Bombay High Court sets aside order seizing properties of former Goa Chief Ministers

The Goa Bench of Bombay High Court has set aside an order of the PMLA Appellate Tribunal with respect to the attachment of property of former Chief Ministers Digambar Kamat (worth Rs 1.20 crores) and Churchill Alemao (worth Rs. 75 lakhs), both of whom are being proceeded against by the Enforcement Directorate (ED) for alleged corruption. .The PMLA Adjudicating Authority had confirmed the attachment of property sought by the ED in 2017. On appeal, the Appellate Authority partly allowed the appeal, making the attachment of property subject to certain conditions. However, the attachment of FDRs was confirmed and directed to continue..On further appeal, the Bombay High Court has ruled,."We are satisfied that the Tribunal, after concluding that the attachment order was required to be set aside, was not justified in issuing the directions. Accordingly, the conditions imposed by the Tribunal for setting aside the attachment of the immovable properties deserve to be set aside. So also, the continuance of the attachment of the Fixed Deposit Receipts (FDRs) by the Tribunal deserves to be set aside.".The Bench of Justices MS Sonak and MS Jawalkar opined that calling upon the parties to furnish indemnities, etc., is not contemplated under the scheme of the Prevention of Money Laundering Act (PMLA)..Hence, such directions could not have been issued “merely on the basis that the CBI had made some allegations against Kamat and Alemao and that prosecutions were pending against them. ."Such directions could not have been issued in the name of 'striking balance' between the interests of the ED as well as the accused persons", the Court added..The present appeal with High Court arose after Kamat challenged the Appellate Tribunal’s order which only conditionally lifting the seizing of properties confirmed by the Adjudicating Authority of the Enforcement Directorate in respect of immovable properties..Alemao and his wife had not appealed in High Court, but they were made respondents in the appeal filed by the ED, which also challenged the same order..Advocate Parag Rao, appearing for Kamat, argued that the Tribunal could not have directed that the attachment of FDRs should continue or imposed conditions for raising attachment in respect of immovable properties in the name of “striking balance.” .He added that the properties/FDRs which are the subject matter of the proceedings are not “proceeds of crime”..With instructions from Kamat and Alemao, Advocate Rao also gave an undertaking not to transfer or encash any properties or FDRs which were enlisted for attaching, without prejudice to their respective rights and contentions and without admitting any of the allegations against them but merely to show their bonafides while the proceedings before the Special PMLA Court are pending and one month after that..Advocate Nikhil Vaze appearing for the ED, which challenged the Tribunal’s order on the ground that it should not have lifted the attachment of the immovable properties even conditionally..The High Court, however, remarked that the ED should have accepted the statements made by Kamat and Alemao rather than to seek to dispossess them from their immovable properties even before the conclusion of the criminal proceedings pending against them..The Court noted that there was no submission to show any likelihood on the part of Kamat and Alemao to deal with in any manner the “proceeds of crime” which may result in frustrating any confiscation proceedings under the PMLA..The Court accepted the undertaking of Kamat to not sell or transfer the attached properties and FDRs until the conclusion of the proceedings before the Special PMLA Court..The Court allowed Kamat to approach the Special Court in the event he wished to sell any property or liquidate any FDR, which the Special Court was to deal with on its own merit..The High Court also directed the Special PMLA Court at Mapusa to dispose of the pending PMLA proceedings within one year from recieving an authenticated copy of the High Court's order..The parties were given time to appear before the Special Court on November 5 at 10.30 a.m. to submit an authenticated copy of the order on record, in the event no earlier date is fixed..Kamat and Alemao have been accused of accepting a bribe from officials of the US-based Louis Berger consultancy firm to secure implementation rights of a multi-billion dollar water and sewerage project in Goa worth Rs 1,031 crore, funded by the Japan International Co-operation Agency (JICA) in 2010..They have been charged with offences under provisions of the Indian Penal Code, the Prevention of Corruption Act and the PMLA..[Read order here]