Allowed

FPA-PMLA-2064/DLI/2017 of M/s. Dankuni Investment Ltd. v/s The Deputy Director Directorate of Enforcement, New Delhi

ATFP7 Mar 2019FPA-PMLA-2064/DLI/2017

Case brief

AI extract

What is this about?

The Appellate Tribunal, upholding a Supreme Court direction regarding the settlement of an underlying dispute, allowed appeals seeking closure of proceedings. The court set aside the provisional attachment of properties and shares under the PMLA and dismissed the prosecution complaint filed under Section 5(5), stating that with compliance of the higher court, all proceedings stand settled.

What did the court decide?

Provisional attachment orders under Section 5(1) of the PMLA quashed and set aside; complaint under Section 5(5) of the PMLA dismissed; ECIR declared as having nothing to survive.

FPA-PMLA-2064/DLI/2017 of M/s. Dankuni Investment Ltd. v/s The… — Money Laundering | ATFP (2019)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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1. MP-PMLA-3992/DLI/2017 (Stay) MP-PMLA-3993/DLI/2017 (Exem.)
FPA-PMLA-2063/DLI/2017
M/s. Mita Holdings Ltd.	…	Appellant
2. MP-PMLA-3994/DLI/2017 (Stay)
MP-PMLA-3995/DLI/2017 (Exem.)
FPA-PMLA-2064/DLI/2017
M/s. Dankuni Investment Ltd.	…	Appellant
3. MP-PMLA-4009/DLI/2017 (Stay)
MP-PMLA-4010/DLI/2017 (Exem.)
FPA-PMLA-2068/DLI/2017
M/s. Global Steel Holdings Ltd.	…	Appellant
4. MP-PMLA-4011/DLI/2017 (Stay)
MP-PMLA-4012/DLI/2017 (Exem.)
FPA-PMLA-2069/DLI/2017
M/s. Balasore Alloys Ltd.	…	Appellant
5. MP-PMLA-4013/DLI/2017 (Stay)
MP-PMLA-4014/DLI/2017 (Exem.)
FPA-PMLA-2070/DLI/2017
M/s. Navadisha Real Estate Pvt. Ltd.	…	Appellant
6. MP-PMLA-4015/DLI/2017 (Stay)
MP-PMLA-4016/DLI/2017 (Exem.)
FPA-PMLA-2071/DLI/2017
M/s. Navoday Consultants Ltd.	…	Appellant
&
7. MP-PMLA-5142/DLI/2018 (Exem.)
FPA-PMLA-2634/DLI/2018
M/s. Balasore Alloys Ltd.	…	Appellant
Versus
The Deputy Director
Directorate of Enforcement, New Delhi	…	Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellants	:	Mr. Gautam Mitra, Advocate
		Mr. Bakul Jain, Advocate
		Mr. Pankaj Baghla, Advocate
		Ms. Rishad Medora, Advocate
For the Respondent	:	Mr. Mohd. Faraz, Advocate
FPA-PMLA-2063, 2064, 2068-2071/DLI/2017 & FPA-PMLA-2634/DLI/2018		Page 1 of 5

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For the State Bank of India : Mr. Manoj Kr. Dubey, Advocate On behalf of Mr. Chandrachur Bhattacharyya, Advocate

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CORAM JUSTICE MANMOHAN SINGH : CHAIRMAN SHRI G. C. MISHRA : MEMBER

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ORDER

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07.03.2019

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FPA-PMLA-2063, 2064, 2068-2071/DLI/2017 & FPA-PMLA-2634/ DLI/2018

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The above mentioned appeals in item nos. 1 to 6 have been filed by the appellants challenging the order dated 25^th September, 2017 in ECIR/03/DZ-I/2017. By virtue of the impugned order various properties were attached. With regard to the other appeal i.e. FPA-PMLA2634/DLI/2018, the same was filed by M/s. Balasore Alloys Ltd. is concerned, in the said appeal the order dated 15^th October, 2018 was challenged by the appellant passed in O.C. No. 867/2018 in Provisional Attachment Order No. 15/2018 dated 15^th December, 2018 in ECIR/03/DZ-I/2017 dated 29^th March, 2017. (The above mentioned appeal is pending before the Single Bench of Hon‟ble Chairman.)

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Learned counsel for the appellants has referred the judgment passed by Hon‟ble Supreme Court of India in Civil Appeal No. 11907 of 2018 arising out of SLP (C) No. 14585 of 2015 filed by State Trading Corporation of India Versus M/s. Global Steel Holding Limited & Ors.

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It is evident that after the discussion, Hon‟ble Supreme Court of India, in the said appeal final directions were issued in Para 31 which read as under:

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FPA-PMLA-2063, 2064, 2068-2071/DLI/2017 & FPA-PMLA-2634/DLI/2018

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Page 2 of 5

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“31. We direct that:

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(i) The Demand Drafts for Rs. 800 crpres (Rupees Eight Hundred Crores) furnished by the respondents, be handed over to STC – Decree Holder;

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(ii) A lump-sum amount of Rs. 600 crores (Rupees Six Hundred Crores) worked out on the basis of 8% S.I. per annum (rounded off) be paid by the respondents to the appellant towards full and final satisfaction of the amounts due under the Settlement Agreement dated 15.11.2010, and Further Settlement Agreement dated 17.05.2012.

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(iii) The amount of Rs. 600 crores be paid by the respondents to STC towards interest in 12 weeks from the date of this Order.

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(iv) Upon payment of the said amount by 28.02.2019, all claims arising out of the two Settlement Agreements ( supra ), would stand finally settled, and put a complete closure to all pending proceedings of any nature whatsoever, between the parties, wherever filed and/or pending against each other.

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(v) If, however, the amount of Rs. 600 crores awarded towards interest is not paid on or before 28.02.2019, it would amount to contempt of the Order passed by this Court, and it would be open to the appellant to take appropriate action against the respondents in accordance with law for non-complaince.”

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If, the said order is read, it is clear from Para 31 that in case the appellants shall deposit a sum of Rs. 600 Crores STC towards interest in 12 weeks, (after the said deposit), all claims arising out of two Settlement Agreements would stand finally settled and put a complete closure to all pending proceedings of any nature whatsoever, between the parties, wherever filed and/or pending against each other.

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Counsel for the appellants has stated that the Rs. 600 Crores have already been deposited with the STC on 28.02.2019 under the compliance of the Supreme Court‟s Judgment. Proof has also been produced before us. Counsel for the appellant states that infact the entire amount of Rs. 2,210 Crores including interest has been paid.

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Learned counsel for the appellant has rightly submitted that fully compliance of order of the Supreme Court, nothing survives in the ECIR No. ECIR/03/DZ-I/2017. He submits that the following orders be FPA-PMLA-2063, 2064, 2068-2071/DLI/2017 & FPA-PMLA-2634/DLI/2018 Page 3 of 5

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passed while allowing the above mentioned seven appeals as per

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directions of the Supreme Court:-

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a) Direct that nothing survives in ECIR No. ECIR/03/DZ-1/2017 , since the underlying dispute stands fully and completely settled.

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b) Direct that the “Provisional Attachment Order” (PAO) of Plant, Machinery, Buildings & Land dated 15.12.2017 and order confirming seizure and/or freezing of shares under the PMLA dated 29.09.2017 under Section 5(1), dated 15.12.2017 be quashed and set aside.

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c) Dismiss the complaint dated 10.01.2018 , filed by the ED, under Section 5(5) of the PMLA.

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Learned counsel Mr. Mohammad Faraz, Advocate appearing on behalf of the respondent submits that the respondent agrees that the Supreme Court directions have to be followed and all pending proceedings of any nature whatsoever stand finally settled. However, he states that as far as, quashing of FIR and ECIR are concerned, the same are to be quashed by an appropriate authority in accordance with law and not by this Appellate Tribunal who has no jurisdiction to pass such orders. He states that even the prosecution complaint is to be withdrawn before the Special Court.

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As far as the directions issued by the Supreme Court are concerned, all the authorities are bound by the said judgment once the payment of Rs. 600 Crores has been paid. It is already held by the Supreme Court that all the proceedings shall stand finally settled and there should be a complete closure of all the pending proceedings of any nature whatsoever, between the parties.

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As far as the ECIR, FIR and Prosecution Complaint are concerned, orders have to be passed by the appropriate authority strictly in view of the judgment passed by the Honb‟le Supreme Court. With regard to the prayer made in the present appeals are concerned, the same is allowed. It is directed that the provisional attachment order (PAO) in respect of Plant, Machinery, Buildings & Land dated 15.12.2017 and order confirming seizure and/or freezing of shares under the PMLA dated FPA-PMLA-2063, 2064, 2068-2071/DLI/2017

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& FPA-PMLA-2634/DLI/2018 Page 4 of 5

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29.09.2017 under Section 5(1), dated 15.12.2017 is quashed and set aside and we also dismiss the Complaint dated 10.01.2018, filed by the ED, under Section 5 (5) of the PMLA.

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