Money Laundering Victim Protection: Jammu and Kashmir High Court Ruling Ensures Justice for Bonafide Individuals
In a landmark judgment, the Jammu and Kashmir High Court has safeguarded the rights of individuals who suffer losses due to money laundering, ensuring they can approach the Special Court to seek restoration of attached properties.
Money LaunderingPrevention Of Money Laundering ActJammu And Kashmir High CourtSpecial CourtEnforcement DirectorateAdarsh Credit Cooperative Society LtdReal EstateJun 23, 2024
The case revolved around a real estate project titled 'Palm Springs' in Humhama, Airport Road Srinagar, initiated by a company registered as a limited by shares entity. The petitioners had invested in this project after confirming its legitimacy, including necessary approvals from competent authorities and NOCs from the Revenue Department and building permissions from the Municipal Corporation.
Despite these precautions, the Enforcement Directorate (ED) attached the properties linked to the project, claiming they were purchased using the proceeds of crime derived from the Adarsh Credit Cooperative Society Ltd (ACCSL) scandal. The petitioners challenged the provisional attachment and its subsequent confirmation on several grounds, arguing that the attachment orders were passed without hearing them, and that the value of the attached property exceeded the alleged proceeds of crime, unfairly impacting them.
The court, citing Section 8(8) of the Prevention of Money Laundering Act, 2002, observed that a person who has acted in good faith and has suffered a quantifiable loss as a result of the offense of money laundering, despite having taken all reasonable precautions and is otherwise not involved in money laundering, would be a claimant entitled to invoke the second proviso to sub-section (8) of Section 8 of the Act of 2002.
The court further explained that the petitioners, as per their claim, fall in the category of claimants and are, thus, well within their right to approach the Special Court under the Prevention of Money-Laundering Act at Jaipur, which has taken cognizance of the prosecution complaint bearing No. 06/2021 filed by the Enforcement Directorate on 31-03-2021.
The judgment is a landmark ruling, as it ensures that individuals who are not involved in money laundering activities but suffer losses due to such offenses, have a statutory remedy to seek restoration of their attached properties.
Case Title Dr. Junaid Vs Union Of India
Citation 2024 LiveLaw (JKL) 164
The Enforcement Directorate (ED) is a law enforcement agency responsible for enforcing economic laws and fighting economic crimes in India.
The Jammu and Kashmir High Court is the highest court in the Indian state of Jammu and Kashmir, with the power to interpret laws and ensure justice is served.
The Prevention of Money Laundering Act, 2002 is a legislation aimed at preventing and controlling money laundering in India. The Act provides for the attachment and confiscation of properties derived from the proceeds of crime.
The Adarsh Credit Cooperative Society Ltd (ACCSL) scandal refers to a financial fraud case where investor funds were diverted into various schemes and properties.
Frequently Asked Questions
What is the Prevention of Money Laundering Act, 2002?
The Prevention of Money Laundering Act, 2002 is a legislation aimed at preventing and controlling money laundering in India. The Act provides for the attachment and confiscation of properties derived from the proceeds of crime.
What is the role of the Enforcement Directorate (ED)?
The Enforcement Directorate (ED) is a law enforcement agency responsible for enforcing economic laws and fighting economic crimes in India.
What is a Special Court under the Prevention of Money-Laundering Act?
A Special Court under the Prevention of Money-Laundering Act is a court established to try offenses under the Act and provide a statutory remedy to claimants for restoration of attached properties.
Who can approach the Special Court under the Prevention of Money-Laundering Act?
A person who has acted in good faith and has suffered a quantifiable loss as a result of the offense of money laundering, despite having taken all reasonable precautions and is otherwise not involved in money laundering, can approach the Special Court.
What is the significance of the Jammu and Kashmir High Court ruling?
The ruling ensures that individuals who are not involved in money laundering activities but suffer losses due to such offenses, have a statutory remedy to seek restoration of their attached properties, providing a safeguard against such offenses.
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