2021 (10) TMI 705 - HC - Money Laundering

Money Laundering - reasons to believe possession of proceeds of crime or not - attachment of residential properties - sub-section (1) of section 5 of the Prevention of Money Laundering Act, 2002 - HELD THAT - We have refrained from delving into the factual narrative as stated in the impugned order of provisional attachment. This is so because we are of the opinion that when the matter is at the stage of adjudication under section 8 of the PMLA Act and adjudication hearing is fixed on 27th October, 2021, we should allow the statutory authority to deal with the matter in accordance with the statute. Of course the point of law raised by Mr.Nankani without adverting to the facts of the present case is an important one and as held by the Punjab and Haryana High Court in Seema Garg 2020 (3) TMI 460 - PUNJAB HARYANA HIGH COURT is certainly a matter which requires attention of the adjudicating authority. The other aspect which has also caught our attention is that the properties attached are much more valuable than the alleged proceeds of crime stated to have been in possession of the petitioners. Petition disposed off.

Summary

Issues:
Challenge to order under Prevention of Money-Laundering Act, 2002 - Provisional attachment of properties - Jurisdiction under PMLA Act - Prematurity of writ petition - Adjudication process under section 8 - Appellate remedies - Comparison of property value with alleged proceeds of crime.

Analysis:

The petition challenged an order issued by the Deputy Director under the Prevention of Money-Laundering Act, 2002, based on allegations related to possession of proceeds of crime. The Deputy Director provisionally attached properties of the petitioners, citing reasons including receipt of funds from a group declared as fugitive economic offenders. The petitioners contended that the properties were acquired before the alleged offense and the amount in question did not constitute proceeds of crime. They argued that the attachment was disproportionate, citing the value of the properties in question. The respondents argued that the writ petition was premature as the matter was before the adjudicating authority under section 8, with further appellate remedies available. The petitioners relied on legal precedents to support their arguments.

The Court refrained from delving into the factual narrative of the provisional attachment order, emphasizing the ongoing adjudication process under section 8 of the PMLA Act. The Court acknowledged the legal issues raised by the petitioners, including the timing of property acquisition and the value comparison between the attached properties and the alleged proceeds of crime. Noting the significance of these issues, the Court allowed the statutory authority to proceed with the adjudication process scheduled for October 27, 2021. The Court kept all contentions open, including the option for the petitioners to offer a bank guarantee during the adjudication hearing. The Court emphasized the importance of expeditiously concluding the hearing before the adjudicating authority.

In conclusion, the writ petition challenging the order under the PMLA Act was disposed of, with the Court directing the adjudicating authority to address the legal issues raised by the petitioners during the scheduled hearing. The Court highlighted the need for a timely resolution of the matter and maintained the petitioners' option to present a bank guarantee as part of the proceedings.