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TMI Blog2023 (11) TMI 1296X X X X Extracts X X X X X X X X Extracts X X X X ..... thority the appeal may be decided on the basis of the other contentions put forward by them. Having considered this submission for the appellant's side, the arguments relating to the non-recording of reasons/satisfaction under the respective provisions of section 17(1), 20(4), and 8(1) are treated as not pressed and are not being adjudicated upon in this order. The documents seized would clearly constitute 'records' for the purposes of the Act. As regards the mobile phone itself, it would fall under the category of 'property'. However, the data contained in it would again answer to the description of 'records'. As mandated by the law, an 'application' (OA) was filed before the learned Adjudicating Authority on 1-12-2017, which was within the prescribed thirty-day period prescribed for this purpose under section 17(4). In the said application, the Assistant Director, Directorate of Enforcement had prayed for permission to retain the seized documents and digital evidence under section 8(3). In the impugned order, the Ld. Adjudicating Authority has not made any mention of the above developments which would have been within its knowledge and which we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prepared to induce the banks to sanction higher amounts of loans which were later on diverted for personal purposes. Various other manipulations, including inflation of the turnover which was actually to the tune of Rs. 304.80 crores but inflated to Rs. 918.30 crores, was also resorted to by the group as per the allegations. 3. So far as the present appellant Shri Anup Prakash Garg is concerned, he was a Director of the Andhra Bank at the relevant time. The allegation is that the Sterling Biotech group was supplying money to him in Delhi regularly with the help of angarias. 4. During the course of investigation of the PMLA case, a search and seizure operation was conducted by the respondent directorate at the premises of the appellant in Indore, Madhya Pradesh on 3-11-2017. During the said search operation, certain incriminating documents and digital evidence were found and seized. In consequence thereof, an application ('Original Application' or 'OA') was made to the learned Adjudicating Authority praying for the retention of the seized material under section 8(3) of the PMLA, 2002 as it was felt that the investigation in the matter was still underway and would t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation can be validly conducted. Similarly, no order was passed under section 20(4) by the learned Adjudicating Authority recording its satisfaction as mandated by that provision. 8. Secondly, it was strongly argued by the learned counsel for the appellant that three of the properties to which the original documents seized relate do not represent proceeds of crime even as per the respondent Directorate. In this context, he referred to the Supplementary Charge Sheet filed by the respondents before the learned Addl. Sessions Judge, Patiala House, Delhi. It is stated that a comparison of the list of documents seized as per the schedule to the seizure memo with the properties listed in the supplementary charge-sheet which are alleged to have been involved in money laundering, as also the list of properties stated to have been acquired out of ill-gotten money as per the reply filed by the appellant, would reveal that three of the original documents seized did not pertain the properties which are alleged to have been acquired out of the alleged illicit money even as per the allegations levelled by the respondent department. The learned counsel also referred to page 79 of the same suppleme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said cash was paid to Shri Anup Garg through Avinash Tirlotkar a peon of the SBL group as per the instructions of Shri Chetan Jayantilal Sandesara. The aforesaid amount of Rs. 1,52,50,000/-was found to be withdrawn from various bank accounts of SBL group companies which were eventually funded out of credit facilities availed fraudulently by the group. Moreover, statements of several persons were recorded under section 50 of PMLA, 2002 which further corroborated the above facts. The respondent has also submitted that it is pertinent to mention that during the period of Mr. Anup Garg's directorship of the Andhra Bank, i.e., 2006-2009, additional credit facilities to the tune of Rs. 23,500 lakh were sanctioned by the Andhra Bank to various companies of the group. It is also pointed out that the investigation carried out by the respondents established that the appellant had committed the offence of money laundering and, therefore, he was arrested on 12-10-2018 under section 19 of PMLA, 2002. Subsequently, a prosecution complaint was filed against the appellant on 9-3-2018. The Hon'ble Court has taken cognizance of the same and leave of the Special Court was also obtained for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent contends that the documents have rightly been permitted to be retained by the learned Adjudicating Authority, and the appeal is devoid of merit and deserves to be dismissed. 16. I have given careful consideration to the facts on record and to the rival contentions of the parties. The first set of contentions raised by the appellant relates to the alleged non-recording of reasons/satisfaction under sections 17(1), 20(4), and 8(1) without which the authorities concerned could not have assumed jurisdiction under the respective provisions. With regard to these, the respondent has suggested that the case records available with the learned Adjudicating Authority may be called for. The Bench was inclined to accept the suggestion made by the learned counsel for the respondent Directorate. However, the learned counsel for the appellant submitted that instead of calling for the record from the learned Adjudicating Authority the appeal may be decided on the basis of the other contentions put forward by them. Having considered this submission for the appellant's side, the arguments relating to the non-recording of reasons/satisfaction under the respective provisions of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted an offence under section 3 or is in possession of proceeds of crime, it may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, or, seized or frozen under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property. (2) The Adjudicating Authority shall, after (a) considering the reply, if any, to the notice issued under sub-section (1); (b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not supported by any reasoning whatsoever. The findings of the learned Authority which are to be found in paragraphs 6-11 of the impugned order, can briefly be summarized as follows: Investigation for the scheduled offences as well as investigation under PMLA are yet to be completed In view of the continuance of investigation, there may be other evidences which are available with the investigating agencies or will be collected by them The material available in the documents and mobile phone may be required to be confronted and further examined by the Directorate The documents and phone themselves may constitute pieces of evidence in the trial for money laundering and cannot be released to the respondent at this stage The explanation for acquisition of the properties named in the Panchnama, title deeds whereof are seized is irrelevant for the present application when the properties are not even attached. It may become relevant when the Provisional Attachment order is passed in respect of such properties and show cause notice is issued under section 5 (5) of the Act, if any The respondent was the director of the Andhra Bank at the relevant time which was defrauded to such a huge ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BCM Paradise (Annexure-'B' of the Schedule to Seizure Memo) and agricultural land in village Karnavad (Annexure 'F' of the same Schedule) were attached provisionally; (iv) In consequence of the provisional attachment order, on 21-3-2018, an Original Complaint (OC) was also filed before the learned Adjudicating Authority which was pending at the time of passing of the impugned order and was passed subsequently on 24-7-2018; 23. In the impugned order, the Ld. Adjudicating Authority has not made any mention of the above developments which would have been within its knowledge and which were pertinent for it to come to a reasoned conclusion. It also reveals that investigations in the case were not at such a preliminary stage as has been made out in the impugned order. It was also known at that stage which of the properties had been provisionally attached as the confirmation of provisional attachment was pending before the very same authority in the form of an OC. 24. At the stage of disposing of the present appeal the factual position is that an order has been passed by the Ld. Adjudicating Authority in OC-905/2018 confirming the attachment of the two properties mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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