2024 (6) TMI 252 - AT - Money Laundering

Bank account attachments overturned where legitimate fund sources proven in foreign remittance money laundering cases

The Appellate Tribunal under SAFEMA at New Delhi decided 13 appeals concerning money laundering charges involving illegal foreign remittances to Hong Kong ... Money Laundering - proceeds of crime - making illegal foreign remittances to Hong Kong through banking channels by submitting fake import documents to the banks - attachment of bank accounts and fixed deposits. HELD THAT:- Attachments were set aside where the appellants successfully demonstrated the legitimacy of their funds and lack of connection to the alleged crime. Appeals were dismissed where the sources of funds were not convincingly explained. The 13 appeals shall stand disposed of along with, pending applications, if any. Issues Involved:1. Legitimacy of the attached properties and bank balances.2. Nexus between the proceeds of crime and the attached properties.3. Validity of the Provisional Attachment Order (PAO) and the confirmation by the Adjudicating Authority (AA).Summary:Issue 1: Legitimacy of the Attached Properties and Bank BalancesMrs. Mamta Jain (FPA-PMLA No.2475/DLI/2018):The appellant argued that the properties were purchased from her legitimate income and business. However, the Tribunal found no substantial evidence to support her claim of sufficient legitimate income during the acquisition period. The appeal was dismissed.Mrs. Bimla Wadhwa (FPA-PMLA-2477/DLI/2018):The appellant's small bank balance was attached based on the presumption it was from her sons' income. The Tribunal found no justification for attaching such a meagre amount and allowed the appeal.Mrs. Bhawna Wadhwa (FPA-PMLA-2478/DLI/2018):The appellant claimed the attached amounts were from her legitimate income. The Tribunal found no specific evidence to substantiate the legitimacy of the sources and dismissed the appeal.Shri Sanjeev Wadhwa (FPA-PMLA-2479/DLI/2018):The appellant argued the attached amounts were his legitimate income. The Tribunal found he was involved in the operations of entities conducting illicit transactions and dismissed the appeal.Gurdeep Kumar Gujral & Sons (FPA-PMLA-2483/DLI/2018):The appellant failed to provide specific evidence of the legitimacy of the bank balances. The Tribunal dismissed the appeal.Mrs. Sushila Gujral (FPA-PMLA-2484/DLI/2018):The appellant failed to explain the sources of substantial initial investments in FDRs. The Tribunal dismissed the appeal.Mrs. Seema Gujral (FPA-PMLA-2485/DLI/2018):The appellant provided evidence of legitimate income, which the respondent failed to counter convincingly. The Tribunal allowed the appeal.Mrs. Kajal Arora (FPA-PMLA-2487/DLI/2018):The appellant failed to explain the sources of the FDRs. The Tribunal dismissed the appeal.Parvesh Kumar Gujral & Sons (FPA-PMLA-2488/DLI/2018):The appellant failed to provide convincing evidence of legitimate sources for the bank balances. The Tribunal dismissed the appeal.Ms. Soumya Jain (FPA-PMLA-2512/DLI/2018):The Tribunal found no proper justification for attaching a small amount and allowed the appeal.Mrs. Swaran Lata Jain (FPA-PMLA-2513/DLI/2018):The Tribunal found no justification for attaching the FDRs and allowed the appeal.Swaran Overseas Pvt. Ltd. (FPA-PMLA-2514/DLI/2018):The Tribunal found sufficient grounds for the attachment as the company was run by the principal accused. The appeal was dismissed.Mrs. Vinita Jain (FPA-PMLA-2515/DLI/2018):The Tribunal found no specific allegation of proceeds of crime flowing to the appellant and allowed the appeal.Issue 2: Nexus Between the Proceeds of Crime and the Attached PropertiesThe Tribunal emphasized that it is not necessary for the respondents to establish a direct nexus between the proceeds of crime and the attached properties. Under section 8 of the PMLA, 2002, once a notice is validly served, it is for the person to indicate the sources of income, earning, or assets out of which the property has been acquired. The presumptions under sections 23 and 24 of the Act are against the appellant.Issue 3: Validity of the Provisional Attachment Order (PAO) and Confirmation by the Adjudicating Authority (AA)The Tribunal upheld the PAO and the confirmation by the AA in most cases, where the appellants failed to provide substantial evidence of legitimate sources of income for the attached properties. Appeals were allowed only in cases where the respondents failed to counter the evidence provided by the appellants convincingly.Conclusion:The Tribunal dismissed most appeals due to the lack of substantial evidence of legitimate income sources for the attached properties. Appeals were allowed in cases involving small amounts or where the respondents failed to counter the evidence convincingly.