Provisional Attachment of Gold Under PMLA Upheld Despite Appellant Not Named in FIR, Section 50(2) Statements Key

The AT under SAFEMA upheld the provisional attachment of gold linked to money laundering under the PMLA Act, 2002. The appellant was found involved in gold smuggling via diplomatic baggage and generating proceeds of crime, corroborated by statements under section 50(2). Despite not being named in one FIR, the appellant was implicated in the ED's prosecution complaint. The tribunal held that attachment of property need not be limited to the accused but can extend to persons who have received proceeds of crime. The appeal challenging the attachment was dismissed. The appellant may seek separate remedies if excess gold beyond the attached value is not released.

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ISSUES:

Whether the attachment of properties under the Prevention of Money Laundering Act, 2002 ("PMLA") is justified in the absence of a predicate offence.Whether the appellant's involvement in the scheduled offence of gold smuggling and consequent money laundering is established.Whether attachment of property can be made in the hands of persons other than those accused in the scheduled offence.Whether the attachment of properties beyond the amount invested by the appellant in the smuggling operation is lawful.Whether the appellant was entitled to a prior opportunity of hearing before attachment and whether the statements recorded under PMLA were voluntary.Whether the seizure and attachment of gold and currency from the appellant's business premises are justified.Whether the offence under Section 3 of PMLA, 2002 is an independent offence distinct from the scheduled offence.

RULINGS / HOLDINGS:

The Court held that the offence under Section 3 of the PMLA, 2002 is an independent offence regarding "the process or activity connected with the proceeds of crime" derived from a scheduled offence, and does not depend on the date or existence of a predicate offence at the time of money laundering activity.The appellant was found to have admitted smuggling 9 kg of gold through diplomatic baggage and involvement in the rotation of proceeds, establishing his participation in the scheduled offence and consequent money laundering under the PMLA.The attachment of property need not be limited to accused persons in the scheduled offence; it can extend to any person involved in any process or activity connected with proceeds of crime, as clarified by the Apex Court.The attachment of properties beyond the initial investment amount by the appellant is lawful, as the appellant admitted smuggling multiple consignments of gold, and attachment was limited to the value of gold smuggled in his hands.The appellant's contention regarding lack of opportunity of hearing and coercion in recording statements was not accepted, given the statutory provisions and evidence on record.The seizure and attachment of gold jewellery and currency from the appellant's business premises were justified as "equivalent value" of proceeds of crime under Section 5(1) of the PMLA, 2002.The Court dismissed the argument that absence of FIR or charge-sheet against the appellant invalidates the attachment, holding that the offence under Section 3 of PMLA is independent and attachment can be made on material indicative of involvement in proceeds of crime.

RATIONALE:

The Court applied the statutory framework under the Prevention of Money Laundering Act, 2002, particularly Sections 2(1)(u), 3, 4, 5(1), 8(1), and 50, along with relevant provisions of the Customs Act, 1962, IPC, and Unlawful Activities (Prevention) Act, 1967.The Court relied on the authoritative interpretation from the Apex Court's judgment clarifying that the offence of money laundering under Section 3 of the PMLA is "an independent offence" concerning activities connected with proceeds of crime, irrespective of the timing or existence of the predicate offence.The Court recognized that proceeds of crime include both property directly derived from the scheduled offence and the "value" of such property, permitting attachment of equivalent value properties when direct proceeds are untraceable.The Court noted the admitted statements under Sections 50(2) and (3) of the PMLA by the appellant acknowledging involvement in smuggling and rotation of proceeds, which formed the basis for the "reasons to believe" required for provisional attachment under Section 5(1).The Court emphasized that attachment can be extended to persons involved in the laundering process, even if they are not named accused in the scheduled offence, consistent with the legislative intent to prevent dissipation of proceeds of crime.The Court declined to entertain challenges regarding non-release of gold jewellery beyond the attached value in the present appeal, indicating such issues require separate remedy.No dissent or doctrinal shift was noted; the Court adhered strictly to established statutory provisions and precedent interpretations.

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