2018 (4) TMI 680 - AT - Money Laundering

Provisional attachment order - Appellant explained the position of the acquittal but the adjudicating authority, PMLA, New Delhi still attached the properties of the appellant - Held that - Proceeds of Crime under Section 2(1)(u) of the PML Act is a property which is derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence . Scheduled Offence is a predicate offence and the occurrence of the same is a prerequisite for initiating investigation into the offence of money laundering. The Trial Court has already acquitted the appellant of any offence which can be termed as scheduled offence under the PMLA. The respondent has also fairly agreed to this point - three properties standing in the name of the appellant and which do not from a part of the confiscated properties vide the Trial Court order dated 29.09.2016 and 07.10.2016 are ordered to be released from the attachments, attached by the ED vide the impugned order dated 17.03.2017 - Appeal allowed

Issues:
1. Quashing of Provisional Attachment Order and Impugned Order
2. Confirmation of immovable properties attachment by Enforcement Directorate
3. Allegations against Major General and his wife leading to provisional attachment
4. Acquittal of the appellant by the trial court
5. Enforcement Directorate's attachment order post-acquittal
6. Interpretation of "Proceeds of Crime" under PML Act
7. Release of properties from attachment

Quashing of Provisional Attachment Order and Impugned Order:
The Appellate Tribunal deliberated on the appeal seeking to quash the Provisional Attachment Order and the Impugned Order issued by the Adjudicating Authority. The Tribunal examined the properties provisionally attached by the Enforcement Directorate and their confirmation in the Impugned Order.

Confirmation of immovable properties attachment by Enforcement Directorate:
The Tribunal noted the immovable properties, including office space and cottages, attached by the Enforcement Directorate based on allegations against Major General and his wife for amassing assets disproportionate to their known sources of income.

Allegations against Major General and his wife leading to provisional attachment:
The judgment highlighted the allegations against Major General and his wife, stating that the wife actively abetted in acquiring assets. The trial court acquitted the appellant, emphasizing the inability to account for disproportionate assets by the Major General.

Acquittal of the appellant by the trial court:
After the trial court acquitted the appellant from all charges and the CBI did not challenge the acquittal, the Enforcement Directorate initiated a case against the appellant based on the same allegations, leading to a provisional attachment order.

Enforcement Directorate's attachment order post-acquittal:
Despite the acquittal, the Enforcement Directorate confirmed the provisional attachment order, prompting the appellant to challenge the decision, arguing that the properties should not be treated as proceeds of crime.

Interpretation of "Proceeds of Crime" under PML Act:
The Tribunal analyzed the concept of "Proceeds of Crime" under the PML Act, emphasizing that the properties in question did not form part of the confiscated properties and thus ordered their release from attachment.

Release of properties from attachment:
In light of the acquittal and the properties not being part of the confiscated assets, the Tribunal ordered the release of the properties standing in the name of the appellant from the attachments made by the Enforcement Directorate. The appeal was allowed, setting aside the impugned order and provisional attachment order, with no costs imposed.

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