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TMI Blog2019 (4) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant by the respondent forthwith. - MP-PMLA-5462/DLI/2019 (I.R.) And FPA-PMLA-2793/DLI/2019 - - - Dated:- 28-3-2019 - Justice Manmohan Singh Chairman For the Appellant : Mr. Lzafeer Ahmad Mohd. Nizam Pasha, Advocate For the Respondent : Mr. Nitesh Rana, Advocate JUDGEMENT FPA-PMLA-2793/DLI/2019 1. By this order, I propose to decide the appeal filed by the appellant under section 26 of Prevention of Money Laundering Act, 2002 challenging the order dated 21st November, 2018, passed in OA 243/2017. 2. The Attachment Order arises out of ECIR/HQ/17/2017 dated 27.10.2017 (in the matter of M/s. Sterling Biotech and other) registered on the basis of FIR No. RCBD1/2017/E/0007 registered by the CBI/BS FC/New Delhi on 25.10.2017. Neither the appellant nor any of its directors/promoters and/ or employees is mentioned or is arrayed as accused in the subject matter of ECIR/HQ/17/2017 or FIR No. RCBD1/2017/E/0007. 3. The application has been filed by the Respondent for retention of documents/digital devices, which include one hard drive, one mobile phone and one black and white box file having 216 loose sheets, which were seized as per the Application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant, which was addressed to Sh. R.S. Nagpal, who is an employee of the Appellant, directing him to appear on 11.06.2018, alongwith all documents relating to the transactions made with M/s Sterling Biotech and Group, since 2004. The same also finds its mention in the said summon received under Section 50(2) and (3) of PMLA, which states that the Office of the Enforcement Directorate requires documents pertaining to M/s Sterling Biotech and Group. iv) Shri R.K. Sharma, Manager (HR) of the Appellant went to the office of Respondent on 11.06.2018 as Shri R.S. Nagpal was unwell and on the instruction of and on behalf of the Appellant Company submitted that there are no transactions of any nature with M/s Sterling Biotech and Group and further explained that certain transactions in the nature of ticket bookings in the ordinary course of business have been conducted with one M/s. Sterling Agro Industries Limited, which appeared to be an unrelated company. However, a copy of the Ledger account of the said concern was provided to the Respondent. v) Further the Respondent posed questions to Mr. R.K. Sharma, Manager (HR) of the Appellant Company, in relation to the following p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete violation of the rules and regulations, on 14.06.2018, conducted a search without according any reasons and in utter disregard to the letter and spirit of the law. It is submitted that the illegal search was conducted at the following premises : a) Business premises of M/s. D. Pauls Tours Travels at B-36, Shivalik, Malviya Nagar, New Delhi. b) Business premises of M/s. D. Pauls Tours Travels at B-38, Shivalik, Malviya Nagar, New Delhi; c) Business premises of M/s. D. Pauls Tours Travels at B-39, Shivalik, Malviya Nagar, New Delhi. d) Business premises of M/s. D. Pauls tours Travels at B-40, Shivalik, malviya Nagar, New Delhi; e) Also at 12/161, 12/162, 12/163, Malviya Nagar, New Delhi and at 193, Mohan Singh Market, INA, New Delhi. x) The aforesaid searches started on 14.06.2018 at around 4:00 PM and continued till 6:00 AM of 15.06.2018, except the premises mentioned at (e) above where the search was concluded at 11:00 PM on 14.06.2018 and for search conducted at 193, Mohan Singh Market, INA no panchanama was created. xi) During the course of the search and seizure, Mr. Gurcharan Singh, who is a lawyer by a profession and the patriarch of the family ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies and persons in relation to whom the investigation was purportedly underway. It became abundantly clear that the investigation of the Enforcement Directorate was in the nature of a roving and fishing inquiry which is impermissible in law. 7. Section 17 of PMLA, 2002 reads as under: 17 Search and seizure. -(1) Where [the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes 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 any act which constitutes money-laundering, or (ii) is in possession of any proceeds of crime involved in 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 - (a) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such records or proceeds of crime are kept; (b) break open the lock o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his possession, referred to in that sub-section, to the Adjudicating Authority in a sealed envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such reason and material for such period, as may be prescribed. (3) Where an authority upon information obtained during survey under section 16, is satisfied that an evidence shall be or is likely to be concealed or tampered with, he may, for reasons to be recorded in writing, enter and search the building or place where such evidence is located and seize that evidence. Provided that no authorization referred to in subsection (1) shall be required for search under this subsection. (4) The authority seizing any record or property under sub-Section (1) or freezing any record or property under sub-Section (1A) shall, within a period of thirty days from such seizure or freezing, as the case may be, file an application, requesting for retention of such record or property seized under sub-Section (1) or for continuation of the order of freezing served under sub-Section (1A), before the Adjudicating Authority.]. 8. Section 18 of PMLA, 2002 reads as under: 18. Search of persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall, if he sees no reasonable ground for search, forthwith discharge such person but otherwise shall direct that search be made. (6) Before making the search under sub-section (1) or sub-section (5) the authority shall call upon two or more persons to attend and witness the search, and the search shall be made in the presence of such persons. (7) The authority shall prepare a list of record or property seized in the course of the search and obtain the signatures of the witnesses on the list. (8) No female shall be searched by any one except a female. (9) The Authority shall record the statement of the person searched under sub-section (1) or sub-section (5) in respect of the records or proceeds of crime found or seized in the course of the search:18 [***] (10) The authority seizing any record or property under sub-section (1) shall, within a period of thirty days from such seizure, file an application requesting for retention of such record or property, before the Adjudicating Authority . 9. Sub-section (1), (2) and (3) of Section 20 read as under:- 20. Retention of property . - (1) Where any property has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of an order of confiscation [or release under subsection (5) or sub-section (6) or sub-section (7) of section 8 or section 58B or sub-section (2A) of section 60] , the Adjudicating Authority shall direct the release of the records to the person from whom such records were seized. (6) Where an order releasing the records has been made by the Court [Adjudicating Authority under section (5) of section 21] the Director or any other officer authorised by him in this behalf may withhold the release of any such record for a period of ninety days from the date of (receipt of] such order, if he is of the opinion that such record is relevant for the appeal proceedings under this Act. ] 11. It is settled law that a particular thing is to be done in a particular manner, it must be done in that way and none other. Reliance in this regard is also placed on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rised by the Central Government, by notification, for this purpose. In the present case, no report against the appellant has been forwarded to the Magistrate. No complaint against the appellant was filed before a Magistrate. No cognizance of schedule offence was taken by any authority or Additional Secretary to the Government of India. 14. Under Section17(1) (A), it is the duty of the officer authorised if where it is found that it is not practicable to seize such property, can make such order that the person concerned shall not transfer or deal with the said property prior to the permission of the officer authorised. A copy of the said order shall be served upon the person concerned. Section 17, Sub-section (2) stipulates that after search and seizure, the authorised officer shall immediately forward a copy of the reason so recorded along with the material in his possession to the Adjudicating Authority in a sealed cover. 15. The authorised officer is to follow the following steps after search and seizure or frozen of any property, any action taken under Section 17(2) or 17(1A) i) the first one is that in case the authority seizes any record or material under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Property Attachment of Property 1. S. 20(1): Recording of reason to believe S. 5(1): Recording of reason to believe 2. S.17(4): OA within 30 days S. 5(5): OC within 30 days 3. S. 20(2): Order by the Authorized Officer S. 5(1): Order by the Authorized Officer 4. Rule 4 of Retention Rules, 2005: Acknowledgment of Order by the Adjudicating Authority Rule 5 of Attachment Rules, 2005: Acknowledgment of Order by the Adjudicating Authority 5. S.20(1): Outer limit of 180 days S.5(1): Outer limit of 180 days 6. S.8(3): Order by the Adjudicating Authority S. 8(3): Order by the Adjudicating Authority 7. S.8(3)(a): Retention restricted to 90 days during investigation. S.8(3)(a): Attachment restricted to 90 days during investigation. 19. In the present case, the statutory obligati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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