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TMI Blog2024 (6) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by him with the bank and to save the property from seizure and attachment. It was not gifted bonafide but to save the property from seizure and attachment after registration of FIR though it was not obtained out of the proceeds of crime but is for the value thereof in absence of the availability of the total proceeds out of the crime i.e. Rs.164.99 crores. The fact is that the property was originally belonging to the accused Nirmal Kumar Kejriwal, the grandfather of the appellant. A gift was made in the year 2020 in favour of the appellant whereas the FIR was registered in the year 2017 followed by the ECIR in the year 2019. The way property was given to the appellant has been noticed and as it was earlier belonging to one of the accused thus, the documents were seized by the respondent and there are no illegality in it. The words the value of such property does specify it to be earlier to the crime or subsequent and the words thus value of such property would mean the property acquired prior or subsequent to the crime is added. The prosecution complaint against the appellant not filed within 365 days - HELD THAT:- It is stated that the prosecution complaint has not been filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IR and ECIR. The aforesaid cannot be considered to be bonafide rather designed to circumvent the provisions of law and the case registered against the accused. Appeal dismissed. - JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN And SHRI BALESH KUMAR : MEMBER For the Appellant : Shri Ankit Agarwal , Advocate For the Respondent : Shri Arjun Sawhney Ms. Mansi Srivastava , Advocates ORDER FPA-PMLA-4358/KOL/2021 The appeal has been preferred under Section 26 of the Prevention of Money Laundering Act, 2002 (in short `the Act of 2002 ) to challenge the order dated 09.09.2021 passed by the Adjudicating Authority confirming the order under Section 17(1) of the Act of 2002. 2. The learned counsel for the appellant submits that a search was conducted after recording ECIR. The documents belonging to the appellant were seized invoking Section 17(1) of the Act of 2002. It is without realising that no FIR or ECIR has been lodged against the appellant and otherwise he was not in possession of the `proceeds of crime . The appellant was, however, served with a show cause notice and aggrieved by it, a writ petition was preferred before Calcutta High Court. However, a reply to the show cause notice was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given. This includes not only the property directly or indirectly coming out of the crime but even property of equivalent value. Thus, it is not necessary that the property attached or seized should be directly or indirectly an outcome of the crime rather in a given case it can be of an equivalent value to the amount involved in the crime. 7. It is further submitted that if somebody is in possession of the property out of money laundering or falls within the definition of the `proceeds of crime then it could be subjected to seizure or attachment though the person possessing the property or holding it may not be an accused in the crime. The requirement is to attach the property involved in money laundering and in the same manner the prosecution complaint need not to be filed against the person whose property is attached or seized rather it would be in reference to the case registered against the accused. Thus, no case is made out in favour of the appellant on any of the issues raised by him. The prayer was made to dismiss the appeal. Appreciation of rival arguments : 8. It is a case where FIR was registered by the CBI on 28.03.2017 for the offence under IPC as well as the Prevention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri Sanjeev Kejriwal and Shri Nirmal Kumar Kejriwal without actual transport of goods. The funds were also diverted from the CC account of M/s Shree Mahalaxmi Corporation Pvt. Ltd. to the current account of M/s Surabhi Tradecom Pvt. Ltd. 11. On the strength of the aforesaid, the investigation was completed by the respondent and prosecution complaint has been filed. The appellant has challenged the order in reference to his own status and that the seized property is not the 'proceeds of crime' and lastly the PC has not been filed against him. 12. It is submitted that the appellant has not committed any scheduled offence.It is stated by the appellant that his name has not been mentioned in the FIR or ECIR for commission of the offence and thus, the document of the property belonging to him or any other document could not have been seized by the respondents. It is also stated that prosecution complaint has not been filed against him within a period of 365 days. The seized documents of property are not `proceeds of crime . 13. To analyse the issue as to whether it is incumbent upon the respondents to first find out whether the documents of the property seized from the posse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omebody has obtained and derived any property out of the crime and has siphoned off or vanished, then any property of equivalent in value can be attached. In view of the above, if the documents related to property have been seized though the property was acquired much prior to the offence then also it can be subjected to seizure or even attachment if the property obtained out of the crime is not available in the hands of the accused or short in value. 15. It is also necessary to clarify that if the accused derived or obtained the property out of the crime has parked it with other person, then the person holding such property can be subjected to attachment or seizure though he may not be accused in the FIR. It is for the reason that if the interpretation otherwise is taken, it would frustrate the object of the Act of 2002. It can be in a manner that the person who derived or obtained the property out of the crime may immediately park it with a third person and the property in that case would not be liable for attachment or seizure for the reason that the person holding the property has not been named as an accused, in that case, the very purpose and object of the Act would be frustr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rohibited criminal activity within the meaning of first limb of the definition. 107. In contrast, the second and third kinds of properties mentioned above would ordinarily be untainted property that may have been acquired by the suspect legitimately without any connection with criminal activity or its result. The same, however, are intended to fall in the net because their owner is involved in the proscribed criminality and the tainted assets held by him are not traceable, or cannot be reached, or those found are not sufficient to fully account for the pecuniary advantage thereby gained. This is why for such untainted properties (held in India or abroad) to be taken away, the rider put by law insists on equivalence in value. From this perspective, it is essential that, before the order of attachment is confirmed, there must be some assessment (even if tentative one) as to the value of wrongful gain made by the specified criminal activity unless it be not possible to do so by such stage, given the peculiar features or complexities of the case. The confiscation to be eventually ordered, however, must be restricted to the value of illicit gains from the crime. For the sake of convenie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven to the appellant has been noticed and as it was earlier belonging to one of the accused thus, the documents were seized by the respondent and we do not find any illegality in it. The words the value of such property does specify it to be earlier to the crime or subsequent and we can insert words thus value of such property would mean the property acquired prior or subsequent to the crime. The prosecution complaint against the appellant not filed within 365 days. 19. The second question is about non-filing of PC against the appellant within 365 days of the impugned order. Reference of Section 8(3) of the Act of 2002 is given and the said provision is quoted hereunder: 8. Adjudication. (1) to (2) xxx (3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under subsection (1) of section 5 or retention of property or [record seized or frozen under section 17 or section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property] or record shall (a) continue during [investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , a person not connected with the crime may not be subjected to investigation or proceedings in the criminal court and in absence of it the parked property by the accused can be saved from attachment and seizure to frustrate the very object of the Act. It is for that reason only the words accused or person from whom property is attached or seized are not mentioned under the provision for filing of PC against them rather what is required is a prosecution complaint in reference to the offence under the Act of 2002. 22. The appellant has referred to the recent judgment of Delhi High Court in the case of Mahender Kumar Khandelwal Vs. Directorate of Enforcement and Anr. Reported in 2024 SCC Online Del 645. It is informed that the judgment aforesaid has been stayed by the Division Bench of the same High Court and even, otherwise perusal of the judgment aforesaid reveals that the learned counsel therein did not properly refer the provision of Section 8(3)(a) of the Act of 2002 to show that the words `accused or `person does not exist in the provision rather mandate is for the completion of investigation within 365 days apart from the continuance of the proceedings in the Court in referenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the authorised officer concerning offence under section 3 of the 2002 Act. 68. It was also urged before us that the attachment of property must be equivalent in value of the proceeds of crime only if the proceeds of crime are situated outside India. This argument, in our opinion, is tenuous. For, the definition of proceeds of crime is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property. If the property is taken or held outside the country, even in such a case, the property equivalent in value held within the country or abroad can be proceeded with. The definition of property as in Section 2(1)(v) is equally wide enough to encompass the value of the property of proceeds of crime. Such interpretation would further the legislative intent in recovery of the proceeds of crime and vesting it in the Central Government for effective prevention of money-laundering. 69. We find force in the stand taken by the Union of India that the objective of enacting the 2002 Act was the attachment and confiscation of proceeds of crime which is the quintessence so as to com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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