2020 (2) TMI 1314 - AT - Money Laundering

Money Laundering - attachment of immovable properties - proceeds of crime - siphoning off of funds - status quo order - HELD THAT - So far as the other land is concerned the same is admittedly a vacant land wherein as per the submissions of the appellants certain plants have been grown to keep it green and the appellants have offered for substitution of the property in question by way of fixed deposit to the extent of proceeds of crime attributed against these appellants. The learned counsel for the Respondent may take appropriate instructions from the ED regarding these offers of the appellants. It is not disputed by the Respondent that these two properties are attached as a value equivalent to the proceeds of crime. That being so and in view of the submission made above during the course of hearing there appears that the appellants have made out a prima facie of issue of ad-interim order of status quo at this stage. Attachments shall continue - Legal and constructive possession of ED shall remain over the properties - the appellant is prohibited from transferring converting or disposing the property in question in favour of any third party - No encumbrance shall be created by the appellant in respect of the properties. List the stay application for hearing on 1st April 2020.

Issues involved:
1. Appeal filed under section 26 of Prevention of Money Laundering Act, 2002 against an order by the Adjudicating Authority.
2. Defects in the appeal - joint appeal filed by three appellants.
3. Stay application filed regarding the notice to vacate immovable properties.
4. Request for substitution of attachment of properties with fixed deposits.
5. Dispute over the valuation of properties and alleged proceeds of crime.
6. Prima facie case for issue of ad-interim order of 'status quo' regarding the properties.

Analysis:

1. The appeal was filed under section 26 of the Prevention of Money Laundering Act, 2002 against an order by the Adjudicating Authority. Upon hearing, notice was issued to the Respondent who sought six weeks to file a reply in the appeal.

2. Defects were pointed out in the appeal as it was a joint appeal filed by three appellants, which is not permissible under law. The appellants agreed to file separate memos of appeal for two appellants and pay the appeal filing fee. The Respondent was directed to file a reply within six weeks.

3. A stay application was filed regarding a notice to vacate immovable properties within 10 days. Arguments were made regarding the cultivation of mustard crop on one property and the residential nature of the other. An application was filed for substitution of attachment with fixed deposits pending appeal.

4. The appellants contended that the current values of the properties exceeded the alleged proceeds of crime. The Respondent disputed this, citing unregistered documents and manufacturing of evidence. The appellants offered fixed deposits in place of the attached properties.

5. A prima facie case for an ad-interim order of 'status quo' was considered for the properties. Both parties were directed to maintain the status quo, with attachments continuing and legal possession with the Enforcement Directorate.

6. The Respondent was given three weeks to file a reply to the stay application and instructed to consider the appellants' offers. The matter was listed for a hearing on 1st April, 2020, with the order to be provided to both parties.

This detailed analysis covers the issues raised in the judgment comprehensively, outlining the legal arguments and decisions made by the Tribunal.

← Previous Next →