2016 (1) TMI 1340 - AT - Money Laundering

Offence under PMLA - provisional attachment of properties - Held that - On being asked by this Tribunal, the counsel for appellant could not offer any explanation on behalf of appellant as to how he has met his household expenses during this period. When the appellant was earning salary of more than ₹ 1,00,000/- per month which is deposited in the bank account and there are no withdrawals to meet out household expenses and he does not offer any explanation as to how the household expenses were met during the relevant period i.e. financial year 2011-12, it gives sufficient reasons to draw adverse inference against the appellant. This adverse inference when considered in the light of the allegations made in the charge sheet, will prima facie show that there is substantial probable cause to believe that the appellant was in possession of alleged proceeds of crime and the amount of ₹ 4,86,900/- seized by the police on 7-2-2012 is out of such alleged proceeds of crime and not out of the sum of ₹ 5,50,000/- withdrawn on 4-8-2011 by the appellant from Allahabad Bank as claimed by him. The explanation offered by the appellant to explain the amount of ₹ 4,86,900/- seized on 7-2-2012 by the Police from his residential house is liable to be rejected. Thus we are of the considered view that the explanation offered by the appellant to explain the amount of ₹ 4,86,900/- seized on 7-2-2012 by the Police from his residential house is liable to be rejected. The explanation offered by the appellant in respect of the amount of ₹ 4,86,900/- is held to be an afterthought to wriggle out of the allegations of money laundering and to project the same as untainted property. Consequently the appeal is dismissed

Issues Involved:
1. Legality of the provisional attachment of properties under the Prevention of Money Laundering Act (PMLA).
2. Validity of the cash seizure of Rs. 4,86,900/- from the appellant's residence.
3. Appellant's involvement in the TET 2011 scam.
4. Explanation and legitimacy of the seized cash as claimed by the appellant.

Issue-Wise Detailed Analysis:

1. Legality of the Provisional Attachment of Properties under PMLA:
The appeal challenges the impugned order dated 29-8-2014, confirming the provisional attachment of properties as per Provisional Attachment Order No. 04/2014. The properties were attached based on allegations that the appellant and other accused persons generated proceeds of crime through fraudulent activities related to the Teachers Eligibility Test (TET) 2011 scam. The Adjudicating Authority confirmed the attachment, which the appellant contested, claiming the attached properties were self-acquired and untainted.

2. Validity of the Cash Seizure of Rs. 4,86,900/- from the Appellant's Residence:
The appellant argued that the seized cash was his hard-earned money, withdrawn from his savings account for his daughter's pregnancy and delivery expenses. The appellant claimed the money remained unused and was kept at home. However, the respondent countered that the cash was part of the proceeds of crime from the TET 2011 scam. The Tribunal noted inconsistencies in the appellant's explanations regarding the source and purpose of the cash, leading to the rejection of his claims.

3. Appellant's Involvement in the TET 2011 Scam:
The appellant and other accused were charged under Sections 420 r/w 120B of IPC and Sections 7/13 & 8/9 of the Prevention of Corruption Act, which are scheduled offences under PMLA. The investigation revealed that the appellant, as Director of U.P. Madhyamik Shiksha Parishad, was allegedly the kingpin of a racket collecting money from candidates to fraudulently pass them in the TET 2011 examination. Statements from various accused persons corroborated the appellant's involvement in the scam.

4. Explanation and Legitimacy of the Seized Cash as Claimed by the Appellant:
The appellant provided multiple explanations for the seized cash, including claims that it was withdrawn for his daughter's delivery expenses and later returned by his daughter and son-in-law in installments. However, these explanations were inconsistent and contradictory. The Tribunal found that the appellant failed to provide a credible explanation for keeping such a large amount of cash at home for an extended period. Additionally, the appellant's bank statements showed no significant withdrawals to meet household expenses, raising doubts about the legitimacy of the seized cash.

Conclusion:
The Tribunal concluded that the appellant's explanations for the seized cash were inconsistent and unconvincing. The evidence suggested that the cash was part of the proceeds of crime from the TET 2011 scam. Consequently, the appeal was dismissed, and the provisional attachment of the properties was upheld. All pending applications were also closed.

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