9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (10) TMI 894 - HC - Money LaunderingMoney Laundering - Provisional attachment of amounts that were frozen - substantive offence under Section 3 r/w Section 4 of the PMLA - HELD THAT - Coming to Rule 3A of the Prevention of Money-Laundering (Restoration of Property) Rules 2016, this Rule is undoubtedly sequel to the inclusion of the second proviso to Section 8(8) of the PMLA. However, both the second proviso to Section 8(8) and Rule 3A use the expression may and not shall . Where in a given case, the Special Court decides to proceed under the second proviso to Section 8(8), then Rule 3A prescribes a procedure for proceeding with the matter further and not otherwise. It is gainsaid that it is public money which, as narrated supra , had transcended into the hands of the accused and the respondent bank is justified in laying its claim for restoration of the property, more so, as a public sector bank. A fortiori , it would be purposeless to retain the property till the conclusion of the trial, which we find from a reading of the amendment, cannot be the intended purpose. Canara Bank will be entitled only to the balance amount that is now available. Canara Bank will not only be entitled to the principal amount but also the interest accrued thereon - In this case, the money that were attached are not counterfeit currency notes or phenolphthalein applied currency notes to be marked as material objects during trial. The proof of the fact that these amounts were provisionally attached by the Enforcement Directorate, the confirmation of the attachment by the Adjudicating Authority and the return of the amounts to Canara Bank can be established by marking a copy of the order of this Court. This Criminal Revision stands dismissed.
Issues Involved:
1. Legitimacy of the Enforcement Directorate's actions under the Prevention of Money-Laundering Act (PMLA). 2. Canara Bank's claim for the return of attached funds. 3. Applicability of Section 8(8) and Rule 3A of the PMLA. 4. The impact of the second proviso to Section 8(8) on Canara Bank's claim. 5. Judicial interpretation of the proviso's scope and its application to Section 8(7). Issue-wise Detailed Analysis: 1. Legitimacy of the Enforcement Directorate's actions under the Prevention of Money-Laundering Act (PMLA): The court acknowledged that the Enforcement Directorate (ED) was justified in registering a case under ECIR.No.1 of 2016 following the offences registered by the Central Crime Branch (CCB) in Crime No.64 of 2013, which are mentioned in the schedule to the PMLA. The CCB issued directions under Section 102 Cr.P.C. to freeze the bank accounts to safeguard the bank's money, and the ED provisionally attached the amounts under Section 5 of the PMLA. The court emphasized that the scheme in Chapter III of the PMLA is to safeguard the proceeds of a crime, with the ultimate power to confiscate the amounts left to the Special Court trying the accused under Section 3 r/w Section 4 of the PMLA. 2. Canara Bank's claim for the return of attached funds: Canara Bank's claim was based on Section 8(7) of the PMLA, which allows for the release of attached property if the trial cannot be conducted for reasons such as the death of the accused or the accused being declared a proclaimed offender. The court noted that for the last 70 hearings, the prosecution in C.C.No.58 of 2016 had been pending without progress, justifying Canara Bank's claim for the attached amounts lying idle in various bank accounts. 3. Applicability of Section 8(8) and Rule 3A of the PMLA: The court examined Section 8(8) of the PMLA, which allows the Special Court to restore confiscated property to a claimant with a legitimate interest who has suffered a quantifiable loss due to money laundering. The second proviso to Section 8(8) and Rule 3A of the Prevention of Money-Laundering (Restoration of Property) Rules 2016 outline the procedure for restoration during the trial. The court doubted whether the amendment (second proviso) would apply to Canara Bank's claim, as the bank had been claiming the amount since 2016. 4. The impact of the second proviso to Section 8(8) on Canara Bank's claim: The court clarified that Section 8(8) would come into play only after the Special Court has confiscated the attached amounts to the Central Government, which would occur only after the trial's conclusion. The court found that the second proviso to Section 8(8) did not apply to Section 8(7) and could not be stretched to cover a different subsection unless explicitly stated. 5. Judicial interpretation of the proviso's scope and its application to Section 8(7): The court referenced the Constitution Bench judgment in Ram Narain Sons Ltd. vs. Asst. Commissioner of Sales Tax, which held that a proviso to a particular provision only applies to the field covered by the main provision. The court concluded that the second proviso to Section 8(8) did not extend to Section 8(7) and that Rule 3A prescribes a procedure only if the Special Court decides to proceed under the second proviso to Section 8(8). Conclusion: The court found no infirmity in the impugned order dated 12.03.2019, dismissing the Enforcement Directorate's Civil Revision Petition. The court noted that Canara Bank would be entitled to the balance amount available and the interest accrued thereon. The court dismissed the apprehension that returning the amounts to Canara Bank would affect the trial, stating that the proof of attachment and return could be established by marking a copy of the court's order. The Criminal Revision was dismissed, and the connected Crl.M.P. was closed.
|
