ED is again in the headlines for its raids in high-profile cases. Within a week, the ED has recovered more than Rs 50 crore in cash and more than 5 kg of gold from the house of Arpita Mukherjee, a close aide of West Bengal minister Partha Chatterjee.
Pictures of a pile of notes recovered from Arpita's house after the ED raid are going viral. Seeing the bundles of notes, the question arises in your mind what happens to so much money?
ED has the right to raid for investigation
ED, CBI, and Income Tax Department have the power to investigate, interrogate, conduct raids and seize movable and immovable properties in money laundering, income tax fraud, or other criminal activities.
These agencies take the confiscated money in their custody and then either by order of the court, that money is returned to the accused or it becomes the property of the government.
Virag said, “Central investigative agencies like ED, CBI, and Income Tax Department have the right to conduct raids to investigate any case. The powers of these agencies to investigate have two parts - one for arrest and interrogation and the other for conducting raids to collect relevant evidence."
"The raids conducted by the investigative agencies are based on different information, so an accused don't need to be raided only once, but the raids can be done in several phases."
ED gets the right to confiscate property under PMLA
Virag Gupta says, "If we talk about ED, then it is under the Prevention of Money Laundering Act 2002, ie PMLA 2002, if there is Custom Department then under Custom Act and if there is Income Tax Department then it is under Income Tax Act. Right to confiscate property.
"Under the law under which the investigating agency works, it has the power to raid, seize and deposit the confiscated goods in the warehouse or warehouse."
ED prepares panchnama of seized goods
Many things can be recovered in the raid - paper documents, cash, and other valuables like gold and silver jewelry can be found.
Virag told that a panchnama is made of the things confiscated in the raid. Panchnama makes the IO of the investigating agency i.e. Investigating Officer. The Panchnama is signed by two independent witnesses. It also bears the signature of the person whose goods are confiscated. After the Panchnama is prepared, the confiscated goods become case property.
cash
First, a panchnama of the confiscated money or cash is made. In the Panchnama, it is mentioned how much money was recovered, how many bags there,
How many 200, 500, and other notes are there?
If the seized cash has any marks or anything written on the note or in the envelope, then it is deposited with the investigating agency, so that it can be presented as evidence in court.
Virag says the rest of the money is deposited in banks. Investigating agencies deposit the seized money in the central government's account with the Reserve Bank of India or State Bank of India.
Sometimes there is a need to keep some money, then the investigating agency keeps it with itself till the completion of the trial of the case by internal order.
Property
The ED has the power to attach the property under section 5(1) of the PMLA. After the confiscation of the property is proved in court, this property is taken over by the government under section 9 of PMLA.
According to Virag, "When the ED attaches any property, a board is put on it, which says that this property cannot be bought or sold or used."
However, in many cases, there is also an exemption for their use when the house and commercial property are attached.
ED can attach property for 180 days
Under PMLA, the ED can attach property for a maximum period of 180 days i.e. 6 months.
If by then the ED is not able to validate the attachment in the court, then after 180 days the property itself will be released, that is, it will no longer be attached.
If the ED proves the attachment of the property within 180 days in court, then the government takes possession of the property. After this, the accused gets 45 days to appeal against this action of ED in the higher courts.
Commercial property can continue to function even if it is attached
Immediate confiscation or provisional attachment of any property by the ED does not seal it.
Many times it also happens that the accused can use the property which is attached by the ED, while the trial of that case is going on in court.
For example, in 2018, the ED attached 50% of former finance minister P Chidambaram's Jorbagh bungalow in Delhi. But his family was living there till the court's notice to vacate the property. Chidambaram's son Karti had also sought legal relief against this notice.
Commercial establishments do not close even after the ED attaches the properties. Commercial properties like shops, malls, restaurants, and hotels may have been attached by the ED, but they can continue to function till the court's decision.
In 2018, the ED attached the Inn Hotel at Delhi's IGI Airport in a case related to Air India, but the hotel continued to make bookings.
jewelry
If the investigating agency recovers gold and silver, jewelry, and other valuables, then that too becomes a panchnama.
The Panchnama contains complete information about how much gold or how much jewelry or how much valuables he has recovered.
Virag explains that gold and silver ornaments and other valuables are confiscated and deposited in the government warehouse or warehouse.
Whose property will be, the court takes the final decision
Be it cash or jewelry or property, the court makes the final decision on the confiscated goods. At the start of the trial, the confiscated goods are presented in the court as evidence.
Virag says that if the court orders confiscation, then the entire property becomes occupied by the government. If the ED is unable to prove the confiscation action in court, the property is returned to the person concerned.
If the seizure is challenged in the court or the High Court or Supreme Court, if the appellant proves the confiscated goods to be legal, then he gets all the confiscated goods back.
Many times the court allows returning the property even after imposing some fine on the person who has the property.
Virag told that the investigating agencies attach the property only by administrative order and then by the order of the court it becomes the government or whose property has been confiscated, it is returned.
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