The High Court of Madras held that the attachment property purchased out of the proceeds of crime Section 3 of the Money Laundering Act is cannot be said to be manifestly arbitrary and it is not violative of the constitutional right to property under Article 300A of the Indian Constitution.
The petitioner, Triad Trading Services Private Limited prayed in front of the court to strike down the provisions of Section 8 (4) of the Prevention of Money Laundering Act, 2002 and the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties confirmed by Adjudicating Authority) Rules 2013 as they are violative of Article 14 of the Constitution of India.
The court while relying on the decisions made by the Apex court noted that the object of the Prevention of Money Laundering Act, 2002 is that holders of properties acquired out of proceeds of crime should not be allowed to enjoy the fruits of that money which had been acquired through criminal activities and the Act was intended to deprive the persons who have acquired the property from enjoying the property which has been generated through proceeds of specific crimes listed in the schedule of the Act.
The division bench consisting of Chief Justice A. P. Sahi and Justice Subramoniun Prasad observed, “Article 300A, is attracted to those situations where the property of a person is acquired only by an administrative/executive order, and not on the basis of any law, validly made. However, even legislation that has the effect of depriving a person of his property rights without any object.”
“A person who has purchased the property using proceeds of crime cannot be said to have any interest in the property and the protection under Article 300 A cannot be pressed into service by a perpetrator of a crime,” the division bench said.
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