• Enforcement Department : Prevention of Money Laundering Act

My late father was a class one government officer in Karnataka. Lokayukth raided his house in 2012. Although, nothing was proved in the Lokayukth case, Enforcement Department (E.D.), filed a "Prevention of Money Laundering Act" case, based on the Lokayukth findings. This case was filed on 2017.

In Jan 2018, my father expired due to a hear attack. 
Due to his death, in Feb 2018, Lokayukth case was dropped by the "Session Court" in Bijapur, Karnataka.

On 8th February 2018, we received 1st Summons from E.D. for hearing regarding our property to be confiscated under money laundering. 
This hearing is in front of Deputy Director of E.D. in New Dehli.
E.D. has given summons in the name of each (all) family members (including my father) who have joint property with my father.

My question is, when Lokyukth case has been dropped due to my fathers death. Can E.D. continue its case, on remaining family members (Nothing against us was proven and it is NOT true either)?
 
Based on what will the E.D. case continue, especially, when the concerned person who is supposed give an explanation is no more.

Many of our local advocates are unaware of E.D. process. Please help us to know how we can proceed with this case, and what are the chances of this case also getting dropped.
Asked 4 years ago in Criminal Law
Religion: Hindu

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13 Answers

Ed case is Registered on the findings of lokayukta case but based in the unaccounted assets if any. If no evidence is found you will get discharge in the same. You can also file quashing under section 482 Crpc in HC for the same.

Prashant Nayak
Advocate, Mumbai
27267 Answers
88 Consultations

4.4 on 5.0

Hello,

As per Sections 48 & 49 of the PMLA, the officers of the Directorate of Enforcement have been given powers to investigate cases of Money Laundering. The officers have also been authorised to initiate proceedings for attachment of property and to launch prosecution in the designated Special Court for the offence of money laundering.

Also the lokayukt proceeding and ED proceedings are two different things and therefore ED can proceed, tell them about the lokayukt case and ask them to clise the investigation.

No case can continue against a dead person.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

Section 5(1) second proviso specifically allows attachment of property in the hands of a third person even without there being a prosecution qua that person under the PMLA. It provides that if the designated officer has reason to believe that the property in possession of such person is involved in Money-Laundering, and non-attachment will frustrate any proceedings under the Act, he can go ahead and attach the same.

2) case can be continued against family members

3) in order to avoid confiscation, you have to prove the legitimate sources of father income, earning or assets, out of which or by means of which he has acquired the property attached, the evidence on which he relies and other relevant information and particulars, and to basically convince the authority as to why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Governme

Ajay Sethi
Advocate, Mumbai
87938 Answers
6207 Consultations

5.0 on 5.0

If the offence under PMLA stands proved, the Special Court shall order confiscation of the property to the Central Government. If the Special Court reaches the conclusion that the offence has not taken place, it shall order release of such property to the person entitled to receive it.

2) Decisions of the adjudicating authority of first instance can be appealed to the Appellate Tribunal created under the Act.

Ajay Sethi
Advocate, Mumbai
87938 Answers
6207 Consultations

5.0 on 5.0

Section 4 of PMLA prescribes the punishment for Money-Laundering as under:

Rigorous Imprisonment for a term

which shall not be less than 3 years, but

which may extend to 7 years/10 years, and

shall also be liable to fine

Ajay Sethi
Advocate, Mumbai
87938 Answers
6207 Consultations

5.0 on 5.0

1. yes, you can file a quash petition petition before the High Court, Karnataka to quash the summon issued by the E.D. The Enforcement directorate is not a body to enquire or conduct the proceedings against the public servant.

2. When the case filed against your father before the Lokayukta being terminated, the Enforcement Directorate cannot proceed the case further on the very same allegations.

3. The E.D cannot confiscated the property when the person allegedly accused in the summon is no more.

4. When the case is filed under the prevention of corruption act before the Lokayukta Karnataka, the family members of the said Government Servant cannot be included as co-accused to the said allegations.

5. Assuming, if the ED has jurisdiction to enquire about the corruption charges foist against the public servant, it can only confiscated the property stands on the name of the concern public servant and not the property of his family members. In your case, they might have served the summon to you as being a legal heirs you are vested interest on the property confiscated by them.

6. You can either approach the High Court of Karnataka to quash the summon issued by the E.D or can file appeal against the confiscated order passed before the Deputy Enforcement Directorate, Karnataka.

Selva Perumal
Advocate, Chennai
329 Answers
36 Consultations

4.9 on 5.0

Hi,

ED is simply another enforcement agency like police & CBI and proving the economic offences.

You are being asked to appear to decide to ascertain the money laundering by your father and accumulation of the wealth through illegal means and to decide the quantum of wealth and to request the attachment of the so acquired property.

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

Dear Sir,

As you said it is a rare case and most of the advocates must not have come across such cases. My opinion is on the basis of available merits of your case you may approach High Court for quashing such notice issued by ED and further investigation. Please see my resume you will understand my experience. If interested you may visit my office in Bengaluru with all relevant documents for necessary legal help.

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

Hi,

In the present circumstances, you are suggested not to make a default and appear before ED and ask the copy of accusations against you and family members. After getting the documents from the ED, you may file a case in High court for stay/quash of the proceedings.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

Hello,

Section 4 provides for punishment and it reads as follow

4. Punishment for money-laundering.—Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine which may extend to five lakh rupees: Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words “which may extend to seven years”, the words “which may extend to ten years” had been substituted.

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

Please note that if the offences under PMLA stands proved then the order for confiscation of the property can be passed in furtherance to second proviso of section 5(1) of the PMLA

if order for attachment of the property is passed and If you are not satisfied with the order of the court then you may approach the appellate authority.

Try and show before the court that your father has been wrongly named and that all source of income is legal and legitimate.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

The provisions of section 72 of PMLA, 2002 is given below for your information :

72. Continuation of proceedings in the event of death or insolvency.-(l)

Where(a) any property of a person has been attached under section 8 and no

appeal against the order attaching such property has been preferred; or

(b) any appeal has been preferred to the Appellate Tribunal, and(i)

in a case referred to in clause (a) such person dies or is

adjudicated an insolvent before preferring an appeal to the

Appellate Tribunal; or

(ii) in a case referred to in clause (b), such person dies or is adjudicated an

insolvent during the pendency of the appeal,

then, it shall be lawful for the legal representatives of such person or the official

assignee or the official receiver, as the case may be, to prefer an appeal to the

Appellate Tribunal or as the case may be, to continue the appeal before the

Appellate Tribunal, in place of such person and the provisions of section 26 shall,

so far as may be, apply, or continue to apply, to such appeal.

(2) Where(a) after passing of a decision or order by the Appellate Tribunal, no

appeal has been preferred to the High Court under section 42; or

(b) any such appeal has been preferred to the High Court, then(i)

in a case referred to in clause (a), the person entitled to file the appeal

dies or is adjudicated an insolvent before preferring an appeal to the

High Court, or

(ii) in a case referred to in clause (b), the person who had filed the appeal

dies or is adjudicated an insolvent during the pendency of the appeal

before the High Court, then, it shall be lawful for the legal representatives of such person, or the official

assignee or the official receiver, as the case may be, to prefer an appeal to the High

Court or to continue the appeal before the High Court in place of such person and

the provision of section 42 shall, so far as may be, apply or continue to apply to such appeal.

T Kalaiselvan
Advocate, Vellore
78097 Answers
1543 Consultations

5.0 on 5.0

To your subsequent question the following provisions of law will be applicable:

63. Punishment for false information or failure to give information, etc.-

(1) Any person wilfully and maliciously giving false information and so causing an

arrest or a search to be made under this Act shall on conviction be liable for

imprisonment for a term which may extend to two years or with fine which may

extend to fifty thousand rupees or both.

(2) If any person,-

(a) being legally bound to state the truth of any matter relating to an

offence under section 3, refuses to answer any question put to him by

an authority in the exercise of its powers under this Act; or

(b) refuses to sign any statement made by him in the course of any

proceedings under this Act, which an authority may legally

require to sign; or

(c) to whom a summon is issued under section 50 either to attend to give

evidence or produce books of account or other documents at a certain

place and time, omits to attend or produce books of account or

documents at the place or time,

he shall pay, by way of penalty, a sum which shall not be less than five hundred

rupees but which may extend to ten thousand rupees for each such default or

failure.

(3) No order under this section shall be passed by an authority referred to in

sub-section (2) unless the person on whom the penalty is proposed to be imposed

is given an opportunity of being heard in the matter by such authority.

(4) Notwithstanding anything contained in clause (c) of sub-section (2), a

person who intentionally disobeys any direction issued under section 50 shall

also be liable to be proceeded against under section 174 of the Indian Penal Code

(45 of 1860).

T Kalaiselvan
Advocate, Vellore
78097 Answers
1543 Consultations

5.0 on 5.0

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