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TMI Blog2024 (10) TMI 1619X X X X Extracts X X X X X X X X Extracts X X X X ..... then Finance Manager of HAL, Mr. Bhaben Maitra, while exercising his official functions had exceeded his authority and allotted a large sum of money to the Appellant along with other contractors on numerous occasions. 2. When the Appellant opposed the aforesaid, Mr. Bhaben Maitra, being a person in authority, threatened and intimidated the Appellant to revoke his license and to kill him if the Appellant did not cater to his demands. So, having no other option, the Appellant had to withdraw the amount which was deposited in his account by Mr. Maitra without his consent and gave it to Mr. Maitra. It is pertinent to mention here that the Appellant did not use a single rupee for the transactions. 3. That subsequent to transactions, a criminal case was instituted by the Special Cell of CBI in the year 2018, in which all the persons related to the monetary transactions including Mr. Bhaben Maitra and the Appellant were made parties to the case. The bank accounts of the Appellant including his sons were frozen in the year 2018 by the CBI. The Appellant was, however, granted bail. 4. In July 2022, the Enforcement Directorate provisionally attached the properties (4 Scheduled Lands) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut in the light of the judgment of the Apex Court in the case of Vijay Madanlal Choudhary Vs. Union of India reported in 2022 SCC OnLine SC 929. A further reference of the judgment of Delhi High Court in the case of Directorate of Enforcement Vs. Axis Bank & Ors. reported in 2019 SCC OnLine Del 7854 was given. The arguments raised by the Ld. Counsel for the respondent would be referred while dealing with the arguments of the counsel for the appellant to avoid repetition of one and the same facts. Finding of Tribunal: 8. We have considered the rival submissions raised by the counsel for both the parties and scanned the record carefully. 9. It is not in dispute that an FIR was registered for commission of the scheduled offence. It was followed by recording of the ECIR. The respondent initially frozen the bank accounts of the appellant and his sons, which was followed by the provisional attachment of the properties vide order dated 27.07.2020. The Provisional Attachment Order has been confirmed by the Adjudicating Authority finding a case of money laundering. 10. The Ld. Counsel for the appellant did not raise argument in reference to registration of the FIR and recording of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of dacoit, the accused secured the money and it has been used for the purchase of property, then such a property would fall in the definition of "proceeds of crime" having been obtained out of proceeds of crime. In other case where the property was not acquired or derived by the accused himself but he passed on money out of the crime to another person and he acquired the property, then also it would be considered to be the proceeds of crime to acquire the property. In any case, there should be an element for use of the proceeds directly or indirectly obtained out of the crime and thereby the property would have nexus with the crime. 14. In second part "the value of any such property" the definition aforesaid starts with "or" after the first part referred and discussed in the para above. The second part of the definition is commonly considered to be attachment of property of equivalent value. The second part applies when the property obtained or derived directly or indirectly out of the criminal activities is not available or vanished and, therefore, to secure the proceeds of equivalent value till completion of trial, it would fall under "the value of any such property" which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty. 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." The perusal of the para quoted above shows that the argument of the appellant that "the value of any such property" would be only when the proceeds have been taken out of India. The argument aforesaid was not accepted and it simplifies that the definition of "proceeds of crime" has three limbs and elaborate judgment to define the "proceeds of crime" was given by the Delhi High Court in the case of Axis Bank (supra). The relevant paras are quoted herein. "106. Among the three kinds of attachable properties mentioned above, the first may be referred to, for sake of convenience, as "tainted property" in as much as there would assumable be evidence to prima facie show that the source of (or considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable. It is sought to achieve the object of the Act of 2002. 18. In the light of judgment of the Apex Court in Vijay Madanlal Choudhary (supra), we are unable to apply the judgment of Kerala High Court in the case of Satish Motilal Bidri (supra). The Ld. counsel did not refer the relevant para of the judgment in the case (supra), rather he referred Para 66 of the judgment of the Apex Court in Vijay Madanlal Choudhary (supra) which permits attachment only of the proceeds of crime. There cannot be any dispute that attachment can be only of the proceeds of crime but what would fall in the definition of "proceeds of crime" and clarified in Para 68 of the same judgment has not been taken into consideration whereas judgement of the Apex Court on the issue is binding on the High Court. 19. The reference to the judgment in the case of Pavana Dibur (supra) has been given where the Ld. Counsel for the parties did not refer Para 68 of the judgment in the case of Vijay Madanlal Choudhary (supra) decided by three judges of the Apex Court. In fact, elaborate arguments to define "proceeds of crime" on the issue were not raised by the parties after referring to the object of the Act of 2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u) uses the expression or the value of any such property. The safeguard which stands constructed in Section 2(1)(u) in such a contingency is that in case the Directorate does proceed against any other property, it must be equivalent in value to the illegal pecuniary benefit or gain that may have been obtained as a result of criminal activity. 80. In the considered opinion of this Court to tie the Directorate's power to move forward in this direction only in cases where property is taken or held outside the country would not only do violence to the plain language of Section 2(1)(u), it would clearly whittle down the scope and intent of the definition itself. It would essentially amount to erasing the expression value of any such property as appearing in Section 2(1)(u) altogether. The Court further notes that in Seema Garg the learned Judges themselves observed that the phrase value of any such property would not mean and include any property which has no link, direct or indirect, with property derived or obtained from commission of a scheduled offence. The Court observes that Section 2(1)(u) clearly and in unambiguous terms includes not only property derived or obtained directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issal of the aforesaid Special Leave Petition cannot in any case be interpreted or understood as being an affirmation of the view as expressed by the Punjab and Haryana High Court. xxxx 105. It would be pertinent to recall that properties which were acquired prior to the enforcement of the Act may not be completely immune from action under the Act in light of what this Court had held in Axis Bank. As was explained by the Court in Axis Bank, the expression proceeds of crime envisage both ―tainted property as well as ―untainted property with it being permissible to proceed against the latter provided it is being attached as equal to the "value of any such property" or "property equivalent in value held within the country or abroad". However, both the italicised categories would be liable to be invoked in cases where the actual tainted property cannot be traced or found out. It is only where the respondents are unable to discover the tainted property that they can take the statutory recourse to move against properties which may fall within the ambit of ―value of any such property or ―property equivalent in value held within the country or abroad. To the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that only those properties which have been were derived or obtained directly or indirectly out of the crime can be attached rather in case of nonavailability of the property derived or obtained directly or indirectly rather when it is vanished or siphoned off, the attachment can be of any property of equivalent value. It is necessary to clarify that the proceeds of crime would not only include the property derived or obtained directly or indirectly out of the criminal activity relating to the scheduled offence but any other property of equivalent value. The word "or" has been placed before "the value of any such property" and is of great significance. Any property of equivalent value can be attached when the proceeds directly or indirectly obtained out of the crime has been vanished or siphoned off. Here, the significance would be to the property acquired even prior to commission of crime. It is for the reason that any property acquired subsequent to the commission of crime would be directly or indirectly proceeds of crime and then, it would fall in the first limb of the definition of proceeds of crime. In the second limb, which refers to "the value of any such property" would i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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