2018 (5) TMI 727 - AT - Money Laundering

Offence under PMLA - appeal filed by minor - provisional attachment order - property gifted by grandfather - Held that - The said property was gifted by the grandfather in favour of the appellant vide Registered Gift Deed dated 15.12.2008, which was originally purchased by the great grandmother of the appellant in the year 1968. The property was acquired by the appellant of one floor i.e. 1st floor, bearing municipal no. 15-1-469 situated at Feel Khana, Hyderabad. At the time of purchasing the property by the appellant, the question of money involved does not arise. This aspect has not been considered by the respondent as well as the adjudicating authority while passing the orders. No reason to believe in this regard has been given. It is settled law that if something wrong is done by the father or in relation, his son cannot be punished, Therefore, the attachment order against the appellant in relation to the 1st floor of the house property bearing municipal no. 15-1-469 situated at Feel Khana, Hyderabad is not sustainable on facts and law. Under these circumstances, the impugned order dated 26.12.2016 with regard to the attachment of the appellant property is set aside by allowing the appeal. The appeal is accordingly allowed.

Summary

Issues:
1. Appeal filed by a minor under the Prevention of Money Laundering Act, 2002.
2. Validity of the attachment of property owned by the minor.
3. Allegations against the minor's father regarding money laundering.
4. Legal protection of minors in court proceedings.

Analysis:
1. The appeal was filed by a minor represented by his father under the Prevention of Money Laundering Act, 2002. The minor, a student, was the Defendant No. 8 in the complaint, and a property owned by him through a Registered Gift Deed was attached. The property in question was a floor of a house in Hyderabad, acquired through a gift deed from his grandfather. The minor's case focused on this specific property.

2. The minor's father was accused of money laundering in 2009, but no charges were brought against the minor. The property gifted to the minor was acquired before the alleged offense by the father. The court emphasized that the minor, being under legal protection, cannot be held accountable for the actions of the father. The court found that the attachment of the property owned by the minor was not justified based on the facts and the law. The court set aside the attachment order regarding the minor's property.

3. The court considered the minor's age at the time of the provisional attachment order and confirmed that he was indeed a minor. The property gifted to him was not questioned by the respondent during the proceedings. The court highlighted that the property was gifted to the minor through a registered document and was not linked to any wrongdoing by the father. The court concluded that the attachment of the minor's property was not sustainable based on the law and facts presented.

4. The court reiterated the legal principle that minors are under the protection of the court, and any decree obtained against a minor without following due process is considered null. The court clarified that the order setting aside the attachment of the minor's property would not impact other properties attached by the respondent. Overall, the court allowed the appeal, emphasizing that the minor's property attachment was not justified given the circumstances and legal protections afforded to minors in such cases.