https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=458050 https://www.taxtmi.com/caselaws?id=458050 Money Laundering - Provisional Attachment Order - proceeds of crime - scheduled offence - Whether the Appellant has committed any offence under Section 3 of the Prevention of Money Laundering Act, 2002? - HELD THAT:- The entire purchase consideration was funded from the Appellant s own income/personal funds obtained from legitimate and fully documented sources, as supported by the Appellant s Bank Statement. Therefore, it cannot be said that the Appellant and the Respondents 5 and 8 acted in concert or that the purchase of the said Property, was part of any conspiracy related to the predicate offence or the alleged offence under the PMLA. It appears from the Impugned Confirmation Order that the Enforcement Directorate/Respondent and the Adjudicating Authority were aware that the Appellant was a Claimant to the said Property in terms of proviso to Section 8(2), PMLA, in view of material available on record. Despite the above, Respondent and the Adjudicating Authority did not issue notice to the Appellant or to afford a hearing to him, during the adjudication proceedings. Thus, the mandatory statutory requirement of the Proviso to Section 8(2), PMLA, the Respondent was cognizant of the details regarding the purchase of the said property and was in possession of the relevant documents. A bare perusal of the same shows that the said Property could not have been attached as proceeds of crime , even if one were to invoke the concept of equivalent value . Locus standi - HELD THAT:- It is settled law that the rights in any asset of a company acquired by any person prior to initiation of the winding-up proceedings against the said company are absolute and cannot be defeated by the winding-up proceedings, subject to the transaction being an arms-length transaction - In the present case, the Agreement to Sell entered into by the Appellant with M/s UBHL is dated 21.05.2012 and the entire purchase consideration was duly paid in advance by 22.09.2012 i.e. prior to even the initiation of the winding-up proceedings and much prior to the subject Provisional Attachment Order. Further, it is not even the Respondent ED s case that the purchase of the subject Property vide inter alia the Agreement to Sell dated 21.05.2012 is not an arms length transaction. As such, the rights of the Appellant would prevail over the rights of the other secured creditors and the Respondent ED. Whether the subject property is proceeds of crime and the Appellant is in possession of proceeds of crime? - HELD THAT:- It is evident that the appellant was the claimant in the flat. By making the entire payment, the appellant is become stake-holder as the amount paid by the appellant was not proceed of crime. The appellant is also not involved in the money laundering. The question of link and nexus in the criminal activities directly or indirectly does not arise. As far as the impugned order dated 1.12.2016 is concerned, the same is not sustainable in law as per facts of the present case. The same is set-aside against the appellant with regard to flat in question. The provisional order is also quashed accordingly by allowing the appeal. Appeal allowed. Case-Laws Money Laundering Tue, 06 Aug 2019 00:00:00 +0530