2025 (4) TMI 110 - AT - Money Laundering

Provisional Attachment Orders Under PMLA Valid Despite Delays in Predicate Offence Investigation, Rules Tribunal

Inderpal Mahajan and Saurabh Mahajan Versus The Deputy Director Directorate of Enforcement, Chandigarh

The appellate tribunal dismissed appeals challenging a Provisional Attachment Order under PMLA, ruling that delays in predicate offence investigation do ... Money Laundering - predicate offence - time limitation - despite the expiry of period of more than 9 years, the predicate offence agency has failed to file the charge sheet - HELD THAT:- The facts on record shows that an FIR was registered against the appellant on 14.12.2016 for the offence u/s 409,420,120-B IPC read with Section 7,13 of the Prevention of Corruption Act, 1988. The ECIR was then recorded finding a predicate offence against the appellant. It proceeded with the investigation and prosecution complaint has already been filed. Thus, there is no delay on the part of the respondent to complete the investigation. So far as the alleged delay of predicate agency to complete the investigation is concerned, we cannot comment on it in absence of the predicate agency to be a party. Learned counsel for the appellant otherwise failed to refer to any provision or the judgment to substantiate his argument on delay in completion of the investigation by the police and its effect on the investigation under the Act of 2002. In fact, no provision or the judgment could be shown in reference to the issue raised by the appellant. Thus, no order made on the delay because it cannot be analyzed in absence of the predicate agency as a party. There are no force in the only argument raised by the counsel for the appellant for challenge to the impugned order. Accordingly, the appeals would fail and are dismissed. ISSUES PRESENTED and CONSIDEREDThe core legal issue considered in this judgment is whether the delay in the completion of the investigation by the predicate offence agency affects the validity and continuance of the Provisional Attachment Order under the Prevention of Money Laundering Act, 2002 (PMLA). Specifically, the Tribunal examined whether the failure to file a charge sheet by the predicate offence agency within a reasonable time frame should result in interference with the Provisional Attachment Order and its confirmation.ISSUE-WISE DETAILED ANALYSISRelevant Legal Framework and PrecedentsThe legal framework primarily involves the Prevention of Money Laundering Act, 2002, and the procedural aspects concerning the attachment of properties believed to be involved in money laundering activities. The appellant's argument hinges on the delay by the predicate offence agency, which registered an FIR under various sections of the Indian Penal Code and the Prevention of Corruption Act, 1988. However, the appellant did not cite any specific legal provision or precedent to support the claim that such a delay impacts proceedings under the PMLA.Court's Interpretation and ReasoningThe Tribunal noted that the proceedings under the PMLA had been initiated with the filing of a Prosecution Complaint, indicating no delay on the part of the Enforcement Directorate (ED). The Tribunal emphasized that the PMLA proceedings are distinct and independent of the predicate offence investigation. The Tribunal found that the appellant failed to substantiate the claim regarding the delay's legal implications on the PMLA proceedings, as no specific legal provisions or judgments were presented to support this argument.Key Evidence and FindingsThe Tribunal relied on the fact that an FIR was registered against the appellant for serious offences, and an ECIR was recorded, establishing a predicate offence. The Prosecution Complaint was filed without delay, suggesting that the PMLA proceedings were appropriately handled by the ED. The appellant did not present any evidence to demonstrate that the investigation by the predicate offence agency was incomplete or that such incompleteness should impact the PMLA proceedings.Application of Law to FactsThe Tribunal applied the provisions of the PMLA, focusing on the independence of the proceedings under this Act from the predicate offence investigation. The Tribunal concluded that the delay, if any, by the predicate offence agency does not automatically invalidate the Provisional Attachment Order or its confirmation under the PMLA, as the appellant failed to show any legal basis for such a claim.Treatment of Competing ArgumentsThe appellant's sole argument was the delay in the predicate offence investigation, which was countered by the respondent's assertion that the PMLA proceedings were unaffected by such delays. The Tribunal agreed with the respondent, noting the absence of any legal authority or provision cited by the appellant to support the argument that the delay should impact the PMLA proceedings. The Tribunal also noted that the predicate offence agency was not a party to the appeal, limiting its ability to comment on the alleged delay.ConclusionsThe Tribunal concluded that the appellant's argument lacked merit and dismissed the appeals. The Tribunal found no legal basis to interfere with the Provisional Attachment Order and its confirmation, as the proceedings under the PMLA were conducted appropriately and independently of the predicate offence investigation.SIGNIFICANT HOLDINGSThe Tribunal established that proceedings under the PMLA are independent of the predicate offence investigation and are not automatically affected by delays in the latter. The Tribunal emphasized that without specific legal provisions or precedents to support the appellant's argument, the delay in the predicate offence investigation does not warrant interference with the Provisional Attachment Order under the PMLA.Final Determinations on Each IssueThe Tribunal determined that the appeals lacked merit due to the absence of any legal authority supporting the appellant's argument regarding the impact of the predicate offence investigation delay on the PMLA proceedings. Consequently, the appeals were dismissed, and the Provisional Attachment Order and its confirmation were upheld.