TMI Blog2014 (10) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... must be lifted if it is found that the scheduled offence, on the basis of which attachment was effected, does not exist. In absence of a scheduled offence, the question of existence of any proceeds thereof, do not arise. The proceedings before the Appellate Tribunal emanate from the order of an Adjudicating Authority passed on 04.02.2011. It is, thus apparent that the Appellate Tribunal would consider the merits of that order. In the present case, an intervening event has occurred inasmuch as the accused of the schedule offence has been acquitted. In the circumstances, it prima facie appears that the attachment order ought to be vacated. The petitioner has already filed a representation before the respondent on 23.04.2013, which is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the respondent alleging commission of offences under the PMLA. It is asserted by the petitioner that the basis of the said case was a scheduled offence, which was alleged to have been committed by one Dr. Jeevan Kumar and was a subject matter of case no. 7/2008. 4. It is asserted by the petitioner that in the said case (ECIR/7/DZ/2008) a provisional order (No. 6/2010) was passed on 09.09.2010, attaching his various properties. It is contended that this order was passed on the basis that Dr. Jeevan Kumar, who was accused of being involved in illegal kidney transplantation racket, had committed a punishable offence under Section 307 of the IPC which was a scheduled offence under the PMLA. Subsequently, respondent filed a complaint (OC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the PMLA would also stand vacated. 8. Mr. Jain, the learned Additional Solicitor General (ASG) appearing for the respondent, raised a preliminary objection and pointed out that the petitioner had already preferred an appeal to the Appellate Tribunal against the Adjudicating Authority s order dated 04.02.2011, confirming the provisional order of attachment, and the same was pending. He further submitted that the contentions urged by the petitioner in this petition were also the subject matter of a separate application filed by the petitioner before the Appellate Tribunal and the same was also pending consideration. He submits that in these circumstances the appropriate Authority to consider the contentions urged would be the Appellate T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, in such manner as may be prescribed: PROVIDED that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973, or a complaint has been filed by a person authorized to investigate the offence mentioned in that Scheduled, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country: PROVIDED FURTHER that, notwithstanding anything contained in clause (b), any property of any person may be attached under this section if the Director or any other officer not below the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of crime and projecting it as untainted property shall be guilty of offence of money-laundering. 15. The plain language of Section 3 indicates that an offence of money laundering is premised on existence of proceeds of crime . The proceeds of crime are properties that are derived or obtained as a result of criminal activity relating to a scheduled offence. As discussed earlier, proceeds of crime - by its definition are nonexistent if the scheduled offence which is stated to give rise to those proceeds is itself negated. Accordingly, acquittal of a concerned person of charges of a scheduled offence, ipso facto, erodes the foundation of the offence of money laundering. 16. Section 8(5) of the PMLA as it existed prior to the 2013 am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned ASG that acquittal of the person after trial of a scheduled office would not release the order of attachment under PMLA till the trial for an offence under Section 3 of the PMLA is completed. This contention is based on an erroneous assumption that a trial for an offence of money laundering under the PMLA would survive. One is hard pressed to imagine how a trial for an offence of money laundering can continue where the fundamental basis the commission of a schedule offence in this case offence under Section 307 IPC has been found to be disproved. 19. It necessarily follows that the attachment of a property is liable to be vacated if the existence of a scheduled offence is negated. Clearly, attachment of proceeds of crime cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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