2018 (2) TMI 2048 - HC - Money Laundering

Violation of principles of natural justice - petitioners case is that before passing the order of provisional attachment another opportunity of hearing should have been given to them - Money Laundering - scheduled offence - proceeds of crime - attachment of property - properties are suspected to be the proceeds of crime - HELD THAT - Before passing the order of provisional attachment the petitioners were given opportunity and only thereafter being satisfied that there are materials to believe the properties in the possession of the petitioners are likely to be proceeds of crime the provisional attachment order has been passed to avoid transfer or concealment. The order of provisional attachment is strictly in conformity to Section 5 of the PMLA. The action of provisional attachment has been initiated by the competent authority only after registration of complaint of schedule offences namely Sections 120 B 420 467 and 471 of IPC r/w Sections 3 and 4 of the Explosive Substances Act - Since the matter has been seized by the adjudication authority we are restraining ourselves from expressing any view on the merit of this case except dismissing the writ petition as devoid of merits. Petition dismissed.

Summary

Issues: Violation of natural justice in passing provisional attachment order

Issue Analysis:
The petitioners, sons of an individual against whom an FIR has been registered for scheduled offenses, were served notices by the Directorate of Enforcement to show cause why provisional attachment should not be made regarding the proceeds of crime found in their possession. The petitioners argued that they were not given another opportunity of hearing before the provisional attachment order was passed, alleging a violation of natural justice. However, the court found no violation upon perusal of the impugned order. It was noted that the petitioners were indeed given an opportunity before the provisional attachment order was passed. The court emphasized that the provisional attachment was in accordance with Section 5 of the Prevention of Money Laundering Act (PMLA) and was initiated after the registration of complaints for scheduled offenses. The court highlighted that the provisional attachment was a preventive measure to avoid transfer or concealment of properties believed to be proceeds of crime. The court concluded that if the petitioners had merits to challenge, they could do so during the adjudication proceedings to prove that the properties were not proceeds of crime. The court refrained from expressing any opinion on the case's merit, dismissing the writ petition for lack of merits.

Conclusion:
The court, after thorough consideration, found no violation of natural justice in passing the provisional attachment order against the petitioners. The court emphasized that the order was in conformity with the relevant legal provisions and was a preventive measure against potential transfer or concealment of properties believed to be proceeds of crime. The petitioners were given an opportunity before the order was passed, and they could challenge the attachment during the adjudication proceedings. The court dismissed the writ petition, refraining from expressing any opinion on the case's merit, leaving it for adjudication by the competent authority.