2018 (9) TMI 456 - HC - Money Laundering

Complaint under Section 5(5) of Prevention of Money Laundering Act 2002 - Held that - After affording an opportunity to the petitioners under Section 50 and being satisfied that prima-facie material against them and reason to believe that the petitioners are in possession of proceeds of crime the complaint has been registered and it is under investigation besides adjudication for attachment. Under these circumstances it cannot be construed that the Authorities have no power under Section 3 or 5 to proceed against the petitioners or the complaint itself is bereft of material and liable to be quashed. It is for the petitioners to participate in the enquiry/investigation. On completion of investigation it is always open to the petitioner to approach the appropriate Court under the appropriate provision of law for redressal of his grievance if any. Therefore both on merits as well as on the facts of the case these petitions are not maintainable and liable to be dismissed. Accordingly dismissed.

Summary

Issues:
Challenge against registering of complaint under Section 5(5) of Prevention of Money Laundering Act, 2002 (PML Act) - Petitioners seeking quashment of complaint - Authority of respondent to register complaint under PML Act questioned - Petitioners claiming no involvement in any crime or money laundering - Interpretation of relevant provisions under PML Act.

Analysis:
The writ petition challenged the registering of a complaint under Section 5(5) of the Prevention of Money Laundering Act, 2002 (PML Act) by the petitioners, who are partners of a firm where a prima facie case of money laundering was found. The petitioners argued that the respondent had no authority under the PML Act to register the complaint and that Section 3 of the Act did not apply to them as there was no material showing their involvement in any crime. They contended that the assets in their possession could not be considered proceeds of crime. The petition sought to quash the complaint against them.

The Court considered the definitions and provisions under the PML Act, including Section 2(u) defining "proceeds of crime," Section 3 on "Offences of Money-laundering," and Section 5(5) regarding the filing of a complaint after provisional attachment of property. The Court noted that after giving the petitioners an opportunity under Section 50 and being satisfied with prima facie material against them, a complaint was registered and was under investigation for attachment.

The Court held that the Authorities had the power under Sections 3 and 5 to proceed against the petitioners as there was prima facie material indicating their possession of proceeds of crime. The Court emphasized that the petitioners could participate in the investigation and could seek redressal in the appropriate Court after the investigation. Therefore, the Court found the petitions not maintainable on merits and dismissed them, stating that the petitioners could approach the Court for relief after the investigation. The Court concluded by dismissing the petitions without costs and closed the connected miscellaneous petitions.