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2025 (4) TMI 1193 - AT - Money LaunderingMoney laundering - predicate offence - possession of proceeds of crime - attachment of shares - HELD THAT - The description of the litigation taken by the appellant has been given with operative paras as otherwise the appellant has also summarized certain parts of the order in the written argument but it is only after extracting small part of the para suitable to the appellant leaving other parts and it is without referring to the operative part of the orders. The earlier litigation resulted in the order based on facts available then and otherwise the involvement of appellants in commission of crime was revealed even in further investigation and therefore prosecution complaint (PC) has been filed against the appellant. The fact otherwise reveals receipt of the amount and purchase of shares was designed for transfer of bribe money out of the deal of Agusta Westland UK. Paras 77 and 83 of judgment have also been referred to indicate that the shares were acquired in the year 2003 which is prior to the allegation of any scheduled offence and as a result of alleged kickbacks paid by AgustaWestland and thereby the Deputy Director of Enforcement Directorate had no authority to freeze the shares which were delivered in settlement to the purchaser and there was no allegation against the purchaser. It is necessary to clarify that in the aforesaid judgment cognizance of the freezing of shares under section 17(1) of the Act of 2002 was taken along with the appeal preferred by the appellant against the freezing order with appropriate liberty to pursue the appeal. If final conclusion would have been drawn by High Court of Delhi in favour of the appellant there was no reason to allow the appellant to pursue the appeal. It is further necessary to clarify that the main allegation against the appellant is routing the bribe money for which ledger entry was referred and thereupon money was transferred and used for purchase of shares. The case of money-laundering is to be taken when it is revealed that proceeds of crime has been channelized. In reference to this we may cite the judgment of Karnataka High Court in Mr. Dyani Antony Paul versus Union of India 2020 (12) TMI 1296 - KARNATAKA HIGH COURT and Telangana High Court in Vem Krishna Keerthan versus Directorate of Enforcement 2024 (12) TMI 1557 - TELANGANA HIGH COURT where it was held that the relevant time to look into the crime would be the date when it comes to the notice of Enforcement Directorate that a crime of money-laundering has taken place and not the date of predicate offence. Part of paras 92 and 93 of the judgment of the High Court of Delhi 2019 (1) TMI 515 - DELHI HIGH COURT have been quoted without indicating the reason of making observation by the High Court of Delhi in regard to the transaction of sale of equity shares of KRBL. In fact the Writ Petition was filed when the respondent restrained the appellant to transact in the shares and it was addressed by the High Court of Delhi as to whether action is legally sustainable or not. Subsequently those shares were frozen and against which appellant filed the appeal and was noted by the High Court of Delhi. No interference in the freezing order was caused. It is necessary to further add that the High Court of Delhi had disposed of the appeal and operative part of the said order has been quoted. It was not entirely favourable to the appellant rather Writ Petition was disposed with certain observations. Had it been a case to hold action of the respondent to be illegal and the appellant is not the recipient of the proceeds of crime there was no reason for the High Court of Delhi to dispose of the petition in reference to the appeal preferred by the appellant against the order of seizure of the shares. Conclusion - The appellants are involved in money laundering activities. The attachment of shares is lawful and justified under the PMLA. Appeal dismissed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment involve:
2. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The PMLA defines "proceeds of crime" under Section 2(1)(u) as any property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence. The Act allows for the attachment of such proceeds under Section 5(1) if they are suspected to be involved in money laundering. Court's interpretation and reasoning: The Tribunal considered previous judgments, including those from the High Court of Delhi, which addressed the legality of the ED's actions and the definition of "proceeds of crime." The Tribunal noted that while the High Court had previously found the ED's initial actions questionable, subsequent investigations provided new evidence linking the appellants to the proceeds of crime. Key evidence and findings: The Tribunal reviewed evidence indicating that funds received by Rawasi AI Khaleej General Trading LLC (RAKGT) were linked to money laundering activities involving AgustaWestland. The funds were allegedly used to purchase shares, which were then subject to attachment. The Tribunal found that the appellants failed to provide satisfactory explanations for these transactions. Application of law to facts: The Tribunal applied the PMLA's provisions to the facts, focusing on the definition of "proceeds of crime" and the evidence of money laundering activities. It concluded that the attachment of shares was justified based on the evidence of the appellants' involvement in money laundering. Treatment of competing arguments: The appellants argued that the shares were acquired legally and that previous litigation outcomes favored them. However, the Tribunal emphasized the new evidence obtained during subsequent investigations, which indicated the appellants' involvement in money laundering. The Tribunal dismissed the appellants' reliance on earlier judgments, noting that those decisions were based on the evidence available at the time. Conclusions: The Tribunal concluded that the attachment of shares was justified under the PMLA, as the appellants were found to be in possession of proceeds of crime. The appeals were dismissed based on the evidence of money laundering activities. 3. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: "The prima facie opinion of the High Court of Delhi is based on the material available at that time. Subsequently, material was collected in further investigation and this order refers as to how the appellant got involved in the commission of crime." Core principles established: The judgment reinforces the principle that the PMLA applies to any property derived from criminal activities, regardless of when the assets were acquired. It also underscores the importance of subsequent investigations in revealing new evidence that can alter the outcome of legal proceedings. Final determinations on each issue: The Tribunal determined that the attachment of shares was lawful and justified under the PMLA. It found that the appellants were involved in money laundering activities, and the appeals were dismissed based on the evidence presented.
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