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TMI Blog2024 (12) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... r to attach the property and its adjudication is in the aid of the Special Court, who shall ultimately pronounce upon the aspect of commission of offence of money laundering. Since the proceedings for attachment and its adjudication by the Adjudicating Authority, are in aid of the trial of the offence, an Appeal being preferred against an order passed by the Authority before the Appellate Tribunal, is definitely liable to be entertained on the criminal side. By reading Section 9 of the Act, it was inferred that the proceedings taken therein, following the procedure of Code of Civil Procedure, results either in confirmation of ad-interim order of attachment passed by the Government or varying the same, and sale of property, leading to equitable distribution among depositors of money realised out of such sale, and it was concluded that it would be in form of Civil Appeal. Reliance placed upon the decision of the Delhi High Court in case of Deputy Director, Directorate of Enforcement, Vs. Axis Bank and Ors. [ 2019 (4) TMI 250 - DELHI HIGH COURT ] where the learned Judge has summarized the conclusion to the effect that the process of attachment (leading to confiscation) of proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f eviction was silent on the aspect of money laundering being committed by the appellant. 2. We have heard learned Senior Counsel Mr. Aabad Ponda for the appellant and Mr Sandesh Patil for the respondent. Since at this stage, we are not concerned with the factual details, suffice it to note that on 21/09/2022, a provisional Attachment Order no.08/2022 was passed, which was confirmed by the Adjudicating Authority on 14/03/2023. On 12/04/2023, a notice for eviction was issued by the respondent and being aggrieved, the appellant preferred the Appeal before the Tribunal, praying for stay to the effect and implementation of the order dated 14/03/2023 and the notice of eviction. On 03/08/2023, the PMLA Appellate Tribunal passed the impugned order rejecting the application filed by the appellant and on 04/08/2024, a fresh notice was issued to the appellant, calling upon it to vacate and hand over peaceful possession of the attached properties within five days of the receipt of the notice. Before we could touch the merits of the matter, a question of grave significance arises as to whether the captioned Appeals challenging the impugned order should be entertained on the civil side or the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reads thus: 4. Punishment for money-laundering. Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine. Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words which may extend to seven years , the words which may extend to ten years had been substituted. 5. Section 5 of the Act describe the procedure for attachment of property involved in money laundering and the power is permitted to be exercised by an Officer prescribed therein, if he has reason to believe, on the basis of the material in his possession that any person is in possession of any proceeds of crime and such proceeds are likely to be concealed, transferred or dealt with, in any manner, which may frustrate the proceedings and it also contemplate provisional attachment of such property for a period not exceeding 180 days. An action of attachment under Section 5 is preceded by commission of an offence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the respondent ordinarily resides or carries on business or personally work for gain. 7. Some other provisions in the statute must also be taken note of and this includes the power and procedure to be followed by Adjudicating Authority as well as the Appellate Authority. The Adjudicating Authority as well as the Appellate Authority, for the purpose of discharging its functions under the Act, are vested with the same powers which are available to the Civil Court under the Code of Civil Procedure, while trying a suit and in what matters the power of Civil Court will be exercised, is clearly set out in Section 11, as regards the Adjudicating Authority, and in Section 35 as regards the Appellate Tribunal. Sub-section (3) of Section 35 clearly prescribe that an order made by the Appellate Tribunal shall be executable as a decree of Civil Court and for that purpose, it shall exercise the powers of a Civil Court and it is even open for the Appellate Tribunal to transmit any order made by it to a civil court having local jurisdiction and thereupon, the civil court may execute the order, as if it may be made by that Court. Sub-section (5) of Section 35 deserve a reproduction:- All pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any proceeding, taken or order made under the PMLA, it is evidently clear that the attachment and confiscation of property as prescribed, in Section 65 of the Act, shall be governed by the Code of Criminal Procedure, 1973. Though the Adjudicating Authority and the Appellate Tribunal are vested with the powers of Civil Court, it is limited for the purpose that is provided in the two sections which confer the power upon them. Section 71 in the PMLA, provide for overriding effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force, which make the intention of the Parliament evidently clear. Upon the offence of money laundering being registered, it is permissible to attach the property involved in money laundering, on the basis of a belief of the Officer authorized, of the person being in possession of any proceeds of crime and such proceeds are likely to be concealed, transferred or dealt with in any manner, which will result in confiscation and the confiscation of such property take place on culmination of the trial of the offence of money laundering by the Special Court constituted under section 43 of the PMLA. This is evident fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need to formally register an ECIR, unlike registration of an FIR by the jurisdictional police in respect of cognizable offence under the ordinary law. There is force in the stand taken by the ED that ECIR is an internal document created by the department before initiating penal action or prosecution against the person involved with process or activity connected with proceeds of crime. Thus, ECIR is not a statutory document, nor there is any provision in 2002 Act requiring Authority referred to in Section 48 to record ECIR or to furnish copy thereof to the accused unlike Section 154 of the 1973 Code. The fact that such ECIR has not been recorded, does not come in the way of the authorities referred to in Section 48 of the 2002 Act to commence inquiry/ investigation for initiating civil action of attachment of property being proceeds of crime by following prescribed procedure in that regard. Therefore, we are of the clear view that since the proceedings for attachment and its adjudication by the Adjudicating Authority, are in aid of the trial of the offence, an Appeal being preferred against an order passed by the Authority before the Appellate Tribunal, is definitely liable to be en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed under that statute shall be heard by a Division Bench hearing First Appeals. Since the order in the present Appeal is not an order of penalty or for confiscation, but it is an order refusing stay to the effect and implementation of the order dated 14/03/2023 passed by the Adjudicating Authority and notice of eviction dated 12/04/2023 issued by the respondent no. 1, pending hearing and final disposal of the Appeals under Section 26 of the PMLA, it must necessarily be filed on the criminal side. 16. Mr. Patil appearing for the Enforcement Directorate, has relied upon the decision of the High Court of Orissa in Cuttack, in case of Braja Kishore Sumanta Pattnaik and Ors. Vs State of Odisha and Anr. MANU/OR/1217/2022, where the maintainability of an Appeal against the order of attachment prescribed u/s. 9 of the Odisha Protection of Interests of Depositors (in financial establishments) Act of 2011 was in question. The question arose whether the Appeal would be a Criminal Appeal or a Civil Appeal. 17. One another indication, which we could gather, is from the observations of the Nagpur Bench in case of Nagpur Cable Operators Association Vs. Commissioner of Police 1995 (2) Mh.L.J 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portion thereof, according to us, do not govern the present statute. 15. Considering the provisions of the said Ordinance and the applicability of various provisions of Civil Procedure Code relating to the attachment, disposal of the property so attached, the expression District Judge used therein, the definition of the said expression in the General Clauses Act and the decision of the Apex Court in Ishwarlal's case (AIR 1965 SC 1818), it cannot be said that the proceedings under the said Ordinance in relation to the attachment and disposal of the property are not of civil nature. With respect I am unable to persuade myself to agree with the decision of the learned single Judge of Andhra Pradesh High Court referred to above. Apparently, the definition of the District Judge under General Clauses Act, the decision of the Apex Court of Ishwarlal's case and the fact that the procedure for to the attachment of the property and disposal thereof is required to be in accordance with the various provisions of C.P.C. do not appear to have been brought to the notice of the Court in the said decision. Rather the arguments were on the assumption that the proceedings under the said Ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rights of the contesting parties, the Adjudicating Authority shall have the powers vested in a civil court under Code of Civil Procedure and the proceedings shall be deemed to be civil proceedings. However, upon the attachment of the property, when it vest in the Central Government under sub-section (5) or sub-section (7) of Section 8, it shall vest in the Central Government free from all encumbrances and the Central Government may appoint the Officers to act as Administrator to manage such property and even to comply with the directions of disposal of the property which could be exercised by the Central Government. The contingency stipulated under sub-section (7) of Section 8 is only in case of death of the accused or the accused being declared as proclaimed offender, or in any case, when the trial could not be concluded whereas, it is only on conclusion of trial, when the conclusion is drawn that an offence of money laundering has been committed or that the property has been used for commission of offence, it shall stand confiscated to the Central Government. The ultimate test to be applied is, whether the attachment of property was on account of the registration of offence under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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