2019 (9) TMI 938 - AT - Money Laundering

Appellate Tribunal clarifies PMLA possession, preservation of proceeds of crime

Shri Karti P. Chidambaram Versus The Deputy Director Directorate of Enforcement, Delhi

The Appellate Tribunal ATPMLA, New Delhi, addressed urgent stay applications under section 8(4) of the Act, jurisdiction to pass interim orders, powers ... Money Laundering - attachment of property - Validity of Interim Order passed - Jurisdiction of this Tribunal to pass the interim order - Section 35 of PMLA - HELD THAT:- Mr. AmitMahajan admits that the proceedings of PMLA were initiated by invoking the section proviso of Section 5(1) of the Act - When it was asked to him to produce the reason to belief to satisfy the mandatory conditions of second proviso, it is replied by him that the said issue is the subject matter of appeal which is listed for final hearing and at that time, he would argue the said issue. With regard to query about the undivided share of his mother, no arguments are addressed on behalf of respondent. The interim order passed on 01.08.2019 is liable to be confirmed - The prayer made in the applications are allowed. Issues:1. Urgent application for stay of proceedings under section 8(4) of the Act.2. Jurisdiction of the Appellate Tribunal to pass interim orders.3. Powers of the Appellate Tribunal under Section 35 of PMLA.4. Purpose and objectives of PMLA in preserving proceeds of crime.5. Comparison of PMLA provisions with Order XXXVIII of the Civil Procedure Code.6. Constitutional rights regarding property and actions under PMLA.7. Interpretation of possession under Section 8(4) of PMLA.8. Challenge to the issuance of notice under Section 8(4) during appeal proceedings.9. Ownership structure of the property under dispute.10. Arguments against the attachment proceedings being bad in law.Analysis:1. The urgent application for stay was mentioned due to the receipt of notice under section 8(4) of the Act. The application was taken up promptly, and both parties made submissions. The appeal was already listed for hearing on a later date, and arguments were presented regarding the pending application and the fresh application filed after receiving the notice.2. The jurisdiction of the Appellate Tribunal to pass interim orders was discussed, with the respondent opposing the stay applications. The Tribunal's powers under Section 35 of PMLA were highlighted, emphasizing the preservation of proceeds of crime until final orders are passed by Special Courts.3. The purpose and objectives of PMLA in preserving proceeds of crime were explained, drawing parallels with the provisions of Order XXXVIII of the Civil Procedure Code. The need for directions to preserve proceeds of crime was underscored, especially in cases where individuals may attempt to dispose of assets.4. The constitutional rights regarding property and the actions under PMLA were examined, with a focus on the Tribunal's authority to attach property to secure proceeds of crime when a prima facie case is established.5. The interpretation of possession under Section 8(4) of PMLA was clarified, emphasizing that possession does not always refer to physical possession, especially if attempts are made to frustrate PMLA proceedings.6. Challenges were raised against the issuance of the notice under Section 8(4) during the appeal proceedings, questioning the timing and necessity of such actions before completion of investigations.7. The ownership structure of the property under dispute was detailed, highlighting the shared ownership and residency arrangements, which were considered in the context of the proceedings.8. Arguments were presented against the attachment proceedings being bad in law, citing various grounds mentioned in the appeal and stressing the need for a fair and lawful process in dealing with the property involved in the case.This comprehensive analysis covers the key issues addressed in the legal judgment delivered by the Appellate Tribunal ATPMLA, New Delhi, providing a detailed examination of the proceedings and arguments presented by both parties.