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Property attachment under Section 5 requires proceeds of crime plus apprehension of concealment or transfer The Appellate Tribunal under SAFEMA at New Delhi allowed an appeal challenging property attachment under PMLA. The Tribunal held that attachment under ...
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Property attachment under Section 5 requires proceeds of crime plus apprehension of concealment or transfer
The Appellate Tribunal under SAFEMA at New Delhi allowed an appeal challenging property attachment under PMLA. The Tribunal held that attachment under Section 5 requires not only proceeds of crime but also apprehension of concealment or transfer. Since Bund Garden Police Station had already frozen the bank account containing Rs.7.96 crores, there was no likelihood of transfer or alienation. The respondent's attachment was therefore unjustified as it lacked the element of apprehension required under the Act. The appeal was disposed of with the order operating until the police freeze remains in force.
Issues Involved: The appeal challenges the order confirming the attachment of moveable property of the appellant under Sections 420, 406, 464, 467, 471, 34, 120-B, 181, 201, 419, 465, and 468 of the Indian Penal Code, based on a complaint regarding the affairs of a Trust.
Summary of Judgment:
Allegations and Defense: The FIR was registered based on the complaint regarding the affairs of Taboot Inam Endowment Trust. The appellant was alleged to have received compensation for a land owned by the Trust under false pretenses. The appellant defended against the allegation, stating that the issue would be tried separately. The appellant argued that the attachment of moveable property was illegal as a larger amount was already with the police, making transfer or alienation unnecessary to frustrate confiscation.
Legal Interpretation - Money Laundering: The Tribunal analyzed Section 5(1) of the Prevention of Money Laundering Act, 2002, which allows attachment of property involved in money laundering when there is a risk of concealment or transfer to frustrate confiscation proceedings. The definition of "proceeds of crime" was clarified, including direct proceeds or their equivalent value. The Tribunal found that the attachment lacked justification as the frozen amount with the police prevented any transfer or alienation by the appellant.
Decision and Directions: The Tribunal interfered with the order of attachment and its confirmation, noting that a larger amount than attached was already frozen by the police. The attachment was ordered to the extent of the actual proceeds of crime involved. The appellant's appeal was disposed of with the direction that the attachment would remain in force until the frozen amount was released. Any defreezing by the police or court would automatically restore the attachment. The appellant was granted the option to file an application for further adjudication after the resolution of related legal proceedings.
This judgment highlights the importance of legal justifications for property attachment in money laundering cases and ensures that attachment orders are proportionate to the actual proceeds of crime involved.
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