khar, Mumbai, was purchased by said Ajit Satam from one Sh. Rashmikant Shah for ₹ 2.65 Crores, through a Deed of Conveyance dated 01/06/2010, and the payments were made by Ajit Satam by cheques. The said Deed of Conveyance dated 01/06/2010 completely and clearly does not give any bearing that the Appellants were/are the owners of the "Subject Property", Plot /Building or "Subject Premises". The Directorate has taken possession of the questioned property by the due process of law. 17. It is also stated by the respondent that the legal heirs cannot acquire a better title than the deceased and even in the present case the deceased Lucian Louis Fonseca had no right whatsoever over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d despite the application of the appellant for intervention in the appeal filed by the owner having been dismissed by this Tribunal earlier. 21. In the rejoinder to the respondent's reply, the appellants have denied that the Subject Premises was purchased entirely by the Respondent No.2 as falsely alleged. It is denied that the Deed of Conveyance dated 1st June, 2010 does not give any bearing that the Appellants were/ are the owners of the Subject Property or Plot Building or Subject Premises as falsely alleged, which is borne out on perusal thereof. The Subject Property is not obtained and/ or acquired through proceeds of crime as defined under Section 3 of the PMLA or that any ill-gotten money is invested therein which is acquired by criminal activities. It is submitted that at no point did the Appellant No.2, his late grandmother or his late father sell or dispose of their respective shares in the Subject Property to the Respondent No.2 or Rashmikant Mansukhlal Shah or consented to the sale of the Subject Property by Lewis Felix Fonseca and the undivided shares, right, title and Interest of his late father and their late grandmother and the Appellant No.2 in the Subject Proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the Hon'ble Bombay City Civil Court on 27.02.1992." (emphasis supplied) The said Conveyance deed dated 01.06.2010 also records the fact that the vendor therein sold, transferred and assigned right, title and interest subject to claim of late Lucian Louis Fonseca [Para 2 of page 218-219 of the Appeal] and also records late Lucian Louis Fonseca as occupant of the subject premises. The same para no. 2 reads as under:- "2. The said Lucian Louis Fonseca occupant/trespasser had filed a suit in the Hon'ble City Civil Court at Bombay being S.C. Suit No. 7587 of 1990 against Mr. Luwis Felix Fonseca in respect of one room together with toilet facilities, and the said suit was dismissed. The Vendor is transferring, selling, assigning the right, title and interest in the said property subject to the claim of the said Lucian Louis Fonseca in respect of the said room with toilet facility." (emphasis supplied) 23. It is submitted by the respondent no. 1 counsel that the order of dismissal having attained finality more than 24 years back, the appellant cannot stake a claim to the disputed portion of the attached property, more so when he had merely put his lock on the door of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal filed by Shri Ajit Satam (Respondent R-2 herein) against the order of the Adjudicating Authority confirming the attachment under PAO 08/2013 (including the subject property). Shri Ajit Satam filed appeal in Bombay High Court (FA 467/2016) against the order of the Tribunal dated 25.01.2016 and the Hon'ble Bombay High Court by order dated 30.11.2016 admitted the appeal of Shri Satam. 26. As regards to status of Criminal Complaint dated 19.01.2015 (Annexure-Z), against Shri Satam, the case was not heard so far and the next date of hearing in the matter is 27.02.2017 and with respect of Suit NO. 360 of 2015, the Court had kept the matter for order on Notice of Motion filed by Lucian Fonseca against Ajit Satam, Rashmikant Shah and Directorate of Enforcement. 27. After having made his submissions on behalf of respondent no. 1, it was admitted that the appellants were claiming Joint ownership in the suit property. It was also admitted by the respondent no. 1 that the respondent no. 2 who is accused party in the manner who had purchased the property from Mansukhlal Shah by virtue of registered documents which contain the dis-claimer of part of the portion i.e. one small room and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of certain alleged titles. 30. As far as involvement of the appellant in the scheduled offence is concerned, it is not denied by the respondent, that the appellants are not involved in any manner and no criminal matter is pending against them in the case pending against the respondent no. 2. It is also not in dispute that at the time of Forfeiture of property, no notice was served to the appellants and thus they were never heard. 31. With regard to the claim raised by the appellant in the application for Intervention and the present appeal, the appellant claim that they have the undivided share, right, title and interest in the subject property and subject premises were never sold to any third party or the Respondent no. 2 as is evident from the recitals in Conveyance deed dated 9th October, 1992, Rectification Deed dated 25th May, 2000 and Agreement for Sale dated 1st June, 2010. 32. Conveyance deed dated 9th October, 1992 records the fact that the vendor therein sold, transferred and assigned right, title and interest subject to claim of late Lucian Louis Fonseca [Para 2 of page 156 of Appeal] and also records late Lucian Louis Fonseca as occupant of the subject prem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer of Attorney Deed has not been given to Shri Rashmikant Shah. As per the site inspection, Lusiyan Luis is having occupation in the constructed area out of the property and there is mention in the Annexure B of the Sale Deed that Shri Lusiyan (Luis) is having possession in the property. Therefore, while it was necessary to have Sale Deed as per rules, from all the holders on the Property Card or on the basis of the Power of Attorney Deed, it is being seen that since the consent of Smt. Sharlet Fonseca, Hedar Clark and Lusiyan (Luis) Fonseca, has not been taken in the Deed, for the purpose of their right in the property, the said Purchase and Rectification Deed cannot transfer the right. Therefore, after the review/enquiry in respect of the entry dated 5.1.2001, the order is being given as under:- Order : The entry taken on 31.1.1991 on the property Card of C.S. No. 195A at City Survey Bandra, Taluka Andheri, District Mumbai Suburban may be revived. Out of the names deleted vide the entry dated 5.1.2001, the names of Smt. Sharlet Mary Fonseca, Hedar Ann Clark and Lusiyan (Luis) Fonseca, may be revived. As Smt. Sharlet Mary Fonseca is expired, the concerned may make application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions made under sub-section (4) of section 17 or under sub-section (10) of section 18, if the Adjudicating Authority has reason to believe that any person has committed an offence under section 3 [or is in possession of proceeds of crime], it may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, or, seized [or frozen] under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property. 1) The Adjudicating Authority shall, after - a. cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that their undivided share, right, title and interest of appellants in subject property and occupancy rights in subject premises are not the "Proceeds of Crime" as same never sold to the Respondent No. 2 or any third party. As already mentioned that this Tribunal has no jurisdiction to decide the civil rights of the parties nor the respondent no. 1 can placed arguments that the appellant have no right or title in the suit property as it is for the Civil Court to decide the same. As for the order dated 27.8.2014 of this Tribunal dismissing the Intervention Application of the appellants in the Appeal No. FPA-PMLA-530/2013/BOM is concerned, the said appeal filed by the main accused (Respondent R-2 herein) has already been dismissed vide the order dated 25.01.2016. Further, the said order dated 27.08.2014 is as per law now merged with the judgment dated 17th March, 2015 passed by the Hon'ble Bombay Court. The respondent no. 1 thus is not entitled to take any advantage of the said order whereby the application of the appellant no. 1. for Intervention as a party in the appeal filed by the accused was dismissed. 37. Therefore it is evident that the attachment by the Respondent No .l on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Money Laundering Act, 2002, it is clear that has not complied with. The second Proviso to section 8(1) of Prevention of Money Laundering Act, 2002 stipulates that where property is held jointly by more than one person, notice shall be served to all persons holding such property. The term "held" not defined under Prevention of Money Laundering Act, 2002. The said term "held" connotes both ownership as well as possession as interpreted by the Hon'ble Apex Court in State of A. P. Vs. Mohd. Ashrafuddin., [AIR 1982 Supreme Court 913] Appellants are undoubtedly owners and in possession and occupation of the Subject Property and Subject Premises. 39. The action of the respondent no. 1 despite of having the knowledge of all these facts and documents in not choosing to issue notice to all persons holding property and to provide hearing to aggrieved persons prior to passing of confirmation order, constitutes total non-compliance with mandatory provisions prescribed u/s 8 of Prevention of Money Laundering Act, 2002 and the attachment pursuant thereto is in the breach of principles of natural justice. 40. The Hon'ble Apex Court in Uma Nath Pandey & Ors. Vs. State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the instance of Petitioners will be maintainable under sub-section (1) of Section 26." The present appeal is filed pursuant to the said judgment dated 19th March, 2015. The delay in filing the appeal was condoned by the Tribunal vide the order dated 17th July, 2015. 43. The next objection of the respondent no. 1 that the subject property is purchased out of proceeds of crime and legal heirs cannot acquire better title than deceased is equally without any force. The alleged claim of the appellant is that they have the undivided share, right, title and interest in the subject property and such share, right, title and interest was never sold and/or transferred to any third persons let alone the Respondent No. 2 as purported, but always remained vested in hands of late Lucian Fonseca and the appellant no. 2. In these circumstances, the undivided share, title and interest of Late Lucian Fonseca and appellant no. 2 in the subject premises and subject property could not/cannot be taken to represent "Proceeds of Crime" within the meaning of section 2(1)(u) of the PMLA. 44. Prima facie, it appears that the respondent no. 2 purchased the undivided share, right, title and interest in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant's undivided share, title and interest in the subject property taken over by the respondent no. 1 is against the law. 48. Now when Bombay High Court has allowed the appellant to file the appeal under section 26, the same respondent no. 1 is again contending that the appeal is in fact not maintainable. Thus, the argument of respondent no. 1 is totally misconceived. The earlier order passed by this Tribunal dismissing the application for Intervention is merged with the order of the Bombay High Court. No advantage can be derived by the respondent no. 1 from the dismissal of the earlier application of the appellant for Intervention of the said appeal. 49. The next submission of the respondent no. 1 that the reliefs sought by the appellants in notice of motion in Short Cause Suit no. 360/2015 have been rejected on ground of section 41 of PMLA also has no force. The Notice of motion is not disposed off or refused and the same is pending. However, only ad interim relief was refused on grounds of lack of urgency, without deciding or opining on the questions of jurisdiction and limitation. The same is yet to be decided. Section 41 of the PMLA, 2002 and Section 34 of the Securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered documents. The contrary averments made in the documents do not help the case of the respondent no. 1 once the said portion has not been purchased by the said accused party. 52. Admittedly, the impugned order was passed without issue of notice under Section 8(1) of the Act to the appellants herein and without providing an opportunity to them to place relevant materials before the Adjudicating Authority and the opportunity of being heard. No notice was served on the appellants under section 8 of the PMLA inspite of their claim of joint ownership of the subject property by the appellant and the fact that the deed of conveyance dated 01.06.2010 (by which the property was allegedly acquired by the Respondent-2) which was also before the respondent during the course of the proceedings specifically noted the claim of the appellant by way of recitals as re-produced in para 23 above. Due to non issue of the notice under section 8(1) of the Act to the appellants, they have not had an opportunity to put their case before the Adjudicating Authority to substantiate their claim that the subject property, to the extent of their undivided share, right title and invest in the subject proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating Authority vide the order dated 16th September, 2013 passed by the Adjudicating Authority. Further, the appeal against the said order dated 16th September, 2013 filed by the main accused, Respondent-2 herein, being appeal no. FPA-PMLA- 530/BOM/2013, was dismissed by this Tribunal vide the order dated 25.01.2016. The relief to be allowed to the appellants herein as per the forgoing para has to take in to account these facts. 55. In this connection it is observed that in a somewhat similar matter of non issue of notice under Section 8(1) of the PMLA to a person claiming ownership of part of the property attached and confirmed in that case, this Tribunal in the case of Amanpreet Singh Gandhi @ Jaggu V/s. The Deputy Director, Directorate of Enforcement, Jalandhar, vide its order dated 13th January, 2017 in Appeal No. FPA-PMLA-582/JL/2014 reviewed its earlier order and remanded the matter to the Adjudicating Authority for decision after issue of notice under Section 8(1) of Act. It is useful to refer to the relevant extracts from the said order which are reproduced herein below: 10. From the above it is evident that section 8(1) casts a responsibility upon the Adjudicating Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. Such a scenario would definitely be in contradiction with the provisions of the PMLA as no such powers of review have been vested in the Adjudicating Authority. The provisions of Section 8, (1), (2) & 3 have to be read harmoniously and a holistic view has to be taken to interpret these provisions correctly. While Section 8(1) speaks of issue of show cause notice to the persons alleged to have committed an offence under Section (3) and to joint holders of the property and on whose behalf the property is held by some other person, Section 8(2) read with its proviso speaks of Principles of Natural Justice to be followed in the form of considering the reply to the show cause notice, hearing the aggrieved persons and the complainant and also hearing any person other than a person to whom the notice has been issued, who claims a right in the property and Section 3 provides for passing an order in writing regarding confirmation of attachment. This scheme of law has no scope for segregating the proviso to Section 8(2) from Section 8(2) as well as the Section 8(3) because a hearing after the passing of the order under Section 8(3) has no meaning. The noticees as well as any other per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for the same. The relevant portions of Section 35 are reproduce below: "35(1) The Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act, the Appellate Tribunal shall have powers to regulate its own procedure. (2) The Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1905 (5 of 1908) while trying a suit, in respect of the following matters, namely:- a) Summoning and enforcing the attendance of any person and examining him on oath; b) Requiring the discovery and production of documents; c) Receiving evidence on affidavits; d) Subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or copy of such record or document from any office; e) Issuing commissions for the examination of witnesses or documents; f) Reviewing its decisions; g) Dismissing a representation for default or deciding it ex parte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Adjudicating Authority and the provisional attachment order No. 03/2013 dated 28.10.2013 in ECIR/06/JLZO/2012 shall remain alive. The applicant shall also continue to deposit charges for use and occupation of the said property @ of ₹ 50,000 per month to be deposited by 15th date of the next English calendar month. IV. This order has been passed on a question of law itself and we are not expressing any opinion on the merits of the case. (emphasis supplied) 56. In view of the facts and circumstances of the case as discussed herein above, and in exercise of the powers conferred under clause (f) of sub-section 2 of Section 35 of the Act, the Tribunal's order dated 25.01.2016 in Appeal no. FPA-PMLA-530/BOM/2013 is reviewed to the extent it upheld the confirmation of the provisional attachment of the subject property to the extent of the appellant's undivided share, right, title and interest in the subject property. Accordingly, the order dated 16th September, 2013 in Original confirming the PAO No. 08 of 2013 dated 28.03.2013 passed by the Adjudicating Authority is set aside to the extent of the above and the matter is remanded to the Adjudicating Authority for issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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