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2022 (9) TMI 1287 - HC - Money LaunderingMoney Laundering - continuation of attachment of the property of the appellant - seeking direction to the respondent to release the said property from attachment - validity of SCN - Non-application of mind - HELD THAT:- It is evident that Appellate Tribunal found that the notice under Section 8(1) was not in conformity with the requirement of the statute and that the adjudicating authority did not form any reason to believe that the noticee had committed an offence under Section 3 or is in possession of proceeds of crime. Therefore, the very foundation for issuance of notice under Section 8(1) was absent. Various other flaws vitiating the order of the adjudicating authority were pointed out by the Appellate Tribunal observing that the same reflected non-application of mind. Appellate Tribunal opined that no purpose would be served by continuing with the attachment. Since the trial before the Special Court may take a number of years, therefore, the State Government may take a stand about the project. However, despite saying so Appellate Tribunal adverted to Section 8(8) of PMLA including the second proviso and relegated the appellant to the Special Court to seek release of the attached property holding that till such time attachment would continue. Though Appellate Tribunal extracted Section 8(8) of PMLA, it did not say that it had passed the order of relegation on the basis of the aforesaid provision. On going through the findings returned by the Appellate Tribunal vis-à-vis the provisional attachment order and the order of the adjudicating authority on one hand and the conclusions of the Appellate Authority on the other hand, it is evident that the conclusions are not consistent with the findings returned by the Appellate Tribunal; rather wholly inconsistent. Appellate Tribunal has held that while carrying out the provisional attachment, the attaching authority did not record reason to believe that the petitioner is in possession of any proceeds of crime and that such proceeds of crime were likely to be concealed, transferred etc., which may frustrate any proceedings relating to confiscation of such proceeds as is the mandatory requirement under Section 5(1) of PMLA. Appellate Tribunal also found fault with the approach adopted by the adjudicating authority in overlooking the above conditions. The show cause notice under Section 8(1) of PMLA was issued in a mechanical manner without application of mind and without forming any reason to believe that the noticee had committed an offence under Section 3 or was in possession of proceeds of crime. The adjudicating authority did not record any reason that the provisional attachment should continue. While the Appellate Tribunal is correct in holding that the provisional attachment order and the order of the adjudicating authority confirming attachment suffered from fundamental flaws, thus being without jurisdiction, it fell short of declaring such orders as illegal; it further fell in error in relegating the appellant to the forum of Special Court to seek release of the attached property as it amounts to abdicating its authority and allowing an illegality to continue. The respondent are directed to release the attached property i.e., 855.7130 acres of land in Prakasham and Guntur districts of Andhra Pradesh as per Annexure – L2 enclosed with the provisional attachment order, to the appellant - appeal allowed.
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