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2019 (6) TMI 1074 - AT - Money Laundering


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 The appellant argued that the money was withdrawn from a bank in September and October 2017 and was intended for employee bonuses and salaries.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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