Tribunal sets aside Provisional Attachment Order and impugned order, releases attached properties to appellants. Acquittal in related case deemed conclusive.

The Tribunal allowed the appeal, setting aside both the Provisional Attachment Order dated 27.09.2016 and the impugned order dated 20.12.2016. The properties attached under the provisional order were ordered to be released to the appellants. The Tribunal concluded that the acquittal in the Prevention of Corruption Act case negated the basis for the PMLA proceedings, as the allegations and evidence were the same in both cases.

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Issues Involved:
1. Confirmation of Provisional Attachment Order.
2. Allegations of disproportionate assets.
3. Acquittal in the Prevention of Corruption Act case.
4. Validity of proceedings under PMLA post-acquittal.
5. Application of amended provisions of PMLA.

Issue-Wise Detailed Analysis:

1. Confirmation of Provisional Attachment Order:
The appeals were filed under Section 26 of PMLA, 2002, challenging the order dated 20.12.2016 by the Adjudicating Authority, which confirmed the Provisional Attachment Order No. 17/2016 dated 22.9.2016. The appellants argued that the confirmation was based solely on the FIR and charge sheet filed by the Karnataka Lokayukta under Sections 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988.

2. Allegations of Disproportionate Assets:
The Karnataka Lokayukta Police registered an FIR against Sri Chandrashekar for possessing assets worth Rs. 83,82,877/- disproportionate to his known sources of income. The charge sheet alleged that from 1984 to 2010, he amassed assets and incurred expenses totaling Rs. 1,24,25,172/-, while his known income was Rs. 52,73,662/-, resulting in disproportionate assets of Rs. 71,51,510/-.

3. Acquittal in the Prevention of Corruption Act Case:
The Special Judge (Lokayukta) and Principal Sessions Judge, Kalaburagi, acquitted Sri Chandrashekar on 21.04.2017, finding him not guilty under Sections 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988. The court determined that only Rs. 5,77,372/- remained unexplained, which was less than 10% of his total income, and thus, not significant enough to justify a conviction.

4. Validity of Proceedings Under PMLA Post-Acquittal:
The Tribunal noted that the acquittal in the Prevention of Corruption Act case rendered the Provisional Attachment Order invalid. The Tribunal emphasized that the allegations were the same in both the Prevention of Corruption Act case and the PMLA proceedings. Since no appeal was filed against the acquittal, the attachment of properties under PMLA had no legal basis.

5. Application of Amended Provisions of PMLA:
The appellants argued that the amended provisions of Section 8(3)(b) of PMLA, effective from 15.02.2013, were not applicable to their case, which was initiated in 2010. The Tribunal agreed, noting that the amended provisions were prospective and not applicable to cases registered before the amendment.

Conclusion:
The Tribunal allowed the appeal, setting aside both the Provisional Attachment Order dated 27.09.2016 and the impugned order dated 20.12.2016. The properties attached under the provisional order were ordered to be released to the appellants. The Tribunal concluded that the acquittal in the Prevention of Corruption Act case negated the basis for the PMLA proceedings, as the allegations and evidence were the same in both cases.

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