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TMI Blog2024 (8) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... 022. The Government had also notified for the exclusion of period of Covid and elaborate discussion has been made in the case of Hygro Chemicals PharmtekPvt. Limited. Thus, the aforesaid need not be reiterated, but it also supports the respondent and thereby a challenge to the order on the ground that it was passed beyond the period of 180 days given under Section 8 (3) of the Act of 2002 is not made out. Coming back to the factual issue, it is necessary to refer to main allegation which exists against M/s Seabird International Pvt. Ltd. and its two Directors Gurinder Singh and Jagmohan Singh and prior to that Pirtpal Singh who had extracted money from 51 students for arranging visa and admission in different colleges in Australia. The amount of Rs.7.56 crores was taken to be `proceeds of crime derived as a result of criminal activity. The detailed investigation has revealed deep involvement of Pirtpal Singh, Jagmohan Singh and Gurinder Singh for generating money to the tune of Rs.7.56 crores from 51 students - The facts on record reveal that the sole purpose of creating circular transaction is to project `proceeds of crime as untainted. In fact, Gurinder Singh and Pirtpal Singh tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. on 01.05.2015 with two more Directors, namely, Gurinder Singh and Jagmohan Singh. 4. Based on the information and materials on record, a search was conducted at the premises of M/s Seabird International Pvt. Ltd. and residential premises of its Directors which resulted in recovery/seizure of several incriminating documents, diaries and electronic devices. 5. The statements of Pirtpal Singh and others were recorded, who disclosed that they were dealing with immigration related services to the students like education visa, etc. and collected a sum of Rs.7.56 crores from 51 students and so far as the appellant is concerned, he received a sum of Rs.78,96,700/- directly from the students. The money was thereupon used to repay the loan obtained for the purchase of land. Accordingly, the land of the appellant was attached. Legal issues raised by the appellant. 6. The learned counsel submits that the appellant is not named as an accused either in the FIR or the ECIR thus his property could not have been attached. In fact, he was having business relation with Pirtpal Singh and Gurinder Singh and, therefore, receipt of the amount was in the course of business which was even with M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h and Gurinder Singh were found involved not only in commission of cheating with the students but other offences which include the offence under Arms Act. The main accused Pirtpal Singh and Gurinder Singh of M/s Seabird International Pvt. Ltd. had collected Rs.7.56 crores from students and out of which a sum of Rs.78,96,700/- came directly to the appellant from the students. The amount was taken to facilitate the students for visa for their study in Australia. The fraud committed by the main accused was investigated followed by the charge sheet and prosecution complaint against them. The appellant received the amount from following students/persons and is indicated in the statement as under: S. No. Name of students/ their parents/ their relatives Date Amount paid by Sant Singh (Rs.) Amount paid to Sant Singh (Rs.) 1. Sukhwinder Singh 24.01.2017 8,00,000/- 2. 25.01.2017 7,00,000/- 3. Harminder Singh 24.01.2017 12,00,000/- 4. 30.01.2017 1,00,000/- 5. Dilpreet Singh 25.01.2017 15,00,000/- 6. Gurpal Singh 02.02.2017 1,76,700/- 7. 02.02.2017 9,20,000/- 8. Harjinder Singh 28.04.2017 13,00,000/- 9. Surjit Singh 26.05.2017 12,00,000/- TOTAL 78,96,700/- 11. The appellant has failed to give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected with the 1[proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence of money-laundering. 2[Explanation.--For the removal of doubts, it is hereby clarified that,-- (i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:-- (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.] 5. Attachment of property involved in money-laundering. (1) Where the Director or any other officer not below th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed. (3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under 4[sub-section (3)] of section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation.--For the purposes of this sub-section, person interested , in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority . 13. Section 2(1)(u) defines the `proceeds of crime while Section 3 provides offence of money laundering. Section 5 is relevant to answer the issue as to whether the property of the appellant, who is not named as accused, coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved or obtained as a result of criminal activity rather if somebody has obtained and derived any property out of the crime and has siphoned off or vanished, then any property of equivalent in value can be attached. In view of the above, if the documents related to property have been seized though the property was acquired much prior to the offence then also it can be subjected to seizure or even attachment if the property obtained out of the crime is not available in the hands of the accused or short in value. 16. It is also necessary to clarify that if the accused derived or obtained the property out of the crime has parked it with other person, then the person holding such property can be subjected to attachment or seizure though he may not be accused in the FIR. It is for the reason that if the interpretation otherwise is taken, it would frustrate the object of the Act of 2002. It can be in a manner that the person who derived or obtained the property out of the crime may immediately park it with a third person and the property in that case would not be liable for attachment or seizure for the reason that the person holding the property has not been named as an accused, in that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmation of the attachment or seizure is passed by the Adjudicating Authority and if an order is passed, the attachment order would not cease to exist though order of confirmation has to be passed within 180 days. If the matter is examined on the aforesaid reasoning, the attachment order in question was confirmed beyond the period of 180 days. However, the case has peculiarity. The fact is that due to Covid-19, the Apex Court excluded the period from 15.03.2020 to 28.02.2022 for the purpose of limitation and even termination of proceedings in the Suo Motu Writ Petition No. 3/2020 decided on 10.01.2022. In view of the above, the period from 15.03.2020 till 28.02.2022 cannot be counted for termination of the proceedings within 180 days. The period has to be excluded from 15.03.2020 till 28.02.2022. We may quote the relevant paras of the judgment of Supreme Court in the Suo Motu Writ Petition (supra) and is quoted thus: 5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs. 20. A detailed judgment thereupon was also given by Telangana High Court in the case of Hygro Chemicals PharmtekPvt. Limited Vs. Union of India Ors. reported in MANU/TL/1003/2023. Relevant paras of the said judgment are quoted thus: 15. Issue No.3: Whether the period from 15.03.2020 to 28.02.2022 which was excluded by the Apex Court in computation of limitation vide In re: Limitation (supra) is applicable to orders confirming provisional attachment within 180 days? i) The Petitioner in W.P. No. 34238 of 2022 contends that the provisional attachment order i.e., PAO No. 04 of 2022 dated 03.02.2022 could not have been confirmed by the Adjudicating Authority vide order dated 22.08.2022 as the same was passed after the lapse of 180 days. Further, the Petitioner contends that Adjudicating Authority cannot rely on In re: Limitation (supra) in calculating the period of 180 days in light of the Apex Court s decision in S. Kasi (supra). ii) In W.P. No. 34627 of 2022, the provisional attachment order therein i.e., PAO No. 01 of 2021 was passed on 01.02.2021. Pursuant to which an original complaint under Section 5(5) of the PMLA was filed on 19.02.2021 and show cause notice under Section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsequently, the limitation period was extended vide In re: Cognizance for Extension of Limitation(hereinafter In re: Limitation, 2022 ) till 28.02.2022. The Apex Court vide the said order clarified that where any statute provides an outer limit of limitation period within which the proceedings are to be completed, the period between 15.03.2020 to 28.02.2022 shall be excluded in computing such period. The relevant paragraphs of In re: Limitation, 2022 (supra) are extracted below: 5.1. The order dated 23-3-2020 [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] is restored and in continuation of the subsequent orders dated 8-3-2021 [Cognizance for Extension of Limitation, In re, (2021) 5 SCC 452 : (2021) 3 SCC (Civ) 40 : (2021) 2 SCC (Cri) 615 : (2021) 2 SCC (L S) 50] , 27-4-2021 [Cognizance for Extension of Limitation, In re, (2021) 17 SCC 231 : 2021 SCC OnLine SC 373] and 23-9-2021 [Cognizance for Extension of Limitation, In re, 2021 SCC OnLine SC 947] , it is directed that the period from 15-3-2020 till 28-2-2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra), the Apex Court extended the period of limitation to safeguard the right of litigants to institute proceedings. The Court held that computation of 180 days to confirm provisional attachment of properties under Section 8(3) of the PMLA cannot be equated to initiation/institution of proceedings. The Court also held that prescription of 180 days is in the form of a protection against deprivation of right to property. The relevant paragraphs are extracted below: 15. It is further relevant to state that the orders passed by the Supreme Court in the Suo Motu writ petition mention specific provisions in specific statutes such as Sections 23(4) and Section 29A of The Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and Section 138 provisos (b) and (c) of the Negotiable Instrument Act, 1881. On an examination of the specific statutes mentioned by the Supreme Court, it will be seen that all these statutes prescribed provide for specific time frame for instituting a suit, filing a claim/counter claim or an application in furtherance of a remedy provided under the statute. The intention was hence to preserve the right of a litigant to seek a remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealt with the prescribed statutory time period for filing of the written statement under Order VIII Rule 1 of The Code of Civil Procedure, as amended by the Commercial Courts Act. Prakash Corporates also recognised the fact that the decision in S. Kasi was concerned with filing of the charge sheet under Section 167(2) of The Code of Criminal Procedure (Cr.P.C.) and hence would not apply to filing of written statements beyond the prescribed time-limit. 22. The reasoning in S. Kasi would apply to the present case. The Supreme Court recognised that the 23rd March, 2020 order in the Suo Motu writ petition was for the benefit of those whose remedy may be barred by time because of not being able to physically come to Court to file proceedings. The Supreme Court made a distinction between the benefit given to litigants and extension of time for filing of a chargesheet by the police as contemplated under Section 167(2) of the Cr.P.C. The Court also noted the element of personal liberty of a person which was required to be protected. Although, the right of the petitioners before the Court is more to do with the right not to be deprived of property save by authority of law - Article 300A, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attachment was not confirmed, benefit can be granted in favour of the Adjudicating Authority by excluding the period as prescribed under In re: Limitation (supra), a fortiori when the property can still be enjoyed. xxii) It is relevant to note that the Supreme Court in Prakash Corporates v. Dee Vee Projects Ltd.dealt with the application of In re: Limitation (supra) in relation to filing of a written statement. The Court therein held that the scope of In re: Limitation (supra) cannot be unnecessarily narrowed and in relation to S. Kasi (supra) held that the same stands on different footing as it dealt with Article 21 of the Constitution of India. The relevant paragraphs are extracted below: 27.7. We are not elaborating on other directions issued by this Court but, when read as a whole, it is but clear that the anxiety of this Court had been to obviate the hardships likely to be suffered by the litigants during the onslaughts of this pandemic. Hence, the legal effect and coverage of the orders passed by this Court in SMWP No. 3 of 2020 cannot be unnecessarily narrowed and rather, having regard to their purpose and object, full effect is required to be given to such orders and direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. (supra), and Hiren Panchal (supra). The relevant paragraphs are extracted below: 12. Insofar as the judgment of the Calcutta High Court that was brought to our notice, we find that the Calcutta High Court had mainly relied upon the judgment of the Apex Court in S. Kasi case. With utmost respect to the learned Single Judge of the Calcutta High Court, we are not in agreement with the reasoning in the above judgment. The issue that was dealt with by the Apex Court in S. Kasi case pertains to the scope of Section 167(2) of Cr.P.C. which is directly referable to Article 21 of the Constitution of India viz., personal liberty of a person. The same cannot be equated while dealing with a property right under Article 300-A of the Constitution of India and the judgment of the Apex Court in S. Kasi case cannot be applied to a case involving property right of an individual or a corporate. 14. Our reasoning supra is also supported by the judgment of the Apex Court in Prakash Corporates v. Dee Vee Projects Limited [(2022) 5 SCC 112]. The Apex Court has explained the scope of the order passed in S. Kasi case and has categorically held that the same cannot be applied in a matter involving proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed within a period of 180 days. Therefore, while calculating/computing the 180 days period, the period from15 .03.2022 to 28.02.2022 shall be excluded. xxviii) To answer Issue No. 3, this Court holds that the decision in In re: Limitation (supra) and subsequent extensions vide In re: Limitation 2022 (supra) are applicable to PMLA proceedings to compute the period of 180 days. While computing such period, the period from15.03.2020 to 28.02.2022 shall be excluded . The perusal of the judgment shows detailed discussion on the issue and the period of 180 days was counted after excluding the period between 15.03.2020 till 28.02.2022. The ratio propounded in the judgment (supra) is in consonance with the judgment of the Apex Court. 21. The Government had also notified for the exclusion of period of Covid and elaborate discussion has been made in the case of Hygro Chemicals PharmtekPvt. Limited (supra). Thus, we need not to reiterate the aforesaid but it also supports the respondent and thereby a challenge to the order on the ground that it was passed beyond the period of 180 days given under Section 8 (3) of the Act of 2002 is not made out. 22. We cannot take a view going against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal had expired even prior to the order dated 23.03.2020 passed by this Court in SMWP No. 3 of 2020. **** 14.4. Even when it appeared to almost all the concerned that normalcy was around the corner, the sneaky spread of virus continued for one reason or the other or in one way or the other; and this led to a huge surge in COVID-19 cases across the country. This phenomenon came to be generally known as the second wave of pandemic. In the given scenario, the Supreme Court Advocates-on-Record Association moved an application in SMWP No. 3 of 2020, seeking restoration of the order dated 23.03.2020 while highlighting the surge of COVID-19 cases in Delhi and the difficulties being faced by the lawyers and litigants to institute their cases. This application was registered as Miscellaneous Application No. 665 of 2021 in SMWP No. 3 of 2020 and was considered by this Court on 27.04.2021. This Court took judicial notice of steep rise in COVID-19 cases that had engulfed the entire country and found that the situation required extraordinary measures to minimise the hardship of litigant-public. Therefore, the order dated 23.03.2020 was restored and in continuation of the order dated 08.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Constitution of India. Hence it shall be a binding order within the meaning of Article 141 on all Courts/Tribunals and Authorities. This order may be brought to the notice of all High Courts for being communicated to all subordinate courts/Tribunals within their respective jurisdiction. Issue notice to all the Registrars General of the High Courts, returnable in 6 weeks. List the Miscellaneous Application on 19th July, 2021. **** 19.2. Further, on 10.07.2020, this Court enlarged the scope of initial order in relation to the timelines fixed in Section 29-A and Section 23(4) of the Act of 1996. Significantly, Section 23(4) of the Act of 1996 mandates that the statement of claim and defence shall be completed within a time period of six months. Yet further, it was also provided that the time for completing the process of compulsory pre-litigation mediation Under Section 12-A of the Commercial Courts Act, 2015 shall stand extended for 45 days after lifting of lockdown. **** 19.5. Reverting to the orders passed by this Court, noticeable it is that on 27.04.2021, this Court restored the order dated 23.03.2020 and it was directed, in continuation of the order dated 08.03.2021, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erating money to the tune of Rs.7.56 crores from 51 students. The details of which have been given in the impugned order. The appellant was not directly involved in it but he has facilitated the main accused and thereby directly received a sum of Rs.78,96,700/- from the students of which no explanation could be given by the appellant. The statements of the appellant were recorded under Section 50 of the Act of 2002 where he stated that Gurinder Singh is a nephew and Pirtpal Singh is his friend. Though he has denied any relation with M/s Seabird International Pvt. Ltd. but was knowing Pirtpal Singh and he had given Rs.72 lakhs to Gurinder Singh and Pirtpal Singh for their business. The Adjudicating Authority meticulously examined the issue and found transaction and transfer of money between the appellant and accused Piritpal Singh and Gurinder Singh, apart from M/s Seabird International Pvt. Ltd. It was nothing but to layer the `proceeds of crime which was routed by the main accused through many sources, which include the source of appellant who had received Rs.78,96,700/- directly from eight students. The bank statement of the appellant was analyzed where it was found that he had r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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