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TMI Blog2023 (1) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... i/b Katariya & Associates for Appellant in FA/338/2022. Mr. Hiten Venegavkar a/w Mr. Bharat Mirchandani for Respondent No.1. P.C. : 1. Appellant, in the first appeal is impugning an order dated 31st December 2020 passed by the Appellate Tribunal for SAFEMA, FEMA, PMLA, NDPS & PBPT Act, at New Delhi, while considering the appeal that appellant had filed against an order dated 16th January 2019 passed by the Adjudicating Authority confirming provisional attachment order (PAO) No.11 of 2018 dated 31st July 2018. Respondent to the appeal, i.e., Directorate of Enforcement (PMLA) Chennai, have registered a case against various individuals/ firms / company for commission of offence under the provisions of Prevention of Money Laundering Act ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cured assets were the proceeds of crime and that they were likely to be transferred or dealt with in any manner which may frustrate any proceedings relating to confiscation thereof ? (e) Whether the respondent could have passed the provisional attachment order in the absence of any allegation that the appellant or its officers committed any offence ? (f)Whether the secured assets are the proceeds of crime ? (g) Whether the secured assets are likely to be transferred or dealt with in any manner which may frustrate any proceedings relating to confiscation thereof ? (h) Whether the respondent has adequate reason to believe that the subject properties are the proceeds of crime and that the same are likely to be transferred or dealt with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, or involved in, money laundering and for matters connected therewith on incidental thereto. As a matter of fact, the properties attached by the Directorate of Enforcement are involved in money laundering or proceeds of crime and the same shall be considered as case properties which are liable to be confiscated by the Special Court (PMLA) after successful prosecution. (d) The PMLA provides for overriding effect to the provisions of Act. Section 71 of the PMLA clearly lays down that, "the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force." Furthermore, section 65 of PMLA further makes the position clear by stating that "the provisions of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to a scheduled offence" and consequently being "proceeds of crime", within the mischief of PMLA. (xii). An order of attachment under PMLA is not illegal only because a secured creditor has a prior secured interest (charge) in the property, within the meaning of the expressions used in RDBA and SARFAESI Act. Similarly, mere issuance of an order of attachment under PMLA does not ipso facto render illegal a prior charge or encumbrance of a secured creditor, the claim of the latter for release (or restoration) from PMLA attachment being dependent on its bonafides." (g) In terms of section 8(5) of PMLA the intention of the legislature is clear that on conclusion of trial for the offence of money laundering, the property involved i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Property can be disposed by the Trial Court dealing with the prosecution complaint in which the issue of confiscation is to be decided by way of filing an application by petitioner herein under Section 8(7) or 8(8) in CC No.20/2019. 5. Prima facie, considering the appeal memo and interim application, it does appear that properties of additional respondent no.1 and additional respondent no.2 as mentioned in paragraph 1 of the appeal memo, have been charged / mortgaged to appellant. It is possible that additional respondent nos.1 and 2 may argue that action by respondents under the provisions of PMLA was incorrect or malafide but that is a separate issue and that cannot deny the fact that the property has been secured to appellant. 6. In o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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