M.D. Odisha Industrial Infrastructure Development Corporation v. Dy. Director Directorate of Enforcement

PREVENTION OF MONEY LAUNDERING ACT, 2002

--Appeal to Appellate Tribunal--Appeal against attachment of property Acquisition of property from proceeds of crime----Where Enforcement Directorate failed to establish that the property in question was acquired out of proceeds of crime, then, the provisional attachment order passed against the property was perverse and contrary to law.--Appellant was a software company. A plot was allotted to company on lease for establishment of Software Development Centre. Later on, bank sanctioned a loan facility to company. However, Enforcement Directorate (ED) provisionally attached the property of the company under section 5 on the ground that the property in question was acquired out of the proceeds of crime by way of bank loan, which was scheduled offence under the Act. Adjudicating Authority also confirmed the attachment order under section 8. Therefore, company filed an appeal under section 26 on the ground that the property in question was not acquired out of any proceeds of crime as per section 2(1)(u), because it had purchased the property much prior to the date of sanction of loan. Further that, there was no material to form reason to believe that the property in question was obtained from the proceeds of crime and liable for attachment. Held: Evidence on record suggested that the company had purchased the property much prior to sanction of loan, thus, the amount paid for acquisition of property could not be in any manner out of the proceeds of crime nor it could be treated as tainted money. ED and Adjudicating Authority failed to record any reasons in writing while attaching the property in question. Hence, the provisional attachment order being perverse and contrary to law was set aside.