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TMI Blog2018 (12) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... th 20(2), PMLA. In the case, there is no other attachment, except the bank account. The impugned order dated 12.9.2017 against the appellant with regard to continuation of attachment of account is set-aside by allowing the appeal. However, it is clarified that, no opinion is expressed or any direction to the bank about the declaration of NPA, the said issue, if any by the bank to be decided or reconsidered as per its own merit. OA against the appellant is accordingly dismissed. - MP-PMLA-4669/2018 And FPA-PMLA-2055/CHD/2017 - - - Dated:- 18-12-2018 - Justice Manmohan Singh Chairman For the Appellant : Mr. Arshdeep Singh, Advocate And Mr. Manish Jha, Advocate For the Respondent : Mr. Atul Tripathi, Advocate JUDGEMENT FPA-PMLA-2055/CHD/2017 1. M/s. Geoxa Steels Private Limited through its Director, Shri Amanpreet Singh has filed the above-mentioned appeal under Section-26 of the Prevention of Money Laundering Act, 2002 against the Order dated 12.09.2017 passed by the Adjudicating Authority in O.A. No. 93/2017. 2. The FIR was registered in Schedule Offence on 8.8.2018, appellant is not named, who is a independent legal entity. The same is the positio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The Respondent no. 2 on 05.05.2017 filed the O.A. No.93/2017 under Section 17(4) of the PML Act, 2002 and asked the Adjudicating Authority for continuation of order of freezing the loan account. 9. The seizure of documents and freezing of any record or property are two distinct terms as used in the statute. Section 8 and Section 17 of the PML Act, 2002 is reproduced hereinafter as under:- 8. Adjudication.- (1) On receipt of a complaint under subsection (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 1[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 2[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 declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1A) of section 17, in such manner as may be prescribed: Provided that if it is not practicable to take possession of a property frozen under sub-section (1A) of section 17, the order of confiscation shall have the same effect as if the property had been taken possession of.] 2[(5) Where on conclusion of a trial of an offence under this Act, the Special Court finds that the offence of money-laundering has been committed, it shall order that such property involved in the money-laundering or which has been used for commission of the offence of money-laundering shall stand confiscated to the Central Government. (6) Where on conclusion of a trial under this Act, the Special Court finds that the offence of money-laundering has not taken place or the property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it. (7) Where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a proclaimed offender or for any other reason or having commenced but could not be concluded, the Special Court shall, on an application moved by the Director or a person claimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l matters relevant for the purposes of any investigation under this Act: Provided that no search shall be conducted unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under Section 157 of the Code of Criminal Procedure, 1973, (2 of 1974) or a complaint has been filed by a person, authorized to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or in cases where such report is not required to be forwarded, a similar report of information received or otherwise has been submitted by an officer authorised to investigate a scheduled offence to an officer not below the rank of Additional Secretary to the Government of India or equivalent being head of the office or Ministry or Department or Unit, as the case may be, or any other officer who may be authorised by the Central Government, by notification, for this purpose]. [(1A) Where it is not practicable to seize such record or property, the officer authorised under sub-section (1), may make an order to freeze such property whereupon the property shall not be transferred or otherwise dealt with, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said order:- We find that the aforesaid order shows total non-application of mind where the submissions of the petitioners have not been adverted to. Accordingly, we direct the Adjudicating Authority to remain present in Court on the next date of hearing to explain the tenor of the order before this Court. 13. On 11.10.2017, the counsel appearing for Union of India pressed for statutory right of appeal available to the appellant and accordingly, the writ petition was disposed off vide Order dated 11.10.2017. 14. Admittedly, the Appellant‟s bank account was frozen on the following sole basis as mentioned in para-14 of the order, the same is reproduced below:- 14. Besides, certain bank accounts of the Accused and their associates were also identified which might have been used for money-laundering. 15. Not a single transaction has been pointed out to justify its freezing, even though it is alleged by the ED that the account statement of such bank account were examined. 16. It appears from para-14 of the order that on the basis of presumptions and perception, the same were freezed that those might have been used for money laundering. 17. It a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturers of Stainless Steels, Tubes Pipes Regd. Office: Village Kuba, Tehsil Samrala, Distt. Ludhiana 141418(Punjab) INDIA E-mail: [email protected] URL: www.geoxasteels.com Tel: +91-1628-267018, 267218 The Special Director Directorate of Enforcement Chandigarh Sir, Sub:- Account No. 034013100000618 in the name of Geoxa Steels Pvt.Ltd. maintained with Andhra Bank Ltd. Please refer to our letter dated 2.5.2017 on the above subject ( copy enclosed). In this connection it is submitted that :- 1) That there is no credit balance in the captioned account. 2) That the nature of the account is Cash Credit Limit account. 3) That non operation of the account will turn the account into NPA account. 4) That non operation of the account has resulted into uncalled for and unnecessary liability of interest towards bank. 5) That the work of the company has effected by non operation of the account. 6) That no foreign exchange transaction has taken place through the said account. 7) That no useful purpose will be served by disallowing the operation of the bank. It is therefore prayed that directio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r) Chief Manager 22. The counsel has also stated that in other cases, the companies are different. Those are to be decided as per its own merit. As per appellant, those are false and frivolous. I hope that this Tribunal should not express any opinion to those cases. Here in the present case, only it is to be decided as to account was rightly freezed or not. 23. It is settled law that if Show Cause Notice fails to put the appellant to notice, with sufficient precision, as to the case being put up against it, this is a illegality which renders the Show Cause Notice bad in law; thereby, vitiating all proceedings held pursuant thereto. See AslamMohammad Merchant v. Competent Authorityy [2008 (14) SCC 186]+. 24. In the present case, on the face of record, it is evident that non application of judicial mind by the Adjudicating Authority by the finding recorded at page 147-148 of the Impugned Order that However, none of the Respondents (including appellant herein) have said anything about why the seizure should not be confirmed and freezing of accounts should not be continued for further investigation into the offence which is very serious . The said finding is proven ..... 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