Tribunal sets aside order, rules seizure lapsed, bank accounts defreezed. Civil disputes to be decided separately.

The tribunal allowed the appeals, setting aside the impugned order. It ruled that the seizure lapsed upon the expiry of the 90-day period, and no prosecution complaint had been filed. Consequently, the bank accounts were ordered to be defreezed. The tribunal clarified that any pending civil disputes between the parties would be decided independently of this order. No costs were awarded.

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Issues Involved:
1. Legality of the freezing of bank accounts under the Prevention of Money Laundering Act, 2002 (PMLA).
2. Compliance with procedural requirements under Sections 17, 18, 20, and 21 of the PMLA.
3. Validity of the seizure order and its continuation beyond the statutory period.

Issue-wise Detailed Analysis:

1. Legality of the Freezing of Bank Accounts:
The appeals were filed under Section 26(1) of the PMLA against the impugned order dated 25.05.2015, which allowed the Original Application No. 24/2015. The appellants contended that the respondent communicated the attachment order to the bank but did not serve any order to the appellant. The bank, based on this order, restricted the appellant from operating the accounts. The appellant was informed of the account freezing through a bank letter dated 12.09.2014. The respondent did not record any reason for freezing the accounts, violating Section 17(1-A) of the PMLA.

2. Compliance with Procedural Requirements under Sections 17, 18, 20, and 21 of the PMLA:
Section 17 of the PMLA outlines the conditions under which search and seizure can be conducted, requiring the Director or an authorized officer to have reasons recorded in writing. Section 18 allows for the search of persons if there is reason to believe that they possess records or proceeds of crime. Section 20 discusses the retention of property seized or frozen, stipulating a maximum period of 180 days unless extended by the Adjudicating Authority. Section 21 deals with the retention of records, similarly limiting the period to 180 days unless extended.

The tribunal noted that the outer limit for deciding the application for retention of property under Section 21(4) is 180 days from the date of seizure, which is non-extendable. The respondent must file an application for retention within this period, failing which the proceedings lapse.

3. Validity of the Seizure Order and Its Continuation Beyond the Statutory Period:
The tribunal observed that no prosecution complaint had been filed against the appellant or her husband. The properties and records were seized solely for investigation purposes. The statutory period of 90 days under Section 8(3)(a) for retention of property or records had elapsed, as more than 3 years and 10 months had passed without any prosecution complaint. This lapse was admitted by the respondent's counsel.

Conclusion:
The tribunal allowed the appeals, setting aside the impugned order. It ruled that the seizure lapsed upon the expiry of the 90-day period, and no prosecution complaint had been filed. Consequently, the bank accounts were ordered to be defreezed. The tribunal clarified that any pending civil disputes between the parties would be decided independently of this order. No costs were awarded.

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