2026 (1) TMI 719 - AT - Money Laundering

Provisional attachment over alleged PMLA proceeds where appellant failed Section 24 burden; attachment confirmed, appeal dismissed

Dominant issue: validity of provisional attachment under the PMLA. The AT upheld the Adjudicating Authority's finding that the appellant failed to ... Money Laundering - provisional attachment order - part-time job fraud involving a mobile application - luring the public with promises of part-time online jobs and investment opportunities - offence under Section 419, 420 of IPC and Section 6(D) and Section 6(C) of the Information Technology Act, 2008 - HELD THAT:- The Adjudicating Authority did not find any reason to deny the confirmation of the PAO. It is more so the appellant failed to produce the evidences to show his involvement in extending tuition to his classmates to generate funds. The sources of funds were declared but remained without any proof. Despite the fact that the burden of proof was on the appellant as per Section 24 of the Act of 2002. It is further found that the appellant has avoided the summons for recording of his statement under Section 50(2) of the Act of 2002 and otherwise during the course of investigation, it was confirmed by Zerodha that one of the suspected email ids belongs to the appellant, Shri Chetan Prakash and bank credit of a sum of Rs. 14.24 Crores were found which was mainly out of the collection of money from the public through the payment gateway- Razorpay Software Private Limited. The amount settled in the bank account of the appellant were in turn debited to various trading accounts on Buyhatke and Zerodha and also routed to his various self- accounts. Taking those facts into account and in the absence of disclosure of source of the amount of Rs. 14.24 Crores by the appellant, there are no reason to cause interference in the impugned order for provisionally attachment of Rs. 1,82,481 in the hands of the appellant - appeal dismissed. Issues: Whether the Appellate Tribunal should interfere with the Adjudicating Authority's order dated 12.02.2024 confirming the Provisional Attachment Order dated 13.09.2023 attaching amounts in the appellant's accounts as proceeds of crime under the Prevention of Money Laundering Act, 2002.Analysis: The Tribunal examined the investigation record including the ECIR, statements recorded under Section 50(2) and 50(3) of the Prevention of Money Laundering Act, 2002, bank account analyses showing credits of approximately Rs. 14.24 crores into the appellant's account, confirmations from trading/payment platforms linking transactions to the appellant, and the appellant's failure to appear for summons and to produce evidence substantiating declared sources of funds. The Tribunal applied the statutory allocation of burden under Section 24 of the Prevention of Money Laundering Act, 2002 and considered whether the appellant had discharged this burden by adducing credible proof of legitimate origin of the funds. The Tribunal found the appellant's claimed sources unproven and noted routing of collected funds through payment gateways and trading accounts, treating the attached sums as direct proceeds of crime.Conclusion: The Tribunal did not find any reason to interfere with the confirmation of the Provisional Attachment Order and dismissed the appeal, thereby upholding the attachment of the specified amounts in the appellant's accounts in favour of the respondent.