JUDGEMENT
FPA-PMLA-1988, 2047, 2048, 2059,2108, 2004 to 2008/MUM/2017
1. On 14.12.2016, the Income Tax Department conducted a raid/search of 15 Bank Lockers in the name of the Appellant (one of the appellant in appeal no. 1988/2017 out of this batch of appeals) at the Bank of Maharashtra, Parvati Branch, Pune. Pursuant to the said search the Income Tax Department seized an amount of Rs. 9,85,16,980/-. On the same day the Income Tax Department also raided /searched the factory premises of the Appellant and allegedly recovered an amount of Rs. 94,56,390/- from the factory premises. It may be noted that a sum of Rs. 7,97,95,500/- (39,893 x 2000 and 19 x 500 New GC Notes) was in new currency and the remaining amount of 1,87,21,480/- was in old currency.
2. On 16.12.2016 a case (FIR) bearing No. RC/PUNE/2016/A/0020 was registered by the CBI (ACB), Pune under Section Sections 420 r/w
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120B Indian Penal Code, 1860 („IPC") and Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988 („PC ACT") against Mr. Sudhir Puranik, Mr. Mangesh Annachhatre, Mr. SatyenGathani („Accused Persons").
3. On 10.01.2017, on the basis of the FIR registered with the CBI (ACB) bearing No. RC/PUNE/2016/A/0020, ECIR No. ECIR/MBZO- II/2017 dated 10.01.2017 was registered against Mr. Sudhir Puranik, Mr. Mangesh Annachatre, Mr. SatyenGathani and other unknown persons for the offence of money laundering punishable under Section 3 and Section 4 of the PMLA Act. The ECIR alleged commission of offences of criminal conspiracy, criminal breach of trust, cheating and criminal misconduct by the Accused Persons and further alleged that huge proceeds i.e. Rs. 7,97,95,500/- has been generated out of the criminal activities related to the Scheduled Offences and the same appears to have been utilized by the Accused thus, projecting them as untainted.
The case of the appellants with regard to reasons to believe
4. The section 5 of the PMLA mandates that the concerned authority, before passing the Provisional Attachment Order, has reasons to believe and the reasons for such belief to be recorded in writing, i.e. "(i) any person is in possession of proceed of crime and (ii) such proceed of the crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating the proceedings..." This mandate is a condition precedent before assuming the jurisdiction to pass the Provisional Attachment order. In other words, the twin condition as envisaged in Section 5(1) PMLA, confers the jurisdiction on the authority to pass the Provisional Attachment Order and if the provisional attachment order was passed without scrupulously following the mandate of Section 5(1), the order would be without jurisdiction and not sustainable in law.
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4.1 The league of Section 5(1) PMLA is ex facie clear that before passing the provisional attachment order, the authority has to fulfill the twin conditions as mentioned therein. The words mentioned after clause (a) and (b) "... he may, by order in writing provisionally attach such property..." is very significant, which the legislature consciously put it, that, before passing the attachment order, the conditions mentioned in (a) and (b) has to be fulfilled and if the provisional attachment order was passed without prior satisfaction as per the requirement of Section 5(1) PMLA, the order would be without jurisdiction. The respondent no.2 passed the provisional without following the mandate of Section 5(1), as such; the assumption of the jurisdiction to pass the attachment order is not sustainable.
4.2 The section 5(1) PMLA has two important components, i.e. firstly, satisfaction as envisaged in (a) and (b) and then, secondly, the action/power of the authority to pass the provisional attachment order. The authority cannot jump to the second component i.e. action/power of passing the provisional attachment order, without the compliance of the first component. Acquisition of the jurisdiction to pass the provisional attachment order would come only after recording the reasons in writing as mandated in section
5(1) PMLA.
4.3 The section 5(1) impose a stringent duty upon the Respondent No.2 that, before passing the provisional attachment order and depriving a person of his property, which is a constitutional right envisaged under Article 300-A of the Constitution of India, cogent and coherent reasons are required to be given and those reasons are to
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be recorded in writing and manifested which are not given in the present case. As such the provisional attachment order is without jurisdiction and not sustainable.
4.4 It is further submitted that not only the compliance of twin conditions of section 5(1) of PMLA is mandatory, but in support of such compliance, the material should be there in the possession of the Authority, which should be reflected in the order, before he proceeds to pass the provisional attachment order. This mandate of law has to be scrupulously fulfilled before assuming the jurisdiction to pass the Provisional Attachment Order. In this regard, any not, or interdepartmental communication or direction or order of the superior authority would not fulfill the requirement of Section 5(1).
4.5 It is settled law that if a statutory authority has been vested with the jurisdiction, he has to exercise it according to his own discretion and if the discretion is exercised under the direction or in compliance with some higher authority"s instruction, then it will be a case of failure to exercise discretion altogether. It is pertinent to state that only the authority, who passed the attachment order, shall record the reasons of his belief which would confer jurisdiction upon him.
4.6 A heavier burden is cast on the officer acting u/s 5(1) of the PMLA to strictly comply the twin conditions not subjectively, but have to pass the order objectively, based on material in his possession, because the order of the attachment is subject to review by the Appellant authority and the courts. The reasons to believe is on a higher pedestal than the mere satisfaction and only satisfaction is not sufficient to pass the order u/s 5(1), but the officer has to have
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reasons to believe and the said reasons to be recorded. The stringent provision of PMLA requires scrupulous compliance. The non-compliance of the stringent provision would lead to nullity of the provisional attachment order and it would be unsustainable.
4.7 Further, the Respondent No.1 did not follow the mandate of Section 8(2) (c) and the finding was given. No cogent and cohesive reason was given for rejection of the submissions in writing. The impugned order is mechanical, without application of judicious mind and as such is liable to be set at naught.
4.8 The Respondent No. 1 while passing the impugned order seriously violated the Principles of Natural Justice. The adherence of the principles of Natural justice is recognized in a civil society being of supreme importance when a quasi judicial authority passed the order. The notice is the first limb of this principle. It must be precise and unambiguous and should appraise the notice of the determinative case which he has to meet. In other words, the party should be put on notice of the case before any adverse order is passed against him. In the present case, the Respondent No.1 issued the notice u/s 8(1).
5. It is stated by all the appellants that the case of the Respondent No. 2 (ED) is false and not appealing to common sense as in some of the cases, the property in question was acquired in 2006-07 by the Appellant no. 1, from the proceed of the crime which was allegedly generated in 2010. Further, there is no immediate necessity of attachment since, the appellants never sold or disposed of the property after its acquisition in 2006-07 and even after the FIR was registered by the Crime Branch in 2015. This ex facie makes it clear that there was no immediate necessity
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to pass the provisional attachment order and the order was passed without application of mind.
6. All the appellants have denied the allegations raised by the respondent no. 1. In their respective stand, they have tried to explain the amount seized by the respondent. When the appeal is finally argued, their stand will be considered on merit.
7. At this stage, the argument addressed on behalf of the appellants is that no copy of reason to believe has been supplied. On this aspect, the order is to be pronounced. The counsel for the respondent has supported the impugned order.
8. The law is a settled law that where a power is given to do a certain thing in a certain way, the thing must be done in that way, or not at all and other methods of performance are necessarily forbidden. This rule was adopted in Taylor v. Taylor in the 19th Century and the Hon"ble Apex Court has approved and applied this principle in several decisions and it is a well recognized principle i.e. the authority should not travel beyond the statutory should not travel beyond the statutory provisions. In the present case, the Authority passed the order u/s 5(1) PMLA and did not adhere to the above recognized and accepted principle and acted in contravention of the said rule. It is submitted that the twin conditions in Section 5(1) is the sine qua non or the condition precedent for the assumption or acquisition of the jurisdiction to pass the attachment order.
9. The mandate of Section 8(2) cast a stringent duty upon the Respondent No. 1 which is as under "...taking into account all the relevant
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material placed on record before him, by an order record a finding whether all or any of the properties referred to in the notice under sub section 1 are involved in money laundering...".
10. Section 5 of the PMLA,2002 provides that property can be attached only when the attaching officer has "reasons to believe" based on the material on record that a person is in possession of any proceeds of crime or where the proceeds of crime are likely to be transferred or dealt with in a manner which would frustrate any proceedings relating to confiscation of such proceeds. It is not merely formality nor it means to repetition of contents/allegations referred in the FIR and charge-sheet. Being an independent action under PML Act, the officer concern has to examine the entire matter in addition to the allegation couple with the additional/independent evidence gathered after investigation.
11. In the case of C.B. Gautam vs. Union of India (1993(1) SCC 78),a Constitution Bench of the Hon'ble Supreme Court of India held that the reasons to be recorded in writing shall not only be incorporated in the order but also shall be communicated to the affected parties. Therelevant extract from the judgement is as under:
"Sec. 269UD(1), in express terminology, provides that the appropriate authority may make an order for the purchase of the property for reasons to be recorded in writing". Sec. 269UD(2) casts an obligation on the authority that it "shall cause a copy of its order under sub-s. (1) in respect of any immovable property to be served on the transferor". It is, therefore, inconceivable that the order which is required to be served by the appropriate authority under sub-s. (2) would be the one which does not contain the reasons for the passing of the order or is not accompanied by the reasons recorded in writing. It may be permissible to record reasons separately but the order would be an incomplete order unless either the reasons are incorporated therein or are served separately along with the order on the affected party. Reasons for the order must be communicated to the affected party." This decision has been followed in various judgments by various
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Courts, including the Hon'ble Supreme Court of India.
12. The submission of the Respondent No. 1 is that where there is specific case law dealing with the reason to believe under provisions of PMLA, recourse to other Act and the decisions on the other acts will not be available to the Appellants.
13. Section 5 and Section 25 of PMLA, 2002 and Section 6 of SAFEMA read as under:-
| PMLA |
SAFEMA |
| Sec. 5. Attachment of property involved in money-laundering (1) Where the Director or any other office officer not below the rank of Deputy Director authorized by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that – (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed. Sec. 25. Appellate Tribunal “The Appellate Tribunal constituted under sub-section (1) of section 12 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act,1976 (13 of 1976) shall be the Appellate Tribunal for hearing appeals against the orders of the Adjudicating Authority and the other authorities under this Act.” |
Sec. 6. Notice of forfeiture (1) If, having regard to the value of the properties held by any person to whom this Act applies, either by himself or through any other person on his behalf, his known sources of income, earnings or assets, any other information or material available to it as a result of action taken under section 18 or otherwise, the competent authority has reason to believe (the reasons for such belief to be recorded in writing) that all or any of such properties are illegally acquired properties. it may serve a notice upon such person (hereinafter referred to as the person affected) calling upon him within such time as may be specified in the notice, which shall not be ordinarily less than thirty days, to indicate the sources of his income, earnings or assets, out of which or by means of which he has acquired such property, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties, as the case may be, should not be declared to be illegally acquired properties and forfeited to the Central Government under this Act. (2) Where a notice under sub- section (1) to any specifies any property as being held on behalf of such person by any other person. a copy of the notice shall also be served upon such other person. |
copy of the notice shall also be served upon such other person.
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14. The Hon"ble Supreme Court in the case of„P.P. Abdulla v. Competent Authority', (2007) 2 SCC 510, while considering an order of confiscation under the SMUGGLERS AND FOREIGN EXCHANGE MANIPULATORS (FORFEITURE OF PROPERTY) ACT, 1976 has held:
"7. Learned counsel submitted that it has been expressly stated in Section 6(1) that the reason to believe of the competent authority must be recorded in writing. In the counter-affidavit it has also been stated in para 8 that the reasons in the notice under Section 6(1) were recorded in writing. In our opinion this is not sufficient. Whenever the statute requires reasons to be recorded in writing, then in our opinion it is incumbent on the respondents to produce the said reasons before the court so that the same can be scrutinised in order to verify whether they are relevant and germane or not.This can be done either by annexing the copy of the reasons along with the counter-affidavit or by quoting the reasons somewhere in the counter-affidavit. Alternatively, if the notice itself contains the reason of belief, that notice can be annexed to the counter-affidavit or quoted in it. However, all that has not been done in this case."
15. The Article 141 of the Constitution of India provides that that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The Apex Court interpreted that "all courts" includes Tribunal and even the authorities. It is immaterial whether the law declared by the Hon"ble Supreme Court is in one enactment or the other enactment, but the ratio of that judgment, whether passed in any of the enactments is binding. Hence, the material aspect is the declaration of the law on a particular point or issue, and not the enactment in which the law was declared.
16. If the Legislature incorporated identical language in the analogous provisions of statutes, the law declared by the Supreme Court on such language would be binding on the Court and authority where such point/ issues were raised and argued. Thus, there is no force in the submission made on behalf of ED.
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17. a) In Kranti Associates v. Masood Ahmed Khan (2010) 9 SCC 496, the legal position was summarized as under:
a. In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.
b. A quasi-judicial authority must record reasons in support of its conclusions.
c. Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.
d. Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.
e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations.
f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. g. Reasons facilitate the process of judicial review by superior Courts.
h. The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice. i. Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.
j. Insistence on reason is a requirement for both judicial accountability and transparency.
k. If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.
l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or `rubber-stamp reasons' is not to be equated with a valid decision making process.
m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harvard Law Review 731-737).
n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya vs. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions".
o. In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Process".
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b) In Income Tax Officer v. LakhmaniMewaldas 1976 (3) SCR 956, the Supreme Court held that there should be a live link or close nexus" between the material before the ITO and the formation of his belief that income had escaped assessment. More recently, in Aslam Mohd Merchant v. Competent Authority (2008) 14 SCC 186, the entire legal position has been explained elaborately by the Supreme Court as under:
28. It is, however, beyond any doubt or dispute that a proper application of mind on the part of the competent authority is imperative before a show cause notice is issued. Section 68-H of the Act provides for two statutory requirements on the part of the authority viz: (i) he has to form an opinion in regard to his `reason to believe'; and (ii) he must record reasons therefor. Both the statutory elements, namely, `reason to believe' and `recording of reasons' must be premised on the materials produced before him. Such materials must have been gathered during the investigation carried out in terms of Section 68-E or otherwise. Indisputably therefore, he must have some materials before him. If no such material had been placed before him, he cannot initiate a proceeding. He cannot issue a show cause notice on his own ipse dixit. A roving enquiry is not contemplated under the said Act as properties sought to be forfeited must have a direct nexus with the properties illegally acquired.
29. It is now a trite law that whenever a statute provides for `reason to believe', either the reasons should appear on the face of the notice or they must be available on the materials which had been placed before him. We have noticed hereinbefore that when the authority was called upon to disclose the reasons, it was stated that all the reasons were contained in the show cause notices themselves. They, however, in our opinion, do not contain any reason so as to satisfy the requirements of sub-section (1) of Section 68H of the Act.
18. The counsel for respondent - ED has referred the decision of Biswanath Bhattacharya versus Union of India & Others. The same is not applicableto the facts of the issue in hand as whether the party is entitled to receive the copy of reasons to believe or not. If yes, at what stge. The other allied issues are not involved at this stage of the appeals. All the appellants at this are requesting for copies thereof.
19. In the said case referred, the accused was under detention in 1976. His wife replied to the said notice without complaining of non-supply of
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reasoning. After his release the respondent No.1 gave a further rejoinder by adopting what had been said by his wife. The authority did not proceed against him until he was served with the reasoning in 1988. The respondent No. 1 was also afforded opportunity to deal with the reasoning in his rejoinder. The competent authority after affording him opportunity of hearing passed a detailed reasoned order. He preferred an appeal. The appeal was allowed in part by a detailed reasoned order rendered by the court who held that in view of said conduct, it was held that the fundamental right of the respondentNo.1 was not infringed. In the background of the above-said facts, the contention of the appellant was rejected as per the finding arrived in para 19 of the judgement which reads as under:
"We reject the submission of the appellant for the following reasons. Firstly, there is no express statutory requirement to communicate the reasons which led to the issuance of notice under Section 6 of the Act. Secondly, the reasons, though not initially supplied along with the notice dated 4.3.1977, were subsequently supplied thereby enabling the appellant to effectively meet the case of the respondents. Thirdly, we are of the opinion that the case on hand is squarely covered by the ratio of Narayanappa case. The appellant could have effectively convinced the respondents by producing the appropriate material that further steps in furtherance to the notice under Section 6 need not be taken. Apart from that, an order of forfeiture is an appealable order where the correctness of the decision under Section 7 to forfeit the properties could be examined. We do not see anything in the ratio of Ajantha Industries case which lays down a universal principle that whenever a statute requires some reasons to be recorded before initiating action, the reasons must necessarily be communicated."
20. In another decision in the case of BRIZO REALITY CO. vs. ADITYA BIRLA FINANCE passed on 20.6.2014 by the High Court in WP(L) no. 1575/2014, which is being referred by the respondent in order to give reply. The said decision is also on different facts as the petitioner in that case filed the writ petition to quash the provisional attachment order dated 31.1.2014 i.e. a show cause notice issued dated 29.4.2014 by the Adjudicating Authority. The Hon"ble High Court after discussing Section 8(1) of the PMLA,2002 rejected the writ petition mainly on the reason that the Adjudicating Authority along with the notice has sent the copy of
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complaint and copy of provisional attachment order who has yet to consider the material placed on record and after hearing of both parties, is to decide as to whether the provisional attachment is to be confirmed or not. Therefore, merely on the basis of averments that the notice u/s 8(1) does not contain the reason to believe, the prayer for quashing of proceedings cannot be allowed as it was pre-matured petition. However, in the present case,the plea is only to extent of supply of copy. The validity of recordal is not being decided at this stage. It is pertinent to mention that the judgement given by the Hon"ble Supreme Court in the case of „P.P. Abdulla v. Competent Authority'(Supra) has not been referred or discussed.
21. This Tribunal is of the view that in the similar facts and circumstances as in the Bishwanath (Supra) or Brizo (Supra), the party may or may not be able to succeed in their relief for quashing the final order, merely on sole ground by stating since the copy of reasons to believe is not served, therefore, the final order be quashed.The proceeding is main factor. In the present appeals, the appellants have requested the ED to supply the copy of reason to believe at least during the pendency of appeals, who refused to accede the request. Thus, the decision referred does not help the case of respondent.
22. This Tribunal at this stage is not deciding the issue of validity of reasons to believe or whether recordal of reasons to believe prior to passing of provisional attachment order separately or along with the PAO or at the stage of issuance of notice under section 8(1) of the Act. The said issue has already been argued in other appeals, the same would be considered and decided on merit. In the present, the only issue is with regard to supply of copies thereof. The validity of recording may or may not be challenged by the appellants after supplying copies of the same.
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23. In paras 74 to 77, the Double Bench of Hon"ble High Court of Delhi in its judgement J. Sekar Petitioner v. Union Of India & Ors. S. 2018 SCC Online Del 6523, has held that:
74. The Court, therefore, holds as under as regards the submissions of the learned counsel for the Petitioners with regard to the constitutionality of the second proviso to Section
5(1) PMLA:
(i) Although the second proviso to Section 5(1) states that the property has to be „involved in money-laundering" and section 5(1) states that mere possession of proceeds of crime is sufficient, the Court does not see any conflict in these expressions. When the definition in Section 3 PMLA is read with Section 2(1)(v) and the Explanation thereto, it becomes clear that the property which constitutes „proceeds of crime" is the property involved in money-laundering.
(ii) The reasons to believe at every stage must be noted down by the officer in the file.
(iii) While the reasons to believe recorded at the stage of passing the order of provisional attachment under Section 5(1) PMLA may not be forthwith at that stage communicated to the person adversely affected thereby, the reasons as recorded in the file have to accompany the complaint filed by such officer within 30 days before the AA under Section 5(5) PMLA.
(iv) A copy of such complaint accompanied by the reasons, as found in the file, must be served by the AA upon the person affected by such attachment after the AA adds its own reasons why he prima facie thinks that the provisional attachment should continue.
75. There are two reasons to believe. One recorded by the officer passing the order under Section 5(1) PMLA and the other recorded by the AA under Section 8(1) PMLA. Both these reasons to believe should be made available to the person to whom notice is issued by the AA under Section 8(1) PMLA. The failure to disclose, right at the beginning, the aforementioned reasons to believe to the noticee under section 8(1) PMLA would not be a mere irregularity but an illegality. A violation thereof would vitiate the entire proceedings and cause the order of provisional attachment to be rendered illegal.
76. The Court disagrees with the learned counsel for the Union of India that there is no mandatory requirement, under section 8(1) PMLA, to communicate to the noticee the reason to believe. On a collective reading of Section 5(1) PMLA and Section 8(1) PMLA, such an interpretation is contraindicated and cannot satisfy the requirement of what the AA is supposed to do under Section 8(2) PMLA, viz. to consider the reply of the noticee, give them and the Director a hearing and „take into account" all relevant materials placed on record.
77. Although at the stage of issuance of notice under Section 8(1) PMLA all the relevant material on record which constituted the basis for reasons to believe may not be made available, if the noticee demands to see those materials on record, the AA is
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bound to make available all those materials on record to them. It is most likely that without such access to such material on record, the noticee will be unable to file an effective reply. Therefore, there cannot be any denial of access to the noticee of the materials on record. If there is any sensitive material, it can probably be redacted before issuing copies thereof, after nothing the reasons for such redaction in writing in the file. But even such redacted material will have to be nevertheless shown to the noticee.
24. Though the operation of the aforesaid judgment has been stayed by the Hon"ble Supreme Court, the above dicta cannot cease to be law of precedential value and binding in other matters i.e. third parties, in view of settled law. One of such decision reported as vide Shree Chamundi Mopeds Ltd. v. Church of South India Trust Assn., (1992) 3 SCC 1 (para 10).
25. A division bench of the Hon"ble Calcutta High Court in Niranjan Chatterjee v. State of West Bengal &Ors., 2007 SCC OnLine Cal 283 after relying on the aforesaid decision has held that:
"17. After hearing the learned Counsel for the parties and after going through the aforesaid position of fact, we find that the Supreme Court by those interim order has, no doubt, stayed the operation of the order of the Division Bench of this Court by directing the parties to maintain status quo but at the same time, has even restrained the State from inducting the third parties on the lands which were the subject matters before the Apex Court. Such interim order is binding upon the parties to the proceedings but the law is equally settled that by mere passing of an interim order staying the operation of a judgment with certain further conditions, the existence of the said judgment is not wiped out and at the same time, for such interim order inter parties, the authority of a decision as a precedent is never undermined. Unless a decision is set aside by the Superior Court, the said decision remains effective as a precedent though may not be binding upon the parties to the proceeding where the superior Court has granted interim order.
20. Therefore, the effect of the order of stay in a pending appeal before the Apex Court does not amount to "any declaration of law" but is only binding upon the parties to the said proceedings and at the same time, such interim order does not destroy the binding effect of the judgment of the High Court as a precedent because while granting the interim order, the Apex Court had no occasion to lay down any proposition of law inconsistent with the one declared by the High Court which is impugned."
[Emphasis Supplied]
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26. Thus, it is wrong to allege on behalf of respondent - ED that the said judgement rendered by the Hon"ble Division Bench of the Delhi High Court cannot be relied upon or not applicable. Unless it is set-aside by the Supreme Court, the same remains effective. The same may not be binding upon the parties. Thus, the said judgement passed by the Division Bench in the case of J. Sekar (Supra) has a binding effect to this Tribunal.
27. During the course of hearing, the learned counsel appearing on behalf of respondent has produced the photocopy of reason to believe to this Tribunal who also tried to explain that major part of reason to believe are incorporated in the provisional attachment order, therefore, there is no need to supply the copy of reasons to believe to the appellants. Level playing field
28. The parties in every case are entitled to apply the principles of equal opportunity to address their respective cases on merit before court regardless of any stringent law. A level playing field is concept of fairness where each party has an equal chance to succeed. Under this concept, one party cannot take advantage against other party (who is unheard)in the absence of reasons of allegations and to stop to prove its innocence. Unfairness can never be shown to any party not to know allegations raised against him by any agency/authority/tribunal, otherwise it would be called one sided action. Thus, each party should be given equal chance to succeed, even the party may be on weak wickets. Thus, I am of the considered view that the appellants are entitled to know the allegations against them in the reason to believe and are entitled to challenge the same in accordance with law. Mere denial to supply copy shall be treated as injustice to the parties and curtail the fair defense and trial in the matter.
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29. In the present appeals, counsel for the respondent and IO have confirmed before this Tribunal that major part of the reasons to believe are incorporated in order of provisional attachment, then where is the difficulty. Thus, I direct that copy of the reasons to believe be supplied within one week to each of the appellants who shall be entitled to file the response, if any, three weeks thereafter.
30. List the above-mentioned appeals for consideration on 8thApril,
2019.
(Justice Manmohan Singh) Chairman
New Delhi,
25th February, 2019
„skb"
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