Partly allowed

FPA-PMLA-885/MUM/2015 of Lucian Louis Fonseca & Anr. v/s The Deputy Director Directorate of Enforcement, Mumbai

ATFP17 Mar 2017FPA-PMLA-885/MUM/2015

Case brief

AI extract

What is this about?

The Appellate Tribunal set aside the confirmation of provisional attachment of property to the extent of the appellants' undivided share due to failure to issue statutory notice under Section 8(1) PMLA. The matter was remanded to the Adjudicating Authority for hearing of the aggrieved owners, and possession of the specific premises was restored to the appellants.

What did the court decide?

Confirmation order set aside to the extent of appellants' share; matter remanded to Adjudicating Authority for notice and hearing; possession of specific premises restored subject to undertaking.

FPA-PMLA-885/MUM/2015 of Lucian Louis Fonseca & Anr. v/s The… — Money Laundering | ATFP (2017)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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Date of Judgment: 17.03 2017

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MP-PMLA-1730/MUM/2015 (INTERIM RELIEF) FPA-PMLA-885/MUM/2015

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Lucian Louis Fonseca & Anr. … Appellants

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Versus The Deputy Director Directorate of Enforcement, Mumbai … Respondent

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Advocates/Authorized Representatives who appeared

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For the appellants	:	Shri Jacob Kadantot, Advocate Shri Rajmohan Amonkar, Advocate
For the respondent	:	Shri N.K. Matta, Advocate & Ms. Sunanda Tulsyan, Advocate
CORAM
JUSTICE MANMOHAN SINGH SHRI KAUSHAL SRIVASTAVA	: :	CHAIRMAN MEMBER
SHRI ANAND KISHORE	:	MEMBER

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FPA-PMLA-885/MUM/2015

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The Appellant has filed the above said Appeal under Section 26 of the Prevention of Money Laundering 2002 against the Confirmation Order dated 16^th September 2013 passed by the Adjudicating Authority under the PMLA in Original Complaint No.197 of 2013 filed by the Respondent No.1 in Provisional Attachment Order No.08 of 2013 dated 28^th March 2013 passed by the Respondent No.1. The appellant was not a party to the said proceeding nor the appellant was served any notice or heard in the said proceedings.

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FPA-PMLA-885/MUM /2015

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The Respondent No. 1 is the Deputy Director, Directorate of Enforcement. The Respondent No. 2 is one of the accused persons against whom Case No. ECIR/10/MZO/2012 under the PMLA was registered by the Respondent No. 1.

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The Appellants have filed the present Appeal challenging the Confirmation Order dated 16^th September, 2013 and taking of actual physical possession and/or attachment in consequent to the seizure by the Respondent No.1 of land admeasuring about 102 sq. mts. situated, lying and being at S. V. Road, Khar Gaothan, Khar, Mumbai bearing survey No. F/195-A Original Plot No.118 and Final Plot No.118 of TPS III, Bandra and bearing corresponding CTS No. F/195-A Taluka Andheri in the Registration District and Sub-District of Bombay City and Bombay Suburban together with building/structure comprising of ground and one upper floor known as "Fifty Fifty" standing thereon including the Appellant premises being rooms in the ground floor of the Building as per case of the appellants and facts mentioned in the appeal.

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The Appellants claim that they are co-owners/Joint owner of the Building and the Subject Property by virtue of having about 50% undivided share, right, title and interest therein as reflected in the property card. In order to establish their claim, few facts are stated by them. They are that their late grandmother Rose Monica Fonseca was absolutely seized and possessed of and well and sufficiently entitled to the Subject Property. The Appellants late father was in possession of the Subject Premises since 1953. The said Rose Monica Fonseca died intestate on 19^th May 1966 leaving behind her surviving five children (1) Anne Mary Fonseca (deceased), (ii) Francis Thomas Fonseca (deceased), (iii) Mary Isabella Cabral (deceased), (iv) Alfred Anthony Fonseca (deceased father of the Appellants) and (v) Lewis Felix Fonseca (deceased), as her only heirs and FPA-PMLA-885/MUM /2015 Page 2 of 40

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legal representatives. Anne Mary Fonseca (deceased) joined a religious order and became a nun and dedicated her life to religion. Isabella Cabral (deceased) was duly compensated for her respective share, right, title and interest in the Subject Property. Accordingly, Francis Thomas Fonseca (deceased), the Appellants deceased father and Lewis Felix Fonseca (deceased) each became entitled to undivided share, right, title and interest in the Subject Property. In or around 19^th February 1966, the Appellant No.2 left the subject premises for her matrimonial home.

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4.1. In or around 26^th November 1967, Mary Isabella Cabral died intestate leaving behind her surviving seven children (i) Lily Agnes Cabral, (ii) Beryl Cabral, (ill) Ruby Fernandes, (iv) Trevor Albert Cabral, (v) Archie Cabral, (vi) Christopher Cabral and (vii) Reynold John Cabral, as her only heirs and legal representatives.

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4.2. On or about 1973, the Appellant No.1 along with his late parents went to stay at Juhu as the Appellant No.1 desired to get married and the Subject Premises was too small to accommodate a larger family. The Appellants late father visited the Subject Premises regularly to clean the same and paid his share of property and other taxes in respect of the Subject Property to the Appellants late Uncle Lewis Felix Fonseca. The Subject Premises was also used by the Appellant No.1 to store furniture, clothes, books and other belongings.

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4.3. In or around 26^th December 1981, Francis Thomas Fonseca died intestate leaving behind him surviving his wife Rose Maria Fonseca (deceased) as his only heir and legal representative.

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4.4 Subsequently, on or about 1981, criminal case was filed against the FPA-PMLA-885/MUM /2015 Page 3 of 40

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Appellant No.1 in the Metropolitan Magistrates Court at Bandra by the Appellants late Uncle Lewis Fonseca, with the intention of harassing and coercing the Appellants late father into parting away with his share in the Subject Premises and the Subject Property. The Appellants late Uncle Lewis Fonseca refused to accept the Appellants late father's contribution towards the property and other taxes in respect of the Subject Property and the Subject Premises.

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4.5. In or around 12^th February 1982 Rose Maria Fonseca died intestate without any issue.

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4.6. In or around 26^th April 1986, Alfred Anthony Fonseca died intestate leaving behind him surviving his wife Charlotte Mary Fonseca (the Appellants deceased mother) and two children, the Appellants herein, as his only heirs and legal representatives. The Appellant No.1 and his mother were since in exclusive occupation of the Subject Premises.

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4.7. On or about March 1989, the Appellants late Uncle Lewis Felix Fonseca together with his two sons began interfering and affecting the Appellant No. l enjoyment of the Subject Premises, forcefully locked some rooms of the Subject Premises preventing and depriving the Appellant No. 1‟s use thereof and erected two huge iron gates in the compound of the Subject Property to restrict the Appellant No. l's access to the kitchen and toilet attached to the Subject Property in the ground floor of the Building. The Appellant no.1 was therefore constrained to file S. C. Suit No.7587 of 1990 on 12^th December 1990 and Notice of Motion No.5393 of 1990 therein at the Bombay City Civil Court at Bombay seeking inter alia order of Injunction restraining the Appellants late Uncle Lewis Felix Fonseca, his two sons and one Mr. Chandu from interfering with the Appellant No. l's

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FPA-PMLA-885/MUM /2015

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possession of the Subject Premises and use of the toilet block on the ground floor of the Building in any manner whatsoever. Subsequently, by an order dated 15^th April 1991 the Hon‟ble Judge of Bombay City Civil Court, in the Notice of Motion No.5393 of 1990 granted the interim order restraining by temporary injunction from interfering with the Appellant No. l's possession of the Subject Premises and use of the toilet block in the ground floor of the Building In any manner whatsoever.

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4.8 It is the case of the Appellant No.1 that he was indisputably in uninterrupted and continuous physical possession, use and occupation of the Subject Premises since 1953 manifest by large name plate of the Appellant No.1 affixed prominently at the entrance to the Subject Premises. The Appellant No.1 has been paying property tax and electricity bills in respect of the Subject Premises/Subject Property.

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4.9 In or around 29'" April 1991, purported Agreement for Sale was surreptitiously entered into between Lewis Felix Fonseca (Appellants late Uncle) and one Mr. Rashmikant Mansukhlal Shah whereby it was agreed that the Appellants late Uncle would sell, assign, release and convey his undivided share, right, title and Interest in the Subject Property to Mr. Rashmikant Mansukhlal Shah.

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4.10. In or around 28^th July 1991, Anne Mary Fonseca died intestate.

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4.11. In or around 9^th October 1992, the Appellants late Uncle Lewis Felix Fonseca without any information to them entered into Conveyance Deed with Mr. Rashmikant Mansukhlal Shah whereby he sold, assigned,

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FPA-PMLA-885/MUM /2015

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released and conveyed his undivided share, right, title and interest in the Subject Property to Mr. Rashmikant Mansukhlal Shah.

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4.12. In or around 25^th May 2000, it is alleged by the appellant that fabricated and false Deed of Rectification was fraudulently made by Mr. Rashmikant Mansukhlal Shah seeking to rectify the Conveyance Deed dated 9^th October 1992 so as to fraudulently include the names of the Appellants and their deceased mother as confirming parties thereto on the basis of forged and fabricated power of attorneys of the Appellants and their late mother. Subsequently, in or around 5^th January 2001 on basis of fraudulent documents, the name of Mr. Rashmikant Mansukhlal Shah was incorrectly added as sole owner of the Subject Property in the property card and the names of the Appellants and their late mother were deleted therefrom.

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4.13. In or around May 2003, Charlotte Mary Fonseca died intestate leaving behind her surviving the Appellants namely Lucian Louis Fonseca and Heather Clarke as her only heirs and legal representatives. The Appellants each became entitled to about 25% undivided share, right, title and interest in the Subject Property.

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4.14 On or about May 2006, the Appellant No.1 upon learning of addition of the name of Mr. Rashmikant Mansukhlal Shah as sole owner of the Subject Property in the property card, promptly challenged the same before the Court of the City Survey Officer, Mumbai Suburban District, Bandra, Mumbai whereupon after detailed hearing and full opportunity being provided to Mr. Rashmikant Mansukhlal Shah, an order dated 14^th January 2009 came to be passed by which the names of the Appellants

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were restored in the property card on the ground that no authority was ever given by the appellants or their deceased mother to Mr. Rashmikant Mansukhlal Shah as purported to make the Rectification Deed dated 25^th May 2000. The order dated 14^th January 2009 of the City Survey Officer at Bandra and true English translation thereof, have been filed, the names of the Appellants were restored in the property card.

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4.15. On or about August 2010, the Respondent No.2 who purchased the property from Rashmi Mansukh Shah started operating out of the rooms in the first floor of the Building which was earlier occupied by the Appellants late Uncle Lewis Felix Fonseca and Mr. Rashmikant Mansukhlal Shah.

¶42

It is alleged in the appeal by the appellants that on 2^nd July 2014, upon a visit to the Subject Premises, the son of the Appellant No.1 could not access the same as it was attached by the Respondent No.1. The Appellant No. l's son came upon the undated Notice affixed on the gate of the Subject Property, by and through which the Appellants for the first time became aware that the Subject Property and the Subject Premises were actually seized, attached and taken possession of by the Respondent No. 1 vide the Provisional Order, pursuant to proceedings initiated against the Respondent No. 2 in Case No. ECIR/10/MZO/2012 and the Confirmation order in Original Complaint No. 197 of 2013. The Appellants subsequently learnt through inquiry with the Respondent No.1 that the seizure/attachment of the Subject Property and the Subject Premises was on an erroneous and false assumption and basis that the Subject Property and the Subject Premises belonged absolutely to the Respondent No. 2. The Appellants state that the erroneous assumption that the Subject Property and the Subject Premises was absolutely vested in the Respondent No.2 was on the basis of purported Agreement for Sale dated 1^st June 2010

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between Mr. Rashmlkant Mansukhlal Shah and Respondent No.2, whereby the Respondent No. 2 was transferred, assigned and conveyed all share, right, title and interest in the Subject Property including the Appellants proportionate share, right, title and interests therein. A copy of purported Agreement for Sale dated 1^st June 2010 between the Mr. Rashmlkant Mansukhlal Shah and the Respondent No.2, obtained by the Appellants through the Respondent No.1 in Writ Petition filed by the Appellants. The appellants submit that the Agreement for Sale was not legal, valid and binding on the Appellants in respect of and to the extent of their share, right, title and interest in the Subject Property. The appellant had no reason to apprehend the purported sale/transaction of the Appellant‟s proportionate share, right, title and interest in the Subject Property in favour of the Respondent No.2 prior to the attachment by the Respondent No.1.

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Thereafter, the Appellant No.1 addressed letter dated 11^th July 2014 to the Respondent No.1 seeking copies of papers and proceedings and information pertaining to Case No. ECIR/10/MZO/2012 as also copies of the Provisional Order and the Confirmation Order. The Appellant No.1 was informed by the Respondent No.1 that Appeal No.53 of 2013 in 0. C. No.197 of 2013 in POA No.8/2013 in ECIR No.10/MZO/2012 was pending before the Appellate Tribunal, New Delhi and that information and documents sought for will not be provided unless the Appellants were made parties therein.

¶47

In view of above that the Appellants filed Intervention Application No.1091/MUM/2014 in Appeal No.530 of 2013/BOM instituted by the Respondent No.2 before this Tribunal on 27^th July 2014, seeking to be

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made parties therein and to be furnished with copies of papers and proceedings pertaining to Case No. ECIR/10/MZO/2012 and Confirmation Order and PAO. The Appellant No.1 also addressed letter dated 31^st July 2014 to the Respondent No.1 setting out an inventory of movable properties lying in the Subject Premises at the time of attachment and seizure by Respondent No.1 and seeking copy of panchnama. The motorbike belonging to the son of the Appellant No.1 was also seized by the Respondent No.1. As far as the movable assets of the appellant are concerned, necessary orders were passed in favour of the appellant no. 1 for removal of the same in Appeal no. 530/2013.

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The Appellants thereafter filed Writ Petition No.8296 of 2014 in or around 22^nd August 2014 before the High Court of Judicature at Bombay, against the Union of India and others, seeking to inter alia challenge the Confirmation Order, the PAO and the undated notice and to obtain directions against the Respondent No. 1 to forthwith restore to the Appellant No. 1 physical possession of the Subject Premises, which reliefs are now being sought in this Appeal. In addition the Appellants also sought directions against the Respondent No. 1 to furnish the Appellants with copies of the PAO and Confirmation Order.

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This Tribunal by Order dated 27^th August 2014 disposed off the Intervention Application No.1091/MUM/2014, holding that as long as the Deed of Rectification dated 25^th May 2000 and the Agreement for Sale dated 1^st June 2010 are not cancelled by an appropriate decree and order of a Court of competent jurisdiction, the Appellants cannot contend even prima facie that they have ownership rights in the Subject Property and Subject Premises. The relevant extracts of the said order are as under:

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“27. The learned counsel for the interveners have not given any cogent reason as to why they should not first invoke their remedy under section 8 of the Act and how they can approach the appellate Court directly. Under Chapter II of the Act, a duty is cast upon the Adjudicating Authority to give hearing to a party which claims to have a right in the property which is sought to be attached whom notice under section 8(1) has not been given. The Act does not prescribe any limitation for giving hearing to a person who has a right in the property who has to be heard under proviso to section 8 (2) and who has not been given any notice u/s 8(1) of the Act and who is not a party to the complaint filed by the Enforcement Directorate.

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28. The words of statute proviso to section 8 (2) of the Act are clear and unambiguous and are reasonably susceptible to one meaning only. If that be so it cannot be construed to mean that the person who has not been given notice under section 8(1) of the Act and whose property is sought to be attached or has been attached and attachment order has been confirmed will be entitled for hearing only if he had approached the Adjudicating Authority before the order of attachment is challenged in an appeal and in case an appeal has been filed then the remedy of such a person will be only to approach the Appellate Tribunal for intervention.

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29. Entertaining the application of the interveners in the appeal, though they have a statutory right to approach the Adjudicating Authority seeking a right of hearing under proviso to section 8 (2) of the Act, provided they are able to show prima facie some right in the property, can have serious consequences for other parties leading to deprivation of their right of first appeal. If this tribunal allows the application for intervention of the interveners and comes to the conclusion that the interveners have right in the property which cannot be attached, then the appellant and the respondent shall be deprived of their right of first appeal, as contemplated under section 26 of the Act and will be left only with invoking their right of second appeal as contemplated under section 42 of the Act. When an efficacious remedy is available to the interveners, then whether it will be appropriate to entertain their application in the appeal in the facts and circumstances, though they have a right to approach the Adjudicating Authority seeking a right of hearing under proviso to section 8 (2) of the Act. When an efficacious remedy is available to the appellant, then it will not be appropriate to entertain their application for intervention in the facts and circumstances.

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Authority seeking a right of hearing under proviso to section 8 (2) of the Act. When an efficacious remedy is available to the appellant, then it will not be appropriate to entertain their application for intervention in the facts and circumstances.

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30. In the circumstances, remedy available to the interveners, if they so desire and opt to do, is to approach the Adjudicating Authority and first establish prima facie that they have independent rights in the property. If they establish their rights, then it will be for the Adjudicating Authority to give them such hearing as may be permissible in the facts and circumstances.”

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It is stated by the Appellants state that they came to learn of the purported fraudulent sale of the entire Subject Property i.e. including the Appellants share, right, title and interest therein by Mr. Rashmikant Mansukhlal Shah to the Respondent No.2 through Agreement for Sale dated 1^st June 2010 without having any authority, right, power and/or title to do so, only in or around July 2014, and upon coming across the undated Notice. It is alleged by the appellant that the Agreement for Sale is evidently not legal, valid and binding on the Appellants in respect of and to the extent of their share, right, title and interest in the Subject Property as the same was prepared and executed by Mr. Rashmikant Mansukhlal Shah on the false and fraudulent assumption that the Appellants share in the Subject Property was vested with him and the said Agreement for Sale fraudulently and suspiciously suppressed the Deed of Rectification dated 25^th May, 2000 and the order dated 14^th January, 2009 of the City Survey Officer at Bandra. The appellant state that copies of the PAO and the Confirmation Order were obtained by the Appellants through the Affidavit in Rejoinder dated 24^th October 2014 of the Respondent No.1 filed in Writ Petition No.8296 of 2014 and served on the Appellants Advocate on 7^th November 2014.

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It is a matter of fact that the Appellants through their Advocates issued notice dated 14^th November 2014 to the Respondent No.2 setting out the above facts and calling upon him to cease and desist from selling and FPA-PMLA-885/MUM /2015 Page 11 of 40

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disposing of or transferring the Subject Property and to effect partition of the Subject Property and deliver to the Appellants shares.

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In January 2015, the Appellants filed Suit No.360 of 2015 before the Hon'ble Bombay City Civil Court at Dindoshi seeking inter alia a declaration that the Appellants are co-owners of the Subject Property and each entitled to 25% undivided share, right, title and interest therein and absolute owners of and exclusively entitled to right, right tile and interest in the Subject Premises as also an order of cancellation of the Deed of Rectification dated 25^th May 2000 and the Agreement for Sale dated 1^st June 2010 in respect and to the extent of the 50% undivided share, right, title and interest of the Appellants in the subject property and appropriate injunctive reliefs against Respondent No. 2. By the above Suit, the Appellants also seek partition of the Subject Property by metes and bounds.

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In January 2015, the Appellant No.1 also filed Criminal Complaint Summons Case No.50 of 2015 against the Respondent No.2, Mr. Rashmlkant Shah and the Sub-Registrar of Assurances before the Hon'ble Metropolitan Magistrates Court at Bandra, Mumbai seeking issuance of process against them for having committed offences under sections 120B, 192, 193, 403, 441, 464, 468, 470 and 471 read with section 34 of the Indian Penal Code, 1860 and imposition of punishment provided by law.

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In February 2015, the Appellants took out Notice of Motion No.675 of 2015 in Suit No.360 of 2015 seeking an order restraining the Respondent No.2 from in any manner asserting or representing himself to be the sole owner of or dealing with transacting, contracting in relation to

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licensing and or otherwise acting in connection with the Subject Property and the Subject Premises, which is pending.

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The Writ Petition No. 8296 of 2014 earlier filed by the appellant was disposed of vide Order dated 19^th March, 2015 passed by the Hon'ble Mr. Justice A. S. Oka and the Hon'ble Mr. Justice A. P. Bhangale of the Hon'ble Bombay High Court by keeping the remedy of the Appellants of preferring an appeal under sub-section 1 of Section 26 of the PMLA and all contentions on merits expressly open.

¶73

The Writ Petition No. 8296 of 2014 earlier filed by the appellant was disposed of vide Order dated 19^th March, 2015 passed by the Hon'ble Mr. Justice A. S. Oka and the Hon'ble Mr. Justice A. P. Bhangale of the Hon'ble Bombay High Court by keeping the remedy of the Appellants of preferring an appeal under sub-section 1 of Section 26 of the PMLA and all contentions on merits expressly open.

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Reply to the Appeal was filed by the respondent no. 1. It is stated by the Advocate on behalf of the appellants that despite of service of respondent no. 2. no one appeared on his behalf or any reply was filed. It is alleged by the respondent no. 1 that the immovable property, which is the subject matter of the present Appeal, was purchased out of the proceeds of crime and projected the same as untainted money/wealth. It is alleged by the respondent no. 1 that the Criminal complaint has already been filed before the Special Court appointed under PMLA, and the matter is still pending before the Special Court against the main accused party i.e. Ajit Satam. The Appeal filed by Ajit Satam against the impugned order dated 16th September, 2013 being Appeal No. FPA-PMLA-530/MUM/2016 has already been dismissed by this Tribunal vide order dated 25.01.2016.

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The said order attained finality. The appeal filed by the appellant is not maintainable. The office premises called “Fifty-Fifty”, built on a plot of land bearing Survey No. 195/A lying and being at S.V. Road, Khar, Mumbai, was purchased by said Ajit Satam from one Sh. Rashmikant Shah for Rs. 2.65 Crores, through a Deed of Conveyance dated 01/06/2010, and the payments were made by Ajit Satam by cheques. The said Deed of Conveyance dated 01/06/2010 completely and clearly does not give any bearing that the Appellants were/are the owners of the “Subject Property”, Plot /Building or “Subject Premises”. The Directorate has taken possession of the questioned property by the due process of law.

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It is also stated by the respondent that the legal heirs cannot acquire a better title than the deceased and even in the present case the deceased Lucian Louis Fonseca had no right whatsoever over the questioned property. The present Appellants have filed a Short Cause Suit No. 360 of 2014, in the Bombay City Civil Court at Dindoshi, Mumbai and made the present Respondent as Defendant No. 3, seeking therein declaration that they are the owners of the suit property which is the subject matter of the present Appeal also. The Appellants had taken out a Notice of Motion in the said pending Bombay City Civil Short Cause, but the relief was refused

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on the ground of Section 41 of the PMLA, 2002 which reads as under:-

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Section 41 “No civil court shall have Jurisdiction to entertain any suit or proceeding in respect of any matter which the Director, an Adjudicating Authority or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act’'.

¶81

It is also stated on behalf of the respondent that Provisional Attachment Order (PAO) was issued on 28.03.2013 under the provisions of sub-section (1) of Section 5 of the Prevention of the Money Laundering Act, 2002 (PMLA, 2002). Under the provisions of the Section 5 (3) of the PMLA, FPA-PMLA-885/MUM /2015 Page 14 of 40

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2002, every order of attachment made under sub-section (1) shall cease to have effect after expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 8, whichever is earlier.

¶83

It is also stated on behalf of the respondent that Prevention of Money Laundering Act, 2002 read with the Prevention of Money Laundering (Appeal) Rules, 2005 allows the aggrieved person only to file an appeal. The said Shri Lucian Louis Fonseca was stranger to the Adjudication proceedings. Therefore no notice was required to be served.

¶84

The argument of learned counsel for the respondent no. 1 is also that the present appeal is not maintainable. This Hon‟ble Tribunal had, vide a detailed order, dismissed the application filed by Lucian Louis Fonseca and Heather Clarke for intervention in the appeal filed by Ajit Bapu Satam against the order of the Adjudicating Authority dated 16.09.2013 confirming the Provisional Attachment order dated 28.03.2013 passed in O.A. NO. 197/2013 - the relevant portion of the order dated 27.08.2014 has already been reproduced in para-9 of this order. It is stated that if the appeal is entertained despite the application of the appellant for intervention in the appeal filed by the owner having been dismissed by this Tribunal earlier.

¶85

In the rejoinder to the respondent‟s reply, the appellants have denied that the Subject Premises was purchased entirely by the Respondent No.2 as falsely alleged. It is denied that the Deed of Conveyance dated 1^st June, 2010 does not give any bearing that the Appellants were/ are the owners of the Subject Property or Plot Building or Subject Premises as falsely alleged, which is borne out on perusal thereof. The Subject Property is not obtained and/ or acquired through proceeds of crime as defined under Section 3 of FPA-PMLA-885/MUM /2015 Page 15 of 40

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the PMLA or that any ill-gotten money is invested therein which is acquired by criminal activities.

¶88

It is submitted that at no point did the Appellant No.2, his late grandmother or his late father sell or dispose of their respective shares in the Subject Property to the Respondent No.2 or Rashmikant Mansukhlal Shah or consented to the sale of the Subject Property by Lewis Felix Fonseca and the undivided shares, right, title and Interest of his late father and their late grandmother and the Appellant No.2 in the Subject Property and the Subject Premises was never sold and/ or transferred to any third persons let alone the Respondent No.2 as purported, but always remained vested in the hands of his late father and the Appellant No.2 and therefore the Subject Property and the share of his father and Appellant No.2 therein and in the Subject Premises could not/cannot be taken to represent "Proceeds of Crime" within the meaning of Section 2(1)(u) of the PMLA. The Respondent No.2 purchased the undivided share, right, title and Interest In the Subject Property from one Mr. Rashmikant Mansukhlal Shah who had purchased It from Lewis Felix Fonseca and hence was/ is at best entitled to proportionate share of Lewis Felix Fonseca therein.

¶89

It is also denied that the father late Lucian Fonseca had no right over the Subject Property as wrongly alleged. It is contended that the question of the legal heirs acquiring a better title than the deceased does not arise and the subject premises and the undivided share, right, title and interest of late father and the Appellant No.2 in the Subject Property devolved upon by her late father and the Appellant No.2 by virtue of the laws of intestate succession and were never acquired by the Respondent No.2.

¶90

It is alleged on behalf of the appellant that the Respondent No.1 is attempting to mislead this Tribunal as the Appellant No.2 and his late father do not have any relationship or connection or association with the Respondent No.2 or Mr. Rashmikant Mansukhlal Shah. No notice as

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mandated under section 8, PMLA was issued to the Appellants or his late father prior to attachment, in total non-compliance and contravention of the PMLA, thus the order and attachment of the Subject Property is in breach of the principles of natural justice.

¶94

It is not denied on behalf of respondent no. 1 that one of the recitals of the Deed of Conveyance dated 01.06.2010 conclusively stipulates that the appellant was an illegal occupant/trespasser in the subject property and that his suit against the owner had been dismissed by the Bombay City Civil Court on 27.02.1992. The said recital (Bottom portion, Page 215 of Appeal) is reproduced as under:

¶95

“AND WHEREAS one small room on the ground floor in the said property is illegally occupied by one Occupant/Trespasser by the name of Lucian Louis Fonseca who had filed SC Suit No. 7587 of 1990 and the said suit was dismissed by the Hon’ble Bombay City Civil Court on 27.02.1992.”

¶96

(emphasis supplied)

¶97

The said Conveyance deed dated 01.06.2010 also records the fact that the vendor therein sold, transferred and assigned right, title and interest subject to claim of late Lucian Louis Fonseca [Para 2 of page 218-219 of the Appeal] and also records late Lucian Louis Fonseca as occupant of the subject premises. The same para no. 2 reads as under:-

¶98

“2. The said Lucian Louis Fonseca occupant/trespasser had filed a suit in the Hon’ble City Civil Court at Bombay being S.C. Suit No. 7587 of 1990 against Mr. Luwis Felix Fonseca in respect of one room together with toilet facilities, and the said suit was dismissed. The Vendor is transferring, selling, assigning the right, title and interest in the said property subject to the claim of the said Lucian Louis Fonseca in respect of the said room with toilet facility. ”

¶99

(emphasis supplied)

¶100

1. It is submitted by the respondent no. 1 counsel that the order of dismissal having attained finality more than 24 years back, the appellant cannot stake a claim to the disputed portion of the attached property, more

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so when he had merely put his lock on the door of the room and some of his belongings were lying therein.

¶104

It is further submitted that, at best, the said room was given on rent to Lucian Fonseca who was not even residing therein and was in fact a trespasser. After his demise, his children cannot claim to be in possession of the said room when the civil court has already dismissed the suit of Lucian Fonseca long back and when the Deed of Conveyance specifically mentions Lucian Fonseca as a trespasser.

¶105

It is submitted by the Respondent‟s No. 1 counsel that the appellant are wrongly claiming the ownership of the said property, has relied upon as Electricity Bill in the name of the appellant. He further claimed that he is in continuous possession and occupation of the subject premises. The subject property is one of the properties involved in the PAO No. 08/2013 (OC 197 of 2013). After confirmation of the said PAO, the officers of the Directorate had taken the possession of the said properties vide Panchanama dated 02.07.2014. At the time of taking of possession of the said property, no one was residing in the disputed portion of the premises. In view of the order of the Tribunal on 17.07.2015, the appellant on 15.09.2015 was allowed to take out the movable items which were not under attachment. Shri Lyle Carl Fonseca (authorized person of late Lucian Fonseca) after inspecting the said disputed portion, decided that he would not take away anything from the small room on the ground floor of the attached property. Further Shri Lyle Carl Fonseca was also given an opportunity to take his motor cycle MH02AS 4457 lying inside the compound wall of said premises and which was not attached, but Shri Lyle Carl Fonseca decided that he would not take away the said motor cycle. The Operation Report dated 15.09.2015 was submitted before this

¶106

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Tribunal. It is stated that a perusal of Aadhar Cards Shri Lyle Carl Fonseca and his family members wherein the address is mentioned as „4B/3, Sangeeta apartments, Juhu Road, Juhu Mumbai‟. Thus, it is clear that neither Shri Lyle Carl Fonseca nor his family members are the residents of the disputed portion of the attached property, as claimed by them. Photocopies of Aadhar cards of Shri Lyle Carl Fonseca, his family members were annexed with the reply which show their place of residence as different from the subject premises.

¶109

This Tribunal by its order dated 25.01.2016 dismissed the appeal filed by Shri Ajit Satam (Respondent R-2 herein) against the order of the Adjudicating Authority confirming the attachment under PAO 08/2013 (including the subject property). Shri Ajit Satam filed appeal in Bombay High Court (FA 467/2016) against the order of the Tribunal dated 25.01.2016 and the Hon‟ble Bombay High Court by order dated 30.11.2016 admitted the appeal of Shri Satam.

¶110

As regards to status of Criminal Complaint dated 19.01.2015 (Annexure-Z), against Shri Satam, the case was not heard so far and the next date of hearing in the matter is 27.02.2017 and with respect of Suit NO. 360 of 2015, the Court had kept the matter for order on Notice of Motion filed by Lucian Fonseca against Ajit Satam, Rashmikant Shah and Directorate of Enforcement.

¶111

After having made his submissions on behalf of respondent no. 1, it was admitted that the appellants were claiming Joint ownership in the suit property. It was also admitted by the respondent no. 1 that the respondent no. 2 who is accused party in the manner who had purchased the property from Mansukhlal Shah by virtue of registered documents which contain the

¶112

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dis-claimer of part of the portion i.e. one small room and a toilet which was occupied by the appellants and the said portion was never sold by the Uncle of the appellant to Mansukhlal Shah who consequently did not purchase the same and was having no rights or title to sell the same to respondent no. 2 who is accused party.

¶115

In a nut-shell, the case of the appellants is that he is the co-owner of the subject matter of the property until 2014 when possession of the entire property was taken over by the respondent, the possession and occupation of one room and toilet since 1953 was with the appellant no. 1. The said portion was never sold to third party by him or his uncle even to the respondent no. 2 as per admission made in conveyance deeds and other documents which were in the knowledge of the respondent no. 1. Despite of that, no notice under Section 8(1) was served on the appellant, otherwise the Adjudicating Authority would not have passed the order dated 16.09.2013 confirming the provisional attachment order dated 28.03.2013 and even said fact was not brought to the notice of this Tribunal at the time of filing the appeal by the Ajit Bapu Satam, the accused person (Respondent R-2 herein). Thus, the order passed on 16.09.2013 is liable to be reviewed as subsequent to the said order, the High Court, Bombay has allowed the appellants to file the present appeal. .

¶116

After having considered the entire gamut of the matter, we are of the view that this Tribunal has no domain to decide the Civil rights of the parties, the same have to be finally determined in the civil remedy. We are also not inclined to comment with regard to the percentage of share claimed by the appellant nor we have the jurisdiction to decide the legal rights of the appellants to claim their right, title and interest in the property in question. At this stage of the appeal we are only concerned with the question as to whether, the property forfeited by the respondent no. 1 FPA-PMLA-885/MUM /2015 Page 20 of 40

¶117

consists of any part or portion of the property that was in the possession of the appellant who has no role in the alleged crime as associated with the accused person who even otherwise has not purchased the part of the property from earlier purchaser. If the accused does not own the part of the property as per registered documents, how can the Adjudicating Authority confirm the provisional attachment without notice to the aggrieved parties who are claiming the rights on the basis of certain alleged titles.

¶118

As far as involvement of the appellant in the scheduled offence is concerned, it is not denied by the respondent, that the appellants are not involved in any manner and no criminal matter is pending against them in the case pending against the respondent no. 2. It is also not in dispute that at the time of Forfeiture of property, no notice was served to the appellants and thus they were never heard.

¶119

With regard to the claim raised by the appellant in the application for Intervention and the present appeal, the appellant claim that they have the undivided share, right, title and interest in the subject property and subject premises were never sold to any third party or the Respondent no. 2 as is evident from the recitals in Conveyance deed dated 9^th October, 1992, Rectification Deed dated 25^th May, 2000 and Agreement for Sale dated 1^st June, 2010.

¶120

Conveyance deed dated 9^th October, 1992 records the fact that the vendor therein sold, transferred and assigned right, title and interest subject to claim of late Lucian Louis Fonseca [Para 2 of page 156 of Appeal] and also records late Lucian Louis Fonseca as occupant of the subject premises. The same para no. 2 read as under:-

¶121

“2. The said Lucian Louis Fonseca has filed a suit in the Bombay City Civil Court at Bombay being S.C. Suit No. 7587 of 1990 against FPA-PMLA-885/MUM /2015 Page 21 of 40

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the Vendor in respect of one room together with toilet facilities. The Vendor is transferring, selling assigning the right, title and interest in the said property subject to the claim of the said Lucian Louis Fonseca in respect of the said room with toilet facility.”

¶123

(emphasis supplied)

¶124

32.1 Similarly copy of the translation of order dated 14.01.2009 of City Survey Officer, at Bandra who after having considered the power of attorney allegedly given by the appellant to the uncle, had come to the following conclusion:

¶125

As per the entry dated 30.06.2010 the names of Frank Thomas Fonseca, Alfred Anthony Fonseca and Luis Felix Fonseca have been entered as the holders on the property card of the property of C.S. No. 195A, of City Survey Bandra, Taluka Andheri, District Mumbai Suburban and the names of Frank Thomas Fonseca and Alfred Anthony Fonseca has been deleted vide the same entry, since they were expired. Vide entry dated 31.1.1991, again, as Alfred Anthony Fonseca is expired, the names of Smt. Sharlet Mary Fonseca, Hedar Ann Clark and Lusiyan (Luis) Fonseca have been entered by succession on the property card. Therefore, before the entry of 5.1.2001 on the property card, the four names of Lusiyan Felix Fonseca and Smt. Sarelet MaryFonseca, Heder Ann Clark and Lusian (Luis) Fonseca were alive as the holder. But, vide the Registered Sale Deed No. 519/92, Luis Felix Fonseca, and on behalf of Lili Agnel Kabrel and five others, sold the entire are of 102 sq. m. of C.S. No. 195A, to Rashmikant Mansukhlal Shah. But, in the said Deed, the consent of Smt. Sharlet, Heder Colark and Lusian Fonseca has not been taken. Similarly, vide the Rectification Deed No. 4254/2000, there is mention of the entire property and the Rectification Deed has been made and given by Shri Rashmikant M. Shah, the Power of Attorney holder on behalf of Sharlet Fonseca, Lusian Fonseca, Hedar Fonseca, and Cristopher Kabrel. But, as per rules, the Power of Attorney Deed of Sharlet Fonseca, and three others, given in writing in his favour was not attached with the said Rectification Deed. Similarly, at the time of enquiry, the copy of the Power of Attorney has not been filed. Shri Lusiyan Fonseca, has stated that the Power of Attorney Deed has not been given to Shri Rashmikant Shah. As per the site inspection, Lusiyan Luis is having occupation in the constructed area out of the property and there is mention in the Annexure B of the Sale Deed that Shri Lusiyan (Luis) is having possession in the property. Therefore, while it was necessary to have Sale Deed as per rules, from all the holders on the Property Card or on the basis of the Power of Attorney Deed, it is being seen that since the consent of Smt. Sharlet Fonseca, Hedar Clark and Lusiyan (Luis) Fonseca, has not been taken in the Deed, for the purpose of their right in the property, the said Purchase and Rectification Deed cannot transfer the right. Therefore, after the review/enquiry in respect of the entry dated 5.1.2001, the order is being given as under:-

¶126

Order :

¶127

The entry taken on 31.1.1991 on the property Card of C.S. No. 195A at City Survey Bandra, Taluka Andheri, District Mumbai Suburban may be revived. Out of the names deleted vide the entry dated 5.1.2001, the names of Smt. Sharlet Mary Fonseca, Hedar Ann Clark and Lusiyan (Luis) Fonseca, may be revived. As Smt. Sharlet Mary Fonseca is expired, the concerned may make application for the purpose of action as per rules in that respect

¶128

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Sd/(N.R. Patil) City Survey Officer, Bandra

¶131

32.2 Thereafter, the record was duly corrected and property card in respect of subject premises was updated. The correction certificate has been filed as Annexure „N‟ to the appeal which is not denied by the respondent.

¶132

32.3 The conveyance deed dated 1.6.2010 executed between Rashmikant Mansukhlal Shah and respondent no. 2 (accused person) also contains a recital (Bottom portion, Page-215 of Appeal) that one small room on the ground floor was occupied by Lucian Fonseca, the same is not denied by the respondent no. 1.

¶133

AND WHEREAS one small room on the ground floor in the said property is illegally occupied by one Occupant/Trespasser by the name of Lucian Louis Fonseca who had filed SC Suit No. 7587 of 1990 and the said suit was dismissed by the Hon’ble Bombay City Civil Court, on 27.02.1992”.

¶134

¶135

“2. The said Lucian Louis Fonseca occupant/trespasser had filed a suit in the Hon’ble City Civil Court at Bombay being S.C. Suit No. 7587 of 1990 against Mr. Luwis Felix Fonseca in respect of one room together with toilet facilities, and the said suit was dismissed. The Vendor is transferring, selling, assigning the right, title and interest in the said property subject to the claim of the said Lucian Louis Fonseca in respect of the said room with toilet facility. ”

¶136

(emphasis supplied)

¶137

It is apparent from the said agreement for Sale dated 1^st June, 2010 that the vendor therein sold, transferred and assigned right, title and

¶138

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interest subject to the claim of late Lucian Louis Fonseca in respect of the said room with toilet facility.

¶141

No notice as contemplated u/s 8(1) of Prevention of Money Laundering Act, 2002 was served on appellants as admitted by the learned counsel appearing on behalf of the respondent no. 1. Counsel for the respondent did dispute about the said disclaimer. Section 8 of the PMLA reads as under:-

¶142

8(1) “Adjudication On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub-section (10) of section 18, if the Adjudicating Authority has reason to believe that any person has committed 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:

¶143

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:

¶144

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.

¶145

1) The Adjudicating Authority shall, after-

¶146

a. considering the reply, if any, to the notice issued under subsection (1);

¶147

b. hearing the aggrieved person and the Director or any other officer authorized by him in this behalf; and

¶148

c. taking into account all relevant materials placed on record before him,

¶149

by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are involved in money-laundering:

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Provided that if the property is claimed by a person, other than a person to whom the notice has been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering.

¶153

2) Where the Adjudicating Authority decides under subsection (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of section 5 or retention of property or [record seized or frozen under section 17 or section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property] or record shall-

¶154

(a) continue during the pendency of the proceedings relating to any [offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and]

¶155

[(b) become final after an order of confiscation is passed under sub-section (5) or sub-section (7) of section 8 or section 58B or sub-section (2A) of section 60 by the [Special Court].]”

¶156

The possession of the subject Attached property was taken over by the respondent on 2^nd July, 2014 on the assumption that Subject Property and Subject Premises exclusively owned by the Respondent No. 2. Appellants are out of possession of the Subject Property and Subject Premises for the last more than 2 years.

¶157

It is not denied by the respondent no. 1 that the appellants have no connection/relation/association with the Respondent no. 2 and have no criminal complaint against them, have lived and led a life of rectitude and are law abiding citizens. Appellant not the accused in O.C. No. 197/2013 in PAO No. 08/2013 (ECIR No. 10/MZO/2012). Appellants not party to proceedings pending before adjudicating authority prior to passing of confirmation order dated 16^th September, 2013.

¶158

Counsel for the appellants has rightly submitted that their undivided share, right, title and interest of appellants in subject property and occupancy rights in subject premises are not the “Proceeds of Crime” as

¶159

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same never sold to the Respondent No. 2 or any third party. As already mentioned that this Tribunal has no jurisdiction to decide the civil rights of the parties nor the respondent no. 1 can placed arguments that the appellant have no right or title in the suit property as it is for the Civil Court to decide the same. As for the order dated 27.8.2014 of this Tribunal dismissing the Intervention Application of the appellants in the Appeal No. FPA-PMLA-530/2013/BOM is concerned, the said appeal filed by the main accused (Respondent R-2 herein) has already been dismissed vide the order dated 25.01.2016. Further, the said order dated 27.08.2014 is as per law now merged with the judgment dated 17^th March, 2015 passed by the Hon‟ble Bombay Court. The respondent no. 1 thus is not entitled to take any advantage of the said order whereby the application of the appellant no. 1. for Intervention as a party in the appeal filed by the accused was dismissed.

¶162

Therefore it is evident that the attachment by the Respondent No .l on erroneous assumption that Subject Property was owned exclusively by the Respondent No. 2, although Agreement for Sale dated 1^st June, 2010 records that the vendor therein sold, transferred and assigned right, title and interest subject to claim of late Lucian Louis Fonseca and Conveyance deed dated 9^th October, 1992 records the fact that the vendor therein sold, transferred and assigned right, title and interest subject to claim of late Lucian Louis Fonseca and that late Lucian Louis Fonseca was occupant of the Subject Premises.

¶163

It is settled law that a co-owner of a property is an owner of the property, till the property is partitioned. The Hon‟ble Apex Court in FGP Ltd, Vs. Saleh Hooseini Doctor & Anr relied upon another judgment of the Hon'ble Apex Court in Sri Ram Pasricha Vs. Jagannath and Ors. (1976) 4 SCC 184 to hold that a co-owner of a property is an owner of the

¶164

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property, till the property is partitioned. The relevant paragraphs of FGP Ltd. Vs. Saleh Hooseini Doctor &Anr. [Civil Appeal no. 6257/2009 in SLP (Civil) No. 30374 of 2008 Supreme Court] are reproduced below:

¶167

“47. In Sri Ram Pasricha Vs. Jagannath and Ors. - (1976) 4SCC 184, it has been held that a co-owner is as much an owner of the entire property as any sole owner. In coming to the said finding, the learned Judges relied on the proposition laid down in Salmond on Jurisprudence (13^th edition). The relevant principles in Salmondon Jurisprudence are set out herein below:

¶168

“..It is an undivided unity, which is vested at the same time in more than one person....The several ownership of a part is a different thing from the co- ownership of the whole. So soon as each of two coowners begins to own a part of the thing instead of the whole of it, the co-ownership has been dissolved into sole ownership by the process known as partition. Co- ownership involves the undivided integrity of what is owned .

¶169

48. Further relying upon Sri Ram which relied upon the Pasricha (supra) held as under:

¶170

“Jurisprudentially it is not correct to say that a co-owner of a property is not its owner. He owns every part of the composite property along with others and it cannot be said that he is only a partowner or a fractional owner of the property. The position will change only when partition takes place..”

¶171

From the facts and circumstances of the case it is clear the second proviso to Section 8 of Prevention of Money Laundering Act, 2002, it is clear that has not complied with. The second Proviso to section 8(1) of Prevention of Money Laundering Act, 2002 stipulates that where property is held jointly by more than one person, notice shall be served to all persons holding such property. The term “held” not defined under Prevention of Money Laundering Act, 2002. The said term " held " connotes both ownership as well as possession as interpreted by the Hon'ble Apex Court in State of A. P. Vs. Mohd. Ashrafuddin ., [AIR 1982 Supreme Court 913] Appellants are undoubtedly owners and in possession and occupation of the Subject Property and Subject Premises.

¶172

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¶174

The action of the respondent no. 1 despite of having the knowledge of all these facts and documents in not choosing to issue notice to all persons holding property and to provide hearing to aggrieved persons prior to passing of confirmation order, constitutes total non-compliance with mandatory provisions prescribed u/s 8 of Prevention of Money Laundering Act, 2002 and the attachment pursuant thereto is in the breach of principles of natural justice.

¶175

The Hon'ble Apex Court in Uma Nath Pandey & Ors. Vs. State of Uttar Pradesh & Anr ., [(2009) 2012 Supreme Court cases 40] held that adherence to principles of natural justice as recognized by all civilized States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any

¶176

administrative action involving civil consequences is in issue. These principles are well settled. The first and foremost principle is what is commonly known as audi alterant partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should appraise the party determinatively the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fair play. The concept has gained significance and shades with time…”

¶177

The Hon‟ble Apex Court further held that “Natural Justice is the essence of fair adjudication, deeply rooted in tradition and conscience, to

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¶180

be ranked as fundamental. The purpose of following the principles of natural justice is the prevention of miscarriage of justice.”

¶181

The Hon‟ble Apex Court in Aslam Mohd. Merchant Vs. Competent Authority & Ors. (Criminal Appeal no. 1053/2003) held that “… when stringent laws become applicable as a result whereof some persons are to be deprived of his/her right in property, scrupulous compliance of statutory requirements is imperative.”

¶182

There is no force in the submission of the respondent that the present proceedings are neither contemplated nor permissible under PMLA. It is a matter of record that the said objection was considered and overruled in Writ Petition 8296 of 2014 of the appellants filed before the Hon‟ble Bombay High Court which vide order dated 17^th March, 2015, in para 4 of the judgment held: “… Thus, sub-section (1) of section 26 provides for remedy of an appeal to any aggrieved person even if the person is not a party to the proceedings before the Adjudicating Authority.” In para 5, the Hon‟ble High Court specifically held: “Therefore, an appeal at the instance of Petitioners will be maintainable under sub-section (1) of Section 26.” The present appeal is filed pursuant to the said judgment dated 19^th March, 2015. The delay in filing the appeal was condoned by the Tribunal vide the order dated 17^th July, 2015.

¶183

The next objection of the respondent no. 1 that the subject property is purchased out of proceeds of crime and legal heirs cannot acquire better title than deceased is equally without any force. The alleged claim of the appellant is that they have the undivided share, right, title and interest in the subject property and such share, right, title and interest was never sold and/or transferred to any third persons let alone the Respondent No. 2 as

¶184

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purported, but always remained vested in hands of late Lucian Fonseca and the appellant no. 2. In these circumstances, the undivided share, title and interest of Late Lucian Fonseca and appellant no. 2 in the subject premises and subject property could not/cannot be taken to represent “Proceeds of Crime” within the meaning of section 2(1)(u) of the PMLA.

¶187

Prima facie , it appears that the respondent no. 2 purchased the undivided share, right, title and interest in the subject property from one Mr. Rashmikant Mansukhlal Shah who had purchased it from Lewis Felix Fonseca and hence he was/is at best entitled to proportionate share of Lewis Felix Fonseca therein. It is not correct and not for the respondents to state that Late Mr. Lucian Fonseca and appellant no. 2 had no right over the subject property. The subject premises and the undivided share, right, title and interest of late Lucian Fonseca and the appellant no. 2 in the subject property devolved upon them by virtue of the laws of intestate succession and were never acquired by the Respondent No. 2.

¶188

Although at this stage, this Tribunal cannot and should not observe anything about the title and interest claimed by the appellant in the subject property, but prima facie , one thing is clear that one room and a toilet on the ground floor has not been sold by the uncle of the appellant. It is also a matter of fact that neither the vendee nor vendor has initiated any proceedings of eviction or to take the possession of said portion against the appellant.

¶189

With regard to argument that the appeal is in fructuous as Criminal Complaint against respondent no. 2 is pending before the Special Court under PMLA and the appeal of respondent no. 2 was already dismissed, there is no bar, express or otherwise under the PMLA or any other Act to

¶190

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¶192

not consider appeal of other aggrieved person(s) in such situation. Dismissal of the independent appeal filed by the respondent no. 2 before this Hon‟ble Tribunal has no bearing and is of no consequence or relevance to the present appeal which stands on its own footing. Even otherwise in the present case, the Hon‟ble Bombay High Court has passed the order allowing the appellant to proceed with the remedy under Section 26 of the Act and in terms of which the present appeal is filed.

¶193

It is not correct to allege by the respondent no. 1 that the possession of subject property was taken by due process of law. It is a matter of record and uncontroverted that no notice as mandated under section 8, PMLA was issued to the appellants or late Lucian Fonseca prior to attachment, in non-compliance and contravention of the PMLA. The order and attachment of the subject property and its confirmation is in breach of the principles of natural justice, capricious and arbitrary. Thus taking over the possession of the subject premises to the extent of the appellant‟s undivided share, title and interest in the subject property taken over by the respondent no. 1 is against the law.

¶194

Now when Bombay High Court has allowed the appellant to file the appeal under section 26, the same respondent no. 1 is again contending that the appeal is in fact not maintainable. Thus, the argument of respondent no. 1 is totally misconceived. The earlier order passed by this Tribunal dismissing the application for Intervention is merged with the order of the Bombay High Court. No advantage can be derived by the respondent no. 1 from the dismissal of the earlier application of the appellant for Intervention of the said appeal.

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¶197

The next submission of the respondent no. 1 that the reliefs sought by the appellants in notice of motion in Short Cause Suit no. 360/2015 have been rejected on ground of section 41 of PMLA also has no force. The Notice of motion is not disposed off or refused and the same is pending. However, only ad interim relief was refused on grounds of lack of urgency, without deciding or opining on the questions of jurisdiction and limitation. The same is yet to be decided. Section 41 of the PMLA, 2002 and Section 34 of the Securitization and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (54 of 2002) are pari materia . Section 34 of the said Act reads as under:

¶198

“No civil Court shall have jurisdiction to entertain any suit or proceedings in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993).”

¶199

The Bombay High Court in State Bank of India Vs. Shri Sagar & Ors. in Civil Revision Application No. 33 of 2010 and Appeal against Order no. 38 of 2010 held that there is no provision is SARFAESI Act conferring jurisdiction upon DRT or Appellate Authority to pass decree of partition or separate possession of property and that therefore it cannot be said that the jurisdiction of civil court to entertain and try suit claiming reliefs as prayed for is barred by Section 34 of the SARFAESI Act.

¶200

Similarly, there are no provisions under the PMLA, 2002 granting powers to the Adjudicating Authority or the Appellate Authority to pass decree of partition or separate possession of property or order of declaration cancelling or rescinding agreements. The scope of the Adjudicating Authority under the PMLA, 2002 is to confirm the attachment of the property that it has reason to believe is involved in money

¶201

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laundering. It is also incorrect to allege that that consideration of the present appeal will lead to multiplicity of proceedings If the said contentions against maintainability of the instant appeal and dismissal of reliefs in the notice of motion the Short Cause Suit no. 360/2015, are considered and accepted, it will render the appellants virtually remediless, denuded and deprived of their property. Further, the appeal and the Short Cause Suit no. 360/2015 seek different reliefs and are not overlapping. Various litigations are pending filed by the appellant no. 1, these are to be decided on merit. The main point in this matter prima facie is that the respondent no. 2 who is the accused party by virtue of conveyance deed dated 01.06.2010 has not at least purchased one room and toilet of the subject property as admitted in the registered documents. The contrary averments made in the documents do not help the case of the respondent no. 1 once the said portion has not been purchased by the said accused party.

¶204

Admittedly, the impugned order was passed without issue of notice under Section 8(1) of the Act to the appellants herein and without providing an opportunity to them to place relevant materials before the Adjudicating Authority and the opportunity of being heard. No notice was served on the appellants under section 8 of the PMLA inspite of their claim of joint ownership of the subject property by the appellant and the fact that the deed of conveyance dated 01.06.2010 (by which the property was allegedly acquired by the Respondent-2) which was also before the respondent during the course of the proceedings specifically noted the claim of the appellant by way of recitals as re-produced in para 23 above. Due to non issue of the notice under section 8(1) of the Act to the appellants, they have not had an opportunity to put their case before the Adjudicating Authority to substantiate their claim that the subject property, to the extent of their

¶205

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undivided share, right title and invest in the subject property and subject premises, was not involved in money laundering and whether the attachment and its confirmation was in accordance with the PMLA.

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Prima facie , we are satisfied that the appellants have made out a reasonable case that the possession, occupation and use of the subject premises i.e. one room and a toilet on the ground floor of the subject property by the appellant no. 1 at all times from 1953 was undisputable, uninterrupted and continuous till 2014 when the possession was taken over by the respondent subsequent to confirmation of the Provisional Attachment Order no. 08/2013 dated 28.03.2013 by the order dated 16^th September, 2013 passed by the Adjudicating Authority. The appellants are not accused in any Criminal Complaint in any court whether under the PMLA or any other Act; however, the attachment and taking over possession of the subject premises in the subject property has the effect of placing the appellants alongside the accused in the proceedings relating to the subject property under the PMLA.

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Under these circumstances, and as far as the present appeal under the PMLA in relation to the subject premises (as per Exhibit ‟B‟ to the Appeal) and in the subject property (as per Exhibit „A‟ thereto) is concerned, we are of the view that the appellants have made out a p rima facie case of ownership and lawful possession of the subject premises since 1953. As they have not been given the statutory notice as required under Section 8(1) of the Act to determine the involvement of such property in money laundering or otherwise, we consider that during such process viz. issue of notice under Section 8(1) of the Act as aforesaid and determination of the said matter, it will be just and proper that while the provisional attachment of the subject premises and property, to the extent of the appellant‟s

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undivided shares, right, title and interest in the subject property is continued, the possession of the same (as per Exhibit ‟B‟ to the Appeal is required to be restored to the appellants on their furnishing an undertaking not to create any encumbrance or third party rights in the subject property and the subject premises in the pendency of such proceedings.

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54.1 In this regard, it is, however, noted that provisional attachment of the subject property and subject premises vide the PAO No. 08/2013 dated 28^th March, 2013 stands confirmed by the Adjudicating Authority vide the order dated 16^th September, 2013 passed by the Adjudicating Authority. Further, the appeal against the said order dated 16^th September, 2013 filed by the main accused, Respondent-2 herein, being appeal no. FPA-PMLA530/BOM/2013, was dismissed by this Tribunal vide the order dated 25.01.2016. The relief to be allowed to the appellants herein as per the forgoing para has to take in to account these facts.

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In this connection it is observed that in a somewhat similar matter of non issue of notice under Section 8(1) of the PMLA to a person claiming ownership of part of the property attached and confirmed in that case, this Tribunal in the case of Amanpreet Singh Gandhi @ Jaggu V/s. The Deputy Director, Directorate of Enforcement, Jalandhar, vide its order dated 13^th January, 2017 in Appeal No. FPA-PMLA-582/JL/2014 reviewed its earlier order and remanded the matter to the Adjudicating Authority for decision after issue of notice under Section 8(1) of Act. It is useful to refer to the relevant extracts from the said order which are reproduced herein below:

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10. From the above it is evident that section 8(1) casts a responsibility upon the Adjudicating Authority to issue a show cause notice to any person who the Adjudicating Authority has reason to believe has committed an offence under Section 3 of PMLA or is in possession of proceeds of crime. The first proviso of section 8(1) further requires that if any property is held by a person on behalf of any other person then a copy of such notice shall also be served on such other person.

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11. The second proviso to section 8(1) requires that in case the property is held by more than one person, the show cause notice shall be served to all persons holding such property. Section 8(2) empowers the Adjudicating Authority to record a finding by an order whether all or any of the properties referred to in the show cause notice are involved in money laundering and the proviso to sub-section (2) of section 8 lays down if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money laundering. It is this proviso which casts a responsibility on the Adjudicating Authority to afford a opportunity of hearing to any person who has not been issued a notice under section 8(1) but claims a right in the property in question.

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12. The main question is whether this obligation has to be discharged before the order under Section 8(3) is passed or a post-decisional hearing would suffice to meet the requirements of law. In the case of Central Bank of India (Supra) this Tribunal has taken a view that the proviso to sub-Section 2 of Section 8 speaks of only affording a opportunity of being heard to a person claiming right in the property but the timing of such hearing need not necessarily be prior to passing of the order under Section 8(3).

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13. In the light of said provisions, we would like to differ with the view taken by the Tribunal in the Central Bank of India as such a view would in fact lead to review of its own orders by the Adjudicating Authority either confirming or modifying its previous orders as any hearing afforded under proviso to sub-Section 2 of Section 8 has to necessarily result into an order. Otherwise such a hearing will have no meaning. If such a hearing is conducted after an order under Section 8(3) has already been passed such hearing may result in order which may be at variance with the previous orders under Section 8(3).

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14. Such a scenario would definitely be in contradiction with the provisions of the PMLA as no such powers of review have been vested in the Adjudicating Authority. The provisions of Section 8, (1), (2) & 3 have to be read harmoniously and a holistic view has to be taken to interpret these provisions correctly. While Section 8(1) speaks of issue of show cause notice to the persons alleged to have committed an offence under Section (3) and to joint holders of the property and on whose behalf the property is held by some other person, Section 8(2) read with its proviso speaks of Principles of Natural Justice to be followed in the form of considering the reply to the show cause notice, hearing the aggrieved persons and the complainant and also hearing any person other than a person to whom the notice has been issued, who claims a right in the property and Section 3 provides for passing an order in writing regarding confirmation of attachment. This scheme of law has no scope for segregating the proviso to Section 8(2) from Section 8(2) as well as the Section 8(3) because a hearing after the passing of the order under Section 8(3) has no meaning. The noticees as well as any other person who claims a right in the property has to be heard before a final order of confirmation of attachment is passed so that the submissions and pleas made by such a person are taken on record and given due consideration before arriving at a final decision by the Adjudicating Authority.

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15. As regards the powers of review of its own orders by the Adjudicating Authority it would be relevant to refer to Section 11 of the Prevention of Money Laundering Act which deals with powers regarding summons to the production of documents and evidence etc of the Adjudicating Authority. Section 11 reads as under:

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“Power regarding summons, production of documents and evidences etc.

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11(1) The Adjudicating Authority shall, for the purposes of this Act, have the same powers as are vested in a civil court under the

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Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:-

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a) Discovery and inspection; b) Enforcing the attendance of any person, including any officer of a banking company or a financial institution or a company, and examining him on oath;

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c) Compelling the production of records; d) Receiving evidence on affidavits; e) Issuing commissions for examination of witnesses and documents, and

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f) Any other matter which may be prescribed.

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1. All the persons so summoned shall be bound to attend in person or through authorized agents, as the Adjudicating Authority may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.

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2. Every proceeding under this section shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).”

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16. The above section do not entrust the Adjudicating Authority with any powers of review of its own orders. Such a power cannot be enjoyed and exercised by the Adjudicating Authority unless it is specifically provided in the law. As per the existing provisions of PMLA the Adjudicating Authority has no powers to review its own orders. Therefore, any order passed by the Adjudicating Authority which amounts to reviewing of its own orders would be against the provisions of PMLA and not sustainable. As regards the powers of review of its orders with the Appellate Tribunal, section 35of the PMLA specifically provides for the same. The relevant portions of Section 35 are reproduce below:

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“35(1) The Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act, the Appellate Tribunal shall have powers to regulate its own procedure.

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(2) The Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1905 (5 of 1908) while trying a suit, in respect of the following matters, namely:-

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a) Summoning and enforcing the attendance of any person and examining him on oath;

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b) Requiring the discovery and production of documents;

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c) Receiving evidence on affidavits;

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d) Subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or copy of such record or document from any office;

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e) Issuing commissions for the examination of witnesses or documents;

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f) Reviewing its decisions;

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g) Dismissing a representation for default or deciding it ex parte;

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h) Setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and

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i) Any other matter, which may be, prescribed by the Central Government.”

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17. Clause (f) of section 35(2) empowers the Appellate Tribunal to review its decisions; however, no such power is vested in the Adjudicating Authority under Section 11 of PMLA.

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22. In the instant case after publication and communication of the confirmation order dated 11.03.2014 to the parties concerned the Adjudicating Authority became functus officio and hence was not empowered or entitled to review its own orders, that too when there are no express provisions for such a review by the Adjudicating Authority in the PMLA. But the Appellate Tribunal can exercise its power of review as per scheme of the Act.

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23. In view of the above, we are of the view that the order dated 12.12.2014 of this Tribunal allowing the applicant to invoke his remedy before the Adjudicating Authority as contemplated under proviso to section 8(2) of PMLA needs to be reviewed.

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24. Therefore, in terms of the powers vested in this Tribunal under section 35(2) of the PMLA we review the order dated 12.12.2014 of this Tribunal and pass the following order:

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I. Order of confirmation dated 31.03.2014 in OC No. 228/2013 in so far as it pertains to house No. D-5/5 DLF Phase-I, Gurgaon, Haryana is set aside and the matter is remanded back to the Adjudicating Authority for deciding the matter afresh after giving an opportunity of being heard to the applicant in terms of proviso to section 8(2) and also the other defendants in OC No. 228/2013.

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II. The Adjudicating Authority shall fix a date of hearing not beyond 45 days from the date of receipt of this order. The applicant and the defendants in OC No. 228/2013 shall appear before the Adjudicating Authority on the date fixed by the Adjudicating Authority for hearing. The Adjudicating Authority shall pass its order in remand proceedings within 45 days of the date of hearing.

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III. The applicant and the defendants in OC No. 228/2013 shall not sell, dispose of, alienate or create any third party interest in the property viz. D- 5/5, DLF Phase-I, Gurgaon, Haryana during the pendency of remand proceedings before the Adjudicating Authority and the provisional attachment order No. 03/2013 dated 28.10.2013 in ECIR/06/JLZO/2012 shall remain alive. The applicant shall also continue to deposit charges for use and occupation of the said property @ of Rs. 50,000 per month to be deposited by 15^th date of the next English calendar month.

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IV. This order has been passed on a question of law itself and we are not expressing any opinion on the merits of the case. (emphasis supplied)

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In view of the facts and circumstances of the case as discussed herein above, and in exercise of the powers conferred under clause (f) of sub-section 2 of Section 35 of the Act, the Tribunal‟s order dated 25.01.2016 in Appeal no. FPA-PMLA-530/BOM/2013 is reviewed to the extent it upheld the confirmation of the provisional attachment of the subject property to the extent of the appellant‟s undivided share, right, title and interest in the subject property. Accordingly, the order dated 16^th

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September, 2013 in Original confirming the PAO No. 08 of 2013 dated 28.03.2013 passed by the Adjudicating Authority is set aside to the extent of the above and the matter is remanded to the Adjudicating Authority for issue of notice under Section 8(1) of the Act to the appellant, and also to the defendant therein (respondent-R-2 herein) with a copy to the Respondent-1 herein, and to decide the matter in accordance with law after giving an opportunity to the parties to file the reply to the notice along with documents which they rely on and after according opportunity of personal hearing to all parties including the Respondent-1 herein.

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We may clarify that till the matter is decided by the Adjudicating Authority, the subject property to the extent indicated above shall remain attached in terms of the provisions of the PMLA till the completion of the proceedings as directed. Further, the appeal against the order dated 16^th September, 2013 confirming the attachment of the remaining portion of the subject property already stands rejected by this Tribunal Order dated 25.01.2016.

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This Tribunal also directs that subject to the appellants furnishing an undertaking not to transfer, sell create any encumbrance or third party rights in the subject premises and the subject property to the extent of their undivided share, title and interest during the pendency of the proceedings as aforesaid, the Respondent No. 1 shall restore physical possession of the Subject Premises, more particularly described in Exhibit “B” to this Appeal, to the appellants within two weeks from furnishing such undertaking. The appellant no. 1 would be entitled to enjoy the possession of the premises in question to the extent of their claim and which was occupied by him at the time of taking the possession in the year by the respondent-1 in 2014.

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Nothing in this order may be construed as having expressed any opinion on the merits of the civil rights of the parties in the subject property or with regard to the percentage share therein claimed by the appellant which fall within the domain of the competent civil courts. Similarly, nothing in this order may be construed as having expressed any opinion on the merits of the question whether the subject property to the extent of the appellant‟s right, till and interest in the subject property was involved in money laundering or otherwise and about the confirmation of attachment of such property which is to be determined in the proceedings as directed.

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