A Division Bench of the Telangana High Court, observed that the properties attached under the PMLA (Prevention of Money Laundering Act, 2002) shall be released upon closure of the case against their owners, either through acquittal or settlement through compromise.
The High Court was dealing with a petition filed by Manturi Shashi Kumar and his wife Swapna, who challenged an order passed by a Single Judge order that rejected their request for the Court to direct the Enforcement Directorate (ED) to release their properties as the money laundering case against them was closed.
The de facto complainant and the appellant reached an agreement before Lok Adalat and later the petitioner requested that the attached assets be released by the ED officials. However, the ED did not react to the petitioner’s request. The plea was then rejected by a single judge in the High Court. The petitioner then filed the writ appeal and received favourable ruling.
A Bench of Chief Justice Ujjal Bhuyan and Justice N Tukaramji said that once a person was acquitted in a criminal case, the connected money laundering case and attachment of properties made under it have no meaning, while allowing the appeal.
“We are therefore of the opinion that the single judge erred in refusing to grant relief to the appellants by concluding that the appellants’ acquittal was based on compromise rather than merit and relegating the appellants to the forum of the designated court. When there is no offense since the criminal prosecution concerning the predicate offense has been closed, continuing attachment of appellants’ possessions is not justifiable,” the Bench noted.
The division bench relied on the judgment of the Supreme Court judgment in Vijay Madanlal Choudary case, wherein it was held that the final acquittal from a scheduled offence or criminal case by competent authority implied there could be no offence. It also stated that it was immaterial whether the acquittal was on merit or compromise.
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