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2013 (8) TMI 474 - HC - Money LaunderingProperty Liable to Attachment - proceeds of crime - Prevention of Money Laundering Act, 2002 - Petitioners contended that the property in ownership, control or possession of a person not charged of having committed a scheduled offence would not constitute proceeds of crime - Held that:- Property owned or in possession of a person, other than a person charged of having committed a scheduled offence was equally liable to attachment and confiscation proceedings under Chapter – III and Section 2(1) (u) which defines the expression “Proceeds of Crime”, was not invalid. Interpretation of Provisions of Section 5 - The Bombay High Court in the Judgement had interpreted the provisions of Section 5 (1) of the Act even prior to incorporation of the Second proviso by the Second Amendment Act, 2009) as enabling initiation of proceedings for attachment and confiscation of property in possession of a person not accused/charged of an offence u/s 3 as well - The Second Amendment Act in so far as it has incorporated the second proviso to Section 5(1), it was contended on behalf of the respondents was by way of clarification and emphasis as to the true import and trajectory of Section 5(1) – Held that:- that the provisions of the second proviso to Section 5 were applicable to property acquired even prior to the coming into force of this provision (vide the second amendment Act with effect from 06032009); and even so was not invalid for retrospective penalization. Validity of Section 23 - Held that:- The presumption enjoined in cases of interconnected transactions enjoined by Section 23 was valid - The challenge to Section 23 was projected on the ground that the presumption enjoined by this provision in respect of interconnected transactions was unduly restrictive of the right to property; was a disproportionate burden, not commensurate with legitimate Governmental interests in targeting proceeds of crime involved in money laundering, for eventual confiscation. Validity of Section 8 – Held that:- Provisions of Section 8 were not invalid for vagueness, incoherence as to the onus and standard of proof, ambiguity as regards criteria for determination of the nexus between a property targeted for attachment/confirmation and the offence of money laundering or for exclusion of mens rea/knowledge of criminality in the acquisition of such property, Section 8(4), which enjoins deprivation of possession of immovable property pursuant to an order confirming the provisional attachment and before conviction of the accused for an offence of money laundering was valid. Constitutionality of Section 24 – Held that:- Section 24 shifts the burden of proving that proceeds of crime are untainted property onto person(s) accused of having committed the offence u/s 3 - This provision was challenged as arbitrary; was contended to be applicable only to the trial of an offence u/s 3 and not the proceedings for attachment and confiscation of property under Chapter III and alternatively as not applicable to proceedings for attachment and confiscation of property of a person not accused of an offence u/s 3. Burden to Prove - Held that:- On its textual and grammatical construction, the provision shifts the burden of proving that proceeds of crime were untainted property on person(s) accused of having committed the offence u/s 3 – The burden of proving that proceeds of crime were untainted property was applicable not only to prosecution and trial of a person charged of committing an offence u/s 3 but to proceedings for attachment and confiscation – in Chapter III of the Act as well; but only to a person accused of having committed an offence u/s 3 - The burden enjoined by Section 24 does not inhere on a person not accused of an offence u/S 3 - The presumption under Section 23 however applies in interconnected transactions, both to a person accused of an offence under Section 3 and a person not so accused.
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