2019 (9) TMI 425 - AT - Money Laundering

Money Laundering - provisional attachment order - proceeds of crime - Section 26 of Prevention of Money Laundering Act, 2002 - scheduled offences or not - violation of the provisions of sections 120-B read with 409, 420, 467, 468 471 of Indian Penal Code and Section 13(2) read with 13(1)(d) of Prevention of Corruption Act, 1988 - HELD THAT - Tribunal is of the view that the property admeasuring 1180 sq. ft. was not involved in the offence of money laundering under Section 3 of the Prevention of Money laundering Act, 2002. From the entire gamut of the matter that the claim of the respondent with regard to 1080 sq. ft. is a civil dispute. Even tribunal has no jurisdiction to decide the same despite of the fact that the appellants have got the sale deed registered in their favour for the part of the said portion. This tribunal has also no jurisdiction to declare that the appellants are the owner of the entire land. It is disputed fact and it is to be decided in other forum and not here. It is also the admitted position that by virtue of sale deed dated 22.01.2007, only the vacant land 308 sq. ft. out of 1180 sq. ft. was purchased. For remaining portion, the appellant has merely produced the receipt in order to show that certain payment was made the actual owner. The possession of the appellants was not disputed by the counsel for the respondent. At the best, it may be the illegal possession. It is admitted position that no civil litigation is pending against the appellants for remaining portion either by the owner of the property or accused party or the bank. Thus, the inference cannot be drawn that the appellants have no right at all in view of having the possession since 2004. The period of 12 years in order to claim adverse possession also expired. No suit is pending against the appellants. The provisional attachment order is set aside - appeal allowed.

Issues Involved:

1. Legitimacy of the provisional attachment order dated 08.08.2013.
2. Involvement of the appellant's property in money laundering under Section 3 of the Prevention of Money Laundering Act, 2002.
3. Ownership and possession of the disputed property (1180 sq. ft.).
4. Jurisdiction of the tribunal to decide on civil disputes related to property ownership.

Issue-wise Analysis:

1. Legitimacy of the Provisional Attachment Order:

The appeal was filed to set aside the order dated 04.02.2014 by the Adjudicating Authority and the provisional attachment order dated 08.08.2013. The provisional attachment was based on the investigation that revealed a criminal conspiracy involving the sanctioning and release of fraudulent housing loans, leading to the misappropriation of funds by Shri B. Subramaniam and Shri K. Gnanasekaran.

2. Involvement of the Appellant's Property in Money Laundering:

The respondent argued that the property (1180 sq. ft.) was involved in money laundering. However, the appellants contended that the entire proceeds of the crime pertained to a different portion of land (1200 sq. ft.). The appellants were not charge-sheeted under the scheduled offense, and no prosecution complaint under PMLA was filed against them. The tribunal found that the appellants' property was not involved in the offense of money laundering under Section 3 of the PMLA, 2002.

3. Ownership and Possession of the Disputed Property:

The appellants claimed ownership of the 1180 sq. ft. property based on advance payments made to the original owner, N. Soundar Rajan, and subsequent peaceful possession since April 2004. The appellants provided various documents, including receipts of payments, sale deeds, and utility bills, to support their claim. The tribunal noted that the possession of the appellants was not disputed and that the title to the land should be decided by a competent civil court, not the tribunal.

4. Jurisdiction of the Tribunal:

The tribunal emphasized that it did not have the jurisdiction to decide civil disputes related to property ownership. The appellants' claim of ownership and adverse possession needed to be adjudicated by a civil court. The tribunal also highlighted that no civil litigation was pending against the appellants regarding the disputed property.

Conclusion:

The tribunal concluded that the property (1180 sq. ft.) was not involved in money laundering and set aside the impugned order dated 04.02.2014. Consequently, the provisional attachment order dated 08.08.2013 was quashed, and the attachment was released forthwith. The tribunal reiterated that the ownership and title disputes should be resolved in a civil court. No costs were imposed.

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