PMLA Tribunal Directs De‑Attachment of Bank Account on Security Deposit of Alleged Proceeds of Crime
Background of the Dispute
The matter in Stealth Bridge Pvt. Ltd. Vs Deputy Director (Appellate Tribunal Under SAFEMA Delhi) concerns a provisional attachment of a bank account under the framework of the Prevention of Money Laundering regime. The Directorate of Enforcement (ED) had provisionally attached the bank account of Stealth Bridge Pvt. Ltd., treating a credit entry of Rs. 10 lakhs as alleged “proceeds of crime”.
Aggrieved by the attachment, the assessee approached the Appellate Tribunal Under SAFEMA at New Delhi, challenging the continued freezing of its operational bank account and seeking appropriate relief.
Facts Placed Before the Tribunal
Unexplained Credit in Bank Account
According to the assessee’s submissions before the Tribunal:
- A sum of
Rs. 10 lakhsreached its bank account through two separate cheques. - The assessee asserted that it had no prior dealings with the persons who caused the cheques to be credited and did not know the source of these funds.
- On noticing the credit, the assessee promptly contacted its bank on the next working day to secure details of the sender and the relevant account particulars.
Attempt to Return the Funds
Once the assessee obtained the account details:
- It initiated a refund through RTGS to send back the entire sum of
Rs. 10 lakhs. - The RTGS transaction could not be completed because the destination account stood closed.
- The assessee consistently maintained that it did not claim ownership or entitlement over this
Rs. 10 lakhsand had no intention to retain the amount.
Despite this, the bank account of the assessee was provisionally attached by the ED on the footing that the credited amount formed part of the “proceeds of crime” in an ongoing money laundering investigation.
Stand of the Appellant (Assessee Company)
No Claim Over the Disputed Amount
The assessee’s counsel clarified before the Tribunal that:
- The company does not assert any right over the sum of
Rs. 10 lakhs. - It only seeks the release of its bank account, which is necessary for carrying out regular business operations.
- The assessee is willing to secure the investigation by depositing the entire disputed amount with the ED.
Offer to Deposit the Entire Alleged Proceeds of Crime
On instructions from the client, counsel for the assessee made a categorical statement that:
- The assessee would deposit the full amount of
Rs. 10 lakhs– treated by the ED as proceeds of crime – with the Directorate of Enforcement. - The assessee had no objection if this amount was kept in a fixed deposit (FD) or otherwise dealt with by the ED strictly in accordance with law.
- The assessee undertook not to raise any challenge to such manner of keeping or managing the amount by the ED, subject of course to the final outcome of the pending criminal proceedings.
Effectively, the assessee’s position was that once it deposits Rs. 10 lakhs with the ED, there would be no further justification to continue the provisional attachment over its bank account.