Allowed

FPA-PMLA-2205/CHD/2018 of Shri Dinesh Kumar v/s The Deputy Director Directorate of Enforcement, Chandigarh

ATFP13 Mar 2020FPA-PMLA-2205/CHD/2018

Case brief

AI extract

What is this about?

This Tribunal allowed an application to restore physical possession of an attached property to the appellant. The court held it had inherent power to issue consequential orders like stay and directed the respondent to restore possession within two weeks, subject to continued attachments and a prohibition on transferring the property.

What did the court decide?

Respondent directed to restore possession of the property to the appellant within two weeks, subject to continued attachments and prohibition on transfer or encumbrance.

FPA-PMLA-2205/CHD/2018 of Shri Dinesh Kumar v/s The Deputy Director Directorate of Enforcement, Chandigarh — ATFP (2020) — LawSathi Research

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

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Date of Decision: 13.03.2020

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MP-PMLA-6934/CHD/2020 (Misc.) FPA-PMLA-2205/CHD/2018

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Shri Dinesh Kumar … Appellant/Applicant

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Versus The Deputy Director Directorate of Enforcement, Chandigarh … Respondent

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Advocates/Authorized Representatives who appeared

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For the appellant	: Shri Saurabh Kapoor, Advocate
For the respondent	: Shri Atul Tripathi, Advocate
CORAM SHRI G. C. MISHRA	: ACTING CHAIRMAN

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JUDGMENT

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MP-PMLA-6934/CHD/2020 (Misc.)

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The aforesaid application has been filed for Restoration of the possession of the following property on the ground stated in the said application:

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“House No. 3086/1, Sector 47D, Chandigarh.”

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The Respondent, on the other hand raised legal and factual grounds in the reply as mentioned therein and has prayed for dismissal of the Restoration of possession of the property application.

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FPA-PMLA-2205/CHD/2018

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Page 1 of 5

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During the course of the hearing, the learned counsel appearing for the appellant submitted that this Tribunal has passed stay order on 28.05.2018 and the appellants has not violated any of the condition stipulated therein and that the dismissal of the appeal was for nonprosecution not on merit and that the property has been acquired in the year 2003 i.e. prior to the alleged commission of crime and that the said property has been allotted by the Chandigarh Housing Board under the Lower Income Group category and that the property was purchased after loan taken from the IDBI and that the property has been taken possession by the Enforcement Directorate after evicting the appellants family which includes himself his wife & Others as well as aged parents. All of them are now staying in the house of his sisters family’s rented accommodation which is causing lot of embarrassment for them and with lot of difficulties and the appellant undertakes not to part with the property or create any encumbrances in any manner in favour of any third party and that he has a prima facie case in restoring the physical possession of the said property and that he is and he would be facing lot of problems and there will be irreparable injury which cannot be compensated in terms of money if the possession of the property is not restored.

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On the other hand the learned counsel appearing for the Respondent has raised objection of restoration of aforesaid property interalia on the ground that this Tribunal is not empowered under the Act to restore the possession of the property in question. He has drawn the attention of this Tribunal to Section 26 and 35 of the PMLA, 2002. He has also submitted that the loan taken from the bank in respect of the property in question has been liquidated out of the proceeds of crime so

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FPA-PMLA-2205/CHD/2018

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Page 2 of 5

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the appellant cannot be allowed to enjoy the said property. It is further contended by him that stay application is still pending and the stay order dated 28.05.2018 was passed before filing of reply to the stay application.

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Heard both sides. Considered the grounds taken in the application as well as the reply to the application and also perused the record. The legal question raised by Respondent that this Tribunal is not empowered to restore the possession is not agreed to on the ground that the power of this Tribunal to issue stay order as well as order consequential thereto is inherent. The section 35(2)(h) of the PMLA, 2002 has empowered this Tribunal to set aside any order of dismissal of any representation for default or any order passed ex-parte. The restoration of possession in the present case is consequential to the order of restoration of appeal which was dismissed for default. The restoration of possession is an order during the pendency of the appeal and the status of the order of restoration of possession is same as in the case of passing of stay order.

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Proceeding further, it is seen from the record that the Division Bench of this Tribunal passed an order of stay on dated 28.05.2018. The second para of the said order is important because the condition order of status quo was passed as agreed by both the parties. The relevant portion of the order dated 28.05.2018 is reproduced below:-

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“2. As agreed both the parties’ status quo shall be maintained in respect of above mentioned properties i.e. H.No. 3086/1, Sector 47-D, Chandigarh. The learned counsel for the appellant upon instruction undertakes that he shall not dispose of this property or create any third party interest directly or indirectly.”

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FPA-PMLA-2205/CHD/2018

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Page 3 of 5

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The aforesaid order of status quo was not challenged by the Respondent at any point of time. The appeal was dismissed for default on 27.11.2019 for non-prosecution. Subsequent to the said order the Respondent issued eviction notice under section 8(4) of the said Act and got the appellant and their family members including aged parents evicted from the aforesaid premises. The appellant preferred an application for restoration of the appeal. After hearing both the parties, the appeal was restored on 04.02.2020 and immediately thereafter the present application for restoration of possession of the property has been filed.

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It is not a disputed fact that the property in question has been allotted in favour of the appellant in 2003 by the Chandigarh Housing Board. It is also not disputed that the property has been acquired after obtaining loan of about Rs. Five Lakhs only from IDBI in 2016. The main allegation against the appellant with respect to this property is that the appellant has liquidated the loan out of proceeds of crime. But the fact is that the appellant was staying with his family which consists of aged parents and that after being evicted they are staying with the family of sister of the appellant in a difficult condition. There is nothing on record that the appellant or their family members have any other accommodation to stay.

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Considering the aforesaid factual and legal position it is held that the appellant has a prima facie case for restoration of possession of the property mentioned above and there will be injustice and irreparable injury would be caused if the possession of the house is not restored. Therefore, the Respondent is directed to restore the possession of the

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FPA-PMLA-2205/CHD/2018

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Page 4 of 5

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property in question to the appellant within two weeks from today. The

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aforesaid order is subject to following condition:

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(i) Attachments shall continue.

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(ii) Legal and constructive possession of ED shall remain over the properties.

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(iii) The appellant is prohibited from transferring, converting or disposing the property in question in favour of any third party.

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(iv) No encumbrance shall be created by the appellant in respect of the properties.

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In view of the above, the application is accordingly disposed of.

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List the appeal on 09^th April, 2020.

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Copy of the order be given ‘dasti’ to both the sides.

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(G. C. Mishra) Acting Chairman

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New Delhi, 13^th March, 2020

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‘D’

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FPA-PMLA-2205/CHD/2018

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Page 5 of 5

FPA-PMLA-2205/CHD/2018 of Shri Dinesh Kumar v/s The Deputy Director Directorate of Enforcement, Chandigarh

Case brief

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FPA-PMLA-2205/CHD/2018 of Shri Dinesh Kumar v/s The Deputy Director Directorate of Enforcement, Chandigarh

Case brief

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