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of <h1>High Court releases provisional attachment order after predicative offences quashed in money laundering case</h1> <h3>LEXUS TECHNOLOGIES PRIVATE LIMITED Versus UNION OF INDIA, Directorate of Enforcement, The Adjudicating Authority, Union Bank of India</h3> LEXUS TECHNOLOGIES PRIVATE LIMITED Versus UNION OF INDIA, Directorate of Enforcement, The Adjudicating Authority, Union Bank of India - TMI Issues Involved:The issues involved in this case include the legality of the provisional attachment of the petitioner company's bank account under the Prevention of Money Laundering Act, 2002, despite the quashing of the scheduled offences against the accused.Issue 1 - Provisional Attachment of Bank Account:The petitioner sought relief to declare the provisional attachment of their company's bank account as illegal, arbitrary, and violative of constitutional rights. The investigation under PMLA was initiated against the petitioner and officials of another entity for alleged misappropriation of funds. The petitioner argued that they had no nexus with the other entity except for a former shareholder who had settled financial matters and left the company. Despite the quashing of scheduled offences, the authorities proceeded with the enquiry, leading to the freezing of the petitioner's account.Issue 2 - Legal Arguments:The petitioner's senior counsel contended that the authorities lacked jurisdiction to continue the proceedings after the quashing of scheduled offences. Reference was made to a judgment by the High Court for Telangana and a Supreme Court case regarding the strict interpretation of 'proceeds of crime' under the PMLA. The counsel argued that since there were no scheduled offences, there could be no offence of money laundering, making the provisional attachment unjustified.Issue 3 - Respondent's Opposition:The standing counsel for the respondents opposed the relief sought, emphasizing the authority's power to proceed with the enquiry under the PMLA. They argued that the judgment relied upon by the petitioner was not applicable to the case, as there was a distinction between initiating prosecution for a scheduled offence and provisional attachment under the Act. The respondents suggested that the petitioner could address their concerns through an explanation before the adjudicating authority and through the appeal process.Judgment:The High Court, after considering the arguments and relevant legal precedents, concluded that the provisional attachment of the petitioner's bank account was unjustified due to the quashing of scheduled offences. Citing the Supreme Court's interpretation of 'proceeds of crime,' the Court held that without scheduled offences, there could be no offence of money laundering. Therefore, the writ petition was allowed, setting aside the provisional attachment order and directing the release of the petitioner's bank account. No costs were awarded, and any pending applications were closed.
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