Appellate Tribunal quashes provisional attachment orders after acquittal in all scheduled offences under PMLA

The Appellate Tribunal under SAFEMA allowed the appeal challenging provisional attachment orders under PMLA, 2002. The Tribunal held that money laundering charges cannot be sustained without a scheduled offence. Since the appellant was acquitted in all seven FIRs constituting scheduled offences under PMLA, and his wife was not accused of any scheduled offence, the foundation for the money laundering case collapsed. The Tribunal ruled that without scheduled offences, there cannot be proceeds of crime, rendering the provisional attachment order and its confirmation by the Adjudicating Authority invalid.

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Issues Involved:
1. Legality of the Provisional Attachment Order (PAO) and the subsequent confirmation by the Adjudicating Authority (AA).
2. Validity of the proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) in the absence of a scheduled offence.
3. Examination of the evidence and arguments presented by both appellants and respondents.

Summary of Judgment:

1. Legality of the Provisional Attachment Order (PAO) and the subsequent confirmation by the Adjudicating Authority (AA):

The appeals were filed against the order of the Ld. Adjudicating Authority dated 19.08.2015, which confirmed the provisional attachment of assets made by the respondent Directorate vide PAO No. 02/2015 dated 30.03.2015. The Directorate had attached properties valued at Rs. 87,50,922/- based on investigations revealing that the appellant had acquired properties from the proceeds of crimes listed as scheduled offences under PMLA, 2002.

2. Validity of the proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) in the absence of a scheduled offence:

The appellant argued that he had been acquitted in four out of the seven FIRs, and the prosecution had not appealed those acquittals. In the remaining three FIRs, the evidence had concluded without implicating the appellant. The Tribunal noted that the appellant had been acquitted in all seven FIRs, which were the basis for the ECIR recorded by the respondent Directorate. The Tribunal emphasized that "in the absence of a scheduled offence, the charges of money laundering under the PMLA, 2002 cannot be sustained."

3. Examination of the evidence and arguments presented by both appellants and respondents:

The respondents contended that the appellant had no licit sources of income to explain the assets and that the income declared was not genuine. They argued that the appellant had engaged in "layering" of tainted funds and invested in properties to project them as untainted. However, the Tribunal found that the acquittal of the appellant in all scheduled offences removed the basis for the PMLA case. The Tribunal cited the Supreme Court's decision in Vijay Madanlal Choudhary and Ors. v/s. Union of India and Ors., which held that "if the person is finally discharged/acquitted of the scheduled offence, there can be no offence of money-laundering against him."

Conclusion:

The Tribunal set aside the impugned order of the Ld. AA confirming the attachment of the subject properties. The properties were ordered to be released from attachment under PMLA, 2002. The Tribunal also clarified that if the orders of acquittal/discharge are overturned by a superior judicial forum, the respondent Directorate would be entitled to take permissible steps under the law. The appeals were allowed, and no order as to costs was made.

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