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TMI Blog2021 (1) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... lant and extending the same. The maintainability point is that the appellant, Deputy Director, ED, Kolkata, had no power to file the appeal before the appellate tribunal in question. He submits that his point had been raised but not dealt with in the said interim orders. We have heard Mr. Banerjee for the Ed, who apprised us of the gravity of the issues involved in this appeal. We have also learnt that because of the situation created by the COVID-19 virus, the appeal, although ready for hearing, could not be taken up. However, we have been shown an order of the tribunal dated 1st July 2020 made during this period, which satisfies us that the tribunal is functional. The interim order made on 21st February 2020 records that the appeal would be taken up on 13th July 2020. We think the interest of justice would be sub-served if we direct the Tribunal to hear out the appeal as expeditiously as possible, preferably with three months from the date by video link or any other mode. We order accordingly. The maintainability point shall be formally raised by the appellant by filing a supplementary affidavit before the tribunal by 7th September 2020, serving copies thereof on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, 2020 to December, 2020, Sh. S.A. Saud, ld. counsel for respondent no. 2 assured this Tribunal that they have moved the Hon'ble High Court of Calcutta for extension of stipulated time. This Tribunal is functioning with only one member and during the Covid-19 period this tribunal has been hearing only the urgent matters such as hearing on eviction notices etc., issued by ED under PMLA, 2002, demand notices issued, by ED under FEMA,1999 and by Income Tax Authority under PBPT Act, 1988 and by Competent Authority under SAFEMA, 1976 and NDPS Act,1985 through virtual hearing. This Tribunal, at present not hearing any appeal on merits due to the Covid- 19 situation except the matters under the directions of the High Courts. In the supplementary affidavit, the respondent no. 2 Sh. Nilesh Parekh has raised several points but chosen the arguments restricted to the issue of maintainability on the ground that the Assistant Director is not competent to file appeal before this Tribunal. Similarly, the respondent no. 14 has also raised the issue of maintainability of the appeal in his reply, much after passing of the order by the Hon'ble Court, on the same ground even though no formal separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have been authorized to sign either provisional attachment order or to file an appeal before this Tribunal because the word used in the section 26(1) is 'the Director' and that whether under the said Act a Special Director or an Additional Director, or a Joint Director can authorize an Assistant Director to pass a provisional attachment order? and that this goes to the root of the case and that under law, Assistant Director could not have been authorized. He has referred to reply, to the supplementary affidavit, on behalf of Enforcement Directorate, Kolkata wherein the appellant has stated that the "Assistant Director was duly authorized on 22.11.2019". By referring to the above the ld. counsel for the respondent no. 2 submitted that this 'duly authorized' could not have been done under law that has been under challenged and the submission made by the appellant in the said reply to the supplementary affidavit that under section 48 of the PMLA, Assistant Director is also one of the authority, is incorrect particularly when there is a specific bar under the law with respect to the rank of an officer. The ld. counsel for the respondent no. 2 has relied on the judgment of M.P. Wakf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the issue of maintainability was taken. Mr. Arun Kumar Agarwal, ld. counsel for the respondent no. 14, during the course of his arguments, in addition to aforesaid sections referred to sections 17(1), 48, 49, 51 of the said Act and submitted that the appeal is not maintainable. The ld. counsel for the respondent no. 14 through his written submission filed on 14. 12.2020 referred to sections 5(1), 16(1), 17(1), 18(1), 19(1), 20(1), 21(1), 26(1), 39(2), 48, 49(1), 49(3), 50(2), 51(1), 66(1) of the PMLA, 2002. The ld. counsel for the respondent no. 14 submits that the appeal u/s 26(1) of PMLA challenging the order of the Adjudicating Authority has been filed by the Assistant Director titled as "Enforcement Directorate, Kolkata through Assistant Director". The appeal, applications, affidavits in support of appeal/applications, Vakalatnama are signed by the Assistant Director. As per section 26(1) of PMLA which provides as follows: "26 Appeals to Appellate Tribunal-(1) Save as otherwise provided in sub-section (3), the Director or any person aggrieved by an order made by the Adjudicating Authority under this Act, may prefer an appeal to the Appellate Tribunal" He further rely on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judicial Review of Administrative Action "De Smith, Woolf and Jowell (Fifth Edition) as follow:- "The rule against delegation A discretionary power must, in general, be exercised only by the authority to which it has been committed. It is a well known principle of law that when a power has been confided to a person in circumstances indicating that trust is being placed in his individual judgment and discretion, he must exercise that power personally unless he has been expressly empowered to delegate it to another." The same principle has been described in "Administrative Law" H.W.R. Wade & C.F. Forsyth (Ninth Edition), Chapter 10, as follows:- "Inalienable discretionary power An element which is essential to the lawful exercise of power is that it should be exercised by the authority upon whom it is conferred, and by no one else. The principle is strictly applied, when where it causes administrative inconvenience, except in cases where it may reasonably be inferred that the power was intended to be delegable. Normally the courts are rigorous in requiring the power to be exercised by the precise person or body stated in the statute, and in condemning as ultra virus action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorised to issue ejectment notices. The Chairman vide an office order delegated issue of ejectment notices in subordinate officers in respect of leases determined by him. Hon'ble Supreme Court rejected the appeal after noting that "4. Regarding delegation of nonlegislative/ administrative powers on a person or a body to do certain things, whether the delegate himself is to perform or a body to do certain things, whether the delegate himself is to perform such functions or whether after taking decision as per the terms of delegation, the said agency can authorize the implementation of the same on somebody else, is the question to be considered. Once the power is conferred, after exercising the said power, how to implement the decision taken in the process, is a matter of procedure. The Legislature may, after laying down the legislative policy, confer discretion on an administrative agency as to the execution of the policy and leave it to the agency to work out the details within the framework of that policy. So long as the essential functions of decision making is performed by the delegate, the burden of performing the ancillary and clerical task need not be shouldered by the prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted with jurisdiction, he has to exercise it according to its own discretion. If the discretion is exercised under the direction or in compliance with some higher authority's instruction, then it will be a case of failure to exercise discretion altogether. In other words, the discretion vested in the DSP in this case by Section 20A (1) was not exercised by the DSP at all." v. Dhahdda Exports v Income Tax Officer Rajasthan High Court (2015) 58 taxmann. Com 176 and Yum Restaurants Asia Pte Ltd. vs. Deputy Director of Income-tax- Delhi High [2018] 99 taxmann.com 423 relied. On the aforesaid grounds and citing/replying aforesaid judgments, the ld. counsel for the respondent no. 14 sought dismissal of appeal on non-maintainability. The ld. counsel appearing for respondent no. 17 has adopted the submissions made on behalf of Respondent no. 2 and 14. On the other hand ld. counsel for the appellant has objected the prayer of the ld. counsels for the respondent nos. 2 & 14 and submitted that the supplementary affidavit filed by respondent no. 2 is a wrong statement. The appeal has been filed by the Directorate of Enforcement not by the Assistant Director. The appeal has been filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny person. This is an appeal against the impugned order and the appeal is a substantive right of the Department and that after due application of mind decision was taken by the Competent Authority and the appeal has been filed. During the course of hearing, a statement has been made by the ld. counsel for the appellant that Enforcement Directorate has taken a decision to file the present appeal by the Joint Director (the zonal head) with the approval of the Special Director (the Regional Head) and he referred to the copy of the internal note dated 22.11.2019 of the Department to show that the decision has been taken at the level of Special Director (ER) to depute the Assistant Director to file the appeal and stay application as per approved draft. The filing of appeal is only a procedural matter and the Assistant Director has been authorised to file the appeal and that there is no illegality in filing the appeal. He has referred sections 2(1)(k), 48, 49, 51(1) 35 read with section 26(1) of the PMLA,2002. The ld. counsel for the appellant has referred to the Authentication Rule of Government of India notified on 16.02.2002 which deals with authorities who may authenticate orders a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions or whether after taking decision as per the terms of the delegation, the said agency can authorize the implementation of the same on somebody else, is the question to be considered. Once the power is conferred, after exercising the said power, how to implement the decision taken in the process, is a matter of procedure. The Legislature may, after laying down the legislative policy, confer discretion on an administrative agency as to the execution of the policy and leave it to the agency to work out the details within the framework of that policy[3]. So long as the essential functions of decision making is performed by the delegate, the burden of performing the ancillary and clerical task need not be shouldered by the primary delegate. It is not necessary that the primary delegate himself should perform the ministerial acts as well. In furtherance of the implementation of the decision already taken by the primary delegate as per the delegation, ministerial or clerical tasks may be performed by authorized officers. The complexity of modern day administration and the expansion of functions of the State to the economic and social spheres have made it necessary that the Legislatu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trative or ministerial functions, which, on any principle of propriety, logic, or necessity are not required necessarily to be performed by the Judges. Receiving a cause or a document and making it presentable to a Judge for the purpose of hearing or trial and many a functions post- decision, which functions are administrative and ministerial in nature, can be and are generally entrusted or made over to be discharged by the staff of the High Court, often by making a provision in the Rules or under the orders of the Chief Justice or by issuing practice directions, and at times, in the absence of rules, by sheer practice. The practice gathers the strength of law and the older the practice the greater is the strength" "Para 16. Practical necessities or exigencies of administration require that the decision making authority who has been conferred with statutory power, be able to delegate tasks when the situation so requires. Thus, the maxim delegate us non potest delegate, gives way in the performance of administrative or ministerial tasks by subordinate authorities in furtherance of the exercise of the delegated power by an authority" Para17. The power that is delegated to the Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o sue in a suit for recovery of the amount advanced" Para9.................................................................................... .......................................................................................... ............. Para 10. In Uday Shankar Triyar v. Ram Kalewar Prasad Singh and Another5, this Court held that procedural defects and irregularities which are curable should not be allowed to defeat substantive rights or to cause injustice. Procedure should never be made a tool to deny justice or perpetuate injustice by any oppressive or punitive use. The Court held as under: - 17. Non-compliance with any procedural requirement relating to a pleading, memorandum of appeal or application or petition for relief should not entail automatic dismissal or rejection, unless the relevant statute or rule so mandates. Procedural defects and irregularities which are curable should not be allowed to defeat substantive rights or to cause injustice. Procedure, a handmaiden to justice, should never be made a tool to deny justice or perpetuate injustice, by any oppressive or punitive use. The well-recognized exceptions to this principle are: (i) where the statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dural violation does not seriously cause prejudice to the adversary party, courts must lean towards doing substantial justice rather than relying upon procedural and technical violation. We should not forget the fact that litigation is nothing but a journey towards truth which is the foundation of justice and the court is required to take appropriate steps to thrash out the underlying truth in every dispute. Therefore, the court should take a lenient view when an application is made for production of the documents under sub−rule (3)" During the course of hearing, the ld. counsel for the appellant submitted that the respondents have raised the maintainability issue at a belated stage so that cannot be considered as the Tribunal has already taken judicial notice of the appeal. In this regard he has relied on the following judgment dated 27.10.2020 passed by Hon'ble Supreme Court in the following matter:- "In M/S L &T Housing Finance Limited vs M/S Trishul Developers, the Hon'ble Supreme Court of India held that: "Para 19. In the facts and circumstances, when the action has been taken by the competent authority as per the procedure prescribed by law and the person affected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant Public Prosecutor invoking the powers of the Court under Section 391 of the CrPC. We are of the opinion that the application should have been granted in the facts and circumstances of the case with the end in view to do full and true justice. The application made by the learned Assistant Public Prosecutor is therefore granted. The High Court will issue appropriate directions for the recording of the evidence to prove the report of the Mint Master under Section 391 Cr.P.C. when the matter goes back to High Court and is listed for directions. The appeal is therefore allowed. The order of acquittal is set aside. The matter is remitted to the High Court for proceeding further in accordance with law in the light of the above said directions." On the basis of above, the ld. counsel for the appellant submits that that ED also need justice and this Tribunal has ample power u/s 35(1) of the PMLA-2002 and that if alternatively it is found that there is some mistake in filing the appeal and this mistake can be rectified and the ED be given opportunity to place its case on merit. He has cited another document which is a communication received from ED, Kolkata Zone nominating him to defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 17(1) pre amended and post amended provisions the ld. counsel for the respondent no. 14 has submitted the following: " From plain reading of original provision of section 17(1), it is clear that the Director alone was conferred power to form the belief and authorize any officer subordinate to him to conduct search. As neither legislature conferred power of formation of belief u/s 17(1) on Additional/Joint/ Deputy Director nor the Director was empowered to sub-delegate the power of formation of belief u/s 17(1), this led to administrative difficulty of exercise of power of search u/s 17 of PMLA. Appreciating the above position of law u/s 17 of PMLA, to overcome the difficulty, section 17(1) of PMLA was amended w.e.f. 1.6.2009 by empowering the Director to authorize any officer not below the rank of Deputy Director to exercise power of formation of belief and authorization of subordinate officer to conduct search u/s 17 of PMLA. 13. The phraseology employed by the legislature in pre-amended (before 1.06.2009) section 17(1) was same as that of section 26(1) for conferring power by using the phrase "The Director". Whereas section 17(1) was amended to come over the administrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the Assistant Director who has filed the appeal ought not to have stated that he is competent to file the affidavit. He has further submitted that in view of the specific bar u/s 26 (1) he is not competent to file the affidavit appended to memo of appeal. In furtherance to the aforesaid submission, the ld. counsel for the respondent nos. 2 relied on the judgment passed by Hon'ble Supreme Court in the matter of M.P. Wakf Board vs Subhan Shah (D) By Lrs. & Ors passed by the Hon'ble Supreme Court of India on 31.10.2006 by relying on this judgment it is submitted that the authority which is empowered to exercise to certain functions that authority must exercise the functions within four corners of the statute. By citing the aforesaid judgment, it is submitted that there is a specific bar u/s 26(1) of the said Act according to which the Assistant Director is not empowered to file the appeal. "where a statute creates different authorities to exercise their respective functions there under, each of such authority must exercise the function within the four corners of the statute" The aforesaid judgment of M.P. Wakf Board vs. Shubam Shah (D) by Lrs. is not applicable in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant to rectify the mistake, if it is held that the filing of appeal by the Assistant Director is not maintainable. While making the aforesaid submissions, he relied on the judgment mentioned above. The references have been made by the parties to the following sections of the said Act which are reproduced below:- 2(1)(c) "Assistant Director" means an Assistant Director appointed under subsection (1) of Section 49; 2(1)(j) "Deputy Director" means a Deputy Director appointed under sub-section (1) of Section 49; 2(1)(k) "Director" or Additional Director" or "Joint Director" means a Director or Additional Director or Joint Director, as the case may be, appointed under subsection (1) of section 49; 5(1) Attachment of Property involved in money-laundering.- where the Director or nay other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chment, file a complaint stating the facts of such attachment before the Adjudicating Authority. 8(2)(b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf, and. 26(1) Save as otherwise provided in sub-section (3), the Director or any person aggrieved by an order made by the Adjudicating Authority under this Act, may prefer an appeal to the Appellate Tribunal. "48. Authorities under the Act.-There shall be the following classes of authorities for the purposes of this Act, namely:- (a) Director or Additional Director or Joint Director, (b) Deputy Director, (c) Assistant Director, and (d) such other class of officers as may be appointed for the purposes of this Act. 49.Appointment and powers of authorities and other officers.- (1) The Central Government may appoint such persons as it thinks fit to be authorities for the purposes of this Act. (2) Without prejudice to the provisions of sub-section (1), the Central Government may authorise the Director or an Additional Director or a Joint Director or a Deputy Director or an Assistant Director appointed under that sub-section to appoint other authorities below the rank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case to file appeal before this Appellate Tribunal the Director who is the head of Enforcement Directorate is to take a decision to file appeal. If any of the officers in the same class of officer (section 48(a) of the said Act) has taken a decision to file an appeal then in my considered view there is no illegality. In this particular appeal, it is the department who is aggrieved and who has filed the appeal. Since, the decision has been taken at the level of Special Director, Kolkata, that the Assistant Director/I.O. to file the appeal, it is nothing but a ministerial work to be performed by the Assistant Director. The ld. counsel for the respondent no. 2 has raised strong objection to the statement mentioned in para 2 of In the Affidavit to the memo of appeal and submitted that Assistant Director is not competent. I do not agree with the aforesaid submission of the ld. counsel for the respondent no. 2 on the ground that the Assistant Director, Mr. Sudarshan Ghosh, who is the investigating officer of this case has been duly authorized with the approval of the authority of the level of Special Director to file the appeal vide internal note dated 22.11.2019. The ld. counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that that on the facts of the present case, the appeal is not maintainable at the behest of the Central Government. Para 9. The preliminary objection as to the maintainability of the appeal is accordingly overruled." In the aforesaid case, his lordship of Hon'ble High Court of Delhi has dealt with an issue akin to the present issue of maintainability. In the aforesaid case, the Enforcement Directorate had filed the appeal on behalf of the Central Government before the Hon'ble High Court and the memorandum of appeal in the appeal before the Hon'ble High Court was supported by the affidavit of Shri S.K. Poddar, who was an Assistant Director, Enforcement Directorate. In the aforesaid matter the issue of maintainability was raised as the preliminary issue because the Union of India filed the appeal through Enforcement Directorate and the memo of appeal was signed by an officer in the rank of Assistant Director, as in the present case. The appeal cannot be dismissed being not maintainable on the ground that an officer of the rank Assistant Director has presented the appeal under his signature with an affidavit sworn by him. The authentication rule cited by the appellant is not app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olation does not seriously cause prejudice to the adversary party, courts must lean towards doing substantial justice rather than relying upon procedural and technical violation. We should not forget the fact that litigation is nothing but a journey towards truth which is the foundation of justice and the court is required to take appropriate steps to thrash out the underlying truth in every dispute. Therefore, the court should take a lenient view when an application is made for production of the documents under sub−rule (3)". The aforesaid observation of the Hon'ble Supreme Court is applicable to the present case and to advance substantial justice, procedural and technical hurdle should not be allowed in the way. In the present appeal I have already held that the since the appeal has been filed by the Enforcement Directorate itself through the Assistant Director, it cannot be said that the appeal is not maintainable. The truth in the allegation against the respondents should be judicially decided and to achieve that the appeal is to be heard on merits. During the course of hearing, it has been argued by the ld. counsels for the respondent nos. 2 & 14 that the respondent no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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