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Money Laundering - Case Laws
Showing 321 to 340 of 2042 Records
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2024 (6) TMI 1442
Seeking grant of interim bail - bail sought on the ground that the health condition of his uncle is getting bad to worse, day by day - HELD THAT:- The applicant, in the present case, is seeking the interim bail on the ground of ailment of his uncle, who, as per the application, met with an accident, on 10th April, 2024 and stated to be in intensive care unit. However, there is nothing on record to probabilize, at this stage, that the doctors have opined that there are no chances of recovery of the patient.
As such, considering the apprehensions, which have been expressed by the Enforcement Directorate, in the status report, this Court is of the opinion that the applicant is not entitled for the relief, which has been sought in the application. Moreover, the apprehensions, which have been expressed, in the status report, cannot be said to be unfounded, at this stage.
Consequently, the applicant is not able to make out a case for grant of interim bail, at this stage. Consequently, the bail application is dismissed.
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2024 (6) TMI 1440
Money Laundering - proceeds of crime - acquisition and possession of assets disproportionate to known sources of income by the Petitioner and his wife and other family members - applicability of Section 45 read with Section 44 of the PML Act - it was held by High Court that the proceedings under the PMLA are maintainable, a prima facie case is established, and the anticipatory bail is not warranted.
HELD THAT:- Issue notice returnable on 29th July, 2024.
In the meanwhile, the petitioner shall not be arrested in connection with Complaint Case (PMLA) No .11 of 2022 arising out of ECIR No. ECIR/BBZO/01/2019 dated 22nd January, 2019 at Bhubaneswar Sub-Zonal Office of Enforcement Directorate pending before the District and Sessions Judge-cum-Special Judge(PMLA), Khurda at Bhubaneswar subject to condition that within two weeks from today, the petitioner shall appear before the Special Court and furnish bonds for appearance in accordance with Section 88 of the Code of Criminal Procedure, 1973.
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2024 (6) TMI 1392
Money laundering - proceeds of crime - Challenge to provisional order of attachment issued under section 5 of PMLA - HELD THAT:- The properties that can be proceeded against, exercising the powers of attachment must be those that have been acquired utilising the proceeds of crime. The contention of the learned counsel for the respondents that the term proceeds of crime will also include the value of the property which had been acquired even earlier is, according to me, too far-fetched and will not be justifiable in the light of the constitutional provisions of fairness and reasonableness. It is also necessary to observe at this juncture that the purpose of the PMLA is to remove tainted money and also to initiate proceedings against the proceeds of crime which have been transformed or converted into other property or intermingled with legitimate sources and then the value of the intermingled gain will assume the colour of proceeds of crime. Such a provision cannot be used to enable the authorities to proceed against properties that are unconnected with any of the criminal activity in question.
As the provisionally attached immovable property was purchased in 2004 - more than a decade and a half before the predicate offence was allegedly committed, the order attaching the immovable property is ex-facie, ultra vires the powers of the statute and totally illegal and arbitrary to the extent of the said attachment. Since ex facie illegal acts can be interfered with under Article 226 of the Constitution of India, notwithstanding the existence of an alternative remedy, this Court is of the view that the provisional attachment of the immovable property as seen from schedule A to Exhibit P11 order dated 22.05.2024 is liable to be set aside.
The provisional attachment order dated 22.05.2024 produced as Exhibit P11, in so far as it relates to Schedule A is hereby set aside. The provisional attachment in relation to the movable properties shown in Schedule B to Exhibit P11 is not interfered with and the petitioner is relegated to pursue his alternative remedies - Petition allowed in part.
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2024 (6) TMI 1119
Seeking grant of bail - Money Laundering - proceeds of crime - irregularities in framing and implementation of Excise Policy of GNCTD for the year 2021-22 - proper consideration of submissions not done by Vacation Judge - it is argued that the Impugned Order is perverse as the Vacation Judge has not given an opportunity of being heard to ED to oppose the bail application filed by the respondent as per mandate of section 45 (1) (i) of PMLA - violation of principles of natural justice - HELD THAT:- The Vacation Judge while passing the Impugned Order did not appropriately appreciate the material/documents submitted on record and pleas taken by ED and the averments/grounds as raised in the petition under section 439 (2) of the Code require serious consideration while dealing with said petition.
Accordingly, the present application is allowed and the operation of the Impugned Order is stayed.
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2024 (6) TMI 1118
Seeking grant of bail - Money Laundering - bribery - proceeds of crime acquired in the form of commission/bribe in lieu of allotment of tenders by the accused Veerendra Kumar Ram, a public servant - fulfilment of parameter fixed u/s45 (ii) of the PMLA - HELD THAT:- It prima-facie appears that the petitioner knowingly assisted to her husband who is co-accused to purchase immovable properties at New Delhi in her name and the purchase consideration was paid from the proceeds of crime generated by her husband Veerendra Kumar Ram. The petitioner knowingly tried to directly conceal the proceeds of crime acquired by her husband and claimed it to be untainted in the guise of taking entries in her bank accounts from the companies providing entries by charging commission. The materials on record reflects that bank account statements of the petitioner, there are huge credits from M/s RP Investment and Consultancy, Manoj Kumar Singh and M/s RK Investment & Consultancy - There are materials against the present petitioner regarding her specific role in the offence of the prosecution complaint that she committed the offence of money laundering with respect to the proceeds of crime.
It appears that the petitioner knowingly assisted his son who is co-accused to purchase immovable properties at New Delhi in his own name to the tune of Rs 22.5 Crore from the commission/bribe amount, which was acquired by his son Veerendra Kumar Ram. Further, the bank account statements of the petitioner reflect huge credits to the tune of Rs 4.525 crores. There are materials against the petitioner regarding his specific role in the offence which is mentioned in Para-11.4 of the prosecution complaint that he committed the offence of money laundering with respect to the proceeds of crime.
It has been settled by Hon’ble Apex Court time and again in its various pronouncements that the powers under Section 438 Cr.P.C., is of extra-ordinary character and must be exercised sparingly in exceptional cases only and therefore, the anticipatory bail can be granted only in exceptional circumstances where the court is prima facie of the view that the applicant has falsely been implicated in the crime, as grant of anticipatory bail to some extent, is interference in the sphere of investigation of an offence and hence, the court must be cautious while exercising such powers - It is also settled connotation of law that the grant or refusal of the application should necessarily depend on the facts and circumstance of each case and there is no hard and fast rule and no inflexible principles governing such exercise by the Court.
In SUSHILA AGGARWAL AND OTHERS VERSUS STATE (NCT OF DELHI) AND ANOTHER [2020 (1) TMI 1193 - SUPREME COURT] the Constitution Bench of the Hon’ble Apex Court has reiterated that while deciding applications for anticipatory bail, Courts should be guided by factors like the nature and gravity of the offences and the role attributed to the applicant and the facts of the case - The Hon’ble Supreme Court, in catena of decisions, has categorically held that the judicial discretion of the Court while considering the anticipatory bail shall be guided by various relevant factors and largely it will depend upon the facts and circumstances of each case.
Further, it is evident by taking into consideration the provision of Section 19 (1), 45 (1), 45 (2), the conditions which is required to be considered while granting the benefit of bail in exercise of power conferred under Section 438 or 439 of Cr.P.C., apart from the twin conditions which has been provided under Section 45 (1) of the Act, 2002, the conditions or the requirement which has been followed while granting the bail under Section 439 or 438, as the case may be, is required to be considered.
Now coming to the facts of instant case, this Court, based upon the imputations as referred in preceding paragraphs which has been discovered in course of investigation, is of prima-facie view that what has been argued on behalf of the learned counsel for the petitioner that proceeds cannot be said to be proceeds of crime but as would appear from the imputations , money which has been obtained by the accused person Veerendra Kumar Ram has been obtained in the form of the commission and same was utilized and concealed by the petitioners despite knowing that it is the proceeds of crime.
In the instant case, there is sufficient evidence collected by the respondent Enforcement Directorate to prima facie come to the conclusion that the petitioners were actively involved in the offence of Money Laundering as defined in Section 3 of the PMLA. As against that there is nothing on record to satisfy the conscience of the Court that the petitioners are not guilty of the said offence and the special benefit as contemplated in the proviso to Section 45 should be granted to the petitioners who are the lady and sick person respectively - on the basis of aforesaid discussion the Court does not find any substance in the submission of the learned counsel for the petitioners.
This Court, in view of the aforesaid material available against the petitioners, is of the view that in such a grave nature of offence, which is available on the face of the material, applying the principle of grant of anticipatory bail wherein the principle of having prima facie case is to be followed, this Court is of the view that the nature of allegation since is grave and as such, it is not a fit case of grant of anticipatory bail.
This Court is of the view that the instant applications are fit to be dismissed and as such, stand dismissed.
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2024 (6) TMI 775
Money Laundering - proceeds of crime - provisional attachment order - opportunity of hearing not provided to petitioner - violation of principles of natural justice - HELD THAT:- From perusal of Section 8, it is evident that the Director or any other officer not below the rank of Deputy Director authorized by the Director Enforcement, is authorized to pass an order in writing, provisionally attaching the property raised by any person by the proceeds of crime. The attachment of such property shall not be for a period exceeding 180 days from the date of the order - It is beyond the pale of any dispute that a person, who has acted in good faith and has suffered a quantifiable loss as a result of the offence of money-laundering, despite having taken all reasonable precautions and is otherwise not involved in money-laundering, would be a claimant entitled to invoke the second proviso to sub-section (8) of Section 8 of the Act of 2002.
Admittedly, the petitioners, as per their claim, fall in the category of claimants and are, thus, well within their right to approach the Special Court under the Prevention of Money-Laundering Act at Jaipur, which has taken cognizance of the prosecution complaint filed by the Enforcement Directorate on 31-03-2021.
It is thus abundantly clear that the remedy of the petitioners lies before the Special Court under the Prevention of Money-laundering Act, at Jaipur which has taken cognizance of the case and is seized of the matter. This remedy is available to the petitioners under Section 8 (8) of the Act read with Rule 3-A of the Rules of 2016. The petitioners have deliberately skipped the aforesaid statutory remedy which is equally efficacious and could be availed before the Special Court under Prevention of Money-Laundering Act and have rushed to this Court invoking extraordinary jurisdiction of this Court.
The petitioners do not dispute the order of provisional attachment on merits nor have they any locus standi to challenge the provisional attachment of the property to the extent it represents the proceeds of crime. The short grievance of the petitioners is that the provisional attachment, as confirmed by the Adjudicating Authority, should be restricted to the land and the dwelling units constructed thereon, the value whereof, is equal to the actual proceeds of crime used in the project in question.
It is not required to entertain this writ petition - petition dismissed.
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2024 (6) TMI 774
Money Laundering - seeking quashment of a attachment order passed by the Enforcement Directorate under the PMLA - predicate offence or not - proceedings against the husband and the wife commenced by registration of a crime by the Lokayukta for offence punishable under Section 13 (1) (e) read with Section 13 (2) of the Prevention of Corruption Act, 1988 - HELD THAT:- The proceedings in the predicate offence i.e., the offence under the Prevention of Corruption Act come to be closed by two orders. One against the wife in the year 2016 and against the petitioner in the year 2023. The proceedings are challenged by the lokayuktha before the Apex Court THE KARNATAKA LOKAYUKTHA POLICE VERSUS LAKSHMAN RAO PESHVE [2023 (9) TMI 1483 - SC ORDER] and there is no interim order of stay is granted - The Apex Court holds that in the event the predicate offence would get obliterated by a competent court of law either by discharge, quashment or acquittal, the proceedings under the PMLA would automatically vanish.
The order dated 22.12.2021 passed by the Adjudicating Authority under the Prevention of Money Laundering Act, 2002, stands quashed - Petition allowed.
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2024 (6) TMI 627
Seeking grant of bail - Money Laundering - proceeds of crime - scheduled offences - cheating innocent citizens by alluring them to invest in the M/s Shine City in terms of various lucrative schemes - HELD THAT:- The Apex Court in Rohit Tandon v. Directorate of Enforcement [2017 (11) TMI 779 - SUPREME COURT] has held that 'The consistent view taken by this Court is that economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. Further, when attempt is made to project the proceeds of crime as untainted money and also that the allegations may not ultimately be established, but having been made, the burden of proof that the monies were not the proceeds of crime and were not, therefore, tainted shifts on the accused persons under Section 24 of the 2002 Act.'
The offence of money laundering as per Section 3 not only relates to generation of such proceeds of crime but it also includes any activity directly or indirectly relating to concealment or possession or acquisition or use amongst others. The said definition is very wide and inclusive, thus, the fact that directly or indirectly if any person is in possession or use of such proceeds of crime whether directly or indirectly, knowingly assists or knowingly is a party or actually involved in any activity connected with proceeds of crime relating to concealment possession acquisition or use or projecting the property as untainted property or claiming as untainted property in any manner whatsoever would be liable for any offence under the PMLA.
In the instant case from the perusal of the complaint and the material brought on record, it reflects prima facie involvement of the applicant. Even though, this Court is conscious of the fact that at this stage a mini trial is not be held nor the court is required to enter into the merits or the depth of the evidence to return a finding of guilt, but what is required of the Court is to prima facie consider the material available on record to enable the court to satisfy itself in order to enable it to form reasonable belief that the applicant is not guilty of the offence and that he is not likely to commit any offence on bail which is one of the condition as enshrined in Section 45 of the PMLA.
This Court is unable to persuade itself to form a, prima facie, satisfaction in terms of Section 45 of the PMLA, at this stage, that the applicant is not guilty or that he may not commit an offence on bail - Bail application rejected.
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2024 (6) TMI 588
Money Laundering - forceful possession of property - proceeds of crime - main plank of the petitioner is that mere forceful possession of the subject property cannot be the proceeds of crime covered under section 2(1)(u) of the PMLA - HELD THAT:- The gist of the offence of money-laundering as defined under section 3 of the PMLA is involvement in any process or activity connected with the proceeds of crime derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. Concerning a scheduled offence, the definition of money-laundering under section 3 encompasses every possible manner of involvement of the person with the proceeds of crime derived or obtained as a result of that crime. Section 3 incorporates “every attempt” whether directly or indirectly to conceal, possess, acquire, or use the proceeds of crime. Even “an attempt” to project the proceeds of crime as untainted property or attempting to claim the same to be an untainted property shall come within the sweep of section 3.
The expression “possession” has a definite meaning and connotation and illegal possession of a person over an immovable property is protected in law to a certain extent. The word “property” within the meaning under clause (v) to section 2(1) of the PMLA includes any property or assets of every description and it can be tangible or intangible. There is a crime registered for forging the revenue records, falsification of the official records and other scheduled offences. This is the case pleaded by the ED that by its timely action the intended acts of forgery and manipulation in the revenue records of the subject property were foiled.
The subject property must be considered the proceeds of crime which is in forceful possession of the petitioner and there is prima facie evidence of an attempt to commit the scheduled offences for legalizing the subject property. To constitute the offence of money-laundering under section 3 of the PMLA, this is not necessary to establish that first a crime was committed which included the scheduled offence. It may so happen, as has happened in this case, that the property was first grabbed and then the attempt was made to make it lawfully acquired through illegal acts which shall constitute the scheduled offence or an attempt to commit the scheduled offence. The interpretation to section 2(1)(u) of the PMLA that is put, is in tune with the intention of the Parliament and further advances the object and purpose behind the legislation.
The validity of section 19 of the PMLA was under challenge in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT]. The Hon’ble Supreme Court held that this provision has reasonable nexus with the purposes and objects of prevention of money-laundering and confiscation of the proceeds of crime involved in money-laundering and prosecution of the persons involved in the processes or activities connected with the proceeds of crime under the PMLA Act; the Constitutional validity of section 19 was upheld. Section 167 of the Code of Criminal Procedure empowers the Judicial Magistrate to authorize the detention of an accused in the custody of the police and, until the accused is committed the Court of Sessions, the Magistrate is vested with the power under section 209 of the Code of Criminal Procedure to remand an accused to custody. However, even where an order of remand is found to be illegal the accused does not get acquitted and the proceedings do not terminate.
The provisions under section 19 of the PMLA are clear and unambiguous. The power of the arresting officer is well defined and his duties are prescribed under sub-sections (2) and (3). This is a fundamental rule of interpretation that if the words of a statute are themselves precise and unambiguous no more is necessary than to expound those words in their natural and ordinary sense as the words themselves shall best declare the intention of the Legislature - In the present case, the question of malafides pales into insignificance in the face of the abundance of materials collected by the ED which prima facie show the involvement of the petitioner with the proceeds of crime and money-laundering.
The case set up by the ED against the petitioner is not based only on the statements recorded under section 50 of the PMLA including of those who claimed themselves real owners of the properties in question, there is an abundance of documents that lay a foundation for the arrest and remand of the petitioner to police and judicial custody. At this stage, this is not possible to hold that the ED has proceeded against the petitioner for no reasons. The admissibility or otherwise of the materials collected by the ED can be examined by the Special Court if a prosecution report is filed against the petitioner. The learned ASG rightly contended that the scheme under the PMLA does not contemplate a mini-trial at this stage.
The maxim “sublato fundamento cadit opus” which means when the foundation goes the superstructure falls shall not be applied in case of subsequent remand(s). Every remand order is a separate order and without laying a challenge to the subsequent remand order(s), the accused must fail in his attempt to seek a declaration that his custody is bad in law. The challenge to the remand order dated 2nd February 2024 is of no consequence and it is not demonstrated that the arrest of the petitioner was illegal.
Petition dismissed.
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2024 (6) TMI 587
Money Laundering - provisional attachment order - making illegal foreign remittances to Hong Kong through banking channels by submitting fake import documents to the banks - HELD THAT:- The prosecution complaints under PMLA, 2002 have been filed and proceedings arising out of the same are pending against all the appellants involved in these appeals. Evidence exists in the form of statements of witnesses, including that of the main accused and other accused persons apart from other evidence, which incriminate the appellants. On the other hand, other than bare denials, the appellants have not presented any credible evidence to discharge their burden of proof under section 24 of the Act.
It is by now well-settled that under PMLA, 2002 provisional attachment of property is an emergent measure to be taken by the designated authority upon being satisfied and having reason to believe that the proceeds of crime are likely to be concealed, transferred or dealt with in any manner, which may result in frustrating any proceedings relating to confiscation of such proceeds of crime. The purpose of such attachment is to protect and preserve the proceeds of crime until the guilt or innocence of the person, as the case may be, is established.
The Hon’ble Supreme Court in Vijay Madanlal Choudhary & Ors. v. UoI & Ors., [2022 (7) TMI 1316 - SUPREME COURT], has observed that it is clear that the provision in the form of Section 5 provides for a balancing arrangement to secure the interest of the person as well as to ensure that the proceeds of crime remain available for being dealt with in the manner provided by the 2002 Act.
Under section 2(1)(d) of the Act, “attachment” has been defined to mean prohibition of transfer, conversion, disposition or movement of property. Attachment of property does not prevent the person from use and enjoyment of the property.
There are no grounds to interfere with the order of the Ld. Adjudicating Authority in the instant set of appeals - appeal dismissed.
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2024 (6) TMI 586
Deletion of bail condition - seeking permission to travel abroad - review of previous order - HELD THAT:- It is settled law that an accused has fundamental right to travel abroad. Certainly, he is required to take permission of the Court. It has to be noted that many accused persons involved in ED cases and who were never arrested under Sec.19 PML Act, have inevitable part of their life / profession to frequently and extensively travel abroad. Every time they have to apply to the Court for seeking permission of the Court. Certainly the Court cannot pass any order without hearing ED. ED raises typical objections of flight risk etc. for which they never thought to arrest the accused under Sec. 19 PML Act.
Another aspect requires consideration is the volume of trial and approximate duration of its conclusion which anyone can anticipate or estimate. The release of applicant (A4) under Sec. 88 Cr.P.C was to safeguard the trial. As per Sec. 44(1)(c) PML Act the trial of PMLA case has to be simultaneously conducted with the trial of the case(s) related to the Scheduled Offence. In the instant case, the case related to the Scheduled Offence was pending in Jammu & Kashmir State and until the Court given direction to the ED, no step had been taken by the ED to commit the same, particularly when one of the accused Nihal Garware (A1) was undertrial prisoner.
This applicant is a frequent flyer and for his profession he has to travel all over the world. Sometimes he visits 2-3 countries and thereafter, has to extend his travel to some other countries. The time span between such travels is very short wherein he cannot return India, approach the Court and seek further extension of travel. In such situation, either he has to loose his opportunities simply because of the Order of the Court or if he (A4) continues his travel to new destination which is not a part of his application for permission, his travel would certainly amount breach of the permission granted by this Court and ED would certainly canvass this aspect.
Applicant is permitted to travel abroad during and until the conclusion of trial to any destination without any impediment of condition - further conditions imposed - application allowed.
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2024 (6) TMI 470
Seeking enlargement on bail - money laundering - proceeds of crime - absence of material which would justify the belief that the applicant may be guilty of an offence under the PMLA - Justification for Arrest u/s 19 of PMLA - Alleged inchoate nature of predicate offences -
Justification for Arrest u/s 19 of PMLA - HELD THAT:- Firstly, the Court cannot loose sight of the fact that CBI FIR was registered pursuant to the directions given by the Division Bench in PIL. Secondly, it is necessary to note, there is material in the form of the interception and seizure of betel nuts by DRI, search and seizure operation at the premises of the applicant and Ikram Haji Haroon Jada (A4). Thirdly, the statements of witnesses, especially that of Manoj Kothari, the transporter, revealed that the applicant was the actual consignee of the alleged smuggled betel nuts and not M/s. Kheboto Traders, the purported consignee. In his statement recorded under Section 50 of the PMLA, the applicant has allegedly stated that he had placed orders and procured betel nuts from F.M. Food. Fourthly, there is further material to show that the applicant had credited the amounts to the accounts of M/s. Kheboto Traders and K.S. Enterprises which were eventually transferred to the account of F.M. Food - In these circumstances, prima facie, it cannot be said that the Investigating Officer had no justification to arrest the applicant.
Alleged inchoate nature of predicate offences - HELD THAT:- The second submission on behalf of the applicant based on alleged inchoate nature of predicate offences deserves consideration. The fact that the CBI has registered FIR pursuant to the directions of the Division Bench in Public Interest Litigation is rather incontestable. It is not the requirement in law that the person who is accused of offence under the PMLA must also be arraigned as an accused in the predicate offence.
The submission that since there has not been any effective investigation in the FIR registered by CBI and till the CBI concludes its investigation, it cannot be said that the applicant has any role in the allegations levelled in the said FIR, also does not merit countenance. For the reason that the CBI has not filed the charge-sheet, it cannot be said that the predicate offence has effaced.
It is true, the allegations that the applicant attempted to bribe the contractual employee to obtain the copies of his statement are of serious nature. Yet the context of the matter is required to be kept in view and, in the totality of the circumstances, where the principal accused is at liberty, in the peculiar facts of the case, it is required to exercise discretion in favour of the applicant.
The applicant is allowed to be released on bail, subject to conditions imposed - bail application allowed.
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2024 (6) TMI 469
Money laundering - proceeds of crime - offence of smuggling of narcotics and running extortion rackets - double attachment of properties - fugitive economic offenders under Section 12 of the Fugitive Economic Offenders Act, 2018 - HELD THAT:- The proceeds of crime was shifted on the area of 14000 Sq. Ft. taken by HazraMemonin consideration of the plot of land of M.K. Mohammad and it is for that reason alone that the respondents attached the said property of HazraMemon. The respondents failed to consider that on shifting of the proceeds of crime and its attachment by attaching the property of 14000 Sq. Ft. they could not have made further attachment of alleged proceeds in the hands of the appellant. In fact, with exchange of the property and that too under the decree of the Court, the area came to the appellant no more remain to be proceeds of crime otherwise it would be a case of double attachment going against the principles of law.
The respondents have tried to divert the fact in reference to the alleged violation of FSI to justify the action of attachment. The arguments were made in ignorance of the fact that violation of alleged FSI is not subject matter of FIR and ECIR and it could not have been under the ECIR being not a schedule offence under the Act of 2002. The arguments in this regard shows an exercise not appropriate to the facts of the case and under the provisions of law. The position of facts could have been different if the appellants would have occupied the area taken by M.K. Mohammad and given to HazraMemon under the assignment without consideration and a decree.
The attachment of the above area at 12 to 15 floors of Ceejay House cannot be considered to be appropriate and legal.
As per Section 8(2), the Adjudicating Authority is required to record its finding that property is involved in money laundering and only on recording of such an opinion, the order of attachment can be confirmed. It cannot be concluded that a property taken on consideration and the Court decree can be said to be involved in the money laundering, rather for that respondents have already taken recourse to attach 14000 sq. ft. area in the hands of HazraMemon.
The impugned orders of attachment are quashed - appeal allowed.
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2024 (6) TMI 451
Money Laundering - proceeds of crime - seizure of documents u/s 17(1) of the Prevention of Money Laundering Act, 2002 - no Prosecution Complaint (PC) has been filed against the appellant though a period of 365 days has already expired after the order of the Adjudicating Authority - appellant is not an accused in the FIR or ECIR.
The seized documents of property are not `proceeds of crime’ - HELD THAT:- In the instant case, serious allegations of fraudulent transactions to the tune of Rs.164.99 crores exists against many accused which includes appellant’s grandfather. The appellant’s grandfather purchased a property in the year 1988 but it was gifted to the appellant in the year 2020 after registration of the FIR in the year 2017 and even the ECIR. It was by way of gift the property was transferred to the appellant to overcome with the fraud committed by him with the bank and to save the property from seizure and attachment. It was not gifted bonafide but to save the property from seizure and attachment after registration of FIR though it was not obtained out of the proceeds of crime but is for the value thereof in absence of the availability of the total proceeds out of the crime i.e. Rs.164.99 crores.
The fact is that the property was originally belonging to the accused Nirmal Kumar Kejriwal, the grandfather of the appellant. A gift was made in the year 2020 in favour of the appellant whereas the FIR was registered in the year 2017 followed by the ECIR in the year 2019. The way property was given to the appellant has been noticed and as it was earlier belonging to one of the accused thus, the documents were seized by the respondent and there are no illegality in it. The words “the value of such property” does specify it to be earlier to the crime or subsequent and the words “thus value of such property” would mean the property acquired prior or subsequent to the crime is added.
The prosecution complaint against the appellant not filed within 365 days - HELD THAT:- It is stated that the prosecution complaint has not been filed against the appellant within 365 days thus, the seizure should lapse in view of Section 8(3)(a) of the Act of 2002. The perusal of the provision aforesaid shows continuance of the order of Adjudicating Authority during investigation for a period not exceeding 365 days or the pendency of the proceedings relating to any offence under this Act before a Court or under the corresponding law of any other country. The provision does not mandate for filing of PC against the person whose property has been attached or seized. The provision requires completion of investigation within a period of 365 days and pendency of the proceedings relating to any offence before the Court. This Tribunal and for that no Court is having competence to add the word in the provision which does not exist.
If Section 8(3)(a) is given interpretation to mandate pendency of the proceedings against the person from whom property has been attached or seized then it would become very easy for the accused to commit the offence of money laundering and park the proceeds with a person having no connection with the crime. In that case, a person not connected with the crime may not be subjected to investigation or proceedings in the criminal court and in absence of it the parked property by the accused can be saved from attachment and seizure to frustrate the very object of the Act. It is for that reason only the words “accused or person from whom property is attached or seized” are not mentioned under the provision for filing of PC against them rather what is required is a prosecution complaint in reference to the offence under the Act of 2002.
The appellant is not an accused in the FIR or ECIR - HELD THAT:- The object of the Act is to freeze proceeds of crime and as discussed in the preceding paras, the property gifted to the appellant would fall within the realm of proceeds of crime. The use of the terms “any person” in Section 5(1)(a) read with “such proceeds of crime” in sub -clause (b) of Section 5(1) includes any person not necessarily an accused. In case, the argument of the appellant is to be accepted, the same would render to defeat intention of the legislature and frustrate the object of the Act - In the instant case, the accused Nirmal Kumar Kejriwal knowing it well that property with him may become subject matter of attachment or seizure gifted it to his grandson much after the registration of FIR and ECIR. The aforesaid cannot be considered to be bonafide rather designed to circumvent the provisions of law and the case registered against the accused.
Appeal dismissed.
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2024 (6) TMI 397
Money Laundering - maintainability of complaint u/s Prevention of Money Laundering Act, 2002 - improper grant of bail by Bench not assigned the case - HELD THAT:- The moment the Bench directed that the case was released and it should be heard afresh, the propriety required that the Bench should not have passed any order on merits, as the roster of the writ petition was with another Bench on that day.
What is shocking is that after releasing the case, when admittedly there was no prayer made by the first respondent for grant of bail on 26.06.2023, the Bench granted bail for releasing the first respondent. Even during the pendency of writ petition, bail was not granted to the first respondent though a prayer for interim relief of grant of bail was made in the petition. Even if such a prayer would have been made on 26.06.2023, the Bench could not have heard the prayer for bail. Only the roster Bench could have heard the same. On that day, the advocate for the first respondent admittedly did apply for bail. Therefore, the appellants were not heard on the prayer for bail. Moreover, bail was granted in an offence under the PMLA without recording any reasons. Bail cannot be granted in such a case only to “strike a balance”.
Roster notified by the Chief Justice is not an empty formality. All Judges are bound by the same. On 26.06.2023, after releasing the case which was heard two months back, the Bench has proceeded to grant bail without anyone praying for grant of bail. No Bench can hear a case, unless as per the prevailing roster, the particular case is assigned to the Bench or that the case is specially assigned to the Bench by the Chief Justice. Therefore, that part of the impugned order by which bail was granted is set aside - the first respondent is permitted to move the roster Bench by filing an application for interim relief/grant of bail.
Appeal allowed in part.
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2024 (6) TMI 252
Money Laundering - proceeds of crime - making illegal foreign remittances to Hong Kong through banking channels by submitting fake import documents to the banks - attachment of bank accounts and fixed deposits.
HELD THAT:- Attachments were set aside where the appellants successfully demonstrated the legitimacy of their funds and lack of connection to the alleged crime. Appeals were dismissed where the sources of funds were not convincingly explained.
The 13 appeals shall stand disposed of along with, pending applications, if any.
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2024 (6) TMI 194
Money Laundering - provisional attachment order - scheduled offences - Validity of the proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) in the absence of a scheduled offence - HELD THAT:- It is a settled position of law by now that in the absence of a scheduled offence, the charges of money laundering under the PMLA, 2002 cannot be sustained and if the person in question has been finally discharged or acquitted of the scheduled/predicate offence, there can be no charge of money laundering against the said person.
In the present case, the respondents are not in a position to dispute fact that the appellant Shri Makhru Singh @ Anil Singh now stands acquitted in all the seven FIRs filed against him in offences which constitute scheduled offences under PMLA, 2002. The other appellant, namely, Mrs. Pammi Devi, is the wife of Shri Makhru Singh and did not stand accused of any scheduled offence as per the filings and submissions from either side. Thus, the acquittal of Shri Makhru Singh @ Anil Singh in the scheduled offences has removed the bedrock upon which the edifice of the PMLA case leading to the attachment of the properties in question in these cases was built.
The Provisional Attachment Order passed by the respondent Directorate and the impugned order passed by the Ld. AA confirming the same, have no legs to stand on. In the absence of any scheduled offence, there cannot be any “proceeds of crime”, i.e., “property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property”.
Appeal disposed off.
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2024 (6) TMI 48
Money Laundering - Provisional attachment of property - proceeds of crime - substitution of attached property by bank guarantee - HELD THAT:- The Supreme Court in various cases has ordered for substitution of attached property. The Supreme Court in ESSKAY PROPERTIES AND INVESTMENTS PRIVATE LIMITED & ANR. VERSUS UNION OF INDIA & ORS. [2022 (9) TMI 1592 - SC ORDER] lifted the attachment order on producing the fixed deposit of Rs. 3,00,00,000/- in lieu of part of the attached property with no lien of any other party except the Enforcement Directorate and order of attachment was allowed to be substituted by fixed deposit although without prejudice to the rights and contentions of the parties in the proceedings to be instituted before the Appellate Authority.
The land admeasuring 26.76 hectares situated at Village Saha, Tehsil Raghurajnagar, District Satna (M.P.) having a total value of Rs. 4,68,60,710/- and attached vide impugned Provisional Attachment Order No 2/2019 dated 23.09.2019 is ordered to be substituted by bank guarantee of equivalent amount to be furnished by the applicant/petitioner no 1 in favour of the respondent no 3 within 15 days who shall be having lien over said FDR. The bank guarantee shall be kept alive by periodical renewal till conclusion of trial arising out of ECIR bearing no. 03/INSZO/2014. If the respondents succeed in present petition then the respondent no. 2 shall be at liberty to encash the bank guarantee. The applicant/petitioner no 1 is also directed to submit an undertaking by way of affidavit that the applicant/petitioner no 1 shall not create any interest in favour of any other person or entity in respect of said bank guarantee.
Application allowed.
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2024 (6) TMI 33
Validity of Provisional Attachment Order u/s 5(1) of PMLA - attachment of shares considering them to be ‘value equivalent to the proceeds of crime’ - substitution by bank guarantee/FDR/Indemnity Bond or any other security - respondent no 2 is a properly constituted Adjudicating Authority under Section 6 of PMLA or not.
Whether 170,00,168 shares of JSPL attached as proceeds of crime based on equivalent in value of proceeds of crime and having book value at Rs. 3,11,05,588/- can be substituted by bank guarantee/FDR/Indemnity Bond or any other security as prayed on behalf of the petitioner?
HELD THAT:- The perusal of impugned Provisional Attachment Order dated 30.07.2021 issued under signature of Sharad Kumar, Deputy Director, Directorate of Enforcement reflects that properties worth Rs. 59,34,21,420 including 1,70,00,168 shares of M/s Jindal Steel & Power Limited with GSPIL as detailed in impugned Provisional Attachment Order equivalent to the proceeds of crime were provisionally attached under section 5 (1) of PMLA. It was observed in impugned Provisional Attachment Order that direct proceeds of crime are not available for provisional attachment due to circular movement/rotation of funds through various transactions. It was also observed that these properties are likely to be transferred or dealt with in such a manner which may result in frustrating the proceedings relating to confiscation under Chapter III of PMLA.
The Supreme Court in Esskay Properties and Investment Private Limited & another V Union of India & others [2022 (9) TMI 1592 - SC ORDER] lifted the attachment order on producing the fixed deposit of Rs. 3,00,00,000/- in lieu of part of the attached property with no lien of any other party except the Enforcement Directorate and order of attachment was allowed to be substituted by fixed deposit although without prejudice to the rights and contentions of the parties in the proceedings to be instituted before the Appellate Authority.
The Division Bench of the High Court of Telangana inY. S. Bharathi Reddy V Enforcement Directorate referred Hetero Drugs Limited V Deputy Director, Directorate of Enforcement, Delhi, [2015 (7) TMI 1255 - APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI] which was a decision of the Appellate Tribunal wherein it was held that there is no provision under the PMLA as well as the Rules framed thereunder which would entitle the appellant to seek replacement of immovable properties under attachment with fixed deposit and also argued by the CGSC observed that the Appellate Tribunal may be right in saying that there is no provision under PMLA and the Rules made thereunder for replacement of attached immovable property for some other property.
The High Court observed that the Court is well within its power to alter or modify the status quo order passed by it and the interest of opposite party/appellant would be protected by directing various parties to provide bank guarantee equivalent to Rs. 192 crores.
The impugned Provisional Attachment Order No. 04/2021 dated 30.07.2021 also attached 170,00,168 shares of JSPL with book value of Rs. 3.11,05,588 out of total provisional attachment of properties worth Rs. 59,34,21,420 as detailed in impugned Provisional Attachment Order as proceeds of crime based on equivalent in value of proceeds of crime and not as proceeds of crime. There is a difference between “proceeds of crime” and “amount equivalent to proceeds of crime” as noted by another coordinate bench and this court is also in agreement with the said view expressed by another Bench.
The Adjudicating Authority in pursuance of order dated 04.10.2021 may continue with proceedings but cannot pass final order. The petitioner is stated to be engaged in the business of investment and finance operations by Inter Corporate Deposits and investment in equity shares/preference shares/debentures/ mutual funds. The 170,00,168 shares of JSPL having book value of Rs. 3,11,05,588 lying with the petitioner and attached not as proceeds of crime but being equivalent value of proceeds of crime cannot remain under provisional attachment in pursuance of impugned Provisional Attachment Order. Accordingly present application is allowed and 170,00,168 shares of JSPL are ordered to be released in favour of the petitioner on furnishing interest bearing FDR amounting to Rs. 3,11,05,588 in name the of the petitioner and shall be deposited with the respondent no 1 who shall be having lien over said FDR. If the respondents succeed in the present petition then the respondent no 1 shall be at liberty to encash the FDR.
Application allowed.
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2024 (6) TMI 3
Seeking grant of anticipatory bail - Money Laundering - proceeds of crime - scheduled offences - Applicability of Section 45 of the PMLA in anticipatory bail - Legality of present ECIR.
Anticipatory bail - Applicability of Section 45 of the PMLA in anticipatory bail - HELD THAT:- This Court has considered the submissions of both the parties and observes that apart from having considered the judgment of the Division Bench, this Court has independently considered the material against the petitioner as well as the arguments of the petitioner and finds that even dehors the observations made by the Division Bench of this Court, it is not possible for this Court to opine that there are reasonable grounds for believing that the petitioner is not guilty of the offence and that he is not likely to commit any such offence while on bail and rather, as has been observed hereinabove, there is sufficient material to make out a prime facie case against the petitioner.
The Hon’ble Supreme Court of India in Vijay Madanlal Choudhary’s case [2022 (7) TMI 1316 - SUPREME COURT] had observed that it would not be logical to disregard the limitations imposed on granting bail under Section 45 of the 2002 Act, in the case of anticipatory bail as well. In the said judgment, reference was also made to the case of P. Chidambaram Vs. Directorate of Enforcement [2019 (9) TMI 286 - SUPREME COURT], in which, it has been observed that the power under Section 438 Cr.PC. has to be exercised sparingly, more so, in case of economic offences as economic offences stand as a different class as they affect the economic fabric of the society and in a case of money-laundering where it involves many stages, it requires systematic and analysed investigation and the success in such interrogation would elude if the accused knows that he is protected by a pre-arrest bail order.
It would also be relevant to note that in para 401 of the said judgment, the Hon’ble Supreme had observed that the Court need not go deep into the merits of the case and is only required to place its view based on probability on the basis of reasonable material collected during investigation and the Court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt - the rigors of Section 45 of the 2002 Act would also apply to an anticipatory bail and this Court after having considered the observations of the Hon’ble Supreme Court in the above-said judgment is of the opinion that the petitioner in the present case does not meet the twin test as contained in Section 45 of the PMLA to be granted the concession of anticipatory bail.
Legality of present ECIR - HELD THAT:- It would be relevant to note that in the present case, the complaint on the basis of which FIRs No. 10 and 11 were registered after the matter had been remanded twice in the proceedings under Section 156 (3) was withdrawn on 09.02.2024 and during the interregnum period, the above said four FIRs with respect to the illegalities committed by the petitioner and the Mahira Group of companies and its Directors etc. were registered and were taken on record of the present ECIR thus, legitimising the existence of the present ECIR.
The Hon’ble Supreme Court in Pavana Dibbur’s case [2023 (12) TMI 49 - SUPREME COURT] has observed that it is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged, must have been shown as an accused in the scheduled offence and thus, a person who is not an accused in the predicate offence can also be tried under the PMLA. The said proposition of law has been exemplified by the Hon’ble Supreme Court by observing that in case the offence under Sections 384 to 389 IPC, relating to extortion, which is a scheduled offence, is committed, then, a person who has committed the crime of extortion would be accused in the FIR registered under Sections 384 to 389 IPC, but the person who is unconnected with the offence of extortion but has assisted the said accused in the concealment of the proceeds of extortion could be held guilty of the offence of money laundering.
This Court is of the opinion that the petitioner does not deserve the concession of anticipatory bail and accordingly, the present petition is dismissed.
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