New Delhi: Bharatiya Janata Party (BJP) this week released a press statement detailing a conversation between Prime Minister Narendra Modi and the party’s Lok Sabha candidate from Krishnanagar, Amrita Roy. In the statement, Modi was quoted as saying that he would explore “legal options” to see how “money looted from the poor” is returned to them through assets and money the Enforcement Directorate (ED) attached from the corrupt.
“The ED has attached 3,000 crore in West Bengal that belongs to the poor. I am taking legal advice and if it allows me, the moment we form a government, I will return the money to those who had to pay a bribe for a job,” Modi, who is seeking a third consecutive term, told the BJP candidate.
However, the law as it stands today, clearly states that till the time a case is under investigation and the trial is complete, leading to a conviction or acquittal, the custody of attached assets and cash, remains with the agency as its custodian and cannot be utilised in any manner.
Further, in case of an acquittal, the seized cash or assets are released and returned to the aggrieved party on court orders and in case of a conviction, directed to the central government, experts told ThePrint.
They added that Modi’s latest remarks could amount to what Union Home Minister Amit Shah, then BJP president, referred to in a 2015 interview with a TV news channel as a “jumla” or election gimmick. Shah was then responding to a question about a promise Modi made in the run-up to the 2014 Lok Sabha polls to bring back “black money” stashed away overseas and deposit Rs 15 lakh in the bank account of each Indian citizen.
Here, ThePrint looks at some key questions: What happens to seizures made during an ED raid? For how long do these assets remain in ED’s custody? And does the law allow the government to give away money or assets seized by the ED under the Prevention of Money Laundering Act?
For the answers to these questions, ThePrint relied on a former ED officer, a legal expert and a lawyer-turned-politician.
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‘ED is custodian of seized money’
The PMLA Act, 2002 defines money laundering as any association, direct or indirect, in any activity connected with ‘proceeds of crime’.
The term ‘proceeds of crime’ refers to any cash, property obtained, directly or indirectly, by any person as a result of criminal activity.
Important to note though is that unaccounted cash, on the other hand, comes under the jurisdiction of the Income Tax (IT) department.
Once the ED attaches a property as part of its probe into a case registered under PMLA, an authority has to confirm that attachment.
The adjudicating authority comprises three members: one each from the fields of ‘law’, ‘administration’ and ‘finance or accountancy’. Further, one of the members is appointed as chairperson of the adjudicating authority that reviews and confirms the attachments.
The body functions under the purview of the Department of Revenue.
A former ED officer told ThePrint that once the ED seizes cash during a raid, it moves the adjudicating authority for its retention. The process is the same as in the case of attachment of immovable assets such as property.
The adjudicating authority also serves a notice to the individual concerned giving them a chance to explain their association with the alleged ‘proceeds of crime’.
Once the attachment is confirmed by the authority, the seized assets remain under ED custody and are taken care of by a specific unit.
“ED becomes the custodian of that money. It remains with the agency till the trial is complete,” said the retired ED officer quoted earlier.
According to the law as it stands today, at the conclusion of the trial, if the court finds that the offence of money laundering has been committed and that said property was in any way involved in the act, the same will be confiscated by the central government. This means that all rights and title of the said property will be transferred to the government.
If the trial could not be completed on account of the demise of the accused or if the accused is declared a proclaimed offender, the court, on application either by the Director of Enforcement or any other person claiming entitlement, passes orders either for confiscation or release of the property. The court can also direct the central government to restore the confiscated property or part of it to the claimant if the presiding officers find that he or she suffered losses due to the offence of money laundering.
Once the property is with the central government, it would appoint an administrator to manage, or dispose of the property — per directions of the government — through an official gazette notification. Records of all evidence, assets, transactions related to these cases are to be maintained.
In terms of cash seizures, experts said the money remains in ED’s custody till the completion of the trial. After the State Bank of India (SBI) officials count the money, a seizure list is prepared by the agency which records the total amount of cash recovered and the denominations. This money continues to be in the ED’s bank account in a relevant branch.
‘Linking money to individuals difficult’
Rajya Sabha MP Bikash Ranjan Bhattacharyya of the Communist Party of India (Marxist), who is a lawyer by profession, said it is difficult to return money seized in such cases because establishing victims, accused and the money and interlinking them is a very difficult process to follow.
“To return money to the people who have suffered, the victims, they have to be first identified. Till the trial is complete and there is conviction, the money cannot be touched at all. How will the Prime Minister return this money? It is not in the hands of the government to return this money.”
He added, “In the absence of any identification of the people who may have suffered the losses and the connection of the accused with the recovered money, this appears to be another jumla.”
A legal expert who did not wish to be named, said in cases pertaining to the PMLA, the prosecution has to prove that an ‘X’ amount is the ‘proceeds of crime’ and therefore, ‘black money’. The transactions between the accused then have to be linked to how the ‘X’ amount was first accumulated and to the same amount that has now been seized.
If the accused is convicted in the case, the money goes into the Consolidated Fund of India as ‘public money’. If the accused are acquitted, the money is returned to them. A victim or a claimant, can approach the court at any time during the trial to submit that he/she has suffered due to the alleged offence of money laundering. It then rests upon the court to decide if the person should be compensated for the loss.
(Edited by Amrtansh Arora)
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