9911796707
TMI Blog2024 (12) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no requirement for an intermediary to import the DAP. Even though, the appellant is not named in the FIR, chargesheet and supplementary chargesheet, the investigating authority under PMLA, 2002, can go ahead with search seizure to arrive at a conclusion whether the retention of the seized items is required for the purposes of further investigation. The respondent ED, in the OA, has categorically reflected the reasons of making further investigation in the matter. It is alleged in the OA that the appellant has made illegal earnings arising out of the criminal acts (illegal commission) and generated funds, which were Proceeds of Crime and that were required to be traced out and that the appellant could not explain the source of acquiring the cash and jewellery during search proceedings. Since, the proceedings before the ED are at the investigation stage, it would not be proper to release the cash and jewellery which are highly liquid in nature. The appeal has no merit. Hence, dismissed. - SHRI G. C. MISHRA : MEMBER And SHRI RAJESH MALHOTRA : MEMBER For the Appellant : Mr. R K Handoo, Adv. For the Respondent : Mr. Aditya Singla, Adv. ORDER Dictated by G. C. Mishra : The pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent transaction as genuine amongst other allegations. IV. It is further revealed from the O.A that during the course of investigation in the above case conducted under PMLA 2002, it was revealed that the appellant, Sh. Ajay Kumar Gupta, sold imported fertilizers to entities in India including entities controlled by the Government of India through a Dubai based company namely Astra Global DMCC, (beneficially owned by Sh. Ajay Kumar Gupta) acting as an intermediary between producers and purchasers and thus gained illegal commissions and that during the course of investigation Sh. Narayan Parasuram was examined and his statement was recorded on 15.09.2023 u/s 50 of PMLA, 2002, wherein he submitted two agreements dated 24.04.2007 and 30.04.2007 and that as per the agreement dated 24.04.2007 the Jordan Phosphate Mining Company (JPMC) was to supply DiAmmonium Phosphate (DAP) to M/s Astra Global DMCC at the price of USD 300 per MT FOB and as per agreement dated 30.04.2007, the M/s Astra Global DMCC was supplying DAP to India Potash Limited at a much higher price of USD 474 per M.T (the said agreement dated 30.04.2007 was also tendered by Shri. P.S Gahlaut, M.D of IPL in his statement u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank account for it with credit Agricole SA and the funds in that account represented his (Vivek Gahlaut's) commission owed to his family's share for the profit of the fertilizers business carried out by Mr. Ajay Kumar Gupta and his companies with IFFCO/IPL. 8. It is stated in the O.A that Ajay Kumar Gupta had set up M/s Astra Global DMCC for sole purpose of booking illegal commission acting as an intermediary with regard to sale of DAP to IPL/IFFCO at inflated prices. 9. It is alleged in the O.A that further investigation has established that Ajay Kumar Gupta and his wife Sonia Gupta are Directors of Tradex India Corporation Private Limited and 100% shareholding of Tradex India Corporation Private Limited is held with Ajay Kumar Gupta HUF, Ajay Kumar Gupta and Sonia Gupta. Moreover, M/s Astra Global DMCC is wholly owned subsidiary of Tradex India Corporation Private Limited which in turn is beneficially owned by Ajay Kumar Gupta and that Tradex India Corporation Private Limited has received huge dividend income from M/s Astra Global DMCC, Dubai during FYs 2011-12, 201213 2013-14 which is presently under investigation. 10. It is also revealed form the O.A that on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under FEMA, 1999 and then later again artificially shown to be seized afresh from the appellant on 29.09.2023 under PMLA, 2002. And that contents of locker were already in possession and control of Enforcement Directorate by way of freeze order dated 15/16.10.2020, hence, being in its possession could not be seized as seizure means and involves taking over of possession and hence there was no reason to believe to issue warrant under PMLA 2002 for seizure. And that the Ld. AA failed to perceive the pre-requisites for invoking the seizure under section 17(1) of PMLA, 2002 on 29.09.2023 on property already lying seized with same officer under FEMA, 1999, since October 2020 and examined under FEMA 1999 on 14.02.2023. And that there is absence of factual foundation in justifying the seizure of the impugned property under PMLA, 2002. And that there was no scope of allowing retention, more so, in view of the facts contrary to the claims and that the procedural guideline. And that procedural safeguard provided in section 17 (4) of PMLA, 2002 providing for making an application within 30 days of the seizure had also been violated in as much as, the application for retention made under 27. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retention of digital data and record has been confirmed and that no specific mention of jewellery in the impugned order. The Ld. Counsel for the appellant has relied on the following judgements in support of their contentions: (i) Opto Circuit India Limited v. Axis Bank and others [(2021) 6 SCC 707] (ii) Pradeep Kumar and Ors. v. Deputy Director, Directorate of Enforcement and Ors. [MANU/TL/ 1285/2022] (iii) Rashmi Metaliks Limited and Another v. Enforcement Directorate and others. [2022 SCC OnLine Cal 2316] (iv) Common Order in I.A. Nos. 1,2 and 3 of 2021 in I.A No. 2 of 2019 in C.M.S.A No. 15 of 2019 On the basis of above, the appellant has prayed for setting aside of the impugned order with direction to release the contents of locker, refund of cash seized with interest. 14. It is submitted by the respondent ED that the CBI FIR dated 17.05.2021 in respect of the scheduled offences under section 120-B 420 of IPC and 13(2) read with 13(1)(d) of the PC Act, 1988 is merely a prosecution in respect of scheduled offence itself, and independent of the process and activity connected with the tainted property, generated from the commission of scheduled offence and the present investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2018 SCC OnLine Del 6565: (2018)248 DLT 630: (2018)360 ELT 395] 17. Heard both the parties, gone through the material available on record and perused the judgements cited by both the parties. 18. On perusal of the OA, it is revealed that the information was with the respondent ED regarding the complicity of the present appellant and appellant's firms mentioned above and on the basis of the information the respondent authority formed had reason to believe already recorded in writing in O.A that the appellant has committed an act which constitutes money laundering and that if one of the conditions envisaged u/s 17(1) of the PMLA, 2002, is present then it qualifies for retention for the purpose of investigation. And that non-mentioning of jewellery in the impugned order maybe a typographical error but the entire paragraph has to be read together and if the entire paragraph of the impugned order is read then it is seen that the Ld. AA has clearly mentioned that thus, the retention of cash, digital devices and documents/records seized as specified in the O.A . It is further seen that in the OA, the respondent ED has clearly prayed for the retention of jewellery items and cash seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l v. Union of India two others has made following observations which are reproduced below: 28. Section 17 authorizes a search and seizure by the Director or an Officer not below the rank of the Deputy Director as may be authorized by him. Search and seizure can be initiated on the basis of information in possession of searching or seizing officer as also on the basis of belief, which has to be recorded in writing, that any person has committed any act constituting money-laundering, etc. Searching and seizing officer then can enter and search the building, place, etc. and carry out various acts as contemplated in Section 17. Such exercise is not permissible in absence of a report or a complaint as the case may be, by a person authorized to investigate the scheduled offence, to the Magistrate or a Court as the case may be, in relation to a scheduled offence and or in cases where such report is unnecessary, the information has to be submitted by the officer authorized to investigate the scheduled offence to an officer mentioned in Section 17. Under sub-section (1-A) of Section 17 of P.M.L. Act, freezing orders of properties can be passed if seizure is not practicable. Similarly, an au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sections 5, 17 and 18 with which Adjudicating Authority or the Court is authorized to deal with can be confirmed by the Adjudicating Authority or by the Special Court on conclusion of the trial. 31. In light of the aforementioned scheme of several provisions of P.M.L. Act, the question as to whether the proceedings under Sections 5, 8 and 17 are civil proceedings or criminal is required to be addressed. The argument is that unless a report or the complaint as contemplated under first proviso to Section 5 and also as contemplated in the proviso to sub-section (1) of Section 17 is made, the proceedings are not sustainable. As noticed in greater detail, the ultimate object of Section 5 is provisional attachment of the property. The object appears to prevent destruction of the evidence which may be produced in the proposed criminal proceedings or to take in possession the property involved in the money-laundering, though the proceedings can be initiated on the basis of the reports or complaint, etc., as contemplated in the first proviso to Section 5. In view of second proviso, proceedings can be initiated under Section 5 even in absence of compliance of first proviso. Various safeguard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, proviso to Section 17(1) indicates that the report under Section 157 of Cr.P.C. may not be necessary and therefore, freezing of accounts under Section 17(1-A) without such report is prima facie permissible. However, in view of the preliminary stage of the proceedings initiated against the petitioners, no final verdict can be pronounced on that aspect. However, in this context, FFR Software Private Limited (supra) explains in detail the authority vested in the Directorate of Enforcement to freeze the properties preceding the provisional attachment under Section 5 of P.M.L. Act. Paragraphs-5 and 6 of the said case can be quoted herein for convenience: 5. Having heard learned counsels for the parties and on perusal of the record of the case, I find substance in the contention of the respondents that the given statutory mandate under the PML Act makes it imperative for the authorities in the course of investigation Le collection of facts to establish specific details of the suspected properties from the concerned authorities prior to issuance of the provisional attachment order under section 5 of the Act. As such, it has to be issued with abundant caution. It is therefore necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the learned counsel for the petitioners, pertinent observations made in FFR Software Private Limited (supra) in Paragraphs-8 9 are thus: 8. It is trite that Article 226 is not meant to short circuit or circumvent statutory procedures. The court must have good and sufficient reasons to bypass the alternative remedies provided by the statute. In the case of Asstt. Collector of Central Excise, Chandan Nagar, West Bengal v. Dunlop India Ltd. and others (1985 SCC(1) 260), the Apex court has held that where the statute itself provided the petitioners with an efficacious alternative remedy by way of an appeal to the Prescribed thereafter Authority, have the a cases second appeal stated to the to the High Court, it tribunal was and not for to the High Court to exercise its extra ordinary jurisdiction under Art. 226 of the Constitution ignoring as it were, the complete statutory machinery. 9. In yet another case of Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement Another Civil Appeal No. 3221 of 2010 Date of judgment 12.04.2010 the Hon'ble Supreme Court has observed that: The High Court does not therefore act as court of appeal against the decision of a court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by convincing the Adjudicating Authority that no offence under Section 3 is committed by the petitioners, the orders de- freezing their accounts can be obtained from the such authority. In the facts and circumstances discussed hereinabove, it is difficult to accept the contention that initiation of the proceedings against the petitioners are illegal. 37. It is worthwhile to note that as per case of the respondents, on consideration of the material found during search aforementioned, a further process to inquire into the matter is initiated. Assuming again that provisions of Sections 5 and 17 were applicable, the material was already collected under FEMA from aforementioned company in which petitioner-Afroz Mohamad Hasanfatta in Special Criminal Application No.1748 of 2014 is a Director. Once such material was collected, there was no occasion for the respondents to again make search for the same purpose and therefore, in the facts of the case, Sections 5 and 17 were not attracted for the purpose of initiation of inquiry or investigation. In view of the provisions made in Cr.P.C., it is always permissible for the authorities or officers under the Act to proceed ahead with the inquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R, chargesheet and supplementary chargesheet, the investigating authority under PMLA, 2002, can go ahead with search seizure to arrive at a conclusion whether the retention of the seized items is required for the purposes of further investigation. The respondent ED, in the OA, has categorically reflected the reasons of making further investigation in the matter. The respondent ED has also recorded reasons in the OA which led to believe them that the cash and jewellery are required for the purpose of further investigation to know the complicity of the appellant, his family members and the companies namely M/s Astra Global DMCC and Tradex India Corporation Private Limited in getting the alleged commission in the import of fertilizers from M/s JPMC as an intermediary. It is alleged in the OA that the appellant has made illegal earnings arising out of the criminal acts (illegal commission) and generated funds, which were Proceeds of Crime and that were required to be traced out and that the appellant could not explain the source of acquiring the cash and jewellery during search proceedings. Since, the proceedings before the ED are at the investigation stage, it would not be proper to r ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
