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TMI Blog2015 (8) TMI 1423X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, we are of the view that the Adjudicating Authority has exceeded its jurisdiction by remanding the matter to the appellant with the direction to carry out fresh investigation and file fresh complaint. The directions given by the Adjudicating Authority are beyond the scope of the provisions of Section 8(2) and 8(3) of PMLA. Consequently, the impugned order dated 19-9-2014 is set aside and the matter is remanded back to Adjudicating Authority to pass a speaking order in accordance with law within a period of six months from the date of this order. During the pendency of proceedings before the Adjudicating Authority, the provisional Attachment order shall continue to be in force and in the mean time, all the parties shall maintain status quo in respect of properties attached vide provisional Attachment Order X X X X Extracts X X X X X X X X Extracts X X X X ..... tune of ₹ 44.22 crores from his firm's accounts maintained with SBI, Main Branch, Kanpur, during the period June 2008 to July 2009 against uncleared credit and had invested these funds in various movable and immovable properties such as in land, house, factory, Real Estate, Mutual Funds, trading in share market, etc. Consequently first Provisional Attachment Order No. 01/2012 was issued on 31-3-2012 for attachment of properties worth ₹ 18.89 crores, which was subsequently confirmed by the Adjudicating Authority vide order dated 8-8-2012, except an investment of ₹ 6.25 Lakhs in M/s Cinema Capital Venture Fund, Mumbai. During the course of further investigation, the proceeds of crime worth ₹ 9.44 crores were traced and a second Provisional Attachment Order No. 01/2013 was issued on 30-3-2013, which was confirmed by the Adjudicating Authority vide order dated 26-9-2013. 5. During the course of further investigation to trace the remaining proceeds of crime, it was revealed that Mr. Hinish Ramchandani had invested proceeds of crime amounting to ₹ 33.25 lakhs with the U.P. State Industrial Development Council, Kanpur (hereinafter referred to as 'UPSIDC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of their income, earning or assets, out of which or by means of which they have acquired the property attached under Section 5(1) of PMLA with evidence on which they relies and other relevant information and particulars and to show cause why all or any of the properties should not be declared to be the properties involved in money laundering and consequently why the provisional attachment order should not be confirmed and the appellant and respondents were asked to appear before the Adjudicating Authority on 7-7-2014. 8. The counsel for appellant submitted that the Registrar /Administrative Officer of Adjudicating Authority issued a letter on dated 7-7-2014 stating that he is directed by the Chairman of Adjudicating Authority that Original Complaint No. 315/14 in respect of M/s. Tejal Edibles Pvt. Ltd. & Ors. was examined and it was found that the investigation in the above case was incomplete and therefore the appellant is requested to carry out a fresh investigation and to file a fresh Original Complaint. He submitted that on receipt of above letter the appellant immediately wrote to registrar vide letter dated 15th July, 2014 with a request to provide certified copy of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are involved in money laundering, he will confirm the attachment of the properties provisionally attached. He submitted that the Adjudicating Authority has exceeded his jurisdiction in passing an order directing the appellant to investigate further and file a fresh complaint which is beyond the scope of the provisions of Section 8 of PMLA. He submitted that on filing a complaint, if the Adjudicating Authority does not have reasons to believe, it can decline to issue show cause notice under Section 8(1) of PMLA in which case no show cause notice under Section 8(1) shall be issued to the defendant in Original Complaint. Once a notice is issued under section 8(1), having formed reason to believe, the Adjudicating Authority is bound to follow the statutory procedure laid down in Section 8(2) and 8(3) of PMLA and had to record a finding whether all or any of the properties referred to in the notice under Section 8(1) are involved in money laundering and if any property is declared to be involved in money laundering, Adjudicating Authority shall by an order in writing, confirm the attachment of the property provisionally attached under Section 5(1) of PMLA. 12. The counsel submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 8(1) of PMLA, Adjudicating Authority has not followed the due procedure prescribed under PMLA and remanded the case without hearing the appellant. He contended that the provisions of Section 8 of PMLA does not confer jurisdiction on Adjudicating Authority to remand the Original Complaint for fresh investigation and for filing fresh Original Complaint. The counsel vehemently argued that the Adjudicating Authority has exceeded its statutory jurisdiction while remanding back the Original Complaint No. 315/14 which is ultra vires of the powers conferred on Adjudicating Authority under Section 8(2) and 8(3) of PMLA and prayed that the impugned order passed by the Adjudicating Authority may be quashed and the provisional attachment of property may be confirmed. 16. The notice of the appeal was issued to the respondents on 10th December, 2014 which was duly served by the appellant to the respondents and an affidavit of service duly sworn and verified on 10th February, 2015 was filed. As no one had appeared on behalf of the respondent and they were proceeded ex parte vide order dated 26th February, 2015. 17. We have heard the arguments advanced by the learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and material for such period as may be prescribed. (3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation. - For the purposes of this sub-section "person interested", in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority." "8. Adjudication. - (1) On receipt of a complaint under sub-section (5) of section 5, or applications 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 Adjudicating Authority." 18. The perusal of record shows that on receipt of Complaint under Section 5(5) of PMLA along with relied upon documents, the Adjudicating Authority after forming reason to believe, issued notice under section 8(1) of PMLA to the defendants in original complaint, one such notice is adverted to as follows :- "BEFORE THE ADJUDICATING AUTHORITY (UNDER THE PREVENTION OF MONEY LAUNDERING ACT, 2002) NEW DELHI NOTICE TO SHOW CAUSE UNDER SECTION 8 OF PMLA ACT, 2002 NOTICE TO SHOW CAUSE 30-4-2014 O.C. No. - 315/2014 Shri Vivek Prasad Joint Director Directorate of Enforcement Prevention of Money Laundering ACT Lucknow Zonal Office 16-Ashok Marg, Lucknow UP___ ... Complainant M/s Tejal Edibles Pvt. Ltd., 7/92, Tilak Nagar, Kanpur through its director Shri Hinish Ramchandani and Smt. Nandani Ramchandani. & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him in this behalf and taking into consideration all relevant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice under Section 8(1) are involved in money laundering. And where the Adjudicating Authority decides under Section 8(2) of PMLA that any property is involved in money laundering, then u/s 8(3), he shall, by an order in writing confirm the attachment of the property made under Section 5(1) of PMLA. In our opinion, the provisions of Section 8(2) and 8(3) of PMLA do not empower the Adjudicating Authority to remand the Original Complaint to carry out fresh investigation and file a fresh Original Complaint after issue of notice u/s 8(1) of PMLA. After issue of notice under Section 8(1) of PMLA, the Adjudicating Authority can either confirm the provisional Attachment of all or any of the properties or can decline to confirm the provisional attachment of the properties but the provisions of Section 8(2) and 8(3) of PMLA do not empower Adjudicating Authority to remand the complaint for fresh investigation and to direct the Enforcement Director to file a fresh complaint. If such a construction is given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directions of the Adjudicating Authority in terms of order dated 19th September, 2014, further investigation is carried out by the appellant and fresh material is collected and a fresh complaint is filed to confirm the provisional attachment order dated 31st March, 2014, which was passed on the basis of material in the possession of appellant on that day i.e. 31-3-2014, the same would be completely illegal and against the provisions of section 5 of PMLA. 21. In the facts and circumstances and considering the provisions of Section 5 and 8 of PMLA and the scheme of the Act, we are of the view that the Adjudicating Authority has exceeded its jurisdiction by remanding the matter to the appellant with the direction to carry out fresh investigation and file fresh complaint. The directions given by the Adjudicating Authority are beyond the scope of the provisions of Section 8(2) and 8(3) of PMLA. Consequently, the impugned order dated 19-9-2014 is set aside and the matter is remanded back to Adjudicating Authority to pass a speaking order in accordance with law within a period of six months from the date of this order. During the pendency of proceedings before the Adjudicating Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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