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TMI Blog2019 (6) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant had withdrawn the sum of about Rs. 15,000,00/- (Rupee Fifteen Lakh) in the month of September and October in 2017 from the bank. No prosecution complaint has been filed against the appellant by the respondent under section 8(3)(a) of the Act. It is admitted that no prosecution complaint is pending against the appellant nor the charge sheet has been filed. Let the written synopsis be filed by the respondent. Both the parties are allowed to file the written synopsis within two weeks from today. The learned counsel for the Chandrakant Patel states that money seized from Shri Ashok Patel does not belong to him. Order reserved. " 3. The facts of the case are that the Anti Corruption Branch of Central Bureau of Investigation (CBI), Mumbai registered a case dated 16.02.2017 against Sh. Ashok Kumar Dhabhai, Dy. General Manager, Regional Office, Union Bank of India, Samachar Marg, Opp. Stock Exchange, Mumbai, Shiva Shankara Rao, Astt. General Manager & Branch Manager, Union Bank of India, Zaveri Bazar Branch, Mumbai, Sh. Rakesh Natrwarlal Patel, Prop. Of M/s Pihu Gold, Zaveri Bazar, Mumbai, Shri Deepak Chavda, Prop. Of M/s Satnam Jewels Mumbai., Sh. Amit Sampat, Director M/s P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alwadi, Bhuleshwar Road, Bhuleshwar, Mumbai- 400002. 9. The said premise was searched on 13.10.2017 under section 17 of the PMLA, 2002 under the reasonable belief that the said premises is in possession of records relating to proceedings of case pertaining to money laundering under PMLA, 2002. 10. During the course of search of the premise, where it found that one Angadia/Courier firm by Name P. Vijaykumar & Co. was functioning from the said premise. Further during the search India Currency amounting to Rs. 14,75,200/- was seized under reasonable belief that the said property is involved in money laundering. Mr. Jignesh Patel who is one of the partner of M/s P. Vijay Kumar & Co. and was present during the search, could not give any satisfactory explanation regarding the source of the said Indian Currency. 11. Further the statement of other partner Mr. Ashok Patel of M/s P. Vijaykuamr & co. was recorded on 16.10.2017, wherein it is alleged that he is in the business of transfer of money through un-official channels, without reflecting bank accounts. It is further alleged that he could not give satisfactory reply or submit documents to substantiate the source of the cash of Rs. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd: 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 of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not available; (c) seize any record or property found as a result of such search; (d) place marks of identification on such record or [property, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, 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.]. 20. Section 18 of PMLA, 2002 reads as under: "18. Search of persons. - (1) If an authority, authorised in this behalf by the Central Government by general or special order, has reason to believe (the reason for such belief to be recorded in writing) that any person has secreted about his person or in anything under his possession, ownership or control, any record or proceeds of crime which may be useful for or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 21. Sub-section (1), (2) and (3) of Section 20 read as under:- 20. Retention of property.- (1) Where any property has been seized under section 17 or section 18 or frozen under sub-Section (1A) of Section 17 and the officer authorised by the Director in this behalf has, on the basis of material in his possession, reason to believe (the reason for such belief to be recorded by him in writing) that such property is required to be retained for the purposes of adjudication under section 8, such property may, if seized be retained or if frozen, may continue to remain frozen, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicating 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. ] 23. It is clear from the reading of Sections 17 to 21 that outer limit upto the date for deciding the application for retention of property within the meaning of sub-section 4 of Section 21 is 180 days from the date of seizure of any property or records. The said period is not extendable. 24. The person concerned/aggrieved party of such order, is entitled to file the appeal under Section 26 of the Act. The same shall be heard and after giving an opportunity of being heard, the appellant Tribunal shall pass the order either to confirm the order of retention or to modify or setting aside the same. 25. Where the Adjudicating Authority decides by an order confirm the retention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money laundering. (3) Where the Adjudicating Authority decides under subsection (2) that any property is involved in moneylaundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of Section 5 or retention of property or record seized or frozen under Section 17 or Section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property or record shall- (a) continue during investigation for a period not exceeding ninety days or the pendency of the proceedings relating to any offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and (b) become final after an order of confiscation is passed under sub-section (5) or sub-section (7) of Section 8 or Section 58-B or sub-section (2-A) of section 60 by the Special Court. 27. The Hon'ble High of Delhi in its Order dated 9th January, 2019 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of subsection (3) of Section 102 of Cr.P.C., the police officer seizing any property on the grounds of suspicion of an offence is required to forthwith report the seizure to the Magistrate having jurisdiction. 62. The said property seized is required to be produced before a Court and/or reported to a Magistrate. In such cases, the court would have the power to pass necessary orders with regard to the said property. In terms of Section 457 of the Cr.P.C., whenever a property is seized by any police officer and is reported to the Magistrate, the Magistrate is empowered to make such orders as he thinks fit in respect of disposal of the property or the delivery of such property to the person entitled to the possession thereof. In cases where such person cannot be ascertained, the Magistrate can pass orders in respect of the custody and production of such property. 63. It is at once clear that scheme of seizure, including the checks and balances in exercise of such power, as contemplated under the Cr.P.C. is wholly inconsistent with the scheme of the provisions under the PMLA. 64. Powers of seizure of properties is a draconian power. Grant of such authoritarian and drastic po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of the PMLA with regard to seizure of property. The said contention is unmerited. The question whether an enactment is repugnant to another is not determined on whether two provisions can be simultaneously obeyed but is determined in the context of the scheme of the legislative enactment. The question to be asked is whether the schemes of the two enactments can subsist and be implemented simultaneously. It is apparent that the scheme of effecting provisional attachment and seizure of property under the PMLA is wholly inconsistent with the one as enacted under the Cr.P.C. 68. In Innoventive Industries Ltd. v. ICICI Bank and Anr.: (2018) 1 SCC 407, the Supreme Court had examined the question of repugnancy between two enactments, namely, the Maharashtra Relief Undertakings (Special Provisions Act), 1958 and the Insolvency and Bankruptcy Code, 2016 in the perspective of the Constitution of India. The Supreme Court had referred to various decisions and culled out the principles with regard to repugnancy between two enactments. Although the decision was rendered in an altogether different context - whether the provisions of the central legislation would override a state enac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r frozen under Section 17 of the PMLA without (a) the Director having a reason to believe, on the basis of material available with him, that the properties are proceeds of crime and (b) recording such reasons in writing; the same officer can on mere suspicion pass orders for freezing the properties without recording reasons. Further, there are strict timelines provided under the PMLA. The orders of provisional attachment and/or seizure and/or freezing cannot extend beyond the period of 180 days. The Director of the Enforcement Directorate (or the officer authorized by him) is required to file a complaint by seeking extension of the period of retention from the adjudicating authority within a period of thirty days from passing such order. However, this safeguard would also be rendered meaningless if the Enforcement Directorate's contention is to be accepted; the Directorate could - as has been done in this case - freeze the assets without recording reasons and without making any application or complaint to the Adjudicating Authority. This Court is unable to accept that even in cases where the Director of the Enforcement Directorate has reasons to believe that the property is proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Khanzode and Ors. v. Reserve Bank of India and Anr.: (1982) 2 SCC The said decision has no application in the facts of the present case. In that case, the petitioners had challenged the circular issued by the Reserve Bank of India whereby it had decided to combine the seniority of all officers. The petitioners had contended that such conditions of service could not be framed by administrative circulars but necessitated framing Regulations under Section 58 of the Reserve Bank of India Act, 1934. The Supreme Court repelled the said contention and held that under Section 7(2) of the Act, the Central Board had the power to provide for service conditions of the bank staff by issuing administrative circulars as long as they did not impinge upon the Regulations made under Section 58 of the said Act. The power of an employer to fix service conditions cannot be equated to police powers. 74. In view of the above, the contention that officers of the Enforcement Directorate could issue orders of freezing under Section of Cr.P.C. is rejected and the communications issued by the Enforcement Directorate to BSE are, plainly, without authority of law." 28. Scheme of Section 8(3) of PMLA a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are mandatory. They have to be applied as it. Being an independent Act, no different meaning can be given. They have to be interpreted as it is. 30. It is correct that the power to attach or seize or freeze a property can be exercised only if the officer concerned has material in his possession who has a reason to believe that property sought to be attached or seized is proceed of crime or related to the crime irrespective as to whether complaint under the schedule offence and prosecution complaint under PMLA is filed or not against the party who has in his possession of proceeds of crime. But, the situation where the investigation was being done on the basis of a mere suspicion against the party where the statute provides prescribed period of time and mandates the condition that it would continue during investigation for a period not exceeding ninety days. Having in possession of proceed of crime and period of investigation on the basis of suspicion are two different situations. 31. The law laid down earlier where the time limit was not provided may not be applicable because of change of situation by virtue of amendment which was carried on 19.4.2018, the specific period is pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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