2015 (11) TMI 1694 - AT - Money Laundering

Appellant's Property Purchase Deemed Legitimate under Anti-Money Laundering Law

The Tribunal found that the appellant was a bona fide purchaser of the property in good faith and for valuable consideration. It held that the property ... PMLA - attachment of residential houses - Provisional Attachment Order - accused of commission of scheduled offence under PMLA - Held that:- The appellant did not have any nexus with the accused Shri Praramjit Singh Sandhu or his wife Smt. Parminder Kaur, that he did not know about the criminality attached to the subject property and that the appellant is a bonafide purchaser of the subject property in good faith for consideration. We accordingly hold that the subject property i.e. residential house No. B-32-E, 14/6290 Plot No. 53 - 54, New Akash Nagar, Village Bhura, Jalandher By Pass, Ludhiana in the hands of appellant is not proceeds of crime and is therefore, not liable to provisions of attachment and confiscation under PMLA. Consequently, the appeal is allowed and the impugned order dated 25th November, 2010 to the extent of confirming provisional attachment of the subject property and provisional attachment order No. 01/2008 dated 23rd December, 2008 to the extent of provisional attachment of subject property are set aside Issues Involved:1. Legitimacy of the attachment of the property under PMLA.2. Bona fide nature of the appellant's purchase of the property.3. Nexus between the appellant and the accused.4. Validity of the sale transaction and possession transfer.5. Compliance with legal procedures in property purchase.Issue-wise Detailed Analysis:1. Legitimacy of the attachment of the property under PMLA:The appeal challenges the order confirming the attachment of the residential property under the Prevention of Money Laundering Act (PMLA). The property was initially attached on the grounds that it was acquired using proceeds of crime by Shri Paramjit Singh Sandhu, who was involved in fraudulent activities. The Adjudicating Authority confirmed the attachment, but the appellant contested this, claiming legitimate purchase.2. Bona fide nature of the appellant's purchase of the property:The appellant argued that he purchased the property in good faith from Shri Gurmeet Singh, who had acquired it from Smt. Parminder Kaur. The appellant provided evidence of a registered sale deed, housing loan from PNB Housing Finance Limited, and payment from legitimate earnings. He claimed no knowledge of the criminal activities of the previous owners and asserted due diligence in the purchase process.3. Nexus between the appellant and the accused:The respondent alleged that the appellant had a nexus with the accused and that the sale was a scheme to avoid attachment. However, the appellant denied any relationship or prior knowledge of the accused's criminal activities. The Tribunal found no material evidence to establish a nexus or collusion between the appellant and the accused.4. Validity of the sale transaction and possession transfer:The Tribunal examined documents, including the agreement to sell, General Power of Attorney, and affidavits, which indicated that Shri Gurmeet Singh had paid the full sale consideration to Smt. Parminder Kaur and received possession of the property. The Tribunal held that the transaction was legitimate and that the appellant had acted in good faith.5. Compliance with legal procedures in property purchase:The appellant provided legal opinions, non-encumbrance certificates, and search reports to demonstrate compliance with legal procedures. The Tribunal noted that the appellant had exercised due diligence and that the housing loan from PNB Housing Finance Limited was legitimate, with no evidence of proceeds of crime being used.Conclusion:The Tribunal concluded that the appellant was a bona fide purchaser of the property in good faith and for valuable consideration. It held that the property in the appellant's hands was not proceeds of crime and was not liable for attachment under PMLA. The appeal was allowed, and the impugned order confirming the attachment was set aside.