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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 ..... id Act. If the section 2(1)(k) is read with section 48(a) of the said Act, it is clear that the Director, Additional Director and Joint Director are put in the same classes of authority for the purpose of this Act, so the decision taken by the Joint Director with the approval of the Special Director (Special Director is higher in rank than Additional Director in the hierarchy of the Enforcement Directorate) to file appeal is not contrary to the provisions of PMLA, 2002. It is not that for each and every 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 obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal on 18th January, 2021. - MP-PMLA-6636/KOL/2019 (Stay) FPA-PMLA-3332/KOL/2019 - - - Dated:- 1-1-2021 - Shri G. C. Mishra Acting Chairman For the Appellant (ED) : Mr. N.K. Matta, Advocate, Mr. Akshay Sinha, I.O. For the Respondent No(s). : Ms. Pratiksha Sharma, Adv, Mr. Ankit Acharya, Adv., Mr. S.A. Saud, Adv., Mr. Arun Kumar Agarwal, Adv, Mr. Alok Kumar, Adv., Mr. Neeraj Grover, Adv., Ms. Poonam Lau, Adv. JUDGMENT FPA-PMLA-3332/KOL/2019 That the Hon ble High Court of Calcutta in the matter of FMAT 343 of 2020 filed by Nilesh Parrekh (Respondent no. 2 herein) passed the following order on 18.08.2020:- The point involved in this appeal is very short. Hence we have taken up the appeal for hearing dispensing with all formalities. Mr. Sarkar, learned senior advocate appearing for the appellant, contends that the point of maintainability which goes to the root of the appeal, had not been considered by the tribunal while passing orders from time to time directing status quo of the properties of the appellant and extending the same. The maintainability point is that the appellant, Deputy Director, ED, Kolkata, had no power to file the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so the signature of Shri Nilesh Parekh was not identified. The same defect was pointed out to the ld. counsel for the respondent no. 2 by the Tribunal and the same was cured by filing sworn affidavit dated 03.09.2020 in the Tribunal on 08.12.2020. During this period, Sh. S.A. Saud, ld. counsel who is also appearing for respondent no. 5 filed miscellaneous application on 12.10.2020 with a prayer to allow the respondent no. 5 to repair the attached flats which are damaged during Amphan cyclone. Reply to the said application was filed on 26.11.2020 and the application was heard and decided on 08.12.2020. There are 21 respondents in the present appeal. Beside Mr. Nilesh Parekh (Respondent no. 2), the respondent no. 14 has also raised the issue of maintainability of the appeal. The respondent no. 2 14 made their submissions on the issue of maintainability of the appeal on 08.12.2020. The arguments on maintainability application continued on dated 10.12.2020, 14.12.2020 and concluded on 16.12.2020 from both sides. During the course of hearing, during the period September, 2020 to December, 2020, Sh. S.A. Saud, ld. counsel for respondent no. 2 assured this Tribunal that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under section 5(1) and that similar is the case under section 5(2) of the said Act. The ld. counsel has also referred to section 8(2(b) of said Act which provides that the Adjudicating Authority shall, after hearing the aggrieved person and the Director or any other officer authorized in this behalf but under section 26(1) the word the Director is mentioned and that there is no mention of any other officer who may prefer an appeal before Appellate Tribunal against an order made by the Adjudicating Authority. It is further submitted by ld. counsel for respondent no. 2 that no other person or authorities other than authorized authority under the Act can prefer an appeal and that reference has made to the title of the appeal and the affidavit thereto. By referring the same, it is argued that the dispute is whether an Assistant Director could have been authorized to file an appeal under section 26 (1) the said Act looking at the specific bar to pass an attachment order under section 5(1) of the said Act and that under the said Act an officer not below the rank of Deputy Director could have been authorized to sign either provisional attachment order or to file an appeal before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said Act. The definition in 2(1)(k), the Director does not include Deputy Director or Assistant Director, so the appeal which is filed by Assistant Director is not maintainable as the Assistant Director is not empowered to file the appeal under the said Act. During the course of hearing he has referred the section 5(1) of the said Act and submitted that the Director has been empowered to authorize any other officer not below the rank of Deputy Director for the purpose of that section, whereas that is not so in the case of filing of appeal under section 26 (1) of the said Act. It was submitted that the Assistant Director is not authorized to file the appeal as in the case of Section 5(1) of the said Act. While referring the section 5(2) he submitted that in this section also Deputy Director has been the last ranked officer to whom authority has been given to forward a copy of order to the Adjudicating Authority in a sealed envelope. No such embargo has been prescribed in sections 5(5) 8(2)(b) of the said Act. The respondent no. 14 has filed reply to the appeal on dtd. 10.11.2020 where in the issue of maintainability was taken. Mr. Arun Kumar Agarwal, ld. counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Assistant Director has not produced any document which shows that he is empowered u/s 26(1) of PMLA to prepare, sign file the present appeal. The ld. counsel for the respondent no. 14 has relied on the following judgments of Hon ble Supreme Court:- 1. Union of India vs. B.V. Gopinath (2014) 1 SSC 351 - Charge memo issued to Respondent on the allegation that he failed to maintain integrity and exhibited a conduct which was unbecoming of a Govt. Servant was sought to be declared non est in the eye of the law on the plea that the charge memo was not approved by the disciplinary authority i.e. Finance Minister who had granted approval only for initiation of departmental proceedings against him. Dismissing appeal by Union of India, it was held that - Charge memo having not been approved by disciplinary authority i.e. Finance Minister, was non est in eye of law. In holding so, Hon ble Court observed with approved following in para 43-44: 43 Accepting the submission of Ms. Indira Jaising would run counter to the well known maxim delegates non protest delegare (or delegari). The principle is summed up in Judicial Review of Administrative Action De Smith, Woolf and Jo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it will not be in the interest of good administration to drop the inquiries which are already going on if the charge-sheets issued in such inquiries are required to be approved by the Finance Minister. In this context, it was submitted that such a contention has already been rejected by this court in Coal India Ltd. v. Saroj Kumar Mishra [2007] 9 SCC 625. Our attention was also drawn to the following excerpt from the said case. The floodgate argument also does not appeal to us. The same appears to be an argument of desperation. Only because, there is a possibility of floodgate litigation, a valuable right of a citizen cannot be permitted to be taken away. This court is bound to determine the respective rights of the parties. ii. Sidharth Sarwagi v Board of Trustees for Port of Kolkata and Ors (2014) 16 SCC 248- In this case, after termination of lease by the Chairman of Board of Kolkata ports, ejectment notices issued by Land Manager was challenged on the plea that he is not competent to do so, and the same being without jurisdiction. Power of termination of lease was delegated by Board of the Kolkata Port in the Chairman and he was also authorised to issue ejectme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fences under the Act. Holding the said notification ultra virus, the Supreme Court observed: The terms of section 20 (i) of the Act do not postulate further delegation by the person so authorised and therefore, the complaint filed by Food Inspector was not maintainable. iv. Anirudhsinghji vs The State of Gujarat (1995) 5 SCC 302 - The power to grant sanction/approval u/s 20A(1) of TADA for recording of any information about commission of an offence under the Act is conferred on District Superintended of Police (DSP). A specific point was taken by the accused that that prior approval, as required by section 20A(1)of TADA, was not taken from DSP. This section was introduced to safeguard the citizen from vexatious prosecution under TADA. Hon ble Supreme Court noted that The DSP did not give any prior approval on his own to record any information about the commission of any offence under TADA. On the contrary, he made a report to the Additional Chief Secretary and asked for permission to proceed under TADA. Allowing the appeal, it held that This is a case of power conferred upon one authority being really exercised by another. If a statutory authority has been vested with juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides that the Director or any person aggrieved by an order made by the adjudicating authority under this Act may prefer an appeal before this Tribunal. He further objected to the reply to the appeal filed by the respondent no. 14 that the respondent no. 14 is an absconded person and respondent no. 14 had undertaken before the Hon ble High Court that he will be appearing in January, 2020 but he has not appeared. Non bailable warrant has been issued against him and the reply to the appeal is filed through his counsel without any verification, without any supporting affidavit. However, in his reply also respondent no. 14 has made a misstatement. He has referred to para no. 2 of the reply to the appeal that the Assistant Director has filed the present appeal which is wrong because the appeal has been filed by the Enforcement Directorate, Kolkata through Assistant Director and submitted that this is a misstatement by the respondent no. 14. The averment made in para 2 of the reply is qua appeal. The ld. counsel for the appellant has submitted that the filing of appeal is a procedural aspect only. The Assistant Director has not taken any order on rights and liabilities or anything o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esham Mohd. Ismail does not suggest 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. The ld. counsel for the respondent relied on internal note dt. 22.11.2019 and submits that the officer Sh. Sudersan Ghosh, AD I.O. of the case authorized to file the appeal and stay application as per approved draft and he may be allowed to visit New Delhi for the purpose. The note was approved up to Special Director and that the decision was taken by the Enforcement Directorate and subsequently, an authorized officer i.e. Assistant Director is deputed to file the appeal before this Tribunal. Accordingly, he has relied upon the Judgment passed by the Hon ble Supreme Court in the matter of Sidhartha Sarawgi Vs Board of Trustee for the Port Trust of Kolkata Ors., wherein the Hon ble Supreme Court of India has held, regarding delegation of non legislative administrative power, that: Para5:- Regarding delegation of non-legislative/administrative powers on a person or a body to do certain things, whether the delegat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorization to subordinates unless there be some rule of law restraining such delegation or authorisation. Every High Court consists of some administrative and ministerial staff which is as much a part of the High Court as an institution and is meant to be entrusted with the responsibility of discharging administrative and ministerial functions. There can be delegation as also there can be authorization in favour of the Registry and the officials therein by empowering or entrusting them with authority or by permitting a few things to be done by them for and on behalf of the Court so as to aid the Judges in discharge of their judicial functioning. Authorization may take the form of formal conferral or sanction or maybe by way of approval or countenance. Such delegation or authorization is not a matter of mere convenience but a necessity at times. The Judges are already overburdened with the task of performing judicial functions and the constraints on their time and energy are so demanding that it is in public interest to allow them to devote time and energy as much as possible in discharging their judicial functions, relieving them of the need for diverting their limited resources ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Tribunal has power to exercise its power under section 35(1), it is very clear that in most of the cases other cited those provisions so unlike other civil court this tribunal shall not bound by any procedure by the C.P.C. The Appellate Tribunal shall not bound by any procedure laid by the C.P.C. 1908 but shall be guided by the principle of natural justice and subject to other provisions of this Act. The appellate Tribunal shall have power to regulate to its own procedure. So the Tribunal has its own power and if any point of time this court feel that there is some irregularities/mistake, the tribunal has power to rectify the mistake and hear the appeal. In this regard the ld. counsel has relied upon the judgment passed by Hon ble Supreme Court Varun Phawa vs. Renu Chaudhary. of India, wherein the Hon ble Court has held that:- Para 8. The plaint is not properly drafted in as much as in the memo of parties, the Plaintiff is described as Varun Pahwa through Director of Siddharth Garments Pvt. Ltd. though it should have been Siddharth Garments Pvt. Ltd. through its Director Varun Pahwa. Thus, it is a case of mistake of the counsel, may be on account of lack of under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or according to the intent and purpose of this Act. In view of the above section, he further submits that, as per this section it is very clear if there is mistake on the part of the concerned officer to mention the name in the cause title, then that can be no ground to invalidate the proceedings under section 26 of PMLA. He Further read the section as mentioned below submits that As per section 2(1)(c) read with section 48 of the said Act, the Assistant Director is an authorized officer and if sections 48 and 49 of the said Act are read collectively, it comes that the Assistant Director is a responsible and authorised person to act on behalf of Enforcement Directorate. In this regard he has referred judgment dated 13.10.2020 passed by Hon ble Division Bench of Hon ble Supreme Court in the following matter: In Sugandhi (Dead) by Lrs. vs P. Rajkumar Rep. By Power Agent, the Hon ble Supreme Court of India held that: Para9. It is often said that procedure is the handmaid of justice. Procedural and technical hurdles shall not be allowed to come in the way of the court while doing substantial justice. If the procedural violation does not seriously cause prejudice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminal case is acquitted. The Community acting through the State and the Public Prosecutor is also entitled to justice. The cause of the Community deserves equal treatment at the hands of the court in the discharge of its judicial functions. The Community or the State is not a person-non-grata whose cause may be treated with disdain. The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest. The High Court was therefore altogether unjustified in rejecting the application made by the learned Assistant Public Prosecutor invoking the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no. 14 that the Joint Director and Special Director are not the Competent Authority in accordance with law and section 26(1) clearly provides that the word The Director who is the competent authority is to take a decision after application of mind as to whether he is aggrieved and whether any appeal is to be filed or not, so admittedly, the decision of filing the appeal has not been taken by the Competent Authority i.e. the Director . He has reiterated his arguments by drawing attention to the provisions of section 51 of PMLA and notification dated 01.07.2005 vide G.S.R 441(E). He has drawn to this notification by giving thrust to the fact that the exclusive power to the Director of Enforcement Directorate given under the PMLA are to be exercised by him only not by any other authority. In the event any other authority has exercised his power than that would be contrary to law. By referring to para 6 of his written submission, he submitted that the director can neither subFPA- delegate this essential function of decision making involving application of mind nor he can abdicate the statutory duty u/s 26(1), entrusted by the legislature. By referring to section 17(1) pre amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arguments made by ld. counsel for the respondent nos. 2 14 on the issue of maintainability of the appeal. Peruse the relevant materials placed on record from both the sides and also gone through the judgments cited and relied on by them. It is seen from the order of Hon ble High Court, Calcutta, dated 18.08.2020, that the respondent no. 2 had raised the maintainability point that the appellant, Deputy Director ED, Kolkata had no power to file the appeal before the Appellate Tribunal in question. The ld. counsel for the respondent no. 2 has chosen to restrict his submissions that the Assistant Director, ED is not competent to file the appeal under 26(1) of the said Act as such the appeal is not maintainable. During the course of argument, the ld. counsel for the respondent no. 2 has referred to sections 2(1)(c), 2(1)(j), 2(1)(K), 5(1), second proviso to section 5(1), 5(2), 8(2)(b) 26(1) of the said Act and submitted that an appeal u/s 26(1) can not be filed by an officer not below the rank of the Deputy Director. During the course of argument Sh. S.A. Saud, ld. counsel for the respondent no. 2 by referring to para 2 of the affidavit to the memo of appeal submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers conferred by sections 26(1), (4), (5), 39, 40, 41, 42, 48, 49, 66 and 69 of the said Act and submitted that the Director is not only to take a decision to file the appeal but also to file the appeal himself and no other authorities are to empowered either to take a decision to file the appeal or to file same. To substantiate his points, he relied on the judgment mentioned above. On the other hand, the main argument of the respondent is that the appeal has been filed by the Enforcement Directorate through Assistant Director as the Enforcement Directorate itself is seriously aggrieved with the impugned order dated 09.10.2019. In this regard he has referred to the cause title and the first para of the appeal which read as follows:- 1. The appellant Department is seriously aggrieved by the erroneous order dated 09.10.2019 passed by the ld. Adjudicating Authority without application of judicial mind in O.C. no. 1146/2019 in P.A.O. dated 16.04.2019, whereby the properties of the respondents provisionally attached, where held to be not involved in money laundering and further not confirming the P.A.O. The ld. counsel for the appellant has made alternative submission to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the nonattachment of the property is likely to frustrate any proceeding under this Act. [Provided also that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this section is stayed by the High Court, shall be excluded and further period not exceeding thirty days from the date of order of vacation of such stay order shall be counted.] 5(2). The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the 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 order and material for such period as may be prescribed. 5(5). The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of this Act. Section 2 of the said Act deals with the definitions. Section 2(1)(c) has defined the word the Assistant Director whereas section 2(1)(j) defined the word Deputy Director and section 2(1)(k) has defined the words Director, Additional Director and Joint Director. They are being defined as the authorities appointed under sub-section 1 of 49 of the said Act. Section 48 of the said Act specified the classes of authorities for the purpose of the PMLA, 2002(the said Act.). The Director or Additional Director or Joint Director have been put under the same class in sub clause (a) whereas the Deputy Director, and Assistant Director have been placed under sub-clause (b) and (c) of the section 48 of the said Act. If the section 2(1)(k) is read with section 48(a) of the said Act, it is clear that the Director, Additional Director and Joint Director are put in the same classes of authority for the purpose of this Act, so the decision taken by the Joint Director with the approval of the Special Director (Special Director is higher in rank than Additional Director in the hierarchy of the Enforcement Directorate) to file appeal is not contrary to the provisions of PMLA, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 5(1), 5(2), 8(2)(b), 17(1) etc. to justify that the Assistant Director has not been validly authorized to file an appeal. In the given facts and circumstances where the appeal has been filed by the Enforcement Directorate, the aggrieved party, I do not find any justification in the submission made by the ld. counsel for the respondent nos. 2 14. In this regard the judgment in the matter of Union of India Vs Amarjeet Singh Bhalla, the Hon ble High Court of Delhi has held that: Para 8. As far as the present case is concerned, the cause title reads Union of India through Directorate of Enforcement as appellant. The memorandum of appeal is supported by the affidavit of Shri S.K. Poddar, Assistant Director, Enforcement Directorate. Nevertheless, unlike the appeal before the High Court in Mohtesham Mohd. Ismail which was not filed by the Enforcement Directorate on behalf of the Central Government, it is plain that the present appeal has been filed by the Central Government represented by the Directorate of Enforcement. Merely because it is filed through the Enforcement Directorate, it cannot be said that the Central Government has itself not filed the appeal. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Finance Minister. This is not the case in the present appeal because the competent authority i.e. the Special Director has stated to have approved the filing of the appeal and that on his approval the Assistant Director has filed the appeal on behalf of Enforcement Directorate. Further it is seen from the nomination letter nominating Sh. N.K. Matta, ld. counsel for the respondent to defend the case against M/s Ganesh Jewellery and Ors. have been approved by the Director. That means the Director was aware of proceedings of Adjudication in the present case. In view of the above this judgment is not applicable in the present facts and circumstance of the case. The other judgments, which are on the issue of delegation of power, relied on by the respondent no. 14 are not applicable to the present appeal on the issue of maintainability. The appellant has relied on the case of the judgment passed by Hon ble Supreme Court in the matter of Sugandhi (Dead) by Lrs. and Ors. Vs. P. Rajkumar decided on 13.10.2020 wherein their lordship have observed that It is often said that procedure is the handmaid of justice. Procedural and technical hurdles shall not be allowed to come in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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