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TMI Blog2024 (9) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... zed Sh. Navin Yadav, Assistant Directors, ED to conduct search at the premises of Respondent No. 4, herein, and two panchas, namely, Sh. Dharendra Singh and Sh. Sunil Kumar for effective and proper adjudication of the present matter; (ii) MA No. 59: Seeking supply of copy of 'reasons to believe' as recorded under Section 17(1); (iii) MA No. 60: Seeking inspection of records and further necessary time to file reply; (iv) MA No. 61: Seeking stay of proceedings in the present matter, till such time the coram of the Adjudicating Authority as stipulated in section 6(7) of PMLA, 2002 is functional; (v) MA No. 62: Seeking necessary orders and directions from the Authority to constitute a fresh Bench for hearing the captioned Original Application by an independent body and before an impartial forum. 2. Of the above-mentioned five Miscellaneous Applications, MA No. 58, seeking cross-examination of the Deputy Director, Directorate of Enforcement (ED) was disposed of as withdrawn by the Ld. AA at the request of the appellant. As such, the issue raised in the said MA is not of concern to us in this order. Further, with regard to MA No. 60, seeking inspection of records and fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of M/s Kadam Developers Pvt. Ltd. The sub-lease holder of the said land, M/s Kadam Developers Pvt. Ltd. allegedly gave mortgage permission in favor of IBHFL, and also to M/s Beacon Trusteeship Ltd. (as security trustee). 4. Search operations under Section 17 of PMLA, 2002 were carried out at various premises related to IBHFL, M3M and their officials on 28.02.2024 and 29.02.2024 in pursuance of the investigations in the above matter. During the searches, various digital records and documents were seized under Section 17(1) of the Act, which inter alia included the following items of the present appellant: 1. 2 Locker Keys (Locker No. 74 and 46 in PNB) 2. One Laptop HP Spectre X360 Convertible, SI No. 5CDO5DIZD 3. One iPhone 13 (128GB), SI. No. G4Q0NH9XC0, IMEI: 354789239665425 & 54789239612005 4. A Samsung Galaxy Tab S8 5G, SI. No. R52T30ALCCB 5. Consequent to the seizures, in accordance with the provisions of the Act, an O.A was filed before the Ld. AA seeking retention of the seized items. It was during the course of the proceedings arising from the said O.A. that the Miscellaneous Applications mentioned in para 1 were filed before the Ld. AA which have since been dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e apprehension that the Adjudicating Authority would not be able to adjudge the case of the Applicant in an impartial manner due to lack of independence of the Authority from its parent organization, and this is against the principles of natural justice. 5. Because The Selection Committee appointing a member is also headed by a chairperson which is from the Department of Revenue. ORDER The Miscellaneous Applicant purposefully misquoted the Prevention of Money Laundering (Appointment and Conditions of Service of Chairperson and Members of Adjudicating Authority) Rule, 2007, Rule 3. The Rule 3 states as under: "3. Qualifications for appointment as Member an Adjudicating Authority shall have three Members-one from the field of Law and two from the fields of administration and finance or accountancy. (1) For the Member from the field of Law, a person shall be qualified for appointment if he- (a) is qualified for appointment as District Judge, or (b) has been a Member of the Indian Legal Service and has held a post in Grade I of that Service (2) For the Member from the field of administration, a person shall be qualified for appointment if he is or has been a Member of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Administration) even after repeated directions of various courts shows that there is reasonable apprehension of bias on part of the parent organization. It is submitted that the Appellant had relied upon several judgments in support of his arguments and contentions raised in the Applicant, which have not been considered by the Hon'ble Authority. The same include: i. Secretary to the Government v. Munuswamy Mudaliar & Ors, 1988 AIR 2232 (SC) ii. Dharampal Satyapal Limited v. Deputy Commissioner of Central Excise, Gauhati and Ors. (2015) 8 SCC 519 iii. Union Of India v. R. Gandhi & Ors., (2010) 11 SCC 1 iv. Madras Bar Associate v. Union of India & Anr., W.P (C) No. 804 of 2020 v. Gold Croft Properties v. Union of India and Anr. , 2023/DHC/001436 (Delhi High Court) vi. Alok Industries v. Assistant Director, Enforcement Directorate W.P.(C) 4680/2021 dated 01.06.2022 (Delhi High Court) 10. Elaborating further on this ground of appeal it is submitted that in the matters before the Adjudicating Authority, the respondent Directorate (ED) is a contesting party/Complainant and the ED is under the direct control of the Department of Revenue, Ministry of Finance. All adminis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iples of State Policy of the Constitution of India are also cited which requires the State to take effective steps in ensuring that there is a separation of powers between the executive and the judiciary. It is submitted that if an Adjudicating Authority is constituted to exercise judicial powers it must possess independence from the influence of the executive. This is a necessary concomitant of the Rule of Law. 14. It is contended that the Ld. Adjudicating authority has failed to appreciate the various judgments relied upon by the Appellant, which are directly related to the facts of the present case. Ld. Adjudicating Authority ought to have decided the application in exercise of its powers to constitute a bench comprising of one or two members under Section 6(5)(b) of PMLA, 2002. The impugned order was passed by the Ld. Adjudicating Authority in a mechanical manner and without application of mind as it fails to deal with the contentions raised by the Appellant and on this count alone, the same deserves to be set aside. 15. It is further contended that it is settled law that if an order is discretionary in nature and is amenable to be challenged before superior courts, then reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has pointed out that reasons are the flesh and blood of judicial adjudication and such reasons must be shown in the orders which are liable to be challenged in the superior court. That applies to the High Court also. The impugned order reads thus: "We have heard the learned counsel on merits. We find no merit in this petition. Dismissed." 7. It is not a reasoned order. We, therefore, set aside the impugned order and remand the matter back to the High Court for disposal of the writ petition afresh in accordance with law." 18. The decision of the Hon'ble Allahabad High Court in its order dated 18.01.2021 in the case of Sanjay & 3 others v. State of U.P. in Application u/s 482 No. 18422 of 2020 is also cited wherein it was held that a Judge's work is like a God and he should not pass order in hasty manner and has to apply his mind and give detailed reasons for the same: "The explanation given by the concerned Magistrate is not acceptable because if a Judge makes such a mistake, then from where will the general public get fair justice. A Judge acts like a God, he/she should not make mistakes due to haste or excess of work. How will a normal man get justice when a j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oot'. Arbitrariness has been always held to be the anathema of judicial exercise of any power, all the more so when such orders are amenable to challenge further before higher forums. The State does not in pursuing or conducting a criminal case or an appeal espouses any right of its own but really vindicate the cause of society at large, to prevent recurrence as well as punish offences and offenders respectively, in order to preserve orderliness in society and avert anarchy, by upholding rule of law. The provision for seeking leave to appeal is in order to ensure that no frivolous appeals are filed against orders of acquittal, as a matter of course, but that does not enable the High Court to mechanically refuse to grant leave by mere cryptic or readymade observations, as in this case, (the court does not find any error), with no further on the face of it, indication of any application of mind whatsoever. All the more so when the orders of the High Court are amenable for further challenge before this Court. Such ritualistic observations and summary disposal which has the effect of, at times, and as in this case, foreclosing statutory right of appeal, though a regulated one canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the direction that the matter be heard afresh. (ii) Vishal Ashwin Patel v. Assistant Commissioner of Income Tax in Civil Appeal No. 2200 of 2022 - it was the duty cast upon the High Court to deal with issues/grounds raised in the Writ Petition. (iii) Mahipal v. Rajesh Kumar @ Polia, Crl. Appeal no. 1844 of 2019 dated 05.12.2019 - merely recording "having perused the record" and "on the facts and circumstances of the case" does not sub-serve the purpose of a reasoned judicial order. Factors which have weighed in the mind of the judge in the rejection or the grant of bail are to be recorded in the order passed. (iv) Yogesh Waman Athavale Vikram Abasaheb Jadhav, Contempt Petition No. 127 of 2019 dated 11.02.2020 Orders cannot be "silent" on the authorities relied upon by the parties and whether they were taken into consideration or not. (v) Municipal Board Sumerpur v. Kundanmal & Ors. Civil Appeal No. 460 of 2008 dated 21.04.2017 - the least which is expected is that the order which decides the lis between the parties should contain the brief facts involved in the case, the grounds on which the action is impugned, the stand of the parties defending the action, the submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red carefully the order of the Ld. Adjudicating Authority and the submissions made on behalf of the appellant. The fundamental contention of the appellant in this appeal is that the Ld. Adjudicating Authority has been constituted against the principles of natural justice. In favor of the contention, the appellant has relied upon a series of case laws, including the decision of the Hon'ble Supreme Court in Union of India v. R. Gandhi (supra) wherein it was observed that Tribunals should not be administratively under the sponsoring departments which generates the disputes that they have to decide. In fact, they should not even get infrastructure and manpower support from the said ministry. 24. In this regard, we firstly note that the observations made in the case laws relied upon by the appellant all relate to tribunals, whereas the Adjudicating Authority under the PMLA, 2002 is not a tribunal. The Act separately provides for an Appellate Tribunal under Section 25 which is distinct and separate from the Adjudicating Authority set up under Section 6. It may be mentioned that many central enactments which have been in force for several decades, including the Customs Act, 1962, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Property) Act, 1976; the Narcotic Drugs and Psychotropic Substances Act, 1985 and the Foreign Exchange Management Act, 1999. Thus, when legislature confers the function of adjudication on an authority under the statute, the same can be performed by such authority within the four corners of the power conferred on it. It is pertinent to note that under PMLA, the Adjudicating Authority neither has power to decide on the criminality of offence nor does it have power to impose punishment." *** "20. It is also pertinent to mention that against an order passed under Section 8 of PMLA, an appeal is provided under Section 25(1) of PMLA before the appellate authority which is presided over by a retired Chief Justice of a High Court. Against the order passed in an appeal, a further appeal lies before the High Court under Section 42 of PMLA. Thus, sufficient checks and balances have been provided under PMLA." 27. Coming to the case laws relied upon by the appellant, in R. Gandhi (supra), the constitutional validity of Chapters 1B and 1C of the Companies Act, 1956 inserted vide and Amendment Act of 2002 came up for challenge before the Hon'ble Supreme Court. The legislative competence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgement in the case of L. Chandrakumar cited by the Hon'ble Supreme Court in its judgement in the aforementioned case of R. Gandhi are in the nature of recommendations. The observations, while highly significant and far-reaching, do not constitute a binding ratio decidendi and it is left to the government to take appropriate action on the recommendations. Notably, the Hon'ble Supreme Court in that case upheld the decision of the Hon'ble High Court that creation of the NCLT and the NCLAT and vesting them with the powers and jurisdiction exercised by the High Courts in regard to Company Law matters, was not unconstitutional. As such, the appellant's reliance on the 'recommendations' of the Hon'ble Supreme Court in the aforesaid case to question the legality of the Adjudicating Authority is misplaced. Moreover, as already pointed out, the Adjudicating Authority is not a tribunal. 30. It is also noteworthy that subsequent to the aforesaid judgment of the Hon'ble Supreme Court, the Government has enacted the 'Tribunals Reforms Act, 2021'. It would be instructive to peruse the 'Statement of Objects and Reasons' accompanying the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunals other than State Administrative Tribunals to be headed by the Chief Justice of India or a Judge nominated by him; (b) Search-cum-Selection Committee for the State Administrative Tribunal to be headed by the Chief Justice of the High Court of the concerned State; (c) recommendation of a panel of two names by the Search-cum-Selection Committee and such recommendation to be considered by the Government preferably within three months; (d) removal of Chairperson and Members on the recommendation of Search-cum-Selection Committee; (e) the Chairperson and Member of a Tribunal to hold office for a term of four years; (f) age of retirement to be seventy years for Chairperson and sixty-seven years for a member; (g) the Chairperson and Member of a Tribunal shall be eligible for reappointment. (ii) abolition of tribunals or authorities under various Acts by amending the Cinematograph Act, 1952, the Copyrights, Act, 1957, the Customs Act, 1962, the Patents Act, 1970, the Airport Authority of India Act, 1994, the Trade Marks Act, 1999, the Geographical Indications of Goods (Registration and Protection) Act, 1999, the Protection of Plant Varieties and Farmers' Rights Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he vacancies must be filled within 8 weeks, which is wholly misplaced. 34. Similarly, in the case of Alok Industries Ltd. (supra),the direction of the Hon'ble Delhi High Court was that "steps shall be taken for filling up the vacant posts ... on an expeditious basis and in any case, within a period of four months from today." Notably, the said case was decided by the same single-judge Bench of the Hon'ble Delhi High Court which later decided Gold Croft Ltd., which has already been discussed above. 35. Next, a number of case laws have cited on behalf of the appellant in support of the contention that the orders of the judicial authorities should be speaking orders providing detailed reasons for the decision, orders should be passed with due application of mind, following the principles of natural justice, should deal with all the grounds raised before it and should record detailed reasons for its decisions on both factual and legal grounds. Furthermore, templated orders without assigning any reasons are against the spirit and rule of natural justice. The case laws cited in this connection have been mentioned in paragraphs 15-21(supra). 36. It is not necessary for us to di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was regarding potential conflict of interest involved in cases generated by the Department of Revenue being adjudicated upon by a body within the same Department. 37. With regard to the above, we firstly note that it was up to the appellant (applicant before the Ld. AA) to correctly highlight the issue being raised in the application rather than focusing on the language of the Rules of appointment of the Member, that too incorrectly. Furthermore, it is noteworthy that the learned the Adjudicating Authority works under a tight time-frame. It has to pass its order within 180 days, otherwise the order of provisional attachment passed under Section 5 will cease to have effect and the property under attachment shall stand released by operation of law. The Ld. AA, therefore, does not have the luxury of unlimited time to deal with an OA/OC referred to it. The appellant is well-aware of this fact. Indeed, this very fact appears to be the main motivation behind the appellant in the present case filing a series of Miscellaneous Applications (as many as five)before the Ld. Authority when it is preoccupied with adjudication proceedings under Section 8 of the Act. The purpose of filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice issued by this Ld. Adjudicating Authority has been served upon the Applicant herein. In the said notice, it has been stated that the Directorate of Enforcement (hereinafter "ED") has filed an application under Section 17(4) of the PMLA against the Applicants/Respondents for the retention of digital devices; documents/records seized. 4. That in terms of Sec 6(2) PMLA, the Hon'ble Authority shall be a three-member body. Further it is expressly provided u/s 6 (7) PMLA, that if the matter of such nature that requires consideration of two or more members, such case may be transferred by the Chairman to such bench consisting of two members. 5. That the present bench of the Adjudicating Authority comprises of one Member/Chairperson from the field of Accounts i.e. non-judicial member. Thus, without appropriate coram in terms of Sec 6(7) PMLA, the action initiated by Adjudicating Authority suffers from 'coram non judice' as explained, hereinafter. That Section 2 (a) of the PMLA defines "Adjudicating Authority" as under: "Adjudicating Authority" means the Adjudicating Authority appointed under subsection (1) of Section 6." That Section 6 of PMLA provides as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng fields: a. law, b. administration, c. finance or accountancy. 7. Section 6(2) of the PMLA provides that "An Adjudicating Authority shall consist of a Chairperson and two other Members: Provided that one Member each shall be a person having experience in the field of law, administration, finance or accountancy". The said requirement is non-negotiable and vital for the proceedings under PMLA. Thus, it is mandatory that the Adjudicating Authority consist of three persons viz. one chairperson and two members and each of them should be from three different fields as stipulated in the section. It is further submitted that the word "each" should also be given effect to, and it cannot be deleted by the executive while executing and/or administering the law. 7. It is further submitted that sub-section (5) of section 6 of the PMLA begins with the term: Subject to the provisions of this Act and it is provided in subclause (a) sub-section (5) of section 6 of the PMLA that: a Bench may be constituted by the Chairperson of the Adjudicating Authority with one or two Members, thereby, clearly stipulating that a Bench of the Adjudicating Authority shall consist of at least two members. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai Bench of Madras High court decided that "The contention regarding coram non-judice, that the Adjudicating Authority is manned only by a single Member also cannot be countenanced with reference to explicit provision contained in Section 6 of PMLA and allied provisions, wherein it is provided for formation of Bench by less than three Members. Therefore, the issue of coram non-judice is answered against the writ petitioners, notwithstanding the fact that at the time of pronouncement of this order, the Adjudicating Authority is consisting of three Members." The division bench of Hon'ble HIGH COURT OF DELHI in W.P.(C) 8100/2017 in J SEKAR ...Petitioner v. UNION OF INDIA AND ORS....Respondents decided on 11.01.2018 in para 87 (vii) that there can be single-member benches of the AA and the AT under the PMLA. Such single-member benches need not mandatorily have to be JMs and can be AMs as well. The division bench of Hon'ble HIGH COURT OF DELHI in LPA 167/2023 & CM APPL. 11254/2023 of GOLD CROFT PROPERTIES PVT LTD.... Appellant versus DIRECTORATE OF ENFORCEMENT.... Respondent decided on 19.09.2023 that the Judgment of the Single Judge confirming the Order dated 25.01.2023 pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred an appeal, however such appeal is on a different ground and not pertaining to the decision with regard to the jurisdiction of a single member bench of the adjudicating authoritywhich was held in favor of the Enforcement Directorate by the Division Bench in J. Sekar. Thus, by a reading of Section 6 of the PMLA Act without adding or substituting words into the statute, it is clear that the adjudicating authority which comprises of a single member bench is entitled to adjudicate the matter and any other interpretation would tantamount to distorting the language adopted in the statute which is impermissible." Recently, the Division Bench of Hon'ble Telangana High Court in WRIT APPEAL No.611 of 2023 has also upheld the validity single member bench of Adjudicating Authority who need not be judicial officer. The issue of Coram-non-judice' is no longer res integra in view of various judgements of Division Bench of Hon'ble High Courts as mentioned above. In view of various judgements of Division Bench of Hon'ble High Courts, MA no. 61 has no merit at all. Accordingly, MA no 61 is disposed of." 40. It is contended on behalf of the appellant that the impugned or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) Judgement of three judge bench of Hon'ble Supreme Court in Opto Circult India Ltd v. Axis bank & Ors (2021) SCC OnLine SC 55. (iv) Judgement of Hon'ble Telangana High Court in M/s Indusviva Health Sciences Pvt. Ltd, Through its Director v. Deputy Director. (v) Judgement of Division Bench Hon'ble Bombay High Court in Abbeys Realcon LLP v. Directorate of Enforcement First Appeal no 39 of 2023. (vi) Judgement of Hon'ble High Court of Sikkim in the matter titled Eastern Institute of Integrated Leading in Management University v. Joint Director, Directorate of Enforcement in WP (Crl.) No. 02/2015. (vii) Judgement of Hon'ble Supreme Court in Pareena Swarup v. Union of India 2008 14 SCC 107. (viii) Judgement of Hon'ble Supreme Court in Karnal Improvement Trust, Karnal v. Parkash Wanti (Smt) (Dead) and another) (1995) 5 SCC 159 (ix) Judgement of Hon'ble High Court of Punjab in (Jalandhar Improvement Trust, Jalandhar v. Improvement Trust Tribunal, Jalandhar and others) (MANU/PH/2012/2008). (x) Order of this Appellate Tribunal in FPA-PMLA-5143-5144/MUM/2022 in appeal titled 'Praful Patel v. Directorate of Enforcement' 45. It is further c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T NO. 1253 OF 2023 decided on 18 August, 2023] (v) Order of the Hon'ble Telangana High Court in Directorate of Enforcement v. Karvy India Realty Limited and Ors. [Writ Appeal No. 611 of 2023 Decided On: 12.02.2024]. 49. The Ld. AA in its order has referred to all these judgments and also quoted relevant text from the same. Therefore, in the interest of brevity, we do not wish to dwell further upon the above judgments. It is sufficient in our view to refer to the last-mentioned decision of the Hon'ble Telangana High Court in Directorate of Enforcement v. Karvy India Realty Limited and Ors. (supra) which is also the most recent, having been decided earlier this year wherein it was held as follows: "22. It is well settled rule of statutory interpretation that the courts should strongly lean against any construction which reduces the statutory provision to a futility (see Tinsukhia Electric Supply Company Limited v. State of Assam (1989) 3 SCC 709). In Mukund Dewangan v. Oriental Insurance Company Limited (2017) 14 SCC 663, it has been held that every word and expression which the legislature uses has to be given its proper and effective meaning as the legislature does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntony Paul v. Union of India WP No. 38642/2016 date 11.12.2020. 23. In view of the above, we do not find any illegality in the impugned order to deny stay of the proceedings till the Adjudicating Authority is constitute with the coram. In fact, one member of the Adjudicating Authority constitutes the coram of the Authority." 51. Since the aforesaid decision of the Appellate Tribunal, the weight of judicial opinion in favor of the legal position that one member of the Adjudicating Authority can constitute coram has only grown. On the other hand, we find that the case laws relied upon by the appellant are either not directly on the issue at hand, or were merely observations of an interim nature or are decisions which are no longer good precedent in view of subsequent judgments of superior courts. The Hon'ble Supreme Court did not record any finding this issue in its landmark judgment in Vijay Madanlal Choudhary which has been cited on behalf of the appellant. The Hon'ble Bombay High Court in its order dated 18.01.2023 in Abbeys Realcon merely noted the matter before them requires consideration and requested the Ld. Addl. Solicitor General to assist the court. In doing so, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to be confirmed. 3. It is submitted that Reasons to Believe have to be recorded under Section 17(1) PMLA, 2002, relevant portion of which reads as under: "17. Search and seizure. - (1) Where the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, on the basis of information in his possession, has reason to believe (the reason for such belief to be recorded in writing) that any person (i) ... (il)... (iii) ... (iv)... then, subject to the rules made in this behalf, he may authorise any officer subordinate to him to- (a) and (f)..." 4. That from a bare perusal of Section 17(1) PMLA, it is clear that only after the Director/Officer authorised by the director not below the rank of a deputy director is satisfied that 'Reasons to Believe exist that an offence of money laundering has been committed, he may authorize any officer subordinate to him to search and seize. 5. The Applicant has supplied emphasis on the following judgements: a. Hon'ble Supreme Court Judgement in Vijay Madanlal Choudhary v. Union of India in 2022 SCC OnLine SC 929 (Para 283 and 289) b. Hon'ble Supreme Court Judgement in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ratio of Three-Judges Bench of Hon'ble Supreme Court in Vijay Madanlal Choudhary v. Union of India , 2022 SCC OnLine SC 929 (Three Judge Bench) have been satisfied before entering for search and seizure; AND d. Pass the necessary Orders and directions thereby directing the ED to supply the 'Reasons to Believe' recorded by the concerned officers of the Directorate of Enforcement in terms of Section 17 (1) of PMLA in the present matter, as filed by ED before this Ld. Adjudicating Authority and as available on the record of the Ld. Adjudicating Authority, as laid down in para 74 of the judgment delivered by the Hon'ble High Court of Delhi in J. Sekar v. Union of India W.P. (C) No. 5320/2017, decided on 11.01.2018; AND e. Pass any other order(s) that this Hon'ble Adjudicating Authority may deem fit and proper and in the interest of justice. 2. Thereafter an opportunity was granted to both parties for hearing on 08.04.2024. During the course of hearing the learned Advocate for ED submitted that the reasons to believe need not be mentioned under the nomenclature of Reasons to Believe. Further Para 2 to 15 of subject OA is the reasons to believe and more particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under this Act: [(14) Where it is not practicable to seize such record or property, the officer authorized under sub-section (1), may make an order to freeze such property whereupon the property shall not be transferred or otherwise dealt with, except with the prior permission of the officer making such order, and a copy of such order shall be served on the person concerned. Provided that if, at any time before its confiscation under sub-section (5) or sub-section (7) of section 8 or section S&B or sub-section (2A) of section 60, it becomes practical to seize a frozen property, the officer authorised under sub-section (1) may seize such property.] (2) The authority, who has been authorised under sub-section (1) shall, immediately after search and seizure for upon issuance of a freezing order), forward a copy of the reasons so recorded along with 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 reasons and material for such period, as may be prescribed. (3) Where an authority, upon information obtained during survey under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpreted strictly thereby not allowing inspection of the material in possession with ED. Further the Hon'ble Supreme Court in Opto Circuit India Ltd v. Axis Bank and Ors (2021 SCC online SC 55) has observed that "It is a well settled salutary principle that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner". The Applicant ED has already recorded reasons to believe under section 17(1) of PMLA and the Applicant ED has also forwarded a copy such reasons to believe recorded along with material in possession to the Adjudicating Authority in a sealed envelope in accordance with provisions of Section 17(2) of PMLA, 2002. Therefore, statutory compliance as per PMLA, 2002 has been made by the Applicant ED. It would be germane to mention that law (PMLA, 2002 as well as rules made there under) mandate certain obligations upon this Directorate, each one of which was duly complied by this office. The requirement as well as the manner in which the requirement is to be fulfilled were duly complied with by the Directorate, as envisaged under Sections 17(2), 17(4), 20(1) and 21(1) of the PMLA. Such compliances we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Hon'ble Delhi High Court in the case of J. Sekar v. Union of India W.P. (C) No. 5320/2017, decided on 11.01.2018 ■ Hon'ble Appellate Tribunal under Prevention of Money Laundering Act. New Delhi in the case of Universal Music India Pvt. Ltd E The Deputy Director, Directorate of Enforcement, Mumbai (27.03.2019-ATML) MANU/ML/0024/2019 ■ J. Sekar v. Union of India 2018 SCC Online 6523 Del ■ Shree Chamundi Mopeds Ltd v. Church of South India Trust Assn MANU/SC/ 0501/1992 ■ Pramod K. Shah v. Commissioner of Custom Export Promotion SIIB. (Export) Criminal Application No.4230 of 2006 ■ Hon'ble High Court of Delhi, in the case of Alaknanda Realtors Pvt. Ltd & Ors., W.P (C) No. 1243/2022 dated 12.09.2022 ■ Ld. Division Bench of Punjab and Haryana High Court in Seema Garg v. Deputy Director, Directorate of Enforcement 2020 SCC Online P & H 738 ■ Hon'ble High Court of Patna in HDFC Bank Limited v. Government Of India & Ors. Criminal Writ Jurisdiction No.2398 of 2017 M/s Hamilton Housewares Pvt. Ltd. 25 Directorate of Enforcement in W.P.(C) 5235/2020 56. It is submitted that the Appellant had relied upon the judgement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 17(1), this Appellate Tribunal in its detailed judgment in the case of Neeraj Singhal v. Deputy Director, Directorate of Enforcement [FPA-PMLA- 6807/DLI/2023, passed on 14.12.2023] has held that the same need not be supplied. The relevant part of the order reads as below: "We may refer to the judgment of the Apex Court in the case of Narayanyappa & Ors. v. Commissioner of Income Tax (1967) 1 SCR 590 wherein similar issue in reference to the Income Tax Act came up for consideration before the Apex Court. Therein also, the reasons led to initiate the proceedings under Section 34 of the Income Tax Act was not supplied and therefore a challenge to it was made before the Apex Court where arguments were found to be misconceived and held that the process of assessment and reassessment start from the issuance notice to the assessee and prior to it, the action of the Income Tax officer for recording the reasons for obtaining the sanction of the Commissioner are administrative in nature and not quasi-judicial. The para 4 of the said judgment is quoted hereunder for ready reference: - "4. It was also contended for the appellant that the Income Tax Officer should have commun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his possession and has reasons to believe that any person has committed any Act which constitute money laundering and is in possession of any proceeds of crime involved in money laundering etc., the Authorised Officer may enter and search the building, place, vessel, vehicle etc. and thereupon take further action as given under Section 17(1) of the Act which includes seizure of records and property. However, it would remain in operation only for a period of thirty days unless the officer file an application requesting retention of such records and property before the Adjudicating Authority and at this stage the Adjudicating Authority would serve a show cause notice alongwith the reasons to believe to the parties effected by it. The Adjudicating Authority would supply complete material to the parties concern to seek their response to show cause notice where the reasons to believe recorded by the Adjudicating Authority are also supplied thus the stage prior to the initiation of Section 8(1) of the Act of 2002 is administrative in nature and the parties are not affected indefinitely unless the order is confirmed by the Adjudicating Authority but before confirmation, an opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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