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2020 (2) TMI 1026 - HC - Money LaunderingProvisional Attachment of property - money laundering - proceeds of crime - reasons to believe - issuance of show‐cause notice under Section 8(1) of the PMLA - It is argued that the “reasons to believe” under Section 8(1) was a necessary pre‐requisite of the notice and had to be disclosed to the petitioner for the latter to effectively give a reply - HELD THAT:- Although Section 5 specifically mentions that the reason for such belief is to be recorded in writing, such requirement is absent in Section 8. Section 8 stipulates that if the AA has reason to believe that any person has committed an offence under Section 3 or is in possession of proceeds of crime, it may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub‐section (1) of Section 5 or seized or frozen under Section 17 or Section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in moneylaundering and confiscated by the Central Government. The notice under Section 8(1) of the PMLA in the present case, was issued by the AA situated at Delhi - Although a writ petition was initially filed in the High Court at Delhi, a learned Single Judge directed that the matter ought to be filed before the Calcutta High Court, which, in essence, was affirmed by a division bench of the Delhi High Court. As such, the present writ petition has been filed before this court, despite part of the cause of action for the present writ having arisen in Delhi. Since nothing has come before the court to prove that the notice given to the petitioner under Section 8(1) of the PMLA disclosed the reasons to believe as contemplated in such section, which was a prerequisite of the notice and had to be arrived at by the AA independently, the notice itself was illegal, being bad in law - no proceeding could be initiated on the basis of the notice under Section 8(1) issued to the present petitioner, thereby rendering the notice under Section 5(1) infructuous, post facto, since the notice under Section 5(1) ultimately merged in the notice under Section 8(1) as the latter was a continuation of the process initiated by the former. Commencing with the notice under Section 5(1) and culminating in the notice under Section 8(1) and the proceedings about to be started on the basis of the latter, are vitiated for the aforesaid reasons and thus, bad in law - the Provisional Order of Attachment whereby the Adjudicating Authority directed the issuance of show‐cause notice to the petitioner under Section 8(1), PMLA, cannot be sustained. Petition allowed.
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