TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 1920
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....gned Order has also confirmed the provisional attachment of residential site in Chintrapalli village, Bellary District in the name of the Appellant Sh. Oli Jagadeesha. Provisional attachment of Agriculture land measuring 4.68 Acres in Koilaragatte village in Bellary District and Agriculture Land measuring 12.08 Acres plus 1.99 Acres in Koilaragatte village in Bellary District in the name of the Appellant Smt. Oli Nirmala has also been confirmed vide the Impugned Order. Movable property i.e., JCB in the name of the Appellant Smt. Oli Nirmala was also provisionally attached and subsequently confirmed vide the Impugned Order. 2. Ld. Counsel for the Appellants argued that the impugned order reveals that an FIR in Crime No.06/2009 dated 22.09.2009 was registered by Karnataka Lokayukt Police, Hospet, Bellary District against Shri Oli Eshappa, Son of Late Shri Sanna Revappa, Assistant Agricultural Officer (since retired), Watershed Development Department, Koilaragatte, Hadagali Taluk, Bellary District, PIN: 583 219, for offences alleged to have been committed under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988. Subsequently, a case under the PMLA was ....
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....ere operates a bar of Art. 20(1) of the Constitution of India. As Art. 20 provides protection against application of ex post facto criminal laws, PMLA being criminal law and coming into effect after the alleged crime has been committed, would only have prospective application and no retrospective application would be permissible. To buttress his submissions Ld. Counsel has relied on judgments by Apex court in Ritesh Agarwal & Anr vs SEBI & Ors. (2008) 8 SCC 205 and Ganesh Gogoi vs. State of Assam (2009) 7 SCC 404. 5. Ld. Counsel for the Appellant contended that the show cause notice issued by the Adjudicating Authority is violative of Section 8(1) of PMLA and therefore the proceedings consequent thereupon is bad in law. Ld. Counsel also submitted that the Ld. Principal District & Sessions Judge by order dated 22.08.2011 had already attached the properties of the Appellants. Hence subsequent attachment through PAO is not permissible by law. Ld. Counsel stated that no evidence was produced to show that the so-called "proceeds of crime" was ever received by the Appellants herein and therefore there was no question of concealment, possession, acquisition, use and projection as untaint....
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.... deposited the cash so withdrawn in my various bank accounts. These amounts might have been withdrawn subsequently to disburse to the daily wage labourers". Ld. Counsel for the Respondent alleged misconduct on the part of the retired official so as to withdraw amounts from Government accounts under his control for syphoning of said amounts to his personal accounts. Ld. Counsel for the Respondent submitted that the agricultural income claimed by Sh. Oli Eshappa was on the higher side and the Appellants have not provided any evidence for the same as well. Moreover, when the claimed agriculture income of Appellants is contrasted with that of the report which was submitted by Asst. Agricultural Director to the Lokayukta, the amount claimed by Appellants does not come close to the estimate as reported. 9. Ld. Counsel for the Respondent contended that the Appellants for the first time in these Appeals have raised the fact about order dt. 22.08.2011 passed by Ld. Principal Dist & Sessions Judge, Bellary attaching assets. Neither the Appellants during the course of investigation nor at the time of adjudication proceedings had mentioned about this fact. Ld. Counsel further argued that sinc....
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....asure which targets for attachment and confiscation of proceeds of crime. On the text and authority of our Constitution while it may perhaps gainfully be contended that conviction for the offence of money-laundering cannot be recorded if the said offence is committed prior to the enforcement of Section 3 of the Act, such a contention cannot be advanced to target proceedings for attachment and confiscation, as these fall outside the 18 pale of the prohibitions of the Constitution, in particular Article 20(1)". It is observed that in the present case, the PAO was issued on 11.08.2014 after the amendment in PMLA to include the provisions of the Prevention of Corruption Act, 1988 in the Schedule to the PMLA in 2009 and 2013. The relevant date is not the date of actual commission of predicate offence but the date on which the tainted property is being projected or being claimed to be untainted as not being involved in money laundering. The PAO was issued much after the amendments to include the provisions of the Prevention of Corruption Act in the Schedule to the PMLA were made. Therefore, the attachment in the present case is not hit by the retrospectivity. 11. Ld. Counsel for the Ap....
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....e 2002 Act - for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in tranches until fully exhausted. The offence of money-laundering is not dependent on or linked to the date on which the scheduled offence or if we may say so the predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provisions (Section 3, as amended until 2013 and were in force till 31.07.2019); and the same has been merely explained and clarified by way of Explanation vide Finance (No. 20) Act, 2019. Thus understood, inclusion of clause (ii) in Explanation inserted in 2019 is of no consequence as it does not alter or enlarge the scope of Section 3 at all." 12. I find that the proceeds of crime in the present matter have arisen from acquisition of disproportionate assets by Sh. Oli Eshappa who has allegedly indulged in corrupt practices. The sources of funding of the impugned properties have not been properly explained by the Appellants. Resultantly there remains a gap as to the source of fund....
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.... 1988, but also on other materials like the statements of the Appellants and Sh. Oli Eshappa under Section 50 of PMLA, 2002. Analysis of the bank statements, income and expenditures are corroborative materials. The contention of the Appellants that the value of the second property is inflated is without any basis and is rejected. 14. It is admitted by Sh. Oli Eshappa that the property comprising of residential site in the name of Sh. Oli Jagdeesha son of Sh. Oli Eshappa was bought by him in the name of his son for Rs. 15,000/-. Sh. Oli Eshappa has been unable to explain the means to purchase the said property. It is on record that he has not filed any Income Tax Returns (ITRs). 15. With respect to the properties in the form of 4.68 Acres of land and 12.08 Acres plus 1.99 Acres of Land in the name of Smt. Oli Nirmala wife of Sh. Oli Eshappa, Smt. Oli Nirmala has attributed the funding of these to her dairy income and agricultural income. The investigation has revealed the total income given by the Appellant Smt. Oli Nirmala does not take into account her other daily house hold expenses as well as money spent by her on canvassing during elections to the Taluk Panchayat. In spite of....
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....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 one hundred and eighty days from the date of the order, in such manner as may be prescribed: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised 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 [first proviso], 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 ....
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.... 19. On comparison of the Order and the Table given in the preceding paragraph with the Impugned Order, it is seen that the two properties in the name of the Appellant Sh. Dodda Siddappa for which the Provisional Attachment Order was made under Section 5(1) of PMLA which was confirmed vide the Impugned Order, are not listed in the Table. The three properties listed in the Table which are in the name of Oli Dodda Siddappa have not been attached under PMLA as is clear from the description and value of the three properties mentioned in the Order dated 13.09.2011 of the Ld. Principal District and Sessions Judge Bellary. The PAO is not only based on the FIR and the Charge Sheet under the Prevention of Corruption Act, 1988 but also on other materials like the statements of the Appellants and of Sh. Oli Eshappa under Section 50 of PMLA. The Investigation under PMLA has also incorporated the analysis of the Bank statements, Income and Expenditures of the Appellants and of Sh. Oli Eshappa. There is enough material on record for the Issuing Authority to have reasons to believe to provisionally attach the Impugned Properties. The provisions of Section 5(1) as mentioned afore clearly bring ou....
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....property at Sr. No. 9 of the Table is JCB Vehicle valued at Rs. 19,30,000/- in the name of Smt. Oli Nirmala. For the properties, both moveable and immovable mentioned afore in the name of Smt. Oli Nirmala the details including the value match those given in the Impugned Order for the said properties. 21. In view of the inference drawn in the preceding paragraph about the four properties being the same it appears that vide the Order dated 13.09.2011 issued by the Ld. Principal District and Sessions Judge had the said four properties had already been attached which came to be subsequently attached by the Deputy Director, ED, on 11.08.2014. The Ld. Adjudicating Authority confirmed the attachment of these four properties as well, vide the Impugned Order dated 07.11.2014. In reply to the Appeals the Respondent Directorate has taken objection that the Order dated 13.09.2011 of the Ld. Principal District and Sessions Judge Bellary was not brought to the notice by the Appellants either during the course of investigation or at the time of Adjudication proceedings. It is for the first time while filing the Appeal that the Appellants have mentioned about the said Order. Ld. Counsel for the R....
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....nd' between clauses (a) and (b) of Section 5(1) of PMLA makes it mandatory that the reasons to believe should not only be with regard to the possession of proceeds of crime but also about its likelihood to be concealed, transferred or dealt with. 23. In this regard, the final Order dated 17.08.2023 passed by this Tribunal in FPA-PMLA-3182-3186/Cochin/2019 relating to Appeals filed by Smt. Suma Sooraj, Sh. T.O. Sooraj, Sh. Rizhin Sooraj, Smt. Rizana Sooraj and Sh. Rizwan Sooraj may be referred to. The relevant paragraphs are reproduced as follows: "It is submitted that an order of attachment requires reasons to believe in writing and it should be on the basis of the material in possession that a person is in possession of proceeds of crime and such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may frustrate the confiscation of the property. An order of attachment pre supposes the conditions referred to above and given under Clause (a) and (b) of sub Section (1) of Section 5. In the instant case, the respondents have failed to show any likelihood of concealment or transfer of the properties so as to frustrate the proceeding of confisca....