TaxTMI 
TaxTMI 
2016 (1) TMI 1326
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....0, 465, 468,471 read with Section 120 B of the Indian Penal Code, 1860 (hereinafter referred to as 'the IPC', for brevity). As the Charge sheet disclosed the commission of "Scheduled Offences", as contemplated under the provisions of the Prevention of Money Laundering Act, 2002, (hereinafter referred to as 'the PML Act', for brevity), the Directorate of Enforcement, Government of India has registered a case under the PML Act. A provisional Order of Attachment passed in respect of movable and immovable properties standing in the name of the petitioner and other family members of the petitioner's husband having been confirmed by the competent authority, in proceedings duly initiated under the PML Act, the present petition is filed. In so far as the connected petition in WP 19732/ 2014, is concerned, it is by the same petitioner as in the first of these petitions, to contend that inspite of a restraint order passed in the first of these petitions, restraining the respondent from proceeding to take action pursuant to the Amendment no. 2 / 2013 of the PML Act, the respondent having instituted a complaint before the Special Court, before the restraint order coul....
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....dulge or knowingly assists is a party or is actually involved in any process or activity connected proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering." Post amendment, it reads as follows : "3. Offence of money-laundering.--Whosoever directly or indirectly attempts to indulge or knowingly assists is a party or is actually involved in any process or activity connected proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering." It is pointed out that the main requirement to proceed under Section 3 was the presence of mens rea. But by virtue of the amendment substituting the phrase - 'with the proceeds of crime and projecting' - with the phrase 'concealment, possession, acquisition or use and projecting or claiming'- the Section has armed the competent officers under the Act with unfettered powers to proceed against persons who may have innocently acquired, what is possibly proceeds of crime. There is now no need to demonstrate the presence of mens rea to prosecute any person accused of....
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.... a report has been forwarded to the Magistrate under Section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorized to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country: Provided further that, notwithstanding anything contained in clause (b), any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorized by him for the purposes of this section has reason to believe the reasons for such belief to be recorded in writing, on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act." This was obviously an amendment which was clarificatory in nature - vis-a-vis, Clause (b) above. Now as per the 2013 Amendment, clause (b) of sub-section (1) of Section 5 has been omitted ....
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.... It is hence contended that under the 2013 Amendment Act the entire Scheme is overhauled, the Act is rendered a stand alone legislation. This is evident from the fact that the amendment corresponding to Section 8(5), Section 8(6) is introduced, whereby even if the person is acquitted of a Scheduled offence, he could still be prosecuted under Section 3 & 4 of the PML Act. This was never the intention of the legislation as originally envisaged. It is contended that if the genesis of action under the PML Act is the commission of the Scheduled offence, as no action under the Act could be initiated unless there was a report under Section 173 of the Cr.P.C, in relation to the Scheduled offence - then it followed that if there was an acquittal of the alleged Scheduled offence it would have a direct bearing on the proceedings under the PML Act; Hence it is inexplicable as to how it is envisaged that there could be prosecution under the PML Act when the proceeds of crime, which was certainly a reference to generation of proceeds by the commission of a Scheduled offence, could no longer be considered as 'proceeds of crime', on acquittal in the case pertaining to the Scheduled offe....
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....y incongruous. In that, when the initiation of proceedings under the PML Act contemplates a report under Section 173 Cr.P.C. being on record, it is inexplicable that for action in terms of Section 17 & 18 the stage could be altered to the FIR stage. The plea of urgency for such precepitative action would not justify the same. Such action would always follow the action already initiated in relation to a Scheduled offence and the investigating agency would be expected to seize or recover such incriminating material, which be very much a part of the charge sheet, a copy of which is forwarded to the Enforcement Directorate for action under the PML Act. At that stage, after scrutiny of the report, the Enforcement Directorate would reach further conclusions for initiation of appropriate action under Section 17 & 18 of the PML Act. Section 19 of the PML Act provides for power of arrest. It is contended that such power cannot be exercised unless the person is found guilty of having committed a Scheduled offence. Such arrest would inflict bodily injury, when the most immediate or urgent situation as contemplated under the Act is the attachment of properties that could be construed as der....
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....ted for the Scheduled offence. It is contended that under Sub-section (2) of Section 50 of the Act, the officers named therein are empowered to summon or call any person for the purpose of recording his statement and in terms of Sub-section (4) , the same is made admissible under the Evidence Act, 1872. This would imply that any and whatever material on being produced before the Special Court, a conviction could follow on the basis of a statement of a person which may have been recorded under duress - which is however made admissible under the Evidence Act. This is a draconian provision and not only inflicts injury on the person but is also grossly violative of a person's fundamental rights. It is contended that though Section 62 of the Act provides for punishment in the event of a vexatious search, this in practice would be illusory - for Section 64 dilutes the rigour of Section 62 by providing for the requirement of a sanction by the Central Government, which is again left to the discretion of the Central Government, without which no court is empowered to take cognizance of an offence under Section 62. It is also pointed out that Section 65 of the Act provides that t....
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....hts of the petitioners apart from the fact that the said provisions are inconsistent and contrary to other provisions of law, both substantially and procedurally and hence seeks that the petitions be allowed as prayed for. 5. Per contra, Shri Prabhuling K. Navadgi, learned Additional Solicitor General of India, appearing for the Union of India, contends as follows: The petitioner has called in question the constitutional validity of Sections 2(1)(u), 3, 5,8, 9, 17, 18, 19, 23, 24 and 44 of the Prevention of Money Laundering Act, 2002 (as amended from time to time). In so far as Section 3 is concerned, it is the contention of the petitioner that the section is too widely worded so as to include innocent persons and therefore it is arbitrary, offending Article 14 of the Constitution of India and hence the same is liable to be struck down. A bare perusal of the definition would go to show that the word 'knowingly' is advisedly used in Section 3 so as to ensure that an element of mens rea is present to attract the offence of money laundering. In these circumstances, the question of any innocent person being prosecuted for the said offence does not arise. At any r....
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....y worded to include innocent persons, is liable to be rejected. In so far as the challenge to the constitutional validity of Section 2(1)(4) is concerned, no factual foundation or legal argument is advanced to show as to how the said provision is unconstitutional. The definition of "proceeds of crime" is defined as being the same as, any property derived or obtained as a result of criminal activity relating to a scheduled offence. The scheduled offence is itself defined in Section 2(1)(y) as offences mentioned in Part A, Part B and Part C of the schedule to the Act. The definition is necessary since the whole object of Money laundering is to stem the commission of offence relating to ill gotten wealth which will be pumped into the economy, thereby destabilizing the economy of the country. Infact, in the Palermo Convention, the comity of nations decided that heinous crimes, including crimes arising out of corruption by persons holding public office, should not be allowed to launder wealth and it had become absolutely necessary to criminalize each of the offences. Therefore, the definition "Proceeds of Crime", forms the basis of the Act and no exception whatsoever could be t....
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....ion 5, which contemplates that attachments effected under sub-section (1) would cease to have effect after the expiry of the period specified in that sub-section, which is 180 days. Apart from this, necessary safeguard is provided under the Act as the Director should send the order of attachment to the Adjudicating Authority immediately and a complaint has to be filed within a period of 30 days from the date of attachment under section 5(5) of the Act. The provisional attachment itself will be decided before the adjudicating authority, who again has to prima facie decide, whether the provisional attachment requires to be confirmed. The authority after issuing notice to the persons concerned would decide upon the confirmation of the attachment. In these circumstances, the argument that Section 5(1) and (2) have become redundant or there is no period specified in proviso (2), is liable to be rejected. As regards Section 8 of the Act, it contemplates confirmation of attachment proceedings made under Section 5 of the Act by the Adjudicating Authority. The said provision is in accordance with law and meets the requirement of constitutional provision. It has been stated by the petitio....
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....the prosecution need not wait for the scheduled offence to be established. It can independently prosecute and lay material to show that he had knowingly assisted or was responsible for laundering of the illicit wealth. In such a situation, the property would then stand attached and the person who is being prosecuted for money laundering has to show the Court that he is not guilty of money laundering. The same would work to his advantage as to whether a scheduled offence has been committed or not. He could show that the property in question has not come in his possession and that he has not knowingly appropriated the same. In such a situation, if the offence is not established, the property would revert back to him. The changes that were brought about to Sections 5 and 8 synchronize with other provisions contained in the Act. Section 44, which now stands amended contemplates trial of both, the scheduled offence and the offence of money laundering by the same Special Court. In these circumstances, there is no likelihood of conflict of orders relating to the said offences. It is further contended that pre-trial confiscation is a well recognized mechanism in order to stem ill-got....
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....the Act is concerned, a reading of the same makes it clear that arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings are subjected to power of jurisdictional Court as contemplated under the provisions of the Cr.P.C. The further argument advanced by the petitioner is that, a mere report under Section 157 of the Cr.P.C. being sufficient for effecting search, seizure and arrest even before pre-charge-sheet stage and hence the same being arbitrary, is not correct. It is settled law that investigation is prior to filing of charge sheet under Section 173 of Cr.P.C. The power of search, seizure and arrest is a part of investigation to detect the crime and apprehend the accused and prevent evidence being destroyed. All these proceedings are therefore required to be done prior to filing of charge sheet itself. Hence, filing of FIR is justified. No prejudice would be caused to any accused if search, seizure and arrest is made, since it is controlled by the other provisions of the Cr.P.C. Section 19 has been assailed on the ground that "no judicial body is provided to scrutinize initial action as in the case of scheduled offences". T....
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....ce the person who is acquitted for money laundering cannot be tried for the scheduled offences. It is contended that this argument is incorrect. It requires to be seen that after the 2013 amendment both the offences are to be tried by the same Court. This has been made clear by Section 44(1)(a). Further Section 44(1)(c) now provides for transfer of a case for a scheduled offence to the court where the proceeding for Money laundering is tried. This provision entirely takes away the argument of the petitioner that one trial has to wait until the completion of the other trial. If the said contention is accepted, Section 44(1)(a) would stand defeated, as the provision is made exactly to meet such a requirement. The contention that prosecution for the offence of money laundering cannot be tried until the person is found guilty for the scheduled offence, assumes that both the accused would be the same person. It would be well within the rights to show before the Court for prosecution of Money laundering that a person who is not accused of a scheduled offence could be punished for knowingly assisting including concealment, possession, acquisition or projecting proceeds of crime, as ....
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....ired High Court Judges or retired Supreme Court Judges along with other members. (f) There is further provision of appeal before the High Court. (g) The proceedings in respect of offences for scheduled offences are tried by the Special Court and all other proceedings are subject matter of the result of such trials. If any person falsely files a complaint or falsely arrests a person, he is liable for imprisonment. Having regard to the safeguards under Section 63, the liberty of an individual is adequately protected. Therefore, the enactment cannot be termed as arbitrary. Apart from this, the Hon'ble Supreme Court of India has enunciated the principle relating to arbitrariness and held that merely because the provision is liable to be misused, it cannot be a reason to strike down the same as unconstitutional in People's Union for Civil Liberties and another vs. Union of India, (2004) 9 SCC 580 and in the following: i) Manzoor Ali Khan vs. Union of India and others, (2015) 2 SCC 33; ii) Sushil Kumar Sharma vs. Union of India and others (2005) 6 SCC 281; iii) Mehmood Alam Tariq vs. State of Rajasthan (1988) 3 SCC 241; and in ....
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....Narcotic Drugs by considering the problem holistically on a priority basis. Eventually the U.N Conference for Adoption of A convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (NDPS) met in Vienna and with participation of delegates of 106 States including India; specialized agencies; and representatives of Inter-Governmental Organizations; interested agencies and bodies drew up the U.N convention Against Illicit Traffic in NDPS. The conference adopted a draft of resolutions pertaining to exchange of information; provisional application of the U.N. Convention against Illicit Traffic in NDPS and provision of necessary resources to the Division of Narcotic Drugs and the Secretariat of the International Narcotic Board to enable discharge of the task entrusted to them under International Drug Control Treaties. The purpose of the contention was to promote cooperation among the parties and to more effectively address various aspects of illicit traffic in NDPS, having an international dimension. The Convention enumerated measures for incorporation as offences, conduct promoting NDPS and for confiscation of proceeds derived from offences established in relation....
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....struck down on the ground that the provisions are not found to be justified. The petitioners have called in question the constitutional validity of Sections 3, 5, 8, 9, 17 to 19, 23, 24 & 44 of the PML Act. The petitioners would have no grievance if the Act as amended in 2009, is maintained. The challenge is mainly to the Amendment Act 2 of 2013. The Act as it was originally enacted and amended from time to time, in so far as the amended provisions under challenge are concerned, are reproduced hereunder for ready reference : Section Original enactment as on 2002 After 2005 Amendment Act After 2009 Amendment Act After 2013 Amendment Act After 2015 Amendment Act Section 3 3.Offence of money laundering.- Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money- laundering. 3.Offence of money- laundering.- Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity....
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....s of crime' was indeed so and that a person has knowingly attempted to indulge or assist or was involved in any activity connected with the proceeds of crime and had projected it as untainted property. The same person could have been accused of the very offence even prior to the amendment. The amendment does not arm the authorities concerned with any greater latitude. The Apex Court has, in the case of Attorney General of India v. Amratlal Prajivandas, (1994) 5 SCC 54, while examining a similar provision under the Smugglers and Foreign Exchange Manipulators ( Forfeiture of Property) Act , 1976, has held thus : "44. It is a well-known fact that persons indulging in illegal activities screen the properties acquired from such illegal activity in the names of their relatives and associates. Sometimes they transfer such properties to them, may be, with an intent to transfer the ownership and title. In fact, it is immaterial how such relative or associate holds the properties of convict/detenu-whether as a benami or as a mere name-lender or as a bona fide transferee for value or in any other manner. He cannot claim those properties and must surrender them to the State und....
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....thorised by him for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; (b) such person has been charged of having committed a scheduled offence; and (c) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding ninety days from the date of the order, in the manner provided in the Income-tax Act, 1961 (43 of 1961) and the Director or the other officer so authorised by him, as the case may be, shall be deemed to be an officer under sub-rule (e) of rule 1 of that Schedule: Provided that no such order of attachment shall be made unless, in relation to an offence under- (i) Paragraph 1 of Part A and Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or (ii) Paragraph 2 of Part A of the Sc....
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....(43 of 1961) and the Director or the other officer so authorised by him, as the case may be, shall be deemed to be an officer under sub-rule (e) of rule 1 of that Schedule: Provided that no such order of attachment shall be made unless, in relation to an offence under- (i) Paragraph 1 of Part A and Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or (ii) Paragraph 2 of Part A of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub- section (1) of Section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985). (2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub- section (1), forward a copy of the order, along with the material in his possession, referred to in that sub- section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed. (3) Every order of attachment made under s....
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....r this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money- laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act. (2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub- section (1), forward a copy of the order, along with the material in his possession, referred to in that sub- section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed. (3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub- section or on the date of an order made under sub- section (2) of section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested ....
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.... frustrate any proceeding under this Act. (2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub- section (1), forward a copy of the order, along with the material in his possession, referred to in that sub- section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed. (3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub- section (2) of section 8 whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation.- For the purposes of this sub-section "person interested" in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a perio....
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....eep such order and material for such period as may be prescribed. (3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub- section (2) of section 8 whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation.- For the purposes of this sub-section "person interested" in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority. Before the 2013 amendment, the attachment of property involved in money laundering could take place only if a person was in possession of any proceeds of crime ( and ? ) such person has been charged of having committed a scheduled offence and that such proc....
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.... that the second proviso is not rendered otiose nor can it be said that the second proviso is bad in law for want of such safe guards as are present in the first proviso. A Division Bench of the Andhra Pradesh High Court in the case of B. Rama Raju v. Union of India (2011) 164 Comp Cases 149 AP, had occasion to consider the constitutional validity of Section 5 of the Act on the following Issue : "Whether property owned by or in possession of a person, other than a person charged of having committed a scheduled offence is liable to attachment and confiscation proceedings under Chapter-III and if so whether Section 2(1)(u) which defines "proceeds of crime" broadly, is invalid;" 32. On the afore-stated scheme the provisions of the Act, the prosecution under the Act; and attachment and eventual confiscation proceedings are distinct proceedings. These two sets of proceedings may be initiated against the same person if he is accused of the offence of money-laundering. Even when a person is not so accused, the property in his possession may be proceeded against for attachment and confiscation, on a satisfaction by the appropriate and competent authority that such prop....
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....ngs, knowledge that a property is proceeds of crime is not legislatively prescribed. 36. Proceeds of crime is defined to include not merely property derived or obtained as a result of criminal activity relating to a scheduled offence but the value of any such property as well. The bogey of apprehensions propounded on behalf of the petitioners is that where proceeds of crime are sequentially transferred through several transactions, in favour of a series of individuals having no knowledge or information as to the criminality antecedent to the property; the authorities may proceed against each and all of such sequential transaction, thus bringing within the vortex of Chapter-III of the Act, all the properties involved in several transactions. The above reasoning is sound and is endorsed by this Court. Section 8 of the Act as amended from time to time is reproduced hereunder: Section Original enactment as on 2002 After 2005 Amendment Act After 2009 Amendment Act After 2013 Amendment Act After 2015 Amendment Act 8. Adjudication. (1) On receipt of a complaint under sub- section (5) of section 5, or applications made under sub-section (4) of ....
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....record shall- (a) continue during the pendency of the proceedings relating to any scheduled offence before a court and (b) become final after the guilt of the person is proved in the trial court and order of such trial court becomes final. (4) Where the provisional order of attachment made under sub-section (1) of section 5 has been confirmed under sub- section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the attached property. (5) Where on conclusion of a trial for any scheduled offence, the person concerned is acquitted, the attachment of property or retention of the seized property or record under sub-section (3) and net income, if any, shall cease to have effect. (6) Where the attachment of any property or retention of the seized property or record becomes final under clause (b) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity of being heard to the person concerned, make an order confiscating such property. 8. Adjudication. (1) On receipt of a complaint under sub- section (5) of section 5, or applications made under sub-section (4) of section....
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....shall- (a) continue during the pendency of the proceedings relating to any scheduled offence before a court and (b) become final after the guilt of the person is proved in the trial court and order of such trial court becomes final. (4) Where the provisional order of attachment made under sub-section (1) of section 5 has been confirmed under sub- section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the attached property. (5) Where on conclusion of a trial for any scheduled offence, the person concerned is acquitted, the attachment of property or retention of the seized property or record under sub-section (3) and net income, if any, shall cease to have effect. (6) Where the attachment of any property or retention of the seized property or record becomes final under clause (b) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity of being heard to the person concerned, make an order confiscating such property. 8. Adjudication. (1) On receipt of a complaint under sub- section (5) of section 5, or applications made under sub-section (4) of section 17 ....
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....f such trial court becomes final. (4) Where the provisional order of attachment made under sub-section (1) of section 5 has been confirmed under sub- section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the attached property. (5) Where on conclusion of a trial for any scheduled offence, the person concerned is acquitted, the attachment of property or retention of the seized property or record under sub-section (3) and net income, if any, shall cease to have effect. (6) Where the attachment of any property or retention of the seized property or record becomes final under clause (b) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity of being heard to the person concerned, make an order confiscating such property. 8. Adjudication. (1) On receipt of a complaint under sub- section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub- section (10) of section 18, if the Adjudicating Authority has reason to believe that any person has committed an offence under section 3, or is in possession of proceeds of crime, he may s....
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....7) of section 8 or section 58B or sub- section (2A) of Section 60 by the Adjudicating Authority. (4) Where the provisional order of attachment made under sub-section (1) of section 5 has been confirmed under sub- section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the property attached under Section 5 or frozen under sub- section (1A) of Section 17, in such manner as may be prescribed: Provided that if it is not practicable to take possession of a property frozen under sub-section (1A) of Section 17, the order of confiscation shall have the same effect as if the property had been taken possession of. (5) Where on conclusion of a trial of an offence under this Act, the Special Court finds that the offence of money- laundering has been committed, it shall order that such property involved in the money- laundering or which has been used for commission of the offence of money- laundering shall stand confiscated to the Central Government. (6) Where on conclusion of a trial under this Act, the Special Court finds that the offence of money- laundering has not taken place or the property is not involved in money- l....
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....sub-section (1) are involved in money- laundering: Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money- laundering. (3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money- laundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of section 5 or retention of property or record seized or frozen under section 17 or section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property or record shall- (a) continue during the pendency of the proceedings relating to any offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and (b) become final after an order of confiscation is passed under subsection (5) or sub-section (7) of section 8 or section 58B or sub- section (2A) of Section 60 by the Special Court. (4) Where the provis....
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.... the offence of money- laundering. It is the case of the petitioners that Section 8 (5) as it stood under the Amended Act of 2009, contemplated that if a person was acquitted of the scheduled offence, the attachment of the property ceased to have effect. The same was in consonance with the logic that if no crime under the scheduled offence could be established there could be no 'proceeds of crime'. But under the Amendment Act of 2013, it is now contemplated that even if the case instituted in respect of a scheduled offence results in acquittal of the accused, a person could still be prosecuted under Sections 3 & 4 of the PML Act. It is contended that if the genesis of the proceedings is relatable only to the scheduled offence as no action could be initiated under the PML Act unless there was a report under Section 173 Cr.P.C. in relation to a Scheduled offence. Therefore, on acquittal in respect of such offence, should ipso facto, result in the proceedings under the PML Act coming to a close. In other words, without the guilt of the accused in the scheduled offence being proved there could be no proceedings under Sections 3 a....
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....llenge to Section 9 of the Act on the ground that if the Adjudicating Authority confirms a provisional attachment order and the guilt is recorded under Sections 3 and 4, there is a provision for confiscation and hence the statutory remedy of appeal is foreclosed. This proposition may not be accurate . Even after an order of confiscation is made, an appeal is provided for to challenge the basis of such order when the finding of guilt is naturally challenged in appeal. It is merely an enabling provision providing for the consequence of a finding of guilt in respect of the offences alleged under the PML Act. The petitioners have challenged the validity of Sections 17, 18 and 19 of the Act, which provide for Search and seizure, Search of persons and Arrest, respectively, on two grounds - namely, that by virtue of the Amendment Act of 2013, officers who have been empowered to arrest are not police officers under the Act; And secondly, that the said officers are enabled to carry out the above measures merely on a report being made under Section 157 of the Cr.P.C. to the Magistrate, whereas for attachment of property, a final report under Section 173 Cr.P.C. is required. It is highligh....
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....ing involves two or more inter- connected transactions and one or more such transaction is or are proved to be involved in money- laundering, then for the purposes of adjudication or confiscation under Section 8, it shall unless otherwise proved to the satisfaction of the Adjudicating Authority, be presumed that the remaining transactions form part of such inter- connected transactions. 23. Presumption in inter- connected transaction.- Where money- laundering involves two or more inter- connected transactions and one or more such transaction is or are proved to be involved in money- laundering, then for the purposes of adjudication or confiscation under Section 8, it shall unless otherwise proved to the satisfaction of the Adjudicating Authority, be presumed that the remaining transactions form part of such inter- connected transactions. 23. Presumption in inter- connected transaction.- Where money- laundering involves two or more inter- connected transactions and one or more such transaction is or are proved to be involved in money- laundering, then for the purposes of adjudication or confiscation under Section 8, it shall unless otherwise proved to the s....
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....re untainted property shall be on the accused. 24. Burden of proof.- When a person is accused of having committed the offence under Section 3, the burden of proving that proceeds of crime are untainted property shall be on the accused. contrary is proved, presume that such proceeds of crime are involved in money- laundering; and (b) in the case of any other person the authority or Court, may presume that such proceeds of crime are involved in money- laundering. 24. Burden of proof.- In any proceeding relating to proceeds of crime under this Act, -- (a) in the case of a person charged with the offence of money laundering under section 3, the Authority or court shall, unless the --- In so far as Section 24 of the Act as it stood prior to or after the amendment by the Amendment Act of 2013, cannot be found fault with. Similar provisions relating to burden of proof in various enactments are to be found. As for instance Section 20 of the Prevention of Corruption Act, 1988, which reads as under : "20. Presumption where public servant accepts gratification other than legal remuneration.-- (1) Where, in any trial of an offence punishable under se....
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....) that the finger-prints of the accused were found at the site of the offence or on anything including arms and vehicles used in connection with the commission of such offence, the Special Court shall draw adverse inference against the accused. (2) In a prosecution for an offence under sub-section (3) of Section 3, if it is proved that the accused rendered any financial assistance to a person, having knowledge that such person is accused of, or reasonably suspected of, an offence under that section, the Special Court shall draw adverse inference against the accused." Under the Amendment Act of 2013, there is an initial presumption that the alleged proceeds of crime on the basis of which an offence under Section 3 of the Act is alleged, are involved in money laundering. In a proceeding under Section 8 (1) of the Act , the defendant is not an accused. It is now possible for the Adjudicating Authority in construing the provisions of Section 24 as applicable to proceedings under Section 8 (1) as well. This places a person being proceeded against under Section 8 (1) at some disadvantage. This construction, by virtue of the impugned amendment, cannot be held to be violative o....