Rashid Ali Vs Deputy Director (Appellate Tribunal Under SAFEMA Delhi)
SAFEMA Tribunal Upholds PMLA Attachment After Accused’s Death, Directs Legal Heir to Seek Relief Before Special Court
The Appellate Tribunal under SAFEMA disposed of the appeal filed by Rashid Ali, legal heir of the deceased Sabir Ali, holding that the provisional attachment of property under the PMLA does not become invalid merely because the accused died before the attachment order was issued. The case arose from an alleged scholarship scam in Uttar Pradesh involving fraudulent disbursement of government funds through fake student records at Ajijia Montessori School, where Sabir Ali served as Manager. The ED attached agricultural land to the extent of ₹9.24 lakh, representing the alleged proceeds of crime or their equivalent value.
The Tribunal rejected the appellant’s contention that proceedings could not continue after the death of Sabir Ali. It distinguished the Supreme Court’s decision in U. Subhadramma v. State of A.P., holding that the attachment mechanism under the PMLA is materially different from the Criminal Law Amendment Ordinance considered in that case. It observed that Section 5 of the PMLA does not require prior notice before provisional attachment, and the statutory requirement under Section 8(1) was duly satisfied by issuing notice to the legal heir, who was entitled to represent the estate before the Adjudicating Authority. The Tribunal also upheld attachment of the property as “equivalent value” under Section 2(1)(u), relying on Vijay Madanlal Choudhary, Axis Bank, Prakash Industries, and Dilbag Singh, while noting that Seema Garg no longer represents the correct legal position.
While declining to interfere with the attachment, the Tribunal clarified that Section 8(7) of the PMLA specifically provides a remedy where the trial cannot be concluded due to the death of the accused. It therefore disposed of the appeal with liberty to the legal heir to approach the Special Court under Section 8(7) for appropriate orders regarding confiscation or release of the attached property after consideration of the available material.
Cases Discussed
- Deputy Director Directorate of Enforcement vs. Amlendu Pandey (D) Through LR (Delhi HC), Misc. in Appeal (PMLA) 8/2022, Judgment dated 21.11.2025
- Dilbag Singh vs. Union of India & Ors. (Punjab & Haryana HC), MANU/PH/3575/2024, Judgment dated 13.11.2024
- Prakash Industries Ltd. v. Directorate of Enforcement (Delhi HC), 2022 SCC OnLine Del 2087
- Vijay Madanlal Choudhary (SC), 2022 SCC OnLine SC 929
- Subhadramma v. State of A. P. (SC), (2016) 7 SCC 797 : (2016) 3 SCC (Cri) 236
- Axis Bank (Delhi HC), 2019 SCC OnLine Del 7854
- Amlendu Pandey vs. The Deputy Director, Directorate of Enforcement, Mumbai, FPA-PMLA-1431/MUM/2016
- Seema Garg Vs. Deputy Director, Directorate of Enforcement (Punjab & Haryana HC), 2020 SCC OnLine Punjab & Haryana 738
- Kumar Pappu Singh Vs. Union of India
- HDFC Bank Limited Vs Government of India, Ministry of Finance
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
This Order disposes of the Appeal No. FPA-PMLA-4340/ LKW/2021 filed by Shri Rashid Ali, against the Order dated 21.09.2021 (Impugned Order) passed by the Ld. Adjudicating Authority (AA) under the Prevention of Money Laundering Act, 2002 (PMLA) in the Original Complaint No. 1462/2021 (OC). The Provisional Attachment Order No. 05/2021 dated 26.03.2021 (PAO) issued in ECIR No. ECIR/18/PMLA/LZO/2012 dated 30.07.2012 was confirmed vide the Impugned Order. The immovable property comprising of agricultural land of area 0.113 Hectares, Gata No. 2908 (Ga), Village Balrampur Dehat, Pargana Tehsil and District Balrampur bearing Sale Deed No. 1523/2009 dated 08.04.2009 to the extent of Rs. 9,24,450/- of the total value Rs. 60,98,000/- was attached.
2. Ld. Counsel for the Appellant submitted that the investigationin the m atter was initiated on the basis of FIR No. 148/2011 registered by Uttar Pradesh Police, Thana Kotwali Dehat on 25.10.2011 under Section 409, 419 and 420 of IPC on the basis of Complaint by Shri Rajesh Kumar Singh, the then District Statistical and Economical Officer, Balrampur for the alleged financial fraud involving Rs. 90,85,000/-. As per the Chargesheet No. 08/2012 dated 08.09.2012, the number of students shown by New India Public School, Maheshbhari and Ajijia Montessori School, Balrampur was not found correct during physical inspection. On perusal of the evidences, it was established that no scholarship was given to students studying in both these schools. No evidence of distribution of scholarship was submitted by Shri Sanjeev Kumar Srivastava, Manager of New India Public School, whereas Sh. Sabir Ali, Manager of Ajijia Montessori School submitted fraudulent documents and on perusal of those documents it was found that no scholarship was distributed. In this way, the Government fund was misused by receiving and disbursing with the help of forged documents by these persons in connivance with Sh. P. N. Pandey, then In-charge, District Handicapped Welfare Officer, and Mohd. Halim Khan, Senior Clerk/In-charge Accounts. For this offence u/s 409, 419, 420, 467, 468 of IPC and under Section 7 and 13 of Prevention of Corruption Act, 1988, the Managers/ Coordinators of these schools namely Sh. Anoop Kumar Srivastava, Sh. Sanjeev Kumar Srivastava, Sh. Ramsagar Chaudhary and Sh. Sabir Ali were charge sheeted.
3. Ld. Counsel for the Appellant further submitted that during the course of investigation under PMLA, Shri Sabir Ali s/o Shri Mubarak Ali, the then Manager/Coordinator of Ajijia Montessori School, Nahar Balaganj, Balrampur in his statements dated 17.04.2013, 18.12.2013 and 09.10.2018 recorded under Section 50 of PMLA stated that he was working as Manager/Coordinator in Ajijia Montessori School, Balrampur and he was fully responsible for all the financial and administrative related work of his school. Rs. 2,41,400 and Rs. 2,16,550 were deposited through transfer in his school account no 20830761518 of Allahabad Bank on 04.09.2009. Rs. 4,66,500 was deposited through transfer on 10.07.2009 in Bank of India, Balrampur bank account no 684110100021616 in the name of his school. The total amount of Rs. 9,24,450/- was deposited as scholarship by District Social Welfare Office, Balrampur in the accounts of his school. He had distributed the above-mentioned amount amongst the students of his school studying from Class Nursery to Class 5 @ Rs 300 per student and from Class 6 to 8 @ Rs. 480 per student. Shri Sabir Ali in his statement dated 17.04.2013 submitted the copy of the Registration Deed No. 1523/2009 dated 08.04.2009 of the impugned property showing that he had purchased the same for Rs. 3,00,000/-. Ld. Counsel submitted that during the service of PAO, it emerged that Shri Sabir Ali had expired therefore his legal heir Shri Rashid Ali was made a Defendant.
4. Ld. Counsel for the Appellant contended that the PAO was non-est as the present case arose out of the scheduled offence allegedly committed by the father of the Appellant who had expired before the PAO was passed. Shri Sabir Ali died on 02.12.2019. However, the PAO was issued subsequent to his death on 26.03.2021. He cited the Judgment of Hon’ble Supreme Court in the matter of U. Subhadramma v. State of A. P. [(2016) 7 SCC 797 : (2016) 3 SCC (Cri) 236]. He also cited the Judgment dated 21.05.2019 of this Tribunal in the matter of Amlendu Pandey vs. The Deputy Director, Directorate of Enforcement, Mumbai (FPA-PMLA-1431/MUM/2016). He argued that Section 72 of PMLA is applicable under the circumstances when the PAO has been adjudged and not at prior stage. Ld. Counsel asserted that the Appellant has nothing to do with the alleged scheduled offence and the offence of money laundering. Moreover, the alleged proceeds of crime amounting to Rs. 9,24,450/- came into the school account of Ajijia Montessori School, Balrampur on 04.09.2009 and 10.07.2009. However, the impugned property had been purchased by Shri Sabir Ali on 08.04.2009 i.e. before the proceeds of crime travelled to him. Ld. Counsel stated that even the attached property does not have nexus with the alleged proceeds of crime and the Respondent had to rely upon the concept of the value thereof to do the attachment. Ld. Counsel cited the judgment of Punjab and Haryana High Court in the case of Seema Garg Vs. Deputy Director, Directorate of Enforcement, reported in (2020 SCC OnLine Punjab & Haryana 738). Ld. Counsel reiterated that the property of already dead person could not be attached. Ld. Counsel therefore pleaded to allow the Appeal.
5. Ld. Counsel for the Respondent submitted that Shri Sabir Ali received money for scholarship for the student studying in Ajijia Montessori School, Balrampur of which he was the Manager. However, he did not distribute the said scholarship though he tried to show it otherwise through fraudulent document. Ld. Counsel drew attention to the investigations which revealed that Shri Sabir Ali had withdrawn cash from the bank accounts of Ajijia Montessori School, Balrampur. Ld. Counsel further stated that the attachment is a civil proceeding and unlike criminal proceeding it does not abate with the death of the accused person. Ld. Counsel also argued that the FIR in the case was registered in April, 2008 and the impugned property was admittedly purchased in April, 2009. He also stated that since the cash drawn by Shri Sabir Ali from the bank accounts of the school was exhausted, the Respondent had no choice but to provisionally attach the value of such proceeds of crime in accordance with the provisions of Section 2 (1)(u) of the PMLA. Ld. Counsel further argued that the date of death had been suppressed by the Appellant. The legal heir of Shri Sabir Ali had not informed above the facts of his demise. Ld. Counsel therefore pleaded to dismiss the Appeal.
6. We have considered the rival submissions and the material on record. It is not disputed that Shri Sabir Ali was allegedly involved in the scheduled offence and the offence of money laundering and it was not the Appellant Shri Rashid Ali, his son, against whom any allegation has been made. Prima facie the facts of the case do show that Rs. 9,24,450/- which arose out of the financial irregularity reached the accounts of Ajijia Montessori School, Balrampur of which Shri Sabir Ali, the father of Shri Rashid Ali was the Manager. The Respondent has put forth the investigation which reveals that the said money was drawn in cash by Shri Sabir Ali. We also find that the impugned property which has been attached is only to the extent of Rs. 9,24,450/-, the alleged proceeds of crime. Such attachment is in accordance with the definition of proceeds of crime.
7. Section 2 (1)(u) of PMLA defines the proceeds of crime as
“2. Definitions.—(1) In this Act, unless the context otherwise requires,
“(u) “proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad;
Explanation. For the removal of doubts, it is hereby clarified that “proceeds of crime” include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence.”
At this stage, we may refer to Para 68 of the Judgment (by the Hon’ble Supreme Court) in the case of Vijay Madanlal Choudhary (2022 SCC OnLine SC 929) which is quoted hereunder.
“68. It was also urged before us that the attachment of property must be equivalent in value of the proceeds of crime only if the proceeds of crime are situated outside India. This argument, in our opinion, is tenuous. For, the definition of “proceeds of crime” is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property. If the property is taken or held outside the country, even in such a case, the property equivalent in value held within the country or abroad can be proceeded with. The definition of “property” as in Section 2(1)(v) is equally wide enough to encompass the value of the property of proceeds of crime. Such interpretation would further the legislative intent in recovery of the proceeds of crime and vesting it in the Central Government for effective prevention of money laundering.”
Elaborate Judgment to define the “proceeds of crime” was given by the Hon’ble Delhi High Court in the matter of Axis Bank (2019 SCC OnLine Del 7854). The relevant paras are quoted herein:
“106. Among the three kinds of attachable properties mentioned above, the first may be referred to, for sake of convenience, as “tainted property” in as much as there would assumable be evidence to prima facie show that the source of (or consideration for) its acquisition is the product of specified crime, the essence of “money laundering” being its projection as “untainted property” (Section 3). This would include such property as may have been obtained or acquired by using the tainted property as the consideration (directly or indirectly). To illustrate, bribe or illegal gratification received by a public servant in form of money (cash) being undue advantage and dishonestly gained, is tainted property acquired “directly” by a scheduled offence and consequently “proceeds of crime”. Any other property acquired using such bribe as consideration is also “proceeds of crime”, it having been obtained “indirectly” from a prohibited criminal activity within the meaning of first limb of the definition.
107. In contrast, the second and third kinds of properties mentioned above would ordinarily be “untainted property” that may have been acquired by the suspect legitimately without any connection with criminal activity or its result. The same, however, are intended to fall in the net because their owner is involved in the proscribed criminality and the tainted assets held by him are not traceable, or cannot be reached, or those found are not sufficient to fully account for the pecuniary advantage thereby gained. This is why for such untainted properties (held in India or abroad) to be taken away, the rider put by law insists on equivalence in value. From this perspective, it is essential that, before the order of attachment is confirmed, there must be some assessment (even if tentative one) as to the value of wrongful gain made by the specified criminal activity unless it be not possible to do so by such stage, given the peculiar features or complexities of the case. The confiscation to be eventually ordered, however, must be restricted to the value of illicit gains from the crime. For the sake of convenience, the properties covered by the second and third categories may be referred to as “the alternative attachable property” or “deemed tainted property”.
8. The Judgment of Seema Garg (Supra) has been dealt with by the Hon’ble Delhi High Court in the matter of Prakash Industries Ltd. v. Directorate of Enforcement reported in (2022 SCC OnLine Del 2087). The relevant paras are quoted hereunder:
“76. Seema Garg principally holds that the phrase value of any such property and property equivalent in value held within the country or abroad cannot be ascribed the same meaning and effect. The learned Judges comprising the Division Bench then proceeded to hold that even if the intent of the legislature was to include any property in the hands of a person within the ambit of the expression proceeds of crime‖, there would be no need to create three limbs of definition of proceeds of crime.
xxxxx
79. Regard must also be had to the fact that the legislation itself is dealing with contingencies where proceeds of crime are layered and their origins camouflaged and masked enabling the accused to project or claim it to be untainted property. The Act clearly as does Axis Bank take into consideration a situation where a person who has obtained proceeds of crime by commission of a scheduled offence has managed to ensure that a property directly or indirectly connected to criminal activity is rendered untraceable. It is to confer authority upon the Directorate to proceed further in such a situation that Section 2(1)(u) uses the expression or the value of any such property. The safeguard which stands constructed in Section 2(1)(u) in such a contingency is that in case the Directorate does proceed against any other property, it must be equivalent in value to the illegal pecuniary benefit or gain that may have been obtained as a result of criminal activity.
80. In the considered opinion of this Court to tie the Directorate’s power to move forward in this direction only in cases where property is taken or held outside the country would not only do violence to the plain language of Section 2(1)(u), it would clearly whittle down the scope and intent of the definition itself. It would essentially amount to erasing the expression value of any such property as appearing in Section 2(1)(u) altogether. The Court further notes that in Seema Garg the learned Judges themselves observed that the phrase value of any such property would not mean and include any property which has no link, direct or indirect, with property derived or obtained from commission of a scheduled offence. The Court observes that Section 2(1)(u) clearly and in unambiguous terms includes not only property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence but also the value of any such property. Seema Garg thus seems to gloss over the statutory imperatives underlying the deployment of the phrase ―or the value of any such property and the concept of deemed tainted properties enunciated in Axis Bank. On a plain textual interpretation of Section 2(1)(u) as well as in the backdrop of the amendatory history of that provision, this Court finds itself unable to agree with the line of reasoning adopted in Seema Garg. As held hereinbefore, affirmation of Seema Garg would amount to virtually deleting the phrase ―or the value of any such property from Section 2(1)(u). That would not only violate the well settled tenets of statutory construction but would clearly amount to the Court rewriting the provision itself in a manner that it stands deprived of vital and purposive content. The Court further notes that Axis Bank had enunciated important safeguards which would apply in respect of third-party interests in deemed tainted property. Those caveats duly secure and protect bona fide third-party interests created for valid consideration. This Court, thus, reaffirms those defences as were culled out in Axis Bank. The Court thus reiterates the interpretation accorded to Section 2(1)(u) by this Court in the aforesaid decision. Consequently, and for all the aforesaid reasons this Court finds itself unable to agree with the principles as laid down in Seema Garg as well as the subsequent decisions rendered by the Andhra Pradesh High Court in Kumar Pappu Singh Vs. Union of India and the Patna High Court in HDFC Bank Limited Vs Government of India, Ministry of Finance.
81. The Court also takes note of the position that although SLP (Crl.) No. 28906/2019 is pending before the Supreme Court against the decision rendered in Axis Bank, the judgement of this Court has not been stayed or placed in abeyance. The interim order of 30 August 2019 passed in the aforesaid Special Leave Petition only requires parties to maintain status quo. Insofar as the judgement of the Punjab and Haryana High Court in Seema Garg is concerned, although SLP (C) No.14713- 14715/2020 preferred against the same came to be dismissed, while doing so the Supreme Court recorded that the petition was being rejected in the peculiar facts and circumstances of the case. The dismissal of the aforesaid Special Leave Petition cannot in any case be interpreted or understood as being an affirmation of the view as expressed by the Punjab and Haryana High Court.”
9. The Hon’ble High Court Punjab and Haryana in the Judgment dated 13.11.2024 in the matter of Dilbag Singh vs. Union of India & Ors. [MANU/PH/3575/2024] has held that the Judgment passed in Seema Garg’s case (supra) is no longer a good law. The relevant paragraphs are reproduced below:
“3.3. The aforesaid observations made by the Supreme Court enable this Bench to re-examine the entire issue, as in the considered opinion of this Bench, the judgment passed in Seema Garg’s case (supra) is no longer a good law. This Court has taken this view due to the subsequent interpretation by the Supreme Court, which has superseded the legal principles established in Seema Garg’s case (supra).
xxxxx
3.8. Moreover, the reasoning adopted in Seema Garg’s case (supra) to the effect that there was no need to insert third part in the definition of the ‘proceeds of crime’ and that ‘value of such property’ is superfluous does not appear sound. It appears that transformative journey of the definition of phrase ‘proceeds of crime’ was not brought to the notice of the Division Bench in Seema Garg’s case (supra). In Abdullah Ali Balsharaf’s case (supra), Delhi High Court inadvertently overlooked the sub-category (i) of second part of definition of ‘proceeds of crime’. Similarly, Andhra Pradesh High Court in Kumar Pappu Singh’s case (supra) was not properly assisted. Furthermore, the attention of Patna High Court was not drawn to part 2(i) in HDFC Bank’s case (supra). Similar is the position in M/s. Himachal Amta Power Limited’s case (supra). In this case, the attention of the Bench was not drawn to the second broader category of the definition. In Hemanshu Rajnikant Shah’s case (supra) the Court relied upon Seema Garg’s case (supra) and held that the properties acquired before the alleged crime and before the enforcement of the ‘2002 Act’ cannot be attached ”
10. Ld. Counsel for the Appellant has emphatically raised the issue that the impugned property was attached on 26.03.2021, however, Shri Sabir Ali had expired on 02.12.2019. Hence, he challenged the attachment on the ground that the property of the dead person could not have been attached. It is clear that the provisional attachment and the confirmation of the impugned property happened only after the demise of Shri Sabir Ali. It is also evident that the allegations are against Shri Sabir Ali and not against the Appellant Shri Rashid Ali, who as legal heir stands in the shoes of his father. The FIR was filed on 25.12.2011 and the chargesheet was filed on 08.09.2012. Ld. Counsel for the Appellant has argued that the trial against the accused Shri Sabir Ali would abate in view of his demise. Ld. Counsel for the Respondent has argued that in view of the provisions of Section 8 (7) of PMLA, the confiscation of the impugned property can still happen in spite of the death of the accused. Ld. Counsel for the Respondent further submitted that the Judgment of Hon’ble Supreme Court in the matter of U. Subhadramma v. State of A. P. is not applicable to the attachment of the properties made under the provisions of PMLA and was issued in the context of different law.
11. The Judgment dated 21.05.2019 of this Tribunal in the matter of Amlendu Pandey vs. The Deputy Director, Directorate of Enforcement, Mumbai (FPA-PMLA-1431/MUM/2016) has been set aside and remanded to the Tribunal for deciding the Appeal afresh vide the Judgment dated 21.11.2025 passed by the Hon’ble High Court of Delhi Misc. in Appeal (PMLA) 8/2022 in the matter of Deputy Director Directorate of Enforcement vs. Amlendu Pandey (D) Through LR. On perusal of the Judgment of Hon’ble Supreme Court in the matter of U. Subhadramma v. State of A. P. [(2016) 7 SCC 797 : (2016) 3 SCC (Cri) 236], we reproduce paragraphs 10 and 11 of the Judgment as follows:
“10. In fact, we find that the learned District Judge could not have proceeded with the attachment proceedings at all since the attachment proceedings were initiated by the State against Ramachandraiah under clause 3 of the Criminal Law Amendment Ordinance, 1944, who was actually dead. Clause 3 contemplates that such an application must be made to the District Judge within the local limits of whose jurisdiction the said person ordinarily resides or carries on business, in respect of property which the State Government believes the said person to have procured by means of the offences. It is incomprehensible, therefore, that such an application could have been made in regard to a dead person who obviously cannot be said to be ordinarily resident or carrying on business anywhere. There is no legal provision which enables continuance of prosecution upon death of the accused. We must record that the proceedings and the decisions of the courts below are disturbing, to say the least. In the first place, though the accused had died, the trial court proceeded with the trial and recorded a conviction two years after his death. Then, this null and void conviction was used as a basis for making an attachment of his properties before the Sessions Court. Astonishingly, all applications succeeded, the attachment was made absolute and over and above all, the High Court upheld the attachment.
11. The orders of the Criminal Court vis-a-vis Ramachandraiah are illegal and liable to be set aside. We also find that the impugned judgment in appeal is unsustainable and is liable to be set aside. The orders of the Courts below are accordingly set aside. The appeal succeeds.”
The provisions of the Ordinance being discussed in the Judgment (supra) required an application to be moved to the District Judge where the person whose property was proposed to be attached ordinarily resided or carried on business. It was found to be incomprehensible that such an application could have been made in regard to a dead person, who obviously could not be said to be ordinarily resident or carrying on business anywhere. We find that in contrast under the provisions of PMLA, the authorities prescribed under the Act can provisionally attach a property for a period not exceeding 180 days under Section 5 (1) of PMLA. We also note that such provisional attachment is then subject to confirmation by the Adjudicating Authority under the provisions of Section 8 of PMLA.
12. The provisions of Section 5 (1) of PMLA are reproduced below:
Section 5. Attachment of property involved in money-laundering.
(1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that–
(a) any person is in possession of any proceeds of crime; and
(b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter,
he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed:
Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country:
Provided further that, notwithstanding anything contained in [first proviso], any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act.
Provided also that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this section is stayed by the High Court, shall be excluded and a further period not exceeding thirty days from the date of order of vacation of such stay order shall be counted.”
Reading of the provisions of Section 5 (1) of PMLA shows that no prior notice is required to be issued to the person whose property is attached. Therefore, in the facts of the present case the attachment of the property of Shri Sabir Ali without any notice to him was in accordance with the provisions of the law, even though Shri Sabir Ali had since expired. The provisions of Section 8 (1) of PMLA are as follows:
“Section 8. Adjudication.—
(1) On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub-section (10) of section 18, if the Adjudicating Authority has reason to believe that any person has committed an 1[offence under section 3 or is in possession of proceeds of crime], it may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, or, seized 2[or frozen] under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government:
Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person:
Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property.”
The requirement of issuing the notice to the person whose property has been provisionally attached has also been met in the present case since the Appellant Shri Rashid Ali, the legal heir of Shri Sabir Ali, was issued a notice whereby he appeared as Defendant before the Ld. Adjudicating Authority. The provisions of the first proviso to Sub-Section 8 (1) of PMLA provides for issuing of a notice to a person who holds the property on behalf of any other person.
Therefore, we find that the attachment of the property in the present case is not de-hors the provisions of the law.
13. On reading of the provisions of Section 8 (7) of PMLA, we observe that the possibility of dealing with the property of an accused whose trial has been abated due to his death has been dealt with under the law. For better comprehension of the provisions, we reproduce Section 8 (5), 8 (6) and 8 (7) of PMLA as follows:
“Section 8. Adjudication.—…………
(5) Where on conclusion of a trial of an offence under this Act, the Special Court finds that the offence of money-laundering has been committed, it shall order that such property involved in the moneylaundering or which has been used for commission of the offence of money-laundering shall stand confiscated to the Central Government.
(6) Where on conclusion of a trial under this Act, the Special Court finds that the offence of money laundering has not taken place or the property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it.
(7) Where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a proclaimed offender or for any other reason or having commenced but could not be concluded, the Special Court shall, on an application moved by the Director or a person claiming to be entitled to possession of a property in respect of which an order has been passed under sub-section (3) of section 8, pass appropriate orders regarding confiscation or release of the property, as the case may be, involved in the offence of money-laundering after having regard to the material before it.”
On confirmation of the Provisional Attachment Order under Section 8 (3) of PMLA, the statute provides for either the confiscation to the Central Government or the release of the attached property to the entitled person, on conclusion of the trial for the offence of money laundering. However, the statute recognizes the third possibility where the trial could not be concluded for reason of the death of the accused or him having been declared as proclaimed offender or for any other reason. Under this third possibility provided for under Section 8 (7) of PMLA, an application can be moved either by the Director or person claiming to be entitled to possession of the property, before the Special Court authorized to conduct the trial under the PMLA. The Special Court may thereupon pass appropriate Orders for either confiscation or release of the property, having regard to the material before it. We therefore, observe that in the facts and the circumstances of the present case the Appellant herein need to move an application before the Special Court for an Order on the impugned property, which will be the appropriate course of action under the statute.
14. In view of the aforementioned discussions and analysis, we dispose of the Appeal No. FPA-PMLA-4340/LKW/2021 filed by Shri Rashid Ali, with liberty to move an application under Section 8 (7) of PMLA before the Special Court. Applications pending, if any, are disposed of accordingly.
