2025 (2) TMI 108 - AT - Money Laundering

Money Laundering - Seizure of bank lockers and Gold - Challenge to order passed by the Adjudicating Authority confirming the seizure of the properties belonging to the appellants - HELD THAT - The appellant has questioned the seizure of bank lockers on the ground that they were already under seizure by the CBI and for the aforesaid reason, there was no chance to deal with those lockers by the appellants. A specific reference of locker no. 86 and 96 in the name of the appellant was given. It is found that if the lockers are already under seizure of CBI it could not have been seized by the respondent by invoking Section 17(1) of the Prevention of Money- Laundering Act 2002. In fact it could have been when they apprehend concealment or tampering of the record or the property. The concealment could not have been when the lockers were already seized by the CBI. Thus there are no justification on the part of the respondent to seize the locker no. 86 and 96 in the name of the appellant Shri Luv Bhardwaj. There are no justification to seize 3.2 kg gold found at the time of search. The appellant has given reference of the Circular issued by the CBDT and submitted that the said gold was belonging to his mother wife unmarried daughter apart from recently wedded sister. A woman is entitled to keep 500 gms gold while an unmarried woman is entitled to 250 gms gold. Once the locker was under seizure with the CBI there remained no justification or reason to seize the same locker and thereby interference in the seizure of those lockers is also made for the reason that seized lockers cannot be seized again rather they can again be seized if it is released by the CBI. The respondent would be at liberty to seize those lockers by taking an action afresh for which this order would not come thereby. Conclusion - The properties already under seizure by one authority (CBI) should not be seized again by another unless specific conditions are met such as release by the initial authority. The respondent s actions lacked justification in several instances leading to partial interference with the impugned order. Appeal disposed off.

Summary

The judgment from the Appellate Tribunal under SAFEMA at New Delhi addresses several core legal issues concerning the seizure of properties, including bank lockers and gold, by the respondent. The appellants challenged the order of the Adjudicating Authority, which confirmed the seizure of their properties. The Tribunal considered the following issues:

Issues Presented and Considered:

1. Whether the seizure of bank lockers, already under the seizure of the CBI, by the respondent was justified.

2. Whether the seizure of 3.2 kg of gold was justified under the CBDT circular allowing certain gold possession limits for women.

3. Whether the seizure of Rs. 5,62,000 was justified given the appellant's inability to justify the possession of the amount.

Issue-Wise Detailed Analysis:

1. Seizure of Bank Lockers:

- Legal Framework and Precedents: The Prevention of Money-Laundering Act, 2002, particularly Section 17(1), was relevant for determining the legality of the seizure. This section allows seizure to prevent concealment or tampering with property.

- Court's Interpretation and Reasoning: The Tribunal found that if the lockers were already under the CBI's seizure, the respondent could not justify a subsequent seizure unless there was a risk of concealment or tampering, which was not possible due to the CBI's prior action.

- Key Evidence and Findings: Specific reference was made to lockers no. 86 and 96, which were already seized by the CBI. The Tribunal found no justification for the respondent's actions.

- Application of Law to Facts: The Tribunal applied Section 17(1) of the Act of 2002, concluding that the respondent's actions were unjustified.

- Treatment of Competing Arguments: The respondent's arguments opposing the appellant's claims were considered but ultimately found unsubstantiated.

- Conclusions: The Tribunal interfered with the seizure of the lockers, stating that they could only be seized afresh if released by the CBI.

2. Seizure of 3.2 kg of Gold:

- Legal Framework and Precedents: The CBDT circular issued on 01.12.2016, which prescribes permissible gold possession limits for women, was central to this issue.

- Court's Interpretation and Reasoning: The Tribunal accepted the appellant's explanation that the gold belonged to various family members and was within the permissible limits.

- Key Evidence and Findings: The gold was claimed to belong to the appellant's mother, wife, unmarried daughter, and other family members.

- Application of Law to Facts: The Tribunal found the appellant's claims consistent with the CBDT circular, leading to the conclusion that the seizure was unjustified.

- Treatment of Competing Arguments: The respondent's opposition was noted but not found convincing.

- Conclusions: The Tribunal ruled against the seizure of the 3.2 kg of gold.

3. Seizure of Rs. 5,62,000:

- Legal Framework and Precedents: The Tribunal considered the requirement for appellants to justify possession of significant cash amounts.

- Court's Interpretation and Reasoning: The Tribunal noted the appellant's failure to provide a source for the cash.

- Key Evidence and Findings: The appellant could not justify the possession of the cash.

- Application of Law to Facts: The Tribunal upheld the seizure due to the lack of justification.

- Treatment of Competing Arguments: The appellant's arguments were insufficient to overturn the seizure.

- Conclusions: The Tribunal did not interfere with the seizure of the cash.

Significant Holdings:

- The Tribunal emphasized that properties already under seizure by one authority (CBI) should not be seized again by another unless specific conditions are met, such as release by the initial authority.

- The Tribunal highlighted the importance of adhering to legal limits on property possession, as outlined in relevant circulars and statutes.

- The Tribunal concluded that the respondent's actions lacked justification in several instances, leading to partial interference with the impugned order.

The Tribunal's decision reflects a careful analysis of the legal framework, facts, and competing arguments, resulting in a nuanced outcome that partially favored the appellants by overturning certain seizures while upholding others.