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TMI Blog2015 (8) TMI 1425X X X X Extracts X X X X X X X X Extracts X X X X ..... any infirmity or illegality in the impugned order. All these points were also pleaded by the appellant during proceedings before the respondent who had after due consideration of the same took a lenient view and imposed a nominal fine of ₹ 1,00,000/- for failing to have an internal mechanism in place for not reporting 31 integrally connected cash transactions in the month of August, 2009. The act of filing Suspicious Transaction Report (STR) will not absolve the appellant of its compliance liability of filing Cash Transaction Report (CTR). - F.P.A.-PMLA No. 621/DLI/2014 - - - Dated:- 18-8-2015 - Shri Arun Kumar Agarwal, Acting Chairperson and Dr. Rabi Narayan Dash, Member Shri Sandeep Srivastava, Advocate, for the Appellant. Shri Satish Agarwal, Advocate and Anshuman, Consultant, for the Respondent. JUDGMENT [Judgment per : Arun Kumar Agarwal, (Acting Chairperson)]. - FPA-PMLA/621/DLI/2014 : This is an appeal challenging the order dated 2nd July, 2014 passed by the Director, Financial Intelligence Unit (FIU) India imposing a fine of ₹ 1 Lakh for failing to have an internal mechanism in place for not reporting 31 integrally connected cash transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31 integrally connected cash transactions and failure to establish mechanism to detect, capture and report such transactions to the respondent. He submitted that in response to the show cause notice, a detail response vide letter dated 3rd April, 2014 was filed before the respondent and at the time of personal hearing before Director FIU-India on 7th May, 2014, oral submissions were made explaining various initiative taken by the appellant in strengthening the internal controls in core operating systems and processes and also demonstrated the commitment of the appellant to put Anti-Money laundering measures at the heart of corporate compliance. 6. The counsel submitted that it is wrong to allege that the appellant has not fulfilled its entire obligation as per Section 12 of PMLA read with the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (in short Rules). He stated that it is an admitted fact that the appellant has not filed Cash Transaction Report within the prescribed time and in the prescribed format. However, the appellant voluntarily submitted the detail of these transactions vide letter dated 11th March, 2010 and also filed Suspicious Transactions Rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the period up to 9th March, 2010, the respondent should have also condoned the non-compliance and dropped the show cause notice. 9. The counsel for appellant prayed that the matter may be revisited and considering the efforts made by the appellant in becoming compliant with the regulations governing its business in letter and spirit, the delay in reporting cash transactions may be condoned and the proceedings be dropped against the appellant. 10. Mr. Satish Agarwal, Advocate learned counsel for the respondent vehemently opposed the pleas and contentions raised by the counsel for appellant. He submitted that there is no infirmity in the order passed by the Director FIU-India. The notice was issued for failure to comply with the provisions of Section 12 of PMLA read with rules, 3(1)(B) and 8(1) of the Rules to file cash transaction report in respect of 13 integrally connected transactions in the name of Chinta Devi wherein cash amounting to ₹ 99,000/- each totaling to ₹ 12,87,000/- had been deposited in August, 2009 and 18 integrally connected transactions in the name of Kalawati Devi Paswan for a total sum of ₹ 15 Lakh in cash deposited in August, 2009 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice within a specified period from the date of the transaction. 14. The counsel submitted that the IRDA is not an authority empowered to enforce the provision of PMLA nor the order passed by the IRDA is under the provisions of PMLA. The proceedings under PMLA are separate and independent from the proceedings by the regulator i.e. IRDA, therefore, the order passed by the IRDA condoning non-compliance/violations committed by the appellant during the period up to 9th March, 2010 is of no consequences for the present proceeding under PMLA. The counsel submitted that non-reporting of integrally connected transactions cannot be condoned and the proceedings initiated cannot be dropped. It was argued on behalf of the respondent that Director FIU-India after considering all facts and circumstances and submissions of appellant took a lenient view and imposed a nominal fine of ₹ 1 Lakh and there is no infirmity in the order prayed that the appeal may be dismissed 15. We have heard the arguments on behalf of the parties and carefully considered the pleadings and documents placed on record. Section 12 of the PMLA lays down the obligations of the appellant reads as follows : 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank notes have been used as genuine and where any forgery of a valuable security has taken place facilitating the transactions; (D) all suspicious transactions, whether or not made in cash and by way of: .. 17. Rule 7 prescribes that the Principal Officer of the banking company shall furnish the information referred to in rule 3 to the respondent i.e. Director FIU-India on the basis of information available with the banking company. Rule 7 is adverted to as follows : 7. Procedure and manner of furnishing information . - (1) Every banking company, financial institution and intermediary, as the case may be, shall communicate the name, designation and address of the Principal Officer to the Director. (2) The Principal Officer shall furnish the information referred to in rule 3 to the Director on the basis of information available with the banking company, financial institution and intermediary, as the case may be. A copy of such information shall be retained by the Principal Officer for the purposes of official record. (3) Every banking company, financial institution and intermediary may evolve an internal mechanism for furnishing information referred to in r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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