2020 Supreme(Bom) 1301

IN THE HIGH COURT OF BOMBAY AT GOA
M.S. SONAK, M.S. JAWALKAR, JJ.
Digambar Kamat & Others – Appellant
Versus
Joint Director (PJZO), Directorate of Enforcement & Others – Respondent
Appeal Under Prevention of Money Laundering Nos. 1 of 2019, 2 of 2019 & 3 of 2019
Decided On : 26-10-2020

The main legal point established in the judgment is that the predicates in Section 5(1)(a) and (b) of the PMLA must be construed conjunctively, and the expression 'and' connecting the predicates cannot be read as 'or'. The court also emphasized the importance of recording reasons for the belief in compliance with Section 5(1) of the PMLA.

Headnote:

Money Laundering - Attachment of Properties - Prevention of Money Laundering Act, 2002 (PMLA) - Section 5(1)

Fact of the Case:

The case involved appeals against the order of the Appellate Tribunal for SAFEMA, FEMA, PMLA, NDPS, PBPT Act at New Delhi, regarding the attachment of properties under the Prevention of Money Laundering Act, 2002 (PMLA). The properties in question were provisionally attached by the Joint Director - ED under Section 5(1) of the PMLA.

Finding of the Court:

The court found that the attachment order was vitiated for non-compliance with the predicates of Section 5(1)(b) of the PMLA. The court held that there were no reasons recorded by the Joint Director to support the belief that the proceeds of crime were likely to be concealed, transferred, or dealt with in any manner by the accused to frustrate confiscation proceedings under the PMLA. The court also found that the directions issued by the Tribunal were unsustainable and not contemplated under the PMLA.

Issues: The issues included the compliance with the predicates of Section 5(1)(b) of the PMLA, the validity of the provisional attachment order, and the propriety of the directions issued by the Tribunal.

Ratio Decidendi: The court held that the predicates in Section 5(1)(a) and (b) of the PMLA must be construed conjunctively, and the expression 'and' connecting the predicates cannot be read as 'or'. The court also emphasized the importance of recording reasons for the belief in compliance with Section 5(1) of the PMLA.

Final Decision: The court allowed one appeal, dismissed two appeals, set aside the impugned order, and directed the Special Court to dispose of the case expeditiously. The court also accepted the statement made by the appellants regarding the non-alienation of properties and directed the appellants to abide by the statement.