2019 (3) TMI 1516 - AT - Money Laundering

Offence under PMLA - attachment orders - Special Court has initiated the proceedings in the present case and taken cognizance - HELD THAT - Section 8 deals with adjudication by the adjudicating authority which as per Section 8(3) authorises, the adjudicating authority to confirm the attachment of the property if it is involved in money laundering. Hence, while the attachment powers are with the adjudicating authority the power to confiscate, release or restore to a claimant of the said property lies specifically with the Special Courts. This Tribunal has not been assigned any specific powers under PMLA with relation to confiscation, release or restoration of the property attached. Since the Special Court has initiated the proceedings in the present case and taken cognizance of the same, the Special Court has to decide the case including the offence of money laundering as discussed above, which in any case only the Special Court can decide and not the Appellate Tribunal. The scheme of things as it exists under the PML Act shows that it is the same property which can be provisionally attached, thereafter this attachment can be confirmed by the adjudicating authority, that the order with regard to the same property would become final after an order of confiscation is passed by the Special Court (Section 8(3)(b), or released or restored as per Section 8(6) or Section 8(8) second proviso as the case may be. In this background, it would be appropriate to keep this appeal in abeyance until the Special Court, who has already taken cognizance finally disposes of the case

Summary

Issues:
1. Appeal filed by M/s. RAG Buildtech Pvt. Ltd. against allegations of money laundering.
2. Allegations of criminal conspiracy and cheating involving a former bank director.
3. Preliminary point raised regarding the jurisdiction of the Special Court under PMLA.
4. Argument regarding the authority of the Appellate Tribunal in relation to confiscation of properties.

Analysis:

1. The appeal was filed by M/s. RAG Buildtech Pvt. Ltd. against allegations of money laundering involving Shri Anup Prakash Garg, a former Director in Andhra Bank. The Enforcement Directorate (ED) alleged that Mr. Garg received gratification for favoring certain companies during his tenure. The ED claimed that funds received by Mr. Garg were funneled into M/s. RAG Buildtech Pvt. Ltd., a company established with his family members as directors.

2. The respondent raised a preliminary point arguing that the case was already before the Special Court under PMLA, and thus, requested to keep the case pending until the Special Court's decision. The appellant contended that the ED failed to establish Mr. Garg's involvement in RAG Buildtech and argued against the attachment of their properties as proceeds of Mr. Garg's alleged crimes.

3. The judgment highlighted the jurisdiction of the Special Court under PMLA, emphasizing that the Special Court has the authority to adjudicate on offenses of money laundering and related proceedings. It was clarified that the Special Court is empowered to order confiscation, release, or restoration of properties involved in money laundering, and the Appellate Tribunal does not possess similar powers in this regard.

4. The Tribunal acknowledged the Supreme Court's ruling reaffirming that offenses under PMLA and scheduled offenses connected to them are triable by the Special Court. The judgment emphasized the procedural steps under PMLA, indicating that property attachment by the adjudicating authority must be confirmed, and final decisions regarding confiscation or release of properties lie within the Special Court's jurisdiction.

5. Consequently, the Tribunal decided to keep the appeal in abeyance until the Special Court's final disposition of the case. Both parties were directed to notify the Tribunal upon the Special Court's pronouncement of the final order, aligning with the legal framework and hierarchy established under the Prevention of Money Laundering Act.