2024 (3) TMI 354 - HC - Money Laundering

Money Laundering - Scheduled offences or not - attachment of properties - Court had quashed the entire complaint - HELD THAT - Since the complaint itself is not maintainable, the respondent has no jurisdiction to attach the properties of the petitioners and therefore the order of attachment passed under Section 5(5) of the Prevention of Money Laundering Act, 2002 dated 30.09.2022 impugned in this writ petition, is liable to be quashed and hence, quashed. Petition allowed.

Summary

Issues Involved:
The issues involved in the judgment are the maintainability of the complaint under Section 409 of the IPC, lack of jurisdiction under the Prevention of Money Laundering Act (PMLA), quashing of the complaint, quashing of provisional attachment orders, and return of movable properties seized during the proceedings.

Issue 1: Maintainability of Complaint under Section 409 of the IPC:
The accused individuals facing trial in a specific case preferred quash petitions challenging the complaint filed against them. The High Court observed that the complaint referred to a conspiracy to commit an offense under Section 409 of the IPC, which is not a scheduled offense. Citing a Supreme Court judgment, the Court held that the complaint is not maintainable as the alleged offense is not a scheduled offense under the PMLA. The Court emphasized that the complaint lacked grounds for invoking the provisions of the PMLA due to the nature of the offense alleged.

Issue 2: Lack of Jurisdiction under the PMLA:
The High Court further noted that since the respondent lacked jurisdiction under the PMLA due to the absence of proceeds of crime related to any scheduled offense, the communications sent to the bank to withhold compensation amounts and the provisional attachment order were unsustainable. The Court highlighted that the lack of jurisdiction under the PMLA rendered the proceedings and the provisional attachment order invalid, as there were no proceeds of crime linked to a scheduled offense.

Issue 3: Quashing of Complaint and Orders:
Based on the above findings, the High Court quashed the entire complaint against the petitioners and also set aside the provisional attachment orders related to the case. The Court emphasized that the complaint itself was not maintainable, leading to the quashing of the orders and attachments associated with the case. The judgment highlighted the lack of jurisdiction and the absence of grounds for invoking the PMLA provisions as key reasons for quashing the complaint and related orders.

Issue 4: Return of Seized Movable Properties:
Following the final orders quashing the proceedings and the complaint, the petitioners sought clarification regarding the return of movable properties seized during the proceedings. The Special Public Prosecutor for the respondent confirmed that in light of the quashing of the proceedings, the petitioners were entitled to the return of the seized movables. Consequently, the Court modified its previous order to direct the release of all movable properties seized within six weeks from the date of the order.