2019 (4) TMI 331 - AT - Money Laundering

Appeal held, deferring to Special Court on money laundering case & property confiscation. Interim orders vacated.

Bharat Yadav, Amit Kumar, Smt. Satyabati Devi Versus The Deputy Director, Directorate of Enforcement, Patna

The judgment held the appeal in abeyance, deferring to the Special Court's jurisdiction over the money laundering case and property confiscation. Interim ... Offence under PMLA - attachment of property - HELD THAT:- Section 8 deals with adjudication by the adjudicating authority which as per Section 8(3) authorizes, the adjudicating authority to confirm the attachment of the property if it is involved in money laundering. Hence, while the attachment powers are with the adjudicating authority the power to confiscate, release or restore to a claimant of the said property lies specifically with the Special Courts. This Tribunal has not been assigned any specific powers under PMLA, 2002 with relation to confiscation, release or restoration of the property attached. Since the Special Court has initiated the proceedings in the present case and taken cognizance of the same, it is my considered view that the Special Court has to decide the case including the offence of money laundering as discussed above, which in any case only the Special Court can decide and not the Appellate Tribunal. The scheme of things as it exists under the PML Act shows that it is the same property which can be provisionally attached, thereafter this attachment can be confirmed by the adjudicating authority, that the order with regard to the same property would become final after an order of confiscation is passed by the Special Court (Section 8(3)(b), or released or restored as per Section 8(6) or Section 8(8) second proviso as the case may be. It would be appropriate to keep this appeal in abeyance until the Special Court who has already taken cognizance finally disposes of the case. The interim orders are also vacated. Issues:1. Appeal against the order confirming attachment of properties acquired from proceeds of crime.2. Interpretation of Section 44 of PMLA regarding the trial of scheduled offences and money laundering.3. Merits of the case including source of income for property acquisition and lack of reason to believe for property attachment.4. Special Court's jurisdiction over money laundering offences and property confiscation.Issue 1: The appellants appealed against the order confirming the attachment of properties acquired from proceeds of crime, alleging that since the main accused had been acquitted in related criminal cases, there could be no proceeds of crime. They cited previous judgments to support their plea.Issue 2: The judgment analyzed Section 44 of PMLA, emphasizing that the Special Court designated for the purpose must try both the offence of money laundering and the scheduled offence together. It referenced a Supreme Court case to reaffirm this interpretation.Issue 3: On the merits of the case, the appellants claimed their revenue from construction and liquor licenses justified property investments. They argued against retrospective application of PMLA and lack of reason to believe for property attachment. The respondent countered, highlighting discrepancies in income sources and lack of documentation.Issue 4: The judgment clarified the Special Court's exclusive jurisdiction over money laundering offences and property confiscation under PMLA. It outlined the process of attachment, confirmation, and final decision by the Special Court, emphasizing that the Appellate Tribunal lacked authority in confiscation matters.Conclusion: The judgment held the appeal in abeyance, deferring to the Special Court's jurisdiction over the money laundering case and property confiscation. Interim orders were vacated, with both parties directed to update the tribunal on the Special Court's final decision.