Property Attachment Under PMLA Remanded for Fresh Consideration Due to Narrow Interpretation of ‘Proceeds of Crime’ | AT-SAFEMA

Case Details: Deputy Director Directorate of Enforcement v. Raj Kumar Goyal - [2024] 169 taxmann.com 424 (SAFEMA-New Delhi)

Judiciary and Counsel Details

• Munishwar Nath Bhandari, Chairman & Rajesh Malhotra, Member
• Ms Nidhi Raman, Adv. for the Appellant.
• Ms Nidhi Mittal, Adv. for the Respondent.

Facts of the Case

In the instant case, the FIR was registered in pursuance to a direction of the High Court as serious allegation existed against respondents alleging that corruption was committed by respondent under the Mahatama Gandhi National Rural Guarantee Scheme.

The Property of the respondent was attached by the Provisional Attachment Order passed by ED. However, the attachment was not confirmed by the Adjudicating Authority vide the impugned order on the ground that ED was not authorized to attach property other than which was involved directly or indirectly in the commission of crime and derived or obtained out of criminal activity pertaining to scheduled offence.

Thereafter, ED filed an instant appeal against the impugned order. It was noted that ED could not attach any other property than proceeds of crime. Further, the proceeds of crime could not be given narrow meaning rather it has three limbs which are independent and are applicable independently in a given situation.

Appellate Tribunal Held

The Appellate Tribunal observed that the Adjudicating Authority committed grave illegality in taking the narrow meaning or giving a different construction to the definition of ‘proceeds of crime’ than legislated by the legislature, and the Courts had no authority to nullify any definition, though the Constitutional Court declared it to be ultra vires.

The Appellate Tribunal held that there were reasons to cause interference in the impugned order which was to be set aside with the remand of the case for a fresh consideration and, thus, the instant appeal was to be allowed.

List of Cases Reviewed

• Shri Sadananda Nayak v. Directorate of Enforcement, Bhubaneswar, in the case of (Appeal No. 5612/2023), decided on 14.10.2024, (para 10), followed