HC dismisses challenge to provisional attachment order under PMLA despite Customs releasing gold imported under SEZ Act

Kerala HC dismissed petition challenging provisional attachment order under PMLA. Court held that petitioner cannot obtain relief against the order despite Customs Department's earlier release of 04.00 kg gold imported under valid SEZ Act authorization. HC clarified that gold's release had no bearing on Enforcement Directorate proceedings, as ED's mandate is recovering proceeds of crime. The provisional attachment order dated 29.01.2024 requires final determination under Section 8 within 180 days by 27.07.2024. Petitioner's objections were already filed.

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Issues involved: Challenge to provisional attachment order u/s 5 of the Prevention of Money Laundering Act, 2002 (PMLA) based on release of gold by Customs Department.

Summary:
The petitioner challenged the Ext. P17 provisional attachment order u/s 5 of the PMLA, claiming that the amount paid by the Customs Department following court directions had been attached. The petitioner argued that since the court found no illegality in the import of gold, the value released by the Customs Department could not be considered proceeds of crime under the PMLA. Respondents contended that the attachment was provisional, pending adjudication, and if the amount was proven to be proceeds of crime, it could be attached under the PMLA. The court held that the release of gold by the court did not affect the Enforcement Directorate's authority to investigate potential money laundering. The petitioner was given the opportunity to contest the attachment before the Adjudicating Authority under the PMLA.

The court found that the release of gold was based on the petitioner's authorization under the SEZ Act, which was not suspended or canceled at the time of import. The court clarified that the release of gold did not impact the Enforcement Directorate's mandate to recover proceeds of crime. The provisional attachment order was to be finalized within 180 days, and the petitioner was directed to present their case before the Adjudicating Authority. The court dismissed the writ petition, allowing the petitioner to contest the attachment during the adjudication process without prejudice to the court's observations.

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