2024 (12) TMI 160 - AT - Money Laundering

SAFEMA Tribunal upholds retention of seized records and digital devices in money laundering case under Section 17(1)

Abhinav Saxena, Rajiv Saxena and Shivani Saxena Versus The Deputy Director Directorate of Enforcement, Delhi

The Appellate Tribunal under SAFEMA dismissed appeals challenging retention of seized records and digital devices. The case involved offences under ... Retention of records and digital devices seized by the respondents - offences punishable under Section 120-B read with Section 420, 468,471 IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 - HELD THAT:- The offence has been committed by M/s Moser Baer India Ltd. with the active support of Rajiv Saxena and Shivani Saxena. Abhinav Saxena was supporting them and for that reason alone, the incriminating documents were found in his possession. It is a fact that during the pendency of the appeal, all the documents and the gadgets recovered during the course of search have been filed along with the PC. It is after showing relevance of the documents with the commission of crime. Hence, there are no reason to order for release of documents. The perusal of the provision reveals that if anyone is found in possession of the record relating to money laundering, then subject to the rules, the Director or an officer authorized by him can search and retain seized property and record, etc. initially for a period of 180 days but after it is sent for confirmation, then subject to the order of the Adjudicating Authority, the retention would continue. Section 17(1) does not provide lapse of the seizure and retention after a period of 180 days, rather sub-section (1) permits continuation subject to the rules. In the absence of the pleadings on factual issues, it cannot be proceeded further to analyze the grounds but it is found that the documents and gadgets seized by the respondents was referred in the Panchnama and is now part of the PC. In the light of the aforesaid, it is not found that any of the provisions have been violated by the respondents to retain the documents/devices relevant for the case and are part of the PC. Thus, even if the appellant is allowed to take the fresh ground without its pleading involving factual issues, a case is not made out to cause interference. This is not a case in favour of the appellant. Interference in the seizure and retention cannot be made only on the ground that the seized material now retained was recovered from a person not implicated as an accused. In fact, Section 17 permits recovery of the documents/record relating to money laundering without any condition that it should be in the possession of the accused - there are no reason to cause interference in the impugned order - Appeals accordingly fail and are dismissed. Issues Involved:1. Legality of seizure and retention of documents and devices from Abhinav Saxena, who is not implicated as an accused.2. Compliance with procedural requirements for confirmation of seizure by the Adjudicating Authority.3. Legality of retention of seized property beyond 180 days.4. Relevance of documents and devices seized from Abhinav Saxena in the context of the alleged crime.5. Procedural compliance in sending all seized materials to the Adjudicating Authority.Issue-wise Detailed Analysis:1. Legality of Seizure and Retention from Abhinav Saxena:The appellants argued that Abhinav Saxena, not being an accused, should not have had his documents and devices seized and retained, as per Section 17 of the Prevention of Money Laundering Act (PMLA) 2002. The respondents countered that documents found with Abhinav Saxena were relevant to the investigation and linked to the accused, thus justifying their retention. The tribunal found that Section 17 allows for the seizure of documents related to money laundering, even if not directly in possession of an accused, and upheld the retention of the documents.2. Procedural Compliance for Confirmation of Seizure:The appellants contended that the respondents did not produce all seized items for confirmation by the Adjudicating Authority, specifically mentioning a locker key and a hard disk. The tribunal noted that the appellants did not raise these factual issues before the Adjudicating Authority or in their appeal, and thus could not proceed further on these grounds. The tribunal found that the seized items were recorded in the Panchnama and were part of the Prosecution Complaint (PC), indicating procedural compliance.3. Legality of Retention Beyond 180 Days:The appellants argued that retention beyond 180 days was illegal under Section 20(1) of the PMLA. The tribunal clarified that while Section 20(1) provides for an initial retention period of 180 days, it allows for continuation if confirmed by the Adjudicating Authority. In this case, the Adjudicating Authority had confirmed the retention, thereby making it lawful.4. Relevance of Seized Documents and Devices:The tribunal found that the documents and devices seized from Abhinav Saxena were relevant to proving the commission of the alleged crime by the accused, as they were included in the PC. The tribunal emphasized that the relevance of the material seized was demonstrated by its inclusion in the PC, thereby justifying its retention.5. Procedural Compliance in Sending Seized Materials:The appellants referenced the Delhi High Court's judgment in J.K. Tyre & Industries to argue that all seized materials should have been sent to the Adjudicating Authority. The tribunal noted that the appellants failed to provide pleadings on this issue and found that the respondents had complied with procedural requirements by sending the relevant materials, as indicated in the Panchnama and their inclusion in the PC.Conclusion:The tribunal dismissed the appeals, finding no merit in the arguments presented by the appellants. It held that the seizure and retention of documents and devices were lawful, as they were relevant to the investigation and confirmed by the Adjudicating Authority. The tribunal emphasized that Section 17 allows for the seizure of documents related to money laundering, regardless of whether they are in the possession of an accused.