FINAL ORDER

05.11.2024

FPA-PMLA-4040, 4047&4048/DLI/2021

The batch of three appeals have been filed to challenge the order dated 16.02.2021 passed by the Adjudicating Authority confirming retention of records and digital devices seized by the respondents under a Panchnama drawn on 15.09.2020.

2. It is a case where an FIR was registered by CBI, BSFC, New Delhi on 17.08.2019 for commission of offences punishable under Section 120-B read with Section 420, 468,471 IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.

3. It was alleged that the Directors and Promoters of M/s Moser Baer India Ltd. including RatulPuri forged and fabricated the documents and induced the Central Government of India to release public funds. It is said to have caused wrongful loss to the bank to the tune of Rs.354.51 Crores.

4. M/s Moser Baer India Ltd.was classified as Non-performing Asset on 29.11.2014 with an outstanding amount of Rs.354.51 Crores. It was then declared to be fraud by the complainant bank on 20.04.2019.

5. After registration of the FIR and investigation as a consequence thereof, it was revealed that M/s Moser Baer India Ltd. and its subsidiaries have taken loan in a fraudulent manner and defaulted in making the payment. The ECIR was recorded by the respondents finding a scheduled offence and a case of money laundering under Section 3 of the Act of 2002.It is a case where during the course of search and seizure, the documents and devices were recovered from the appellant and have been allowed to be retained in view of the confirmation of seizure order.

Arguments of the appellant

6. The learned counsel for the appellantssubmitted that the appellantAbhinavSaxena is not an accused for commission of offence while others two appellants, namely, Rajiv Saxena and ShivaniSaxenamay be the accused. The appellant Abhinav Saxena has nothing to do with the crime yet he was searched and the documents and gadgets have been seized by the respondents in an illegal manner. It is de hors Section 17 of the Act of 2002 which does not permit seizure and retention of the documents from a person not implicated as an accused. Thus, on the aforesaid ground itself, the impugned order deserves to be set aside vis-à-vis the appellant Abhinav Saxena.

7. The learned counsel for the appellants made a specific reference to Section 17(1) of the Act of 2002 to endorse his argument. He further cited the judgment of the Delhi High Court in the case of Mahender Kumar Khandelwal Vs. Directorate of Enforcement &Ors. decided by the order dated 31.01.2024 in Writ Petition No. 10993/2023. The Delhi High Court has given interpretation to Section 17 in reference to the issue of seizure of documents and its retention from a person not implicated as an accused. The documents and gadgets recovered from him could not be retained when appellant Abhinav Saxena had no nexus with the commission of crime. It cannot be only for the reason that he was relative to the accused.

8. The respondents ignored the aforesaid aspect and retained the seized documents on their whims and fancies. Thus, on the aforesaid ground itself, the appeal filed by Abhinav Saxena deserves to be allowed.

9. The learned counsel for the appellants further submitted that the respondents committed a grave illegality while passing the order to retain the documents and the devices. It was submitted that whatever was seized by the respondents during the course of search had not been produced for its confirmation by the Adjudicating Authority.

10. The learned counsel for the appellants made specific reference of a recovered key of a locker belonging to the appellant. The locker was also sealed but key of the locker was not sent for its confirmation by the Adjudicating Authority despite mandate under the law to send all the material seized during the course of search. To support the argument, reference of the judgment of the Delhi High Court in the case of J.K. Tyre& Industries Vs. Directorate of Enfo