Rs 17 crore recovered in Kolkata searches: How ED seizes cash, where is it kept? – The Indian Express

The search locations included a house owned by Naser Khan, who runs a transport business. Amir Khan, the younger son of Naser Ahmed Khan, had launched a mobile gaming application called E-Nuggets, which initially rewarded investors with a commission and allowed hassle-free withdrawal of the balance in their wallets, according to officials.

The ED had registered a case in this regard against Aamir Khan and others based on a complaint by Federal Bank authorities on February 15, 2021.

How are seizures made?

ED is mandated to conduct searches at premises of suspects in a case under the Prevention of Money Laundering Act (PMLA). ED generally approaches the suspect with a search warrant and conducts searches. The recoveries made during the searches are seized in presence of independent witnesses who have to sign the seizure memo.

What does ED do with the seized cash and gold?

Earlier, the cash seized by the agency was deposited by the concerned administrative zone into fixed deposit accounts opened by them. The money remained in the account until the case was decided. If the accused got convicted, the cash so attached (given that it was proved to be proceeds of crime), would be deposited in the government treasury. If the case ended in acquittal, the entire amount, along with interest, would be returned to the accused.

Seized gold or other valuables would be deposited in a locker.

In 2018, however, the entire system was rationalized and now the money gets deposited directly in the treasury through personal deposit accounts. Concerned zones now open PD accounts in the name of Enforcement Directorate with the State Bank of India. These accounts do not generate any interest on deposits. The rest of the procedure for both cash and gold remains the same.

What happens after seizure or attachment?

The purpose of attachment is to deprive an accused of the benefits of the attached asset. The law also provides for the property to remain out of bounds for the accused until the trial is complete.

After ED attaches or seizes any property, including cash, it has 180 days to get a confirmation on the said seizure from the Adjudicating Authority of the agency. Once the attachment has been confirmed, the ED can take possession of the seized property. In case it is an immovable property, the ED can issue eviction notice to the property owner and take possession of it.

The Adjudicating Authority order, however, can be challenged in the Prevention of Money Laundering Act (PMLA) Appellate Tribunal and further in the high court which can stay the order, restore the property to the owner or clear the way for ED’s possession of the asset.

A few years back, ED attached a property in Ranchi in relation to a money laundering case. The accused was not granted relief in the matter by either the PMLA Tribunal, nor the high court. The agency eventually took possession of the property and opened its branch office there. The case eventually ended in conviction and the property has now been mutated in the government’s name. The ED office is still operating out of there.

There may be properties which are of no use to the agency or any other government department while the trial in the case is still on. In such cases the concerned special director of the ED is made custodian and administrator of the property. Once the trial is over, the property can be auctioned by the government. In cases where trials run for a long time, such properties can begin to crumble because of lack of maintenance.

What happens when ED attaches a running business, such as a hotel?

As a rule, running businesses are not shut down or taken possession of following confirmation by the Adjudicating Authority. However, if the accused does not get legal protection from the tribunal or the high court, the ED has powers to claim all the profits from the operation of the commercial premises, such as a hotel. These profits are again deposited in PD accounts of the agency. The entire money would be returned to the accused if he/she is acquitted.

What happens if attached property is a residence?

In cases where residences are attached by the ED, and the same is confirmed by judicial authorities, the agency has a right to seek eviction of the accused from the premises. However, in case the accused is unable to move out, the ED can seek rent.

In a money laundering case, the agency had attached the residence of a person in Jaipur and eventually served him an eviction notice. However, after the accused made a petition that it was the only residence he had, the ED allowed him to stay there and is taking rent at market rate from him.

What happens when vehicles are attached?

Earlier, attached vehicles would be sent to warehouses owned by the Central Warehousing Corporation, where the ED paid to park the vehicle. As cases dragged on for years, the vehicles would rot. At the end of the trial, neither the accused nor the ED recovered anything from the vehicle. The agency would, in many cases, end up paying more rent than the value of the vehicle.

The rules were thus amended recently and now the ED allows the accused to use the attached vehicle but seeks rent at a rate fixed by the local transport department.