Gujarat High Court
Vinod Tarachand Agrawal vs Deputy Director, Enforcement ... on 21 December, 2021
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
C/CA/1216/2021 ORDER DATED: 21/12/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CIVIL APPLICATION NO. 1216 of 2021
In F/FIRST APPEAL NO. 13212 of 2021
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VINOD TARACHAND AGRAWAL
Versus
DEPUTY DIRECTOR, ENFORCEMENT DIRECTORATE
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Appearance:
MR MONAAL J DAVAWALA(6514) for the Applicant(s) No. 1
MR DEVANG VYAS(2794) for the Respondent(s) No. 1
NOTICE SERVED BY DS(5) for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
Date : 21/12/2021
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE NIRAL R. MEHTA)
1. The applicant - original appellant has preferred the present Civil Application for condonation of delay of 408 days caused in preferring First Appeal.
2. By way of said First Appeal under Section 42 of the Prevention of Money Laundering Act, 2002 (for short 'the PMLA Act'), the applicant has sought to challenge the order dated 3.12.2018 passed by the Appellate Tribunal for SAFEMA, FEMA, PMLA, NDPS and PBPT Act at New Delhi in PMLA-5211/AHD/2018 (stay).
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3. The brief facts, according to us, which are necessary so as to appreciate the controversy in hand, are as under :
3.1 The CBI, Gandhinagar registered an FIR No.0292018A0006 dated 26.3.2018 against M/s.Diamond Power Infrastructure Ltd., Vadodara (DPIL) as well as against its Founders, Managing Directors, Joint Managing Directors and also against unknown public servants of various banks and unknown others for commission of offence under Sections 420, 467, 468, 471 read with 120-B of the IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 (for short 'the Act').
3.2 In view of the aforesaid, the money laundering investigation under the PMLA Act has been initiated vide ECIR/AMZO/03/2018.
Pursuant to the aforesaid investigation, vide provisional order No.02/2018 dated 24.4.2018, one of the properties being land and commercial building, Khata No.874, Revenue Survey No.619 mouje Atladara, District - Vadodara, land admeasuring 5722 sq. mtrs. belonging to the company i.e. M/s.Mayfair Leisures Ltd. came to be provisionally attached by the authority exercising the powers under Section 5(1) of the PMLA Act.
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C/CA/1216/2021 ORDER DATED: 21/12/2021 3.3 The property was mortgaged by M/s.Mayfair Leisures Ltd. to
the respondent No.2 - Bank of India with a view to avail term loan to the tune of Rs.63 crores.
3.4 It appears that thereafter, the complaint has been filed by the respondent No.1 before the Adjudicating Authority at New Delhi being OC No.977 of 2018 on 22.5.2018 under Section 5(1) of the PMLA Act against DPIL and 12 others including M/s.Mayfair Leisures Ltd. and further requested, inter-alia, to adjudicate the complaint under the PMLA Act of 2002 and also requested to confirm the provisional order dated 22.4.2018. 3.5 The Adjudicating Authority, after considering the submissions of the concerned parties, came to the conclusion that prima facie, the offence has been committed and the properties those are provisionally attached are 'proceeds of crime' or value thereof and thereby, are involved in the crime as envisaged under the PMLA Act, the Adjudicating Authority, therefore, vide its order dated 1.10.2018 confirmed the provisional attachment order. 3.6 Being aggrieved by the aforesaid, the respondent No.2 appears to have approached the Appellate Tribunal, New Delhi under Section 26 of the PMLA Act. The Appellate Tribunal vide its Page 3 of 13 Downloaded on : Wed Jan 12 13:14:23 IST 2022 C/CA/1216/2021 ORDER DATED: 21/12/2021 interim order dated 3.3.2018, directed both the parties i.e. respondent No.2 and respondent No.1 to maintain the status-quo in respect of the properties attached.
3.7 It also appears that in the meantime, the respondent No.2 had approached the NCLT, Ahmedabad for recovery of its dues to the tune of Rs.76.88 crores which was due and payable by M/s.Mayfair Leisures Ltd. The company petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 therefore was filed by respondent No.2 - bank. The NCLT, Ahmedabad vide its order dated 2.6.2020, admitted the said Company Petition No.213 of 2018 and declared moratorium and stayed all the proceedings qua the company.
3.8 The NCLT, Ahmedabad had initially appointed one Mr.Chandra Prakash Jain as the Interim Resolution Professional to conduct CIRP as well as to take control over the management of the company. However, pursuant to the resolution passed by the Committee of Creditors constituted under the CIRP, NCLT, Ahmedabad vide its order dated 21.10.2020 appointed Mr. Vinod Tarachand Agrawal, the applicant herein, as the RP to conduct the CIRP as well as to take control over the management of the Page 4 of 13 Downloaded on : Wed Jan 12 13:14:23 IST 2022 C/CA/1216/2021 ORDER DATED: 21/12/2021 company i.e. M/s.Mayfair Leisures Ltd. It appears that in view of the aforesaid, somewhere in July, 2021, the appeal under Section 42 of the PMLA Act came to be filed challenging, inter-alia, the order dated 3.12.2018 passed by the Appellate Tribunal for SAFEMA, FEMA, PMLA, NDPS and PBPT Act at New Delhi, however, with the present application for condonation of delay of 408 days.
4. This Court vide order dated 26.7.2021, issued Rule making it returnable on 2.8.2021. Pursuant to the service of notice of Rule, the respondent No.1 i.e. Deputy Director of Enforcement Directorate, Ahmedabad entered his appearance through Mr.Devang Vyas, the learned Assistant Solicitor General of India.
5. The respondent No.1 has filed its reply dated 4.8.2021 affirmed by one Mr.Mayur Joshi, Assistant Director, Enforcement Directorate, Ahmedabad, opposing the condonation of delay application filed by the applicant.
6. We have heard Mr.Monaal J. Davawala, the learned counsel appearing for the applicant and Mr.Devang Vyas, the learned Assistant Solicitor General of India for the respondents. Page 5 of 13 Downloaded on : Wed Jan 12 13:14:23 IST 2022
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7. Mr. Monaal J. Davawala, the learned counsel appearing for the applicant, submitted that the applicant appointed as RP by NCLT, Ahmedabad vide its order dated 21.10.2020 under the provision of Section 23 of the Insolvency and Bankruptcy Code, 2016. Thus, to complete CIRP in a time bound schedule, the property attached by the respondent No.1 herein is required to be released, however, due to order dated 3.12.2018 passed by the Appellate Tribunal for SAFEMA, FEMA, PMLA, NDPS and PBPT Act at New Delhi, the properties of the company is under the direction of status-quo. Therefore, the present Appeal is necessitated and immediately filed in July, 2021. He further submitted that during that time, country was facing the pandemic situation of Covid-19 and thereby, the Hon'ble Supreme Court vide its order dated 27.4.2021 extended the period of limitation which was in existence since 15.3.2021. He, therefore, submitted that in view of the provision of Section 42 of the PMLA Act, the applicant said to have become aggrieved by the impugned order dated 3.12.2018 only on he being appointed as RP only on 21.10.2020. Under the circumstances, the applicant could not file the Appeal under the prescribed limitation period. However, he urged before this Court to condone the delay in view of the order passed by the Supreme Court in Misc. Civil Application No.665 of 2021. Page 6 of 13 Downloaded on : Wed Jan 12 13:14:23 IST 2022
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8. Per contra, Mr.Devang Vyas, the learned Assistant Solicitor General of India for the respondents, vehemently opposed the present application. He submitted that the present application at the instance of the applicant is without any justifiable and genuine cause, explaining, inter-alia huge delay of 408 days. He further heavily relied upon Section 42 of the PMLA Act of 2002 to contend that the Appeal was supposed to be filed within the period of 60 days from the date of the communication of the order. He further submitted that the provisio provides for further period of 60 days for filing the Appeal only if the High Court is satisfied that the applicant is prevented to file the Appeal within a period of 60 days. He further submitted that Section 42 does not provide powers to condone the delay beyond the period of 60 days. Thus, Mr.Vyas requested this Court to dismiss the Civil Application for condonation of delay.
9. Having considered the submissions made by the learned counsel appearing for the respective parties and having gone through the materials on record in detail, in our view, the question, which calls for our consideration is whether the delay deserves to be condoned for preferring the Appeal which was filed in the wake of Covid-19 situation?
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10. In our view, the provision of Section 42 of the PMLA Act is relevant for the purpose of deciding the aforesaid question. Thus, the same are reproduced as under :
"42. Appeal to High Court.--Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law or fact arising out of such order: Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days. Explanation.
--For the purposes of this section, "High Court" means-
(i) The High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and
(ii) Where the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain."
11. A plain reading of the said provision, in our view, would reveal that the Appeal against the order of Appellate Tribunal has to be filed within the period of 60 days from the date of the Page 8 of 13 Downloaded on : Wed Jan 12 13:14:23 IST 2022 C/CA/1216/2021 ORDER DATED: 21/12/2021 communication / award of the Tribunal. It further appears that further 60 days' time has been granted if in case the Appeal is not filed within the period of 60 days. In other words, limitation period for filing the appeal is prescribed as 60 days with further condonable period of maximum 60 days and not beyond that. However, in the case on hand, the fact as emerging from the record that the applicant has been appointed as RP on 21.10.2020 by NCLT, Ahmedabad by exercising the powers under the provision of Section 23 of the Insolvency and Bankruptcy Code, 2016. Thus, in our considered opinion, the applicant was brought in picture by the process of law on 21.10.2020. Hence, he could be said to be an aggrieved by impugned order dated 3.12.2018, only from the date on which he has been appointed as RP i.e. on 21.10.2020. It is pertinent to note that the time when the present applicant was appointed as RP, the country was facing the pandemic situation due to Covid-19. The Supreme Court, therefore, having taken cognizance of pandemic situation, vide its various orders passed in Misc. Civil Application No.665 of 2021 dated 23.3.2021, extended the period of limitation in filing the Petition / Application / Suits / Appeals / all other proceedings irrespective of prescribed under the General and Special Laws w.e.f. 15.3.2021 till further orders and same was then put an end Page 9 of 13 Downloaded on : Wed Jan 12 13:14:23 IST 2022 C/CA/1216/2021 ORDER DATED: 21/12/2021 to 8.3.2021. It further appears that on 27.4.2021, the Supreme Court has again restored its earlier order dated 23.3.2021, noticing the quick rising of Covid-19 cases, which can be profitably quoted as under :
"The order dated 27.4.2021 passed by the Supreme Court in Misc. Application No.665 of 2021 in SMW(C) No.3 of 2020.
The Court is convened through Video Conferencing.
This Court took suo motu cognizance of the situation arising out of the challenge faced by the country on account of COVID-19 Virus and resultant difficulties that could be faced by the litigants across the country. Consequently, it was directed vide order dated 23rd March, 2020 that the period of limitation in filing petitions/ applications/ suits/ appeals/ all other proceedings, irrespective of the period of limitation prescribed under the general or special laws, shall stand extended with effect from 15th March, 2020 till further orders. Thereafter on 8th March, 2021 it was noticed that the country is returning to normalcy and since all the Courts and Tribunals have started functioning either physically or by virtual mode, extension of limitation was regulated and brought to an end. The suo motu proceedings were, thus, disposed of issuing the following directions:
"1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.
2.In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation Page 10 of 13 Downloaded on : Wed Jan 12 13:14:23 IST 2022 C/CA/1216/2021 ORDER DATED: 21/12/2021 remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.
3.The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.
4. The Government of India shall amend the guidelines for containment zones, to state.
"Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements."
Supreme Court Advocate on Record Association (SCAORA) has now through this Interlocutory Application highlighted the daily surge in COVID cases in Delhi and how difficult it has become for the Advocates-on-Record and the litigants to institute cases in Supreme Court and other courts in Delhi. Consequently, restoration of the order dated 23rd March, 2020 has been prayed for.
We have heard Mr. Shivaji M. Jadhav, President SCAORA in support of the prayer made in this application. Learned Attorney General and Learned Solicitor General have also given their valuable suggestions.
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C/CA/1216/2021 ORDER DATED: 21/12/2021 We also take judicial notice of the fact that the steep rise in COVID-19 Virus cases is not limited to Delhi alone but it has engulfed the entire nation. The extraordinary situation caused by the sudden and second outburst of COVID-19 Virus, thus, requires extraordinary measures to minimize the hardship of litigant-public in all the states. We, therefore, restore the order dated 23rd March, 2020 and in continuation of the order dated 8th March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders.
It is further clarified that the period from 14th March, 2021 till further orders shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings. We have passed this order in exercise of our powers under Article 142 read with Article 141 of the Constitution of India. Hence it shall be a binding order within the meaning of Article 141 on all Courts/Tribunals and Authorities. This order may be brought to the notice of all High Courts for being communicated to all subordinate courts/Tribunals within their respective jurisdiction.
Issue notice to all the Registrars General of the High Courts, returnable in 6 weeks.
List the Miscellaneous Application on 19th July, 2021."
12. In view of the aforesaid, the Appeal was filed on 16.7.2021when the Supreme Court has extended the period of limitation. Thus, in our considered opinion, the provision of Section Page 12 of 13 Downloaded on : Wed Jan 12 13:14:23 IST 2022 C/CA/1216/2021 ORDER DATED: 21/12/2021 42 of the PMLA Act would not be applicable in the peculiar facts and circumstances of the case on hand. We say so because, the Supreme Court has by an order extended the period of limitation with respect to any proceedings that are governed by the Limitation Act or by any special Act.
13. For the foregoing reasons, we are inclined to condone the delay of 408 days caused in preferring the First Appeal. Accordingly, the Civil Application for condonation of delay is allowed. Rule is made absolute. The Registry is directed to register the First Appeal and place for admission hearing on 22.12.2021 on top of the Board.
Sd/-
(J. B. PARDIWALA, J) Sd/-
(NIRAL R. MEHTA,J) VISHAL MISHRA Page 13 of 13 Downloaded on : Wed Jan 12 13:14:23 IST 2022