TaxTMI 
TaxTMI 
2015 (3) TMI 1437
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....kidney transplant operations as required under Transplantation of Human Organ Rules. The brother of Appellant, Dr. Amit Kumar was registered under Central Council of Indian Medicine and had obtained a degree of Bachelor of Ayurvedic Medicine and Surgery (BAMS) from Nagpur University. 2.2. They formed a company called M/s. Liberty Health Care Pvt. Ltd. in which Dr. Amit Kumar was a Promoter/Director giving the registered address of the company as Malviya Nagar, Delhi. However, the kidney transplant operations were allegedly carried out at a hospital at 4374, sector 23 Palam Vihar, Gurgaon which was also not registered with Appropriate Authority under Transplantation of Human Organs Act 1994. 2.3. A complaint under section 22 of Transplantation of Human Organs Act, 1994 was filed in the court of Special Judicial Magistrate (CBI cases) Ambala on 29.4.2008 against Amit Kumar, Jeevan Kumar, (Appellant) and other associated persons, namely, Dr. Upendra Kumar, Dr. K.K. Aggrawal, Dr. S.K. Govind etc. who allegedly entered into a criminal conspiracy to fraudulently remove the kidneys of innocent victims and transplanting the same to recipients for huge monetary considerati....
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.... by PML (Amendment) Act, 2009 w.e.f. 01.06.2009. The alleged offences had been committed prior to this date, therefore, any money allegedly earned out of illegal kidney transplant cannot be treated as proceeds of crime. It has also been alleged that major part of the purchase consideration was taken as a loan from Standard Charted Bank amounting to Rs. 30 lakhs which cannot be termed as proceeds of crime. The Appellant alleged that out of the loan amount of Rs. 30 lakhs, Rs. 27,04,296/- is still outstanding. Appellant, Jeevan Kumar also alleged that since 2008 onwards, Jeevan's wife Pooja Kumar was repaying the loan instalments from her own independent business source that is her export business. Copies of bank statement in respect of M/s. P.J. Buying House in Syndicate Bank, K.G. Marg, New Delhi were also produced showing some small payments to M/s. Essel Tower. Therefore, it had been alleged that the property is not the proceeds of crime. 2.6. The respondent refuted the pleas of the Appellant Jeevan Kumar and contended that the sale deed for this property between M/s. Essel Housing Project Pvt. Ltd. and Sh. Jeevan Kumar was executed only on 30.03.2007 which date fall....
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.... by Pooja (who married Jeevan Kumar, Appellant, in 2005) much later in 2008 and onwards are too insignificant to make a difference and to draw a prima facie inference that the said property does not represent the proceed of crime. 2.8. Regarding Industrial Plot No. 77, Ecotech - 1 Extn. Greater Noida. (allotted to M/s. Anchal Paper Products Pvt. Ltd./Sh. Raghuvinder Singh, Director) it has been contended that it was first time allotted to M/s. Anchal Paper Products Pvt. Ltd. through its Director Raghuvinder Singh by Greater Noida Authority. According to respondent, the Appellant had confirmed that he purchased this plot in Greater Noida and his wife had given Rs. 6 lakhs from her account to Sh. Raghuvinder Singh who was the actual allottee. Appellant also confirmed further payment of Rs. 12 lakhs to Sh. Raghuvinder Singh. According to the appellant, other co-investor Sh. Sanjay Gupta who was his friend had given his own share of investment to Sh. Raghuvinder Singh from his own sources. Sh. Sanjay Gupta, proprietor of M/s. Sangam Glass Work, Hauz Khas Market, New Delhi in his statement to the Deputy Director had confirmed the joint investment along with Jeevan Kumar in this....
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....e was paid to M/s. Anchal Papers Products Pvt. Ltd. upon execution of the agreement. Later on Rajesh Gupta filed an F.I.R. alleging offenses against Raghuvinder Singh. A Civil Suit has also been filed in the Hon'ble High Court of Delhi for recovery of the money paid, alleging that as the terms of the contract were not complied with and as Raghuvinder Singh avoided to get the lease deed registered, Rajesh Gupta has become entitled to receive back the consideration paid by him. The said suit being CS(OS) No. 2428 of 2008 was filed in November 2008. 2.13. It has also transpired that on 28.09.2010 another agreement to sell the same property was allegedly executed between M/s. Anchal Paper Products Pvt. Ltd. and M/s. N.R. Merchant Pvt. Ltd. for a consideration of Rs. 1.61 Crore and the possession of the plot was also given to M/s. N.R. Merchant Pvt. Ltd. who alleged that he is a bona fide purchaser. The said company contended that as he is a bona fide purchaser, the said property was purchased from legal money, the said property cannot be attached and the attachment order is liable to be vacated. 2.14. On behalf of Sanjay Gupta it was submitted that the investment ....
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....or development of the property on payment of Rs. 30 lakhs. The amount of Rs. 30 lakhs was paid by two cheques from the Citi Bank account of Sh. Rajiv Chanana. The original owners, Mr. & Mrs. Rastogi had made wills in favor of Rajiv Chanana in respect of this property. The wills devised the their share/rights in this property (ground floor, first floor, second floor with entire terrace over and above second floor) to Shri Rajiv Chanana. On 23.01.2006 Rajiv Rastogi and Vandana Rastogi had also executed a registered general power of attorney authorizing Rajiv Chanana and Pooja Singhal w/o. Jeevan Kumar to renovate and develop the property and thereafter to sell the same. On 23.01.2006 Pooja Singhal transferred her rights in the said property in favor of Sh. Rajiv Chanana and executed a confirmation document which was duly signed by Sh. Rajiv Chanana and Smt. Pooja Singhal. 2.17. The original owners Mr. & Mrs. Rastogi, thereafter, on 7.3.2008 cancelled the power of attorney in favor of Sh. Rajiv Chanana and Pooja Singhal wife of Sh. Jeevan Kumar. A fresh power of attorney was thereafter, executed on 7.3.2008, the same date on which the earlier power of attorney was cancelled, ....
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....ended that the said GPA dated 23.1.2006 had no existence in law on the date of provisional attachment, as subsequently this was cancelled and a new power of attorney GPA dated 7.03.2008 was executed. The appellant/Rajiv Chanana contended that he had got the name of Pooja Singhal included in the GPA for family reasons and subsequently Pooja Singhal had withdrawn herself. Therefore, the new general power of attorney dated 07.03.2008 appointed Shri Rajiv Chanana and not the Pooja Singhal wife of Shri Jeevan Kumar. It was contended that there is no proof of any investment by Pooja Singhal in this property with reference to any bank or cash transactions. In the circumstances it was alleged that Pooja Singhal had nothing to do with the investments in the property covered under GPA i.e. E-86, South Extn. Part-I, New Delhi. Appellant Rajiv Chanana also emphasized that there is no evidence that Pooja Singhal had received any money from her husband Sh. Jeevan Kumar who allegedly earned huge amounts from illegal kidney transplants. According to him the sale proceeds of the flats of New Delhi South Extension cannot be construed as proceeds of crime so as to further link it with the investment ....
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....ing inter-alia that there is no "proceeds of the crime" invested in the said property nor has it been conclusively proved and even if assumingly, any sum was invested by Sh. Jeevan Kumar and Sh. Sanjay Gupta, then the same stands returned by M/s. Anchal Paper Products Pvt. Ltd. towards their respective shares and therefore, the subsequent agreements with Rajesh Gupta and N.R. Merchant Pvt. Ltd, Appellant, were only efforts to save this property from the provisional attachment and ultimate confiscation is perverse. According to said appellant the Agreement to Sell entered into with Rajesh Gupta was entered into on 29.3.2008 and an amount of Rs. 1 crore as advance was duly paid by Sh. Rajesh Gupta and the provisional order of Attachment was passed by the Dy. Director (Enforcement) on 9.9.2010. 3.6 The said Appellant's plea is that the Adjudicating Authority overlooked the fact that Sh. Rajesh Gupta is the Director in the Appellant Company and is also one of the beneficiaries of the Appellant Company. The Agreement to Sell (with Possession) entered into between M/s. Anchal Paper Products Pvt. Ltd. and the Appellant was only to bring quietus to the pending disputes between....
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.... affidavit dated 15th May, 2013 was filed by the Appellant along with the copy of the judgment dated 22nd March, 2013 passed by the Additional Session Judge cum Special Judge (CBI) in CBI case No. 7 of 2008. The Appellant had also sought time on 24.10.2013 in the appeal to file an application contending that since Jeevan Kumar has been acquitted, the attachment of the property will not be maintainable and the appeal be accepted and the attachment of the property be released. The application filed by the Appellant being MP-PMLA-684/DLI/2013 was dismissed in default with the appeal 13.12.2013 and for reasons stated in the order, was later on restored by order dated 3rd July, 2014. 3.10 The appellant, in the application contended that since respondent No. 2 has been acquitted, therefore, there was no proceeds of crime and therefore, there could not be any provisional attachment order against him and consequently the property cannot continue to be attached. Though the respondent No. 1/Enforcement Directorate had sought time to file the reply of the said application, however, no reply was filed. 3.11 The counsel for the appellant sought a few adjournments and thereafte....
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....lity of Provisions of PMLA it was contended that the sale deed of the residential premises at EC-II, C-102 Essel Tower Complex, Gurgaon in favor of Jeevan Kumar was executed on 30.03.2007 which was after the effective date of PMLA i.e. 01.07.2005. It was contended that the sale deed confers the ownership rights and effectively this is the material date when the projection of tainted money as untainted has taken place. A part payment was also made on 23.03.2007 amounting to Rs. 3,52,400/- as confirmed by M/s. Essel Housing Project Pvt. Ltd. Therefore, the entire purchase consideration was not paid by Jeevan Kumar prior to coming in force of PMLA. A total sum of Rs. 3,41,000/- was also paid back to Standard & Chartered Bank as loan repayments on different dates during the period 24.02.2007 to 25.01.2008. These dates of re-payment were also after PMLA came into effect and therefore, the provisions of PMLA would be attracted. 4.4. According to the counsel for the Enforcement Directorate the time of committing of scheduled offence was not relevant and it was the time of committing the offence of money laundering that was relevant. He contended that section 18, 19 and 20 of Transplant....
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.... of crime since he had no other source of income as admitted by him in course of interrogation. Repayments of Bank loan to the extent of Rs. 3,41,000/- during the period 24.02.2007 to 25.01.2008 were also held to be from the proceeds of crime in absence of any other source of income of Jeevan Kumar. The cash payment of Rs. 3,52,400/- on 23.03.2007 also was from the tainted source. Therefore, it has been held that whatever payments were made exclusive of Bank loan were obviously from the proceeds of crime. 5.3. Regarding alleged Bank loan allegedly taken by the Appellant, Jeevan Kumar, it was held that even if the loan had been obtained to show the immediate source to a substantial extent for acquisition of the property, the part re-payment was obviously from tainted source in absence of any untainted source. Further payment in future would have been planned from tainted source only in the absence of any ostensible source of income of Jeevan Kumar. At the time of sanction of loan in 2003 there was no known clean source with Jeevan Kumar for paying the stipulated monthly instalments. Small payments made by Pooja (who married Jeevan in 2005) in 2008 and onwards are too insignifican....
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....aw. It was further held that even otherwise in this case transfer of ownership required permission of Greater Noida Authority which has not been obtained as is clear form para 4 of this agreement. Therefore, even if consideration has been paid and possession had been given, it cannot be regarded as transfer of property. It has only created debtor-creditor relationship. 5.7. In respect of agreement to sell dated 29.03.2008 between M/s. Anchal Paper Products Pvt. Ltd. and Rajesh Gupta, it was held that only part payment was made and possession was not given. M/s. Anchal Paper Products Pvt. Ltd. avoided executing the sale deed that led Rajesh Gupta to file a civil suit in the High Court. As such there was no sale. It was further held that this document shows that M/s. N.R. Merchant Pvt. Ltd. was not a party to it and apparently Rajesh Gupta had entered into this agreement in his personal capacity and M/s. N.R. Merchants Pvt. Ltd. has no locus standi in the proceedings before the Adjudicating Authority. The Adjudicating Authority further held that proceeds of crime were involved in the said property on the basis of statements of Jeevan Kumar and Sanjeev Gupta as well as the agreemen....
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.... Cheques were also purchased by payment of cash to Bank that would mean M/s. Anchal Papers Products Pvt. Ltd. had as much as Rs. 36 Lakhs cash on that day which has not been established even prima facie. 5.8. The Adjudicating Authority has held that proceedings under section 8(1) of PMLA is not a trial for criminal offence nor it is a civil litigation on a property dispute as to ownership of the properties. The rigors of Evidence Act as contemplated in a crime trial are not applicable to proceedings for attachment under the provisions of PMLA. It is held that what is to be seen is whether the properties provisionally attached are involved in money laundering, irrespective of its legal ownership or not and all that is required to be seen is whether there was cogent materials on the basis of which the Deputy Director could form his reason to believe that the properties represent proceeds of crime. 5.9. The Adjudicating Authority has also held there was no infringement of any constitutional rights of the Appellant on attachment of their properties since ownership is not affected by the attachment order which is provisional in nature. If the proceedings before the criminal court ....
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.... is valued at Rs. 4.5 crores. Thus the valuable right was alienated without any mention of consideration. The Adjudicating Authority inferred that the property attached i.e. East of Kailash, Delhi has a close link with the property in south Extn. where the initial investment was made as the sale proceeds of the portions of that property have flowed into the investment in East of Kailash property. It was reasoned that if the owners of the New Delhi South Extension property, Mr. & Mrs. Rastogi, had given the power of transferring the developed portion of the property and also to receive the consideration amount to Shri Rajiv Chanana without mentioning the consideration in the GPA, then it is apparent that they were not just acting on behalf of the owners. Shri Rajiv Chanana would not have given free service to the owners of the property and substantial property rights, even if not full ownership has been given through this GPA to Rajiv Chanana and Pooja Singhal. If Pooja Singhal had been given substantial right she would not have given up her rights as has been alleged. Regarding the valuation of the property it was held that no alternative report of any approved valuer had been prod....
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....eeds of the portions of this property were also proceeds of crime. Therefore, it was held that the balances in these accounts attached by the Deputy Director would also represent proceeds of crime. 5.15. The Adjudicating Authority thus confirmed the provisional attachment order in respect of all the properties which were provisionally attached by the Enforcement Directorate by the order dated 4th February, 2010. 6. In the case of Shri Rajiv Chanana, an application for allowing the appeal in view of acquittal of Jeevan Kumar was filed, being MP-PMLA-498/DLI/2013 dated 10th April, 2013. Along with the application the applicant/Rajiv Chanana had produced the copy of judgment dated 22.03.2013 of Shri Najar Singh Addl. Session Judge-cum-Special Judge, CBI, Haryana Panchkula acquitting the Appellant Sh. Jeevan Kumar from all charges. The Applicant contended that in view of acquittal of Sh. Jeevan Kumar from the scheduled offense, provisional attachment order dated 9.9.2010 and the order of confirmation dated 4.2.2011 passed in OC 66 of 2010 is liable to be vacated in terms of section 8(5) of PMLA. The Appellant/Shri Rajiv Chanana sought disposal of the appeal in these circumstances....
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....dispose of the appeal within eight weeks and also permitted the counsel for the parties to further address arguments, if any, sought to be addressed by either of the counsel on the merits of the appeal or to fix a date for such hearing. 11. The copy of the order dated 13th January, 2015 was not served on the Tribunal on or before 20th January, 2015 the date fixed by the Division Bench for hearing further the parties. A photocopy of the said order was received on 21st January, 2015. Consequently the Tribunal listed the appeals of Jeevan Kumar and Rajiv Chanana on 22nd January, 2015 and intimated the counsel for Rajiv Chanana and Enforcement Directorate. On 22nd January, 2015 the counsel for Rajiv Chanana and Enforcement Directorate appeared and sought time to raise further arguments. The said appeal FPA-167/DLI/2011 was therefore, adjourned to 28th January, 2015. 12. On 28th January, 2015, arguments were partly heard. However, the arguments were not concluded by the counsel for the parties on the ground that an application for clarification had been filed in the High Court in respect of order dated 13th January, 2015 and therefore, the appeal was adjourned to 5th February, 201....
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....n Kumar and the Appellant, Rajiv Chanana allegedly having the proceeds of crime from Sh. Jeevan Kumar cannot be inferred and the properties are liable to be released from attachment. The arguments were concluded and the order was reserved on 3rd March, 2015. In the meantime, the application for modification of order dated 13th January, 2015 was also disposed of by the Hon'ble Division Bench holding that order dated 13.1.2015 did not express any opinion and it is for the Appellate Authority to hear both the parties and dispose of the appeal independently, without being swayed by any observation in the said order. The Hon'ble Division Bench reiterated that the parties will be entitled to raise additional grounds including the ground that provisional attachment will cease to have any effect in terms of section 8(5) of PMLA as it stood prior to amendment by Act 2 of 2013 which ground had already been taken by the appellant/Rajiv Chanana in his application dated 10th April, 2013. 18. Arguments on behalf of another Appellant, M/s. N.R. Merchant Pvt. Ltd. were also concluded on that date and the order was reserved. The counsel for the said appellant also did not address argumen....
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....ng the provisional order of attachment of properties. Therefore the grounds of appeal raised by the Appellants in their appeals have not been considered and stipulated here in this order. The counsel for the applicants in all the three appeals vehemently contended that the amendment to the PMLA which was notified in February 2013 does not stipulate that the provisions of amended Act are retrospective nor they can be construed to be retrospective as the amendment effects the rights of the appellants substantially. 21. The learned counsel for the Appellant, Shri Badrinath had relied on (1984) 1 SCC 206 in which the Hon'ble Supreme Court held that the Retrospectivity of an Act depends upon express or implied language used in it. It was held that where language is not clear, the provision should be construed in context of surrounding circumstances. It was further held that there is presumption against retrospectivity. In (2002) 3 SCC 463 Land Acquisition officer cum DSWO, A.P. Vs. B.V. Reddy and sons relied on by the Appellants, it was held that a substantive provision cannot be retrospective unless the provision itself so indicates. 22. The Appellants had also placed relianc....
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....omes final under section 8(3) "after the guilt of the person is proved in the trial court and order of such trial court becomes final". Problems are faced in such cases where money laundering has been done by a person who has not committed the scheduled offence. Therefore, it is proposed to amend section 8(5) to provide for attachment and confiscation of the proceeds of crime, even if there is no conviction, so long as it is proved that predicate offence and money laundering offence have taken place and the property in question (i.e. the proceeds of crime) is involved in money-laundering. 24. To emphasise his plea, the learned counsel for the respondent has relied on (2011) 3 SCC 581, Radhey Shyam Kejriwal Vs. State of West Bengal. He contended that the Hon'ble Supreme Court had held that the adjudication proceedings and criminal prosecution can be launched simultaneously; decision in adjudication proceedings is not necessary before initiating criminal prosecution; adjudication proceedings and criminal proceedings are independent in nature to each other; the finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for cri....
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....Act in accordance with the amended section 8(3). 27. Reliance has also been placed by the learned counsel on (1990) 1 SCC 445, Gurbachan Singh Vs. Satpal Singh & Ors. to contend that the amendment to the Act in 2013 did not create any new offence and as such it did not create any substantial right in the Appellants. According to him the amendment of 2013 is merely a matter of procedure and as such it is retrospective in nature. He contended that the general rule is that all the statutes, other than those which are merely declaratory or which relate only to matters of procedure or of evidence, are prima facie prospective, and retrospective effect is not to be given to them unless, by express words or necessary implications, it appears that this was the intention of the legislature. However, this presumption against retrospection does not apply to the legislation concerned merely with matters of procedure or of evidence and provisions of such nature are to be construed as retrospective unless there is a clear indication that such was not the intention of the Parliament. 28. Reliance has also been placed by the respondent on (1987) 3 SCC 27, M/s. Rai Bahadur Seth Shreeram Durgap....
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.... in the light of the surrounding circumstances retrospective effect should be given to it or not. 18. ......... 19. In the above case, the Court held that the aforesaid provision had retrospective effect and applied to buildings constructed prior to the date on which the said Act came into force provided they satisfied the conditions mentioned therein." 30. In Land Acquisition Officer (supra) relied on by the Appellants, the Hon'ble Court in para 6 at page 471 had held as follows:- "6. Coming to the second question, it is a well-settled principle of construction that a substantive provision cannot be retrospective in nature unless the provision itself indicates the same. The amended provision of Section 25 nowhere indicates that the same would have any retrospective effect. Consequently, therefore, it would apply to all acquisitions made subsequent to 24-9-1984, the date on which Act 68 of 1984 came into force. The Land Acquisition (Amendment) Bill of 1982 was introduced in Parliament on 30-4-1982 and came into operation with effect from 24-9-1984. Under the amendment in question, the provisions of Section 23(2) dealing with solatium were amended a....
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....ly Co. v. Central Govt. 2, SCC p. 219, para 17.)" 32. In State of Punjab v. Bhajan Kaur (supra) relied on by the Appellant, the Hon'ble Supreme Court had held that the golden rule is that in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be construed to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed. The Supreme Court had held as under: "15. Section 140 of the 1988 Act does not contain any procedural provision so as to construe it to have retrospective effect. It cannot enlarge any right. Rights of the parties are to be determined on the basis of the law as it then stood viz. before the new Act came into force. 16. It is now well-settled that a change in the substantive law, as opposed to adjective law, would not affect the pending litigation unless the legislature has enacted otherwise, either expressly or by necessary implication. 17. In Garikapati Veeraya v. N. Subbiah Choudhry the law is stated thus: (AIR p. 553, para 25) "25. ... The golden rule of construction is that, in the absence of anything in the enactment to sho....
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....of Haryana relied by the Appellant it was held that no law can be interpreted so as to frustrate the very basic rule of law. The provisions have to be strictly construed and cannot be given retrospective effect unless legislative intent and expression is clear beyond ambiguity. In the said judgment at page 220, the Hon'ble Supreme Court had held as under: "18. No law can be interpreted so as to frustrate the very basic rule of law. It is a settled principle of interpretation of criminal jurisprudence that the provisions have to be strictly construed and cannot be given a retrospective effect unless legislative intent and expression is clear beyond ambiguity. The amendments to criminal law would not intend that there should be undue delay in disposal of criminal trials or there should be retrial just because the law has changed. Such an approach would be contrary to the doctrine of finality as well as avoidance of delay in conclusion of criminal trial. 19. Still, reference can be made to the judgment of this Court in Ravinder Singh v. State of H.P. 5, wherein this Court was dealing with the question as to what would be the law applicable for imposition of a sen....
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....at is to be considered is the provision of PMLA. This cannot be disputed that the action of attachment is not in relation to a person as such but essentially to freeze the proceeds of crime. In respect of section 5(1) of the Act the term "person" appearing in clause (a) of the Section 5(1) of the Act cannot be limited to the person who has been charged of having committed a scheduled offence. If that was the intent of the legislature, there was no reason to insert Clause (a). In that case, the Legislature would have simply provided for any person who has been charged of having committed a scheduled offence and in possession of any proceed of crime, such proceeds of crime can be attached and confiscated, subject to fulfillment of the specified conditions. Consequently, even if the person has not been charged of scheduled offence but who has the proceeds of crime, then such properties with such 'person' can be attached. In W.P. No. 530 of 2011 and M.P. Nos. 2 to 4 of 2011, decided on 01.04.2011, G. Srinivasan Vs. The Chairperson, Adjudicating Authority, the Hon'ble Madras High Court had held as under: "13. The Appellants however, have placed emphasis on the expre....
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....B of the Schedule, a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973; or 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 Section 36(1) of NDPS Act, 1985. This proviso essentially is directed against the second category of person covered by Sub-section (1), namely, person who has been charged of having committed a schedule offence. In other words, action of attachment of proceeds of crime in possession of the person charged of a scheduled offence can be proceeded only on forwarding of a report to Magistrate under Section 173 of the Code or a complaint has been filed for taking cognizance of offence by the Special Court constituted under the NDPS Act. In so far as the person who is not named in the scheduled offence, there can be no question of filing of any report or complaint for taking cognizance. That stipulation has no application to the person who is not a person having been charged of a scheduled offence. The view that we propose to take is reinforced from the purport of Section 3 and 4 of the Act of 2002. The same ....
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....fice it to observe that even Section 8 contemplates adjudication to be done by the Adjudicating Authority after provisional attachment order is passed under Section 5 of the Act and upon receipt of complaint under Section 5(5) of the Act. We are not referring to other provisions mentioned in the said Section 8(1), as we are dealing only with the case arising under Section 5 of the Act. Considering the above, we are of the considered opinion that there is no merit in the argument of the Appellants that action under Section 5 of the Act could not have proceeded against them, as they were not charged of having committed a scheduled offence." 36. Thus a person charged of committing a scheduled offence and having proceeds of crime is liable for attachment of his properties acquired from proceeds of crime and another person who is not charged of committing a scheduled offense but having the proceeds of crime is also liable for attachment of properties acquired from the proceeds of crime. The Appellant Jeevan Kumar belongs to both the categories. He was charged with scheduled offence and to have acquired from the proceeds of crime generated by him and also having the proceeds of crime ....
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....ount of provision of TOHO Act prevailing over the provision of IPC. Therefore, it cannot be held that the accused Amit Kumar had not been convicted of scheduled offence. He was convicted of scheduled offence and he had generated proceeds of crime and his proceeds of crime laundered by Jeevan Kumar, Appellant will be liable for attachment and thereafter for confiscation, if proved that he had indulged in money laundering under section 3 & 4 of PMLA. 39. In Radha Mohan J. Lakhotia & Ors. Vs. Dy. Director PMLA, the Hon'ble High Court had held that section 5 can be invoked against a person who is not named as an accused in the commission of a scheduled offence. After his acquittal in the criminal case, Appellant Jeevan Kumar continues to remain a person who is not named as an accused in the commission of a scheduled offence but who has the proceeds of crime as he did not have any source of income and whatsoever he had was from his brother, Amit Kumar who has been convicted. In FP-PMLA-21/AHD/2008, Dy. Director, PMLA Vs. M/s. Lok Prakashan Ltd., it was held as under:- "62. The definition of "offence of money laundering" in section 3 and read with section 5 shows that any....
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.....H.M.S. is, Diploma of Homeopathic and Medicine and Surgery; that it is a fact that his brother Shri Amit Kumar was earlier detained under COFEPOSA; that it is also a fact that in January 2008 his brother Shri Amit Kumar was apprehended by the Nepal Police; that he was assisting his wife Smt. Pooja Singhal in her garment business and apart from that he did not have any other business; that he used to cooperate with his brother Shri Amit Kumar; that Dr. Upendra Kumar used to get the donors and assists Shri Amit Kumar in kidney operations; that he was arrested by the CBI in kidney racket scam; that on earlier occasion he was arrested by the Mumbai Police in kidney racket scam; that he has purchased different properties in India; that he purchased one flat from Essel Group for Rs. 34 Lakhs and got financed Rs. 30 Lakhs approximately from Standard Chartered Bank; that he was repaying loan amount by paying monthly installments of Rs. 26,000 to Rs. 29,000/- approximately per month; that he purchased plot in Greater NOIDA from Eco Tech and his wife has given Rs. 6 Lakhs from her account to one Raghuvinder Singh of Saket who was the actual allottee of the plot; that he paid Rs. 12 Lakhs to....
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....quittal of the Jeevan Kumar as detailed hereinbefore. Assuming that the provision of amended Act carried out in the PMLA on 15.2.2013 are retrospective, then in view of amended section 8(5) of PMLA, mere acquittal of Shri Jeevan Kumar in the scheduled offence is not sufficient for releasing the properties and there should be acquittal in the case filed against the said appellants under section 3 & 4 of the PMLA also. 45. As the counsel for the Appellants did not advance arguments on the merits of the appeal against the impugned order dated 4.2.2011 and the said order is not liable to be set aside on account of acquittal of appellant Jeevan Kumar in the criminal case of scheduled offense, all the three appeals are liable to be set aside. 46. The above appeals FPA-PMLA-169/DLI/2011; FPA-PMLA-167/DLI/2011 & FPA-PMLA-168/DLI/2011 and the pending applications in these appeals are dismissed. The order of attachment confirmed by the Adjudicating Authority dated 4.2.2011 in O.C. 66 of 2011 is not liable to be set aside and the properties of three appellants in three appeals are not liable to be released from attachment. Parties are also left to bear their own costs. ============= ....
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....owingly assists or knowingly is a party or is actually involved in any process or activity connected with the 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. 5 (1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director 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 (a) any person is in possession of any proceeds of crime; and any proceeds of crime; and (b) such person has been charged of having committed a scheduled offence; and (b) 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 (c) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceed....
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.... any proceeding under this Act.] Provided further that, 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 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.] 8 (5) Where on conclusion of a trial of an offence under this Act, the Special Court finds that the offence of 8 (5) Where on conclusion of a trial for any scheduled offence, the person concerned is acquitted, the attachment of the property or money-laundering retention of the seized property or record under sub section (3) and net income, if any, shall cease to have effect. 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....