Dismissed

FPA-PMLA-1205/JP/2016 of Pushya Mitra Singhdeo v. The Deputy Director, Directorate of Enforcement, Jaipur

ATFP14 May 2024FPA-PMLA-1205/JP/2016

Case brief

AI extract

What is this about?

The Appellate Tribunal dismissed two appeals challenging a provisional attachment order under the Prevention of Money Laundering Act. The court held that the amendment adding corruption offences to the PMLA schedule applied prospectively from the ECIR date, the ad-hoc Deputy Director was competent, and natural justice was not violated as documents were supplied.

What did the court decide?

The appeals were dismissed summarily with no other relief being granted.

FPA-PMLA-1205/JP/2016 of Pushya Mitra Singhdeo Vs. The Deputy… — Money Laundering | ATFP (2024)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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1. FPA-PMLA-1205/JP/2016 PushyaMitraSinghdeo … Appellant Versus The Deputy Director, Directorate of Enforcement, Jaipur … Respondent 2. FPA-PMLA-1206/JP/2016 Anita Singhdeo … Appellant Versus The Deputy Director, Directorate of Enforcement, Jaipur … Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellants : Shri AakashVashishtha, Shri AbhijeetVaishnav, ShriPrateekKasliwal, Advocates For the Respondent : Shri Aditya Singla, Ms. Saakshi Garg, Shri Shubham Kr. Singh, Advocates

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CORAM JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI BALESH KUMAR : MEMBER

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FINAL ORDER 14.05.2024

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FPA-PMLA-1205&1206/JP/2016

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Two appeals have been preferred by the appellants to challenge common order dated 10.12.2015 passed by the Adjudicating Authority. Thus, both the appeals are decided by the common order.

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FPA-PMLA-1205&1206/JP/2016

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Page 1 of 11

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Brief facts of the case:A case was registered against the appellant PushyaMitraSinghdeo for the offence under Section 13(2) and 13(1)(e) of Prevention of Corruption Act, 1988 (for short `the Act of 1988). The appellant Anita Singhdeo was implicated with add of Section 109 IPC.

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The allegation against the appellants was for possession of assets disproportionate to the known sources of income to the tune of Rs.57,76,797/- during the check period 01.04.1996 to 31.12.2007. The charge sheet in pursuance to the FIR was filed on 28.12.2011. The ECIR was recorded in reference to the predicate offence and thereupon provisional attachment order was issued on 26.06.2015 attaching certain properties of the appellants. A show cause notice was issued by the Adjudicating Authority and after a reply and opportunity of hearing, the impugned order was passed.

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The learned counsel for the appellants at the outset submitted that the check period to find out the properties disproportionate to the known sources of income of the appellant, a government employee, is 01.04.1996 till 31.12.2007 when the offence under the Act of 1988 was not a predicate offence. It was added by way of amendment in the year 2009 i.e. much subsequent to the check period. Thus, on the aforesaid ground itself, the attachment order would not be sustainable but ignoring the aforesaid aspect, the Adjudicating Authority confirmed the order of attachment.

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FPA-PMLA-1205&1206/JP/2016

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Page 2 of 11

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Referring to the facts of this case, it is submitted that FIR was registered on 09.10.2009 for the offence under the Act of 1988 and thereupon the ECIR was recorded on 16.03.2010. At the time of recording of the ECIR, the offence under the Act of 1988 became predicate offence. It is, however, submitted that the check period to find out assets disproportionate to the known source is of the period prior to the amendment. Thus, the ECIR as well as the provisional attachment order would not be sustainable in the eyes of law and on the aforesaid ground itself, the impugned order deserves to be set aside.

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The learned counsel for the appellants further submitted that the officer issued the provisional attachment order was not competent as per the provisions of the Prevention of Money Laundering Act, 2002 (for short `the Act of 2002‟) as he was placed as Deputy Director on ad hoc basis. Elaborating argument, it is submitted that Shri Ashok Gautam, IRS was sent on deputation under the Directorate of Enforcement. He was appointed on the post of Deputy Director of Enforcement on ad hoc deputation basis. The officer on ad hoc basis is not authorized to exercise statutory duties. The impugned order of attachment was passed by him having no authority under the law and thereby the order of attachment having been passed by the incompetent authority could not have been confirmed by the Adjudicating Authority. This Tribunal may accordingly cause interference in the impugned order of provisional attachment passed by the incompetent officer. Reference of the Government FPA-PMLA-1205&1206/JP/2016 Page 3 of 11

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order was given to show that an officer on ad hoc basis would not be authorized to exercise statutory duty.

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The violation of principles of natural justice has also been alleged. It is submitted that the relied upon documents were not supplied to the appellants. In absence of the documents relied upon by the respondents, the appellant could not defend his case effectively and accordingly the impugned order deserves to be set aside even on the aforesaid ground. It is also submitted that the Adjudicating Authority failed to pass a speaking order, rather unreasoned order has been passed to confirm the attachment. Accordingly, the impugned order deserves to be set aside.

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Per contra, the argument raised by the counsel for the appellants has been contested by the counsel for the respondent. The learned counsel for the respondent submitted that ECIR against the appellants was recorded on 16.03.2010 pursuant to the FIR for the offence under Section 13(2) read with Section 13(1)(e) of the Act of 1988. The appellants were having disproportionate assets to the known sources of income to the tune of more than Rs.57 lakhs.

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As per the charge sheet filed by CBI, appellant PushyaMitraSinghdeo joined Railway Protection Force on 18.12.1995 as Assistant Security Commissioner. He was thereupon promoted to a higher post and remained posted at different places. The Govt. employee along with his wife were found having assets disproportionate to the known sources of FPA-PMLA-1205&1206/JP/2016 Page 4 of 11

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income and accordingly FIR was registered by the CBI. It is submitted that the FIR was registered subsequent to the amendment in the Act of 2002 to add offence under the Act of 1988 in the schedule and the ECIR was recorded even much subsequent to the amendment in the Act. The FIR and even ECIR after the amendment was rightly registered for the schedule offence under the Act of 2002. The check period for it would not be relevant but relevance is the date of registration of the case under the Act of 2002. An offence of money laundering is otherwise a continuing offence. However, reiterating the facts, it is submitted that the ECIR recorded for the offence under the Act of 1988 was a schedule offence, therefore, rightly proceeded

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for filing prosecution complaint and even for attachment of property. He has given reference of the following judgments to support his argument:

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“a) Vijay MadanlalChoudhary&Ors. V. Union of India &Ors. 2022 SCC Online SC 929 –Paras 269-270;

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b) Alive Hospitality and Food Private Limited v. Union of India and Ors. 2013 SCC Online Guj 3909-Paras 10,11 and 12;

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c) B. Rama Raju v. Union of India and Ors. 2011 SCC Online AP 152 – Paras 14,48-56;

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d) Dyani Antony Paul and Others v. M. Gopi 2020 SCC Online Kar 4995 – Paras 149 to 153;

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e) Tarun Kumar v. Assistant Director, Directorate of Enforcement 2023 SCC Online SC 1486;

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f) Anosh Ekka v. The Directorate of Enforcement, Judgment dated 20.01.2023 passed by the Hon‟ble High Court of Jharkhand in Criminal Appeal (SJ) 332 of 2020 – Paras 52 and 53;

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g) Narendra Mohan Singh v. Directorate of Enforcement, Ranchi and Anr. 2014 SCC Online Jhar 2861 – Para 15,16 and 18;

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FPA-PMLA-1205&1206/JP/2016

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Page 5 of 11

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h) Hari Narayan Rai v. State of Jharkhand and Ors. 2010 SCC Online Jhar 515”.

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The argument accordingly is about the prospective application of the amendment under the Act of 2002 to make the offence under the Act of 1988 a schedule offence and, therefore, there is no illegality either in recording of ECIR and attachment subsequent to it. In the light of the judgments referred to above, the prayer is to summarily reject the first argument.

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Coming to the next issue, the counsel for the respondent submits that the Director or Deputy Director is competent to make an order for provisional attachment under Section 5 of the Act of 2002. Therefore, Shri Ashok Gautam, author of the attachment order was competent to pass the order. He was appointed as Deputy Director on ad hoc deputation basis thus authorized to discharge all the powers of the post of Deputy Director. It is submitted that the posts in the Directorate of Enforcement are filled even by way of deputation and the appointee would then be empowered to exercise the power of the post. There is no embargo on the officer appointed on ad hoc basis not to exercise the powers vested in the post. It is further submitted that the circular of the Govt. of India has no application to the facts of this case and accordingly prayer was made to summarily reject the second argument also.

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It is further contended that the appellant was served with relied upon documents. However, in the appeal, pleading exists

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FPA-PMLA-1205&1206/JP/2016

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Page 6 of 11

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for non-supply of the documents seized by the CBI during the course of search. Those documents have not been provided to the appellant along with charge sheet by the CBI which has no relevance to the present case. In fact, the respondents were under an obligation to supply relied upon documents to the show cause notice and which has been supplied to the appellant. The respondents have not relied upon any other document than referred in the show cause notice. Thus, even third ground is not sustainable.

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It is lastly submitted that the Adjudicating Authority has passed a detailed and speaking order dealing with all the issues raised by the appellant. Thus, the prayer was made to dismiss the appeal.

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We have considered the rival submissions and perused the record.

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The brief facts relevant to the case has been given which make a reference not only to the registration of the FIR against the appellant for the offences under Section 13(2) and 13(1)(e) of the Act of 1988 but to add of Section 109 IPC for the wife. The

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FIR was registered on 09.10.2009 followed by ECIR on 16.03.2010. The appellant was charge-sheeted for having assets disproportionate to the known sources of income by taking check period from 01.04.1996 till 31.12.2007. An argument in reference to the check period has been made to state that the offence for disproportionate assets to the known sources of income is of a period when the offence under the Act of 1988 was FPA-PMLA-1205&1206/JP/2016 Page 7 of 11

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not a schedule offence under the Act of 2002. The argument aforesaid has been made in ignorance of the fact that the relevant date would be the date of registration of the case and even for ECIR. It could not be disputed that on the date of registration of the ECIR, the offence under the Act of 1988 was one of the schedule offence. In the light of the aforesaid, the amendment has not been applied retrospectively. The offence under the Act of 2002 is otherwise considered to be a continuing offence and accordingly the issue was dealt with by the Apex Court in the case of Vijay MadanlalChoudhary (supra) and even by the High Courts. Para 15 of the judgment in the case of

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Narendra Mohan Singh Vs. Directorate of Enforcement,

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Ranchi &Anr. reported in (2014) 2 AIR Jhar R 670 is quoted hereunder:

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“15. Further, it be stated that in part B of the scheduled to the Prevention of Money Laundering Act, 2002, Section 13 of the Prevention of Corruption Act, was incorporated by Money Laundering Amendment Act, 2009, which came into force w.e.f. 01/06/2009. From reading of the provision as contained in Sections 3, 2(u) and 2(v), it would appear that any person who involves himself directly or indirectly with any process or activity connected with the proceeds of crime and projects it as untainted money can very well be prosecuted under Section 3. Therefore, it would be that date when one person is found involved in any process or activity connected with the proceeds of crime and projected it as untainted property would be relevant for the purpose of prosecution under Section 3 of the P.M.L. Act and not the date when the scheduled offence was committed. This proposition has been laid down by this Court in a case of Hari Narayan Rai v, Union of India , (2010 (4) AIR Jhar R 629) (supra)”.

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Thus, the first ground raised by the appellant for challenge to the impugned order cannot be accepted. It is more so when the appellant did not challenge the ECIR on the ground urged before us as admitted by the counsel for the appellant and if it was FPA-PMLA-1205&1206/JP/2016 Page 8 of 11

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challenged, could not show a favourable order. The period after registration of the ECIR is now of more than 14 years and accordingly even the prosecution complaint was filed followed by trial. If the ECIR is sustainable in reference to the offence under the Act of 1988, as brought by way of amendment in the Act of 2002, in the year 2009, the challenge to the impugned orders would not be sustainable on the ground urged by the appellant. 16. The next issue raised by the appellant was about the competence of the officer who passed the order of attachment. It is submitted that Shri Ashok Gautam was not competent to issue the order as he was appointed as Deputy Director on ad hoc basis. The argument aforesaid has been advanced without realising that the posts in the Directorate are filled even by way of deputation and whoever is appointed on the post is entitled to discharge the duties akin to the post. There is no embargo in discharge of duties by ad hoc appointee on the post, rather whoever is holding the post of Deputy Director is competent to discharge the duties of the aforesaid post. It is not a case where an employee is promoted on a higher post on ad hoc basis so as to raise an argument that he would not be competent to discharge the duties though even that argument would not be tenable once an officer occupies the higher post as per the rules. The circular of the Government has no application to the case and otherwise cannot be read against the statutory provisions. Thus, even the second ground for challenge to the impugned order is not made out. FPA-PMLA-1205&1206/JP/2016 Page 9 of 11

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Page 9 of 11

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The last argument is in reference to the alleged violation of the principles of natural justice. It is submitted that the relied upon documents were not supplied to the appellant. The perusal of the appeal reveals a reference of the documents seized by the CBI during the course of search and said to have been relied in the charge sheet. The ground raised in the appeal does not contain an allegation regarding non-supply of the documents used against the appellant despite being referred in the show cause notice served by the Adjudicating Authority. The appellant was supplied all the relied upon documents and thereby even the last argument raised by the appellant for challenge to the order would not be sustainable.

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We further find that the Adjudicating Authority has passed an elaborate and speaking order as otherwise we have dealt with all the issues raised by the appellant and thereby even the argument in reference to the impugned order alleged to be nonspeaking is not sustainable.

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The issues raised by the appellant have been dealt with by us as no other issue than dealt with by us was raised at the time of argument. Finding no merit, the appeals fail and are dismissed summarily.

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(JUSTICE MUNISHWAR NATH BHANDARI) CHAIRMAN

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FPA-PMLA-1205&1206/JP/2016

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Page 10 of 11

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(BALESH KUMAR) MEMBER

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New Delhi 14th May, 2024

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„SRD‟