9911796707
TMI Blog2022 (11) TMI 1488X X X X Extracts X X X X X X X X Extracts X X X X ..... ONEY LAUNDERING ACT AT NEW DELHI ] provisional attachment order was confirmed by the adjudicating authority, the correctness of which was an issue before the Appellate Tribunal in the pending appeal. Appellate Tribunal was yet to decide whether such attachment was right or wrong. It was during the pendency of such appeal before the Appellate Tribunal that the appellant moved for replacement of the attached immovable properties. On looking at the judgment and order of the Appellate Tribunal, it is evident that Appellate Tribunal had allowed the appeal of the applicant by interfering with the order of provisional attachment as well as the confirmation order. Even in the provisional attachment order, it was clearly mentioned that value of the attached property was equivalent to proceeds of crime. In other words, even as per the attaching authority property attached was not acquired by proceeds of crime. Since the proceeds of crime got intertwined with other transaction, property of equivalent value was attached. However, in so far the present case is concerned, even this position has now become academic in as much as Appellate Tribunal had interfered with the orders of attachment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so the appellant in C.M.S.A.No.15 of 2019 i.e., Deputy Director, Directorate of Enforcement, Government of India, Hyderabad, has filed three separate but identical counter affidavits to the three interlocutory applications objecting to and seeking dismissal of the same. 7. We may mention that C.M.S.A.No.15 of 2019 has been filed by the opposite party as the appellant assailing the legality and validity of the judgment and order dated 26.07.2019 passed by the Appellate Tribunal for SAFEMA, FEMA, PMLA, NDPS and PBPT Act (briefly, the Appellate Tribunal, hereinafter) at New Delhi in FPAPMLA-1574/HYD/2016 filed by Smt. Y.S.Bharathi Reddy. By the aforesaid judgment and order dated 26.07.2019, Appellate Tribunal disposed of altogether fourteen appeals. 8. Joint Director of Enforcement Directorate passed provisional attachment Order No.2 of 2016 on 29.06.2016 under Section 5(1) of the Prevention of Money Laundering Act, 2002 (briefly, PMLA hereinafter) holding that he had prima facie reasons to believe that the properties identified in para 16 of the aforesaid order constituted properties involved in the offence of money laundering within the meaning of property as defined under Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per requirement of Section 5(5) of PMLA, Joint Director, Directorate of Enforcement, Hyderabad filed original complaint before the adjudicating authority being O.C.No.618 of 2016 in which applicant Smt. Y.S.Bharathi Reddy was arrayed as defendant No.2. Her above properties, both immovable and movable, which were provisionally attached, were subject matter of proceedings before the adjudicating authority. By the order dated 23.11.2016, adjudicating authority confirmed the order of provisional attachment. 10. It is against the above order dated 23.11.2016, that appeal bearing No.FPA-PMLA-1574/HYD/2016 came to be filed by the applicant Smt. Y.S.Bharathi Reddy before the Appellate Tribunal under Section 26 of PMLA. As noticed above, the said appeal was heard along with other appeals, altogether there were fourteen appeals. Appellate Tribunal in its common judgment and order dated 26.07.2019 noted that total attachments affected in the entire O.C.No.618 of 2019 was to the tune of Rs.746.17 crores. It was noticed that insofar the applicant Smt. Y.S.Bharathi Reddy was concerned, attachment of immovable and movable properties was to the tune of Rs.22.31 crores. Appellate Tribunal noted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulti-national company. Sri Y.S.Jagan Mohan Reddy and his associates did not have a majority stake in BCCL. Therefore, the insinuation that salaries paid to the applicant were amounts from other sources was wholly untenable. That apart, flow of investments from M/s.Silicon Builders Private Limited into BCCL was in the regular course of business. Such transactions were completely legal and as per the test laid down in the Companies Act, 1956. Noting that PMLA did not empower the Enforcement Directorate to attach legitimate earnings of the applicant, it was held that salary amount used by the applicant was not proceeds of crime. Appellate Tribunal found that out of the remunerations received by the applicant, she had paid income tax to the tune of Rs.6.37 crores. This amount was also not excluded by the Enforcement Directorate while computing the net amount of proceeds of crime for the purpose of attachment. Accordingly, appeal filed by the applicant was allowed. 10.1. Appellate Tribunal prepared a chart and pointed out therefrom the wrongful approach adopted by the Enforcement Directorate. Regarding attachment of the subject land at Sl.No.7 of the chart, it was mentioned that the att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent, Appellate Tribunal allowed the appeal vide the judgment and order dated 26.07.2019. Against the same, opposite party/appellant has preferred the related appeal under Section 42 of PMLA. Along with the same, I.A.No.2 of 2019 was filed for stay. This Court vide the order dated 18.11.2019 had stayed the operation of the order dated 26.07.2019. Therefore, order passed by the Appellate Tribunal has not attained finality as the same is subject matter of the related appeal. 14.1. Process of attachment leading to confiscation of proceeds of crime under PMLA is in the nature of civil action which runs parallel to investigation and criminal action vis- -vis the offence of money-laundering. Enforcement officer is the competent authority under PMLA to attach not only tainted property but also any other property of equivalent value. 14.2. It is the case of the Enforcement Directorate that applicant was receiving disproportionate remuneration as salary even though she did not have any expertise in the cement business and no person appointed by the foreign investor having 51% stake in BCCL was receiving even half of her remuneration. This was because of the influence exerted by her husband ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as the Rules framed thereunder which would entitle the appellant to seek replacement of immovable properties under attachment with fixed deposit. 20. While Appellate Tribunal may be right in saying that there is no provision under PMLA and the Rules made thereunder for replacement of attached immovable property for some other property, however, it must be noted that the said decision was in the context of an appeal pending before the Appellate Tribunal. The appeal was filed by the appellant against the order of the adjudicating authority confirming provisional attachment of the immovable properties relevant to the said case. In other words, in Hetero Drugs Limited (supra) provisional attachment order was confirmed by the adjudicating authority, the correctness of which was an issue before the Appellate Tribunal in the pending appeal. Appellate Tribunal was yet to decide whether such attachment was right or wrong. It was during the pendency of such appeal before the Appellate Tribunal that the appellant moved for replacement of the attached immovable properties. It was in that context that the Appellate Tribunal negated such prayer after holding that there is no provision in PM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that where the attached immovable property as confirmed by the adjudicating authority is in the form of land, building, house, flat etc and is under joint ownership, the authorised officer may accept the equivalent value of fixed deposit to the extent of the value of the share of the concerned person in the property estimated by the authorised officer to be involved in money laundering. Therefore, it would not be correct to say that PMLA as well as the Rules framed thereunder does not have any provision for accepting alternative equivalent value of attached property. 24. That brings us to the related appeal and the order passed by the Appellate Tribunal. We have already seen that appeal filed by the applicant against the order of attachment as confirmed by the adjudicating authority was allowed by the Appellate Tribunal vide the judgment and order dated 26.07.2019. If we look at the judgment and order of the Appellate Tribunal, it is evident that Appellate Tribunal had allowed the appeal of the applicant by interfering with the order of provisional attachment as well as the confirmation order. Even in the provisional attachment order, it was clearly mentioned that value of the at ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
