2024 (10) TMI 386 - AT - Money Laundering

Money Laundering - predicate offence - provisional attachment of immovable properties - source of income - invocation of Section 5(1) of the Act of 2002 - HELD THAT - It is a fact that the appellant Nirmal Chandra Rout had disclosed a very meagre income of Rs. 5,74,880/- in the Assessment Years 2008-09 to 201213 but invested in many properties to the tune of more than Rs. 20,87,700/-, apart from his investment in the construction of one-storied building. No document was produced to prove loan to purchase the properties of the worth more than his income. Even the wife, who is also appellant before us in whose name some of the properties have been purchased has stated that she is a housewife and money was taken by way of loans, however could not produce any documentary evidence to substantiate the same. Accordingly, argument of the appellant that no material or evidence has been shown for his involvement in the case cannot be accepted. It is also that they had not disclosed the source of income. The chances of transfer of the property remains immediately on registration of the FIR and ECIR. Thus, whenever there is likelihood of transfer of the property, the attachment can be made. In the instant case, the appellant has not stated that he would not transfer the property till conclusion of the trial and if he makes a statement to this effect, then he needs to clarify how he would be affected by the attachment when properties can be used by him without its alienation. There are substance in the argument of the learned counsel for the respondent. In fact, it would be impossible to produce the material to show preparation for transfer of property. If the accused would be intent to transfer the property, it can be done within no time. Finding no merit in the issues raised by the appellants, appeal would fail and is dismissed.

Issues Involved:

1. Legality of the provisional attachment of immovable properties under the Prevention of Money Laundering Act, 2002.
2. Connection of the appellant with the main accused and alleged crimes.
3. Compliance with Section 5(1) of the Prevention of Money Laundering Act, 2002 regarding attachment.
4. Sufficiency of evidence to establish the appellant's involvement in money laundering activities.

Detailed Analysis:

1. Legality of the Provisional Attachment:

The appeals challenged the common order dated 20.03.2019 by the Adjudicating Authority, which confirmed the provisional attachment of the appellants' properties. The attachment was based on the registration of FIRs for predicate offences and the subsequent ECIR recorded by the respondent. The respondent argued that the properties were acquired from the 'proceeds of crime' or were of equivalent value, thus justifying the attachment. The Tribunal found that the attachment was made to prevent the proceeds from being concealed or transferred, which could frustrate confiscation proceedings.

2. Connection of the Appellant with the Main Accused:

The appellant, Nirmal Chandra Rout, was alleged to be a close associate of the Dhal Samanta brothers, who were involved in various heinous crimes. The Tribunal noted that the appellant was implicated in four FIRs for offences including murder and extortion. The appellant's partnership firm, M/s Chetana Agency, was found to have business transactions with entities controlled by the Dhal Samanta brothers. The Tribunal found sufficient material indicating the appellant's involvement in criminal activities, including benefiting from contracts obtained through coercion.

3. Compliance with Section 5(1) of the Prevention of Money Laundering Act, 2002:

The appellants contended that the attachment order violated Section 5(1) of the Act, which requires a belief that proceeds of crime are likely to be concealed or transferred. The Tribunal examined the provision and concluded that the attachment was justified under the second proviso to Section 5(1), which allows for attachment if there is a likelihood of property transfer. The Tribunal found that the attachment was necessary to prevent the frustration of proceedings, as the likelihood of transfer existed immediately upon registration of the FIR and ECIR.

4. Sufficiency of Evidence to Establish Involvement:

The appellants argued that there was no evidence connecting them to the crimes or proceeds of crime. However, the Tribunal found that the appellant's statements and financial transactions provided sufficient prima facie evidence of involvement. The Tribunal noted that the appellant had disclosed a meager income but invested significantly in properties, without substantiating the source of funds. The Tribunal emphasized that it only needed to establish a prima facie case for money laundering, not a final determination of guilt.

Conclusion:

The Tribunal dismissed the appeals, finding no merit in the issues raised by the appellants. The provisional attachment of properties was upheld as lawful and necessary under the circumstances. The Tribunal concluded that sufficient evidence existed to establish a prima facie case of money laundering against the appellants, and the legal requirements for attachment under the Act were met.

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