2019 (9) TMI 942 - AT - Money Laundering

Money Laundering - proceeds of crime - immovable property acquired as divorce alimony - whether any proceed of crime has been used by her and or her ex-husband, ShivrajPuri in acquiring the said property? - Attachment of the property. HELD THAT - From the investigation conducted, it has inter-alia emerged that Shri Shivraj Puri by abusing his official position as the Relationship Manager in Citibank Gurgaon, and in furtherance to a criminal conspiracy hatched and executed by him together with his relatives/associates fraudulently opened and operated Custodian Account No. 5011666247 in the Bank in the names - the appellant was removed from the aforesaid premises by the Gurgaon Police on 9.6.2011 without any notice. The premises was locked. Her belongings including her education and experience certificates, clothes and her personal belongings are inside the house. The possession was taken by the ED. The appellant is neither an accused nor a co-accused nor even a witness in the Citibank Scam being investigated and was named merely as a respondent as she was rightly a defendant and a rightful claimant of one of the property. The above-mentioned property was not acquired from the proceed of crime and is not involved in money laundering, therefore, the attachment at the hand of respondent is released by setting aside the impugned order only pertaining to said property - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Ownership and acquisition of House No. M-4/9, DLF Phase-II, Gurgaon.
2. Involvement of proceeds of crime in acquiring the property.
3. Appellant's involvement in money laundering.
4. Legitimacy of the attachment of the property under PMLA.

Detailed Analysis:

1. Ownership and Acquisition of House No. M-4/9, DLF Phase-II, Gurgaon:

The appellant claimed ownership of the property through a registered gift deed as part of a divorce settlement. The property was purchased by her ex-husband, Shivraj Puri, in 2009 before the alleged criminal activities began. Payments for the property were made on 25th September 2009 and 29th October 2009 through Standard Chartered Bank drafts. The appellant argued that the property was acquired legitimately and was transferred to her as part of the divorce settlement recorded before the court.

2. Involvement of Proceeds of Crime in Acquiring the Property:

The Enforcement Directorate (ED) alleged that the property was purchased using proceeds of crime generated by Shivraj Puri through fraudulent schemes. However, the appellant contended that the property was purchased before the fraudulent activities began. The SEBI circular, which was the basis of the bogus scheme, was dated 1st January 2010, and the Citibank Custodian Account was opened on 27th October 2009. The appellant asserted that there were no transactions in the account until November 2009, and the payments for the property were made prior to these dates.

3. Appellant's Involvement in Money Laundering:

The appellant was not named in any FIR, charge-sheet, or prosecution complaint. She was not accused of any wrongdoing and had no involvement in the fraudulent activities conducted by her ex-husband. The appellant was separated from Shivraj Puri in 2009 and was unaware of his criminal activities until informed by Citibank in December 2010. She was not called upon by any court as an accused or even as a witness.

4. Legitimacy of the Attachment of the Property under PMLA:

The provisional attachment order was challenged by the appellant, arguing that the property was not acquired from proceeds of crime. The Tribunal found that the property was purchased legitimately before the fraudulent activities began and was not involved in money laundering. The attachment of the property was set aside, and the appellant was directed to approach the Special Court, PMLA, Gurgaon, to get the property released as per the prescribed provisions of Sub-section 8 of Section 8 of the Act.

Conclusion:

The Tribunal concluded that the property was not acquired from proceeds of crime and was not involved in money laundering. The attachment of the property by the ED was released, and the appellant was allowed to approach the Special Court for the release of the property. The appeal was allowed, and no costs were awarded.