2017 (12) TMI 98 - AT - Money Laundering

Offence under PMLA - provisional attachment order - Held that - On the similar issue another judgement has been delivered in the matter of Shri Ajay Kumar Gupta Vs. Adjudicating Authority (PMLA) 2017 (8) TMI 135 - MADRAS HIGH COURT . In the present case that the Hon ble High Court has dealt with the issue of retrospective effect the said judgment has binding effect upon us. This Tribunal cannot take the different view as the judgment has been passed between the parties under the PML Act. Full respect has to be given to the said Judgement. The impugned order is set-aside. The appeals are allowed. The attachment order passed u/s 5 was contrary to law. The attached properties shall stand released forthwith. The appellants may take necessary steps to take the possession as per the law. As far as the criminal complaint pending against the appellant Mr. Satyanarayana for offence before the Special Court is concerned the same would be decided as per its own merit and without any influence of the judgement passed by me today. My respected brother who is a member and heard the matter with me though agreed that the appeals are liable to be allowed but he has given his own independent reasons.

Summary

Issues Involved:
1. Confirmation of Provisional Attachment Order.
2. Allegations of disproportionate assets against the appellant.
3. Involvement of the Prevention of Corruption Act and the Prevention of Money Laundering Act.
4. Validity of the attachment of properties.
5. Retrospective application of the Prevention of Money Laundering Act.
6. Quashing of proceedings under the Prevention of Money Laundering Act by the High Court.
7. Impact of the High Court judgment on the attachment order.

Issue-wise Detailed Analysis:

1. Confirmation of Provisional Attachment Order:
The appeals were filed against the impugned order dated 19.11.2012, which confirmed the Provisional Attachment Order dated 26.07.2012. The attachment was in relation to assets allegedly amassed by the appellant through corrupt practices, as per a CBI charge-sheet.

2. Allegations of Disproportionate Assets:
The appellant, a retired Director Technical of ECIL, was alleged to have amassed assets disproportionate to his known sources of income. The CBI charged him with possessing assets worth ?45,94,764.84/- beyond his known income, which was punishable under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988.

3. Involvement of the Prevention of Corruption Act and the Prevention of Money Laundering Act:
The Enforcement Department registered an ECIR and initiated an investigation under the Prevention of Money Laundering Act, 2002, as the alleged offense was a scheduled offense under the Act. Statements of various individuals were recorded under Section 50 of the Act, leading to the provisional attachment of properties.

4. Validity of the Attachment of Properties:
The properties attached included a flat in Jai Residency and a fixed deposit in HDFC Bank. The appellant contested the attachment, arguing that he had no connection with the deposits or the loans taken against them. He also contended that the bank manager's involvement and internal manipulations were not adequately considered.

5. Retrospective Application of the Prevention of Money Laundering Act:
The High Court of Hyderabad, in a criminal revision case, discharged the appellant from the allegations of money laundering, noting that the alleged offenses occurred before the relevant provisions of the Prevention of Money Laundering Act were included in the schedule of offenses. The court emphasized that the Act could not be applied retrospectively.

6. Quashing of Proceedings under the Prevention of Money Laundering Act by the High Court:
The High Court's judgment, which discharged the appellants, was not challenged by the respondent. The judgment highlighted that the provisions of the Act invoked by the Enforcement Directorate were not in force at the time of the alleged offenses, thus making the proceedings unsustainable.

7. Impact of the High Court Judgment on the Attachment Order:
Given the High Court's judgment, the Tribunal found that the attachment order under Section 5 of the Act was not sustainable. The Tribunal set aside the impugned order, allowing the appeals and directing the release of the attached properties. The Tribunal noted that the criminal complaint pending against the appellant under the Prevention of Corruption Act would be decided on its own merits, independent of the current judgment.

Conclusion:
The Tribunal allowed the appeals, setting aside the attachment order as it was contrary to law. The attached properties were ordered to be released immediately. The pending criminal complaint against the appellant would proceed independently based on its merits.