Partly allowed

FPA-PMLA-1951/LKW/2017 of Shri Umesh Chandra Rai & Anr. v/s The Deputy Director, Directorate of Enforcement, Lucknow

ATFP26 Apr 2019FPA-PMLA-1951/LKW/2017

Case brief

AI extract

What is this about?

The Appellate Tribunal allowed the appellant's stay application and dismissed the respondent's application for recall of interim orders. The Tribunal noted repeated breaches of undertaking by the respondent (Enforcement Officer) to restore attached property possession, obliging him to appear for appropriate action if non-compliance persists.

What did the court decide?

Appellant's stay application allowed; Respondent's recall application dismissed. Possession of attached property to be restored within two weeks; failure to do so attracts action against the Investiga

FPA-PMLA-1951/LKW/2017 of Shri Umesh Chandra Rai & Anr. v/s The Deputy Director, Directorate of Enforcement, Lucknow — ATFP (2019) — LawSathi Research

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APPELLATE TRIBUNAL, FOR SAFEMA, FEMA, PMLA, NDPS, PBPT, FERA ACT AT NEW DELHI

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MP-PMLA-5815/LKW/2019 (Stay) MP-PMLA-3836/LKW/2017 (Stay) &

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FPA-PMLA-1951/LKW/2017

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Shri Umesh Chandra Rai & Anr. … Appellants

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Versus

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The Deputy Director, … Respondent Directorate of Enforcement, Lucknow

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Advocates/Authorized Representatives who appeared

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For the appellants : Shri Shishir Singh, Advocate For Respondent : Shri Mohd. Faraz, Advocate Mr. Atul Jaishwal, I.O. CORAM JUSTICE MANMOHAN SINGH : CHAIRMAN SHRI G.C. MISHRA : MEMBER

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ORDER 26.04.2019

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MP-PMLA-5815/LKW/2019 (Stay)

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The present appeal was filed u/s 26 of Prevention of Money Laundering Act, 2002 against the order dated 1^st August, 2017. By this order, we proposed to decide the stay application filed by appellant as well as application filed by the respondent for modification of earlier order.

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The notice was issued in the said appeal only on 11^th October, 2017. Counsel for the appellant at that time had agreed to move the application for interim stay once any notice u/s 8(4) is received for taking

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FPA-PMLA-1951/LKW/2017

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the possession. The said liberty was granted to file the interim application if any notice u/s 8(4) has been issued by the respondent.

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When the matter was taken up on 15^th February, 2018 no reply to the appeal was filed. One more opportunity was granted to the respondent to file the reply within four weeks and the matter was adjourned for 24^th April, 2018. On 24^th April, 2018, it was recorded that reply still not filed by the respondent. Counsel for the respondent states that reply was almost ready and it has sent to the department for approval. One more opportunity was granted to the respondent for filing the reply within four weeks.

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On 7^th February, 2019, a fresh application for early hearing was filed by the appellant as it was apprehended on behalf of the appellant that the respondent may take the possession of the attached property. One week time was granted to the respondent to file the reply. In the meantime status quo order was passed with regard to the attached properties subject to the condition that the attachment will continue and appellant shall not dispose of the property or not to create any third party rights directly or indirectly in the property.

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As a matter of fact that the said order was passed after hearing of both the parties and having gone through the prayer made in the grounds of appeal. The said prayer is read as under:-

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(a) Quash and set-aside the impugned order dated 01.08.2017 passed by the learned Adjudicating Authority under the Prevention of Money Laundering Act, 2002 in O.C. No. 753/2017.

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(b) Quash and set-aside the Provisional Attachment Order No. 01/2017 dated 31.03.2017 passed by the Joint Director, Directorate of Enforcement, Lucknow;

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FPA-PMLA-1951/LKW/2017

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(c) Quash the Original Complaint No. 753/2017 dated 27.04.2017, filed by the respondent under section 8 of PMLA before the Hon‟ble Adjudicating Authority;

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(d) Pass any other order or orders as may be deemed to be fit and property in the interest of justice.

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On 19^th February, 2019, 22^nd February, 2019 and 5^th March, 2019

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the following orders were passed:-

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“ On 7^th February, 2019 the following interim order was passed.

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Fresh application for early hearing has been filed by the appellant. The appeal is coming up on 16^th July, 2019. Reply to the said application be filed within one week.

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List on 19^th February, 2019.

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In the meanwhile, both the parties shall maintain status quo with regard to the attached properties subject to the condition that the attachment will continue and the appellant shall not dispose of the property and create any third party right directly or indirectly in any manner. ”

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The learned counsel for the respondent submits that due to communication gap, despite of said interim order, the possession has been taken by the Enforcement Directorate. He agrees that the possession shall be handed over to the appellant forthwith.

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As far as stay is concerned, learned counsel for the appellant is agreeable to file the application within one week, which will be considered on merits.

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List on 16^th July, 2019. In the meanwhile interim order passed on 7^th February, 2019 shall continue.

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Order be given dasti to both the parties.”

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”

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6.1. “

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ORDER 22.02.2019

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FPA-PMLA-1951/ LKW /2017

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This order is passed in continuation with the order dated 19^th February, 2019. Counsel for the appellant states that as per the instruction taken from the client, no possession has been restored despite the order passed on last date i.e. on 19^th February, 2019 which was passed on the basis of consent given on behalf of respondent. The Investigating Officer is again directed to comply with the orders dated 7^th February, 2019 and 19^th February, 2019 within three days as last chance, otherwise he will remain present before the court for the purpose taking appropriate action against him for violation of the orders.

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FPA-PMLA-1951/LKW/2017

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In the meanwhile, fresh application for stay has filed by the appellant. Issue notice to the respondent. Let the reply be filed by the next date. List on 5^th March, 2019.

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Copy of the order be given „dasti‟ to all parties and counsel.”

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6.2. “

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ORDER 05.03.2019

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On 7^th February, 2019 the following order has been passed:

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“FPA-PMLA-1951/LKW/2017&MP-PMLA-5628/LKW/2019 (E.H.)

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Fresh application for early hearing has been filed by the appellant. The appeal is coming up on 16^th July, 2019. Reply to the said application be filed within one week.

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List on 19^th February, 2019.

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The said order was not complied by the respondent. Despite of the order the possession was taken by the respondent. On 22^nd February, 2019, again the following order was passed:

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“ FPA-PMLA-1951/ LKW /2017

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In the meanwhile, fresh application for stay has filed by the appellant. Issue notice to the respondent. Let the reply be filed by the next date. List on 5^th March, 2019.

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Copy of the order be given „dasti‟ to all parties and counsel.”

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Mr. Atul Jaiswal, Investigating Officer appeared before us. It is recorded in the order dated 22^nd February, 2019 that in case the possession is not restored within three days, then I.O. shall remain

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FPA-PMLA-1951/LKW/2017

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present for the purpose of taking action against him for violation of the orders.

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Mr. Atul Jaiswal, I.O. states that the file has been sent to the Headquarters.

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We are not concerned with the same. As the order passed by this tribunal are to be complied with strictly.

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The counsel for the respondent states that they may give one week time to comply the order. The said undertaking has been accepted from the I.O.

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List this matter on 14^th March, 2019.

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In case, the said order still has not complied with, Mr. Atul Jaiswal, I.O. shall remain present.”

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It is subsequently come to our notice that our orders dated 7^th February, 2019,19^th February, 2019 and 22^nd February, 2019 were challenged by the respondent before Hon‟ble High Court being FIRST APPEAL FROM ORDER No. 734 of 2019 . Who has pleased to pass the details order, the operative part of the said order are as under where certain directions were issued:-

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“This appeal is disposed of granting opportunity to the appellant to file recall application before the Tribunal for recall of the order dated 7.2.2019 and subsequently orders dated 19.2.2019 and 22.2.2019 passed by the Tribunal. The Tribunal is directed to pass reasoned and speaking order on the application of the applicant within one month from the date of presentation of certified copy of this order before it after affording opportunity of hearing to the parties in accordance with law.

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In the meantime no coercive action shall be taken against the appellant or its officer by the Tribunal.

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In the meanwhile, the respondent has to file the application for recall of order dated 7^th February, 2019, 19^th February, 2019 and 22^nd February, 2019. The main contention of the respondent is that since no application for stay was filed alongwith the appeal so the interim order ought not have to pass.

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FPA-PMLA-1951/LKW/2017

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It is a matter of fact that on 5^th March, 2019, the I.O. Sh. Atul Jaishwal appeared before us and it was recorded that the respondent seeks one week time to comply the order and undertaking is given by the I.O. was accepted on 5^th March, 2019. But despite of order passed by this tribunal on 5^th March, 2019, the said order was not complied by the respondent.

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When the matter was taken on 14^th March, 2019 then again Mr. Atul Jaishwal, I.O. given the undertaking on behalf of the respondent that he will comply the order passed by this Tribunal and possession shall be restored by 7^th April, 2019. The order dated 14^th March, 2019 is re-produced here below:

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“

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ORDER 14.03.2019

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FPA-PMLA-1951/LKW/2017

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Mr. Atul Jaiswal, Investigating Officer (I.O.) undertakes on behalf of the respondent that he shall comply the orders passed by this Tribunal and shall restore the possession by 07^th April, 2019. Counsel for the appellant has no objection. Let the same be complied with. In failure to do so, Mr. Atul Jaiswal, I.O. shall remain present on 12^th April, 2019.

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List on 12^th April, 2019.

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”

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It appears from the order passed by Hon‟ble High Court, the factum of undertaking given two times by the respondent before us has not been brought to the notice of the Hon‟ble High Court. Investigating Officer who is present today has stated that the reference of order dated 5^th March, 2019 was mentioned, however

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undertaking part was not brought to the notice by that time because

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FPA-PMLA-1951/LKW/2017

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copy of the order dated 5^th March, 2019 was not received by him. However, no explanation given about the subsequent order dated 14^th March, 2019 where the second time undertaking was given by the respondent.

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We are of the view that had these orders dated 5^th March, 2019, 14^th March, 2019 brought to the notice of the Hon‟ble High Court. The order passed by Hon‟ble High court on 26^th March, 2019 would have different as the undertaking part has not been disclosed before the Hon‟ble High Court.

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In the said matter only explanation given by the respondent is that since on 7^th February, 2019, the application for stay was not available so status quo order ought not to have passed. We do not agree with the argument of the respondent. In view of order, prayer made and couple with the main prayer of the grounds of appeal.

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It is a matter of fact that when the matter was heard on the point of stay on 7^th February, 2019 the respondent did not raise any objection that since the appellant has not filed separate application for stay so no stay can be granted.

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No explanation what so ever given on behalf of the respondent is that why despite of undertaking given on 5^th March, 2019, 14^th March, 2019 the said order has not been complied. It is clearly a case of a breach of undertaking.

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FPA-PMLA-1951/LKW/2017

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It is a matter of record when the matter was taken on 5^th March, 2019 the application for stay was available on record and the respondent has given an undertaking when was repeated in subsequent order dated 14^th March, 2019.

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No reply to the application of the appellant is filed. Under these circumstances, the application for stay filed by the appellant is allowed. The application filed by the respondent for recall of order is dismissed. The respondent is directed to restore the possession with the appellant within two weeks from today, in failure to so, the I.O. shall remain present, so that the appropriate action be taken in accordance with law.

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Order be given dasti to both the parties.

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FPA-PMLA-1951/LKW/2017

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Reply has been filed by the respondent. No rejoinder has been filed by the appellant. Right to file the rejoinder is closed.

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Both the parties are allowed to file the written synopsis by the next date of hearing.

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List the appeal on 16^th July, 2019 for final hearing.

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(Justice Manmohan Singh) Chairman

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(G.C. Mishra)

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Member

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New Delhi, 26^th April,, 2019

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„s‟

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FPA-PMLA-1951/LKW/2017

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FPA-PMLA-1951/LKW/2017 of Shri Umesh Chandra Rai & Anr. v/s The Deputy Director, Directorate of Enforcement, Lucknow

Case brief

What is this about?

What did the court decide?

FPA-PMLA-1951/LKW/2017 of Shri Umesh Chandra Rai & Anr. v/s The Deputy Director, Directorate of Enforcement, Lucknow

Case brief

What is this about?

What did the court decide?

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