SAFEMA Tribunal dismisses appeal against currency seizure in Rs.15 crore Hawala case under PMLA Section 50

The Appellate Tribunal under SAFEMA at New Delhi dismissed an appeal challenging seizure of Indian Rupees under PMLA, 2002 in a Hawala transaction case. The appellant argued they were not accused in FIR/ECIR and that seized currency was legitimately withdrawn from bank accounts. The Tribunal held that evidence showed Hawala transactions totaling Rs.15 crore involving the appellant facilitating activities for other parties. The appellant failed to explain money sources, account deposits, or legitimate business use of withdrawn funds. Statement under Section 50 proved appellant's involvement in illegal transactions. Appeal dismissed due to insufficient evidence of innocence.

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Issues:
Challenge to the order confirming the seizure of Indian Rupees 15,66,340 under the Prevention of Money Laundering Act, 2002.

Analysis:
1. The appellant, an authorized money changer, had their office premises searched by the respondent based on suspicion of Hawala transactions. Despite cooperation and explanations, the currency was seized under Section 17 of the Act. The appellant provided detailed representations and documents to explain the source of the money seized, which was from bank withdrawals for business operations. The Adjudicating Authority confirmed the seizure, leading to the appeal.

2. The respondent introduced individuals to show a business relationship with the appellant, alleging Hawala transactions. The appellant, not named in the FIR or ECIR, argued against the seizure, presenting bank statements and justifying the source of the seized amount. The appellant claimed the money was part of the working capital and requested its return, but the Adjudicating Authority upheld the seizure order.

3. The respondent alleged involvement in Hawala transactions based on statements from individuals associated with criminal activities. The appellant's employee confirmed the recovery of the seized amount and incriminating documents. The investigation against the appellant was ongoing, with a prosecution complaint pending. The respondent urged dismissal of the appeal due to the ongoing investigation.

4. The Tribunal considered the submissions and perused the record, noting the involvement of the appellant in money transactions related to Hawala operations. The appellant's arguments regarding non-involvement as an accused and lack of connection to the seized amount were rejected. The Tribunal analyzed Section 17 of the Act, emphasizing that possession of proceeds of crime could lead to seizure, even if not directly linked to the accused.

5. The Tribunal addressed the appellant's arguments concerning the withdrawal and utilization of funds, highlighting the lack of evidence showing legitimate use for foreign exchange transactions. Despite bank records reflecting withdrawals, the appellant failed to demonstrate proper utilization of the funds. The Tribunal found no merit in the appeal, as the appellant's defenses were insufficient to counter the allegations of involvement in Hawala transactions. The appeal was dismissed based on the lack of compelling arguments presented during the proceedings.

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