SAFEMA Tribunal upholds provisional attachment orders under PMLA section 24 for illegal foreign remittances scheme

The Appellate Tribunal under SAFEMA dismissed appeals challenging provisional attachment orders under PMLA, 2002. The case involved illegal foreign remittances to Hong Kong through fake import documents submitted to banks. The Tribunal held that prosecution complaints were filed and proceedings were pending against all appellants. Evidence including witness statements and confessions incriminated the appellants, while they failed to discharge their burden of proof under section 24. The Tribunal emphasized that provisional attachment is an emergent measure to preserve proceeds of crime until guilt or innocence is established, citing Vijay Madanlal Choudhary v. UoI. The attachment merely prohibits transfer but allows continued use and enjoyment of property.

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Issues Involved:
1. Legitimacy of Provisional Attachment Order (PAO) and its confirmation by the Adjudicating Authority (AA).
2. Involvement of appellants in the alleged money laundering activities.
3. Legitimacy of the attached properties and their connection to proceeds of crime.
4. Procedural fairness and adherence to legal standards in the investigation and attachment process.

Summary:

Legitimacy of Provisional Attachment Order (PAO):
The appeals challenge the order of the learned Adjudicating Authority (AA) u/s 5(1) of the Prevention of Money Laundering Act, 2002 (PMLA, 2002), confirming the PAO passed by the Directorate of Enforcement, Delhi, attaching various properties of the appellants. The AA's order dated 09.07.2018 confirmed the PAO, which attached movable properties valued at Rs. 3,59,22,534/- and immovable properties valued at Rs. 12,43,000/-.

Involvement of Appellants in Alleged Money Laundering Activities:
The appellants contended that they were not named in the FIR or ECIR and had no involvement in the alleged illegal activities. They argued that the allegations against them were false and baseless. However, the respondents presented evidence, including statements from various individuals, showing the involvement of the appellants in a complex web of interconnected transactions for remitting foreign exchange abroad through fraudulent means.

Legitimacy of Attached Properties:
The appellants claimed that the attached properties were acquired from legitimate sources, duly disclosed in their income tax returns. They argued that there was no evidence linking the attached properties to proceeds of crime. The respondents, however, provided evidence indicating that the properties were linked to money laundering activities and were acquired through proceeds of crime.

Procedural Fairness and Legal Standards:
The appellants argued that the investigation and attachment process was conducted with mala fide intentions and without due application of mind. They claimed that their submissions were ignored by the AA. The respondents countered that the provisional attachment was an emergent measure to prevent the proceeds of crime from being concealed or transferred, as per the legal standards set by the PMLA, 2002.

Consideration and Findings:
The Tribunal noted that prosecution complaints under PMLA, 2002, were filed and proceedings were pending against all appellants. Evidence, including statements of witnesses and accused persons, incriminated the appellants. The Tribunal found that the appellants failed to discharge their burden of proof u/s 24 of the Act. The Tribunal also observed that the provisional attachment of property is a measure to protect and preserve the proceeds of crime until the guilt or innocence of the person is established, as held by higher courts.

Order:
The Tribunal concluded that there were no grounds to interfere with the order of the AA. Accordingly, all appeals were dismissed, and the order of the AA was upheld. No order as to costs was made.

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