9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 1023 - AT - Money LaunderingProceedings under the Prevention of Money Laundering Act, 2002 - Provisional attachment of property - The appellant was not arrayed in the FIR or charge sheeted. She was not involved in schedule offence. No prosecution complaint is pending against her. From the documents placed on record, it is evident that the appellant paid the entire purchase consideration from her personal bank account. She has no family relation whatsoever with any of the respondents named above. Even the purchase consideration part of, directly or indirectly, any transaction(s) with the respondents named above. The appellant has filed confirmation issued by the bankers HSBC confirming the details of the cheques issued in favour of UB Holdings HDFC Bank Escrow Account and cleared from her account. Held that - From the entire gamut of the matter, it is evident that the appellant was the claimant in the flat. By making the entire payment, the appellant is become stake-holder as the amount paid by the appellant was not proceed of crime. The appellant is also not involved in the money laundering. The question of link and nexus in the criminal activities directly or indirectly does not arise. As far as the impugned order dated 11.2.2016 is concerned, the said order is not sustainable in law and the facts of the present case. The same is set-aside against the appellant with regard to flat in question. The provisional order is also quashed accordingly by allowing the appeal. However, it is clarified that this tribunal has decided the appeal pertaining to the order passed on the attachment of flat allegedly purchased by the appellant. The finding shall have no bearing with regard to merit of other proceedings pending against the accused parties including extradition proceedings. It is alleged that the flat in question is one of the assets in which the Official Liquidator is appointed, therefore, the appellant, the respondent nos. 3, 5 and 8, unless the final order is passed in her favour, shall not create third party interest directly or indirectly.
Issues Involved:
1. Whether the appellant has committed any offence under Section 3 of the Prevention of Money Laundering Act, 2002. 2. Whether the subject property is proceeds of crime and whether the appellant is in possession of proceeds of crime. 3. Whether the appellant has any rightful and legal claim over the subject property. 4. Validity of the Provisional Attachment Order and Confirmation Order. 5. Whether the appellant was given mandatory notice under Section 8(2) of PMLA. 6. The impact of other pending proceedings on the current appeal. 7. The relevance of the appellant's role as an Independent Director in another company related to the accused. Detailed Analysis: 1. Offence under Section 3 of PMLA: It is not the case of the Respondent that the appellant has committed any offence under Section 3 or is involved in the commission of the same. The appellant is the purchaser of the subject property, for which she paid the complete consideration through duly documented legal banking channels, even prior to the date of registration of the FIR or the ECIR. 2. Proceeds of Crime: The subject property has been attached as "value thereof." The appellant has vested rights in the subject property prior to the attachment by Respondent-ED. It is not even the case of the Respondent that the subject property is involved in money laundering. The entire purchase consideration was paid before the registration of the FIR pertaining to the predicate offence and the registration of the ECIR. There is no evidence or material on record to show that the appellant has any link, nexus, or association with the accused parties. 3. Rightful and Legal Claim: The appellant entered into agreements to purchase the flat and paid the full consideration through legal banking channels. The agreements were executed much before the registration of ECIR and FIR. The appellant has paid sufficient Stamp Duty on the Agreements to Sell and the Construction Agreements. The appellant is a bona fide purchaser and has a legitimate interest in the subject property. 4. Provisional Attachment Order and Confirmation Order: The Provisional Attachment Order No. 11/2016 was passed on 11.6.2016, and the Confirmation Order was passed by the Adjudicating Authority on 11.2.2016. The appellant was not named in the FIR or ECIR, and no notice under Section 8(2) was issued to her. The impugned order dated 11.2.2016 is not sustainable in law and the facts of the present case and is set aside against the appellant with regard to the flat in question. The provisional order is also quashed accordingly. 5. Mandatory Notice under Section 8(2) of PMLA: The appellant was not given the mandatory notice required under Section 8(2) of PMLA. Despite having full knowledge about the transaction, Respondent No. 1 and the Adjudicating Authority failed to issue notice to the appellant or afford her a hearing during the adjudication proceedings. This failure to comply with the mandatory statutory requirement invalidates the attachment. 6. Impact of Other Pending Proceedings: The appellant has filed applications in O.S.A. No. 5/2017 before the Hon’ble Karnataka High Court, seeking impleadment and directions for the execution of the Sale Deed(s). These proceedings have no bearing on the adjudication of the present appeal, which is limited to determining whether the subject property is involved in money laundering. The tribunal has no jurisdiction to pass orders regarding the execution of the sale deed or delivery of possession. 7. Role as Independent Director: The appellant has no connection with UBHL or Kingfisher Airlines Ltd., which are the companies alleged to be involved in the FIR and the ECIR. She has never been a Shareholder or Director in UBHL or KAL and has no other direct or indirect interest, financial or otherwise, in these companies. The appellant was an Independent Director of M/s United Breweries Ltd., a public listed company, and received only sitting fees and commission permissible under the Companies Act, 2013. The appellant's role as an Independent Director does not establish any collusion or connection with the accused parties. Conclusion: The appeal is allowed, and the impugned order dated 11.2.2016 is set aside against the appellant with regard to the flat in question. The provisional attachment order is quashed. The appellant is recognized as a bona fide purchaser with a legitimate interest in the subject property. The findings of this tribunal have no bearing on the merit of other proceedings pending against the accused parties, including extradition proceedings. The appellant, respondent nos. 3, 5, and 8, unless a final order is passed in her favor, shall not create third-party interest directly or indirectly. No costs are awarded.
|
