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2019 (6) TMI 1074 - AT - Money LaunderingOffence under PMLA - retention of the seized cash from the appellant s office - HELD THAT - Reading of Sections 17 to 21 that outer limit upto the date for deciding the application for retention of property within the meaning of sub-section 4 of Section 21 is 180 days from the date of seizure of any property or records. The said period is not extendable. The person concerned/aggrieved party of such order, is entitled to file the appeal under Section 26 of the Act. The same shall be heard and after giving an opportunity of being heard, the appellant Tribunal shall pass the order either to confirm the order of retention or to modify or setting aside the same. PMLA is a Special Act. The provisions of the said Act are mandatory. They have to be applied as it. Being an independent Act, no different meaning can be given. They have to be interpreted as it is. It is correct that the power to attach or seize or freeze a property can be exercised only if the officer concerned has material in his possession who has a reason to believe that property sought to be attached or seized is proceed of crime or related to the crime irrespective as to whether complaint under the schedule offence and prosecution complaint under PMLA is filed or not against the party who has in his possession of proceeds of crime. But, the situation where the investigation was being done on the basis of a mere suspicion against the party where the statute provides prescribed period of time and mandates the condition that it would continue during investigation for a period not exceeding ninety days. Having in possession of proceed of crime and period of investigation on the basis of suspicion are two different situations. The law laid down earlier where the time limit was not provided may not be applicable because of change of situation by virtue of amendment which was carried on 19.4.2018, the specific period is prescribed in the Act for the purpose of investigation. Earlier, no specific timeline was set to complete the investigation and to file the prosecution complaint. The mandates now is changed whereby it is mandated that the retention shall continue during investigation for a period not exceeding ninety days, as provided under section 8(3)(a) of the Act or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India. The second part of the provision is not applicable in the absence of such situation. In the light of above, the appeal is allowed. The impugned order dated 02.04.2018 against the appellant is set-aside.
Issues Involved:
1. Legality of the retention order under Section 26 of the Prevention of Money Laundering Act (PMLA), 2002. 2. Investigation and seizure procedures under PMLA. 3. Compliance with statutory timelines for investigation and filing of prosecution complaints under PMLA. 4. Applicability of amendments to Section 8(3)(a) of PMLA. Issue-wise Detailed Analysis: 1. Legality of the Retention Order: The appeal was filed against an order dated 2nd April 2018, which retained ?14,75,200 seized from the appellant’s office. The appellant argued that the money was withdrawn from a bank in September and October 2017 and was intended for employee bonuses and salaries. No prosecution complaint or charge sheet was filed against the appellant under Section 8(3)(a) of PMLA, and no FIR or criminal complaint by CBI was pending against the appellant. The respondent admitted that no such complaint was filed within the stipulated 90 days. 2. Investigation and Seizure Procedures: The case originated from an Anti-Corruption Branch of CBI investigation into a criminal conspiracy involving Union Bank of India officials and others. The Enforcement Directorate (ED) recorded an ECIR under PMLA against the accused. During the investigation, it was found that demonetized currency was deposited and transferred to purchase gold bullion. The seized cash of ?14,75,200 was found during a search of premises linked to the appellant, who could not satisfactorily explain the source of the money. 3. Compliance with Statutory Timelines: The relevant provisions of PMLA, including Sections 17, 18, 20, and 21, outline the procedures for search, seizure, and retention of property. Section 8(3)(a) mandates that retention of property during investigation should not exceed 90 days unless a prosecution complaint is filed. The appellant argued that the retention order was invalid as the investigation was not completed within the prescribed timeline, and no prosecution complaint was filed. 4. Applicability of Amendments to Section 8(3)(a): The amendment to Section 8(3)(a) effective from 19.04.2018, limited the investigation period to 90 days. The Tribunal noted that the specific period for investigation and retention of property is now prescribed, and earlier orders without such timelines are not applicable. The Tribunal emphasized that the law mandates the retention of property during the investigation for a period not exceeding 90 days, and failure to comply with this timeline renders the retention order invalid. Conclusion: The Tribunal allowed the appeal, setting aside the impugned order dated 02.04.2018. It was concluded that the retention order was invalid due to non-compliance with the statutory timelines prescribed under the amended Section 8(3)(a) of PMLA. No costs were awarded.
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