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2017 (8) TMI 798 - AT - Money LaunderingPMLA - provisional attachment - Held that - The tainted nature of the property was well known to JMD Media Pvt. Ltd. as well as the buyers. As stated earlier, the Chief Inspector of Registration, Gujarat State, Gandhinagar had issued a circular conveying that where properties have been attached under Section 5(1) of the Prevention of Money Laundering Act, 2002, the properties mentioned in the attachment order should not be registered without prior approval of the concerned Department. Having received the initial payment of ₹ 6 Lakhs on 13.12.2010 M/s JMD Media Pvt. Ltd. thought it prudent to give a notice in the newspaper through their Advocates only on 08.04.2011 as regards any person having objection to the sale of the said property, Still further, an amount of ₹ 5 lakhs was paid by the appellant to M/s JMD Media Pvt. Ltd. on 9th June, 2011 itself, whereas a communication from the Advocate stating that no objection had been received from anyone to the proposed sale of the said property has been received vide certificate dated 22.09.2011 only. As far as registration of sale deed is concerned, the same has not been registered. We agree with regard to the argument that the FIR in the matter was registered on 31.01.2008 and the schedule offence were added on 01.06.2009, the same have no force as the units in questions were sold only in the year-2011. As regards the other arguments of the appellant, the same have no force as each and every plea raised by the appellant before us has been dealt in the impugned order. There is no infirmity in the impugned order. We find no force in the arguments of the appellants that the impugned order dated 10th July, 2012 is arbitrary, unreasonable, high handed, only without jurisdiction and illegal and void. There is no infirmity in the order, we have passed a detailed order in the connected appeal.
Issues Involved:
1. Legitimacy of provisional attachment order on Vishal House. 2. Compliance with Section 5(1) of the Prevention of Money Laundering Act (PMLA). 3. Connection between Vishal House and proceeds of crime. 4. Validity of sale deed and registration issues. 5. Allegations of scheduled offences and their timeline. 6. Jurisdiction and procedural propriety of Enforcement Directorate (ED). 7. Impact of the circular dated 30.06.2010 and letter dated 21.07.2011. Detailed Analysis: 1. Legitimacy of Provisional Attachment Order on Vishal House: The Adjudicating Authority confirmed the provisional attachment order dated 15.03.2012, which attached Vishal House. The appellant contested this confirmation, arguing that the property was not purchased using proceeds of crime and that there was no material evidence to support such a claim. 2. Compliance with Section 5(1) of the PMLA: The appellant argued that the Adjudicating Authority failed to fulfill the essential conditions of Section 5(1) of the PMLA. Specifically, the appellant contended that there was no reason to believe that Vishal House was acquired from proceeds of crime, and the charge sheet did not provide any evidence to support such a claim. The respondent, however, maintained that the reasons to believe were based on sufficient material, including the CBI charge sheet and statements of directors. 3. Connection Between Vishal House and Proceeds of Crime: The appellant claimed that the funds used to purchase Vishal House were obtained from different and independent parties, not from proceeds of crime. The respondent countered this by detailing the flow of funds, showing that the amount used to purchase Vishal House was transferred from group firms controlled by the masterminds of the scam, Pradeep Mehta and Deepak Mehta. The respondent provided a detailed fund flow chart to substantiate this claim. 4. Validity of Sale Deed and Registration Issues: The appellant argued that the execution of the sale deed on 10.12.2011 established ownership of the property, despite the Sub-Registrar's refusal to register the sale deed based on the ED's letter dated 21.07.2011. The respondent contended that the sale deed was a sham document created after the ED's letter and that the property was known to be tainted. 5. Allegations of Scheduled Offences and Their Timeline: The appellant argued that the offences under Sections 120B, 420, 471, and 477A of the Indian Penal Code and Section 13(2) of the Prevention of Corruption Act were not scheduled offences at the time they were allegedly committed. The respondent maintained that the offences were added to the schedule on 01.06.2009, and the property was sold in 2011, making the attachment valid. 6. Jurisdiction and Procedural Propriety of ED: The appellant claimed that the ED had no jurisdiction to attach the property as the charge sheet did not allege commission of a scheduled offence resulting in the property being derived or obtained. The respondent argued that the ED's actions were based on sufficient material and that the designated court's cognizance of the charge sheets lent further credence to the ED's actions. 7. Impact of Circular Dated 30.06.2010 and Letter Dated 21.07.2011: The appellant argued that the circular and letter were misquoted and that the ED had no authority to issue restraint orders before passing the provisional attachment order. The respondent maintained that the circular and letter were valid and necessary to prevent the transfer of the tainted property. Judgment: The Tribunal upheld the Adjudicating Authority's order, confirming the provisional attachment of Vishal House. The Tribunal found no merit in the appellant's arguments and dismissed the appeal. However, the Tribunal allowed the appellant to continue possession of the property, subject to depositing ?25,000 per month with the respondent until the final disposal of proceedings under the PMLA. This deposit would be without prejudice, and its fate would depend on the final outcome of the trial.
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