SAFEMA provisional attachment order lapses after 365 days without prosecution complaint filing

The Appellate Tribunal under SAFEMA at Delhi allowed appeals challenging a provisional attachment order. The appellant argued that no prosecution complaint was filed against any accused within 365 days of the attachment order, requiring it to lapse. The Tribunal held that freezing/attachment continues during investigation within 365 days or case pendency, but since over two years had passed without prosecution complaint filing, the freezing order lapsed due to efflux of time. The impugned order was set aside and appeals allowed.

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Issues:
Challenge to the order confirming provisional attachment due to non-filing of prosecution complaint within 365 days.

Analysis:
The judgment pertains to a batch of appeals challenging the order confirming provisional attachment issued by the Adjudicating Authority. The main contention raised by the appellant's counsel was the non-filing of a prosecution complaint against any accused named in the ECIR within 365 days from the date of the impugned order. The respondent, while admitting the delay in filing the prosecution complaint, argued that one of the accused, Mr. Prakash Goyal, named in the ECIR was involved in the business of betelnut, and the betelnuts might belong to other appellants as well. The FIR was registered following the Bombay High Court's direction, but no custom case was registered against any appellants. Despite the lapse of 365 days, the prosecution complaint had not been filed.

The Tribunal considered the submissions and noted that the FIR and ECIR were registered based on the Bombay High Court's order regarding illegal trading of betelnut from foreign countries. The High Court had expressed concern over the retention of betelnut as perishable goods and directed early disposal of the appeal filed by the appellants. However, as the prosecution complaint had not been filed within the stipulated time, the Tribunal analyzed Section 8 of the Prevention of Money Laundering Act, 2002, which governs the adjudication process.

The Tribunal referred to a previous judgment regarding the interpretation of Section 8, emphasizing that the freezing or attachment of properties should continue during the investigation period, not beyond 365 days unless the case is pending before the court. The Tribunal concluded that the freezing order had lapsed due to the prolonged delay, considering the perishable nature of the goods and the absence of a prosecution complaint against any accused. Consequently, the impugned order confirming the attachment was set aside, and the appeals were allowed. The Tribunal also waived the costs imposed on the officer involved in the case.

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