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Money Laundering - Case Laws
Showing 181 to 200 of 2025 Records
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2024 (10) TMI 390
Provisional Attachment Order - time limitation - whether it is appropriate to entertain the present writ petition against the Provisional Attachment Order (PAO) issued by the Directorate of Enforcement on 28.08.2024 before the statutory period of 30 days elapsed when the Adjudicating Authority is required to examine the same under Section 5 (5) of the Prevention of Money Laundering Act, 2002? - HELD THAT:- The Supreme Court, in Vijay Madanlal Choudhary & Others v. Union of India & Others [2022 (7) TMI 1316 - SUPREME COURT], while examining the constitutional validity of various provisions of the 2002 Act, has also examined the validity of Section 5. It has been found that the adequate safeguards have been provided in the 2002 Act in order to give an opportunity to the aggrieved person to file his response/objections before the Adjudicating Authority. The 2002 Act has also ensured that the PAO will be passed either by the Director or any other officer not below the rank of Deputy Director authorized by the Director for the purpose of this Section while giving reasons to believe on the basis of material in his possession.
Once the sufficient provisions have been made in the 2002 Act to ensure availability of the adequate remedies, it would not be appropriate for this Court to entertain the petition even before the statutory 30 days’ period from the date when PAO has been passed. It is only in the rare and exceptional cases, the Constitutional Court would entertain the petition before the expiry of the period of 30 days.
This Court disposes of the writ petition relegating the petitioner to avail its alternative remedy. Needless to observe that this Court has not made any observation on the merits of the case and the Adjudicating Authority will make efforts to expedite the matter.
Petition disposed off.
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2024 (10) TMI 389
Money Laundering - Application for quashing of proceeding - predicate offences - petitioner had amassed huge amount of wealth, which could not have been from his known source of income - HELD THAT:- In Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT], the Hon’ble Supreme Court upheld the validity of several salient features of the PML Act. Among other things, it was held there that if a person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money laundering against him.
Admittedly, the present proceeding under the PML Act relates to predicate offences in a case instituted by the CBI, which has not been dropped and/or quashed. It is still pending. It is a different thing that in the said parent case, the petitioner has still been shown as witness. The proposition of law that an accused in a PML Act case need not be an accused in the predicate offences case covers this issue.
The proceeding that has been dropped is an independent one that was started against the petitioner on charges, inter alia, of amassing disproportionate assets. This case too was initiated by the CBI. But, the instant PMLA proceeding does not owe its origin to the purported predicate offences contained in such subsequent case started by the CBI. Therefore, the dropping of such subsequent proceeding would hardly have much bearing on the PML Act case started in respect of first case concerning predicate offences.
The allegations levelled against the petitioner indeed involve disputed questions of fact that cannot be gone into at this stage.
There are no merit in the petitioner’s application for quashing of proceeding. Therefore, the same is dismissed, however without any order as to costs.
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2024 (10) TMI 388
Money Laundering - proceeds of crime - the respondent ED are allowed to retain/seize/freeze the documents, digital records, bank accounts etc., seized from the premises of various persons including the present appellant - HELD THAT:- The plea of the present appellant that he is not involved in any offence is without any merit in view of the allegations pointed out by the respondent.
However, seeing the fact that prosecution complaint is already filed, the present appellant is entitled to the copies of all relied upon documents/seized material and he has right to apply for release of all un-relied documents (if any), if the same are not required for any further investigation.
The present appeal is hereby dismissed.
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2024 (10) TMI 387
Money Laundering - Proceeds of crime - scheduled offences - respondent ED are allowed to retain/seize/freeze the documents, digital records, bank accounts etc., seized from the premises of various persons including the present appellant company, during the search conducted on 07.04.2017 - Sections 420 & 120B of the Indian Penal Code, 1860 and Section 13(2) r/w 13(1) (d) of the Prevention of Corruption Act, 1988 - principles of natural justice - HELD THAT:- The fact that present appellant is neither named in the CBI/police charge-sheet case, nor in the prosecution complaint filed by respondent ED is no ground to release the said amount, as there is nothing on record that appellant supplied any goods or services against the said amount to M/s Prenda Creations, by way of any invoice/bill. Therefore, the sum of Rs. 6.05 Crores being part of proceeds of crime which were transferred to the aforesaid bank account of M/s RAP Events is correctly seized/frozen by respondent ED. The appellant M/s RAP Events cannot be allowed for unjust enrichment out of the proceeds of crime, simply because, appellant was ignorant about the nature of said remittance.
The present appeals are liable to be dismissed being devoid of any merits - Appeal dismissed.
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2024 (10) TMI 386
Money Laundering - predicate offence - provisional attachment of immovable properties - source of income - invocation of Section 5(1) of the Act of 2002 - HELD THAT:- It is a fact that the appellant Nirmal Chandra Rout had disclosed a very meagre income of Rs. 5,74,880/- in the Assessment Years 2008-09 to 201213 but invested in many properties to the tune of more than Rs. 20,87,700/-, apart from his investment in the construction of one-storied building. No document was produced to prove loan to purchase the properties of the worth more than his income. Even the wife, who is also appellant before us in whose name some of the properties have been purchased has stated that she is a housewife and money was taken by way of loans, however could not produce any documentary evidence to substantiate the same. Accordingly, argument of the appellant that no material or evidence has been shown for his involvement in the case cannot be accepted. It is also that they had not disclosed the source of income.
The chances of transfer of the property remains immediately on registration of the FIR and ECIR. Thus, whenever there is likelihood of transfer of the property, the attachment can be made. In the instant case, the appellant has not stated that he would not transfer the property till conclusion of the trial and if he makes a statement to this effect, then he needs to clarify how he would be affected by the attachment when properties can be used by him without its alienation.
There are substance in the argument of the learned counsel for the respondent. In fact, it would be impossible to produce the material to show preparation for transfer of property. If the accused would be intent to transfer the property, it can be done within no time.
Finding no merit in the issues raised by the appellants, appeal would fail and is dismissed.
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2024 (10) TMI 228
Seeking grant of default bail - Money Laundering - amassing Assets disproportionate to known sources of income u/s 13 (1) (e) of the Prevention of Corruption Act, 1988 - Under what circumstances can a Complaint filed in the Court can be considered as incomplete?
HELD THAT:- In the case of Satender Kumar Antil [2021 (10) TMI 1296 - SUPREME COURT], the Apex Court observed that it is the duty of the Agency to complete the investigation within the time prescribed and a failure would entitle the accused to be released on default bail. The right enshrined is an absolute and indefeasible one, inuring to the benefit of suspect, to which due effect must be given by the Courts. Thus, any detention beyond the period would certainly be illegal, being an affront to the liberty of the person concerned. Therefore, it is not only the duty of the investigating agency but also of the Court to ensure that in appropriate cases, the accused gets the benefit of Section 167 (2) of the Cr.P.C.
Similar observations were made in Rakesh Kumar Paul [2017 (8) TMI 1526 - SUPREME COURT] wherein it was observed that the ‘default bail’ is an important right about which millions of countrymen may not be aware because of their ignorance and illiteracy.
In the case of Sanjay Dutt [1994 (9) TMI 351 - SUPREME COURT], the expression “if not already availed of” as they appear in Section 167 (2) have to be understood to mean that when an Application is filed by the accused and he is prepared to offer the bail then it has to be held that the accused has availed his indefeasible right even though the Court has not considered the said Application and has not indicated the terms and conditions of bail.
Under what circumstances can a Complaint filed in the Court can be considered as incomplete? - HELD THAT:- In the present case, the contents of the Complaint disclosed all the ingredients for commission of an offence against the accused and the cognizance is also taken, it is evident that the investigations qua the accused for disclosing the commission of the offence, is complete. There may be supplementary investigations undertaken, but the learned Special Judge has rightly observed that incidental or supportive investigations may continue by way of F.S.L. Report, which was to collect such other further details but that in itself would not take away the completeness of the Complaint in so much as the contents of the Complaint discloses all the ingredients for commission of offence. Mere supplementary evidence, which is only intended to be filed in support of the main Charge Sheet, would not make the Complaint incomplete.
In the case of Vijay Madanlal Chaudhary and Others [2022 (7) TMI 1316 - SUPREME COURT] it was observed that Clause (ii) of the Explanation to Section 3 is only an enabling provision permitting to take on record material regarding further investigation against any accused person involved in respect of offence of money-laundering for which Complaint has already been filed, whether he has been named in the complaint or not. Such a provision, in fact, is a wholesome provision to ensure that no person involved in the commission of offence of money-laundering, must go unpunished. It is always open to the Authority authorised to seek permission of the Court during the trial of the Complaint in respect of which cognizance has already been taken by the Court, to bring on record further evidence which request can be dealt with by the Special Court in accordance with law keeping in mind the provisions of the 1973 Code as well.
The learned Trial Court has, therefore, rightly concluded that the Complaint filed against the petitioners, were complete in the sense of containing all the necessary ingredients for the commission of the offence. Any further investigations, which are only supplementary in nature which do not make the Complaint incomplete, there being no default in filing the Complaint within the statutory period.
The default bail under Section 167 (2) of Cr.P.C. is, therefore, rightly denied to the applicants and both the Petitions are hereby dismissed. However, this does not prevent their right to seek Regular Bail on merits.
Petition disposed off.
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2024 (10) TMI 227
Provisional attachment order - challenge to the order of the Adjudicating Authority has been made alleging it to be beyond 180 days from the date of the provisional attachment order - Money Laundering - possession of assets, dis- proportionate to the known sources of income while he was in service of Steel Authority of India Ltd. - HELD THAT:- The period intervening 15th March 2020 till 28th February 2022 must be excluded for determination of the period of 180 days. It is not in dispute that the provisional attachment order was issued on 23rd December 2020 and the confirmation order was passed on 09.11.2021. The period was affected by Covid 19 and the Apex Court in Suo Moto Writ Petition (C) No. 3 of 2020 excluded [2022 (1) TMI 385 - SC ORDER] the period of Covid-19 for termination of proceedings in itsorder dated 10.01.2022.
Since the period of Covid- 19 from 15.03.2020 till 28.02.2022 has been excluded by the Apex Court for termination of proceedings, the Telangana High Court took notice to it and held that if period of 180 days was falling during the period eliminated by the Apex Court for termination of proceeding, then the provisional attachment would not lapse. In the light of the detailed Judgement of the Telangana High Court, we are unable to accept the first argument.
Attachment of the appellant's bank account receiving pension - It is submitted that on account of the attachment of bank account, the appellant has been deprived to get pensionary benefit which is not sustainable because one cannot be deprived from his pension - HELD THAT:- If the appellant is getting pension, then the account in which it is received, should be allowed to operate by the appellant while maintaining the amount lying therein and would not be withdrawn by the appellant, but it should be with the permission to get the pension with its withdrawal by the appellant.
While not causing interference the impugned order, the respondents are directed to allow the appellant to operate the bank account in which he is getting pension while the amount lying till date would be maintained and the appellant would not withdraw the said amount as agreed by the counsel.
Appeal allowed in part.
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2024 (10) TMI 226
Money Laundering - Challenge to Provisional Attachment Order - offence under Section 120-B IPC read with Section 7, 8 and 10 of the Prevention of Corruption Act, 1988 - HELD THAT:- It is a case where an FIR was registered for the offence under Section 7,8 and 10 of the PC Act along with Section 120-B IPC. It is not in dispute that a sum of Rs.89,68,000/- was seized by the CBI and the amount now remains under seizure pursuant to the order of the CBI Court. In those circumstances, it could not be clarified by the respondent as to whether there were likely of transfer or alienation of the said amount to frustrate the proceedings for confiscation.
The perusal of Section 5(1)(b) would reveal that the attachment of the property can be made when the `proceeds of crime’ is likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to the confiscation of such proceeds of crime. In the instant case, `proceeds of crime’ is said to be a sum of Rs.89,68,000/- and was seized by the CBI. An order for it was passed by the CBI Court and thereby the amount is lying with it. Therefore, it could not be clarified how the said amount was likely to be concealed, transferred or dealt with in any manner to frustrate the proceedings of confiscation.
The counsel for the respondent has referred to the judgment in the case of Om Prakash Daulat Ram Nagoj [2011 (9) TMI 1143 - BOMBAY HIGH COURT] which permits attachment of the property - In that case, the argument considering Section 5(1)(b) of the Act of 2002 was not raised. The attachment of the property is permitted when it is likely to be concealed, transferred or alienated to frustrate the proceedings of confiscation. Section 5(1)(b) thus puts an embargo on the attachment. Considering the rider of Section 5(1)(b), attachment of the amount in the present case would not be permissible otherwise it is nothing but to offend Section 5(1)(b) of the Act of 2002.
It is found that the attachment of the amount is in ignorance of the mandate of Section 5(1)(b) of the Act of 2002 and are set aside - appeal disposed off.
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2024 (10) TMI 225
Money laundering - permission to respondent ED to retain/seize/freeze the documents, digital records, bank accounts etc., seized from the premises of various persons including the present appellants, during the search conducted on 07.04.2017 - HELD THAT:- The impugned retention order passed by the Ld. Adjudicating Authority to continue the seizing/ freezing of the documents and material seized/freeze by respondent ED, till the completion of investigation. After the completion of investigation, prosecution complaint is already filed by respondent ED, wherein present appellant Bhawna Kirpal along with her other family members are arrayed as accused persons. Even otherwise, the aforesaid property is mentioned in the list of properties for the purpose of confiscation in case of conviction, in prosecution complaint case under PMLA. Therefore, the impugned order passed by Ld. Adjudicating Authority was just an interim order/step to protect the same, till the conclusion of trial. Therefore, the appellants are not agreed upon, hence, the present appeals are liable to be dismissed being devoid of any merits.
However, seeing the fact that prosecution complaint is already filed, the present appellants are entitled to the copies of all relied upon documents/seized material and have right to apply for release of all un-relied documents (if any), if the same are not required for any further investigation.
The present appeals are hereby dismissed.
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2024 (10) TMI 224
Money Laundering - Challenge to order allowing the respondent ED to retain/seize/freeze the documents, digital records, bank accounts etc., seized from the premises of various persons including the present appellant firm, during the search conducted on 07.04.2017 - HELD THAT:- The respondent ED is hereby directed to defreeze the Credit Accounts (CC & BC Account) and appellant is at liberty to clear its outstanding loan liability, if any, with direction to appellant not to dispose of the properties on whose collateral the CC Accounts have been secured. Karnataka Bank is hereby restrained from releasing more credit into the said CC Account. However, the saving and current account will remain frozen till final disposal of criminal trials.
However, seeing the fact that prosecution complaint is already filed, the present appellant (if arrayed as an accused) is entitled to the copies of all relied upon documents/seized material and he has right to apply for release of all un-relied documents (if any), if the same are not required for any further investigation.
The present appeal is hereby dismissed.
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2024 (10) TMI 154
Money Laundering - seeking grant of Regular Bail - Predicate Offence - paying illegal gratification to BSF personnel deputed on the Border - Applicant was a party to cattle-smuggling in so much as he facilitated the same for money considerations - HELD THAT:- In the recent decision of Manish Sisodia vs. Central Bureau of Investigation, [2023 (11) TMI 63 - SUPREME COURT], the Hon’ble Supreme Court observed that right of liberty guaranteed under Article 21 of the Constitution of India is a sacrosanct right which needs to be accepted even in cases where stringent provisions are incorporated through special laws. It was held that prolonged incarceration before being pronounced guilty of an offence, should not be permitted to become punishment without trial. It was further observed that fundamental right of liberty provided under Article 21 of the Constitution is superior to statutory restrictions and reiterated the principle that “bail is the rule and refusal is an exception”.
In the present case, the allegations are that the Applicant was a party to cattle-smuggling in so much as he facilitated the same for money considerations. The investigations qua the Petitioner are already complete as the Complaint has been filed in the Court. Pertinently, the Applicant was named only in First Supplementary Charge Sheet. He is not a flight risk, considering his position of being a Commandant in the BSF and that he has deep roots in the Society. The evidence being essentially documentary, is not likely to be tampered or the witnesses influenced.
The Applicant is admitted to bail subject to fulfilment of conditions imposed - bail application allowed.
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2024 (10) TMI 153
Money Laundering - disclosure of the source of income to acquire Anil Marriage Hall - challenge to attachment order under Prevention of Money Laundering Act, 2002 - HELD THAT:- It is despite an opportunity to the appellant to produce the CC loan limit on the receipt of the notice from the Adjudicating Authority but no documents was produced. In fact, notice under section 8 (1) of the Act of 2002 was given to disclose the source of income but despite an opportunity for it, no document was submitted. The bank statement has been filed along with the appeal. The source of it has not been disclosed.
The amount of Rs. 41,49,807/- was deposited in the bank account in cash. No justification for deposit of the amount in cash could be given by the appellant and that too when it was not a small amount but was more than Rs. 41 lakhs. No transaction of M/s Amit Traders could be proved - the appellant could not give explanation to the admission made by the deceased appellant for embezzlement of Rs. 65 lakhs and further admission that the amount was used for the construction Anil Marriage Hall in Rajinder Nagar Colony, Fatehpur. The land was otherwise purchased partly in the name of deceased appellant’s wife on 01.08.2005 and remaining in the name of deceased appellant on 02.03.2006. The source of purchase of land has also not been disclosed.
The Investigating Officer has analyzed the bank account of the deceased appellant and his family members to make a proper scrutiny but no source for transfer of amount inter-se was found except in the account number 2800 in District Cooperative Bank which was also not sufficient to substantiate the pleas and arguments raised by the counsel for the appellant. The allegation for embezzlement is not levied only on the deceased appellant but even others who said to have taken money out of the bogus cheques of the farmers and it was embezzled in connivance with each other. The charge sheet pursuant to the FIR has already been filed.
There are no case to cause interference in the order passed by the Adjudicating Authority - appeal dismissed.
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2024 (10) TMI 152
Money Laundering - retention/seizure/freezing of documents, digital records, and bank accounts by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 - HELD THAT:- After the completion of investigation, prosecution complaint is already filed by respondent ED, wherein present appellants along with other family members of Ashu Mehra are arrayed as accused persons. Even otherwise, the aforesaid properties are stated to be mentioned in the list of properties for the purpose of confiscation in case of conviction, in prosecution complaint case under PMLA. Therefore, the impugned order passed by Ld. Adjudicating Authority was just an interim order/step to protect the same, till the conclusion of trial. There are no illegality in the impugned order. Therefore, the Ld. Counsel for the appellants not agreed upon and hence, the present appeals are liable to be dismissed being devoid of any merits.
However, seeing the fact that prosecution complaint is already filed, the present appellants are entitled to the copies of all relied upon documents/seized material and he has right to apply for release of all un-relied documents (if any), if the same are not required for any further investigation.
The present appeals are hereby dismissed.
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2024 (10) TMI 60
Money Laundering - proceeds of crime - scheduled offences - vicarious liability on the companies - attachment of properties - HELD THAT:-The value of any such property or the property equivalent in value held within the country or abroad is also to be construed as “proceeds of crime”. Therefore, the circumstances indicated under Section 2(1)(u) of PMLA are that any property derived by a person, in result of criminal activity relating to a scheduled offence can be treated as proceeds of crime. The value of any such property or if such property is taken or held outside the country, then the property equivalent in value held within the country can be construed as proceeds of crime. Therefore, some properties, in result of criminal activity, is held outside the country, then the property equivalent in value held within the country can be attached by the Enforcement Directorate. The very object of the provision would be to protect the economic interest of the country. Therefore, the petitioners cannot take a ground that the property attached were purchased prior to the scheduled offence between the years 2010 and 2017.
Explanation (2) to Section 70 of PMLA clarifies that a company may be prosecuted, notwithstanding, whether the prosecution or conviction of any legal juridical person shall be contingent on the prosecution or conviction of any individual. Therefore, it is expressly clarified under Section 70 of PMLA that a company may be prosecuted. Thus, the ground taken by the petitioners that the company cannot be held vicariously liable runs counter to Section 70 of PMLA and stands rejected.
The merits involved in the Provisional Attachment Order need not be adjudicated in the present petitions filed under Section 482 Cr.P.C. - this Court has no hesitation in arriving at a conclusion that the respondent have made out a prima facie case for prosecuting the individual persons and the companies under Section 70 of PMLA. Thus, the petitioners have to establish their defence on merits and based on documents and evidences available on record.
Petition dismissed.
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2024 (10) TMI 59
Money Laundering - reasons to believe - Invocation of writ jurisdiction as well as inherent jurisdiction of this Court under section 482 of the Code of Criminal Procedure, 1973 - illegal arrest and detention of the petitioner - whether arrest of the petitioner by the respondents was in consonance with the ratio laid down by the Supreme Court in the case of Arvind Kejriwal Vs. Directorate of Enforcement [2024 (7) TMI 760 - SUPREME COURT], in the sense, whether there was sufficient material with the authorized officer who had recorded his “reasons to believe” in writing and whether there was a necessity to arrest the petitioner?
HELD THAT:- In Vijay Madanlal Choudhary, the Supreme Court on the aspect of the checks on the power to arrest stated that there must be material in possession with the Authority before the powers of arrest can be exercised as opposed to the Cr.P.C. which gives the power of arrest to any police officer and the officer can arrest any person merely on the basis of a complaint, credible information or reasonable suspicion against such person. Thirdly, there should be reason to believe that the person being arrested is guilty of the offence punishable under the PMLA in contrast to the provision in Cr. P.C, which mainly requires reasonable apprehension/suspicion of commission of offence.
In case of Arvind Kejriwal [2024 (7) TMI 760 - SUPREME COURT], the Supreme Court has further elaborated the expression “reasons to believe” by stating that it is not synonymous with subjective satisfaction of the officer. The belief must be held in good faith; it cannot merely be a pretence. In the same case, it was held that it is open to the Court to examine the question whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the purpose of the section.
The respondent Nos. 1 and 2 seem to have already in possession of sufficient material qua the petitioner and his companies as well as alleged transactions during the arrest and interrogation of the petitioner’s father, after whose release by the Special Court, the petitioner came to be arrested on 29th July, 2024 during alleged second search within four days of release of petitioner’s father. The material in possession of respondent Nos. 1 and 2 prior to the arrest of the petitioner as demonstrated by the respondents appears to be with it and, therefore, respondent Nos. 1 and 2 could have arrested the petitioner at the time of alleged first search which was conducted on 26th June, 2024 itself.
Thus, it is the subjective satisfaction of the respondents sans rational connection to their formation of belief i.e reasons to believe.
It is deemed necessary to grant an interim relief of bail to the petitioner in light of the fact that the right to life and liberty is sacrosanct in view of the constitutional mandate.
Pending the disposal of the petition, the petitioner shall be released on executing a P.R bond in the sum of Rs. 1,00,000/- with one or two sureties in the like amount to the satisfaction of the learned Special Judge under PML Act, City Civil and Sessions Court, Mumbai - In case the petitioner is unable to furnish sureties of the amount aforesaid, he be released on furnishing cash security in the sum of Rs. 1,00,000/- for a period of four weeks - The petitioner shall co-operate with the respondents as and when summoned - List the petition for admission on 12.11.2024.
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2024 (10) TMI 14
Money Laundering - attachment by the Enforcement Directorate - HELD THAT:- Since the amount is being directed to be disbursed to the depositors under the orders of the Division Bench of the High Court, in the peculiar facts and circumstances of the case, no interference is warranted.
The special leave petitions are, accordingly, dismissed.
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2024 (10) TMI 13
Money Laundering - proceeds of crime - predicate offence - allegation against the appellant in the predicate offence is that after illegally transporting cattle across the border, he bribed various officials - HELD THAT:- Bail granted to the appellant not only on the ground of parity but also for the reason that the trial is yet to commence. Admittedly, there are 85 witnesses. The trial has not even started. The appellant has been incarcerated for more than 2½ years in the present case. Thus, even if any period of incarceration undergone in a predicate offence is left out, a continued incarceration where the appellant is not entirely at fault for the completion of trial due to a prolonged delay, would enure to his benefit for the purpose of granting bail.
The appellant cannot be solely faulted for the non-commencement of the trial as he has not gained anything. Therefore, without commenting on the entitlement of the appellant to receive the copies of the document relied upon the prosecution, we are of the view that taking into consideration not only the period of incarceration but also the trial getting delayed owing to numerous witnesses, he is entitled for bail at this stage.
The impugned order stands set aside and the appellant is granted bail, subject to the conditions that may be imposed by the Trial Court - Appeal allowed.
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2024 (9) TMI 1687
Money Laundering - provisional attachment order - recipient of proceeds of crime - appellant has not been named as an accused either in the FIR or in the ECIR but his property has been attached begin recipient of the proceeds of crime - absence of prosecution complaint within 365 days from the date of the order passed by the Adjudicating Authority - HELD THAT:- The fact is that no evidence exist to show any legal advice to the accused company and in fact the appellant could not produce any evidence to support his claim for receipt of the amount towards the professional charges. It is when the statement of the appellant was recorded u/s 50 of the Act, 2002 on 30.07.2019 and 31.07.2019. As per his statements, he interacted only with accused i.e. Chetan Jayantilal Sandesara and he did not interact with any other person for legal advice which included even any officer of the legal department - The amount received by the appellant was not a small amount rather it was Rs. 2,07,25,500/- even as per the statement of the appellant. The aforesaid amount towards alleged legal advice could not be substantiated and therefore respondents rightly arrived at the conclusion it to be the proceeds of crime transferred to the appellant by none else but the main accused thus, on the facts on record, this is not a case in favour of the appellant.
Section 8(3)(a) of the Act provides for thecurrency to the order of attachment during the investigation to be completed within 365 days or the pendency of the proceeding in a court relating to any offences under the Act of 2002. The period of interim order precluded the respondents to file the prosecution complaint cannot be taken to the benefit of the appellant and thereby we are unable to accept the arguments of the appellant regarding lapse of the order of provisional attachment or as to its confirmation. The explanation to Section 8(3) of the Act, 2002 has been ignored by the appellant which excludes the period of an interim order of the court from the period of 365 days.
Assuming predicate offence of robbery take place and FIR is registered followed by an ECIR against the accused. The proceeds of crime is parked by the accused with third person who may then purchase the property after that or keep the money parked with him. The respondents would be within their right to attach or seize the property in the hands of third person though he is not an accused. This is to protect the property obtained out of the crime. If the argument of the appellant is accepted, then despite the proceeds of crime in the hands of a person other than the accused, it can not be attached or seized and if at all it is attached or seized,the investigation has to be completed against such person within 365 days. This would be nothing but showing requirement to complete the investigation against a person who is not even an accused and need not to be. The seizure or attachment is because the property or related document may be with a person other than an accused.
As per the judgment of the apex court in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)] it is not necessary that the attachment can be of the property only of the accused rather it is of the proceeds of crime whether in the hands of the accused or with the other person or it can be for value equivalent.
Conclusion - It is not necessary that the attachment can be of the property only of the accused rather it is of the proceeds of crime whether in the hands of the accused or with the other person or it can be for value equivalent.
Appeal dismissed.
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2024 (9) TMI 1686
Application for pre-trial bail - money laundering - proceeds of crime - scheduled offences - applicant is entitled to bail under Section 45 of the PML Act or not - HELD THAT:- An attempt has been made to indicate that the amount as shown by the prosecution as received by the applicant as proceeds of crime is nothing but hard earned money of the applicant. The said amount is said to be her saving from her part of salary which she invested as well as money she earned from the sale and purchase of agricultural and commercial land and also part of her income she derived from sale and purchase of cow milk and other dairy products and from agricultural income apart from the monetary help extended to her by her husband and children.
The record would further indicate that large number of documents were recovered from the premises/house of the applicant. The details of which have been mentioned in ECIR, Clause 3.4. The nature of the documents so recovered are certain FIRs lodged against the applicant relating to the year 2016. Documents indicating investments made in PIP Plan of Shine City Infra Project relating to Ajay Pal, Kuldeep Singh, Ram Awadh Yadav and the applicant herself.
It could not be explained by the applicant as to why there large number of original sale deeds belonging to third parties were present at the residence of the applicant. Thus, in absence of any plausible reason, either the properties have been parked in names of third parties to cerate a smokescreen to evade it being traced to the applicant or the applicant has deep rooted connections to hold on to said documents for third parties for some ulterior gains.
Merely to suggest that a sum of Rs. 16,00,000/- and odd has been shown as proceeds of crime and the applicant being a school teacher and later promoted to the post of Headmaster between the year 2009 to 2020 had the means to garner such amount which was in her account and it cannot be treated as an alarming figure.
The applicant could have easily indicated her source of income from agricultural activities if she could give details of the extent of her landholding but it has not been done. No details were given to show how much live stock she had from where she could substantially earn by the sale of milk and dairy products - In absence of such material or explanation to justify the documents, data and amount found with the applicant such as third party sale deeds, plot buyer agreements, e-payment receipts which if seen in juxtaposition to the language of Section 3 of The PML Act of 2002 which provides that any act of a person engaged directly or indirectly being connected or associated with proceeds of crime or even being involved in concealing, possessing, acquisition or use or projecting as untainted property, all such acts falls within Section 3 of The PML Act of 2002.
Conclusion - This Court is unable to persuade itself to form a, prima facie, satisfaction in terms of Section 45 of The PML Act of 2002, at this stage, that the applicant is not guilty or that she may not commit an offence on bail.
Bail application is rejected.
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2024 (9) TMI 1667
Money Laundering - predicated crime - proceeds of crime - Propriety in passing interim order in the nature of staying the provisional freezing order - It is alleged that the borrower has manipulated project cost statements and also diverted the bank funds to its subsidiaries - Compliance with procedural requirements under Section 17 of the PML Act - HELD THAT:- The reasons stated in the order under Section 17(1) of the PML Act indicates that the accused of predicated offence carried out diversion and layering of the POC through related parties and dummy entities for the accumulation of the assets. It is not in dispute that the parties are related with the Directors of M/s Corporate Power Limited as well as registered office is one of the same. In this background, by resorting the powers under Section 17 of the PML Act, the Assistant Director, Enforcement Directorate has passed freezing orders and by the time, the matter has been referred to the Adjudicating Authority. The Authority on receipt of an application under Section 17(4) of the PML Act, has already issued summons to the petitioners seeking their explanation.
Preliminary investigation paper indicates that during search various property documents, electronic record were recovered on the same registered premises. It was primarily revealed that the seized assets were diversion of proceeds of crime of the accused company in dummy entities of the relatives of accused. Primary search indicates that crores of rupees have been transferred from accused company to the faulty companies. Prima facie there are no deficiency to invoke writ jurisdiction in either of the petitions.
The Magnitude of the investigation is quite vast as allegedly huge sum to the extent of Rs. 4037.87 crores has been siphoned through various shell entities. In the wake of above position, the petitioners have to satisfy the Adjudicating Authority, which is the mechanism set up for its redressal. Apparently, an effective efficacious remedy is available for the petitioners. In view of above, at this stage, there are no propriety in passing interim order. The Authority to expedite the proceeding contemplated under Section 8(2) of the PML Act.
Place the matter for further consideration after six weeks for filing a reply.
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