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TMI Blog2022 (4) TMI 1586X X X X Extracts X X X X X X X X Extracts X X X X ..... : MIS. ANJALI AGARWAL Counsel for the Respondent: SRI RAJESH MADDY ORDER: (per Hon'ble Sri Justice A.Rajasheker Reddq) I.A.No.1 of 2021 is filed seeking direction to the respondent to release the Fixed Deposits aggregating to an amount of INR 152,84,61,315/- encashed by and lying in the possession of the respondent, to the petitioner, in compliance with the judgment dated 26.07.2019 (as modified by Order dated 06.08.2019) passed by the Appellate Tribunal, PMLA, New Delhi in FPA-PMLA-1579/HYD/2016 in the matter of M/s. Bharathi Cement Corporation Private Limited v. Joint Director, Directorate of Enforcement. 2. I.A. No. 2 of 2019 is filed by the Directorate of Enforcement-respondent in I.A.No.1 of 2021, seeking stay of the operation of the orders dated 26.07.2019 in FPA-PMLA-1579/HYD/2016 passed by the Appellate Tribunal under the provisions of Prevention of Money Laundering Act, 2002 (for short the Act of 2002'). 3. I.A. No. 1 of 2021: It is the case of the petitioner that appeal i.e., CMSA No. 26 of 2019 is filed by the respondent-Directorate of Enforcement challenging the judgment dated 26.07.2019 (as modified by the order-dated 06.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution of confirmed attached property with the Bank Guarantee. The impugned order in the Appeal dated 26.07.2019 is contrary to the provisions of the Act of 2002. The petitioner is free to approach the respondent to take back the Bank Guarantee until the matter is decided by this Court. Against the impugned common order dated 26.07.2019, the respondent preferred 14 appeals before this Court. Interim direction for 'status quo' had already been granted by this Court immediately after filing of 12 appeals in connected matters, filed by the respondent including CMSA No.14 of 2019 in the matter of Sri Y.S. Jagan Mohan Reddy and others. The release of confirmed attached properties at this juncture during pendency of appeal would make the appeal infructuous, which would amount to denial of justice and would cause grave and irreparable loss to the respondent. 5. Heard Sri C.V. Mohan Reddy, learned Senior Counsel for the petitioner for Sri Maddy Rajesh, learned counsel for the petitioner and Sri T. Surya Karan Reddy, learned Additional Solicitor General of India for Smt. Anjali Agarwal, learned Standing Counsel for the respondent and perused the material on record. 6. Sri C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent by accepting the Bank Guarantee in lieu of Fixed Deposits. 7. On the other hand, Sri T. Surya Karan Reddy, learned Additional Solicitor General of India appearing for the respondent while reiterating the averments in the counter affidavit submits that as per the provisions of the Act of 2002, the proceeds of crime cannot be converted into Bank Guarantee and that the petitioner can approach the respondent and take back the Bank Guarantee. He also submits that proceeds of crime should be continued in the same form as per the Act of 2002, as such, accepting Bank Guarantee and releasing FDRs does not arise. He also submits that it is not the question of taking Bank Guarantee in lieu of FDRs, but it is the question of law involved in this petition, as there is no provision in the Act of 2002 for accepting Bank Guarantee in lieu of FDRs, which are proceeds of Crime. 8. It is to be seen that along with the appeal, the respondent filed I.A.No. 2 of 2019 seeking stay of judgment dated 26.07.2019 passed by the Appellate Tribunal, New Delhi and no interim stay was granted by this Court till date. 9. According to learned Additional Solicitor General of India for the respondent, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of the petitioner is concerned, it goes to show that Gujarat Ambuja was granted a Prospecting Lincense for a period of 2 years from 13.09.2000 till 12.09.2002. Since it was unable to complete the prospecting work, it applied for renewal of the same for further period of two years till 12.09.2004. Since there is no reply from the concerned authorities with regard to renewal, under deemed provision, it continued till 12.09.2004. However, Gujarat Ambuja continued to carryout prospecting operations for one more year till 31.10.2005, when the State Government cancelled the Prospecting Lincense after issuance of prior notice vide Memo no.16794 on 21.09.2005. As per Section 7 (2) of the Mines and Minerals (Development and Regulation) Act, 1957, the total period for which a Prospecting Licence may be granted to any party including extensions cannot exceed maximum period of five years. However, in the case of Gujarat Ambuja, it crossed more than five years. As per the provisions of MMDR Act, no further extension of the period beyond five years of prospecting license is permitted. Admittedly, no application for renewal of prospecting licence was made by Gujarat Ambuja after 12.09.2005, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our of the petitioner was in accordance with the due procedure, the amount in FDRs cannot be termed as proceeds of crime, as such, the question of changing its character does not arise. Moreover, the petitioner has already furnished Bank Guarantee on 22.08.2019 equivalent to the amount in FDRs, in order to protect the interest of the respondent, till disposal of the appeal. Since we are disposing of the interlocutory applications only, it cannot be concluded that the judgment of the Tribunal, is erroneous on these grounds. The Tribunal, after considering the all the relevant facts, prima facie held that the there is no illegality in granting Mining Lease in favour of the petitioner. The grounds raised in appeal can be elaborately considered in appeal. 13. It is vehemently argued by the learned Additional Solicitor General of India for the respondent that the proceeds of crime cannot be converted into Bank Guarantee in lieu of FDRs. In this context, it is relevant to examine the definition of the expression Proceeds of Crime' under Section 2(1)(u) of the Act, which shows that the property derived or obtained directly or indirectly by any person as a result of a criminal acti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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