2019 (6) TMI 635 - AT - Money Laundering

Offence under PMLA - Provisional Attachment Order - HELD THAT - This tribunal is of the view that the adjudicating authority is duly bound to specifically come to the final conclusion as to whether the property attached was involved in money laundering or not and it was acquired from the proceed of crime or not. No doubt, if the property which was acquired is not traceable or disposed of due to misconduct of the accused party, only then other property can be attached in lieu of value thereof, in order to secure the proceeds of crime. However, in the present appeal, the hearing officer was unsure about the same, he had adopted oblique system which is not permitted in law. It is evident that due process has not been followed which is mandated in law. If alternative oblique system will continue, the confusion is to continue. The impugned order is set-aside. The matter is remanded back to the Adjudicating Authority to decide afresh after hearing both parties and their contentions raised. The same be decided within 180 days from today. All the contentions raised by the appellant shall be considered by the Hon ble Member (Law) who will hear the matter.

Summary

Issues:
Challenge to provisional attachment order confirming two properties as proceeds of crime and involved in money laundering.

Analysis:
1. The appellant contested the order confirming the attachment of two properties, arguing they were purchased for a valuable consideration and not from proceeds of crime.
2. The source of funds for the properties was explained by the appellant, detailing transactions and agreements with sellers.
3. The appellant disputed the reliance on a previous court order involving a different party, asserting it had no bearing on the present case.
4. It was argued that the appellant acquired the properties legitimately, contrasting them with properties of another individual involved in multiple cases.
5. The appellant retracted a statement regarding the sale consideration of the properties, claiming coercion and asserting it should not be relied upon.
6. Legal precedents were cited to support the argument that retracted statements should not be considered as evidence.
7. The appellant presented evidence of income from a franchise business and TDS deductions to demonstrate the legitimate source of funds for the properties.
8. It was highlighted that statements from the real owner and title holder of one property were not recorded by the respondent.
9. The tribunal noted that the impugned order did not conclusively determine if the properties were proceeds of crime, pointing out deficiencies in the decision-making process.
10. Due to the lack of a clear conclusion in the order, the tribunal set it aside and remanded the matter back to the Adjudicating Authority for a fresh decision within a specified timeframe.

This detailed analysis covers the key arguments, evidence presented, legal contentions, and the tribunal's decision regarding the challenge to the provisional attachment order involving the two properties in question.