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TMI Blog2019 (6) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Square Mall, Delhi. 2. The case of the appellant on merits is that, the appellant‟s husband, Sh. Ranjit Malik joind Delhi Nagrik Sahkari Bank Ltd. as Driver, and drew a salary of Rs. 30,352/-(Rupees Thirty Thousand Three Hundred and Fifty Two Only) per month. The appellant‟s husband worked with Delhi Nagrik Sahkari Bank Ltd. till May 2015, but his services officially ended in May 2017. 3. In November 2012, the appellant married Sh. Ranjit Malik. In the year 2015, the Appellant‟s husband commenced working under Sh. Gagan Dhawan and continued to be employed with him till August 2017. It is alleged that her husband job was for carrying and delivering printing material against a monthly remuneration. 4. On 30.08.2017, the Central Bureau of Investigation (CBI) registered FIR being RC No. 08(A)/2017-AC III, for the alleged commission of offences u/s 13(2) r/w 13(1)(d). The same was purportedly based on search operations carried out by the Income Tax Department on 28.06.2011 at various premises of M/s Sterling Biotech Limited. Admittedly, neither the Appellant nor her husband were named as accused in the FIR. 5. On 31.08.2017, the Enforcement Directorate regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he malafide with which the Enforcement Directorate has been operating, whose sole attempt has been to harass the Appellants family. 10. It is also alleged by the appellant in the grounds of appeal that during the illegal custody of the Appellant‟s husband by the Enforcement Directorate, he was asked to explain the sources of his income vis a vis his and the Appellant‟s Bank accounts. The appellant‟s husband requested the officials of the Enforcement Directorate for some time to furnish the same and that he would furnish the some time to furnish the same and that he would furnish the same upon his release on bail, as the Bank accounts relate to a period of 6 years and it would be impossible for him to give exact details of the same immediately. It is further alleged that the Appellant‟s husband was at that point of time in no state of mind to immediately recapitulate exact details of the Accounts, as he feared for his life and safety, having been illegally detained by the Officials of the Enforcement Directorate. It is also stated that the appellant was not called to the office of the Enforcement Directorate even once to explain the details of the Bank Accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or] make or cause to be made extracts or copies therefrom; (e) make a note or an inventory of such record or property; (f) examine on oath any person, who is found to be in possession or control of any record or property, in respect of all 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, authorised 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 pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any proceedings under this Act, he may search that person and seize such record or property which may be useful for or relevant to any proceedings under this Act: [Provided that no search of any person shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised 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.] (2) The authority, who has been authorised under sub-section (1) shall, immediately after search and seizure, forward a copy of the reasons so recorded along with material in 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 reasons and material for such period, as may be prescribed. (3) Where an authority is about to search any person, he shall, if such person so requires, take such person within twenty-four hours to the nearest gazetted officer, superior in rank to him, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceeding one hundred and eighty days from the day on which such property was seized or frozen, as the case may be. (2) The officer authorized by the Director shall, immediately after he has passed an order for retention or continuation of freezing of the property for purposes of adjudication under section 8, forward a copy of the order along with the material in his possession, referred to in sub-section (1), to the Adjudicating Authority, in a sealed cover, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed. (3) On the expiry of the period specified in sub-section (1), the property shall be returned to the person from whom such property was seized or whose property was ordered to be frozen unless the Adjudicating Authority permits retention or continuation of freezing of such property beyond the said period. 18. Section 21 of PMLA reads as under:- "21. Retention of records. - (1) Where any records have been seized, under section 17 or section 18 or frozen under sub-section (1A) of section 17 and the Investigating Officer or any other officer authorised by the Director in this behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (1) of Section 17 or Section 18 for the purpose of continuation during investigation for a period not exceeding ninety days under this Act before the Competent Court, or under the corresponding law of any other countries as the case may be under Subsection (3) (a) of Section 8 may take necessary action within the time prescribed. In failure to do so under this Act, all the proceedings, seizures/frozen under Section 17 would be lapsed ipso facto. 22. Section 8 of the PMLA provides for procedure for adjudication by the Adjudicating Authority. The relevant extract of Section 8 of the PMLA is set out below:- "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 under Section 3 or is in possession of proceeds of crime, he 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red the detailed judgement in the case of "Omar Ali Obaid etc. vs. ED‟ has discussed the entire scheme of seizure made under Section- 102 of Cr. P.C. The relevant paras 58 to 74 are read as under:- '58. In terms of Section 73 of the PMLA, the Central Government is empowered to make rules for carrying out the provisions of the PMLA. In exercise of such powers, the Central Government has notified the Prevention of Money- Laundering (Forms, Search and Seizure or Freezing and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the Period of Retention) Rules, 2005. Rule 4 of the said Rules also provides for the procedure related to freezing of any property found as a result of search of any building, place, vessel, vehicle or aircraft. 59. It is relevant to note that an order of provisional attachment or an order of seizure is not an end in itself and does not stand in isolation. The said orders are passed in aid of the provisions to confiscate properties, which are found to be proceeds of crime. 60. The scheme of seizure made under Section 102 of the Cr.P.C. is materially different. Section 102 of Cr.P.C. is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, without commensurate checks and balances, would militate against the principle of rule of law engrafted in the constitution of India. A police officer does not possess unfettered rights to freeze any asset without the same being reported immediately to a Magistrate. The party aggrieved, thus, has immediate recourse in respect of the said action of freezing the property. As observed above, the scheme of provisional attachment or seizure of a property, as contemplated under the provisions of the PMLA is materially different. The PMLA has separate checks and balances to ensure that such powers are exercised in aid of the object of confiscating or vesting such proceeds of crime with the Government. The power to provisionally attach or seize or freeze a property can be exercised only (a) if the specified officer has material in his possession, which provides him reason to believe that the property sought to be attached or seized is proceeds of crime or related to a crime; and (b) after recording the reasons in writing. 65. In the aforesaid view, the reliance placed on provisions of Section 65 of the PMLA is misplaced. By virtue of Section 65, the provisions of Cr.P.C. apply only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent - the principles of inconsistency between two enactments as noticed by the Supreme Court would be equally applicable to determine whether the provisions of Section 102 Cr.P.C. are inconsistent with the provisions of the PMLA. In that case, the Supreme Court has referred to various decisions to set out the principles on the anvil of which the question whether two enactments are inconsistent are to be tested. In the aforesaid context, the Supreme Court had, inter alia, observed as under:- "51.7. Though there may be no direct conflict, a State law may be inoperative because the Parliamentary law is intended to be a complete, exhaustive or exclusive code. In such a case, the State law is inconsistent and repugnant, even though obedience to both laws is possible, because so long as the State law is referable to the same subject-matter as the Parliamentary law to any extent, it must give way. One test of seeing whether the subjectmatter of the Parliamentary law is encroached upon is to find out whether the Parliamentary statute has adopted a plan or scheme which will be hindered and/or obstructed by giving effect to the State law. It can then be said that the State law trenches u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeds of crime, he can provisionally attach the same only for a period of one hundred and eighty days, but in cases where he has mere suspicion that the property in question is proceeds of crime, he can without recording any reasons, without issuance of any notice and without any obligation to make a complaint/ application in this regard to the Adjudicating Authority, pass an order freezing the property for an indeterminate period. This interpretation would militate against the scheme of the PMLA as enacted by the Parliament. 71. With much respect to the view of the Hon‟ble Gujarat High Court, this Court is unable to agree with the view as expressed in Paresha G. Shah v. State of Gujarat and Ors. (supra). An order of freezing under Section 102 of Cr.P.C. cannot be considered to be in aid of order of provisional attachment passed under Section 5(1) of the PMLA or an order of seizure and/or freezing of property under Section 17(1A) of the PMLA. Both the orders under Section 5(1) and under Section 17 of the PMLA are orders of interim nature and are operative for a limited period till pending adjudication under Section 8 of the Act and further confiscation of the property. Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of PMLA a) Section 8(3)(a) of PMLA, originally provided that confirmation of attachment by Adjudicating Authority would continue during the pendency of proceedings relating to scheduled offence before a court and becomes final after guilt of person is proved in the trial court in the said scheduled offence. Thus, finality of attachment even after confirmation by Adjudicating Authority was dependent upon the pendency of proceedings relating to scheduled offence and achieving finality of judgement in such case and not otherwise. Subsequently, there was an amendment incorporated in the said provision. The same was applicable w.e.f. 15.2.2013. b) With effect from 19.04.2018, an amendment was brought in Section 8(3)(a) that attachment would continue during investigations for a period not exceeding 90 days or pendency of proceedings relating to any offence under PMLA before a court. c) It is evident from the said provision that investigation has to be completed within a period of 90 days as otherwise there will be no attachment. d) The latest amendment in PMLA has fixed the limitation of 365 days as limitation of period for investigation. The said amendment is yet to be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c period is prescribed in the Act for the purpose of investigation. Earlier, no specific timeline was set to complete the investigation and to file the prosecution complaint. The mandates now is changed whereby it is mandated that the attachment shall continue during investigation for a period not exceeding ninety days, as provided under section 8(3)(a) of the Act or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India. The second part of the provision is not applicable in the absence of such situation. 28. Even this Tribunal is of the view that ninety days period is a less period and the said provision is rightly further amended where the period has been substituted by Act 7 of 2019-5-22 (i) to 365 days from 90 days, however, it is yet to be notified. Thus, unless it is notified, this Tribunal is duty bound to apply the provision as existed. 29. In the light of above, the appeal is allowed. Both the accounts are de-freezed accordingly. The impugned order against the appellant is setaside pertaining to two bank accounts only maintained by the appellant. As far as the bank accounts of her husband/ joint accounts are c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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