Case Law Details
Visakh K. Vs SRS Mining (Appellate Tribunal Under SAFEMA at Delhi)
The Appellate Tribunal under SAFEMA dismissed the recall applications filed by M/s SRS Mining seeking to set aside earlier ex-parte orders passed in benami proceedings under the Prohibition of Benami Property Transactions Act (PBPTA). The Tribunal held that the Applicant failed to demonstrate “sufficient cause” for non-appearance, despite being granted multiple opportunities over an extended period.
The contention that absence was due to personal difficulties (illness and death in family) and negligence of counsel was rejected, as the Tribunal observed that other partners of the firm could have pursued the matter, and adequate time existed even after the stated events. It emphasized that recall jurisdiction requires proof that non-appearance was beyond the party’s control, which was not established in this case.
The Tribunal also clarified the distinction between recall and review, stating that recall is permissible only when there is denial of opportunity due to sufficient cause, whereas review requires an error apparent on record. The Applicant failed on both counts.
Further, the attempt to rely on a subsequent Supreme Court judgment (in a PMLA matter) was rejected, noting that it was not relevant to PBPTA proceedings and, in any case, was not brought on record in time.
Accordingly, finding no justification to interfere, the Tribunal refused to recall its earlier orders, leaving the Department’s appeal (allowing benami attachment) intact.
FULL TEXT OF THE ORDER OF APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
This Order disposes of the Applications I.A. Nos. MP-PBPT-917/CHN/2025 (Recall) dated 03.02.2025, MP-PBPT-918/CHN/ 2025 (Recall) dated 03.02.2025 and MP-PBPT-1286/CHN/2025 (Recall) dated 18.03.2025 have been filed by the Respondent/ Applicant M/s SRS Mining under Section 40 of the Prohibition of Benami Property Transaction Act, 1988 (PBPTA) seeking Recall of the Orders dated 03.07.2024, 14.01.2025 and 30.01.2025 passed by this Tribunal. The Applicant has also filed an Application for taking certain additional documents on record.
2. The present matter arises out of the Appeal No. FPA-PBPT-191/CHN/2018 filed by the Department against the Order dated 15.10.2018 passed by the Ld. Adjudicating Authority whereby the Provisional Attachment Order dated 27.09.2017 was not confirmed. During the course of the Appellate proceedings, the Tribunal vide its Order dated 03.07.2024 decided to proceed ex-parte against the Applicant due to its non-appearance on 18.10.2023, 13.02.2024 & 03.07.2024. However, the Respondent was granted liberty to join proceedings. Thereafter, the Respondent failed to appear on 16.10.2024 and 14.01.2025. The Appeal was argued at length by the Ld. Counsel for the Appellant Department on 14.01.2025. Since none had appeared for the Respondent i.e. the Applicant herein, the Order was reserved on 14.01.2025. The Appeal was disposed of by the Tribunal vide its Order dated 30.01.2025 by setting aside the Order dated 15.10.2018 passed by the Ld. Adjudicating Authority as being devoid of merit and the Department’s Appeal No. FPA-PBPT-191/CHN/2018 was allowed.
3. Ld. Sr. Counsel for the Applicant, M/s SRS Mining, argued that non-appearance on their behalf was neither wilful nor deliberate. One of the partners of the Applicant Firm, Shri J. Sekar, had assumed the responsibility of managing the case. However, during the relevant period, he was preoccupied due to his father’s serious health ailments who eventually passed away in July, 2024. This caused immense emotional distress to Shri J. Sekar which led to disruption in coordinating with the Counsel. The previous Counsel also failed to monitor the progress of the proceedings and did not inform the Applicant of the developments therein.
4. Ld. Sr. Counsel further argued that during the pendency of the Appeal proceedings, the Hon’ble Supreme Court in the case of J. Sekar @ Sekar Reddy v. Directorate of Enforcement [Criminal Appeal No. 738 of 2022 arising out of SLP (Crl.) No. 8305 of 2021] by its Order dated 05.05.2022, quashed the ECR CEZO 19/2016 including the Complaint bearing No. 2 of 2017. The Hon’ble Supreme Court stated the grounds as the “detailed order of acceptance of the closure report of the scheduled offence in RC MA1 2016 A0040 and the quashment of two FIRs by the High Court of the scheduled offence and of the letter dated 16.05.2019 of IT Department and also the observations made by the Adjudicating Authority in the order dated 25.02.2019, the evidence of continuation of offence in ECR CEZO 19/2016 is not sufficient.” The previous Counsel for the Applicant failed to bring this Judgement on record which would have had a direct bearing on the Appellate proceedings. Ld. Sr. Counsel for the Applicant therefore contended that failure to take into account the Supreme Court’s judgement of J. Sekar @ Sekar Reddy v. Directorate of Enforcement [Criminal Appeal No. 738 of 2022 arising out of SLP (Crl.) No. 8305 of 2021] would result in miscarriage of justice.
5. Ld. Sr. Counsel for the Applicant cited the Judgments of the Hon’ble Supreme Court in the matters of J. K. Synthetics Ltd. v. Collector of Central Excise [(1996) 6 Supreme Court 92] and Grindlays Bank Ltd. v. Central Government Industrial Tribunal and others [1980(supp) Supreme Court Cases 420] to state that the ‘Tribunal’ has the power to set aside its ex-parte order, if it is satisfied that the aggrieved party was prevented from appearing by sufficient cause even in the absence of an express provision in the concerned Act or Rules thereunder. Ld. Sr. Counsel also cited Rules 41 of the Custom, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982, in this regard. On the basis of the aforementioned arguments, Ld. Sr. Counsel for the Applicant prayed for the recall of the three Orders, as challenged vide the three Applications filed.
6. Ld. Counsel for the Non-Applicant submitted that despite being granted sufficient opportunities, the Applicant had failed to appear before the Tribunal. The father of Sh. J. Sekar passed away in July, 2024, yet in spite of adequate time available thereafter, the Applicant failed to participate in the proceedings. Moreover, the Applicant Firm M/s SRS Mining consisted of three partners, yet none of the other partners appeared before this Tribunal despite claiming rights over the attached property.
7. Ld. Counsel for the Non-Applicant further argued that the Applicant was well aware of the Judgment dated 05.05.2022 of the Hon’ble Supreme Court in J. Sekar @ Sekar Reddy v. Directorate of Enforcement [Criminal Appeal No. 738 of 2022 arising out of SLP (Crl.) No. 8305 of 2021], yet failed to place it on record till moving the Application on 19.02.2025 after the Appeal of the Department was disposed of by the Tribunal on 30.01.2025. Since, the Non-Applicant was not a party to the proceedings of the Hon’ble Supreme Court in the above-mentioned case, it could not have brought the same to the notice of the Tribunal. Moreover, the Judgment of the Hon’ble Supreme Court is not relevant to the present proceedings as it relates to the Prevention of Money Laundering Act, 2002 whereas the matter before the Tribunal arises under the PBPTA. Ld. Counsel also contended that the Application for filing additional documents by the Applicant can only be considered once the said Orders are recalled. Ld. Counsel submitted that the Applicant chose not to participate in the Appeal proceedings and has filed the present Application for additional documents only because the final order dated 30.01.2025 was not passed in its favour. He pleaded to dismiss the three Applications for recalling of the Orders.
8. We have considered the rival submissions and heard the arguments as well as perused the material on record. The present Applications have been filed by the Applicant M/s SRS Mining seeking recall of the Orders dated 03.07.2024, 14.01.2025 and 30.01.2025 passed in the Appeal proceedings by this Tribunal resulting in allowing of the Appeal No. FPA-PBPT-191/CHN/2018 filed by the Non-Applicant/ Appellant Department.
9. The Applicant has contended that its non-appearance was due to sufficient cause as the father of Sh. J. Sekar was suffering from dementia and later passed away in July 2024. It is also contended by the Applicant that there was negligence of the previous Counsel. Ld. Counsel for the Applicant also drew attention to the Judgment dated 05.05.2022 of the Hon’ble Supreme Court in J. Sekar @ Sekar Reddy v. Directorate of Enforcement which he claimed would have direct bearing on the proceedings.
10. The Non-Applicant vehemently opposed the recall applications and asserted that multiple opportunities had been duly afforded to the Applicant. However, the Applicant remained negligent, particularly in the light of the facts, that other partners were available and could have assumed the responsibility of managing the matter. Moreover, no error apparent on the face of record exists to justify interference at this stage. The Non-Applicant concluded by stating that no sufficient cause was established for recall of the ex-parte
11. The Tribunal is not inclined to accept the arguments of the Applicant that they were prevented by sufficient cause from appearing in the proceedings. The record reflects that the Applicant was provided a number of opportunities to appear before the Tribunal. The Applicant remained absent from the proceedings since 18.10.2023. The relevant Orders date-wise in this regard, are reproduced below:
18.10.2023
“None for the respondent.
However, Mr. Ankit Gupta, Advocate appeared and submitted that he has been recently engaged in the matter and is seeking two weeks time to file Vakalatnama. Request allowed.
Appellant is seeking adjournment on the ground that the main counsel is not available. Request allowed.
On request, appeal is adjourned to 13th February, 2024.”
13.02.2024
“Adjournment sought from the side of the Appellant to file written synopsis within four weeks. None for the Respondent however it is informed by Ld. Counsel for the Appellant that, as per his information, the Counsel for the Respondent is unwell.
On request, list on 3rd July, 2024.”
03.07.2024
“It is pointed out by the Ld. Counsel for the appellant that on the last date of hearing the name of the respondent is inadvertently written as B Babu Manoharan in place of M/s SRS Mining. The same is considered and allowed the correction has been made in court today.
None for the Respondent. Respondent is proceeded against exparte, with liberty to join proceedings.
On request, list the appeal for final hearing on 16th October, 2024.
In the meantime, operation of the impugned order is hereby stayed.
Copy of this order is given by hand, if so desired.”
16.10.2024
“The appeal is listed for final hearing but due to the absence of the Main Counsel for the appellant the same could not be taken up. Four weeks adjournment is sought. The same is considered and allowed as a last chance.
On request, list the appeal for final hearing on 14th January, 2025.”
14.01.2025
“Ld. Counsel for the appellant argued at length in the appeal. In spite of having granted number of opportunities, none was there to represent the respondents. Order Reserved.”
12. The aforementioned Orders demonstrate that ample opportunities were provided to the Applicant to appear and participate in the Appellate proceedings. Notably, even following the demise of the father of Sh. J. Sekar in July 2024, sufficient time was available with the Applicant to participate in the proceedings before this Tribunal. Even on 16.10.2024 it was made clear that the four weeks adjournment was being granted as a last chance. The Applicant Firm comprised of three partners. No explanation has been offered by the Applicant as to the reason for the failure of non-participation in the proceedings by the other two partners. Thus, no sufficient cause has been demonstrated to justify the non-appearance of the Applicant.
13. The Applicant has relied upon Judgments of the Hon’ble Supreme Court in the matters of J. K. Synthetics Ltd. v. Collector of Central Excise [(1996) 6 Supreme Court 92] and Grindlays Bank Ltd. v. Central Government Industrial Tribunal and others [1980(supp) SCC 420] to reaffirm the principle that the Tribunal has the power to recall its orders upon satisfaction that sufficient cause has been established to do so. Both the Judgments require it to be established that a non-appearance is for no fault of its own. The Judgments have held that in such cases not to recall the Orders on the grounds that no explicit provision is provided in the statute would be manifest injustice. Ld. Sr. Counsel for the Applicant has also emphasised on the inherent power of this Tribunal to review as well as recall its Orders. In this regard, he cited Section 40 (2) (h) of the PBPTA. The said provisions stipulate that the Appellate Tribunal shall have the power to set aside any order of dismissal of any representation for default or any order passed by its ex-parte. We do agree that the Tribunal enjoys the inherent power to either review or recall its orders. The principles underlying the recall and the review of an Order require interference with the said Order only if sufficient cause for non appearance is established in the case of recall and error apparent on the face of the record is clearly established in the case of review. The Judgment dated 21.01.2009 of the Hon’ble Supreme Court in the matter of Asit Kumar Kar v. State of West Bengal [MANU/SC/0062/2009] distinguished between the two and stated that a review is limited to correcting an error apparent on the face of the record, in a recall petition the Court does not go into the merits, but simply recalls an Order which was passed without giving an opportunity of hearing to an affected party. We note that the three Applications, which have been filed and are under consideration plead for recall of the aforementioned three Orders. In the facts and circumstances of the present case, we find that the Applicant has failed to demonstrate any sufficient cause warranting the recall of the Orders.
14. The Applicant has pleaded to take on record the Judgment dated 05.05.2022 of the Hon’ble Supreme Court in the matter of J. Sekar @ Sekar Reddy v. Directorate of Enforcement (Criminal Appeal no. 738 of 2022), through an Application moved on 19.02.2025 after the Appeal of the Department was disposed of by the Tribunal on 30.01.2025. We agree with the Non-Applicant that the said Application can only be considered after the three Applications are disposed of. It is also observed that there was sufficient time for the Applicant to have moved the said Application between 05.05.2022 and 14.01.2025, but it failed to do so. We do find merit in the arguments of the Non-Applicant that it could not bring the said Judgment on record, because it was not party to it since the Judgment relates to the Prevention of Money Laundering Act, 2002 and present proceedings are under the PBPTA.
15. In the light of the aforementioned discussion and analysis, we dismiss the three Applications I.A. Nos. MP-PBPT-917/CHN/2025 (Recall) dated 03.02.2025, MP-PBPT-918/CHN/2025 (Recall) dated 03.02.2025 and MP-PBPT-1286/CHN/2025 (Recall) dated 18.03.2025.
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