2016 (10) TMI 1086 - AT - Money Laundering

PMLA - Attachment orders - Held that - The documents relied upon or referred to in the matter may not be supplied simply on the grounds that most of the documents are already in the possession of the appellants or on the ground that they are not relevant. We are of the considered view that once the documents are referred or likely to be referred while passing the order after considering the reply and taking into account all the relevant materials placed on record under sub-section (2) of Section 8 of the PMLA the same are necessary to be supplied even though some of the documents are already in the possession of the accused person. As far as the attachment of any other properties and/or further attachment of properties are concerned where the investigation is ongoing the appellants are not entitled to any document and part of the statement(s) of witnesses recorded during the investigation at this stage if it relates to such attachment/on-going investigations. Only the documents referred to in the statement of witnesses in relation to the attachment of properties as covered in the present P.A.O. and relied on in the present original complaint are to be supplied. The prayers made in the above-mentioned appeals are partly allowed by setting aside the impugned orders dated 8-9-2016. The limited prayer is granted by directing the respondent to supply the copies of statement(s) of witnesses recorded by the investigation and pertaining to the attachment of certain properties under the present P.A.O. and relied on in the present original complaint which are in its possession and the documents shown/tendered during such statement(s) to the appellants within a period of 10 days from today. It is agreed by the learned counsels for the appellants that they will file the reply within 10 days thereafter and would not seek any adjournment in the matter before the Adjudicating Authority so that the Adjudicating Authority would be at liberty to decide the show cause notice issued within the time prescribed under the Act.

Issues Involved:
1. Supply of complete documents relied upon in the complaint.
2. Principles of natural justice in proceedings under the Prevention of Money Laundering Act (PMLA).
3. Relevance and necessity of documents for the defense of the accused.
4. Allegations of delaying tactics by the appellants.
5. Adjudicating Authority's discretion and compliance with procedural fairness.

Issue-wise Detailed Analysis:

1. Supply of Complete Documents Relied Upon in the Complaint:
The appellants contended that the documents supplied along with the complaint were incomplete, prejudicing their right to file a proper reply to the show cause notice. They highlighted specific instances where statements and documents referred to in the complaint were not provided. The respondent argued that most documents were already in the possession of the appellants or were irrelevant to the current provisional attachment order (PAO). The tribunal emphasized that the appellants are entitled to receive documents and statements pertaining to the attachment of properties under the present PAO and relied upon in the original complaint.

2. Principles of Natural Justice in Proceedings under PMLA:
The tribunal noted that the question of compliance with the principles of natural justice is to be seen in accordance with the scheme of the PMLA. It highlighted the framework of attachment and adjudication under the PMLA, emphasizing the importance of providing notice and relevant documents to the concerned parties at the stage of adjudication. The tribunal underscored that the right to be heard includes the right to know the case made against the accused and to have a fair opportunity to correct or contradict the evidence and statements affecting them.

3. Relevance and Necessity of Documents for the Defense of the Accused:
The tribunal observed that the documents referred to or likely to be referred to while passing the order are necessary to be supplied to the accused, even if some documents are already in their possession. It clarified that the appellants are entitled to receive documents and statements only pertaining to the attachment of properties that are the subject matter of the present complaint and not to ongoing investigations or other attachments.

4. Allegations of Delaying Tactics by the Appellants:
The respondent alleged that the appellants were adopting delaying tactics to extend the use of the proceeds of crime. The tribunal found no merit in this argument, noting that the appellants filed the application for complete documents promptly and agreed not to delay the adjudication process. The tribunal emphasized that the appellants' request for documents was legitimate and necessary for their defense.

5. Adjudicating Authority's Discretion and Compliance with Procedural Fairness:
The tribunal disagreed with the Adjudicating Authority's rejection of the appellants' application, stating that the confirmation of attachment of properties is a serious matter requiring an opportunity for the accused to raise their defense. It held that the Adjudicating Authority's decision lacked consideration of the principles of natural justice and procedural fairness. The tribunal directed the respondent to supply the necessary documents and statements within 10 days and allowed the appellants to file their reply within 10 days thereafter.

Conclusion:
The tribunal partly allowed the appeals, setting aside the impugned orders dated 8-9-2016. It directed the respondent to supply the relevant documents and statements to the appellants, ensuring compliance with the principles of natural justice and procedural fairness. The tribunal emphasized the importance of providing a fair opportunity for the accused to defend themselves in the adjudication process under the PMLA.

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