2019 (10) TMI 1252 - AT - Money Laundering

Tribunal Upholds Validity of PMLA Notice, Grants Interim Stay for Son's Residence

The Tribunal upheld the validity of the notice issued under Section 8(4) of PMLA, 2002, finding it compliant with the law. A prima facie case for granting ... Stay of operation of impugned order - validity of notice issued under Section 8(4) of PMLA, 2002 - case of the respondent that Sri Watali, has purchased the property in question in the name of his wife Mrs. Sarwa Zahoor. He has paid the consideration amount. Since the payment has come from him, even though the property is in the name of Mrs. Sarwa Zahoor, so the property has been attached as a value equivalent to proceeds of crime. Therefore, the appellants don’t have a prima facie case for stay. HELD THAT:- In substance there is no difference between the language used in the format and in the notice - there are no irregularity or illegality in the common notice issued under Section 8(4) of PMLA, 2002 to the appellants. It is in accordance with the provisions of Section 8(4) r/w relevant rules. Whether the appellants are entitled to any relief at this stage depends upon, whether the appellants have prima facie case for the purpose of stay, whether the balance of convenience lies in favour of granting stay, whether there will be irreparable injury which can’t be compensated in terms of money if stay is not granted. The respondent could not produce any independent document rebutting the documents of appellants with regards to non-residing of Dr. Yawar Zahoor Watali, s/o the appellants in the given address of the property in question. Dr. Yawar is working as a medical doctor at Aakash Hospital, Dwarka, New Delhi. The Electricity Bill shows there are consumption of electricity. In the absence of any contrary evidence, it is concluded that the appellant’s son is residing in the said address and if the physical possession of the floor in which Dr. Yawar is taken by the respondent than the appellant’s son and his family would suffer irreparable loss which can’t be compensated in terms of money. Status quo shall be maintained by both parties as on today with respect of the floor occupied by the son & his family of the appellants. No coercive action shall be taken in view of notice issued under Section 8(4) of PMLA, 2002 with respect to the first floor till the next date of hearing - The appellants shall deposit a sum of ₹ 10,000/- received from the tenant residing in the ground floor from the date of impugned order till further orders - The attachment of property in question shall continue.. List the matters on 12th February, 2020, the date already fixed. Issues:1. Validity of the notice issued under Section 8(4) of PMLA, 2002.2. Prima facie case for granting stay.3. Balance of convenience.4. Irreparable injury if stay is not granted.5. Ownership and possession of the property in question.6. Rental agreement for the ground floor.7. Enforcement of stay orders.Detailed Analysis:1. Validity of the notice issued under Section 8(4) of PMLA, 2002:The appellants contested the validity of the notice issued under Section 8(4) of PMLA, 2002, claiming it was not in accordance with the prescribed format. The respondent argued that the property in question was purchased by the wife of the accused using funds from the accused, justifying the attachment. The Tribunal found no irregularity in the notice, stating it complied with the provisions of the law.2. Prima facie case for granting stay:The appellants, represented by Mrs. Sarwa Zahoor, argued that their son, a medical practitioner, resided in the attached property. Documents such as bills, identity cards, and agreements were presented to support this claim. The Tribunal noted that the property was attached as proceeds of crime, but since there were no allegations against Mrs. Sarwa Zahoor, a prima facie case for interim stay was established for the floor occupied by their son.3. Balance of convenience:Considering the circumstances, the Tribunal decided to maintain the status quo for the floor occupied by the son and his family, preventing any coercive action until the next hearing. A deposit was ordered for the rent received from the ground floor tenant, and Mrs. Sarwa Zahoor was directed to hand over the rented floor within a specified period.4. Irreparable injury if stay is not granted:The Tribunal acknowledged the potential irreparable loss the son and his family would suffer if possession of the floor was taken by the respondent, emphasizing that such loss could not be compensated in monetary terms. It differentiated between the occupied floor and the rented floor in terms of irreparable injury.5. Ownership and possession of the property in question:The property in question was owned by Mrs. Sarwa Zahoor, with the son residing in one part and the ground floor rented out. The respondent failed to provide evidence contradicting the appellants' claim regarding the son's residence, leading to the Tribunal's decision in favor of the appellants.6. Rental agreement for the ground floor:An unregistered rent agreement existed for the ground floor, with financial benefits accruing to Mrs. Sarwa Zahoor. The Tribunal found no irreparable injury in the case of the rented floor, as compensation could be made in monetary terms.7. Enforcement of stay orders:Various orders were passed, including maintaining status quo, depositing rent amounts, and restricting third-party rights over the property. The attachment of the property continued, and the respondent was given the liberty to inquire into the market rent for the rented property.In conclusion, the Tribunal granted interim relief in favor of the appellants based on the prima facie case established, balancing the interests of both parties and ensuring no irreparable harm was suffered by the occupants of the property. The orders provided a structured approach to address the complex legal and factual issues involved in the case.