SAFEMA Tribunal upholds provisional attachment order in money laundering case involving suspicious demonetization payments

The Appellate Tribunal under SAFEMA upheld the provisional attachment order against the appellant in a money laundering case. The appellant received payments through three non-existing companies during demonetization, claiming these were for cloth supplies to a third party. The Tribunal found the transactions suspicious as payments came from firms to whom no supplies were made, without proper written arrangements. Despite the appellant producing invoices showing cloth supply, the Tribunal held that the appellant knowingly received proceeds of crime through these dubious channels. The appeal was dismissed, confirming the attachment order as legally valid.

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Issues Involved:
1. Whether the Adjudicating Authority correctly confirmed the provisional attachment order.
2. Whether the appellant was involved in money laundering or received proceeds of crime.
3. Validity of the payment received by the appellant from non-existing companies.

Issue-Wise Summary:

1. Confirmation of Provisional Attachment Order:
The appeal was filed under \u/s 26 of the Prevention of Money Laundering Act, 2002, against the order dated 04.10.2019, confirming the provisional attachment order. The appellant argued that the Adjudicating Authority confirmed the attachment order without evidence of money laundering and ignored applicable legal provisions.

2. Appellant's Involvement in Money Laundering:
The appellant, engaged in the textile business since 1985, sold cloth to Ajay Kumar Jain and received payment through cheques. However, the payment was considered proceeds of crime as it came from non-existing companies' bank accounts created using fake documents. The appellant claimed no knowledge of the fraudulent activities and argued that the payment was for legitimate business transactions.

3. Validity of Payment from Non-Existing Companies:
The respondents contended that the money attached was tainted, and the appellant received payments from non-existing companies with whom he had no business transactions. The investigation revealed that demonetized money was deposited in these companies' accounts and then transferred to the appellant's account. The appellant argued that he was unaware of the fraudulent nature of these companies and received payment for legitimate supplies.

Judgment:
The Tribunal found that the appellant received payments from non-existing companies without any business transactions, indicating involvement in money laundering. The appellant's bank accounts were attached for sums of Rs. 15,737/- and Rs. 49,910/- in two appeals. Despite not being an accused in the FIR or charge sheet, the Tribunal held that the proceeds of crime were channeled to the appellant, justifying the attachment order. The appellant's claims of innocence were not accepted, and the appeals were dismissed. The Tribunal suggested that the appellant could seek legal remedies against Ajay Kumar Jain if necessary.

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