2019 (5) TMI 473 - AT - Money Laundering

Offence under PMLA - Provisional Attachment Order - HELD THAT - Respondent No. 1 and the Adjudicating Authority have not complied with the mandatory statutory requirement of the Proviso to Section 8(2), PMLA. The appellant had interest in the property in question, but no mandatory notice required under section 8(2) was served. Section 8(2) is a mandatory provision, it is mandated under the proviso that if property is claimed by a person other than accused, he shall also be given an opportunity of being heard to prove that the property is not involved in money laundering. Despite of above, no notice was given. The appellant is, no doubt, claimant in the attached property. It is not understood why the requisite notice was not issued by the respondent and Adjudicating Authority. Despite being Appellant s claim to the said Property, Respondent failed to fulfill its statutory duty, in terms of Rule 3(2) PML (Issuance of Provisional Attachment Order) Rules, 2013, to supply a copy of the Provisional Attachment Order to the Appellant at the time of the issuance of the same. Respondent-ED even prima facie is not able to establish any collusion/connection of the Appellant and accused person/seller. The impugned order is not sustainable against the appellant. The same is set-aside by allowing the appeal. Consequently, Provisional Attachment Order against the said impugned property 15A/18, East Patel Nagar, New Delhi is also quashed.

Issues Involved:
1. Confirmation of Provisional Attachment Order.
2. Innocence and Bona Fide Purchase of the Appellant.
3. Non-involvement in Scheduled Offence.
4. Procedural Lapses by Respondent and Adjudicating Authority.
5. Compliance with Section 8(2) of PMLA.
6. Legal Precedents and Jurisprudence.

Detailed Analysis:

1. Confirmation of Provisional Attachment Order:
The appeal was filed against the order dated 27.10.2016, which confirmed the provisional attachment of property at 15A/18, East Patel Nagar, New Delhi. The Adjudicating Authority had confirmed the attachment without attributing any role of crime to the appellant.

2. Innocence and Bona Fide Purchase of the Appellant:
The appellant claimed to be an innocent purchaser of the property before the date of the alleged offence. She was not charged with any offence by any agency, and no prosecution complaint was pending against her or the seller. The appellant presented documents, including the sale deed dated 02.02.2015, and evidence of payment through banking channels, proving the lawful acquisition of the property.

3. Non-involvement in Scheduled Offence:
It was undisputed that the appellant was not named in the FIR or charge-sheeted. The FIR involved allegations against other individuals for illegal foreign remittance and forgery. The appellant was not involved in any scheduled offence under PMLA 2002.

4. Procedural Lapses by Respondent and Adjudicating Authority:
The Adjudicating Authority did not consider the appellant's documents proving lawful purchase. Despite the appellant's claim and evidence, the Authority failed to issue a mandatory notice under Section 8(2) of PMLA, which requires a hearing for any claimant to the property. The respondent also failed to supply a copy of the Provisional Attachment Order to the appellant at the time of issuance.

5. Compliance with Section 8(2) of PMLA:
The appellant was not given an opportunity to be heard, as mandated by Section 8(2) of PMLA. The provision requires that if a property is claimed by a person other than the accused, they must be given a chance to prove that the property is not involved in money laundering. The failure to comply with this mandatory provision was a significant procedural lapse.

6. Legal Precedents and Jurisprudence:
The judgment referenced the case of B. Rama Raju Vs. UOI, where it was held that if a person proves the bona fide acquisition of a property, the Adjudicating Authority must consider this and relieve the property from provisional attachment. The proceedings for attachment and confiscation are distinct from prosecution for money laundering, and bona fide acquisition must be carefully considered.

Conclusion:
The impugned order confirming the provisional attachment was found unsustainable against the appellant. The appeal was allowed, and the Provisional Attachment Order against the property at 15A/18, East Patel Nagar, New Delhi, was quashed. No costs were awarded.

← Previous Next →