2024 (12) TMI 159 - AT - Money Laundering

Challenge to provisional attachment order - appellant submits that prosecution complaint has not been filed against anyone which includes the accused named in the ECIR despite expiry of 365 days from the date of the impugned order, thus, the attachment and so the order should lapse - HELD THAT - The freezing/ attachment would continue during the period of investigation to be completed within 365 days or pendency of the case before the Court in reference to offences under the Act of 2002. At times, the respondent make argument that with sending a copy of ECIR is to be considered as pendency of the case in the competent court for the offence of Act of 2002. There are no reason now for the respondent to continue freezing rather it stands lapsed which are otherwise perishable goods and after freezing by the respondent, a period of more than 2 years as already gone by now. In the light of the aforesaid and the legal position in reference to Section 8(3) of the Act of 2002, there are reasons to cause interference in the impugned order rather the freezing order and its confirmation is declared to have lapsed by an afflux of time in absence of the prosecution compliant against any of the accused and accordingly the impugned order is said aside. The appeals are allowed.

Summary

Issues:
Challenge to the order confirming provisional attachment due to non-filing of prosecution complaint within 365 days.

Analysis:
The judgment pertains to a batch of appeals challenging the order confirming provisional attachment issued by the Adjudicating Authority. The main contention raised by the appellant's counsel was the non-filing of a prosecution complaint against any accused named in the ECIR within 365 days from the date of the impugned order. The respondent, while admitting the delay in filing the prosecution complaint, argued that one of the accused, Mr. Prakash Goyal, named in the ECIR was involved in the business of betelnut, and the betelnuts might belong to other appellants as well. The FIR was registered following the Bombay High Court's direction, but no custom case was registered against any appellants. Despite the lapse of 365 days, the prosecution complaint had not been filed.

The Tribunal considered the submissions and noted that the FIR and ECIR were registered based on the Bombay High Court's order regarding illegal trading of betelnut from foreign countries. The High Court had expressed concern over the retention of betelnut as perishable goods and directed early disposal of the appeal filed by the appellants. However, as the prosecution complaint had not been filed within the stipulated time, the Tribunal analyzed Section 8 of the Prevention of Money Laundering Act, 2002, which governs the adjudication process.

The Tribunal referred to a previous judgment regarding the interpretation of Section 8, emphasizing that the freezing or attachment of properties should continue during the investigation period, not beyond 365 days unless the case is pending before the court. The Tribunal concluded that the freezing order had lapsed due to the prolonged delay, considering the perishable nature of the goods and the absence of a prosecution complaint against any accused. Consequently, the impugned order confirming the attachment was set aside, and the appeals were allowed. The Tribunal also waived the costs imposed on the officer involved in the case.