TaxTMI 
TaxTMI 
2025 (7) TMI 221
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....e attachment of properties attached by the Respondent/Enforcement Directorate ("ED") vide PAO No. 09/2015 dated 28.03.2025 ("Provisional Order"). 2. The Respondent/ED had attached the following list of properties belonging to the Appellant in connection with Enforcement Case Information Report bearing No. ECIR/53/DZ/2010 since 28.03.2015:- I. Bank A/Cs S.No. Name A/c No. Last Balance 1. Barclays Bank, Nehru Place 000003280571 0.00 2. Barclays Bank, Nehru Place 000003152103 1,25,361.39 3. HDFC Bank, GK-I, New Delhi 00921000112082 0.00 4. HDFC Bank, Sec 28, Noida 00881370001348 24,916.43 5. ICICI Bank, CP, New Delhi 000701211460 22,316.45 6. HDFC Bank, Deer Park, Safdarjung, New Delhi 05031930005607 1,01,683.45 Total Balance 2,74,277.72 II. Life Insurance Policies S.No. Policy No. Insurance Provider Date of Maturity Sum Assured 1. 111973427 LIC 15.11.2016 1,00,000 2. 113049028 LIC 25.01.2016 50,000 3. 1200900858548 Metlife Insurance Co. 31.03.2019 25,000 4. 00359581 ICICI Prudential Life Insurance ....
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....inst the Appellant and one Praveen Kumar @ Ankit for commission of offences punishable u/s 3 of the MCOCA. e) During the investigation of FIR No. 47/2010 u/s 3, 4, 5, 6, 8 of ITP Act, a number of personal diaries, cheque books, CDs, Pamphlets, cash Rs. 1,55,000/- and US$ 20, a gold arm band, mobile phones, 2 Honda cars, and various bills, cash receipts, insurance policies, deposit slips, credit cards and sundry documents showing income and expenditure and transactions of their illegal trade were seized. f) After the arrest of the Appellant, Praveen Kumar and their associates, their criminal activities were studied. It was observed that the accused Shiv Murat Dwivedi was indulged in continuing unlawful activities in an organized manner and had generated huge wealth to the tune of Rs. 1.5 crores (approx.) from these activities. g) The investigation further revealed that the Appellant and his associates had no legal source of income but they accumulated huge wealth by continuously indulging in the said criminal activities. h) As a result, the Respondent/ED recorded ECIR No. 53/DZ/2010 and thereafter initiated investigation under PMLA. The Respondent....
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....us, no retrospective application is permitted to attach the properties of the Appellant; c) The learned Appellate Authority fails to draw out its 'reasons to believe' as to which specific predicate/scheduled offence was committed by the Appellant which resulted in the tainted money and that this was the tainted money used by the Appellant to purchase the properties; d) The Appellant does not possess any 'proceeds of crime' as his earnings are a result of being previously involved in religious ceremonies, from where he started earning around Rs. 35,000/- to 40,000/-, which the Appellant saved up to buy the property bearing No. C-120/1, Jawahar Park, Devli Road, Khanpur, Delhi - 110062 comprising of basement, ground and first floor from one Late Sh. Mool Chand for a sale consideration of Rs. 1,60,000/-; e) Possession of unaccounted property acquired by legal means does not qualify the said property as "proceeds of crime"; f) The presumption under Section 23 PMLA is a mere conjecture since the transactions took place in two different timelines which cannot be interconnected. 7. To support its submissions, learned Counsel for the Appellant has rel....
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....2. Since the present appeal revolves around the dispute of whether the Appellant's properties would constitute proceeds of crime under PMLA, it would be apposite to refer to the definition of 'proceeds of crime' given under Section 2(1)(u), which reads as under: "2. Definitions.- (1) In this Act, unless the context otherwise requires, - xxx (u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the country, then the property equivalent in value held within the country] [or abroad]; [Explanation.-For the removal of doubts, it is hereby clarified that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence;] 13. Further, the offence of money laundering, which has been defined under Section 3 of the PMLA, reads as under:- "3. Offence of money-laundering.-Whosoeve....
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....intent of tracking and reaching up to the property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence. Therefore, the Explanation is in the nature of clarification and not to increase the width of the main definition of "proceeds of crime". The definition of "property" also contains Explanation which is for the removal of doubts and to clarify that the term property includes property of any kind used in the commission of an offence under the 2002 Act or any of the scheduled offences. 108. In the earlier part of this judgment, we have already noted that every crime property need not be termed as proceeds of crime but the converse may be true. Additionally, some other property if purchased or derived from the proceeds of crime even such subsequently acquired property must be regarded as tainted property and actionable under the Act. For, it would become property for the purpose of taking action under the 2002 Act which is being used in the commission of offence of money laundering. Such purposive interpretation would be necessary to uphold the purposes and objects for enactment of the 2002 Act. 109. Tersely pu....
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.... would constitute offence of money laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence-except the proceeds of crime derived or obtained as a result of that crime. 135. Needless to mention that such process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled offence). It would be an offence of money laundering to indulge in or to assist or being party to the process or activity connected with the proceeds of crime; and such process or activity in a given fact situation may be a continuing offence, irrespective of the date and time of commission of the scheduled offence. In other words, the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money laundering under the 2002 Act - for continuing to possess or conc....
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....of such proceeds, the alleged layering and integration, and the efforts to project such funds as untainted all constitute elements of a continuing offence under the PMLA." 17. Coming to the facts of the present case, the material on record indicates that after the arrest of the Appellant and his associates, their criminal activities were studied, which revealed that the Appellant was indulged in continuing unlawful activities in an organized manner since 1997 and in such commission, had managed to generate huge wealth, approximately to the tune of Rs. 1.5 crores. The Appellant was also found to be involved in several criminal cases along with his associates between the 1997 and 2003, making it abundantly clear that the Appellant is not unknown to criminal activity. 18. During the course of investigation under the ITP Act, a number of personal diaries, cheque books, CDs, pamphlets, cash to the tune of Rs. 1.55 crores, US $20, a gold arm band, mobile phones, 2 Honda cars, and various bills, cash receipts, insurance policies, deposit slips, credit cards and sundry documents showing income and expenditure by the Appellant for illegal trade which includes payments made to brokers,....