2018 (6) TMI 388 - AT - Money Laundering

Appeal Granted: Properties Released due to Acquittal under PMLA

The Tribunal allowed the appeal, setting aside the Provisional Attachment Order and the impugned order. It ordered the release of attached properties to ... Offence under PMLA - provisional attachment orders - order of acquittal - Held that:- Once the main appellant has been acquitted by the Special Court under the Schedule Offence after the trial and no appeal has been filed by the State against the said Judgement (as informed by the parties), the appeal is liable to be allowed. The complaint under schedule offence was decided on merit after recording the evidence. The FIR was filed in 2009 as well as charge sheet have been quashed by the Special Court. Impugned Order that the reply/documents/materials and evidence filed by the appellant have not been considered nor the statement made by the appellants under section 50 of the Act. The Provisional Attachment Order has not discussed the source of funds available with the accused. It was merely assumed that the accused/appellant had not any savings despite of submitting the material and documents and also from his spouse, son Rakesh and Avinash. The Adjudicating Authority ought to have complied with all the principles of duly conducting a judicial proceeding where rights of the parties are to be based on the cogent findings based on the evidence led in the case, as every proceedings under the PMLA 2002 is a judicial proceeding within the meaning of section 50 of PMLA Act 2002. Sri Pandari has already been acquitted in the offence on the basis of allegation made. On the basis of same allegation, prosecution complaint under section 45 of the Act is pending. Except one property i.e. agricultural land which was purchased on 5th August, 2009, all other immovable properties were purchased/acquired during the period 1995 to 2007 in the name of Sri Pandari and his family members. Section13 of PC Act was added as schedule offence in PMLA, 2002 w.e.f. 1.6.2009. When the acquittal order was passed, the impugned order and prosecution complaint were already available with the respondent. Appeal allowed Issues Involved:1. Legality of the Provisional Attachment Order under the Prevention of Money Laundering Act (PMLA), 2002.2. Impact of acquittal under the Prevention of Corruption Act, 1988 on the PMLA proceedings.3. Applicability of amended provisions of Section 8(3)(b) of PMLA Act, 2002.4. Double jeopardy and the validity of subsequent prosecution under PMLA.Issue-wise Detailed Analysis:1. Legality of the Provisional Attachment Order under PMLA, 2002:The appeals were filed under Section 5(5) of the PMLA, 2002. The Directorate of Enforcement, Bangalore, conducted an investigation and concluded that the properties were acquired from the proceeds of crime, leading to a Provisional Attachment Order. However, the Adjudicating Authority's confirmation of this order was challenged, as it did not consider the evidence and statements provided by the accused and his family members.2. Impact of Acquittal under the Prevention of Corruption Act, 1988 on PMLA Proceedings:The Special Judge acquitted the accused of offenses under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988. The judgment stated, 'The prosecution has failed to produce cogent, corroborative and satisfactory evidence to prove the charges leveled against the accused.' Consequently, the acquittal meant that the attached properties should be released, as the charges under the schedule offense were not substantiated. The Tribunal noted that 'once the appellant was acquitted from the schedule offense and no appeal was filed, the attached properties are liable to be released.'3. Applicability of Amended Provisions of Section 8(3)(b) of PMLA Act, 2002:The Tribunal discussed the amendment to Section 8(3)(b) of the PMLA Act, effective from 15.02.2013. The amendment made the provision applicable only to cases registered after this date. The Tribunal held that 'the amended provisions to section 8(3)(b) are prospective in nature.' Therefore, the provisions applicable at the time of the FIR and search in 2010 should govern the case, not the amended provisions.4. Double Jeopardy and the Validity of Subsequent Prosecution under PMLA:The Tribunal addressed the issue of double jeopardy, noting that the accused had already been acquitted of the same allegations under the Prevention of Corruption Act. The Tribunal stated, 'The respondent is now pressing for another/second trial under PMLA for the same offense/allegations against the appellant.' The Tribunal concluded that once acquitted under the schedule offense, the question of money laundering does not arise, as the allegations and evidence remain the same. The Tribunal emphasized that 'the appeal is liable to be allowed' since the acquittal order was not appealed, and the prosecution complaint under PMLA did not present new allegations or evidence.Conclusion:The Tribunal allowed the appeal, setting aside both the Provisional Attachment Order dated 19.08.2016 and the impugned order dated 31.03.2016. It ordered the release of attached properties to the appellant, noting that 'the present appeal is allowed' and 'all pending applications stand disposed of.' The Tribunal emphasized that the acquittal under the Prevention of Corruption Act nullified the basis for the PMLA proceedings, thereby invalidating the attachment of properties.