Telangana HC suspends PAO in Musaddilal Jewellers case

Despite the pendency of an appeal of MJPL before Appellate Tribunal under PMLA, a PAO dated February 1, 2021 was issued to attach two immovable properties in Hyderabad which are collectively valued at Rs. 4.37 crore.

Hyderabad: The Telangana High Court has suspended the Provisional Attachment Order (PAO) of the Enforcement Directorate (ED) issued in connection with a case pertaining to Musaddilal Jewellers Private Limited (MJPL), senior advocate B Chandrasen Reddy said on Monday.

The Provisional Attachment Order (PAO) dated February 1, 2021, is related to attachment of properties acquired and have been in possession of the first petitioner Kailash Chand Gupta, a businessman and a resident of Banjara Hills, since 1970.

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Further, the properties have now been gifted by Kailash Chand Gupta to two other petitioners prior to the issuance of PAO. Despite the pendency of an appeal of MJPL before Appellate Tribunal under PMLA, a PAO dated February 1, 2021 was issued to attach two immovable properties in Hyderabad which are collectively valued at Rs. 4.37 crore.

According to Reddy, it was submitted that ‘proceeds of crime’ in terms of Section 2(u) of the PMLA refers to 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 such property.

Further, Section 3 defines ‘offence of money laundering’ as whoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money laundering.

In this regard, Kailash Chand Gupta was supported by the judgment of the High Court of Punjab and Haryana in PMLA and a recent judgment of High Court of Andhra Pradesh at Amaravati wherein it was observed that the properties purchased before that date of offence cannot be termed as proceeds of crime.

 

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