Allowed

FPA-PMLA-2744/DLI/2018 of The Deputy Director Directorate of Enforcement, New Delhi v/s Shri Sanjeev Mahajan

ATFP22 Aug 2019FPA-PMLA-2744/DLI/2018

Case brief

AI extract

What is this about?

The Appellate Tribunal allowed the respondent (non-named person) to recover seized gold coins. The court set aside a retention order confirmed under Section 8(3)(a) of the PMLA because no prosecution complaint was filed against him within the statutory 90-day limit despite multiple hearings.

What did the court decide?

The retained material shall be returned to the respondent within four weeks. Previous appellate views were not decided on merits; this order lapses the retention order due to statutory non-compliance.

FPA-PMLA-2744/DLI/2018 of The Deputy Director Directorate of… — Money Laundering | ATFP (2019)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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Date of decision : 22.08.2019

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FPA-PMLA-2744/DLI/2018

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The Deputy Director Directorate of Enforcement, New Delhi … Appellant

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Versus Shri Sanjeev Mahajan … Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellant	: Mr. Nitesh Rana, Advocate
For the Respondent	: Mr. R. K. Rawal, Advocate
CORAM
JUSTICE MANMOHAN SINGH	: CHAIRMAN
SHRI G. C. MISHRA	: MEMBER

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JUDGEMENT

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FPA-PMLA-2744/DLI/2018

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The Deputy Director, Enforcement Directorate has preferred this present appeal against the order dated 26^th September, 2018 passed by the Learned Adjudicating Authority in the matter of OA No. 204/2018 in which it is held that condition laid down for retention are not satisfied and OA is rejected.

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In Para no. 4 of the impugned order it is held by the Learned Adjudicating Authority as follows:

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“Based on the submissions made by the Applicant and the Respondent it is on record that as a result of search conducted by the Assistant Director only few gold coins have been recovered and it is not difficult to ascertain whether they, can be useful in any investigation in the matter. Applicant has termed them as proceeds of crime. However there is no justification for that. I don’t find any justification for retention of seized gold coins as it does not carry any special marking or mention on it. I am also shocked to see that the application has been filed before the Authority but in the 3 hearings conducted

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FPA-PMLA-2744/DLI/2018 Page 1 of 5

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by the Authority in none of the them Applicant or its Counsel remain present for replying to query or making arguments in favour of the Application. This indifference towards the proceedings before the Authority after filing of the Application is totally unjustified and ridiculous. In view of this it is not tenable to support the Application of the Applicant and accordingly the Application is rejected. The seized item should be restored to the Respondent.”

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Heard the respective counsels and gone through the materials available on record. It is seen from the record that the ED registered an ECIR on the basis of an FIR registered by CBI vide RCBD1/2017/E/0007 on 25.10.2017 under Section 13(2) r/w 13(1)(d) of PC Act, 1988 and Sections 120(B) r/w 420, 467, 468 & 471 of IPC, 1860. It is alleged in the said FIR that M/s. Sterling Biotech Limited, its 05 Directors, namely S/Sh. Nitin Jayantilal Sandesara, Chetan Jayantilal Sandesara, Rajbhushan Dixit, Vilas Dattatray Joshi and Smt. Dipti Chetan Sandesara and others hatched criminal conspiracy with each other with dishonest intention to cheat Andhra Bank and other Public Sector Banks. The Sterling Biotech Limited availed loan of more than INR 5000 Crores which have turned into Non-Performing Assets (NPA).

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The Respondent is not an FIR named accused nor named in the ECIR. It is the case of the appellant that during the course of search dated 16.04.2018, they found some Gold Coins of different weights weighing about 368 grams in total valued at Rs. 11,77,600/- alongwith jewellery from one of the locker no. 104 with SBI, New Ashok Nagar, New Delhi - 110096, jointly held in the name of the respondent and his wife. According to the appellant only the Gold Coins were seized. The relevant documents concerning the search, seizure/panchnama dated 16.04.2018 are perused.

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FPA-PMLA-2744/DLI/2018

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Page 2 of 5

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In appeals bearing no. FPA-PMLA-2383/DLI/2018 and FPA-PMLA2384/DLI/2018 against the orders passed by Adjudicating Authority dated 04^th May, 2018 in OA No. 155/2018 and 160/2018 respectively arising out of the same ECIR and between the same parties, this Appellate Tribunal had passed the following orders:

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“FPA-PMLA-2383/DLI/2018

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By this order, we propose to decide the above mentioned appeal which has been filed under Section 26 of the Prevention of Money Laundering Act, 2002 against the order dated 04th May, 2018 passed by the Adjudicating Authority in OA No. 155/2018.

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The impugned order was passed on 04th May, 2018. The prosecution complaint has been filed within 90 days under Section 8(3)(a) of the Act. Section 8(3)(a) is a mandatory provision which stipulates that if no prosecution complaint is filed, the retention order of seizure lapses. In the present case, more than a year has been passed. No prosecution complaint has been filed. Therefore, the appeal is allowed by setting aside the order dated 04th May, 2018. However, the retained material shall be returned to the appellant within four weeks.

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In the interest of justice, the respondent is at liberty to keep the copy/print of the same before handing over the same to the appellant.

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It is clarified that we have not decided anything on merit of the case. The appeal is accordingly disposed of.

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FPA-PMLA-2384/DLI/2018

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In the interest of justice, the respondent is at liberty to keep the copy/print of the same before handing over the same to the appellant.

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It is clarified that we have not decided anything on merit of the case. The appeal is accordingly disposed of. ”

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The aforesaid two appeals were also relating to search and seizures

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of certain documents etc., from the possession of the present respondent

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FPA-PMLA-2744/DLI/2018

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Page 3 of 5

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arising out of same ECIR. The said two impugned orders were set aside by this Bench of the Tribunal on the grounds stated therein.

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During the course of arguments the learned counsel for the respondent amongst others submits that the respondent is not named in the FIR or ECIR and no complaint has been filed against him under PMLA. The retention of seized items, therefore, beyond the prescribed period provided under Section 8(3)(a) of the PML Act, 2002. The prescribed period of the retention having already expired, there is no justification of retaining this seizure.

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It is an undisputed fact that the respondent is not an FIR named accused nor named in the ECIR and no prosecution complaint has also been filed against him even though prosecution complaint under PMLA has been filed against several persons including Shri Gagan Dhawan, Shri Nitin Jayantilal Sandesara, etc., arising out of same ECIR and the Special PMLA Court has taken the cognizance of the same and further trial proceedings are underway. There is no whisper anywhere in the appeal that either the respondent is prosecuted under PMLA or the materials seized herein are part of any prosecution complaint.

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The arguments of this appeal were completed on 30.07.2019 and then it is fixed for orders.

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In the circumstances, as per the provisions of Section 8(3)(a) of PMLA, 2002 as existed till 31.07.2019 prosecution complaint was to be filed within 90 days. The impugned order was passed on 26^th November, 2018. As per the said mandatory provision then existed, the prosecution complaint was to be filed involving the property in question within the prescribed period of 90 days and that if no prosecution complaint is filed FPA-PMLA-2744/DLI/2018 Page 4 of 5

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in respect of the property concerned, the retention order of seizure lapses. In the present case more than 90 days have been passed since the day of passing of the impugned order and no prosecution complaint was filed that the materials seized herein are part of any prosecution complaint. Therefore, in the light of the above the impugned order to the extent that “ The seized item should be restored to the Respondent. ” is confirmed with a direction to the appellant that the retained material shall be returned to the respondent within four weeks.

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It is clarified that we have not decided the present appeal on merit.

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(Justice Manmohan Singh)

Chairman

(G. C. Mishra)

Member

New Delhi, 22^nd August, 2019

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„AS‟

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FPA-PMLA-2744/DLI/2018

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Page 5 of 5

FPA-PMLA-2744/DLI/2018 of The Deputy Director Directorate of Enforcement, New Delhi v/s Shri Sanjeev Mahajan

Case brief

What is this about?

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FPA-PMLA-2744/DLI/2018 of The Deputy Director Directorate of Enforcement, New Delhi v/s Shri Sanjeev Mahajan

Case brief

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