TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 69
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....the Prevention of Corruption Act, 1988. 3. The charge sheet in reference to the FIR followed by the supplementary charge sheet was filed by the CID, Assam. The charge sheet revealed that the written test for the recruitment of 597 posts of Sub-Inspector of Police (UB) of Assam Police scheduled on 20.09.2020 had to be cancelled due to the leak of the question paper on WhatsApp. Appellant was one of the person named as an accused, apart from 41 other persons. 4. The investigation under the Act of 2002 was caused after recording of the ECIR where statements under Section 50(2) and 50(3) of the Act of 2002 were recorded. The respondents then caused Provisional Attachment Order to attach the properties of the appellant to the tune of Rs. 16,60,000/. 5. The appeal has been preferred on many grounds. However, the learned counsel for the appellant submits that he would be pressing only one ground for challenge to the impugned order and accordingly we would record arguments of counsel for the appellant. Arguments of counsel for the appellant: 6. The learned counsel for the appellant submitted that the property under attachment was acquired prior to the commission of crime thu....
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....ty worth of Rs. 16,60,000/-. could be provisionally attached, which is much below the value of the proceeds of crime in the hands of the appellant. 11. Contesting the only argument, it was submitted that the purchase of the flat under attachment was made on 25.06.2019 i.e. during the currency of the commission of offence between 11.04.2018 to 19.09.2020. The provisionally attached property was still shown to be for value thereof. The appellant has failed to disclose the source to acquire the property of Rs. 16,60,000/- thus should have been taken to be direct proceeds of crime. In any case, if the proceeds of crime has been vanished and not available or traceable, then the property of equivalent value can be provisionally attached even if it was purchased during the currency of the crime or prior to it. Reference of several judgments of the High Courts and Supreme Court, apart from this Tribunal was given while dealing with the arguments of counsel for the appellant. Finding of the Tribunal: 12. The facts involved for commission of crime under IPC, apart from Prevention of Corruption Act and Information Technology Act have been referred in the opening para of this order. I....
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....he strength of the judgments cited aforesaid, the prayer was made to cause interference in the impugned order. It was on the ground that the property acquired prior to the commission of crime cannot be attached. Such a property would not fall in the definition of proceeds of crime defined under Section 2(1)(u) of the Act of 2002. 14. The learned counsel for the respondents made reference of several judgments of the High Courts and Supreme Court in rebuttal which includes the judgment of the Apex Court in the case of Vijay Madanlal Choudhary Vs. Union of India reported in 2022 SCC OnLine SC 929 and the judgment of the Delhi High Court in the case of Prakash Industries Ltd. Vs. Directorate of Enforcement reported in 2022 SCC OnLine Del 2087 and many other judgments. The judgments cited by the respondents would be referred while dealing with the issue raised by the appellant, rather this Tribunal has given a detailed judgment on the issue after discussing the judgment of the Punjab & Haryana High Court in the case of Seema Garg (supra) and of the Supreme Court in the case of Pavana Dibbur (supra). It was after giving reference of the judgment of the Delhi High Court in the case of ....
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....(supra) of which few paras have been quoted but the part relevant to define proceeds of crime has not been referred by the counsel appearing before the High Courts. It is true that what can be attached is the proceeds of crime but the proceeds of crime does not mean only the property acquired or derived directly or indirectly as a result of criminal activity relating to the scheduled offence but in absence of availability of it, property of equivalent value can be attached and for that it is not necessary that the proceeds of crime has been sent out of the country. The crucial aspect in reference to what would fall in the definition of "proceeds of crime" remain untouched. This Tribunal has discussed the issue aforesaid elaborately in the case of Sadananda Nayak (supra). The relevant paras of the said judgment are quoted hereunder: "8. We have considered the rival submissions raised by the counsel for both the parties and scanned the record carefully. 9. It is not in dispute that an FIR was registered for commission of the scheduled offence. It was followed by recording of the ECIR. The respondent initially frozen the bank accounts of the appellant and his sons, w....
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....irectly or indirectly out of criminal activities would be termed to be the proceeds of crime. The properties can be acquired directly or indirectly with the use of proceeds of crime. The use of proceeds directly or indirectly would be relevant part to fall in first part of the definition of 'proceeds of crime'. To clarify the definition, it may be illustrated. Assuming in a case of dacoit, the accused secured the money and it has been used for the purchase of property, then such a property would fall in the definition of 'proceeds of crime' having been obtained out of proceeds of crime. In other case where the property was not acquired or derived by the accused himself but he passed on money out of the crime to another person and he acquired the property, then also it would be considered to be the proceeds of crime to acquire the property. In any case, there should be an element for use of the proceeds directly or indirectly obtained out of the crime and thereby the property would have nexus with the crime. 14. In second part "the value of any such property" the definition aforesaid starts with "or" after the first part referred and discussed in the para above. The second ....
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....before us that the attachment of property must be equivalent in value of the proceeds of crime only if the proceeds of crime are situated outside India. This argument, in our opinion, is tenuous. For, the definition of "proceeds of crime" is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property. If the property is taken or held outside the country, even in such a case, the property equivalent in value held within the country or abroad can be proceeded with. The definition of "property" as in Section 2(1)(v) is equally wide enough to encompass the value of the property of proceeds of crime. Such interpretation would further the legislative intent in recovery of the proceeds of crime and vesting it in the Central Government for effective prevention of money- laundering." The perusal of the para quoted above shows that the argument of the appellant that "the value of any such property" would be only when the proceeds have been taken out of India. The argument aforesaid was not accepted and it simplifies that the definition of "proceeds of crime" has three l....
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....as "the alternative attachable property" or "deemed tainted property". 17. The judgment of the Delhi High Court makes it clear that the definition of "proceeds of crime" has three limbs and in the second limb the properties of equivalent value to the proceeds obtained out of crime can be attached which may have been acquired prior to the commission of crime but it would be when proceeds of crime has been vanished and is not available. It is sought to achieve the object of the Act of 2002. 18. In the light of judgment of the Apex Court in Vijay Madanlal Choudhary (supra), we are unable to apply the judgment of Kerala High Court in the case of Satish Motilal Bidri (supra). The Ld. counsel did not refer the relevant para of the judgment in the case (supra), rather he referred Para 66 of the judgment of the Apex Court in Vijay Madanlal Choudhary (supra) which permits attachment only of the proceeds of crime. There cannot be any dispute that attachment can be only of the proceeds of crime but what would fall in the definition of "proceeds of crime" and clarified in Para 68 of the same judgment has not been taken into consideration whereas judgement of the Apex Court on....
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....ir origins camouflaged and masked enabling the accused to project or claim it to be untainted property. The Act clearly as does Axis Bank take into consideration a situation where a person who has obtained proceeds of crime by commission of a scheduled offence has managed to ensure that a property directly or indirectly connected to criminal activity is rendered untraceable. It is to confer authority upon the Directorate to proceed further in such a situation that Section 2(1)(u) uses the expression or the value of any such property. The safeguard which stands constructed in Section 2(1)(u) in such a contingency is that in case the Directorate does proceed against any other property, it must be equivalent in value to the illegal pecuniary benefit or gain that may have been obtained as a result of criminal activity. 80. In the considered opinion of this Court to tie the Directorate's power to move forward in this direction only in cases where property is taken or held outside the country would not only do violence to the plain language of Section 2(1)(u), it would clearly whittle down the scope and intent of the definition itself. It would essentially amount to erasing the ....
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....ourt has not been stayed or placed in abeyance. The interim order of 30 August 2019 passed in the aforesaid Special Leave Petition only requires parties to maintain status quo. Insofar as the judgement of the Punjab and Haryana High Court in Seema Garg is concerned, although SLP (C) No.14713-14715/2020 preferred against the same came to be dismissed, while doing so the Supreme Court recorded that the petition was being rejected in the peculiar facts and circumstances of the case. The dismissal of the aforesaid Special Leave Petition cannot in any case be interpreted or understood as being an affirmation of the view as expressed by the Punjab and Haryana High Court. xxxx 105. It would be pertinent to recall that properties which were acquired prior to the enforcement of the Act may not be completely immune from action under the Act in light of what this Court had held in Axis Bank. As was explained by the Court in Axis Bank, the expression proceeds of crime envisage both ―tainted property as well as ―untainted property with it being permissible to proceed against the latter provided it is being attached as equal to the "value of any such property" or "p....
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....ld advance the cause of the accused to promote the crime of money laundering. The Judgment in the case of Vijay Madanlal Chaudhary (supra) is of three judges bench while the judgment in the case of Pavana Dibur (supra) is of two judges bench. The issue has otherwise been dealt with by this Tribunal in the case of FPA-PMLA- 2909/CHD/2019 M/s. Besco International FZE vs. The Deputy Director Directorate of Enforcement, Chandigarh dated 31.07.2024. The relevant para of the said judgment is quoted hereunder: "It is not that only those properties which have been were derived or obtained directly or indirectly out of the crime can be attached rather in case of non-availability of the property derived or obtained directly or indirectly rather when it is vanished or siphoned off, the attachment can be of any property of equivalent value. It is necessary to clarify that the proceeds of crime would not only include the property derived or obtained directly or indirectly out of the criminal activity relating to the scheduled offence but any other property of equivalent value. The word "or" has been placed before "the value of any such property" and is of great significance. A....