A.M. Khanwilkar, J.

1. Heard Counsel for the parties at length. By consent, we are finally disposing of the three appeals by this common Judgment and Order as the questions involved therein are overlapping.

2. These appeals are directed against the Judgment and Order passed by the Appellate Tribunal under Prevention of Money Laundering Act, New Delhi dated November 23, 2009 in appeals filed by the Appellants herein to challenge the order of the Adjudicatory Authority at New Delhi on Complaint Nos. 1,2,3 and 4 of 2007 dated 1st June, 2007, which in turn confirms the provisional attachment order passed by the Deputy Director, Mumbai Zonal Office, Directorate of Enforcement against the Appellants herein under section 5(1) of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the of 2002 for the sake of brevity) read with Notification No. GSR.441(E)dated 1st July, 2005.

3. Briefly stated, sometime on 8th December, 2006, a complaint was filed by the Mumbai Zonal Office of the Narcotic Control Bureau(for short the NCB) bearing Complaint No. NDPS Spl. Case 192/2006. As a consequence of the said complaint, the Deputy Director, incharge of Mumbai Zonal Office, issued the impugned provisional attachment orders against each of the Appellants. He not only took into account the copy of the abovesaid complaint but also statements of bank accounts, report forwarded by the NCB and statements of the Appellants. After considering the material available with him he was of the view that action against the Appellants and others ought to proceed under the provisions of the of 2002. For, he had reason to believe that the Appellants herein as well as others were in possession of properties of crime. Further, they had directly or indirectly indulged in money laundering. They had invested the money received by them through the specified Demat account held with Infrastructure Leasing and Financial Services Ltd., Mumbai. Further, he was of the opinion that the stated properties were likely to be concealed, transferred or dealt with in such a manner so as to frustrate proceedings relating to confiscation under Chapter III of the of 2002. Accordingly, the said Authority in exercise of powers under the of 2002 issued separate provisional attachment orders against each of the appellants herein, as also other persons involved in the transaction. Provisional attachment orders served on the respective appellants read thus:

IN APPEAL NO.527 OF 2010

PROVISIONAL ATTACHMENT ORDER-1/2007

(under sub-section(1) of Section 5 of the Prevention of Money

Laundering Act, 2002)

In exercise of authorization dtd.07.02.2007 issued by the Director of Enforcement under sub-section (1) of section 5 of the Prevention of Money Laundering Act, 2002 (15 of 2003) read with Notification No.GSR.441(E) dated 1st July, 2005, I, ATUL VERMA, Deputy Director, incharge of Mumbai Zonal Office make the following order:

WHEREAS on the basis of material placed before me such as copy of complaint No.NDPS Spl.Case No.192/2006 dtd. 08.12.2006 filed by the Mumbai Zonal Office of the Narcotics Control Bureau, statement of bank accounts, report forwarded by the Narcotics Control Bureau and statements of Shri Radhamohan Lakhotia in case of ECIR/04/MZO/07 dtd. 24.01.07 and on its examination, I have reason to believe-

(a) the Shri Umesh Bangur, Bldg. No.11-B, Flat No.501, 502, Kalpak Estate, Antophill, Mumbai -400 037 is in possession of proceeds of crime; that part of the said money has been parked with Shri Radhamohan Lakhotia, that the said Radhamohan Lakhotia had invested the money so received in shares through the Demat Account No.1601480000009377 held with Infrastructure Leasing and Financial Services Ltd., Mumbai which is more particularly detailed below;

(b) that the said Shri Umesh Bangur has been charged of having committed the schedule offence under section 23 & 27 (a) of the NDPS Act, 1985 in Complaint No.NDPS Spl. Case No.192/2006 dtd. 08.12.2006 filed by the Mumbai Zonal Office of the Narcotics Control Bureau; and

(c) that the said Shri Umesh Bangur has invested the proceeds of crime through Shri Radhamohan Lakhotia for the purpose of laundering to project the said proceeds as untainted property; that the properties detailed below are likely to be concealed, transferred or dealt with in such a manner that, I have reason to believe that if no Provisional Attachment Order is passed in this case at this crucial stage, it may result in frustrating proceedings relating to confiscation under Chapter III of the Prevention of Money Laundering Act, 2002(15 of 2003) NOW THEREFORE, I, order that the properties mentioned in the Annexure to this order are provisionally attached for a period of 90(ninety days) and further order that you shall not remove, part with or otherwise del with such properties without my previous permission.

Details of Properties

Movable properties Immovable Properties

1. Shares held by Shri Radhamohan Lakhotia in

the Demat Account No. 1601480000009377 held

with Infrastructure Leasing enclosed annexure. Nil

SEALED AND SIGNED ON THIS 9TH DAY OF MARCH, 2007

Sd/-

09.03.2007

(ATUL VERMA)

DEPUTY DIRECTOR

MUMBAI ZONAL OFFICE

DIRECTORATE OF ENFORCEMENT,

2nd floor, Mittal Chambers,

Nariman Point, Mumbai.

SEAL

To

(1) Shri Umesh Bangur,

Bldg.No.11-B, Flat No.501,502,

Kalpak Estate, Antop hill,

Mumbai 400 037.

(2) Shri Radhamohan J. Lakhotia,

A:4/502, Alak CHS Ltd.,

Sector-19 A, Nerul,

Navi Mumbai -400 706.

(3) M/s. Infrastructure Leasing & Financial

Services Ltd.(DP:14800)

IL & FS House, Plot No.14,

Raheja Vihar, Chandivali,

Andheri(East),

Mumbai-400 072.

Copy to:-

(1) Shri R.M.Sharma, Chairperson, Adjudicating Authority Chairperson, Adjudicating Authority, Room No.408, A-Wing, 4th Floor, Shastri Bhavan, Dr. Rajendra Prasad Road, New Delhi-110001.

(2) The Director, Directorate of Enforcement, Head Quarters, NEW

Delhi. (3) The Additional Director (PMLA), Directorate of Enforcement, Mumbai.

ANNEXURE TO ATTACHMENT ORDER

Sr. No. Name of the company Date of acquisition No. of shares Purchase value

1. Peerless Shipping 05.06.06 2000 304660

2. Glenmark Jan-Feb 07 2275 1342250

Total 1646910

Note:

The purchase value of Rs.1646910/- is inclusive of the profit derived out of disposal of shares purchased earlier and disposed.

IN APPEAL NO.528 OF 2010

PROVISIONAL ATTACHMENT ORDER-2/2007

(under sub-section(1) of Section 5 of the Prevention of Money

Laundering Act, 2002)

In exercise of authorization dtd.07.02.2007 issued by the Director of Enforcement under sub-section (1) of section 5 of the Prevention of Money Laundering Act, 2002 (15 of 2003) read with Notification No.GSR.441(E) dated 1st July, 2005, I, ATUL VERMA, Deputy Director, incharge of Mumbai Zonal Office make the following order:

WHEREAS on the basis of material placed before me such as copy of complaint No.NDPS Spl.Case No.192/2006 dtd.08.12.2006 filed by the Mumbai Zonal Office of the Narcotics Control Bureau, statement of bank accounts, report forwarded by the Narcotics Control Bureau and statements of Shri Radhamohan Lakhotia in case of ECIR/04/MZO/07 dtd. 24.01.07 and on its examination, I have reason to believe-

(a) the Shri Umesh Bangur, Bldg. No.11-B, Flat No.501, 502, Kalpak Estate, Antophill, Mumbai -400 037 is in possession of proceeds of crime; that part of the said money has been parked with Shri Radhamohan Lakhotia, that the said Radhamohan Lakhotia had invested the money so received in shares through Shri Radhamohan J. Lakhotia(HUF) in the Demat Account No.16014800000048216 held with Infrastructure Leasing and Financial Services Ltd., Mumbai which is more particularly detailed below;

(b) That the said Shri Umesh Bangur has been charged of having committed the schedule offence under section 23 & 27 (a) of the NDPS Act, 1985 in Complaint No.NDPS Spl. Case No.192/2006 dtd. 08.12.2006 filed by the Mumbai Zonal Office of the Narcotics Control Bureau; and

(c) that the said Shri Umesh Bangur has invested the proceeds of crime through Shri Radhamohan Lakhotia for the purpose of laundering to project the said proceeds as untainted property; that the properties detailed below are likely to be concealed, transferred or dealt with in such a manner that, I have reason to believe that if no Provisional Attachment Order is passed in this case at this crucial stage, it may result in frustrating proceedings relating to confiscation under Chapter III of the Prevention of Money Laundering Act, 2002(15 of 2003)

NOW THEREFORE, I, order that the properties mentioned in the Annexure to this order are provisionally attached for a period of 90(ninety days) and further order that you shall not remove, part with or otherwise deal with such properties without my previous permission.

Details of Properties

Movable properties Immovable Properties

1. Shares held by Shri Radhamohan

Lakhotia in the Demat Account No.

16014800000048216 held with

Infrastructure Leasing enclosed annexure. Nil

SEALED AND SIGNED ON THIS 9TH DAY OF MARCH, 2007

Sd/-

09.03.2007

(ATUL VERMA)

DEPUTY DIRECTOR

MUMBAI ZONAL OFFICE

DIRECTORATE OF ENFORCEMENT,

2nd floor, Mittal Chambers,

Nariman Point, Mumbai.

Seal

To

(1) Shri Umesh Bangur,

Bldg.No.11-B, Flat No.501,502,

Kalpak Estate, Antop Hill,

Mumbai 400 037.

(2) Shri Radhamohan J. Lakhotia,

9 fa527-529.sxw

A:4/502, Alak CHS Ltd.,

Sector-19 A, Nerul,

Navi Mumbai -400 706.

(3) M/s. Infrastructure Leasing & Financial(in respect of shares at

Services Ltd.(DP:14800) St.No.1-7 of Annexure)

IL & FS House, Plot No.14,

Raheja Vihar, Chandivali,

Andheri(East),

Mumbai-400 072.

(4) Franklyn Templrton Mutual Fund(in respect of 30000 units of

1st floor, Sakhar Bhavan, -Franklyn India Smaller Cos. Fund)

230, Backbay Reclamation,

Nariman Point,

Mumbai 400 021.

Copy to:-

(1) Shri R.M.Sharma, Chairperson, Adjudicating Authority Chairperson, Adjudicating Authority, Room No.408, A-Wing, 4th Floor, Shastri Bhavan, Dr. Rajendra Prasad Road, New Delhi-110001.

(2) The Director, Directorate of Enforcement, Head Quarters, NEW

Delhi.

(3) The Additional Director (PMLA), Directorate of Enforcement, Mumbai.

ANNEXURE TO ATTACHMENT ORDER

Sr. No. Name of the company Date of acquisition No. of shares Purchase value

1. Firstsource Solutions 30.01.07 136 8704

2. Glenmark 22.12.06 100 62452

3. Honeywell 23.02.07 75 127340

26.02.07 210 356132

285 483472

4. Idea Cellular 12.02.07 344 25456

5. Larsen & Toubro 26.06.06 50 105116

28.06.06 25 51522

18.07.06 50 10330

BONUS 125 0

250 166968

6. Power Finance Corp. 01.02.07 136 11560

7. Tata Consultancy 26.06.06 50 82788

BONUS 50 0

21.10.06 10 10993

110 93781

8. Mutual Fund Franklin India 13.01.06 30000 300000

Smaller Cos. 2199901736686

1152393

AND

PROVISIONAL ATTACHMENT ORDER-3/2007

(under sub-section(1) of Section 5 of the Prevention of Money

Laundering Act, 2002)

In exercise of authorization dtd.07.02.2007 issued by the Director of Enforcement under sub-section (1) of section 5 of the Prevention of Money Laundering Act, 2002 (15 of 2003) read with Notification No.GSR.441(E) dated 1st July, 2005, I, ATUL VERMA, Deputy Director, incharge of Mumbai Zonal Office make the following order:

WHEREAS on the basis of material placed before me such as copy of complaint No.NDPS Spl.Case No.192/2006 dtd.08.12.2006 filed by the Mumbai Zonal Office of the Narcotics Control Bureau, statement of bank accounts, report forwarded by the Narcotics Control Bureau and statements of Shri Radhamohan Lakhotia in case of ECIR/04/MZO/07 dtd. 24.01.07 and on its examination, I have reason to believe-

(a) the Shri Umesh Bangur, Bldg. No. 11-B, Flat No.501, 502, Kalpak Estate, Antophill, Mumbai -400 037 is in possession of proceeds of crime; That part of the said money has been parked with Shri Radhamohan Lakhotia, That the said Radhamohan Lakhotia had invested Rs,11 Lakhs with M/s. E.V.Homes, 303, Vardhaman Chambers, A-Wing, Sector 17, Vashi, Navi Mumbai 400 703 as advance towards purchase of Shop No.17, Millenium Park, No.22 & 23, Sector 25, Nerul, Navi Mumbai;

(b) that the said Shri Umesh Bangur has been charged of having committed the schedule offence under section 23 & 27 (a) of the NDPS Act, 1985 in Complaint No.NDPS Spl. Case No.192/2006 dtd. 08.12.2006 filed by the Mumbai Zonal Office of the Narcotics Control Bureau; and

(c) that the said Shri Umesh Bangur has invested the proceeds of crime through Shri Radhamohan Lakhotia for the purpose of laundering to project the said proceeds as untainted property; That the properties detailed below are likely to be concealed, transferred or dealt with in such a manner that, I have reason to believe that if no Provisional Attachment Order is passed in this case at this crucial stage, it may result in frustrating proceedings relating to confiscation under Chapter III of the Prevention of Money Laundering Act, 2002(15 of 2003)

NOW THEREFORE, I, order that the properties mentioned in the Annexure to this order are provisionally attached for a period of 90(ninety days) and further order that you shall not remove, part with or otherwise del with such properties without my previous permission.

Details of Properties

Movable properties Immovable Properties

1. Nil Shop No.17,

Millenium Park, No.

22 & 23, Sector 25,

Nerul, Navi Mumbai.

ISSUED AT MUMBAI ON THIS 9TH DAY OF MARCH, 2007

Sd/-

09.03.2007

(ATUL VERMA)

DEPUTY DIRECTOR

MUMBAI ZONAL OFFICE

DIRECTORATE OF ENFORCEMENT,

2nd floor, Mittal Chambers,

Nariman Point, Mumbai.

SEAL

To

(1) Shri Umesh Bangur,

Bldg.No.11-B, Flat No.501,502,

Kalpak Estate, Antop Hill,

Mumbai 400 037.

(2) Shri Radhamohan J. Lakhotia,

A:4/502, Alak CHS Ltd.,

Sector-19 A, Nerul,

Navi Mumbai -400 706.

(3) M/S EV Homes,

303, Vardhama Chambers,

A-Wing, Sector-17, Vashi,

Navi Mumbai- 400 703.

With further directions to M/s. E.V.Homes that if the title of this property is not transferred to Shri Radhamohan J. Lakhotia, no further transfer to be allowed and the advance of Rs.11 lakhs along with interest or the appreciated rate should not be parted with. Copy to:-

(1) Shri R.M.Sharma, Chairperson, Adjudicating Authority Chairperson, Adjudicating Authority, Room No.408, A-Wing, 4th Floor, Shastri Bhavan, Dr. Rajendra Prasad Road, New Delhi-110001.

(2) The Director, Directorate of Enforcement, Head Quarters, NEW Delhi. (3) The Additional Director (PMLA), Directorate of Enforcement, Mumbai.

IN APPEAL NO.529 OF 2010

PROVISIONAL ATTACHMENT ORDER-4/2007

(under sub-section(1) of Section 5 of the Prevention of Money

Laundering Act, 2002)

In exercise of authorization dtd.07.02.2007 issued by the Director of Enforcement under sub-section (1) of section 5 of the Prevention of Money Laundering Act, 2002 (15 of 2003) read with Notification No.GSR.441(E) dated 1st July, 2005, I, ATUL VERMA, Deputy Director, incharge of Mumbai Zonal Office make the following order:

WHEREAS on the basis of material placed before me such as copy of complaint No.NDPS Spl.Case No.192/2006 dtd.08.12.2006 filed by the Mumbai Zonal Office of the Narcotics Control Bureau, statement of bank accounts, report forwarded by the Narcotics Control Bureau and statements of Smt. Asha Lakhotia in case of ECIR/04/MZO/07 dtd. 24.01.07 and on its examination, I have reason to believe-

(a) the Shri Umesh Bangur, Bldg. No.11-B, Flat No.501, 502, Kalpak Estate, Antophill, Mumbai -400 037 is in possession of proceeds of crime; that part of the said money has been parked with Smt. Asha Lakhotia, that the said Smt. Asha Lakhotia had invested the money so received in shares held by the Demat Account No.1601480000009417 held with Infrastructure Leasing and Financial Services Ltd., Mumbai which is more particularly detailed below;

(b) that the said Shri Umesh Bangur has been charged of having committed the schedule offence under section 23 & 27 (a) of the NDPS Act, 1985 in Complaint No.NDPS Spl. Case No.192/2006 dtd. 08.12.2006 filed by the Mumbai Zonal Office of the Narcotics Control Bureau; and

(c) that the said Shri Umesh Bangur has invested the proceeds of crime through Shri Radhamohan Lakhotia for the purpose of laundering to project the said proceeds as untainted property; that the properties detailed below are likely to be concealed, transferred or dealt with in such a manner that, I have reason to believe that if no Provisional Attachment Order is passed in this case at this crucial stage, it may result in frustrating proceedings relating to confiscation under Chapter III of the Prevention of Money Laundering Act, 2002(15 of 2003)

NOW THEREFORE, I, order that the properties mentioned in the Annexure to this order are provisionally attached for a period of 90(ninety days) and further order that you shall not remove, part with or otherwise del with such properties without my previous permission.

Details of Properties

Movable properties Immovable Properties

1. Shares held by Smt. Asha Nil Smt. Asha Lakhotia.

Lakhotia in the Demat Account

No.1601480000009417 held with

Infrastructure Leasing and Financial

Services Ltd., Mumbai as per

enclosed annexure.

ISSUED AT MUMBAI ON THIS 9th DAY OF MARCH, 2007

Sd/-

09.03.2007

(ATUL VERMA)

DEPUTY DIRECTOR

MUMBAI ZONAL OFFICE

DIRECTORATE OF ENFORCEMENT,

2nd floor, Mittal Chambers,

Nariman Point, Mumbai.

Seal

To

(1) Shri Umesh Bangur,

Bldg.No.11-B, Flat No.501,502,

Kalpak Estate, Antophill,

Mumbai 400 037.

(2) Smt. Asha Lakhotia,

A:4/502, Alak CHS Ltd.,

Sector-19 A, Nerul,

Navi Mumbai -400 706.

(3) M/s. Infrastructure Leasing & Financial

Services Ltd.(DP:14800)

IL & FS House, Plot No.14,

Raheja Vihar, Chandivali,

Andheri(East),

Mumbai-400 072.

Copy to:-

(1) Shri R.M.Sharma, Chairperson, Adjudicating Authority

Chairperson, Adjudicating Authority, Room No.408, A-Wing, 4th Floor,

Shastri Bhavan, Dr. Rajendra Prasad Road, New Delhi-110001.

(2) The Director, Directorate of Enforcement, Head Quarters, NEW Delhi. (3) The Additional Director (PMLA), Directorate of Enforcement, Mumbai.

ANNEXURE TO ATTACHMENT ORDER

Sr. No.

Name of the company

Date of acquisition

No.of shares

Purchase value

1.

Peerless Shipping

24.05.06

3601

583145

2.

Glenmark

Nov06- Feb07

1620

931500

Total

1514645

4. As required by section 5(2) of theof 2002, the authorized Officer forwarded the copy of the Provisional Attachment orders alongwith the material in his possession to the Adjudicating Authority in the manner provided by the said provision. The Adjudicating Authority on receipt of the provisional attachment orders considered the question as to whether the provisional attachment orders were just and proper in exercise of power conferred under section 8(1) of theof 2002. The appellants and others, who were served with provisional attachment order filed their replies. The appellants had raised preliminary objection that the complaints were not maintainable and should be dismissed at the threshold. For, the sine qua non for proceeding against the person involved in money laundering is his connection with the proceeds of crime. If the same is absent as in the present case, the action is without authority of law. According to the appellants, the complaint as filed itself mentions that no proceeds of crime were generated by way of sale of 200 kgs. cocaine, which fact is reinforced from the communication of Superintendent of NCB, Mumbai dated 23rd January, 2007 addressed to the Assistant Director of Enforcement. The said communication clearly stated that the investigation carried out could not establish any link with the seized 200 kgs. cocaine and the funds transferred from Shri R.B.Modani to various individuals and companies in India. This was the principal argument canvassed before the Adjudicating Authority as can be discerned from the Judgment dated 1st June, 2007. The Adjudicating Authority examined the said argument and answered the same against the appellants. It found that the investigating machinery under the of 2002 and NDPS are distinct. Besides, the scope and object of the two enactments was entirely different. Therefore, the observations of the Superintendent of NCB, Mumbai would not bind the complainant under the of 2002. It then found that the proceeds of crime can be from the crime committed in earlier point of time and need not be limited to the actual offence regarding sale of 200 kgs. of cocaine, which is the subject matter of complaint under NDPS Act dated 8th December, 2006. It has placed reliance on section 23 to buttress this opinion. It has also adverted to section 2(u), which is very wide and would cover any person even if he is not accused of a scheduled offence or not directly involved in the commission of such scheduled offence. It opined that it is a notorious fact of which a judicial notice can be taken that in any illegal activity one gets paid after performing his role successfully. The cocaine was successfully loaded and smuggled out of Ecuador and reached India. The overseas persons have carried out their job successfully and must have received their payments. Such payments are not dependent on the final outcome of the operations i.e. whether cocaine has reached the indent final destination and has been sold or not. It has then analysed the factual position emerging from the record that M/s. OPM International Private Ltd. was regularly importing from Ecuador through the same route with the active involvement of the same persons and firms who are controlled by the close relatives and had close nexus with each other. It held that it was obvious that all payments in question were remitted from the account of R.P.Modani. Further, no reliable material was produced by the Appellants, who were obliged to do so, to persuade the authority to take the view much less prima facie view that money remitted from the account of Shri R.P.Modani was out of his legitimate earnings. On the other hand, the material on record would indicate that the amount in the account of Shri R.P.Modani was not legitimate. On this analysis the adjudicating authority opined that the money in question in the hands of the Appellants was proceeds of crime. It then adverted to three different stages before the provisional attachment property is finally confiscated under section 8(6) of the. Firstly, of issuance of provisional attachment by the Director or authorised officer of the Director in that behalf under section 5(1) of the. Secondly, confirmation of the provisional attachment by the Adjudicating Authority under section 8(3) of the. And lastly, final order of confiscation by the Adjudicating Authority under section 8(6) of the. The stage at which the present proceedings came up before the Adjudicating Authority was to confirm the provisional attachment order under Section 8(3) of the. It went on to observe that satisfaction of the Adjudicating Authority at this stage is limited one so as to enquire as to whether the property in question is ascribable to money laundering or not. It held that at this stage, it was unnecessary to assess or weigh the full evidence as is required at the stage of final decision, which may be necessary for the final order of confiscation to be passed under section 8(6) of the Act, which outcome would depend on the fact as to whether the accused has been found guilty or not. Having said this, the Adjudicating Authority then proceeded to examine the broad factual matrix of the case on hand, so as to find out as to whether there was reliable evidence forthcoming to support the plea of the appellants that the properties in their hand was out of the legitimate sources of the remittances of Rs.8.45 crores. It prima facie found that such evidence was lacking. As a concomitant to that finding, it would follow that the properties in the hands of the appellants was proceeds of crime. It also affirmed the opinion of the Deputy Director that he had reason to believe that the said proceeds of crime were likely to be concealed, transfered and dealt with in such a manner that may result in frustrating any proceedings relating to confiscation of such proceeds of crime. On that finding, the provisional attachment order was directed to be continued during the pendency of the proceedings relating to scheduled offence before the Court and to become final after the guilt of the person is proved in the trial and order of such trial Court becomes final. We think it apposite to reproduce the relevant extract of the decision of the Adjudicating Authorities, which reads thus:

13. There are four firms involved in this smuggling of Cocaine viz.

(i) M/s.OMP International Pvt.Ltd., Mumbai

(ii) Mega International Pvt.Ltd., Singapore

(iii)M/s.Royal Globel Exports Pvt.Ltd., Singapore, and

(iv) M/s. SSMS Exports, Ecudor, S.A. The Managing Director of M/s. OPM International Pvt.Ltd. Shri Omprakash, Nogaja(accused No.1) in NDPS Cases is a ral brother of one of the Directors of M/s. Royal Globel Exports Pvt.Ltd. Shri Manek Maheshwari. The other directors M/s. OPM International Pvt.Ltd., Shri Umesh Bangur (defendant herein and accused No.2) in NDPS Case is real brother of the wife of Shri Manek Maheshwari i.e. Smt.Madhubala Maheshwari and Smt. Trupti Modani, wife of Sri R.P.Modani. Smt. Madhubala Maheshwari and Smt. Nirmala Biyani @ Neelu (W/o Shri Shambu Prasad Biyani, another director of M/s. Royal Globel Exports Pvt.Ltd.) jointly hold 74% shares of M/s. OPM International Pvt.Ltd. Shri Manek Maheshwari of Royal Global Exports had paid the freight charges of the consignment of timber in which Cocaine was seized, inspite of the fact that the consignor was M/s. Mega International Pvt.Ltd., Shri Rasha Mohan Lakhotia and Smt. Asha Lakhotia w/o Shri Radha Mohan Lakhotia and Sister of Shri R.P.Modani.

14. R.P.Modani is residing at Bangkok and there is no proof that he has any business either at Singapore or in India. It is surprising that he has accounts NRE & NRO with Baharat Overseas Bank, Fort, Mumbai. His status as certified by the Embassy of India Bangkok vide certificate No.67/2006 dated 29.6.06 is that of an employee of M/s. Trupti International as is available from record Annexure-5. There are huge remittances of US$ 1106235 and Euro 514791 were effected from Singapore into the NRE account of R.P.Modani. Out of said amount US$ 634140 was remitted by M/s. Royal Globel Exports Pvt.Ltd., Singapore and the remaining on the self basis. It is surprising when there are no business relation existing between R.P.Modani and M/s. Royal Globel Exports Ltd., Singapore, they have remitted the money into the account of Shri R.P.Modani for business reasons. This warrants a reasonable inference that the remittances by M/s. Royal Globel Exports Ltd., and the self remittances from Singapore into the account of Shri Modani is nothing but generated out of proceeds of illicit trade of narcotics drugs in the guise of timber trade. We have already stated herein above about the link of M/s. Royal Globel Exports, Singapore to the companies engaged in the exports of timber to India. Over the money in the account of R.P.Modani, Umesh Bangur has a complete control. It is appeared on the record that according to this Umesh Bangur himself, blank signed cheque leaves were left with him by R.P.Modani and he had the freedom to fill in the names of payee as well as the amount payable to those payees in those blank signed cheques. Thus the funds in NRE account of R.P.Modani which according to Indian currency is Rs.8.45 crores was completely at the disposal of his brother in law Shri Umesh Bangur. It is also on record that the entire amount was transferred into the account of various firms and individuals for no economic reasons such as gifts, purchases of shares, etc. Thus the above suspected proceeds of crime having changing hands with Chartered Accountants S/Shri R.P.Modani, Umesh Bangur and Radha Mohan Lakhotia. In reply, it has been contended on behalf of accused that Shri R.P.Modani has earned over US$ one million out of salary and business which is equivalent to Rs.4.5 crores approx. Prma facie there is no reliable evidence therefore. Even assuming it to be reliable, the legitimate sources of the remittances of Rs.8.45 crores is not justified. This is more particularly so because of his other investments i.e. holding of 49% equity in M/s. Trupti International Bangkok, holding shares worth 74 lakh Thal Bath etc. as required. Further the documents at page 4 and 5 of the compilation of documents annexed to the reply of defendant no.2 Shri Radha Mohan J. Lakhotia indicate the uneconomic transaction i.e. Smt. Madhubala Maheshwari and Mohit Maheshwari have transferred US$ One lakh each to R.P. Modani which in turn was transferred by him to his NRE A/C, which was placed at the disposal of Umesh Bangur and it was further transferred in the guise of gifts etc. As an upshot of the above discussion and findings it is held that the properties, detailed in the respective provisional attachment orders, which are the subject matter of the above detailed respective complaints, are involved in money laundering, consequently this Authority hereby confirms the attachment of the properties detailed in the respective provisional attachment orders. Order that the attachment shall (a) continue during the pendency of the proceedings relating to scheduled offence before a Court; and (b) become final after the guilt of the person is proved in the trial Court and order of such trial Court becomes final.

5. Against this decision, the Appellants carried the matter in appeal before the Appellate Tribunal under Prevention of Money Laundering Act, New Delhi. The Appellate Authority upon considering the material on record and the relevant provisions answered the grounds of challenge against the Appellants. Before the Appellate Authority essentially two grounds were urged. First ground was that the order of provisional attachment and its confirmation by the Adjudicating Authority was on the basis of assumption and presumption only and no link or nexus has been established by the Authorities under the to prove that the properties attached are proceeds of crime and gifts/money received by the appellants are not from legitimate sources. Secondly, the Appellants have not been charged of having committed a Scheduled Offence which is a sine qua non to initiate proceedings for provisional attachment under section 5 of the. As aforesaid, on analysis of all aspects of the matters both these grounds were answered against the Appellants by the Appellate Authority vide Judgment and Order dated November 23, 2009. The Appellate Authority affirmed the opinion of the Deputy Director as well as that of the Adjudicating Authority and concluded that the conclusion reached by the said Authorities was founded on the material in possession of the Authorities that there was reason to believe and reason for such belief has been recorded in writing that the Appellants were in possession of proceeds of crime and the said proceeds of crime were likely to be concealed, transferred or dealt with in a manner which may result in frustrating the proceedings relating to confiscation of such proceeds of crime. Accordingly, Appellate Tribunal confirmed the opinion of the Deputy Director as well Adjudicating Authority regarding provisional attachment of the properties in question.

6. This common decision is the subject matter of challenge in the present appeals. Notably, besides the three appeals before this Court from the Judgment under appeal, it is noticed that six other appeals filed by the other persons who were common to the transaction in question were also decided by the same common Judgment. For the time being, only three appeals have been filed by the above named appellants. The grounds which were urged before the Appellate Tribunal have been reiterated even before this Court.

7. Before we proceed to examine the same, we would deal with the scope of present appeals. The present appeals have been filed under section 42 of theof 2002. It provides that any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court on any question of law or fact arising out of such order. Indeed, going by this provision, it may appear that the appeal will have to proceed on question of law as well as fact as if it is a first appeal. However, considering the scheme of enactment since the appellants have exhausted one statutory remedy of appeal before the Appellate Tribunal against the order passed by the Adjudicating Authority, the remedy of appeal under section 42 of theof 2002 is in the nature of Second Appeal. However, we would not express any final opinion on this plea pressed by the Respondents. At the same time, we are in agreement with the argument of the Respondent that the findings on facts recorded by the Deputy Director, which has been confirmed by the Adjudicating Authority and in the appeal before the Appellate Tribunal being concurrent findings on the point in issue, the same cannot be lightly brushed aside by this Court unless it is shown that the same are manifestly wrong or perverse.

8. Be that as it may, the second plea taken before the Appellate Tribunal by the Appellants is a pure question of law. In that, whether action under Section 5 of theof 2002 can be proceeded only against a person charged of having committed a Scheduled Offence. We shall straightaway address this question. In doing so, we may have to keep in mind some of the provisions of the enactment such as section 2(p), which defines the term money-laundering. It has the same meaning as assigned to it in Section 3 of the. The term person has been defined under section 2(s). It is an inclusive definition. It includes individual, who may be an offender of Scheduled Offence or otherwise. The term proceeds of crime

Which has some significance in construing section 5 of the Act, is defined under section 2(u). It 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. Once again, the expression used in this definition is any person and not limited to offender or person charged of having committed a Scheduled Offence. The definition of proceeds of crime refers to property derived or obtained as a result of criminal activities. The term property has been defined in section 2(v) to mean any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located. The definition clauses also defines scheduled offence to mean the offences specified in Part A of the Schedule; or the offences specified in Part B of the Schedule, if the total value involved in such offences is thirty lakh rupees or more. In so far as the case on hand is concerned, it is common ground that it is covered by paragraph-2 of the Part A of the Schedule. We shall now turn to section 5 of thearound which the entire argument revolves. Section 5 of theas was in force at the relevant time when the provisional attachment order was passed in March, 2007, the same read thus:

5. Attachment of property involved in money-laundering.

(1) Where the Director, or any other officer not below the rank of Deputy Director authorised by him 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;

(b) such person has been charged of having committed a scheduled offence; and

(c) 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 ninety days from the date of the order, in the manner provided in the Second Schedule to the Income-tax Act, 1961 (43 of 1961) and the Director or the other officer so authorised by him, as the case may be, shall be deemed to be an officer under sub-rule (e) of rule 1 of that Schedule: Provided that no such order of attachment shall be made unless, in relation to an offence under:

(i) Paragraph 1 of Part A and Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or

(ii) Paragraph 2 of Part A of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub-section (1) of section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985).

(2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed.

(3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 8, whichever is earlier.

(4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation.- -For the purposes of this sub-section, "person interested", in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property.

(5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority.

9. The argument of the Appellants proceeds in the context of wording of Sub-section (1) of Section 5 to the effect that the said action can be resorted to only against a person who has been charged of having committed a scheduled offence.

10. Admittedly, the appellants are not named as accused in any scheduled offence. However, action has been resorted to against the properties in question referred to in the Provisional Attachment Orders which were incidentally in the hands of or possession of the Appellants, on the basis that the same are proceeds of crime. For, the same had originated from or its acquisition could be directly traced to amount received by the appellant from the account of one R.P.Modani who is a non-resident Indian and residing in Bangkok since 1993-1994. He held NRE Account No.06-104-1181 and NRO account No.027 with Bharat Overseas Bank Ltd., Fort Branch, Mumbai. The activities of the said R.P.Modani has come under scanner after the seizure of 200 kgs. of cocaine. It is stated that the NCB is pursuing for registration of scheduled offence against him. That process has taken some time as R.P.Modani is resident of Bangkok. The said properties in the hands of the Appellants have been acquired by them out of the amounts received from the said accounts of R.P.Modani, who incidentally is related to the appellants.

11. The question is whether section 5 can be invoked against a person who is not named as an accused in the commission of a scheduled offence Sub-section (1) of Section 5 will have to be read as a whole conjointly with the other provisions of the already referred to hitherto, including section 8 thereof. Section 5 authorises the Director or any other officer not below the rank of Deputy Director authorised by Director for the purposes of the said section to resort to action of attachment of property if he has reason to believe and the reason of such belief has been recorded in writing arrived at on the basis of material in his possession. That action is intended to freeze the proceeds of crime, which property, is derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence or value of any such property until the criminal action for the scheduled offence is taken to its logical end against the accused named therein. The proceeds of crime means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located which has been derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence or the value of such property. The proceeds of crime may be or can be in possession of any person. Be it a person charged of having committed a scheduled offence or otherwise. In the case of any other person in possession of proceeds of crime, if it is also found that he has directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property, he shall be liable to be prosecuted for offence under section 3 read with section 4 of theof 2002 in addition to suffering the action of attachment of the proceeds of crime in his possession. Attachment of proceeds of crime in possession of any person(other than the person charged of having committed a scheduled offence) will, therefore, be legitimate within the sweep of Section 5 of theof 2002. In our opinion, the thurst of section 5 is to attach every property involved in money-laundering irrespective of whether it is in possession of the person charged of having committed a scheduled offence or any other person- provided however it must be shown to be proceeds of crime and further, that 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 the.

12. Going by the definition of person occurring in Section 2(s) and on conjoint reading of section 2(u), which also refers to any person; coupled with the purpose and intent for which the enactment has been brought into force, accepting the argument of the appellants would result in a pedantic approach and limiting the plenitude of action of attachment and confiscation of proceeds of crimes only in the hands of the persons who have been charged of having committed a scheduled offence and none else. Whereas, the has come into being to prevent money laundering and to provide for confiscation of property derived from or involved in, money laundering and for matters connected therewith or incidental thereto. It is the outcome of the Political Declaration and Global Programme ofion, as annexed to the resolution S-17/2 adopted by the General Assembly of the United Nations at its seventeenth special session on the twenty-third day of February, 1990. It has come into being also on account of the Political Declaration adopted by the Special Session of the United Nations General Assembly held on 8th to 10th June, 1998 which called upon the Members States to adopt national money-laundering legislation and programme. The term money-laundering has the same meaning assigned to it in Section 3 of theof 2002. It essentially refers to the tainted property which is derived from criminal activity relating to a scheduled offence. Such tainted property may travel at different levels or by way of circular transactions for being eventually projected as untainted property in the hands of or possession of person other than the person charged of having committed a scheduled offence. That involves direct or indirect involvement of person or persons other than the person(s) accused of having committed a scheduled offence. Such other person(s) may directly or indirectly attempt to indulge or knowingly assist or knowingly is a party or is actually involved in any process or activities connected with the proceeds of crime and projecting it as untainted property. If such is the nature of activity, the of 2002 is intended to deal with the same sternly. In a given case a person can be in possession of any proceeds of crime without his knowledge that the property held by him is tainted. That person may not face prosecution under section 3 of theof 2002. But even in his case, an order of attachment of the proceeds of crime can be invoked and later end up with confiscation thereof depending on the outcome of the criminal action against the person charged of having committed a scheduled offence. The action of attachment is not in relation to a person as such but essentially to freeze the proceeds of crime. The interpretation given by the Appellants, if accepted would be destructive of the said legislative intent. Suffice it to observe that the term person appearing in clause (a) of the Section 5(1) of thecannot be limited to the person who has been charged of having committed a scheduled offence. If that was the intent of the legislature, there was no reason to insert clause (a). In that case, the Legislature would have simply provided for any person who has been charged of having committed a scheduled offence and in possession of any proceed of crime, such proceeds of crime can be attached and confiscated, subject to fulfillment of the specified conditions.

13. The Appellants however, have placed emphasis on the expression such person used in clause (b) of section 5(1) of the. According to them, the word such is prefix to the word person in clause (b). That is not superfluous, but is ascribable to the person referred to in clause (a). Which means that even clause (a) deals with person who has been charged of having committed a scheduled offence. It is not possible to countenance this submission. We are conscious of the fact that penal provisions should be strictly construed. At the same time, we cannot overlook the language of section 5 as applicable at the relevant time. In our opinion, clause (a) refers to any person- whether he has been charged of having committed a scheduled offence or otherwise. The only requirement is that that person should be in possession of any proceeds of crime. The governing factor is possession of any proceeds of crime by a person. Taking any other view may defeat the legislative intent. In as much as, a person who has been charged of having committed a scheduled offence can successfully defeat the object of the enactment of attachment and confiscation of the proceeds of crime by transferring it to some other person who is not so involved with him in commission of stated scheduled offence. In our opinion, on fair reading of section 5 (1) read with section 8 of the Act, it postulates two categories of persons against whom action of attachment of property can be proceeded with. The first category is any person who is in possession of any proceeds of crime. A person falling in this category need not be a person, charged of having committed a scheduled offence. The second category is of a person who has been charged of having committed a scheduled offence. Besides, being charged of having committed a scheduled offence, that person is found to be in possession of any proceeds of crime. In either case, it is open to take recourse to section 5 of theif the specified Authority has reason to believe and reason for such belief is recorded in writing that the 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. Indeed, the proviso to subsection (1) as was applicable at the relevant time envisaged that no order of attachment can be made unless, in relation to the offence under paragraph 1 of Part A and Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973; or paragraph-2 of Part A of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under section 36(1) of NDPS Act, 1985. This proviso essentially is directed against the second category of person covered by sub-section (1), namely, person who has been charged of having committed a schedule offence. In other words, action of attachment of proceeds of crime in possession of the person charged of a scheduled offence can be proceeded only on forwarding of a report to Magistrate under section 173 of the Code or a complaint has been filed for taking cognizance of offence by the Special Court constituted under the NDPS Act. In so far as the person who is not named in the scheduled offence, there can be no question of filing of any report or complaint for taking cognizance. That stipulation has no application to the person who is not a person having been charged of a scheduled offence. The view that we propose to take is reinforced from the purport of section 3 and 4 of theof 2002. The same deal with the offence of money-laundering and punishment for money-laundering respectively. Both these provisions, even on strict construction, plainly indicate that the person to be proceeded for this offence need not necessarily be charged of having committed a scheduled offence. For, the expression used is whosoever. The offence of money-laundering under section 3 of theof 2002 is an independent offence. It is committed if any person directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property. Further, it would create a piquant situation as a person who is not charged of having committed a scheduled offence even if can be proceeded for offence of money laundering and even if such person is in possession of any proceeds of crime, no action of attachment and confiscation of the proceeds of crime can be resorted to qua him-albeit the proceeds of crime are in his possession. If the argument of the appellants were to be accepted, even the expression whosoever appearing in section 3 and 4 of thewill have to be limited to person who has been charged of having committed a scheduled offence. The object of the enactment of 2002 would be completely defeated by such approach. Besides, the view that we propose to take is reinforced also from the purport of section 8 of theof 2002. It provides that the Adjudicating Authority if has reason to believe that any person has committed an offence under section 3, may serve notice upon such person calling upon him to indicate his source of his income, earning or assets, out of which or by means of which he has acquired the property attached under section 5(1) of the. Once again, the legislature has unambiguously used the term any person and not person charged of having committed a scheduled offence. Indeed, any person referred to in this provision is a person who has committed an offence under section 3 of theof 2002. He may not necessarily be a person charged of having committed scheduled offence. The proviso to sub-section (1) thereof stipulates that where a notice under the said sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person. Suffice it to observe that even section 8 contemplates adjudication to be done by the Adjudicating Authority after provisional attachment order is passed under section 5 of theand upon receipt of complaint under section 5(5) of the. We are not referring to other provisions mentioned in the said section 8(1), as we are dealing only with the case arising under section 5 of the. Considering the above, we are of the considered opinion that there is no merit in the argument of the appellants that action under section 5 of thecould not have proceeded against them, as they were not charged of having committed a scheduled offence.

14. We would now refer to the argument of the Counsel for the Respondents that even the amendment to Section 5 of theof 2002 effected by the Prevention of Money-Laundering (Amendment) Act, 2009 (Act 21 of 2009) would also throw light on the point in issue. According to him the amendment to proviso below sub-section (1) of Section 5 is only declaratory and clarificatory. However, we cannot rest our conclusion on the basis of the amended provision which had no application to the case on hand at the relevant time. Accordingly, we do not wish to dilate on this argument any further.

15. We however, find force in the argument of the Respondents that the of 2002 has been enacted by the Parliament with intent to cause deterrence to the assets and properties which are derived and obtained from the proceeds of crime generated out of the act of crime mentioned in the schedule under that Act. The aims and objects for enacting the said act envisages as under:

The Prevention of Money Laundering Act, 2002 intends to make money laundering an offence under Section 3 thereof and provides for punishing which extends to imprisonment as well as imposition of fine under Section 4. This part, the scheme of the envisages attachment of all properties involved in money laundering, i.e. where the proceeds of the crime which fall within the scope of the have been invested in property-movable or immovable, tangible or intangible- and attempts have been made to show that the property is untainted.

16. We find force in the argument of the respondents that the legislation has predicated two parallel proceedings. One, with regard to the attachment of the properties derived and obtained from the proceeds of crime and its confiscation after the guilt of the person in schedule offence is established before the concerned Court. The second action contemplated by the is, prosecution and punishment for commission of offence covered by section 3 of theand upon being found guilty, impose punishment under section 4 of the. From the scheme of the provisions of the enactment under consideration, no property can be confiscated unless it is attached in the first instance. The provisional attachment is an emergent measure to be taken by the Authorised Officer upon being satisfied and having reason to believe that the 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. On the basis of material in his possession, the Authorised Officer upon identifying the property derived from the proceeds of crime is competent to order provisional attachment of such property. That power flows from section 5 of the. At the same time, until, the proceeds of crime are finally confiscated under section 8(3), the same have to be protected and preserved until the guilt or innocence of the person, as the case may be, is established. In the present case, we are dealing only at the stage of issuance of provisional attachment order passed by the Authorised Officer, which has been affirmed by the Adjudicating Authority and further upheld by the Appellate Tribunal.

17. The next grievance of the appellant is that the provisional attachment and its confirmation by the Adjudicating Authority is founded on assumption and presumption only. No live link or nexus has been established by the Authorities to prove that the properties attached are proceeds of crime and gifts/money received by the Appellants are not from legitimate sources. This ground may require us to consider the factual aspects of the matter. The action of provisional attachment was resorted to against the appellants under section 5, on account of reference made by NCB, Mumbai to the Director of Enforcement for investigation under the of 2002. The reference was the consequence of the reported scheduled offence in respect of which complaint was filed by the NCB, Mumbai before the Court of Special Judge for NDPS cases, Greater Mumbai on 8th December, 2006. The said case pertains to seizure of 200 kgs of cocaine on 3/4 June, 2006 from a container originated from Ecuador, South America declared to contain teak wood imported by M/s. OPM International Pvt.Ltd. The importer placed the order for supply of the said consignment with M/s. Megha International Pvt.Ltd., Singapore and the consignment was shipped from Ecuador. When the consignment was intercepted, 200 kgs. Cocaine was recovered. In this connection, NCB, Mumbai arrested Shri O.P.Nogaja, Umesh Bangur, both directors of M/s. OPM International Pvt.Ltd. And Vijay A. Throve, Managing Director of M/s Mayur Clearing Agency, the Customs House Agent under NDPS Act, 1985. The department initiated investigation in the case when it was revealed that there were four firms involved in the smuggling of cocaine, namely, (i) M/s. OPM International Pvt.Ltd., Mumbai, (ii) M/s. Megha International Pvt.Ltd., Singapore, (iii) M/s. Royal Global Exports Pvt. Ltd., Singapore and (iv) M/s. S.S.M.S.Exports, Ecuador, S.A. It was revealed that all the three foreign based companies at Sr.Nos. (ii) to (iv) above were held by another holding company based in Singapore. It was further revealed that persons behind the said firms were not only common, but close relatives having interests in each others business. Inter-relation and nexus between them has been stated by the department as under :

(a) The Managing Director of M/s. OPM International Pvt.Ltd., Shri Om Prakash Nogaja(accused No.1 in NDPS case) is a real brother of one of the Directors of M/s. Royal Global Exports Pte.Ltd. Shri Manek Maheshwari. (b) The other director of M/s. OPM International Pvt. Ltd., Shri Umesh Bangur (accused No.2 in NDPS case) is real brother of wife of Shri Manek Maheshwari i.e. Smt. Madhubala Maheshwari.

(c) Shri Umesh Bangur is real brother of Smt. Trupti Modani wife of Shri R.P.Modani, who had remitted the proceeds of crime into his NRE Account and placed the same under the control of Shri Umesh Bangur by providing signed cheque leaves.

(d) Smt. Madhubala Maheshwari and Smt. Nirmala Biyani (wife of Shri Shambhu Prasad Biyani, another director of M/s. Royal Global Exports Pte. Ltd.) jointly hold 74% shares of M/s. OPM International Pvt.Ltd. by way of investing approx. Rs.7 crores.

(e) Shri Manek Maheshwari of M/s. Royal Global Pte. Ltd. Had paid the freight charges of the consignment of Tiber in which cocaine was seized, inspite of the fact that the consigner was M/s. Megha International Pte. Ltd.

(f) Shri Radha Mohan Lakhotia and Smt. Asha Lakhotia, the defendants in the Original Complaint No. 1 to 4 are brother-inlaw and real sister respectively of Shri R.P. Modani,

(g) S/Shri Shyam Sunder Modani and Shriniwas. Modani, are the real brothers of the said Shri R.P. Modani.

(h) That Shri Rajendra Prasad Modani (R.P. Modani) is the brother-in-law of said Umesh Bangur and real brother of the appellant. He and his wife Smt. Trupti Modani (sister of Shri Umesh Bangur) both resident of Bangkok, found to have remitted a total amount of Rs. 8.45 crores on different occasions in to the NRE account No.6.104.1181 (old A/c. No. 10233/4) with Bharat Overseas Bank) and the entire amount was found to have been transferred to various individuals including relatives and firm for no economic reasons by placing the funds at the disposal of Shri Umesh Bangur in the form of signed blank cheque leaves. The modus operandi adopted by way of handing over signed blank check leaves to him. Part of the said checks alongwith some pay-in-slips and signed blank check leaves of SB NRO A/c. No. 6.106.197 (old A/c. No. 27) jointly held by said Shri R.P. Modani and his wife Smt. Trupti Modani with M/s. Bharat Overseas Bank, Fort Mumbai were recovered from the residence of Shri Umesh Bangur during the search of his residence by NCB. Thus the said Shri Umesh Bangur was found to be in possession and control over the money lying in the said accounts. The details of transfer of the said money to different individuals and firms have been detailed in the complaint. It is evident that proceeds of crime has been transferred by Shri R.P. Modani and placed at the disposal of Shri Umesh Bangur which was further transferred in the guise of gift to close relatives viz. Shri Radha Mohan Lakhotia, Smt. Asha Lakhotia. Shri Shyam Sunder Modani and Shri Niwas Modani and also in the guise of purchase of shares of unlisted company, viz. M/s. Shubh Laxmi Syntex, for creating further layers to facilitate laundering of money.

18. We have already adverted to the order of provisional attachment and the same has been reproduced as a whole pertaining to the respective appellants. We have also reproduced the relevant part of opinion recorded by the Adjudicating Authority while confirming the order of provisional attachment. The Appellate Tribunal has upheld the opinion so recorded by the Authorised Officer as well as the Adjudicating Authority. That being concurrent finding of fact, needs no interference in the present appeals. We shall presently briefly indicate our reasons to sustain those decisions. The Appellate Tribunal has found that various parties i.e. companies, their directors and shareholders and other individuals involved in illegal import of 200 kgs. Cocaine are closely related and their activities are spread across international borders i.e. India, Singapore, Thailand, South America etc. Further, the funds remitted into the NRE account of R.P.Modani by M/s. Royal Global Exports Pvt. Ltd. and on self basis from Singapore and further transfer of these funds by way of gifts/share application money etc. are for no commercial/business/economic reasons. The banks pay in slips for depositing cheques drawn on NRE account of Shri R.P.Modani into the bank accounts of appellants M/s. Shubhlaxmi Syntex and Sri Niwas Modani, seized during search of residential premises of Umesh Bangur and admission of Shri Niwas Modani and Shyam Sunder Modani in their statements before the Respondents reveal that they were not aware as to who deposited the cheques/pay order in their accounts for such huge amount. Yet, the amount is used to purchase the property in question. This does prima facie indicate that the properties attached are proceeds of crime and involved in money laundering. The Appellate Tribunal has further held that in view of the fact that value of 200 kgs. of cocaine runs into several hundred crores and such a huge illegal import of cocaine cannot be the first ever crime of Shri Om Prakash Nogaja and Shri Umesh Bangur, directors of M/s. OPM International Pvt.Ltd, and others who have been regularly importing teak logs in the past from Ecuador, South America and the Freight charges were paid by Shri Manek Maheshwari of M/s. Royal Global Exports Pte. Ltd. in relation to the consignment in which cocaine was seized. For all these reasons, the opinion formed by the Authority that the remittances in the NRE account of R.P.Modani was the proceeds of crime is reinforced. After having recorded this finding, the Appellate Tribunal proceeded to hold that there was sufficient material to make out prima facie case that all appellants have received proceeds of crime from the same account of R.P.Modani. The Appellate Tribunal has also adverted to the fact that offence is already registered against the appellants under section 3 read with section 4 of theof 2002 in respect of which process has been issued to the appellants. The said order issuing the process has been confirmed right up to the High Court. In the circumstances, the Appellate Tribunal has found that there was no infirmity in the order of provisional attachment issued by the Deputy Director and subsequently confirmed by the Adjudicating Authority. The view so taken by the Appellate Tribunal in our opinion, is a possible view. If the said opinion is to be upheld, the argument propounded by the Appellants that the provisional attachment order and confirmation thereof by the concerned authorities is on the basis of assumption and presumption falls to the ground.

19. We shall now revert back to the argument that the provisional attachment of properties is sans any material to show that the said properties are derived from the transaction of import of 200 kgs. of cocaine. Counsel for the Appellants vehemently argued that the Respondents have not been able to even remotely show that the properties under provisional attachment were acquired out of the sale proceeds of cocaine transaction in question, which in fact happened in June, 2006. Whereas the properties provisionally attached were already acquired by the respective appellants between November, 2005 to May, 2006. The argument though attractive has been rightly repelled by the Authorities below on the finding that the transaction resulting in scheduled offence may not be the first of its kind and there is reason to believe that similar transactions must have taken place in the past, which have gone unnoticed. The Authorities have adverted to the purport of Section 23 of theto buttress this opinion. Besides, it is held that the Appellants were not in a position to rebut the presumption about the interconnected transactions. Moreso, of the fact that the appellants were involved in projecting the proceeds of crime as untainted properties. That burden was on the appellants. The fact that the Respondents could have acted only if there was reason to believe that a person is in possession of proceeds of crime does not mean that the Authorities at this stage are obliged to prove the fact beyond doubt that the property in possession was in fact proceeds of crime. All that the Authority is required to show is that there was substantially probable cause to form opinion that the property under attachment is proceeds of crime. The circumstances adverted to by the Authorities below do indicate that there was substantially probable cause to form such opinion. At this provisional attachment stage as well when the matter goes before the Adjudicating Authority, by virtue of section 24 of theof 2002 the burden of proving that the property possessed by the noticees was not proceeds of crime and were untainted properties would be on them. As has been found by the Authorities below, except stating that the amount has come in the bank account of the appellants disbursed from NRE account of R.P.Modani by way of gift, no other justification is offered. The fact that the amount has been disbursed from NRE Account and such remittance is permissible in law does not and cannot legitimise the transaction, until it is established that the amount so gifted by R.P. Modani itself was not tainted funds. The real question is whether the funds in the account of R.P.Modani were tainted or otherwise. The burden to prove that fact is on the appellants themselves, by virtue of Section 24 of the. The argument of the appellants that the provisions regarding presumption and burden of proof will have no application as the said Shri R.P.Modani or for that matter M/s.Royal Global Exports Pte. Ltd. Has still not been charged of having committed a scheduled offence, is of no avail. In as much as, the fact whether R.P.Modani has still not been charged of having committed a scheduled offence will not extricate the appellants who have been named as accused in offence under section 3 of theof 2002. The burden of proof that properties in their possession are untainted properties, as per Section 24 is on the person accused of having committed offence under section 3 of theof 2002. The Appellants cannot absolve themselves by saying that the amount received by them was from the NRE account of Shri R.P.Modani. That is not enough. It was necessary for the appellants to further establish that the amount so disbursed from the account of R.P.Modani was equally untainted amount.

20. Suffice it to observe that there was enough material before the Authority as also the Adjudicating Authority to initiate action under section 5 of theof 2002 of provisional attachment of the proceeds of crime. The Apex Court in the case of Aslam Mohd.Merchant v/s. Competent Authority & ors. reported in JT in 2008(7) SC 446: 2008(14) SCC 186, in paragraph-29 has expounded 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 material, which was placed before him. It is also open to the Authority to disclose the reason when called upon to do so. The question is whether the reasons recorded by the Authority in the provisional attachment order were sufficient to initiate action under section 5 of the. The provisional attachment order not only records satisfaction about the reasons to believe that the property in question in possession of the appellants was outcome of the proceeds of crime, but also the fact that the said property was likely to be concealed, transferred or dealt with in such a manner that if no provisional attachment was passed at this crucial stage, it may result in frustrating proceedings relating to confiscation under the of 2002. For recording the said satisfaction, the Authority has relied on the contents of the complaint filed by the NCB under provisions of NDPS Act dated 8th December, 2006 as also the statements of Bank account, reported forwarded by the NCB and statements of the appellant in the concerned case. The order also records that Shri Umesh Bangur has been charged of having committed a scheduled offence under sections 23 and 27 of the NDPS Act in the complaint dated 8th December, 2006 filed by the NCB. Further, the said Umesh Bangur had invested the proceeds of crime through the appellants for the purpose of laundering to project the said proceeds as untainted property. On analysing the said material, the Authority has recorded its satisfaction that the property in possession of the appellants, which needs to be provisionally attached, was proceeds of crime. Thus understood, from the circumstances spelt out in the order of attachment as well as by the Adjudicating Authority and has been upheld by the Appellate Tribunal, the action under section was inevitable. There is material on record which goes to show that prima facie link is established that the properties attached are proceeds of crime and the so called gifts/money received by the appellants from R.P. Modani were not from the legitimate source. At this stage, it is enough to consider whether the prima facie view so expressed by the Authorities below is a possible view or manifestly wrong. In our opinion, it is not possible to take a different view of the matter. If so, keeping in mind the observations of the Apex Court in the case of Mamad Hassam Bhagad & Ors. Vs. State of Gujarat & ors reported in (1996) 8 SCC 574 [LQ/SC/1996/977] , no interference is warranted. That was a case dealing with section 7(A) of Terrorist and Disruptive Activities(Prevention) Act, 1987, whereunder the properties to be attached was of persons, who were involved in the offence under that Act. It was reasonably believed that the property to be attached was derived from the commission of terrorist activities or was acquired by the process of terrorism. Even in that case, the decision which was impugned before the Apex Court by way of appeal under Section 19 of the TADA Act was an order of provisional attachment during the pendency of the trial in relation to the TADA offence. The Apex Court opined that at this stage, it will not be appropriate to interfere with the conclusion reached by the designated court. Following the same principle, we have no hesitation in rejecting the challenge of the appellants. Significantly, complaint has been filed under section 3 of theof 2002 against the appellants, being Case No.1 of 2008, before the Designated Judge under the Prevention of Money Laundering Act, 2002, Sessions Court, Mumbai, dated 25/8/2008. It gives graphic description of the circular transactions resorted to project that the money transferred from the account of R.P. Modani disbursed to the appellants, was untainted property in possession of the appellants. On reading the said complaint as a whole, prima facie, there is enough material to indicate that the property attached in terms of provisional attachment order under section 5(1) of thepossessed by the appellants herein was proceeds of crime. It is noticed that Umesh Bangur Accused No.3 has stated that his brother in law R.P.Modani is maintaining NRE account with M/s. Bharat Overseas Bank, Fort Branch, Mumbai jointly with his wife Trupti and whenever R.P.Modani visited Mumbai, he used to sign some cheque leaves of this account and leave it with him for operational conveyance and that as per the instructions of the said Modani he used to issue cheques in favour of the payee. He has further admitted that the documents marked as D-6 to D-8 were in respect of such payments made to M/s. Subh Laxmi Syntex Ltd. totalling to Rs. 90 Lakhs and the documents marked D-9 and D-10 are pay-in-slips of ICICI Bank in respect of payments totaling to Rs.1.65 crores made to S.N.Modani. The document marked D-11 is one of the signed account payee cheque found with said Umesh Bangur, which was not used as name of the payee was written wrongly. The document marked D-13 was in respect of NRO account with M/s. Bharat Overseas Bank. Even in respect of the said account, the said R.P.Modani left some signed and unsigned cheques thereof with Umesh Bangur. In substance, Umesh Bangur in his statement has admitted that he was in possession of signed blank cheque leaves of the said NRE and NRO accounts of R.P.Modani and that he was transferring money from the said NRE account by using the signed blank cheques. He also stated that by virtue of having signed blank cheques, technically he was in possession of the money in the account of R.P.Modani and he could have transferred the same, if he wanted, though he did not do so. Notably, on the basis of the case made out in the said complaint the trial Court has already issued process against the appellants. The appellants have unsuccessfully challenged the same right upto this count. The fact that the said orders have been allowed to become final is not in dispute at all. It presupposes that prima facie material on record to proceed against the appellants for offence punishable under Section 3 of theof 2001. For the same reasons the opinion of the Authorities below arrived at for the purpose of passing order of provisional attachment of proceeds of crime in possession of the appellants herein would be unexceptionable. Taking any view of the matter, the satisfaction recorded by the Authority and confirmed by the Adjudicating Authority which has been upheld by the Appellate Tribunal, is founded on cogent material to justify the said opinion. As a result, no interference is warranted with the concurrent view taken by the three Authorities below on the factum of satisfaction and recording of reasons to believe that the properties placed under provisional attachment were proceeds of crime and that the same were 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.

21. The Appellate Tribunal has also noticed that there exists many enactments like The Smugglers and Foreign Exchange Manipulators(Forfeiture of Property) Act, 1976(SAFEMA), Terrorist and Disruptive Activities (Prevention) Act, 1987, the Prevention of Terrorism Act, 2002, Narcotic Drugs and Psychotrophic Substances(Amendment) Act, 1988(NDPS)(Chapter VA), Code of Criminal Procedure(Amendment) Act, 1993(Chapter VIII A), which dealt with illegal acquired properties from specified criminal activities by providing for forfeiture/confiscation of illegally acquired properties. Even Counsel appearing for the parties have placed before us decisions under the respective enactments, which dealt with the purport of provisions regarding forfeiture/confiscation of the properties under the said Acts. On analysing the provisions of those enactment, though the form of the provision, may appear to be different, the substance of subject dealt with by the respective enactment is similar. Since we have already elaborately dealt with the purport of section 5 of the Act, it may not be necessary to specifically deal with each of the authorities cited across the bar which deal with the interpretation of provisions of the concerned enactment. Moreover, in the facts of the present case we have upheld the decisions of the Authorities below having found that the same were unexceptionable and does not suffer from any infirmity nor are manifestly wrong. But to complete the record, we would refer to the authorities cited before us, which are as follows:

(i) Smt. Heena Kausar v/s Competent Authority[2008(7) Scale 331]. NDPS Act 1985, Chapter V-A.

(ii) Aslam Mohd. Merchant (supra)- NDPS Act 1985, Chapter V-A.

(iii) Smt.Kesar Devi v/s. Union of India & Ors.[JT 2003 (6) SC 330 [LQ/SC/2003/721] ]:[2003(7) SCC 427]. SAFEMA Act, 1976.

(iv) P.P.Abdulla & Anr. v/s. Competent Authority & ors. [(2007) 2 SCC 510] [LQ/SC/2006/1285] . SAFEMA Act, 1976.

(v) Attorney General of India v/s. Amrat Lal Prajiwan Das & ors.[JT 1994 (3) SC 580 [LQ/SC/1994/452] ] SAFEMA Act, 1976.

(vi) State of M.P. V/s. Balram Mihani & ors.[JT 2010(2) SC 143 [LQ/SC/2010/147] ]. Criminal Procedure Code, 1973, Chapter VII-A.

(vii) Peoples Union of Civil Liberties v/s. Union of India [AIR 2004 SC 456 [LQ/SC/2003/1287] ]. POTA Act, 2002.

(viii) Shobha Suresh Jumani v/s. Appellate Tribunal Forfeited Property[AIR 2001 SC 2288 [LQ/SC/2001/1240] . SAFEMA Act, 1976.

(ix) Noor Aga v/s. State of Punjab and Anr.[(2008) 16 SCC 417] [LQ/SC/2008/1384] . - NDPS Act, 1985.

(x) Unreported decision of Division Bench of Bombay High Court in Criminal Writ Petition No. 881 of 2000 decided on 30th September, 2008 in the case of Smt. Neeta N. Bhanushali v. State of Maharashtra. NDPS Act forfeiture order.

22. Accordingly, all these appeals fail being devoid of merits. Instead, we confirm the provisional attachment orders as passed by the Deputy Director and confirmed by the Adjudicating Authority, which view has been upheld by the Appellate Tribunal. Therefore, we proceed to pass following order.

ORDER

All the appeals are dismissed with costs.