Omar Ali Obaidbalsharaf Vs Deputy Director Directorate Of Enforcement, Delhi

,,,,,

FPA-PMLA-2617, 2618/DLI/2018 & FPA-PMLA-2817-2818/DLI/2019",,,,,

1. By this common order, this Tribunal proposes to decide the above-mentioned four appeals.",,,,,

2. FPA-PMLA-2617/2018 & 2618/2018 pertain to 78,38,330 shares frozen u/s 17 (1A) on 22.03.2018 by Directorate of Enforcementand retained",,,,,

frozen by allowing u/s 17 (4) by Adjudicating Authority on 10.09.2018 in OA 194/2018 filed by the respondent.,,,,,

3. FPA-PMLA-2817/2019 & 2818/2019 pertain to 65,00,000 shares sold through BSE (Respondent No.2) on 12.02.2018, sale proceeds of",,,,,

INR.386,10,00,261/- was frozen by Directorate of Enforcement on 13.02.2018 u/s 102 Cr PC, then on 23.03.2018 Directorate of Enforcement",,,,,

instructed BSE to remit INR.386,10,00,261/- (approx USD 60 million-equivalent of 64,94,891 shares) to USA to purchaser (M/s PabraiInvestment",,,,,

Fund) andallowed remaining shares to be sold for INR.30,35,006.90 through BSE.",,,,,

4. The total shares of 1,43,38,330 [78,38,330 + 65,00,000]were subscribed by the Appellants in November, 2003 by foreign inward remittances from",,,,,

Saudi Arabia to India through State Bank of India, Overseas Branch, New-Delhi. Approval of the Reserve Bank of India was obtained and is on",,,,,

record. These shares were held uninterrupted from 2003 to 2018 Jan/Feb. The PML Act, 2002 was notified on 01.07.2005.",,,,,

5. The brief facts of the present matter are as follows:,,,,,

a) The Appellants are the foreign nationals and are residing in Saudi Arabia.,,,,,

b) They are importer of rice in Saudi Arabia from India for more than three decades. The imports of rice from India directly is above 2 billion USD in,,,,,

the last 30 years.,,,,,

c) Due to interest in the rice business, the Appellants decided to make some investment in KRBL Ltd an Indian company producing rice and exporting",,,,,

the same to the Appellants in Saudi Arabia.,,,,,

d) The Appellants applied to make an investment in 15,00,000 equity shares of Rs.10/- each at a premium of Rs.80/- per share on 18/12/2003 to",,,,,

Khushi Ram BehariLal Ltd. (KRBL) who has been the major exporter of rice to the Appellants for almost the last three decades. The company,,,,,

KRBL Ltd. made an application under the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India),,,,,

Regulations, 2000 to the Reserve Bank of India, Securities Exchange Board of India (SEBI) and other regulatory authorities of the Government of",,,,,

India to allow the Appellants to make the said investment in US dollars.,,,,,

e) Thereafter, theyremitted on 17.11.2003 and 24.11.2003 from their bank accounts in Saudi Arabia through banking channel a total sum of USD",,,,,

29,51,364.81 each equivalent to Rs.13,50,00,000/- to KRBL Ltd. for allotment of 15,00,000 equity shares of Rs.10/- each at Rs.90/- per equity share.",,,,,

The copy of Statement of Account of Saudi Holland Bank dated 12.11.2003 of account no. SAR 032_013_779_779 is filed as Annexure D. The copy,,,,,

of the Certificate of Foreign Inward Remittance dated 17.11.2003 is filed as Annexure E. The copy of the Certificate of Foreign Inward Remittance,,,,,

dated 28.11.2003 bearing no. 443370 is filed as Annexure F. The copy of the account of Saudi Holland Bank dated 19.11.2003 of account no. SAR,,,,,

032_013_779_779 is filed as Annexure G. The copy of the Certificate of Foreign Inward Remittance dated 28.11.2003 bearing no. 443378 is filed as,,,,,

Annexure H. The copy of the Certificate of Foreign Inward Remittance dated 28.11.2003 bearing no. FI/10247714 is filed as Annexure I. The Bank,,,,,

Statement of M/s KRBL showing the transaction details dated 01.11.2003 is filed as Annexure J. The Debit / Credit advice issued by State Bank of,,,,,

India dated 02.01.2004 is filed as Annexure K.,,,,,

f) The said shares 7,50,000 were allotted to the Appellants on 18/12/2003 by the said company after receipt of the said share capital money. The letter",,,,,

dated 13.01.2004 issued by Reserve Bank of India with respect to allotment of shares to the Appellants and others isfiled as Annexure L. Thus, the",,,,,

Appellants are the shareholders of KRBL Ltd. since the date of the said allotment. The shareholding of the Appellantshave been duly disclosed in the,,,,,

annual audited accounts of KRBL Ltd. submitted every year to all the government authorities particularly because KRBL Ltd. is a listed company in,,,,,

the Bombay Stock Exchange and National Stock Exchange.,,,,,

g) The equity shares allotted to the Appellants were also listed on the trading portal of Bombay Stock Exchange as per order dated 12.10.2004 of the,,,,,

Stock Exchange. Copy of the order dated 12.10.2004 of the Bombay Stock Exchange is filed as Annexure M.,,,,,

6. It is contended on behalf of appellants that the Enforcement Directorate after issuing instructions dated 13.02.2018 to BSE to restrain them (BSE),,,,,

not to give effect to a concluded transaction No. 1718218 of 65 Lacs shares sold on 12.02.2018, thereby depriving the Appellants funds worth approx..",,,,,

Rs.386 crores and it is alleged that the said act on the part of ED was illegal.,,,,,

7. On 23.03.2018, Enforcement Directorate further issued another instructions to BSE to remit these funds to the tune of Rs.386 Croresto M/s.Pabrai",,,,,

Investment Fund, USA. The BSE has compiled the said direction despite of having knowledge that it was a concluded contract between the appellants",,,,,

and Pabrai USA. The amount was paid to M/s. Pabrai Investment Fund without the knowledge of the appellants or court.,,,,,

8. Thereafter, on 21.05.2018 Directorate of Enforcement released 64,94,891 shares to SMC (Respondent No.3). Subsequently, on",,,,,

14.06.2018Directorate of Enforcement took “declaration cum undertaking†from SMC (Respondent No.3) that said funds would not be,,,,,

withdrawn without permission from Directorate of Enforcement. Directorate of Enforcement, thus effectively frozeINR.30,35,006.90 with ICICI",,,,,

Bank. Alsoon 14.06.2018Directorate of Enforcement froze 64,94,891 shares u/s 17 (1A) of PMLA which was confirmed on 05.12.2018 by AA u/s 17",,,,,

(4) by AA in OA 242/2018.,,,,,

9. The Respondent, thereafter, filed an Application under Section 17(4) of PMLA, seeking retention of documents/articles seized on 22.03.2018 under",,,,,

section 17 of the Prevention of Money Laundering Act, 2002 (PMLA) for continuation of order of freezing / Panchnamma issued under section",,,,,

17(1A) of PMLA. The case of the respondent in the reason to believe as well as in the application filed under Section 17(4) was that it was a tainted,,,,,

amount and it amounts to money laundering. The Adjudicating Authority has allowed the prayer of the application for retention of shares/property.,,,,,

10. After confirmation orders passed by theAdjudicating Authority, in the writ petition filed by the appellant, the High Court, whoafter hearing the",,,,,

parties, haddelivered the detailed judgement on 9.1.2019. ED and BSE were the parties there. The Court had discussed the entire matter from various",,,,,

angles and decided many issues. The finding given by the Honâ€ble High Court has binding upon this Tribunal. Paras 76, 77, 79 â€" 83, 85, 86, 88, 89-",,,,,

94 are reproduced hereunder:-,,,,,

76. As noticed above, the petitioners had sold 65,00,000 shares of KRBL Ltd. on the floor of BSE on 12.02.2018. SMC had issued a contract",,,,,

Buyer Client,Securities to be withheld,Seller Client,Funds to be withheld,,

The Pabrai Investment Fund

II LP","64,94,891 shares","Abdullah Ali Abdullah Al

Omar Ali Obaid Balsharaf","iRs.3,86,10,00,261.00",,

Sum

of

Qty","Sum of

TRADE

_VALUE","Buy

CP_MEMBER","Buy

CP_MEMBER_

NAME","Buy

CP_CLIEN

TCODE","Buy CP-

CLIENTNA

M

E

25,148.50,37,"BIPIN RATILAL

VORA",J005,"JETAL

PRAVINCHA

NDRA

PAREK

H

5000,2970250.00,3010,"SHRI

PARASRAM

HOLDINGSPVT.

LTD.",OWN,"SUBHASH

AGARWAL

84,49904.04,6507,"GKN

SECURITIES",OWN,"GKN

SECURITI

ES

D. M/s. Interstellar Technologies Limited transferred Euro 1 million and USD 1 million to M/s. Windsor Group Holding Limited between,,,,,

2009 to 2012. Out of which, USD 830,000 were transferred to M/s RAKGT between 03.02.2010 to 13.02.2010.",,,,,

E. M/s. Interstellar Technologies Limited transferred USD 10,000 to the accounts of M/s. Carisma Investment Limited in 2010. Whereas,",,,,,

USD 419,980 were transferred to M/s RAKGT between 18.04.2009 to27.02.2010 by M/s. Carisma Investment Limited.",,,,,

F. M/s. Interstellar Technologies Limited transferred USD 200,000 to the accounts of M/s. Capital Infrastructure Limited in 2009 out of",,,,,

which USD 114,972 were transferred to M/s RAKGT on 18.04.2009.â€​",,,,,

101. During the course of hearing, this Court had repeatedly called upon the learned counsel for the Enforcement Directorate to explain as",,,,,

to how the petitioners are connected with the funds remitted to RAKGT and the material available with the Enforcement Directorate, which",,,,,

would give reasons to believe that the petitioners are in possession of the proceeds of crime overseas.,,,,,

102. In this regard, the learned counsel for the Enforcement Directorate referred to the affidavit filed on behalf of the Enforcement",,,,,

Directorate in compliance with the orders passed by this Court that the books of accounts of RAKGT had revealed that money was received,,,,,

by RAKGT from the petitioners and had credited in the ledger account maintained in the name of OAB-GK. Paragraphs 2 and 3 of the said,,,,,

affidavit are relevant and are set out below:-,,,,,

“2. That further, the books of account of M/s RAKGT revealed that the money was received by M/s. RAKGT from the Petitioner Omar Ali",,,,,

Balsharaf and the same has been shown as credited in its ledger account maintained in the name of OAB-GK. Basis the money trail, there",,,,,

are strong reasons to believe that the same are Proceeds of Crime parked in the said ledger account and investigation to ascertain the exact,,,,,

nature of the transaction is still ongoing.….,,,,,

3. That therefore, approximately Rs 111 Crores were found credited in the ledger account of Petitioner Omar Ali Balsharaf from the above",,,,,

companies, which are directly or indirectly in receipt of proceeds of crime related to M/s. Agusta Westland….â€​",,,,,

103. A credit entry in the books of RAKGT indicates receipt of money. According to the Enforcement Directorate, RAKGT had received",,,,,

funds, which are alleged to be proceeds of crime and the same are allegedly shown as credited to the account of the petitioners. However,",,,,,

this would only indicate that the petitioners had parted with the proceeds of crime in favour of RAKGT and consequently, the alleged",,,,,

proceeds of crime are with RAKGT and not the petitioners. Prima facie, there appears to be no material with the Enforcement Directorate to",,,,,

indicate that the petitioners are in possession of proceeds derived from any alleged crime or any property received as kickbacks from,,,,,

AgustaWestland. However, it is not necessary for this Court to delve into this issue any further as the petitioners have already challenged the",,,,,

orders passed by the Adjudicating Authority allowing the application filed under Section 17(4) of the PMLA and extending the orders,,,,,

passed under Section 17(1A) of the PMLA, before the Appellate Tribunal.",,,,,

104. The limited question to be addressed at this stage is whether the provisions of the PMLA are applicable to the shares in question. Mr.,,,,,

Bhattacharya had contended that the PMLA was enacted after the shares were purchased, therefore, the PMLA would be inapplicable to",,,,,

those shares.â€​,,,,,

“105. This Court is of the view that the question whether the provisions of PMLA would apply would depend on the allegation made,,,,,

against the petitioners.â€​,,,,,

106. The expression “proceeds of crimeâ€​ has been defined under Section 2(1)(u) of PMLA as under:,,,,,

“Section 2(1) (u) â€" “Proceeds of crime†means any property derived or obtained, directly or indirectly, by any person as a result",,,,,

of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the,,,,,

country, then the property equivalent in value held within the country] [or abroad];â€​",,,,,

“107. A plain reading of the aforesaid definition indicates that the definition/expression of proceeds of crime is in two parts. The first,,,,,

part relates to proceeds of crime derived or obtained by crime and the second relates to property of an equivalent value. The expression,,,,,

“proceeds of crime†means any property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled,,,,,

offence. Clearly the shares in question do not fall within this part of the definition. This is so because shares were subscribed by remittances,,,,,

paid through banking channels much prior to commission of any alleged crime and much prior to the PMLA coming into force.â€​,,,,,

“110. The petition is, accordingly, disposed of in the aforesaid terms. It would be open for the petitioners to seek consequential and other",,,,,

reliefs in any court or forum. The pending applications are also disposed of.â€​,,,,,

12. Let me now deal with the rival submissions of parties on the issuein hand on merit, which is to be decided by this Tribunal as observed by the",,,,,

Honâ€ble High Court in paras97-110 of the judgement. The order which was pronounced by the Honâ€ble Single Bench of the High Court, has been",,,,,

confirmed by the Division Bench, who dismissed the appeals filed by ED and BSE.",,,,,

13. It is submitted on behalf of appellantsthat Bombay Stock Exchange (Respondent no. 2 herein) is a necessary party to the captioned Proceedings.,,,,,

The Honâ€ble Division Bench of Delhi High Court in a petition bearing no. LPA 163/2019 filed by Bombay Stock Exchange (Respondent no. 2,,,,,

herein), has dismissed the appeal filed by BSE/ Respondent no. 2 vide order dated 08.03.2019.",,,,,

14. The cause of action against Bombay Stock Exchange (Respondent no. 2 herein) commenced on 13.02.2018 when Bombay Stock Exchange,,,,,

(Respondent no. 2 herein) withheld about INR.386 Crores of Appellants†funds equivalent to 65 lakh shares sold by the Appellants through the,,,,,

platform of Bombay Stock Exchange (Respondent no. 2 herein). The Learned Adjudicating Authority, Enforcement Directorate (ED) moved",,,,,

application u/s 17 (4) of PMLA, 2002, without making Bombay Stock Exchange (Respondent no. 2 herein) a party. Bombay Stock Exchange",,,,,

(Respondent no. 2 herein) has been a necessary party before the Learned Single Judge of the Honâ€ble Delhi High Court as well as before the,,,,,

Honâ€ble Division Bench of the Honâ€ble High Court. That is why Bombay Stock Exchange (Respondent no. 2 herein) is a necessary party before,,,,,

this Tribunal. The Respondent no. 1 â€" Directorate of Enforcement had on 13.02.2018instructed Bombay Stock Exchange (Respondent no. 2 herein),,,,,

to withhold about Rs.386 Crores of Appellantsâ€​ funds and then again on 23.03.2018 instructed Bombay Stock Exchange (Respondent no. 2 herein) to,,,,,

part with Appellantsâ€​ funds of about INR.386 Crores abroad, in violation of FEMA, 1999 and PML Act, 2002.",,,,,

15. The Bombay Stock Exchange (Respondent no. 2 herein) is a necessary party in the present appeals also as reflected from averments made by,,,,,

Bombay Stock Exchange (Respondent no. 2 herein) in these Appeals which read, inter-alia, as follows:-",,,,,

Para 6 (iii).,,,,,

“In the present case, the Exchange received directions dated 13.2.2018 from the Enforcement Directorate, New Delhi (“EDâ€),",,,,,

directing the Enchange in exercise of powers conferred upon Section 102 of the Code of Criminal Procedure, 1973, read with Sections 65",,,,,

and 2 (na) of the Prevention of Money-Laundering Act, 2002, to withhold the pay-out of funds/securities in the scrip of KRBL Ltd for trades",,,,,

executed on 12.2.2018, wherein the Petitioners were reflected as clients who were supposed to receive pay-out of funds pursuant to their",,,,,

sale of shares in the said scrip.,,,,,

…………………………………………………..â€​,,,,,

Para 6 (iv),,,,,

“The Exchange duly complied with the said directions of the ED and accordingly the counter-party members and the member through,,,,,

whom the Petitioners transacted, i.e., Respondent No. 3 herein were intimated by the Exchange about withholding of their pay-out of funds",,,,,

and securities to the receiving members pursuant to the direction received from the ED.,,,,,

………………………………………………………………….â€​,,,,,

16. It is alleged on behalf of appellants thatthe Respondent no. 1 â€" Directorate of Enforcement and Bombay Stock Exchange (Respondent no. 2,,,,,

herein) have acted in league with each other to deprive about INR.386 crores to the Appellants. The affidavit filed before this Tribunal by Bombay,,,,,

Stock Exchange (Respondent no. 2 herein) is replete with averments that Bombay Stock Exchange (Respondent no. 2 herein) has followed illegal,,,,,

instructions of the Respondent no. 1 â€" Directorate of Enforcement. It is stated by the appellants that in was done without a whimper of any protest,,,,,

or application of its own mind.,,,,,

17. During hearing of the appeals, EDdid not raise any objection if BSE is impleaded as respondent no.2. Counsel of BSE has filed the counter-",,,,,

affidavit and argued the appeals. Therefore, in order to decide the real controversy, BSE is a necessary party.",,,,,

18. In fact, Bombay Stock Exchange (Respondent no. 2 herein) hadtaken action on the basis of communications issued by Respondent no. 1 â€"",,,,,

Directorate of Enforcement. Bombay Stock Exchange (Respondent no. 2 herein) is, thus, a necessary party. Bombay Stock Exchange (Respondent",,,,,

no. 2 herein) has acted as an extended arm of the Respondent no. 1 â€" Directorate of Enforcement.,,,,,

19. In case, the entire judgement rendered by the Honâ€ble Delhi High Court is read in meaningful manner, it appears inpara-77 whereinit is held that",,,,,

the assumption/allegation that said shares were acquired in the process of money-laundering is perverse and without application of mind. It is also held,,,,,

in same para that appellants had acquired the shares of KRBL Ltd. In the year 2003 which was prior to the allegation of any scheduled crime and it,,,,,

was ex facie erroneous. Honâ€ble Court has also recorded that now ED had contended that the proceeds of crime have been received overseas,",,,,,

therefore, the orders freezing property in India. In fact, the ED has admitted after changing its stand before the High Court had confirmed that it is no",,,,,

longer shares acquired from proceed of crime.,,,,,

20. The first and foremost issue in the present case is to whether 1,43,38,330 shares (78,38,330 + 65,00,000) subscribed in 2003 by foreign remittances",,,,,

through State Bank of India are “proceeds of crimeâ€​ under section 2(1)(u) (notified on 1.7.2005).,,,,,

21. It is the admitted position that Mr. D.P. Singh, learned counsel appearing on behalf of Directorate of Enforcement has conceded before the",,,,,

Honâ€bleSingle Judge of Delhi High Court that the shares are not proceeds of crime (para 77 of the judgment). Directorate of Enforcement now in,,,,,

fact shifted its earlier stand that these were acquired from proceed of crime and contended that theshares are “equivalent†to proceeds of crime,",,,,,

therefore, seizure and frozen of any movable and immovable property is permissible in law as per amendment carried out in the Act.",,,,,

22. It was observed by the High Court that had the proper material been available with the authorised officer, such situation could not have arisen",,,,,

apprehension and assumption and perception is a dangerous proposition.It is observed by the Honâ€ble High Court that some material must be in hand,,,,,

of authorised officer who is duty bound to record the reason to believe pertaining to the party concerned whose property is to be seized and frozen. In,,,,,

the absence of above, it is an abuse of process of law.",,,,,

23. It appears from reason to believe that on 23.02.2018 when reason to believe recorded by the authorised officer, he inter-alia had mentioned that",,,,,

further on 12.02.2018, the bull of trading of shares of M/s. KRBL Limited owned by Omer Ali Balsharaf was done in BSE, which seems to be an",,,,,

attempt to shift the suspected proceeds of crime related to the present case to frustrate the purpose of further proceedings under PMLA during the,,,,,

pendency of investigation and the same was put on hold with BSE.,,,,,

24. On 13.2.2018, there is a recordal of reason to believe that also on the basis of news published. The relevant part is reproduced below:-",,,,,

From Today‘s Economic Times, it has been learnt that Omar Ali Balsharaf had entered into a transaction in bulk trading of shares of",,,,,

KRBL yesterday on 12.02.18, which is strongly suspected due to transfer of money in view of on-going investigation and examination of the",,,,,

Directors of KRBL in recent past in Embraer case.,,,,,

In view of above facts and circumstances, the suspected persons are still under the process of layering of tainted money as untainted and",,,,,

attempting to frustrate the further proceedings under PMLA.,,,,,

In view of the facts and circumstances mentioned above, it is proposed that the transaction dated 12.02.2018 pertaining to the trading of shares of",,,,,

KRBL by Omer Ali Balsharaf and Abdul Ali Balsharaf may be restrained/stopped.,,,,,

25. It is admitted position that in the letter of 23rd February, 2018 written by Pabrai Investment Funds to the respondent, the said party has given two",,,,,

options to the ED. The extract of the said option and relevant part of the letter given as under: -,,,,,

In the light of the above, I respectfully request that the BSE be directed to either transfer the shares of KRBL Ltd to us or annul the",,,,,

aforesaid trade and return the funds, amounting to Rs. 386 crores to us at the earliest. We also believe that several other investors are also",,,,,

in a similar position of not having access to their money or having received securities. If there is any suspicion regarding the seller‘s,,,,,

bona fides, it is respectfully submitted that the buyers of shares on the floor of the exchanges should not be made to suffer and we should",,,,,

either be entitled to our funds or to the securities which we sought to buy.,,,,,

We do not simply focus on staying within the law. We strongly believe in conducting all our affairs with the highest ethical standards. On,,,,,

this front, I am happy to speak with or meet with anyone from the Enforcement Directorate or any other regulatory or enforcement body to",,,,,

provide any information transparently. I am in Mumbai until Wednesday, February 28, 2018. My India mobile is +91.97179.00029 and my",,,,,

email address is mohnish@pabraifunds.com. Please feel free to contact me if I can be of any service.,,,,,

26. It is stated on behalf of appellants that 1,43,38,330 shares are neither “proceeds of crimeâ€, nor equivalent to proceeds of crime u/s 2 (1) (u) of",,,,,

PMLA. Hence Directorate of Enforcementâ€​s action to freeze them as proceeds of crime is contrary to law on the date of freezing the same.,,,,,

27. It is argued on behalf of appellants that the said illegal act of remittance of USD 60 millions outside India can also amount to offence u/s 418 and,,,,,

420 of IPC, which is a scheduled offence under Part A Paragraph 1 of the Schedule to the PMLA u/s 2 (y), with cross border implications as per Part",,,,,

C of the Schedule and Directorate of Enforcement not only illegally depleted Indiaâ€s forex reserves amounting to USD.60 million,but also knowingly",,,,,

caused wrongful loss to the Balsharafs, whose lawful interest is to be bound to protect. Directorate of Enforcement wrongly induced BSE to deliver",,,,,

Balsharafâ€s property to USA party and since the Directorate of Enforcementâ€s actions are illegal and malafide, no protection u/s 67 PMLA is",,,,,

available to them.,,,,,

28. Learned counsel appearing on behalf of BSE has made very short submission and admitted that the BSE has followed the instruction of ED for,,,,,

releasing the money to Pabrai Investment Fund. Counsel has admitted that it was the concluded contract between two parties. In normal course, the",,,,,

appellants were entitled to the said amount towards selling of shares. However, BSE had no option to return the amount, once the letter is received",,,,,

from Deputy Director of ED.,,,,,

29. It is evident that Pabrai has never insisted for refund of amount against the shares purchased. In its letter, it was merely given two options, either",,,,,

to receive the refunds back or to the securities which the company sought to buy, but ED, despite of contract, issued the direction to BSE toreturn",,,,,

back the amount, and BSE as per direction without raising protest, returned back the amount which was supposed to be received by the appellants as",,,,,

per contract and not only that even the shares were also attached.,,,,,

30. It is submitted by Mr. Bhattacharya, learned senior counsel appearing for the appellants that by amending Section 2 (1) (u) of the PMLA, a new",,,,,

offence (holding property “equivalent†in value in India) was created by Parliament on 14.05.2015 (date of receiving Presidential Assent under,,,,,

Article 111 of the Constitution). This can have only prospective application in view of Article 20 (1) of the Constitution of India and plain language of,,,,,

the bill/act â€" “shall be inserted†as it is the admitted position that all the 1,43,38,330 shares were subscribed in November 2003. Till",,,,,

13.05.2015these were not “proceeds of crimeâ€. From 14.05.2015 (date of Presidential assent of the new law) these cannot become “proceeds,,,,,

of crimeâ€​ as that would contravene Article 20 (1) of the Constitution.,,,,,

31. Mr. D.P. Singh appearing on behalf of respondent has referred the pleadings and material available on record. It is submitted by him that the,,,,,

investigation has revealed that proceeds of crime amounting to approx. Rs.111 croreswere parked in the books of accounts of M/s. Rawasi Al,,,,,

Khaleej General Trading LLC, Dubai (RAKGT) under the head OAB-GK. The investigation has revealed that 65 transactions were made by",,,,,

different entities including either direct payments from M/s. Interstellar or routing by M/s. Interstellar to different entities. It is revealed that the,,,,,

accounts involved were used by GautamKhaitan to transfer proceeds of crime linked to the Augusta Westland helicopter case. The chart explaining,,,,,

the flow of money is shown by Mr. D.P. Singh.,,,,,

32. It is also stated by him that the appellants in their WP (Civil) 3531/18 have taken a stand that the amount was advanced to RAKGT through the,,,,,

assistance of GautamKhaitan, a renowned international solicitor for purchase of rice and other material from RAGKT. However, the said stand is",,,,,

contradicted by GautamKhaitan in his statement u/s 50 PMLA dated 15.02.2018 wherein he states in relation to the appellant that :,,,,,

“I do not remember any personal meeting with him and I confirm that I have no direct dealings personal or professional, with him or any",,,,,

of his companies.â€​,,,,,

33. Therefore, it is argued by him that there are reasons to believe that the frozen shares may be“proceeds of crime†under the PMLA. He also",,,,,

states that after the completion of investigations, the appellants might or might not found to be involved, however, at this stage, no opinion can be",,,,,

formed.,,,,,

34. It is stated on behalf of appellants that Directorate of Enforcement has allegedly shown Rs.111 crores worth of ledger entry abroad, and has",,,,,

frozen about Rs.900 crores (value of 1,43,38,330 shares) alleging them as equivalent to Rs.111 crores and its shows the non-application of mind of the",,,,,

authorised officer of Directorate of Enforcement. Therefore, the freezing orders dated 22.3.2018 and 14.6.2018 are, thus, liable to be quashed even on",,,,,

merit on the ground itself and evidence.,,,,,

35. In reply to the contention of learned senior counsel for the appellants about the retrospective effect, Mr. D.P. Singh, counsel for ED submitted that",,,,,

Article 20(1) of the Constitution of India prohibits ex-post facto laws resulting in conviction for offences or imposition of penalties greater than which,,,,,

might have been inflicted under the law enforceable at the time of commission of the offence, therefore, as the instant proceedings are civil in nature,",,,,,

the same are not covered under Article 20(1) of the Constitution of India.,,,,,

36. In his support, he has referred the decision of â€"",,,,,

a) Constitution Bench of the Apex Court in “State of West Bengal v. S.K. Ghosh, AIR 1963 SC 255â€​, it was observed that:",,,,,

“15. [...] We are therefore of opinion that forfeiture provided,,,,,

In Section 13(3) in case of offences which invoke the embezzlement etc. of government money or property is really a speedier method of,,,,,

realising government money or property as compared to a suit which it is not disputed the Government could bring for realising the money,,,,,

or property and is not punishment or penalty within the meaning of Article 20(1). Such a suit could ordinarily be brought without in any,,,,,

way affecting the right to realise the fine tat may have been imposed by a criminal court in connection with the offence.â€​,,,,,

b) The learned Single Judge of the High Court of Delhi in “Deputy Director Directorate of Enforcement Delhi v. Axis Bank and Others, 2019 SCC",,,,,

OnLine Del 7854‘held the following:,,,,,

“171. [...] The process of attachment (leading to confiscation) of proceeds of crime under PMLA is in the nature of civil sanction which,,,,,

runs parallel to investigation and criminal action vis-a-vis the offence of money laundering.â€​,,,,,

Thus, no question of any violation of Article 20 (1) arises in the instant case.",,,,,

37. Mr. D.P. Singh hasalso referred to the following provision of Section 2(1)(u) in support of his argument:,,,,,

“Proceeds of crimeâ€​, as defined u/s 2(1)(u) PMLA means:",,,,,

a. any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence, or",,,,,

b. the value of any such property, or",,,,,

c. where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad.",,,,,

38. It is stated by him that “value of any such propertyâ€​ as mentioned in section 2 (1)(u) means:,,,,,

“a value equivalent to the value of a property derived or obtained directly or indirectly by any person as a result of criminal activity. The,,,,,

property itself may no longer be available but the equivalent value of such property, whether held in cash, etc., would be available for",,,,,

attachment.â€​,,,,,

39. It is submitted by him that the shares were frozen in lieu of value of equivalent which provision was already existed previously. The said,,,,,

amendment of property equivalent abroad only which seeks to prevent frustration of any proceeding relating to attachment and confiscation of,,,,,

proceeds of crime, in line with the object of the Act, by necessary implication.",,,,,

40. Let me now deal with the rival submissions of parties. It is not denied on behalf of ED and BSE that on 13th February, 2018, 65 lakhs shares were",,,,,

sold by Balsharafs on the platform of BSE and approx.. Rs.386,10,00,261/- were payable to Balsharafs. Sale was concluded even as observed in",,,,,

paras 80, 86 of Honâ€​ble High Court order dated 9.1.2019.",,,,,

41. It appears that on 23.3.2018 Directorate of Enforcement instructed BSE to remit about USD 60 millions(INR.386,10,00,261/- ofBalsharafsâ€",,,,,

money) to USA. It is argued on behalf of appellants that the said Act is in violation of Section 3 (b) of Foreign Exchange Management Act, 1999",,,,,

(FEMA), which, inter-alia, reads as follows :-",,,,,

“ Save as otherwise provided in this Act, …… or with general or special permission of the Reserve Bank, no person shall make any",,,,,

payment to for credit of any person resident outside India in any manner.â€​,,,,,

42. It has come on record that after returning the amount in a concluded sale transaction, the Directorate of Enforcement froze 64,94,891 shares on",,,,,

14.6.2018. The shares which wereallowed to be sold on 12.2.2018 forRs.386,10,00,261/- and 5109 shares [65,00,000-64,94,891] were allowed to be",,,,,

sold on 13.02.2018. The sale proceeds thereof [INR.30,35,006.90] were frozen. It is stated on behalf of the appellant that Directorate of Enforcement",,,,,

abused its authority and allowed only 5109 shares of appellants to be sold and froze sale proceeds [INR.30,35,006.90].",,,,,

43. There is a force in the argument of the senior counsel appearing on behalf of appellants that the concluded sale transaction could not have been,,,,,

annulled or cancelled or interdicted by Directorate of Enforcement even as observed by the High Court of the in paras 72, 86, 92 of the judgement",,,,,

dated 9.1.2019.,,,,,

44. It is argued that under the direction of Directorate of Enforcement who was having knowledge about the concluded transaction directed BSE,,,,,

(Bombay Stock Exchange) to remit Appellantâ€s money [about INR.386,10,00,261/-]abroad to the purchaser [Pabrai, USA]of 64,94,891 shares. The",,,,,

said appellants†funds to the tune of about INR.386,10,00,261/- wrongly remitted as per the direction of ED. The said instructions to remit funds",,,,,

abroad in flagrant violation of FEMA, 1999 and PMLA, 2002 and without any jurisdiction. The concluded transaction cannot be frustrated in this",,,,,

manner as these 64,94,891 shares belonged to the Purchaser [M/s Pabrai Investment Fund].",,,,,

45. The Honâ€ble High Court of Delhi, at New Delhi in para-80 of the judgement passed by the Honâ€ble Delhi High Court, it was observed thaitt",,,,,

was decided that the transaction between the appellant and PabraiInvestment Fund who had purchased the shares was complete contract and at the,,,,,

best as observed in para-82 that the officer of ED could have frozen the money which were to be paid to the appellants by BSE. It has also been,,,,,

noticed by the High Court that on 25.02.2019, M/s. Pabrai Investment Fund sent a letter to ED confirming the purchase of shares and paid the entire",,,,,

consideration to BSE and ED has no justification to withhold the same.,,,,,

The Honâ€ble High Court has recorded that by letter dated 23.3.2018, Assistant Director, PMLA sent a letter to BSE to release the amount paid by",,,,,

M/s. Pabrai Investment Fund but to continue to withhold the securities and shares of KRBL Ltd.,,,,,

46. The Honâ€ble High Court of Delhi in para-86 of the judgement, held that the Police Officer cannot set-aside a transaction which was completed",,,,,

contract under the provision of Section 102 Cr.P.C. and the appellants were entitled to the consideration paid by Pabrai Investment Fund. The Deputy,,,,,

Director of ED had interdicted the BSE for doing so in its letter dtd. 23.03.2018.,,,,,

47. The Honâ€​ble High Court judgment dated 9.1.2019 in para 82 has held that :-,,,,,

“Clearly, the Deputy Director of the Enforcement Directorate had no authority whatsoever to freeze the shareswhich were to be",,,,,

delivered in settlement to the purchaserâ€​.,,,,,

48. This Tribunal is also of the opinion as held by the Honâ€ble High Court as on 15.02.2018, INR.386,10,00,261/- belonged to the Appellants and only",,,,,

shares 64,94,891 are to be handed over to M/s Pabrai Investments Limited and at the best, amount could have been frozen if the shares were acquired",,,,,

from proceed of crime.,,,,,

49. Learned senior counsel for appellant has referred and relies upon the judgement of Delhi High Court between the same parties and argued that the,,,,,

ED has no jurisdiction or any justification to issue any direction to BSE to remit the entire amount which is as per contract to be the property of the,,,,,

appellants. Both authorities were fully aware the actual position. It was done beyond the jurisdiction with full knowledge. The said Act is contrary to,,,,,

law. It is a malafide Act and misuse of power.,,,,,

50. From the entire gamut of the matter, this Tribunal is of the view that at the best, ED might be frozen the amount at the hand of the appellant if any",,,,,

case is made out against the appellant. It is rightly observed by the Honâ€​ble Court.,,,,,

51. It is stated by the learned counsel for the respondent that the appellants were given ample opportunities to present their stand through repeated,,,,,

issuance of summons. Therefore, ED has rightly invoked provisions u/s 102 Cr.P.C. to perform the seizure based on suspicion of the commission of an",,,,,

offence. If the argument of the appellants i.e non-applicability of the section 102 Cr.P.C. is to be accepted by ignoring the provisions of section 65,,,,,

PMLA, it would not only encourage the deliberate failure of the appellants to join the investigations, but also frustrate the proceedings under PMLA. It",,,,,

is stated by the counsel that non-bailable warrants have been issued by the Special Judge, PMLA against the appellants vide order dated 04.05.2019.",,,,,

52. The Directorate of Enforcement on the basis of apprehension and reason to believe is alleging that there is ledger entry in the name of Balsharafs.,,,,,

However, the Honâ€ble High Court of Delhi has held that the Ledger entry is not property [as held by Honâ€ble Single Judge of Honâ€ble High Court",,,,,

of Delhi in para 98] and cannot be “proceeds of crimeâ€​ u/s 2 (1)(u) of PMLA.,,,,,

53. The Honâ€ble High Court has held that the respondent has wrongly exercised powers u/s 102 (1) Cr PC without referring them forthwith to a,,,,,

Magistrate u/s 102 (3), who has illegally annulled a concluded contract, and incorrected directed remittance USD 60 million abroad in violation of",,,,,

Section 3 (b) of FEMA, 1999, and in contravention of PML Act, 2002 without any power to exercise Section 102 Cr PC to freeze shares and/or",,,,,

interdict and annul an executed sale purchase transaction, held Honâ€​ble High Court. This Tribunal fully endorsed the finding of the Honâ€​ble Court.",,,,,

54. Mr. D.P. Singh has not disputed the fact that the Honâ€ble Delhi High Court has already dealt with this aspect, included the interpretation of",,,,,

Section-65 of the PMLA as well as the provision of Section 102 Cr.PC where the arguments of D.P. Singh were rejected. The said paras 56 to 74 of,,,,,

the judgement where the said issues were discussed, are reproduced below:-",,,,,

“56. It is clear from the aforesaid scheme of the PMLA that any property can be provisionally attached under Section 5 or be seized,,,,,

under Section 17 or be frozen under Section 17(1A) of the PMLA. However, any such order can be passed only if the necessary checks and",,,,,

balances are complied with; namely, that the seizure or attachment is preceded by the concerned authority having reason to believe that",,,,,

such properties are proceeds of crime or are otherwise related to crime. Further, such reasons to believe must be formed on the basis of",,,,,

material in possession of the concerned officer and must be recorded in writing. In addition, such orders cannot be extended beyond the",,,,,

period of one hundred and eighty days, within which the Adjudicating Authority has to examine the matter and pass an order after issuing",,,,,

notice to the concerned persons and after affording the concerned person full opportunity to be heard. Any person aggrieved by any such,,,,,

order of the Adjudicating Authority is entitled to prefer an appeal to the appellate tribunal constituted under Section 25 of the Act.,,,,,

57. It is axiomatic that no order of freezing can be passed except in accordance with the provisions of Section 17(1A) of the PMLA.,,,,,

58. In terms of Section 73 of the PMLA, the Central Government is empowered to make rules for carrying out the provisions of the PMLA. In",,,,,

exercise of such powers, the Central Government has notified the Prevention of Money-Laundering (Forms, Search and Seizure or Freezing",,,,,

and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the",,,,,

Period of Retention) Rules, 2005. Rule 4 of the said Rules also provides for the procedure related to freezing of any property found as a",,,,,

result of search of any building, place, vessel, vehicle or aircraft.",,,,,

59. It is relevant to note that an order of provisional attachment or an order of seizure is not an end in itself and does not stand in isolation.,,,,,

The said orders are passed in aid of the provisions to confiscate properties, which are found to be proceeds of crime.",,,,,

60. The scheme of seizure made under Section 102 of the Cr.P.C. is materially different. Section 102 of Cr.P.C. is set out below:-,,,,,

“102. Power of police officer to seize certain property.,,,,,

(1) Any police officer, may seize any property which may be alleged or suspected to have been stolen, or which may be found under",,,,,

circumstances which create suspicion of the commission of any offence.,,,,,

(2) Such police officer, if subordinate to the officer in charge of a police station, shall forthwith report the seizure to that officer.",,,,,

(3) Every police officer acting under sub- section (1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the,,,,,

property seized is such that it cannot be conveniently transported to the Court, he may give custody thereof to any person on his executing a",,,,,

bond undertaking to produce the property before the Court as and when required and to give effect to the further orders of the Court as to,,,,,

the disposal of the same.â€​,,,,,

61. It is clear from the plain reading of Section 102 Cr.P.C. that any police officer may seize the property, which may be alleged or",,,,,

suspected to have been stolen or which is found in circumstances which create suspicion of the commission of any offence. However, the",,,,,

said order of seizure is only a temporary order and in terms of sub-section (3) of Section 102 of Cr.P.C., the police officer seizing any",,,,,

property on the grounds of suspicion of an offence is required to forthwith report the seizure to the Magistrate having jurisdiction.,,,,,

62. The said property seized is required to be produced before a Court and/or reported to a Magistrate. In such cases, the court would",,,,,

have the power to pass necessary orders with regard to the said property. In terms of Section 457 of the Cr.P.C., whenever a property is",,,,,

seized by any police officer and is reported to the Magistrate, the Magistrate is empowered to make such orders as he thinks fit in respect of",,,,,

disposal of the property or the delivery of such property to the person entitled to the possession thereof. In cases where such person cannot,,,,,

be ascertained, the Magistrate can pass orders in respect of the custody and production of such property.",,,,,

63. It is at once clear that scheme of seizure, including the checks and balances in exercise of such power, as contemplated under the",,,,,

Cr.P.C. is wholly inconsistent with the scheme of the provisions under the PMLA.,,,,,

64. Powers of seizure of properties is a draconian power. Grant of such authoritarian and drastic powers, without commensurate checks",,,,,

and balances, would militate against the principle of rule of law engrafted in the constitution of India. A police officer does not possess",,,,,

unfettered rights to freeze any asset without the same being reported immediately to a Magistrate. The party aggrieved, thus, has immediate",,,,,

recourse in respect of the said action of freezing the property. As observed above, the scheme of provisional attachment or seizure of a",,,,,

property, as contemplated under the provisions of the PMLA is materially different. The PMLA has separate checks and balances to ensure",,,,,

that such powers are exercised in aid of the object of confiscating or vesting such proceeds of crime with the Government. The power to,,,,,

provisionally attach or seize or freeze a property can be exercised only (a) if the specified officer has material in his possession, which",,,,,

provides him reason to believe that the property sought to be attached or seized is proceeds of crime or related to a crime; and (b) after,,,,,

recording the reasons in writing.,,,,,

65. In the aforesaid view, the reliance placed on provisions of Section 65 of the PMLA is misplaced. By virtue of Section 65, the provisions",,,,,

of Cr.P.C. apply only insofar as they are not inconsistent with the provisions of the PMLA. There can be little doubt that scheme of seizure,,,,,

under Section 102,Cr.P.C. is inconsistent with the provisions relating to attachment and seizure of property under the PMLA.",,,,,

66. What is sought to be canvassed on behalf of the Enforcement Directorate is a devised scheme under which the Enforcement Directorate,,,,,

refers to the provisions of Section 102(1) of Cr.P.C. for drawing the power to issue orders for immediately seizing the property on mere,,,,,

suspicion but at the same time ignores the provisions of Section 102(3) of Cr.PC which requires such seizure to be reported to a Magistrate.,,,,,

There is clearly no principle of law that would permit such interpretation, where officers can draw the power under a statute and yet not be",,,,,

accountable for the checks and balances enacted therein.,,,,,

67. Mr Singh had contended on behalf of the Enforcement Directorate that the PMLA does not contain any provision regarding seizure on,,,,,

mere suspicion, therefore the power to make such seizure can be drawn from Section 102 of Cr.P.C. He contended that the provisions of",,,,,

Section 102(1) of Cr.P.C. are, therefore, not inconsistent with the provisions of the PMLA with regard to seizure of property. The said",,,,,

contention is unmerited. The question whether an enactment is repugnant to another is not determined on whether two provisions can be,,,,,

simultaneously obeyed but is determined in the context of thescheme of the legislative enactment. The question to be asked is whether the,,,,,

schemes of the two enactments can subsist and be implemented simultaneously. It is apparent that the scheme of effecting provisional,,,,,

attachment and seizure of property under the PMLA is wholly inconsistent with the one as enacted under the Cr.P.C.,,,,,

68. In Innoventive Industries Ltd. v. ICICI Bank and Anr.: (2018) 1 SCC 407, the Supreme Court had examined the question ofrepugnancy",,,,,

between two enactments, namely, the Maharashtra Relief Undertakings (Special Provisions Act), 1958 and the Insolvency and Bankruptcy",,,,,

Code, 2016 in the perspective of the Constitution of India. The Supreme Court had referred to various decisions and culled out the",,,,,

principles with regard to repugnancy between two enactments. Although the decision was rendered in an altogether different context,,,,,

â€"whether the provisions of the central legislation would override a state enactment â€" the principles of inconsistency between two,,,,,

enactments as noticed by the Supreme Court would be equally applicable to determine whether the provisions of Section 102 Cr.P.C. are,,,,,

inconsistent with the provisions of the PMLA. In that case, the Supreme Court has referred to various decisions to set out the principles on",,,,,

the anvil of which the question whether two enactments are inconsistent are to be tested. In the aforesaid context, the Supreme Court had,",,,,,

inter alia, observed as under:-",,,,,

“51.7. Though there may be no direct conflict, a State lawmay be inoperative because the Parliamentary law is intended to be a complete,",,,,,

exhaustive or exclusive code. In such a case, the State law is inconsistent andrepugnant, even though obedience to both laws is possible,",,,,,

because so long as the State law is referable to the same subject-matter as the Parliamentary law to any extent, it must give way. One test of",,,,,

seeing whether the subject-matter of the Parliamentary law is encroached upon is to find out whether the Parliamentary statute has adopted,,,,,

a plan or scheme which will be hindered and/or obstructed by giving effect to the State law. It can then be said that the State law trenches,,,,,

upon the Parliamentary statute. Negatively put, where Parliamentary legislation does not purport to be exhaustive or unqualified, but itself",,,,,

permits or recognises other laws restricting or qualifying the general provisions made in it, there can be said to be no repugnancy.â€​",,,,,

69. As is clear from the above, one of the tests for determining whether there is repugnancy between two statutes is to find out where one of",,,,,

the statutes has adopted a plan or a scheme, which will be hindered or obstructed by giving effect to the other statute. This principle to",,,,,

determine whether there is repugnancy between two enactments is of universal application. If one applies the aforesaid test, it is at once",,,,,

clear that the PMLA has set out a separate scheme with a separate set of safeguards for ensuring that properties of parties are not attached,,,,,

or seized without the authorities effecting such actions having reason to believe that such properties are proceeds of crime or are related to,,,,,

a crime.,,,,,

70. If the contention as advanced on behalf of the Enforcement Directorate is accepted, it would mean that whereas the property cannot be",,,,,

provisionally attached under Section 5(1) of the PMLA and/or seized or frozen under Section 17 of the PMLA without (a) theDirector,,,,,

having a reason to believe, on the basis of material available with him, that the properties are proceeds of crime and (b) recording such",,,,,

reasons in writing; the same officer can on mere suspicion pass orders for freezing the properties without recording reasons. Further, there",,,,,

are strict timelines provided under the PMLA. The orders of provisional attachment and/or seizure and/or freezing cannot extend beyond,,,,,

the period of 180 days. The Director of the Enforcement Directorate (or the officer authorized by him) is required to file a complaint by,,,,,

seeking extension of the period of retention from the adjudicating authority within a period of thirty days from passing such order.,,,,,

However, this safeguard would also be rendered meaningless if the Enforcement Directorateâ€s contention is to be accepted; the",,,,,

Directorate could â€" as has been done in this case â€" freeze the assets without recording reasons and without making any application or,,,,,

complaint to the Adjudicating Authority. This Court is unable to accept that even in cases where the Director of the Enforcement Directorate,,,,,

has reasons to believe that the property is proceeds of crime, he can provisionally attach the same only for a period of one hundred and",,,,,

eighty days, but in cases where he has mere suspicion that the property in question is proceeds of crime, he can without recording any",,,,,

reasons, without issuance of any notice and without any obligation to make a complaint/ application in this regard to the Adjudicating",,,,,

Authority, pass an order freezing the property for an indeterminate period. This interpretation would militate against the scheme of the",,,,,

PMLA as enacted by the Parliament.,,,,,

71. With much respect to the view of the Honâ€ble Gujarat High Court, this Court is unable to agree with the view as expressed inParesha",,,,,

G. Shah v. State of Gujarat and Ors. (supra). An order offreezing under Section 102 of Cr.P.C. cannot be considered to be in aid of order,,,,,

of provisional attachment passed under Section 5(1) of the PMLA or an order of seizure and/or freezing of property under Section 17(1A),,,,,

of the PMLA. Both the orders under Section 5(1) and under Section 17 of the PMLA are orders of interim nature and are operative for a,,,,,

limited period till pending adjudication under Section 8 of the Act and further confiscation of the property. Orders of freezing of property,,,,,

passed under section 17(1A) of the PMLA or provisional attachment are by their nature provisional orders that require confirmation. Such,,,,,

powers are exercised in emergent situations warranting passing such orders. The contention that an order of provisional freezing is in aid,,,,,

of provisional attachment is plainly unpersuasive.,,,,,

72. It is possible that prior to acquiring any material providing the Enforcement Directorate any reason to believe that any property is a,,,,,

proceed of crime, the concerned officers may entertain a suspicion that property in question represents proceeds of crime; but that does not",,,,,

entitle them to freeze the property, interdict transactions and perhapsbring a personâ€s business to a standstill. The nature of the power of",,,,,

seizure contemplated under the provisions of Cr.P.C. is drastic and exercise of such powers is likely to have severe adverse effects on the,,,,,

person concerned; thus, the parliament in its wisdom did not confer upon the Enforcement Directorate, any powers to attach or freeze",,,,,

assets on a mere suspicion.,,,,,

73. The learned counsel appearing for the Enforcement Directorate has also referred to the decision of the Supreme Court in V.T.Khanzode,,,,,

and Ors. v. Reserve Bank of India and Anr.: (1982) 2 SCC The said decision has no application in the facts of the present case. In that,,,,,

case, the petitioners had challenged the circular issued by the Reserve Bank of India whereby it had decided to combine the seniority of all",,,,,

officers. The petitioners had contended that such conditions of service could not be framed by administrative circulars but necessitated,,,,,

framing Regulations under Section 58 of the Reserve Bank of India Act, 1934. The Supreme Court repelled the said contention and held that",,,,,

under Section 7(2) of the Act, the Central Board had the power to provide for service conditions of the bank staff by issuing administrative",,,,,

circulars as long as they did not impinge upon the Regulations made under Section 58 of the said Act. The power of an employer to fix,,,,,

service conditions cannot be equated to police powers.,,,,,

74. In view of the above, the contention that officers of the Enforcement Directorate could issue orders of freezing under SectionofCr.P.C.",,,,,

is rejected and the communications issued by the Enforcement Directorate to BSE are, plainly, without authority of law.â€​",,,,,

55. As far as BSE is concerned, one is failed to understand how can an expert body can take such steps to hand over the amount to third party which",,,,,

was the subject matter of concluded contract. If any directions are received from ED, BSE could haveobtained the legal opinion from legal expert.",,,,,

BSE was aware that it was a concluded transaction, but still ignoring the law and sufferance of a party, proceeded further as per direction without",,,,,

even raising formal protest.,,,,,

56. The Honâ€ble High Court in para nos. 97-103, the merit of the case was discussed as well as the counter-affidavit was filed on behalf of ED,",,,,,

however, in para-98 of the judgement, it was that M/s. RAKGT is alleged to have received the alleged proceed of crime and it is unclear on what",,,,,

basis it is alleged that the appellants are the recipient of proceed of crime and it was held that merely on the basis of ledger entry, the same is not a",,,,,

property and cannot be the proceed of crime.,,,,,

57. It is correct that the present proceedings are of civil nature, but culmination of these proceedings involve the party concerned to criminal liabilities",,,,,

as per Section-4 of PML Act, 2002, which speaks for itself. The same is reproduced below:",,,,,

4. Punishment for money-laundering.â€"Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment,,,,,

for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine which may extend to,,,,,

five lakh rupees:,,,,,

Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of,,,,,

the Schedule, the provisions of this section shall have effect as if for the words “which may extend to seven yearsâ€, the words “which",,,,,

may extend to ten yearsâ€​ had been substituted.â€​,,,,,

Retrospective effect,,,,,

58. It is matter of fact that a new offence of property “equivalent†of proceeds of crime was enacted by Parliament vide Finance Act, 2015",,,,,

(w.e.f 14.05.2015). It is admitted position that these shares were purchased in 2003 when PMLA was not in existence. It is also matter of record that,,,,,

the relevant period about the bribe amount, if any, is between from the period 2008 onward. The question of purchase of shares in the year 2003 from",,,,,

tainted amount or acquiring the shares from proceed of crime does not arise.,,,,,

59. Clause 145 of the Finance Act, 2015, and Clause 171 of the Finance Bill, 2015, reads, inter-alia, as follows :-",,,,,

AMENDMENT TO THE PREVENTION OF MONEY-LAUNDERING ACT, 2002",,,,,

145. Amendment of Section 2---In the Prevention of Money-Laundering Act, 2002 (15 of 2003) (herein referred to as the Money-laundering Act),",,,,,

in Section 2, in sub-section (1),----",,,,,

(i) in clause (u), after the words “or the value of any such propertyâ€, the words “or where such property is taken or held outside the country,",,,,,

then the property equivalent in value held within the countryâ€​ shall be inserted.,,,,,

The “EQUIVALENT†concept was inserted in Section 2 (1)(u) of PMLA, 2002 with effect from 14.05.2015. The amendment is prospective as",,,,,

its plain language indicates. Plain language is the determining factor of prospective application of law. There is ho saving clause in the Act or in the,,,,,

notification issued that the same are not perspective and retrospective.,,,,,

60. The definition of proceeds of crime is provided under Section 2(u) PMLA as under:,,,,,

“proceeds of crime†means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity",,,,,

relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the country, then the",,,,,

property equivalent in value held within the country],,,,,

61. As per the above definition, only the following properties can be categorized as proceeds of crime and consequently attached:",,,,,

a) property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence",,,,,

b) value of any such property,,,,,

c) property equivalent in value held within the country, where such property is taken or held outside the country",,,,,

62. In the present case, the ED has sought to attach the assets of the Appellants by making out a case of equivalent in value thereof. The same is",,,,,

endorsed by the Adjudicating Authority. For making out such a case, the ED, first of all, has to prime facie establish that the appellants have",,,,,

committed the offences and they have a nexus or a link in relation to criminal activities which is constituting proceeds of crime and the property,,,,,

constituting the value of any such property. The attached property being “value of such property‘, has to have a link or nexus with the actual",,,,,

property derived from criminal activity and it cannot merely be a “property equivalent in value‘, attachment of which is only permissible if the",,,,,

proceeds of crime is taken or held outside India. Such conditions are missing from the facts of the present case, nor it is the case of respondent as",,,,,

nothing has been even prima facie established that the appellants are involved in the money laundering. There is no material on record to show that,,,,,

they are ever investigated for the last many years at their Saudi Arabia. It appears that the respondent is rather insisting that they should come to India,,,,,

and clarify certain things. However, they have already denied all allegations against them. It is admitted by Mr. D.P. Singh that the matter is after",,,,,

investigation, the appellants may or may not be involved, however, the respondent would only come to know once the investigation is complete.",,,,,

63. The legislature has consciously used the words “value of any such property†and “property equivalent in value‘ in the same definition,,,,,

clause and therefore, they cannot connote or mean as the same property.",,,,,

64. Therefore, when the case of the ED falls under equivalent in “value of any such propertyâ€, it cannot take any unrelated property which has no",,,,,

nexus or link with the actual proceeds of crime and attach the same as “property equivalent in valueâ€​ in the absence of evidence.,,,,,

65. On the issue of the question of retrospectively operation, the Maxwell on Interpretation of Statutes, Twelfth Edition, at page 215, under the",,,,,

heading-Retrospective Operation of Statutes, writes.",,,,,

“UPON the presumption that the legislature does not intend what is unjust rests the leaning against giving certain statutes a retrospective,,,,,

operation. They are construed as operating only in cases or on facts which come into existence after the statutes were passed unless a,,,,,

retrospective effect is clearly intended. It is a fundamental rule of English law that no statute shall be construed to have a retrospective,,,,,

operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication. The",,,,,

statement of the law contained in the preceding paragraph has been “so frequently quoted with approval that it now itself enjoys almost,,,,,

judicial authority.â€​,,,,,

66. In Lauri v. Renad (1892) 3 Ch 402, by Lindley, L.J. that it is a fundamental rule of English Law that no “statute shall be construed so as to",,,,,

have a retrospective operation, unless its language is such as plainly to require such a construction. And the same rule involves another and",,,,,

subordinate rule, to the effect that a statute is not to be construed so as to have a greater retrospective operation than Us language renders necessary.",,,,,

It is stated that it is well recognized rule that statutes should be interpreted, if possible, so as to respect vested rights, but such a construction should",,,,,

never be adopted if the words are open to another construction. It is also stated that if a statute be ambiguous, the Court should lean to the",,,,,

interpretation which would support existing rights.,,,,,

67. In the Queen v. The Inhabitants of St. Mary, Whitechapel (1848) 12 QB 120, the Court pointed out that “The Statue which in its direct",,,,,

operation of prospective cannot be properly called a retrospective statute because a part of the requisites for that action is drawn from the time,,,,,

antecedent to its passingâ€​.,,,,,

68. The fundamental rule of interpretation of statutes. Following case laws are cited:-,,,,,

a) Monnet Ispat and Energy Limited Versus Union of India and Others (2012) 11 SCC at page 90 paras 153 & 154 held that:,,,,,

“153. Having carefully considered Section 17-A, I have no hesitation in holding that the said provision is prospective. There is no",,,,,

indication in Section 17-A or in terms of the amending Act that by insertion of Section 17-A Parliament intended to alter the pre-existing,,,,,

state of affairs. Parliament does not seem to have intended by bringing in Section 17-A to undo the reservation of any mining area made by,,,,,

the State Government earlier thereto for exploitation in public sector. Parliament has no doubt plenary power of legislation within the field,,,,,

assigned to it to legislate prospectively as well as retrospectively. As early as in 1951 this Court in KeshavanMadhavaMenon v. State of,,,,,

Bombay [AIR 1951 SC 128 : (1951) 52 Cri LJ 860 ]had stated about a cardinal principle of construction that every statute is prima facie,,,,,

prospective unless it is expressly or by necessary implication made to have retrospective operation. Unless there are words in the statute,,,,,

sufficient to show the intention of the legislature to affect existing rights, it is deemed to be prospective only. In Principles of Statutory",,,,,

Interpretation (7th Edn., 1999) by Justice G.P. Singh, the statement of Lord Blanesburg in Colonial Sugar Refining Co. v. Irving [1905 AC",,,,,

369 : (1904-07) All ER Rep Ext 1620 (PC)] and the observations of Lopes, L.J. in Pulborough Parish School Board Election, In re, Bourke",,,,,

v. Nutt [(1894) 1 QB 725 : (1891-94) All ER Rep 831 (CA)] have been noted as follows: (QB p. 737),,,,,

“In the words of Lord Blanesburg, “provisions which touch a right in existence at the passing of the statute are not to be applied",,,,,

retrospectively in the absence of express enactment or necessary intendmentâ€. “Every statute, it has been saidâ€, observed Lopes, L.J.,",,,,,

“which takes away or impairs vested rights acquired under existing laws, or creates a new obligation or imposes a new duty, or attaches",,,,,

a new disability in respect of transactions already past, must be presumed to be intended not to have a retrospective effectâ€​.â€​",,,,,

154. Where an issue arises before the court whether a statute is prospective or retrospective, the court has to keep in mind presumption of",,,,,

prospectivity articulated in the legal maxim nova constitution futurisformamimponeredebet non praeteritis i.e. “a new law ought to regulate what is,,,,,

to follow, not the pastâ€. The presumption of prospectivity operates unless shown to the contrary by express provision in the statute or is otherwise",,,,,

discernible by necessary implication.â€​,,,,,

b) Keshavan Madhav aMenon Versus State of Bombay, AIR 1951 SC 128 â€" para 7 [7 Judge Bench of Honâ€​ble Supreme Court]",,,,,

“7. ………………………………………………………………….,,,,,

Every statute is prima facie prospective unless it is expressly or by necessary implications made to have retrospective operation. ……………,,,,,

………………………………………………………………………… ………………………………………………..â€​,,,,,

c) MahadeolalKanodia Versus Administrator, General of West Bengal, AIR 1960 SC 936 â€" para 8 [3 Judge Bench of Honâ€ble Supreme Court],",,,,,

held that:,,,,,

“8. The principles that have to be applied for interpretation of statutory provisions of this nature are well-established. The first of these is,,,,,

that statutory provisions creating substantive rights or taking away substantive rights are ordinarily prospective; they are retrospective only,,,,,

if by express words or by necessary implication the legislature has made them retrospective; and the retrospective operation will be limited,,,,,

only to the extent to which it has been so made by express words, or necessary implication. The second rule is that the intention of the",,,,,

legislature has always to be gathered from the words used by it, giving to the words their plain, normal, grammatical meaning. The third",,,,,

rule is that if in any legislation, the general object of which is to benefit a particular class of persons, any provision is ambiguous so that it is",,,,,

capable of two meanings, one which would preserve the benefit and another which would take it away, the meaning which preserves it",,,,,

should be adopted. The fourth rule is that if the strict grammatical interpretation gives rise to an absurdity or inconsistency such,,,,,

interpretation should be discarded and an interpretation which will give effect to the purpose the Legislature may reasonably be considered,,,,,

to have had will be put on the words, if necessary even by modification of the language used.â€​",,,,,

d) K. C. Arora and Another Versus State of Haryana, 1984 (3) SCC 281, para 15 [3 Judge Bench of SC], held that:",,,,,

“15. It may be pointed out at the very outset that the Parliament as also the State Legislature have plenary powers to legislate within the,,,,,

field of legislation committed to them and subject to certain constitutional restrictions they can legislate prospectively as well as,,,,,

retrospectively. It is, however, a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by",,,,,

necessary implication made to have retrospective effect………………………………………..â€​,,,,,

69. In M/s Punjab Iron Supply Co., Chandigarh V. Central Government, [1984]1SCR42,8 the exemption was granted by the Home Department",,,,,

Notification dated 31.01.1973, as modified notifications dated 24.09.1974 to those buildings which were given sewerage connection or electric",,,,,

connection or which are occupied, as the case may be, on or after January 31, 1973. It was held that the benefit of the notification cannot be extended",,,,,

to the buildings which were given the sewerage connection or electric connection or which were occupied, as the case may be, prior to January 31,",,,,,

1973. Those buildings are governed by the provisions of the Act and any decrees passed in respect of them are governed by S. 13 of the East Punjab,,,,,

Urban Rent Restriction Act, 1949, as applicable to Union Territory of Chandigarh, Their Lordships, with regard to the rule of interpretation regarding",,,,,

retrospectively observed (at pages Sc 93 and 94) as under:-,,,,,

“All laws which affect substantive rights general operate prospectively and there is a presumption against their retrospectivity if they,,,,,

affect vested rights and obligations unless the legislative intent is clear and compulsive. Such retrospective effect may be given where there,,,,,

are express words giving retrospective effect or where the language used necessarily implies that such retrospective operation is intended.,,,,,

Hence, the question whether a statutory provision has retrospective effect or not depends primarily on the language in which it is couched. If",,,,,

the language is clear and unambiguous effect will have to be given to the provision in question in accordance with its.,,,,,

(32) It would appear from the case law considered above that the rule of construction or interpretation is very well settled and well,,,,,

established that laws generally are prospective in character more particularly, law affecting vested or substantive rights or laws creating",,,,,

new liabilities or imposing new disabilities, unless there are express words in the statute affecting the existing rights of unless there is clear",,,,,

manifestation of the intention of the Legislative on the basis of which it can be said that the law is retrospective in character, and even vested",,,,,

rights have been taken away or new liabilities have been created or new disabilities have been imposed. There are laws and lawâ€s and,,,,,

cases, the real question of application of the cardinal rule of construction which is propounded and considered above. It is also well",,,,,

established that there is a presumption against retrospectivity and this presumption can only be rebutted by express words in the Statute or,,,,,

by necessary intendment of the statute. It is also well established that only to what extent, retrospectivity may be considered of the provisions",,,,,

in the statute which necessary arises from the express words or from necessary intendment. Beyond that extent, retrospectivity should not be",,,,,

considered to have arisen.,,,,,

70. These shares were admittedly not acquired from the proceeds of crimewhich is even recorded by the Honâ€ble Court when the respondent had,,,,,

changed his stand. The allegation of alleged bribe, if any, is from the period 2008 onward as it is observed by the Honâ€ble High Court. The issue in",,,,,

hand is whether the principle of retrospective effect would apply in the present case in view of acquiring the shares in the year 2003. Even at that,,,,,

time, PMLA was not in existence.",,,,,

71. The total shares of 1,43,38,330 [78,38,330 + 65,00,000]were subscribed by the Appellants in November, 2003 by foreign inward remittances from",,,,,

Saudi Arabia to India through State Bank of India, Overseas Branch, New-Delhi. Approval of the Reserve Bank of India was obtained and is on",,,,,

record. These shares were held uninterrupted from 2003 to 2018 Jan/Feb. The PML Act, 2002 was notified on 01.07.2005",,,,,

72. It is correct that the amendment of property equivalent abroad is only to seek to prevent frustration of any proceeding. In case the argument of,,,,,

D.P. Singh is taken a face value, admittedly, the effective date of notification (vide-GSR: 437(E) of this Act is dated 1st July, 2005. The shares in the",,,,,

present case were acquired in the year 2003 when the Act itself does not exist. Secondly, it was admitted on behalf of respondent that shares were",,,,,

not acquired from proceed of crime nor the proceed of crime has been taken from this country to the abroad. Even as per respondent, the",,,,,

investigation against the appellants is still going on. Mr. D.P. Singh has informed that at this stage, ED is not sure as to whether the appellants are",,,,,

involved in money laundering or not. He says that the appellants arenot joining the investigation.,,,,,

73. In the present case, such property means the shares, in question, which were admittedly acquired in the year 2003. The relevant period of bribes",,,,,

was from 2008 onwards and secondary in the year 2003, PMLA was in existence. It is also a matter of fact that Mr. D.P. Singh, advocate for the",,,,,

respondent, has conceded before the Honâ€ble Delhi High Court that the shares were not acquired from proceeds of crime.Thus the question of",,,,,

freezing the shares even equivalent in value does not arise.Even there is no material or evidence available prima facie as of today about the,,,,,

involvement of appellants.,,,,,

74. In order to satisfy my conscious, this Tribunal,despite of above, wanted to proceed with the matter on merit of the case, though it is settled law that",,,,,

if the criminal liabilities of any law is involved, the sameis always perspective. There is no saving clause about the retrospective effect in the Act or",,,,,

the amendment carried out in year 2015.,,,,,

75. The authorised officer is to follow the following steps after search and seizure or frozen of any property, any action taken under Section 17(2) or",,,,,

17(1A) â€",,,,,

i) the first one is that in case the authority seizes any record or material under sub-section (1) or sub-section (1A) of Section-17, the authorized officer",,,,,

shall within a period of thirty days from the date of seizure or frozen can file the application requesting for retention of such property.,,,,,

ii) Secondly, sub-section (1) of Section 20 mandates that where any property has been seized under Section 17 or Section 18 or frozen under sub-",,,,,

section (1A) of Section 17, the officer authorised on the basis of material in his possession has chosen to retain the property for the purposes of",,,,,

adjudication under Section 8, he has to pass as to record the reason to believe in writing for continuation of the same for a period not exceeding one",,,,,

hundred and eighty days from the day the such property was seized or frozen as the case may be. The officer authorized immediately after he has,,,,,

passed the order of retention or continuation of freezing of property for the purpose of adjudication under Section 8, has to forward a copy of the order",,,,,

along with the material in his possession to the Adjudicating Authority in a sealed cover within the meaning of Sub-section (2) of Section 20. Sub-,,,,,

section (3) of Section 20 mandates that on the expiry of 180 days, the property shall be returned to the person concerned from whom such property",,,,,

was seized and whose property was ordered to be frozen unless the Adjudicating Authority permits retention or confirmation thereof of such property,,,,,

beyond the said period.,,,,,

76. It is clear from the reading of Sections 17 to 21 that outer limit upto the date for deciding the application for retention of property is 180 days from,,,,,

the date of seizure of any property or records. The said period is not extendable as per the scheme of the Act, unless the prayer for retention is",,,,,

allowed and subject to filling of prosecution complaint within 90 days from the date of passing the retention order.,,,,,

77. No doubt, once the prayer is allowed, the person concerned/aggrieved party of such order, is entitled to file the appeal under Section 26 of the Act.",,,,,

The same shall be heard and after giving an opportunity of being heard, the appellant Tribunal shall pass the order either to confirm the order of",,,,,

retention or to modify or setting aside the same.,,,,,

78. The provisions of section 20 (Retention of Property) are similar to the provisions of section 5(Attachment of Property) as shown here-under:,,,,,

Stages,Retention of Property,Attachment of Property,,,

1.,"S. 20(1): Recording of “reason to

believeâ€​","S. 5(1): Recording of “reason to

believeâ€​",,,

2.,S.17(4): OA within 30 days,S. 5(5): OC within 30 days,,,

3.,"S. 20(2): Order by the Authorized

Officer","S. 5(1): Order by the Authorized

Officer",,,

4.,"Rule 4 of Retention Rules, 2005:

Acknowledgment of Order

by the Adjudicating Authority","Rule 5 of Attachment Rules, 2005:

Acknowledgment of Order

by the Adjudicating Authority",,,

5.,S.20(1): Outer limit of 180 days,S.5(1): Outer limit of 180 days,,,

6.,"S.8(3): Order by the Adjudicating

Authority","S. 8(3): Order by the Adjudicating

Authority",,,

7.,"S.8(3)(a): Retention restricted to

90 days during investigation.","S.8(3)(a): Attachment restricted to

90 days during investigation.",,,

as the case may be; and,,,,,

(b) become final after an order of confiscation is passed under sub-section (5) or sub-section (7) of Section 8 or Section 58-B or sub-section,,,,,

(2-A) of section 60 by the Special Court.,,,,,

83. It is settled law that if a particular thing is to be done in a particular manner, it must be done in that manner only and none other. Reliance in this",,,,,

regard is also placed on a judgements of Honâ€ble Supreme Court in the cases of DipakBabaria and another vs. State of Gujarat 2014 (3) SCC 502,,,,,

and J. Jayalalitha&Anrvs State of Karnataka &Ors 2014 (2) SCC 401.,,,,,

84. Sub-section (1) of Section 17 provides that the authorised officer has to record the reason to believe in writing. In the such reason to believe, he",,,,,

has also to record the basis of information which is in his possession before conducting the search and seizure.,,,,,

85. It stipulates that if person concerned has committed any act which constitutes money-laundering, or is in possession of any proceeds of crime",,,,,

involved in money-laundering, or is in possession of any records relating to money-laundering, then any authorised officer can enter and search any",,,,,

building, place, vessel, vehicle or aircraft where that such records or proceeds of crime are kept, who is also empowered to break open the lock of any",,,,,

door, box, locker, safe, almirah or other receptacle where the keys thereof are not available and seize any record or property found as a result of such",,,,,

search, place marks of identification on such record or make or cause to be made extracts or copies therefrom; make a note of an inventory or such",,,,,

record or property and to examine on oath any person who is found to be in possession or control of any record or property, in respect of all matters",,,,,

relevant for the purposes of any investigation. However, the said action is sustainable subject to conditions stipulated in the proviso of Section 17(1) of",,,,,

the Act, which says that the search and seizure shall not be conducted unless â€"",,,,,

• in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 157 of the Code of Criminal Procedure, 1973, (2",,,,,

of 1974),,,,,

or,,,,,

• a complaint has been filed by a person, authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking",,,,,

cognizance of the schedule offence, as the case may be,",,,,,

or,,,,,

• in cases where such report is not required to be forwarded, a similar report of information received or otherwise has been submitted by an officer",,,,,

authorized to investigate a scheduled offence to an officer not below the rank of Additional Secretary to the Government of India or equivalent being,,,,,

head of the office or Ministry or Department or unit, as the case may be, or any other officer who may be authorised by the Central Government, by",,,,,

notification, for this purpose.",,,,,

In the present case, no report against the appellants has been forwarded to the Magistrate. No complaint against the appellants was filed before a",,,,,

Magistrate. No charge-sheet of schedule offence has been filed.,,,,,

86. Under Section17(1) (A), it is the duty of the officer authorised if where it is found that it is not practicable to seize such property, can make such",,,,,

order that the person concerned shall not transfer or deal with the said property prior to the permission of the officer authorised. A copy of the said,,,,,

order shall be served upon the person concerned. Section 17, Sub-section (2) stipulates that after search and seizure, the authorised officer shall",,,,,

immediately forward a copy of the reason so recorded along with the material in his possession to the Adjudicating Authority in a sealed cover.,,,,,

87. Before the High Court, the counter-affidavit was filed by the respondent no. 1 stating that the proceed of crime suspected to be passed in the",,,,,

account of RAKGT under the ledge entries of M/s.Omar Ali Balsharaf GK who is the major shareholder of M/s. KRBL Ltd. It was stated that,,,,,

RAKGT is alleged to have received the alleged proceed of crime. It was observed by Honâ€ble Delhi High Court that a ledger entry is not property,,,,,

and cannot be proced of crime. Nothing has been brought on record to show that the said alleged ledger entries of M/s. Omar Ali Balsharaf GK is the,,,,,

part of proceed of crime. It was merely an apprehension and suspicion. More than an year is passed. As per the scheme of the Act that outer time,,,,,

limit for investigation is 90 days if the retention/ confirmation order is to continue. Merely stating that the party is not joining the investigation is not,,,,,

enough, it was for the respondent to investigate the matter as per time limit provided by the Act. The mandatory provision of Special Act cannot be",,,,,

ignored merely on the basis if the agency has suspected some wrong doing by a party. The alleged accused has denied having any association or,,,,,

contact with the appellants. The appellants are the foreign nations and are residing in Saudi Arabia, they are the importer of rice for the last about",,,,,

30years. The investment in KBB Limited was made in 2003 of Indian Company.,,,,,

88. Mr. D.P. Singh, learned counsel is not able to answer that under which law merely on the basis of suspicion that contract between two private",,,,,

parties got terminated/cancelled by any agency.,,,,,

89. It is correct that the power to attach or seize or freeze a property can be exercised only if the officer concerned has material in his possession,,,,,

who has a reason to believe that property sought to be attached or seized is proceed of crime or related to the crime irrespective as to whether,,,,,

complaint under the schedule offence and prosecution complaint under PMLA is filed or not against the party who has in his possession of proceeds,,,,,

of crime.,,,,,

90. But, the situation where the investigation was being done on the basis of a mere suspicion against the party where the statute provides prescribed",,,,,

period of time and mandates the condition that it would continue during investigation for a period not exceeding ninety days. Having in possession of,,,,,

proceed of crime and period of investigation on the basis of suspicion are two different situations.,,,,,

91. The law laid down earlier where the time limit was not provided may not be applicable because of change of situation by virtue of amendment,,,,,

which was carried on 19.4.2018, the specific period is prescribed in the Act for the purpose of investigation.",,,,,

92. Earlier, no specific timeline was set to complete the investigation and to file the prosecution complaint. The mandates now is changed whereby it is",,,,,

mandated that the retention shall continue during investigation for a period not exceeding ninety days, as provided under section 8(3)(a) of the Act or",,,,,

under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India. In the facts of the present case, as",,,,,

there is no allegations made by the respondent that the appellants have taken the proceed of crime from India to their home country.,,,,,

93. It is admitted position that no prosecution complaint has been filed against the Appellant herein. The properties and records of the Appellant were,,,,,

seized only for the purpose of investigation. The period of 90 days as prescribed under section 8 (3) (a) has already elapsed as more than an year has,,,,,

been expired. No prosecution complaint has been filed by the respondent against the appellants. The said fact has been admitted by the learned,,,,,

counsel for the respondent. The dispute is not ended here as one set of appellants are pressing for passing the decree in their favour.,,,,,

94. The appellants in appeal nos. 2817 and 2818/2018 have also claimed the decree of its own money of about INR.386 crores with interest which is,,,,,

arising out of a concluded sale transaction on the platform of Bombay Stock Exchange (Respondent no. 2 herein) on 13.02.2018.,,,,,

95. Mr. Bhattacharya, learned counsel appearing on behalf of appellants in order to claim the decree in favour of his client, submits that the market",,,,,

value of the shares have gone down to large extent. It was the malafide act on the part of ED and BSE, the appellant has suffered Rs.386 crores",,,,,

without any fault of the appellant. They must return this amount with interest. He has referred the relevant dates, facts and Section-35 of PML Act,",,,,,

2002, the power of Appellate Tribunal. He says that any order passed by this Tribunal is executable as a decree of Civil Court u/s 35(1)(3) of the Act.",,,,,

Senior counsel says that the Act of ED and BSE is not bonafide, rather malafide, wilfully and in bad faith.",,,,,

96. Mr.D.P. Singh, learned counsel appearing on behalf of ED has strongly opposes the prayer. He says that this Tribunal has no jurisdiction to a",,,,,

decree for money. Even otherwise, there is bad of suits in civil court under Section-67 of the Act if anything is done by Government in good faith",,,,,

under this Act.,,,,,

97. This Tribunal on the basis of facts involved in the matter is clearly of the view that the appellant is entitled to receive the entire amount with,,,,,

interest or difference of amount as the value of the shares have gone down. Now, the question before this Tribunal is as to whether a decree for such",,,,,

amount can be passed in the present set of appeals.,,,,,

98. One of the prayers “(A)â€​ read as under â€",,,,,

“Award a decree of INR.386,10,00,261/- in favour of Appellants against Directorate of Enforcement and BSE jointly and severally, with",,,,,

interest @ 18% from 15.02.2018 till the date of paymentâ€​,,,,,

It is true that in para-86 of Honâ€ble High Court judgement dated 9.1.2018 upheld by Honâ€ble Division Bench of the Honâ€ble High Court held that,,,,,

the appellants were entitled to the sale consideration paid by M/s. Pabrai Investment Fund. Learned counsel appearing on behalf of appellants argues,,,,,

that under Section 35(3) an order made by this Tribunal shall be executable as a decree of civil court and the Tribunal shall have all the powers of a,,,,,

civil court.,,,,,

99. Learned senior counsel appearing on behalf of appellants argues that under Section 35(3) an order made by this Tribunal shall be executable as a,,,,,

decree of civil court and the Tribunal shall have all the powers of a civil court. 78. Before dealing with Section 35(3), it is relevant to reproduce",,,,,

Section 26(4) of the appeals to Appellate Tribunal under Chapter VI:,,,,,

26(4) On receipt of an appeal under sub-section (1), or sub-section (2), the Appellate Tribunal may, after giving the parties to the appeal an",,,,,

opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.",,,,,

100. It is very clear from sub-section(4) of Section 26 that this Tribunal is given power to confirm or modify or setting aside the impugned order. No,,,,,

power is given to pass a decree for recovery of amount. The recovery of amount, interest and to receive the compensation and damages lies with the",,,,,

civil court.,,,,,

101. Under section 35(3), the power of civil courts are given to do the work in this Tribunal which is akin to civil court for that purpose only. But a",,,,,

decree for recovery cannot be passed for the same. However, at the same time I am of the view that suit in civil court for recovery may be brought",,,,,

against any authority if anything done or intended to be done in bad faith with malafide intention, deliberately and wilfully having knowledge that the",,,,,

said act of any authority would cause loss and injury to the party without its fault. Under these circumstances, there is no bar of suits in civil court.",,,,,

The said preposition of law is not disputed by Mr.D.P. Singh at the time of hearing.,,,,,

102. Therefore, the decree in terms of prayer “Aâ€​ of appeal no. 2817/2018 and 2818/2018 cannot be passed. The appellants, no doubt, are entitled",,,,,

to receive the money which is wrongly remitted to third party but in accordance with law. However, the appellants are entitled for relief of de-freezing",,,,,

all the shares forthwith, subject to the conditions.",,,,,

103. There is no dispute that laundering of proceed of crime is a continuing offence and it does not wipe out the original guilt and it keeps the,,,,,

contravention alive but it depends upon case to case basis. If the properties are attached against the proceed of crime and valid case of Section 3 is,,,,,

made out and proceed of crime covers Section 2(u) of the Act on the date of passing the provisional attachment order on the basis of material placed,,,,,

on record.,,,,,

104. But the same would not apply in those cases where if the party is not involved in money laundering and is not connected with proceed of crime,",,,,,

namely, has not in his possession of proceed of crime, the party has not concealed the proceed of crime or has not acquired or use or projecting as",,,,,

untainted property and claiming thereof. Then, under these circumstances, the question of continuing offence does not arise and the retrospective",,,,,

effect shall apply.,,,,,

105. In the facts of the present case, there is no material to show that there is any offence committed by the appellants or they are already guilty of",,,,,

any offence and they are keeping on contravention alive day to day. No such even prima facie averments are available, either in the reason to believe",,,,,

or in the pleading of the respondent. Rather, on behalf of respondent, it was submitted that let the appellants may join the investigation and they may or",,,,,

may not be involved in the money laundering. The appellants are foreign citizens, this Tribunal cannot observe anything on this aspect, however, one",,,,,

thing is that it was the duty of respondent to investigate the matter and collect the evidence. Ninety day period prescribed under Section 8(3)(a) of the,,,,,

Act has already expired.,,,,,

106. Here is not the case where the respondent can allege that property is derived or obtained from the scheduled offence and it is acquired as a,,,,,

result of any criminal activity relatable to the schedule offence. It is matter of fact that Shri D.P. Singh, Advocate has admitted before the High court",,,,,

that the shares are not purchased from proceed of crime. There is no evidence or any material on record to show that those are acquired from,,,,,

proceed of crime or the appellants are investigated in their home country in order to establish that they are involved in money laundering till date.,,,,,

Final findings,,,,,

107. As of today, there is no evidence available on record against the appellants. They are not charge-sheeted. No prosecution complaint is pending,",,,,,

however, in the interest of justice, equity and fair play and to strike the balance in the present circumstances and the nature of case and in view of",,,,,

investigation is sub-judice by the police under schedule offence against other parties. Without prejudice, the appellants are directed to execute the",,,,,

indemnity bond by way of an undertaking to the tune of 111 crores within four weeks as a surety that if it was found by producing evidence in trial and,,,,,

directed by the court, at the time of passing the final judgement while coming to the conclusion that the ledger entry in the account of RAKGT is part",,,,,

of the bribe amount, the appellants shall deposit the said amountwith the respondentas equivalent to value thereof. The liberty is also granted to the",,,,,

appellants to move the application before the Special Court for waiving of such condition if charges are not framed against the appellants.,,,,,

108. All the four appeals are partly allowed by modifying the impugned orders, on the compliance is made as per terms mentioned in the",,,,,

precedingparas within the period of one month. Once the compliance is made, all shares shall stand de-freezed as the same are admittedly not",,,,,

acquired from proceed of crime.,,,,,

109. All pending applications are also disposed of.,,,,,

110. No costs.,,,,,