Acquittal In Predicate Offence Won't By Itself End PMLA Proceedings : Solicitor General Tells Supreme Court

Responding to a batch of petitions challenging the procedures under the Prevention of Money Laundering Act, Solicitor General of India Tushar Mehta on Thursday told the Supreme Court that "the impression which is created that at the drop of the hat, searches are conducted and attachments are made under the PMLA" is not correct."In the last 17 years, investigation was carried out in 4700 matters by using investigating tools available under the PMLA. This includes only 388 searches in 17 years! The reason is the high threshold and responsibility and layers of safeguards in the Act. Proceeds of crime worth Rs.98,000 crores were identified and attached under section 5 of PMLA, out of which proceeds of crime of 55, 899 crores have been confirmed by the adjudicating authority and a substantial part of the attached proceeds of crime are still under adjudication by the adjudicating authority. 853.63 crores have already been confiscated to the central government under the orders of the courts", he submitted.Continuing, he advanced, "The investigation in 56 cases of terror and naxal financing has resulted in identification of proceeds of crime of 1249 crores and attachment of proceeds of crime of 982 crores, that is 256 properties, and filing 37 prosecution complaints and conviction of two terrorist under the PMLA. The attachment of proceeds of crime include properties of Hafiz Mohammad Sayeed- a UN designated terrorist, Syed Salahuddin- the head of Hijbul Mujahideen and Iqbal Mirchi- who was involved in Mumbai blasts and is an international narcotics smuggler"On Thursday, the Court discussed if attachment of property involved in money laundering can be effected by the Enforcement Directorate under section 5 of the PMLA Act even before the registration of the predicate offence.Section 5(1) provides that where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that-(a) any person is in possession of any proceeds of crime; and(b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, 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 Cr. P. C. or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, 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 first proviso, any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act.Isn't registration of FIR in predicate offence necessary for attachment under second proviso to Section 5? Bench asksAt the outset, Justice A. M. Khanwilkar asked, "So as per the first proviso, the police report under 173 ought to have been forwarded to the magistrate before an order of attachment is made? Once he has passed the order, where is the question of the second proviso coming in?"The SG responded that the exception to this general rule in the first proviso is found in the second proviso. "The ED officer has to record reasons why attachment is immediately necessary and why he should not wait for the police report to be filed. Because in all cases it may not be desirable to wait for the complaint or the chargesheet to be filed"Justice Khanwilkar noted, "That very aspect is reflected in clause (b) of subsection (1) also, which says that if such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings, the officer may provisionally attach such property"Justice Dinesh Maheshwari observed, "We are noticing that in fact this section 5, as originally standing, was amended in 2013. The requirement earlier was that the person has been charged with committing a scheduled offence. In 2013, it was modulated, that particular aspect has been taken away. We would like to know the progression,...

Acquittal In Predicate Offence Won't By Itself End PMLA Proceedings : Solicitor General Tells Supreme Court

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Acquittal In Predicate Offence Won't By Itself End PMLA Proceedings : Solicitor General Tells Supreme Court

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