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of <h1>Enforcement Directorate appeal dismissed, no money laundering evidence found, civil remedies suggested</h1> <h3>The Deputy Director Directorate of Enforcement, Mumbai Versus M/s Phonographic Performance Ltd & Ors.</h3> The Deputy Director Directorate of Enforcement, Mumbai Versus M/s Phonographic Performance Ltd & Ors. - TMI Issues Involved:1. Non-payment of royalties to the complainant by IPRS.2. Alleged cheating and criminal conspiracy by IPRS and its directors.3. Attachment of bank accounts of PPL by the Enforcement Directorate.4. Determination of 'proceeds of crime' under PMLA.5. Jurisdictional and procedural aspects of the provisional attachment order.Detailed Analysis:1. Non-payment of Royalties to the Complainant by IPRS:The complainant, a lyricist, alleged that IPRS failed to pay royalties for his work included in Hindi films despite repeated demands. He also claimed that his membership was unilaterally terminated by IPRS to avoid payment. The complaint suggested that other members might have faced similar issues.2. Alleged Cheating and Criminal Conspiracy by IPRS and Its Directors:The complaint led to the registration of an FIR under sections 120B, 406, 420, 468, 471, 506, and 34 of the IPC against IPRS directors and others. The Agra Police filed a charge sheet, and the Enforcement Directorate initiated an investigation under PMLA, linking the alleged offenses to money laundering.3. Attachment of Bank Accounts of PPL by the Enforcement Directorate:Based on the investigation, the Deputy Director of the Enforcement Directorate attached the bank accounts of PPL, suspecting the funds as 'proceeds of crime.' The attachment order was challenged, and the Adjudicating Authority rejected the attachment, leading to the appeal.4. Determination of 'Proceeds of Crime' Under PMLA:The Adjudicating Authority concluded that there was no material evidence showing that PPL derived any property from the alleged criminal activities of IPRS. The Authority emphasized that the proceeds of crime must be directly linked to the criminal activity, which was not established in this case. The funds in PPL's accounts were from legitimate licensing activities, not from any criminal activity.5. Jurisdictional and Procedural Aspects of the Provisional Attachment Order:The Adjudicating Authority noted that the FIR and charge sheet did not specifically mention PPL. The complaint and subsequent proceedings were primarily against IPRS. The Authority also highlighted procedural lapses, such as the lack of specific amounts due to the complainant and the absence of a direct link between the alleged crime and the funds in PPL's accounts.Conclusion:The appeal by the Enforcement Directorate was dismissed, and the provisional attachment order was not confirmed. The Adjudicating Authority found no evidence that PPL was involved in money laundering or that the funds in its accounts were proceeds of crime. The Authority also noted that the disputes were of a civil nature and could be resolved through appropriate civil remedies. The judgment emphasized the need for a clear and direct link between the alleged criminal activity and the funds in question to justify attachment under PMLA.
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