TaxTMI 
TaxTMI 
2026 (9) TMI 2003
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....5.2017 at Police Station, Civil Lines, Allahabad. Pursuant to the said FIR, Directorate of Enforcement, Allahabad Zonal Office recorded an ECIR on 11.09.2017 and purportedly initiated investigations under PMLA. Subsequently, a chargesheet was filed by the police in the aforesaid FIR against the Appellant and others which is pending before the Ld. Trial Court. Ld. Counsel for the Appellant further submitted that the Respondent conducted search under Section 17 of PMLA at the joint family residence of the Appellant on 11.02.2020 and pursuant to the aforesaid search the Respondent filed an Application bearing Original Application No. 386/2020 under Section 17(4) of PMLA before the Ld. Adjudicating Authority on 09.03.2020 seeking retention of the seized articles including jewellery. Ld. Counsel for the Appellant contended that the Appellant received the letter dated 10.07.2020 from the Ld. Adjudicating Authority whereby it was informed to the Appellant that a Show Cause Notice dated 16.03.2020 (SCN) was sent to him, which was in fact never served to the Appellant, and that the Appellant had to file reply before 14.08.2020. 3. Ld. Counsel for the Appellant submitted that the second C....
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....t which on face of it is arbitrary and illegal. It was submitted that there is no FIR or chargesheet against Sh. Jamal Ashraf and others and the O.A. is nothing but colourable exercise of powers. 5. Ld. Counsel for the Appellant submitted that the permitted time period of 180 days mandated under Section 20 of PMLA for retaining the seized articles, from the day of seizure expired on 09.08.2020 and during the said period of 180 days no order was passed under Section 8 of PMLA by the Ld. Adjudicating Authority to permit retention of the seizure of said articles beyond the period of 180 days and the Adjudicating Authority had thus become functus officio. Ld. Counsel for the Appellant submitted that the Appellant filed a writ petition No. W.P (C) 3749/2021 on 16.03.2021 before Hon'ble Delhi High Court, inter alia, on the ground that the proceedings emanating from the search have lapsed and the seized articles as per Section 20(3) PMLA are mandatorily to be returned. The said petition is pending. Ld. Counsel therefore pleaded to allow the Appeal and release the jewellery. 6. Ld. Counsel for the Respondent submitted that the Allahabad Sub-Zonal Office, conducted searches under ....
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....eries, properties, cars, miscellaneous purchases etc. 7. Ld. Counsel for the Respondent submitted that during the offense period (2013-2016), Sh. Kamal Ahsan incurred exorbitant expenditures, routing the proceeds of crime through various accounts. He purchased multiple luxury vehicles, including an Audi for Rs. 35 lakhs (2016), a Honda City for 11 lakhs (2014), and two Toyota Fortuners for 25 lakhs each, registered in the names of his wife, brother Jamal Ashraf, and driver Syed Yawar Hussain. These vehicles were later sold after the scam was uncovered, with Rs. 28 lakhs deposited into SHIATS accounts as partial restitution. He frequently bought and sold immovable properties, with transactions amounting to crores and stamp duties exceeding Rs.20 lakhs. Additionally, he funded a lavish lifestyle, hosting extravagant parties and making substantial payments for jewellery through his wife's accounts. He also invested crores in insurance, finance, and mutual funds during the period. It was submitted that the search was conducted under Section 17 of the PMLA to trace additional proceeds of crime as part of the ongoing investigation against Sh. Kamal Ahasn and others, as detailed in....
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....e wants everyone to forget his criminal activity and the application of criminal mind for generation of the proceeds of crime of Rs. 24 Crores in a period of three continuous years and the Appellant now wants that after attachment of small portion of proceeds of crime no further investigation should be carried so that the purpose of PMLA gets defeated. He has least regard for the law of the land and therefore he has been non-cooperative with the investigation so far and he has been making continuous efforts for hampering the investigation under the provisions of PMLA meant for preventing the Appellant from enjoying the fruits of proceeds of crime. Ld. Counsel for the Respondent submitted that the account statements of bank accounts in the name of the Appellant and his wife clearly reflect multiple entries in respect of payments made for purchase of jewelleries. All the accounts of the Appellant and his family members have been operated by the Appellant only. Such heavy amount of jewellery seized from the premises and in possession of the Appellant is part of the proceeds of crime generated by him through the fraudulent debit transaction in the accounts of SHIATS maintained in the A....
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....on of immovable properties, vehicles, jewellery, mutual funds and other assets. Properties valued at approximately Rs. 4.58 crores had already been provisionally attached and the attachment was confirmed by the Ld. AA vide Order dated 13.12.2019 in OC No.1171/2019. The Hon'ble Supreme Court in Vijay Madanlal Choudhary v. Union of India, (2022) SCC OnLine SC 929, while examining the scheme of Sections 17, 18, 20 and 8 of the PMLA, has recognised the statutory power of the Enforcement Directorate to conduct search and seizure where the conditions prescribed under Section 17 are satisfied. The Court has further explained that the purpose of such proceedings is to trace and secure property which is connected with the offence of money-laundering and the proceeds of crime. 11. In the present case, the material placed before us shows that the search was not undertaken on the basis of a mere conjecture or suspicion unrelated to the scheduled offence. The investigation had already disclosed substantial movement of the alleged proceeds of crime through the accounts of the Appellant, his wife and other closely connected persons. The Respondent has specifically stated that substantial a....
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....s of crime and is involved in the offence of money-laundering. The proceedings and investigation cannot be curtailed merely because any one of the persons involved in the offence of money laundering has not been named as an accused in the scheduled offence. 12. In this regard, we cite Paragraph 65 of the Judgment of the Hon'ble Supreme Court in the case of Vijay Madanlal Choudhary vs. Union of India & Ors. (2022) SCC OnLine 929: "65. As aforesaid, in this backdrop the amendment Act 2 of 2013 came into being. Considering the purport of the amended provisions and the experience of implementing/enforcement agencies, further changes became necessary to strengthen the mechanism regarding prevention of money- laundering. It is not right in assuming that the attachment of property (provisional) under the second proviso, as amended, has no link with the scheduled offence. Inasmuch as section 5(1) envisages that such an action can be initiated only on the basis of material in possession of the authorised officer indicative of any person being in possession of proceeds of crime. The precondition for being proceeds of crime is that the property has been derived or obtained, direct....
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....roperty that was seized being proceeds of crime". An example in reference to it has been given in preceding paras. If the argument of the appellant is accepted, then it would become very convenient for the accused to park the proceeds of crime" with third person not involved in the crime and in that case, the third person being not accused would always raise a plea that property with him could not have been subjected to attachment. In the instant case, the accused Nirmal Kumar Kejriwal knowing it well that property with him may become subject matter of attachment or seizure gifted it to his grandson much after the registration of FIR and ECIR. The aforesaid cannot be considered to be bonafide rather designed to circumvent the provisions of law and the case registered against the accused. In view of the above, we are unable to accept the last argument raised by counsel for the appellant." 13. The Appellant has further argued that the Respondent has not identified individual payments made to jewellers from the account of his wife. The Original Application does not establish a direct transaction-wise trail between the alleged proceeds of crime and each item of jewellery. In our con....