TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the Enforcement Directorate was required to conduct an independent investigation into the predicate offence before proceeding under the Prevention of Money Laundering Act, 2002. (ii) Whether immovable properties acquired before the commencement of the Act or before insertion of the scheduled offence could still be attached as proceeds of crime or value thereof. (iii) Whether provisional attachment was vitiated for want of compliance with the requirements of Section 5(1) of the Prevention of Money Laundering Act, 2002, including its second proviso and clauses (a) and (b). (iv) Whether the appellant's discharge in the predicate offence required release of the attached properties.
Issue (i): Whether the Enforcement Directorate was required to conduct an independent investigation into the predicate offence before proceeding under the Prevention of Money Laundering Act, 2002.
Analysis: The statutory scheme treats the scheduled offence as the foundation for identifying proceeds of crime, but the money-laundering inquiry is confined to the existence, projection, possession, concealment, layering, and trail of those proceeds. The Enforcement Directorate may rely on the FIR and police report for the predicate offence and is not expected to reassess or re-try the scheduled offence as a supervisory agency. Its role is to examine whether proceeds of crime exist and whether they have been dealt with in a manner attracting the money-laundering provisions.
Conclusion: The issue was decided against the appellant. No independent investigation into the predicate offence by the Enforcement Directorate was required.
Issue (ii): Whether immovable properties acquired before the commencement of the Act or before insertion of the scheduled offence could still be attached as proceeds of crime or value thereof.
Analysis: The offence of money-laundering is an independent and continuing offence, and the relevant date is the date on which the property is dealt with as if it were untainted, not merely the date of commission of the predicate offence. Properties purchased before the Act or before amendment are not immune if they represent the proceeds of crime or their equivalent value, especially where the tainted property itself is not traceable and the attachment is directed against value thereof. On the facts, the Tribunal found that the purchases were not shown to be supported by genuine lawful income and that the properties were linked to the accused's illicit funds or their value.
Conclusion: The issue was decided against the appellant. The properties were not protected merely because some purchases pre-dated the Act or the amendment.
Issue (iii): Whether provisional attachment was vitiated for want of compliance with the requirements of Section 5(1) of the Prevention of Money Laundering Act, 2002, including its second proviso and clauses (a) and (b).
Analysis: Section 5(1) authorises attachment where the officer has reason to believe, on material in possession, that a person is in possession of proceeds of crime and that such proceeds are likely to be concealed, transferred, or otherwise dealt with to frustrate confiscation proceedings. The Tribunal accepted that the properties were acquired out of proceeds of crime, the explanation of lawful income was not substantiated, and there was a real apprehension of alienation. It also held that the second proviso and the requirements of clauses (a) and (b) stood satisfied on the material before the authority.
Conclusion: The issue was decided against the appellant. The provisional attachment was held to be valid and compliant with Section 5(1).
Issue (iv): Whether the appellant's discharge in the predicate offence required release of the attached properties.
Analysis: The attachment under the money-laundering statute is not confined to persons arraigned in the scheduled offence. The decisive consideration is whether the property represents proceeds of crime or is held in connection with money-laundering. A discharge of the appellant as an abettor in the predicate case did not extinguish the husband's pending prosecution, nor did it erase the statutory basis for attaching property found to be linked to proceeds of crime. The Tribunal therefore rejected the contention that discharge in the predicate offence automatically required release.
Conclusion: The issue was decided against the appellant. Discharge in the predicate offence did not entitle her to release of the attached properties.
Final Conclusion: The Tribunal upheld the provisional attachment and rejected the challenge to the confirmation order, leaving the attachment in force on the footing that the properties were connected with proceeds of crime and liable to action under the money-laundering law.
Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, attachment may be sustained against any person in possession of proceeds of crime or their value, and properties acquired before the Act or before amendment may still be proceeded against if they are linked to money-laundering and the explanation of lawful source is not established.
TaxTMI 
