SRI NAGESH NAYAK KEREMANE vs THE DEPUTY DIRECTOR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 02ND DAY OF AUGUST, 2021

PRESENT

THE HON'BLE Mr. JUSTICE ARAVIND KUMAR

AND

THE HON'BLE Mr. JUSTICE PRADEEP SINGH YERUR

MISCELLANEOUS SECOND APPEAL No.61 OF 2019

BETWEEN:

SRI NAGESH NAYAK KEREMANE S/O.LATE HONNAPPA NAYAK KEREMANE SINCE DECEASED BY LR.

1 (a) SMT.SANDHYA NAYAK

W/O.SATISH H.NAIK

AGED ABOUT 60 YEARS

R/AT KUMBERAKERI

ANKOLA TALUK

(Amended as per Court UTTARA KANNADA DISTRICT Order dated 15.03.2021)

... APPELLANT

(BY SRI NITYANAND V. NAIK, ADVOCATE)

AND:

THE DEPUTY DIRECTOR DIRECORATE OF ENFORCEMENT 3RD FLOOR, ‘B’ BLOCK BMTC, TTMC, K.H.ROAD SHATHINAGAR BENGALURU – 560 0027

... RESPONDENT

(BY SRI UNNIKRISHAN M., ADVOCATE) *****

THIS MISCELLANEOUS SECOND APPEAL IS FILED UNDER SECTION 42 OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002 PRAYING TO SET ASIDE THE ORDER DATED 27.05.2019 (ANNEXURE-A) PASSED BY THE APPELLATE TRIBUNAL FOR SAFEMA, FEMA, PMLA, NDPS AND PBPT ACT AT NEW DELHI AND ETC.

THIS APPEAL COMING ON FOR ADMISSION, THIS DAY, ARAVIND KUMAR J., DELIVERED THE FOLLOWING:

J U D G M E N T

Heard Sri Nityanand V. Naik, learned counsel appearing for appellant and Sri Unnikrishnan M., learned Standing Counsel appearing for respondent. Perused the records.

On 13.09.2012 in FIR No.RC17(A)2012/BLR came to be registered by Central Bureau of Investigation (for short ‘CBI’) against the accused persons for the offences punishable under Sections 120(B) read with Sections 409, 420 of IPC and Sections 7, 12 and 13 read with Sections 13(1)(c) and 13(1)(d) of the Prevention of Corruption Act, 1988 (for short ‘ the PC Act’). On 10.12.2015, the Director of Enforcement passed a provisional order of attachment whereunder properties as mentioned therein including property bearing No.95, “Manasi”, Vandige Village, Ankola

Taluk, Uttara Kannada District came to be attached. The Adjudicating Authority by order dated 29.04.2016 passed the adjudication order against the persons mentioned therein (Annexure-A1). On 06.05.2016, possession notice was issued by the respondent herein to Sri Narendra G. Hitalamakki, Smt.Kala M. Hitalamakki and Sri Vedanth Hitalamakki, M/s.Gokarna Sea View Beach Resort Private Limited, Senior Branch Manager, Canara Bank. On 04.08.2018, the said property was attached.

The appellant herein being dispossessed of property approached this Court by filing a writ petition in WP.No.40034/2018, which came to be disposed of by the learned Single Judge by order dated 17.09.2018 (Annexure-A5) granting liberty to the petitioner to avail alternate remedy available under Section 26 of Prevention of Money Laundering Act, 2002 (for short ‘PML’ Act). In fact, learned Central Government Standing Counsel appearing for respondents in the said writ petition had made a submission that in the event of appeal being filed,

respondents therein would not object on limitation aspect. The said statement made by the learned Central Government Standing Counsel has been recorded as under: “3. Learned Central Government Standing Counsel appearing for Respondents 1 to 3 who is appearing on advance notice, submits that if the Petition is availing the alternative appellate remedy, then some time may be grated to the Petition to file the appeal and that the Respondents 1 to 3 would not object on the limitation aspect of the matter.”

In the light of said submission made by the learned Central Government Standing Counsel appearing for respondents therein, writ petition came to be dismissed as withdrawn by reserving liberty to the petitioner i.e. appellant herein to avail appellate remedy available under Section 26 of the PML Act and it was further made clear that if such appeal is filed within a period of one month from the date of order (17.09.2018), the Appellate authority should not dismiss the appeal on the ground of

delay. Within a period of one month, appeal is said to have been preferred by appellant herein before the Appellate tribunal i.e. on 16.10.2018. Along with an appeal, an interlocutory application for stay of order impugned therein i.e. the order of the Adjudicating Authority was sought for. Tribunal by impugned order dated 27.05.2019 has rejected the interim application for stay and has listed the matter for consideration of contention of delay application. Being aggrieved by the order passed by the tribunal not granting stay, present appeal is filed.

Reiterating the grounds urged in the appeal memorandum, Sri Nityanand V. Naik, learned counsel appearing for appellant would contend that under sub- Section(4) of Section 5 of the PML Act, “person interested” has been explained to include all persons claiming or entitled to claim any interest in the property and as such the Adjudicating Authority before proceeding to either attach property or to take possession of the property so attached ought to have issued notice to the appellant since

he has constructed building in the property so attached and it is also reflected in the Income Tax returns filed by him and as such, the order of the Adjudicating Authority ought to have been stayed by the Appellate tribunal and non consideration of these vital aspects though urged before the tribunal and some having been given a complete goby by the tribunal, has resulted in miscarriage in the administrative of justice. Hence, he contends that substantial question of law is involved in this appeal and prays for appeal being admitted by framing the substantial question of law as framed in the appeal memorandum and consequently, set aside the order under challenge by allowing the present appeal.

Per contra, Sri Unnikrishnan M., learned Central Government Standing Counsel would support the impugned order and prays for dismissal of the appeal.

Having heard the learned Advocates appearing for parties, we notice that appeal filed by the present appellant before the appellate tribunal is still at large, in

other words, there is no finding recorded by the appellate tribunal about the contentions urged in the present appeal as well as in the appeal filed before the appellate tribunal. If this Court were to embark upon making roving enquiry with regard to contentions raised in this second appeal, necessarily the rights of either of parties would be prejudiced in the pending first appeal before the appellate tribunal. Thus, we are not inclined to entertain this appeal by admitting the same. That apart, we notice that tribunal has rightly taken note of the fact that prima facie the property which has been attached belongs to Smt.Kala M.Hhitalamakki. As to what is the right of the appellant who claims to be a person interested in the property which is attached is an issue which will have to be decided by the Appellate Tribunal itself. The said issue being at large before the Appellate tribunal, we are not inclined to entertain this appeal. Though present appeal requires to be dismissed with costs, we refrain from imposing such cost on the appellant taking into consideration that original appellant has expired and the present applicant is claiming

to be the legal representative of deceased appellant viz., as a legatee under the Will. Hence, we do not propose to impose cost. Appeal stands dismissed.

We make it clear that we have not expressed any opinion on merits and tribunal would be at liberty to adjudicate the appeal on merits and in accordance with law. All contentions of both parties are kept open. In view of appeal having been dismissed, IA.No.1/2019 for restoration of possession of property does not survive for consideration and it stands rejected.

Sd/-

JUDGE

Sd/- JUDGE

SRI NAGESH NAYAK KEREMANE vs. THE DEPUTY DIRECTOR