Unexplained cash and gold, predicate offence, and proper document supply upheld the seizure and retention challenge failure.

Unexplained possession of seized cash and gold was not accepted where the claimed withdrawals and personal savings were unsupported by complete bank records or a convincing explanation for retaining such a large amount at home, so the confirmation of seizure and retention was sustained. The Tribunal also held that the record disclosed a predicate offence under the Arms Act and allied penal provisions, based on material indicating receipt of money for arranging and renewing arms licences in connection with illegal arms trade, and treated the relevant penal statutes as applicable for that purpose. Alleged non-supply of reasons to believe, relied upon documents, and Section 50 statements was rejected because the record showed service with the show-cause notice. No interference was warranted.

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Issues: (i) Whether the seized cash and gold were satisfactorily explained so as to warrant interference with the order confirming seizure and retention. (ii) Whether a predicate offence existed to sustain action under the Prevention of Money Laundering Act, 2002. (iii) Whether non-supply of reasons to believe and relied upon documents vitiated the proceedings.

Issue (i): Whether the seized cash and gold were satisfactorily explained so as to warrant interference with the order confirming seizure and retention.

Analysis: The Tribunal found that the explanation for the cash was not supported by reliable and complete proof. The withdrawals shown from firms and the plea of personal savings were not corroborated by the individual bank records or a convincing explanation for keeping such a large amount at the residence. The claim regarding the gold jewellery was also not accepted in the light of the overall material and admissions recorded during investigation.

Conclusion: The explanation for the seized assets was not accepted, and the order confirming seizure and retention was upheld.

Issue (ii): Whether a predicate offence existed to sustain action under the Prevention of Money Laundering Act, 2002.

Analysis: The Tribunal held that the record disclosed offences under the Arms Act and allied penal provisions, and that the material showed receipt of money for arranging and renewing arms licences in connection with illegal arms trade. It also held that, after the constitutional and legal changes applicable to Jammu and Kashmir, the relevant penal statutes had become applicable for the purpose of determining the predicate offence. The material therefore supported the existence of a scheduled/predicate offence.

Conclusion: A predicate offence was held to exist, and the challenge on that ground failed.

Issue (iii): Whether non-supply of reasons to believe and relied upon documents vitiated the proceedings.

Analysis: The Tribunal found from the record that the reasons to believe and the relied upon documents were supplied along with the show-cause notice, and that the assertion of non-supply was contrary to the record. The contention regarding non-service of Section 50 statements was also rejected on the same basis.

Conclusion: No violation of the requirement of supply of reasons or relied upon documents was established.

Final Conclusion: The Tribunal found no ground to interfere with the impugned order and sustained the seizure and retention, leaving the cash and allied relief subject to the final outcome of the trial.

Ratio Decidendi: Where the material shows unexplained possession of seized assets, admissions and bank entries connect the funds to illegal arms-licence activity, and the record shows service of the reasons to believe and relied upon documents, interference with the confirmation of seizure is unwarranted.

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