Property Attachment Under PMLA Upheld as Appellant Failed to Prove Property Was Not Proceeds of Crime

Case Details: Chanda Singh v. Joint Director, Directorate of Enforcement - [2024] 166 taxmann.com 440 (SAFEMA-New Delhi)

Judiciary and Counsel Details

• V. Anandarajan, Member

Facts of the Case

In the instant case, an investigation by ED revealed that one ‘B’, after being elected as a Member of the Jharkhand Legislative Assembly and while working as a Minister of Health and Labour, Government of Jharkhand, had acquired properties beyond his source of income.

The said assets were acquired in his own name and in the names of his relatives. In pursuance of proceedings so initiated, the Director of Enforcement formed a reasonable belief that certain properties were involved in ‘Proceeds of crime’ u/s 2(1)(u) of the PMLA, 2002, were required to be attached for the purpose of an ongoing investigation. Accordingly, he issued an order for provisionally attaching certain movable and immovable properties, including the subject property.

The Adjudicating Authority confirmed the said order. The appellant, being one of the relatives of ‘B’, challenged the said order on the ground that the subject land standing in the name of her late husband was also attached by AA.

According to the appellant, her husband had purchased the subject land out of his hard-earned, and the mere fact that the appellant was a relative of the accused did not allow the Directorate to draw an inference that the said money belonged to the accused.

It was noted that the appellant’s contentions were also not sustainable either on facts or under law. However, respondents had brought enough material on record to confirm the attachment of the subject properties.

Further, the burden of proving that the property possessed by the appellant was not the proceeds of crime and where untainted properties were squarely upon the appellant, which had remained undischarged.

Appellate Tribunal Held

The Appellate Tribunal held that the claim of deriving substantial income from legal sources and having purchased the subject property out of legitimate income had remained an empty claim. Thus, there were no reasons to interfere with the impugned order, and accordingly, an instant appeal was to be dismissed.

List of Cases Referred to

• Som Prakash v. State of Delhi (1974) 4 SCC 84 (para 65)
• Ram Krishna Bedu Rane v. State of Maharashtra (1973) 1 SCC 366 (para 75).