Appellate Tribunal sets aside provisional attachment order as seized money already under seizure lacks concealment likelihood under Section 5(1)(b) PMLA

The Appellate Tribunal under SAFEMA set aside a provisional attachment order in a money laundering case. The case involved offences under Section 120-B IPC and Sections 7, 8, and 10 of the Prevention of Corruption Act, 1988. The tribunal found that Rs.89,68,000/- was already seized by CBI and remained under seizure pursuant to CBI Court order. The tribunal held that attachment under Section 5(1)(b) of the Prevention of Money Laundering Act, 2002 requires likelihood of concealment, transfer, or alienation to frustrate confiscation proceedings. Since the amount was already under court seizure, no such likelihood existed. The attachment order was set aside as it violated Section 5(1)(b) mandate. Appeal disposed of.

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Issues:
Challenge to order confirming Provisional Attachment Order under Prevention of Money Laundering Act, 2002.

Analysis:
The appeal challenged an order confirming a Provisional Attachment Order dated 04.05.2019 under the Prevention of Money Laundering Act, 2002. The appellants argued that the attachment of Rs.89,68,000 was made in ignorance of Section 5(1) of the Act, as the amount had been seized by the CBI and an order for it was passed by the CBI Court, leaving no chance of transfer or alienation to frustrate confiscation proceedings. They sought interference in the impugned order.

The respondent contended that the attachment was permissible unless barred by statute, citing the Bombay High Court judgment in support. They argued that the CBI Court had seized the amount involved in money laundering, justifying the attachment. The Tribunal considered both submissions and examined the case.

The Tribunal noted that an FIR was registered for offenses under the Prevention of Corruption Act and IPC, with Rs.89,68,000 seized by the CBI and remaining under seizure. The Tribunal analyzed Section 5(1)(b) of the Act, which allows attachment when proceeds of crime are likely to be concealed, transferred, or dealt with to frustrate confiscation proceedings. It found no evidence that the seized amount was at risk of being concealed or transferred, as it was already under CBI Court's control.

Referring to a previous judgment, the Tribunal emphasized the necessity of reasons to believe in writing for attachment based on possession of proceeds of crime likely to be concealed or transferred. It concluded that the attachment in this case disregarded Section 5(1)(b) of the Act, setting aside the orders but allowing re-attachment if the amount is released by the CBI Court. The Tribunal highlighted that attachment should not offend Section 5(1)(b) and disposed of the appeal accordingly.

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