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=458134 https://www.taxtmi.com/caselaws?id=458134 Money Laundering - proceeds of crime - provisional attachment order - reasons to believe - applications of the appellants for cross examination of witnesses have not been disposed of - No opportunity was given before passing the provisional attachment order - principles of natural justice - HELD THAT:- The PML Act is a special enactment. The Act inter-alia seeks to prohibit any act of money laundering and seeks attachment and confiscation of proceeds of crime/properties involved in money laundering and stringent punishment and fine for a person found guilty of offence of money laundering. The attachment proceedings are in the nature of interlocutory proceedings. At this stage the primary objective is to protect the property so that they are not alienated, transferred, dissipated or dealt with so that they are available at the confiscation stage which proceedings take place at a later stage. At this stage it is not necessary to follow a full fledge adjudication including cross examination of witness, if necessary, to arrive at a final conclusion. The facts of the Shahid Balwa case [ 2013 (2) TMI 39 - DELHI HIGH COURT ] are different from the facts of the present case. In the Shahid Balwa case, the petitioner was charged for the contravention of the provisions of section 42 of the Foreign Exchange Management Act, 1999 and proceedings could have resulted in imposing penalty. Further the provisions pertaining to adjudication proceedings under the FEMA are different from the adjudication proceedings under PML Act. The Supreme Court in Bharat Petroleum Corporation Ltd. and Anr. v. N.R. Vairamani and Anr. [ 2004 (10) TMI 576 - SUPREME COURT ] had also held that a decision cannot be relied on without considering the factual situation. The appellants neither disclosed sufficient reasons or special circumstances in the application for cross examination nor they pressed the application at the time of oral submissions before the Adjudicating Authority. Thus the contention raised by the appellants is rejected. No opportunity was given before passing the provisional attachment order - principles of natural justice - HELD THAT:- As per scheme of the PMLA, provisional attachment is done with a view to prevent frustration of any proceedings relating to confiscation of proceeds of crime under the PML Act and also with the objective that the accused does not enjoy the proceeds of crime. The proceeds of crime are gradually laundered with a view to inject it in the economy as clean money. If proceeds of crime are detected and noticed, it is the first step required to be taken by the respondent so that such proceeds of crime are not concealed or transferred or wasted and remain available for their confiscation and they are also dealt with during the proceedings. The urgency of the situation, therefore, requires that the provisional attachment as prescribed in sub-section (1) of section 5 is made at the earliest possible time - Similar question came up for consideration in Purshottam Budhwani v. Dy. Director PMLA, Ahmedabad. By its judgment dated 30.3.2011 this Tribunal held that as the provisional attachment proceedings are based on urgency of the matter and are followed up with full-fledged adjudication proceedings before Adjudicating Authority in a time bound manner, the Act does not contemplate an opportunity of hearing by respondent before passing provisional attachment order and there in no violation of principles of natural justice. Every order of Provisional attachment passed u/s 5(1) of the Act shall cease to have effect after the expiry of the period specified in sub section 5(1) or on the date of an order made under sub section (2) of section 8 whichever is earlier. Passing of order of provisional attachment is the first stage of the Attachment, Adjudication and Confiscation proceedings under the Act and at this stage the prima facie satisfaction that the property in question constitutes proceeds of crime as defined in the Act, is a satisfaction that the appropriate authority arrives on his own on the basis of material in possession and opportunity is not envisaged, obliged or contemplated to the accused/affected party at this stage. Therefore, provision of Section 5(4) contemplates that accused/affected party shall not be prevented from the enjoyment of the immovable property attached u/s 5(1) of the Act. In the present case, it is not in dispute that the properties attached have been acquired out of proceeds from sale of medicine Body Revival . One of the objects of PMLA is that the perpetrators of scheduled crimes should not be allowed to enjoy the fruits of the money that passed under the activity and the enactment is intended to deprive them of the property which is related to the proceeds of specific crimes listed in the Schedule to the Act. The plea raised by the appellants that the word shall should be read as may and provisions of section 8(4) should be read as discretionary is not relevant in the facts and circumstances and does not require any further consideration in view of The Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013 - the appellants have failed to make out any illegality or irregularity in the orders of the Adjudicating Authority. Appeal dismissed. Case-Laws Money Laundering Wed, 01 Jan 2014 00:00:00 +0530