DEPUTY DIRECTOR Vs. AXIS BANK

JUDGEMENT

(1.) These five appeals presented under Section 42 of the Prevention of Money-Laundering Act, 2002 ("PMLA", for short) against more or less similar orders of the appellate tribunal (constituted under Section 25), such orders having been rendered on appeals of the respondents ("banks") vis-a-vis the orders of provisional attachment issued by the enforcement officers under Section 5 , as confirmed by the adjudicating authority under Section 8 , give rise, inter alia, to certain common questions of law of import concerning nature of property that may be attached under this special law as indeed the conflict arising from claim of bonafide acquisition of interest by third parties. Hence, they have been heard together and are being decided by this common judgment.

(2.) The measure of attachment of property involved in "money laundering", it essentially representing "proceeds of crime" (as defined in law), is provided to ensure that the ultimate objective of "confiscation" of such ill-gotten property be not frustrated, the power and jurisdiction to order confiscation being vested in the Special Court. As would be seen at length in later part of this judgment, the provisions for attachment (followed by adjudication) leading to confiscation are sanctions in addition to the criminal sanction rendering the act of "money laundering" a penal offence (by virtue of section 4 ). The order of "confiscation" of property attached under PMLA takes away the right and title of its owner and vests it "absolutely in the Central Government free from all encumbrances" ( Section 9 ).

(3.) The appeals at hand relate to claims of entities other than the persons in whose name the attached properties are held - to be referred hereinafter as "third party" - such claims of the third party emanating from charge, lien or encumbrances legitimately created. To put it simply, the conflict meriting resolve here concerns the sovereign authority of the State to take away and confiscate the property which has been acquired by a person through criminal activity as against the lawful claim of a third party to reach out to such property to recover, in accordance with law, what is due by attachment and sale of same very property. Crl. Appeal No.143/2018 & others Page 4 of 105