2024 (10) TMI 457 - AT - Money Laundering

Money Laundering - Provisional attachment of assets - scheduled offence - limitation period for filing of prosecution complaint - HELD THAT - The relevant notification in this regard is GSR 383(E) dated 19.04.2018 and the amended clause came into effect on the date of publication of the notification, i.e., 19.04.2018. Accordingly, the respondent Directorate had 90 days from 19.04.2018 to file the prosecution complaint. As per appellants' own admission, the prosecution complaint in this case was filed on 16.07.2018. It is found that counted from 19.04.2018, the said date was within the limitation period of 90 days. In Sree Sankaracharya University of Sanskrit 2023 (5) TMI 1246 - SUPREME COURT , while upholding the position that if a statute is curative or merely clarificatory of the previous law, retrospective operation thereof may be permitted, the Hon'ble Supreme Court also pointed out that in order for a subsequent order/provision/amendment to be considered as clarificatory of the previous law, the pre-amended law ought to have been vague or ambiguous. It is only when it would be impossible to reasonably interpret a provision unless an amendment is read into it, that the amendment is considered to be a clarification or a declaration of the previous law and therefore applied retrospectively. It was also held that merely because a provision is described as a clarification/explanation, the Court is not bound by the said statement in the statute itself, but must proceed to analyze the nature of the amendment and then conclude whether it is in reality a clarificatory or declaratory provision or whether it is a substantive amendment which is intended to change the law and which would apply prospectively - In the present case neither the amendment states that it was meant to be clarificatory or declaratory nor any such necessary implication arises considering the text of the amendment. Also, no such difficulty in interpretation or implementation existed vis- -vis the PMLA, 2002 which made the provisions of Section 8(3)(a) impossible to interpret without the amendment made vide Finance Act, 2018. There are no merit in the appellant's contention that the subject properties which were provisionally attached were liable to be released on account of the respondent Directorate's failure to file a prosecution complaint within 90 days of the order of the Ld. AA dated 19.01.2015. The period of 90 days would commence from the date the amendment came into force, i.e., 19.04.2018. The respondent's having complied with the requirement of filing the prosecution complaint within 90 days of 19.04.2018, there is no illegality in the continued attachment of the properties during the pendency of proceedings arising from the prosecution complaint which has been filed by the respondents. Appeal dismissed.

Summary

Issues Involved:
1. Provisional attachment of assets under the Prevention of Money Laundering Act, 2002.
2. Limitation period for filing a prosecution complaint.
3. Locus standi of the appellants to file the appeal.

Issue-Wise Detailed Analysis:

1. Provisional Attachment of Assets:
The case involves the confirmation of the provisional attachment of assets by the Directorate of Enforcement against M/s Birla Power Solutions Ltd. and its directors. The provisional attachment was confirmed by the Adjudicating Authority based on allegations of money laundering and diversion of funds collected as fixed deposits and inter-corporate deposits. The funds were allegedly siphoned off to other group companies, creating a web of interconnected transactions to hide the true source and purpose of the funds. The appellants contested the attachment, arguing that there was no "reason to believe" for the attachment and that the attached property did not constitute "proceeds of crime." However, these arguments were not pressed during the final hearing.

2. Limitation Period for Filing a Prosecution Complaint:
The main issue raised by the appellants was the alleged failure of the Directorate to file a prosecution complaint within the stipulated limitation period. Initially, there was no time limit for filing such complaints under the PMLA. However, amendments in 2018 and 2019 introduced timelines of 90 days and 365 days, respectively, from the date of confirmation of the provisional attachment order. The appellants argued that the amendment should apply retrospectively, thus rendering the attachment invalid due to the delay in filing the prosecution complaint. The Tribunal found that the amendment was not retrospective and that the Directorate filed the complaint within 90 days of the amendment's effective date, thus within the legal timeframe. The Tribunal concluded that the attachment of properties was valid during the pendency of proceedings.

3. Locus Standi of the Appellants:
The respondents challenged the appellants' locus standi to file the appeal, arguing that the confirmation order did not pertain to any property of the appellants. However, the Tribunal noted that the appellants were listed as defendants in the original complaint and that the Adjudicating Authority had recorded adverse findings against them. Under Section 26 of the PMLA, any person aggrieved by the Adjudicating Authority's order may appeal to the Appellate Tribunal. The Tribunal found that the appellants had the right to contest the adverse findings and thus had the standing to file the appeal.

Conclusion:
The Tribunal dismissed the appeals, concluding that the Directorate complied with the amended law regarding the filing of the prosecution complaint. The Tribunal also rejected the respondents' challenge to the appellants' locus standi, affirming their right to appeal the adverse findings. The appeals were dismissed on the grounds that the Directorate's actions were within the legal framework, and the appellants' contentions on the limitation period and attachment were without merit. No costs were ordered.