Delhi High Court
Joint Director , Directorate Of ... vs Ritu Khaitan & Anr on 8 May, 2019
$~46
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Judgment: 08.05.2019
+ LPA 117/2019 & CM APPL. 7787-7788 & 20677-20678/2019
JOINT DIRECTOR , DIRECTORATE OF
ENFORCEMENT & ANR ..... Appellants
Through: Ms. Maninder Acharya, ASG with
Mr. Anurag Ahluwalia, Ms. Nidhi
Mohan Parashar & Mr. Umang Kumar
Singh, Advocates
versus
RITU KHAITAN & ANR ..... Respondents
Through: Mr. P.V. Kapur, Sr. Advocate with
Ms. A.T. Patara & Mr. Aditya,
Advocates
CORAM:
HON'BLE MR. JUSTICE G.S. SISTANI
HON'BLE MS. JUSTICE JYOTI SINGH
G.S. SISTANI, J. (ORAL)
1. Challenge in this appeal is to the order dated 10.12.2018 passed by the
learned Single Judge of this Court. Some necessary facts which are required
to be noticed for disposal of this appeal are that the respondents herein had
challenged an order passed by the Appellate Tribunal constituted under the
provisions of the Prevention of Money Laundering Act, 2002 (hereinafter
referred to as „PMLA‟ in short). Another important factor to be noticed is
that one of the parties to the proceedings being the husband/father of the
respondent (petitioner in writ petition) filed a review petition before the
Appellate Tribunal, which is still pending.
2. The petitioners in the writ petition had filed an application seeking a
direction to the appellants herein to release the jewellery, which was seized
during the search operation of 22.09.2014 conducted on the respondents
herein. The petitioners/respondents herein sought the release of the
jewellery in lieu of security by way of a Fixed Deposit of Rs. 1,23,22,317/-
in the case of respondent No. 1 and Rs. 29,64,387/- in the case of respondent
No.2. This amount was as per the valuation of the jewellery given by the
appellants herein. Mrs. Acharya, learned Additional Solicitor General
submits that the filing of a writ petition by two parties and filing of a review
petition and getting the matter adjourned sine die is part of a larger device of
the parties to delay the matter and even otherwise a single order cannot be
split and the parties cannot be permitted to take advantage in the manner
which is being sought. Additionally, it is contended before us that there is
no provision under the PMLA for return of seized articles, even on
furnishing of a security.
3. Mr. Kapur, learned Senior Counsel appearing for the respondents
submits that no prejudice would be caused to the rights of the appellant and
all legal issues sought to be raised in the writ petition as also in the review
petition as well as rights and contentions of the parties may be kept open.
Mr. Kapur also submits that the petitioners (respondents herein) have not
sought release of the jewellery unconditionally, but have agreed to protect
the rights of the Department by furnishing a Fixed Deposit receipt as per the
valuation of the Department. He also relies on Section 9 and 10 of the
PMLA in support of his contention that should the appellant succeed, they
would be well within their rights to liquidate the amount. It is also
contended by Mr. Kapur that since no notice was issued to the respondents
herein under Section 17(4) or Section 20 of the Act and also that they were
not parties to the adjudicating proceedings, the jewellery could in any case
not be retained by the appellants for a period of more than 180 days, as per
Section 20(3), which is reproduced below:
"20. Retention of property.--
(1) xxx xxx xxx
(2) xxx xxx xxx
(3) On the expiry of the period specified in sub-section (1), the
property shall be returned to the person from whom such
property was seized unless the Adjudicating Authority permits
retention of such property beyond the said period."
4. We have heard the learned counsel for the parties, and have examined
the order passed by the learned Single Judge, the operative part of which
reads as under:
"10. Prima facie, the contention advanced by the petitioners
appears to be merited as admittedly no order of seizure of
jewellery has been passed against the petitioners.
11. As noted above, there appears to be no dispute that certain
jewellery seized on 22.09.2014 belongs to the petitioners. This
is also noted by the Appellate Tribunal in the impugned order.
12. Admittedly, after the seizure was affected under Section
17(1) of the Act, the respondents were required to seek an
extension under Section 20 of the PMLA if the respondents
required to retain the seized property beyond the period of 180
days. It was also incumbent upon the respondents to make an
application under Section 17(4) of the Act, which would be
required to be adjudicated by the Adjudicating Authority in
terms of Section 8 of the PMLA. Section 8(1) of the PMLA
also requires that notice of not less than 30 days be issued to be
person from whose the possession of the property is recovered,
calling upon them to show cause why the property could not be
treated as properties involved in money laundering. The
Adjudicating Authority, thereafter, is required to pass an order
after considering the reply, if any, submitted by such a person.
13. In the present case, it is not disputed that no notice in
respect of the subject jewellery (seized jewellery belonging to
the petitioners) has been issued to them.
14. However, at this stage, it is not necessary for this Court to
dwell further into the said issue as the prayers made by the
petitioner are of a limited import. The petitioners merely seek
conditional return of the jewelleries seized by the respondents
on them furnishing security for full value of the same.
Considering above, this Court finds no reason to reject this
present application, while ensuring that the interest of the
respondents are duly protected.
15. Accordingly, the respondents are directed to return the
jewellery of the value belonging to petitioner nos. 1 and 2
(jewellery valued at Rs. 1,23,22,317/- in case of petitioner no. 1
and Rs. 29,64,387/- in case of petitioner no. 2). This shall be
released to petitioners on them furnishing (a) fixed deposit of
the aforesaid amount to the respondents; and (b) an undertaking
to this Court that they shall not transfer, part with, encumber or
in any manner alienate the jewellery so returned. It is clarified
that the attachment with regard to the jewellery shall continue
and although, the petitioners may be placed in possession of the
said jewellery the same would be considered as custodia legis."
5. We do not find any force in the submissions made by the learned ASG
in view of the fact that admittedly the respondents herein are not party to the
proceedings initiated against the husband/father of the respondents herein
respectively. We are also of the view that the appellants have not sought any
extension under Section 20(3) of the PMLA for further retention of the
jewellery. Learned ASG submits that a notice was issued subsequently and
the effect of which would be decided by the Single Judge.
6. We are prima facie satisfied that no prejudice in any manner will be
caused to the appellant if the jewellery is released, for the reason that before
the Single Judge, the respondents have volunteered to furnish a fixed deposit
receipts in the amount Rs. 1,23,22,317/- and Rs. 29,64,387/- respectively
and also furnish an undertaking that they would not transfer, part with or
encumber in any manner or alienate jewellery returned to them and this
undertaking has been accepted by the Court. We are informed that the
undertaking has been furnished. Additionally, we direct the Department to
take pictures of the jewellery in the presence of the respondents herein and
the pictures would be duly signed by both the parties for the purposes of
proper identification. The jewellery would be returned to the respondents
against a proper receipt to be issued by the appellants.
7. We find no grounds to entertain this appeal.
8. The appeal is accordingly dismissed.
9. The order be complied within 10 days.
G.S.SISTANI, J
JYOTI SINGH, J
MAY 08, 2019
rd
