2024 (10) TMI 388 - AT - Money Laundering

Tribunal Upholds ED's Seizure of Documents Amid Fraud Allegations; Appellant Granted Access to Certain Materials for Defense.

Dinesh Kumar Versus Deputy Director, Directorate of Enforcement

The Tribunal dismissed the appellant's appeal against the Adjudicating Authority's order permitting the ED to retain/seize documents and bank accounts ... Money Laundering - proceeds of crime - the respondent ED are allowed to retain/seize/freeze the documents, digital records, bank accounts etc., seized from the premises of various persons including the present appellant - HELD THAT:- The plea of the present appellant that he is not involved in any offence is without any merit in view of the allegations pointed out by the respondent. However, seeing the fact that prosecution complaint is already filed, the present appellant is entitled to the copies of all relied upon documents/seized material and he has right to apply for release of all un-relied documents (if any), if the same are not required for any further investigation. The present appeal is hereby dismissed. Issues:Appeal against order allowing retention/seizure of documents and bank accounts post search by ED.Analysis:The appellant filed an appeal against the order passed by the Adjudicating Authority allowing the Enforcement Directorate (ED) to retain/seize/freeze documents, digital records, and bank accounts seized during a search. The appellant claimed innocence, stating he had no direct or indirect connection to any tainted assets or money. He argued that his involvement was based on assumptions and conjectures, seeking release of bank accounts and documents. The ED, however, contended that the appellant and his associates defrauded a bank through fraudulent transactions, causing substantial losses. The ED presented details of fraudulent SWIFT messages creating liabilities against the appellant's proprietorship concern. The ED maintained that the seized items were likely linked to money laundering and proceeds of crime. The Tribunal considered both sides' arguments but found the appellant's claim of innocence unsubstantiated given the serious allegations by the ED.The Tribunal acknowledged that a prosecution complaint was filed and granted the appellant copies of relied upon documents/seized material. The appellant was also allowed to apply for release of un-relied documents not needed for further investigation. Despite this, the Tribunal dismissed the appeal, stating that the appellant's lack of involvement in any offense was baseless in light of the ED's allegations. The Tribunal emphasized that the dismissal of the appeal would not impact the prosecution case under the Prevention of Money Laundering Act, 2002. The decision was made with consideration of the ongoing legal proceedings and the appellant's rights to access relevant materials.In conclusion, the Tribunal upheld the order allowing the retention/seizure of documents and bank accounts by the ED following the search. The dismissal of the appeal was based on the lack of merit in the appellant's claim of innocence and the serious nature of the allegations against him. The Tribunal's decision emphasized the importance of the prosecution case under the Prevention of Money Laundering Act, 2002, while granting the appellant access to certain materials for legal proceedings.