SAFEMA Set Aside Attachment of Amount Seized by CBI for Ignoring Sec. 5(1)(b) of PMLA | Reattachment Allowed Post-Release

Case Details: Venkateshwar Rail Nirman (P.) Ltd. v. Deputy Director, Directorate of Enforcement - [2024] 167 taxmann.com 306 (SAFEMA-New Delhi)

Judiciary and Counsel Details

• Munishwar Nath Bhandari, Chairman & Balesh Kumar, Member
• Arshdeep Singh Khurana, Sulakshan S.V., Nikhil Pawar, R.K. Mohit Gupta & Ankur Chawla, Advs. for the Appellant.
• Aditya Singla, Adv. for the Respondent.

Facts of the Case

In the instant case, an FIR was registered for an offence under Section 120-B IPC read with Sections 7,8 and 10 of the Prevention of Corruption Act, 1988 (PC Act). It was alleged that one M, a Member of the Staff Railway Board, along with others, committed an offence under the Act in connivance, thereby attracting an offence under Section 120-B of the IPC.

The amount of Rs.89.68 lakh was recovered by the CBI and seized under the order of the CBI Court. The respondent subsequently attached the amount. It was noted that the attachment of property is permitted when it is likely to be concealed, transferred or alienated to frustrate proceedings of confiscation.

In the instant case, the CBI seized the `proceeds of crime’, and the amount now remains under seizure pursuant to an order of the CBI Court. However, the ED failed to clarify how the said amount was likely to be concealed, transferred, or dealt with in any manner that would frustrate confiscation proceedings.

Appellate Tribunal Held

The Appellate Tribunal held that the attachment of the amount was made in ignorance of the mandate of Section 5(1)(b) of the 2002 Act and, accordingly, the attachment was to be set aside.

However, liberty was granted to re-attach the amount if it was released by the CBI Court. Therefore, the respondent would be at liberty to pass a fresh order of attachment of the amount, if so warranted at the relevant time and for it, the instant order would not come in their way.