2018 (9) TMI 931 - AT - Money Laundering

Application for interim stay under section 35 of PMLA Act - provisional attachment order - Held that - The suggestion was made on the last few dates that the attachment order already passed in respect of Room No. 39, 3rd Floor, Ambulkar Sadan, Gokhale Road, South Dadar, Mumbai-400028 may continue till the final outcome of the criminal complaint which is pending before the Special Court. The counsel for the respondent has no objection. The counsel for the appellant states that this Order may be passed without prejudice to the right and contention of the appellant. The counsel for the appellant agrees to deposit ₹ 181/- per month with the respondent till the final outcome of the matter before the Special Court. The said suggestion is agreeable to the learned counsel for the respondent. The appeal is disposed of. In case the proceedings pending before the Special Court are decided in favour of the appellant, who would be entitled to file appropriate application as well as refund of the rental amount which is being deposited as user and occupation charges as well as release of flat in question.

Issues:
1. Challenge against the provisional attachment order under the Prevention of Money-laundering Act, 2002.
2. Claim of the property being tenancy property and not owned by the appellant.
3. Allegation of violation of principles of natural justice due to inadequate notice period and denial of opportunity to file written submissions.
4. Dispute regarding the ownership of the property in question.
5. Interim stay granted against dispossession pending appeal.

Analysis:

1. The appellant challenged the provisional attachment order dated 21st August, 2014, under the Prevention of Money-laundering Act, 2002, as Defendant no. 6 in the order. The appellant argued that the property in question was tenancy property and not owned by them, providing evidence of a tenancy agreement and rent receipts.

2. The appellant contended that the property mentioned in the provisional attachment order was under the Pagdi System and being a residential tenancy property, it could not be attached under the provisions of the Prevention of Money-laundering Act, 2002. The appellant raised concerns about the denial of the opportunity to substantiate their claim and highlighted the violation of principles of natural justice due to inadequate notice period for responding to the allegations.

3. The appellant further stated that the property in question was not purchased by them, providing details of a different property owned and sold by them in the past. They argued that the amount received from the sale agreement was reserved for investing in house property and was used to execute the tenancy agreement for the property under dispute.

4. An interim stay was granted against the dispossession of the appellant from the premises in question, subject to monthly deposits with the respondent. The appellant agreed to deposit the specified amount per month until the final outcome of the matter before the Special Court. The appeal was disposed of with the possibility of the appellant filing appropriate applications and seeking a refund of the rental amount deposited.

5. The proceedings were to continue before the Special Court, and if decided in favor of the appellant, they would be entitled to seek refund and release of the property. No costs were awarded in the judgment.

This detailed analysis covers the issues raised in the legal judgment, including challenges against the provisional attachment order, property ownership disputes, violations of natural justice, and the interim stay granted pending appeal.

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