2019 (8) TMI 1774 - HC - Money Laundering

Money Laundering - proceeds of crime - allegation is that the respondents who were doing business in gold though received money through RTGS transaction did not part with the gold - HELD THAT - The submission made with respect to the statement made by Mr.Sukash Chandra Shekar pertains to only a sum of ₹ 46,69,000/-. Similarly in respect of the other amount of ₹ 51,25,000/-, there is a RTGS transaction. Thus, the appellate tribunal's findings in this regard cannot be found fault with. The appellate tribunal has rendered the above decision by considering the materials available on record. However, we find that a specific averment has been raised by the appellate in the complaint that the total amount of ₹ 4,60,94,825.97 is also the proceeds of the crime. The final adjudication in this matter is to be done by the trial court which is ceased of the matter. The order passed by the appellate tribunal stands modified. The respondents in both the appeals shall furnish either bank guarantee or immovable property security to the satisfaction of the adjudicating authority forthwith for a sum of ₹ 3,63,00,825.97. In other respects, the order passed by the appellate tribunal stand confirmed. The Registry is directed to post this matter on 14.10.2019 for reporting compliance.

Summary

Issues:
Challenge to order under The Prevention of Money Laundering Act, 2002.

Analysis:
The High Court of Madras addressed the challenge to the order dated 23.03.2017 passed by the appellate tribunal under The Prevention of Money Laundering Act, 2002. The appellate tribunal set aside the order passed by the adjudicating authority in Original Complaint No.211 of 2013, stating that only the attachment to the extent of &8377; 3,63,00.825.97 out of the total amount of &8377; 4,60,94.825.97 was liable to be released. The court did not delve into the factual details but highlighted the findings of the appellate tribunal regarding the transactions involved in the case. The court noted that the respondent failed to rebut the observations made by the appellant regarding the transactions and lack of action against other entities involved in the alleged money laundering. The court also considered statements indicating discrepancies in the transactions and decided to release a specific amount while retaining another sum pending further proceedings.

The appellant's case revolved around the proceeds of the crime allegedly available in the respondent's account, involving transactions with Mr. Sukash Chandra Shekar. The appellate tribunal's order was based on the lack of evidence showing the transfer of gold as claimed by Mr. Sukash Chandra Shekar, leading to the decision to attach specific amounts. The Additional Solicitor General argued that the attachment should not have been restricted and highlighted the application of Sections 22 to 24 of The Prevention of Money Laundering Act, 2002. The respondent's counsel contended that the attachment was rightly upheld for the specified amounts and raised objections to the appeal's maintainability.

After considering the submissions, the court found that the appellate tribunal's findings regarding the specific transactions and amounts could not be faulted. However, the court directed the respondents to provide security for the remaining amount pending final adjudication by the trial court. This decision aimed to safeguard the interests of both parties until the trial court's determination. The court modified the appellate tribunal's order, requiring the respondents to furnish security for the specified amount while confirming the rest of the appellate tribunal's decision. The Civil Miscellaneous Appeals were disposed of accordingly, with the matter scheduled for compliance reporting on a specified date.