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2020 (7) TMI 415 - AT - Money LaunderingMoney Laundering - provisional attachment order - whether the appellant has made out a prima facie case for grant of order of status quo ante? - HELD THAT - Since the respondent has followed the procedure prescribed, there are no illegality in getting the amount transferred in the account of ED. The appellant has offered Bank Guarantee for the retransfer of the aforesaid amount is not agreed by the respondent. During the course of hearing, the ld. senior counsel for the appellant submitted that the appellant is economically hard pressed and the aforesaid amount would be utilized by them for their real estate business. The aforesaid amount is alleged to be the proceeds of crime, therefore, the said amount cannot be allowed to be used by the appellant at this stage. Appropriate decision would be taken after hearing the parties on the merits of the appeal. At this stage, the offer of the appellant cannot be allowed. The application seeking ad-interim order for reversal of the transfer of funds and restoration of status quo-ante is dismissed - The appeal is already listed on 11th September, 2020.
Issues Involved:
1. Interim Stay on Impugned Order 2. Urgent Disposal Application 3. Transfer of Attached Amount 4. Prima Facie Case for Status Quo Ante Issue-wise Detailed Analysis: 1. Interim Stay on Impugned Order: The appellant sought an interim stay on the operation of the impugned order dated 10.01.2020 passed by the Adjudicating Authority. The reliefs sought included maintaining a minimum bank balance equivalent to the attached amount, furnishing a bank guarantee of the equivalent amount, and other suitable orders. However, by the time the applications were filed, the appellant had no knowledge that ?6,03,53,579/- had already been transferred from their bank account to the respondent. Consequently, the stay application became infructuous and was dismissed. 2. Urgent Disposal Application: The appellant filed an urgent disposal application through email on 09.06.2020, citing an order from the Delhi High Court dated 04.06.2020 in the case of Dilip Kumar Lalwani Vs. Union of India and Ors. The appellant sought an ad-interim order for the reversal of the transfer of funds and restoration of the status quo-ante. The grounds for this application included: - The liquidation/transfer of the attached amount was undertaken before the expiry of the appeal period. - The appellant was not charge-sheeted by the CBI in the predicate offense. - The proceedings were ultra-vires to Article 20(1) of the Constitution of India. - The appellant relied on interim relief granted by the Delhi High Court in a related case. - The appellant argued that the order was based on new reasons/allegations violating the principle of natural justice. - The appeal was delayed due to the suspension of work during the COVID-19 pandemic. - The appellant claimed irreparable loss due to the liquidation of the attached amounts and offered to provide a bank guarantee. 3. Transfer of Attached Amount: The respondent opposed the application, arguing that the transfer of the attached amount was legal and justified. They cited the following points: - An FIR was registered, and the case was transferred to the CBI, which filed a charge sheet. - The adjudicating authority confirmed the attachments. - The act of money laundering is a continuing offense and does not have retrospective application. - The transfer was done following Rule 4(5) of the Prevention of Money Laundering Rules, 2013. - The offer of a bank guarantee by the appellant was not tenable. 4. Prima Facie Case for Status Quo Ante: The tribunal examined whether the appellant had made a prima facie case for granting an order of status quo ante. The tribunal noted that the amount of ?6,03,53,579/- had already been transferred to the Enforcement Directorate. The appellant argued that the transfer was contrary to the prayer made in the Provisional Attachment Order (PAO) and the consequent confirmation order. However, the tribunal found that the respondent had followed the procedure prescribed under Rule 4(5) of the said rules, which allowed the transfer of the amount to the ED. The tribunal did not find any illegality in the respondent's action and dismissed the application seeking an ad-interim order for reversal of the transfer of funds and restoration of status quo-ante. Conclusion: The tribunal dismissed the stay application as infructuous and found no merit in the urgent disposal application. The transfer of the attached amount was deemed legal, and the appellant's offer of a bank guarantee was not accepted. The appeal was listed for hearing on 11th September 2020.
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