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TMI Blog2024 (12) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... rty being a joint property without notice to the joint holder invalidates the attachment order? - HELD THAT:- There are no material on record to show that the property attached to be a joint property and in any case, if it is assumed for the sake of argument that the property attached is a joint property, the challenge to the order should have been made by the party holding the property with joint share. The appeal is not preferred by anyone else than the appellant - this ground cannot be accepted as well. Thus, there are no case to cause interference in the impugned order - appeal dismissed. - JUSTICE MUNISHWAR NATH BHANDARI CHAIRMAN AND SHRI RAJESH MALHOTRA MEMBER For the Appellant: Mr. Pranav Sarthi, Advocate For the Respondent: Ms. Anubha Bhardwaj, Advocate ORDER The appellant has preferred this appeal under section 26 of the Prevention of Money Laundering Act, 2002 (in short, the Act of 2002) to challenge the order dated 28.12.2021 confirming the provisional attachment order dated 12.01.2021. 2. Three immovable properties worth of Rs. 4,87,00,000/- have been attached. 3. It is a case where an FIR was registered for the offence under section 120-B read with section 420, 467, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of 180 days. Thus, the impugned order deserves to be set aside on the aforesaid ground itself. 6. The other ground was that property attached by the respondent is a joint property. The entire property has been attached ignoring the joint ownership and without a notice to the joint holder of the properties. Thus, on the aforesaid ground also, the impugned order deserves to be set aside. 7. The appellant did not raise any other issue to the question the impugned order despite an opportunity rather he was called upon to raise any other issue pleaded in the appeal or any other legal issue, but the counsel for the appellant restricted his argument limited to issues referred above and accordingly the counsel for the respondent was called to contest the appeal. 8. The counsel for the respondent contested the appeal on both the grounds urged by the appellant. It was submitted that the provisional attachment order would not lapse despite its confirmation after a period of 180 days because of Covid -19. 9. The period from 15.03.2020 till 28.02.2022 has been excluded by the Apex Court for termination of proceeding in Suo Moto Writ Petition (C) No. 3 of 2020 decided by order dated 10.01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rose due to Covid-19. The period of Covid-19 has been excluded from 15th March 2020 till 28th February 2022 by the purpose of limitation for the litigants and for termination of the proceedings. 17. In view of the above, the period intervening 15th March 2020 till 28th February 2022 has to be excluded for determination of the period of 180 days. It is not in dispute that the provisional attachment order was issued on 23rd December, 2020 and the confirmation order was passed on 09.11.2021. The period was effected by Covid 19 and the Apex Court in Suo Moto Writ Petition (C) No. 3 of 2020 excluded the period of Covid-19 for termination of proceedings in its order dated 10.01.2022. In the subsequent Judgement of the Apex court in the case of Prakash Corporates vs Dee Vee Projects Limited [2022 INSC 180], elaborate discussion of the issue was made and therein the earlier judgement of the Apex Court in the case of S. Kasi v. State [Criminal Appeal No. 452 of 2020] was discussed and distinguished. 18. The Telangana High Court in the case of Hygro Chemicals Pharmtek Pvt. Limited Vs. Union of India Ors [MANU/TL/1003/2023] has given a detailed Judgement on the issue and the relevant paras of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cations physically. The relevant paragraphs of In re: Limitation (supra) are extracted below: 1. This Court has taken suo motu cognizance of the situation arising out of the challenge faced by the country on account of Covid-19 virus and resultant difficulties that may be faced by litigants across the country in filing their petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under special laws (both Central and/or State). 2. To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective courts/tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or special laws whether condonable or not shall stand extended w.e.f. 15-3-2020 till further order(s) to be passed by this Court in present proceedings. v) Subsequently, the limitation period was extended vide In re: Cognizance for Extension of Limitation MANU/SC/0108/2022: (2022) 3 SCC 117 (hereinafter 'In re: Limitation, 2022') till 28.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.02.2022 shall be excluded to compute the period of 12 months under Section 29A of the Arbitration Conciliation Act, 1996. Similarly, Section 12A(3) of the Commercial Courts Act, 2015 provides an outer time period of three months within which pre-institution mediation shall be completed. However, by virtue of In re: Limitation, 2022 (supra), the period from 15.03.2020 to 28.02.2022 shall be excluded to compute the period of 3 months. Therefore, In re: Limitation, 2022 (supra) states that wherever a statute prescribes a maximum period within which proceedings have to be completed, the period from 15.03.2020 to 28.02.2022 shall be excluded to compute such maximum period. vii) To decide the applicability of In re: Limitation (supra) in computation of 180 days for confirming the provisional attachment of property, it is apposite to discuss the nature of time frame prescribed under Section 5 of the PMLA. For the sake of convenience, Section 5 is extracted below: 5. Attachment of property involved in money- laundering.- 29[(1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. viii) Section 5(1) of the PMLA provides that the authorized officer can provisionally attach properties for a period not exceeding 180 days. The third proviso to Section 5(1) of the PMLA states that if the proceedings initiated under the PMLA are stayed by the High Court, then such period during which the stay operates shall be excluded in computi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt paragraph is extracted below: 22. In view of the above discussion, this Writ Petition is disposed of granting two months time from today to the petitioners to submit their explanation/reply to the show cause notice dated 19.09.2022. However, it is made clear that the petitioners herein shall not seek further extension of time and they shall submit explanation/reply within the said extended period of two months by keeping in view the object and legislative intent of Section 8 of the Act, that the adjudicating process is time bound. It is relevant to note that for the purpose of computing the period of 180 days, the period which was extended by this Court for submitting reply is excluded as per third proviso to Section 5(1) of the Act. xi) The decision in Karvy Realty (supra) confirmed by a division bench of this Court vide order dated 13.02.2023 in W.A. No. 194 of 2023. xii) According to this Court, in appropriate cases, certain period can be excluded while computing the 180 day period under Section 5(3) of the PMLA. It is important to note exclusion of certain period is different from extending the period. In the present case, the Apex Court exercising its inherent powers under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limitation, In re, MANU/SC/0505/2020: (2020) 19 SCC 10] never meant to curtail any provision of the Code of Criminal Procedure or any other statute which was enacted to protect the personal liberty of a person. The right of prosecution to file a charge-sheet even after a period of 60 days/90 days is not barred. The prosecution can very well file a charge-sheet after 60 days/90 days but without filing a charge-sheet they cannot detain an accused beyond a said period when the accused prays to the court to set him at liberty due to non- filing of the charge-sheet within the period prescribed. The right of prosecution to carry on investigation and submit a charge-sheet is not akin to right of liberty of a person enshrined under Article 21 and reflected in other statutes including Section 167 CrPC. the right of personal liberty of a person as enshrined in the Constitution of India. The order of this Court dated 23-3-2020 [Cognizance for Extension of Limitation, In re, MANU/SC/0505/2020: (2020) 19 SCC 10] never meant to curtail any provision of the Code of Criminal Procedure or any other statute which was enacted to protect the personal liberty of a person. The right of prosecution to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its judgment dated 12-5-2020 has after considering the judgment of this Court dated 23-3-2020 passed in Cognizance for Extension of Limitation, In re [Cognizance for Extension of Limitation, In re, MANU/SC/0505/2020 : (2020) 19 SCC 10] has taken the view that the order of this Court does not cover police investigation. We approve the above view taken by the learned Single Judge of the Madras High Court in Settu v. State [Settu v. State, MANU/TN/3790/2020] as well as by the Kerala High Court [Mohd. Ali v. State of Kerala, MANU/KE/1171/2020], the Rajasthan High Court [Pankaj v. State, MANU/RH/0309/2020] and the Uttarakhand High Court [Vivek Sharma v. State of Uttarakhand First Bail Application No. 511 of 2020, order dated 12-5-2020 (Utt)] noticed above. xv) Relying on the decision in S. Kasi (supra), a learned single judge of the Delhi High Court in Vikas WSP Ltd. (supra) held that provisional attachment of properties deprives a party of his right to property. Therefore, In re: Limitation (supra) does not extend to PMLA proceedings in computation of 180 days within which provisional attachment of properties has to be confirmed by the Adjudicating Authority. The Court therein also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of limitation prescribed under the Arbitration and Conciliation Act, 1996 and under Section 138 of the Negotiable Instruments Act, 1881, observing as under:- 31. In fact, the most relevant in this series of orders to the present controversy is the order dated 10.07.2020, which clearly shows that the above referred two orders of the Supreme Court were only in relation to the period of limitation and did not extend the period to do something required under a Statute or the period of validity of an order, as in the present case. Realizing such difference, the Supreme Court extended the period to pass an Arbitral Award under Section 29A and for completion of pleadings under Section 23(4) of the Arbitration and Conciliation Act, 1996 as also for completing the process of compulsory pre- litigation, mediation and settlement under Section 12A of the Commercial Courts Act, 2015, however, refused to extend the period of validity of a cheque. This itself shows that the orders of the Supreme Court are not a universal extension of time across the board, be it limitation or period prescribed for doing a particular thing, or as in the present case, the period of validity of an order. 32. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e judgment of the Hon'ble Supreme Court in the case of S. Kasi (supra) in my considered opinion the Adjudicating authority/Respondent No. 2 cannot be called a litigant or advocate or a quasi- judicial authority and cannot take the benefit of the order of the Hon'ble Supreme court passed in Suo moto Writ Petition (Civil) No. 3 of 2020 (supra) by taking the stand that on the expiry of validity of the said provisional attachment order after 180 days under Section 5 (3) of the aforesaid Act, the same would be deemed to have been extended automatically by virtue of the aforesaid order of the Hon'ble Supreme Court when he was not required to pass any formal order of extension of the same under Section 8 (3) of the aforesaid Act. I am of the considered opinion that such stand of the Respondent No. 2 is legally not sustainable since the impugned order of provisional attachment of bank accounts and postal accounts in question of the petitioner, dated 11th December, 2019, which has expired its validity on 9th June, 2021, has no force after expiry of 180 days from the date of passing of such order in view of not passing any formal order under Section 8 (3) of the said Act extendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 under the Act and not to deprive a litigant of such right of remedy where the litigant has not been able to physically come to the Court or to the Tribunal to file the proceeding in aid of the right. 16. The right thus conferred by the Supreme Court is in relation to the prescribed period of limitation in instituting a proceeding. 18. Section 5(3) is a clear embargo on the order of attachment continuing to have effect after the expiry of 180 days. Section 5(1) designates the authority and the steps to be taken for proceeding against any person who is in possession of any proceeds of crime. The section is hence c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit 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, the petitioners have established a case where such right is under threat by the action of the ED. The litigants have been conferred a benefit under Section 5(1)(b) and 5(3) of the PMLA on the failure of the Authority to take action with in the specified time frame. If the Authority does fail to take requisite steps, the right to relief arises immediately after exhaustion of the 180 days window and once such right is (supra). xviii) According to this Court, the decision in S. Kasi (supra) cannot be relied upon by the Petitioners to contend that In re: Limitation (supra) is not applicable in computing 180 days under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause sub-section (6) of Section 8 postulates that where on conclusion of a trial under the 2002 Act which is obviously in respect of offence of money laundering, the Special Court finds that the offence of money laundering has not taken place or the property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it. Once the possession of the property is taken in terms of sub-section (4) and the finding in favour of the person is rendered by the Special Court thereafter and during the interregnum if the property changes hands and title vest in some third party, it would result in civil consequences even to third party. That is certainly avoidable unless it is absolutely necessary in the peculiar facts of a particular case so as to invoke the option available under sub-section (4) of Section 8. 305. Indisputably, statutory Rules have been framed by the Central Government in exercise of powers under Section 73 of the 2002 Act regarding the manner of taking possession of attached or frozen properties confirmed by the Adjudicating Authority in 2013, and also regarding restoration of confiscated property in 2019. Suffice it to obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Cognizance for Extension of Limitation, In re, MANU/SC/0108/2022 : (2022) 3 SCC 117 : (2022) 2 SCC (Civ) 46 : (2022) 1 SCC (Cri) 580 : (2022) 1 SCC (L S) 501], this Court again restored the principal order dated 23-3-2020 [Cognizance for Extension of Limitation, In re, MANU/SC/0505/2020 : (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] and in continuation of the previous orders, has further 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 judicial or quasi-judicial proceedings. Be that as it may, the fresh order in SMWP No. 3 of 2020 need not be elaborated for the present purpose.] 32.2. In fact, in S. Kasi case [S. Kasi v. State, MANU/SC/0491/2020 : (2021) 12 SCC 1] , this Court also noticed that a coordinate Bench of the same High Court had already held [Settu v. State, MANU/TN/3790/2020] that the said order dated 23-3-2020 [Cognizance for Extension of Limitation, In re, MANU/SC/0505/2020 : (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] did not cover the offences for which Section 167 CrPC was applicable but, in the order [S. Kasi v. State, MANU/TN/7730/2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the view adopted in Vikas WSP Ltd. (supra), Gobindo Das (supra) and Hiren Panchal (supra). The decision in Vikas WSP Ltd. (supra) was stayed by a Division Bench of the Delhi High Court vide order dated 08.01.2021 in LPA 362/2020. In any case, the question regarding the application of In re: Limitation (supra) was left open. xxv) As far as Gobindo Das (supra), is concerned, though it is true that Adjudicating Authority is not a litigant, the authorized officer representing the ED is a litigant to the proceedings initiated under PMLA and for the purpose of application of In re: Limitation (supra). Therefore, where the ED has been diligent in provisionally attaching the property and filing the original complaint within 30 days under Section 5 of the PMLA, prejudice cannot be caused to it by not excluding the period from 15.03.2020 to 28.02.2022. One litigant's interests cannot be protected at the cost of another. This Court would further like to stress that the provisionally attached properties can still be enjoyed under Section 5(4) of the PMLA. xxvi) The reasoning in Hiren Panchal (supra) that what was protected under In re: Limitation (supra) was institution of proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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