The Punjab & Haryana High Court has held that property acquired prior to the commission of Criminal Activity cannot be attached unless taken outside the country.
In the case of Seema Garg vs. Deputy Director, the court held that the property acquired cannot be attached prior to the commission of scheduled offence such as criminal offence or introduction of Prevention of Money Laundering Act (PMLA), unless the property obtained from the offence is held or taken outside the country.
The appellant, in this case, was M/s Jaldhara Exports under the proprietorship of Raman Garg. The FIR was filed against the proprietor on the grounds alleging the fraudulent refund of Value Added Tax (VAT). As a consequence, the Deputy Director attached the property.
The High Court of Punjab & Haryana comprised of the bench of Justice Jaswant Singh and Justice Sant Parkash in the light of Delhi HC judgment, the Bench asserted that if property derived or obtained from the scheduled offence was taken or held outside India, the property of equivalent value held in India or abroad may be attached irrespective of the date of purchase.
However, in this case, while addressing the issue it was held that the property acquired cannot be attached prior to the commission of a scheduled offence such as criminal offence or introduction of Prevention of Money Laundering Act (PMLA) unless the property obtained from the offence is held or taken outside the country.
While allowing the appeals, the court also held that the Director or any other officer is bound to record reasons, which are ought to be a specific and mere representation by words is insufficient.
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