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2019 (5) TMI 474 - AT - Money LaunderingOffence under PMLA - Provisional Attachment Order - whether any proceedings against the appellant survived once his father was not convicted under any offence? - HELD THAT - It is not denied by the respondent that his father expired before competition of trial and final order. He was not convicted accused when expired. In the present case, there was no FIR against the appellant. No charge-sheet was filed against the appellant. He was not charged. He had purchased the property after selling two properties owned by him. The Supreme Court judgment U. SUBHADRAMMA AND ORS. VERSUS STATE OF A.P. AND ORS. 2016 (7) TMI 1514 - SUPREME COURT is directly on the issue in hand. In the light of above, the impugned order passed by the Adjudicating Authority is set-aside by allowing the appeal. The provisional attachment order is also quashed.
Issues Involved:
1. Challenge to Provisional Attachment Order (PAO) and its confirmation. 2. Determination of the property as "Proceeds of Crime" under Section 2(1)(u) of PMLA. 3. Impact of the death of the accused on the proceedings. 4. Validity of statements recorded under Section 164 Cr.PC. 5. Legal implications of transactions involving sale of properties. Issue-Wise Detailed Analysis: 1. Challenge to Provisional Attachment Order (PAO) and its confirmation: The appellant contested the Provisional Attachment Order dated 15.01.2015 and its confirmation on 01.06.2015 by the Adjudicating Authority under Section 5(1) of the Prevention of Money Laundering Act, 2002 (PMLA). The appellant, an engineer with a reputable MNC, argued that his property, Flat No. 31401 at ATS Township Noida, was purchased from his savings and not from proceeds of crime. 2. Determination of the property as "Proceeds of Crime" under Section 2(1)(u) of PMLA: The appellant claimed that the property did not fall under the definition of "Proceeds of Crime" as per Section 2(1)(u) of the PMLA. The charge sheet indicated that the transactions investigated by CBI were from 2009 to 2010, involving the appellant's father, who was alleged to have embezzled funds. The appellant's defense was that the funds used to purchase the property were from the sale of another property, not from the alleged embezzled funds. 3. Impact of the death of the accused on the proceedings: The appellant’s father, who was implicated in the embezzlement, died before the trial concluded. The judgment referenced the Supreme Court case U. Subhadramma & Ors. Vs. State of Andhra Pradesh, which stated that proceedings against a deceased person cannot continue. The court concluded that since the appellant's father was not convicted, the attachment of the appellant's property could not be justified. 4. Validity of statements recorded under Section 164 Cr.PC: The Adjudicating Authority heavily relied on statements recorded under Section 164 Cr.PC by Virender Goyal and Neeraj Upadhyay. However, these statements were not corroborated, and the Supreme Court in Jwinglee Ariel V. State of Madhya Pradesh ruled that uncorroborated statements under Section 164 Cr.PC cannot be considered valid evidence. The court found that these statements did not support the case against the appellant. 5. Legal implications of transactions involving sale of properties: The appellant provided evidence of the sale of two floors of property at 43/5 Ashok Nagar, New Delhi, to Virender Goyal and Neeraj Upadhyay, with the proceeds used to purchase the flat in question. The transactions were confirmed by registered sale deeds, and the payments were received through cheques. The court noted that the respondent did not dispute the ownership or sale of the properties, and there was no evidence to show that the ?88 lakhs was part of the alleged embezzled funds. Conclusion: The court set aside the impugned order passed by the Adjudicating Authority, quashed the Provisional Attachment Order, and lifted the attachment of the flat. The judgment emphasized that there was no FIR or charge sheet against the appellant, and the property was purchased through legitimate means. No costs were awarded.
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