Tribunal Upholds Order on Property Attachment under PMLA, Clarifies Retrospective Amendment

The Tribunal upheld the Adjudicating Authority's order confirming the provisional attachment of properties under the Prevention of Money Laundering Act (PMLA). It held that the attachment was valid despite the appellant not being charged with a scheduled offense, as the properties were proceeds of crime involved in money laundering. The Tribunal found the 2009 amendment to the PMLA retrospective and clarified that the PMLA and the Securitisation Act operate in distinct fields, with the former aimed at preventing money laundering. The attachment order was deemed interlocutory, allowing the appellant to contest during final confiscation proceedings.

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Issues Involved:
1. Legality of the provisional attachment order under the Prevention of Money Laundering Act (PMLA), 2002.
2. Applicability of Section 5(1) of the PMLA.
3. Retrospective effect of the 2009 amendment to the PMLA.
4. Conflict between the PMLA and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Securitisation Act), 2002.
5. Validity of the attachment order in light of prior actions under the Securitisation Act.

Issue-Wise Detailed Analysis:

1. Legality of the Provisional Attachment Order:
The appeal challenged the order of the Adjudicating Authority dated 2nd March 2009, which confirmed the provisional attachment of properties owned by M/s. Himalayan Projects Pvt. Ltd. and Shri Gopinath Das under Section 5 of the PMLA. The properties were attached due to allegations of money laundering involving fake and forged documents for export, leading to fraudulent gains from banks. The appellant argued that the attachment order was illegal as the appellant was not charged with a scheduled offense.

2. Applicability of Section 5(1) of the PMLA:
The appellant contended that the conditions laid down in Section 5(1) of the PMLA were not satisfied, arguing that the person in possession of the proceeds of crime must be charged with a scheduled offense for the attachment to be valid. The Tribunal, however, referred to its previous judgment in Radha Mohan J. Lakhotia & Others vs. Dy. Director, PMLA, asserting that properties constituting proceeds of crime can be attached even if the person in possession is not charged with a scheduled offense. The Tribunal held that the attachment was valid as the properties were proceeds of crime and involved in money laundering.

3. Retrospective Effect of the 2009 Amendment to the PMLA:
The appellant argued that the second proviso to Section 5(1) of the PMLA, inserted by the 2009 amendment, was not retrospective and not clarificatory in nature. The Tribunal, however, found that the proviso was clarificatory and had retrospective effect, as it was intended to remedy unintended consequences and supply an obvious omission in the original statute. The Tribunal cited various Supreme Court judgments to support the view that clarificatory amendments are retrospective.

4. Conflict Between the PMLA and the Securitisation Act:
The appellant argued that the Securitisation Act, being a later special law with an overriding clause, should prevail over the PMLA. The Tribunal examined the legislative history and dates of enactment, concluding that the PMLA, despite being enacted later, was intended to address a different mischief-money laundering and forfeiture of proceeds of crime. The Tribunal found no conflict between the two statutes, as they operate in exclusive fields. The Tribunal emphasized that the PMLA's purpose is to prevent money laundering and forfeit illegal properties, while the Securitisation Act deals with the recovery of debts due to banks.

5. Validity of the Attachment Order in Light of Prior Actions Under the Securitisation Act:
The appellant argued that the properties were already under possession and proceedings of the Securitisation Act before the provisional attachment under the PMLA, and thus, the attachment should be annulled. The Tribunal rejected this argument, stating that the PMLA's provisions for attaching proceeds of crime take precedence, and the properties would vest in the Central Government if found to be proceeds of crime. The Tribunal noted that the attachment order is interlocutory, and the appellant would have an opportunity to prove its case during the final confiscation proceedings.

Conclusion:
The Tribunal upheld the order of the Adjudicating Authority confirming the provisional attachment of properties, dismissing the appeal. The Tribunal emphasized the broad scope of the PMLA in addressing money laundering and the necessity of interpreting the statute to achieve its legislative purpose.

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