Disposed

FPA-PMLA-1629/CHN/2017 of Ashwanth Pothy v/s The Deputy Director Directorate of Enforcement, Chennai

ATFP15 May 2018FPA-PMLA-1629/CHN/2017

Case brief

AI extract

What is this about?

The Tribunal observed the absence of 'reason to believe' records under Section 5 on record regarding an attachment order. It directed the Adjudicating Authority to file the sealed cover containing these records for examination, while noting the appellants were not involved in scheduled offences.

What did the court decide?

Directed the Adjudicating Authority to file the sealed cover containing 'reason to believe' records with the Tribunal for examination.

FPA-PMLA-1629/CHN/2017 of Ashwanth Pothy v/s The Deputy Director… — Money Laundering | ATFP (2018)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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MP-PMLA-3106/CHN/2017 (Misc.) & FPA-PMLA-1624/CHN/2017
S. Ramesh Pothy	…	Appellant
MP-PMLA-3107/CHN/2017 (Misc.) &
FPA-PMLA-1625/CHN/2017
S. Ashok
	…	Appellant
MP-PMLA-3108/CHN/2017 (Misc.) &
FPA-PMLA-1626/CHN/2017
S. Mahesh	…	Appellant
MP-PMLA-3109/CHN/2017 (Misc.) &
FPA-PMLA-1627/CHN/2017
M/s. Pothys Pvt. Ltd.	…	Appellant
MP-PMLA-3110/CHN/2017 (Misc.) &
FPA-PMLA-1628/CHN/2017
S. Murugesh	…	Appellant
MP-PMLA-3111/CHN/2017 (Misc.) &
FPA-PMLA-1629/CHN/2017
Ashwanth Pothy	…	Appellant
MP-PMLA-3112/CHN/2017 (Misc.) &
FPA-PMLA-1630/CHN/2017
S. Pothiraj	…	Appellant
Versus
The Deputy Director
Directorate of Enforcement, Chennai	…	Respondent
Advocates/Authorized Representatives who ap	peared
FPA-PMLA-1624, 1625, 1626, 1627, 1628, 1629 & 1630/CHN/2017		Page 1 of 4

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For the appellant : Shri E. Omprakash, Sr. Advocate, Ms. Madhusmita Bora, Advocate, For the respondent : Shri Atul Tripathi, Advocate CORAM JUSTICE MANMOHAN SINGH : CHAIRMAN SHRI ANAND KISHORE : MEMBER

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ORDER

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15.05.2018

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FPA-PMLA-1624-1630/CHN/2017

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We have seen the record and also seen by the counsel for the respondent. It appears from the record that before issuing the notice under Section 8(1) on 19^th September, 2006 it was recorded by the Adjudicating Authority that they have gone through O.C & material and are satisfied that it is a fit case for issuance of notice under Section 8(1) of the Act.

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As far as “reason to believe” in writing under Section 5 is concerned, it is appropriate to refer to section 5(1) and 5(2). The same reads as under:

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Attachment of property involved in money-laundering. — “5.1 Where the Director, or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that—

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Provided further that, notwithstanding anything contained in clause (b), any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act.]

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5(2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be

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FPA-PMLA-1624, 1625, 1626, 1627, 1628, 1629 & 1630/CHN/2017 Page 2 of 4

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prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed.”

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If section 5(1) is read in meaningful manner it is mandated in law that reason to believe is to be recorded in writing on the basis of the material in the possession of the Director/Deputy Director prior to passing of the Provisional Attachment Order. Sub-section 2 of section 5 stipulate that after attachment of property under Section 5(1), the Director / Deputy Director shall forward a copy of the order alongwith the material in his possession to the Adjudicating Authority in sealedcover and the Adjudicating Authority shall keep the same in the prescribed manner.

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As far as the reason to believe in writing is concerned under Section 5(1), there is nothing available on record. Counsel appearing on behalf of the respondent submits that under the provision of Section 5, it must have been sent to the Adjudicating Authority in compliance of section 5(2) of the Act. From the record summoned from the office of the Adjudicating Authority, we do not find the said “reason to believe”. It may be possible that the same may be sent in sealed-cover to the Adjudicating Authority separately. We direct the Adjudicating Authority to file the sealed cover with this office so that the same may be examined in view of the objection raised by the appellants.

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It is an admitted position in the above said appeals that the appellants are not involved in the scheduled offence. The prosecution complaint has been filed after passing the impugned order and even during the pendency of appeals.

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FPA-PMLA-1624, 1625, 1626, 1627, 1628, 1629 & 1630/CHN/2017

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Page 3 of 4

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Mr. Atul Tripathi, Advocate states that reason to believe is the internal document which is supposed to be sent under the compliance by the said section 5(1) or 5(2) of the Act, if that is the position, the file pertaining to that be produced on the next date if lying with the respondent.

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List on 24^th July, 2018.

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(Justice Manmohan Singh) Chairman

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(Anand Kishore) Member

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New Delhi, 15^th May, 2018

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„K‟

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FPA-PMLA-1624, 1625, 1626, 1627, 1628, 1629 & 1630/CHN/2017

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Page 4 of 4

FPA-PMLA-1629/CHN/2017 of Ashwanth Pothy v/s The Deputy Director Directorate of Enforcement, Chennai

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FPA-PMLA-1629/CHN/2017 of Ashwanth Pothy v/s The Deputy Director Directorate of Enforcement, Chennai

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