Mortgaged Properties of Economic Offenders Can Be Attached under PMLA: Delhi HC
In a significant ruling, the Delhi High Court has said that properties mortgaged with banks by economic offenders can be attached by the investigating agencies. The Court also clarified that in conflicts between laws such as money laundering, bankruptcy code and other legal provisions, for attaching properties obtained as proceeds of crime, the Prevention of Money Laundering Act (PMLA) will prevail.
 
In the judgement, the bench of Justice RK Gauba said, "...the assets, which have been the subject matter of attachment in the appeals at hand, are not 'tainted property', the same having been seemingly acquired prior to the criminal activity giving rise to accusations of money-laundering. But, they are sought to be attached and subjected to eventual confiscation on account of they being the alternative attachable properties or deemed tainted properties, which is permissible in law."
 
"The Audi car (subject matter of first appeal) was acquired by a transaction, which has no direct connection with the case of money-laundering. However, there is no clarity as to the value of proceeds of crime, which are to be confiscated as against value of the attached property as indeed the extent of the debt yet to be recovered by the secured creditor. The monetary gains made by the transactions, which are subject matter of the accusations of money-laundering on account of illicit foreign exchange transactions (third appeal) or the case of cheating by use of fabricated defence supply orders (fourth appeal), both involving public servants, require closer scrutiny as to the claim of the respondent banks of bonafide action. Though, there is no such element of complicity on part of any of the officials of the respondent banks in the case relating to fictitious hospital equipment (second appeal) or the one involving consortium of banks (fifth appeal), scrutiny respecting legitimacy and bonafide of the claim on the touchstone, inter alia, of the subsisting value of the secured interest and chronology of events leading to attachment would be necessary," the Court said in its ruling.  
 
Justice Gauba also set aside two key conclusions of the PMLA Appellate Tribunal in the process. He held that investigating agencies like Enforcement Directorate (ED), the Income-tax (I-T) department, Central Bureau of Investigation (CBI) and Serious Frauds Investigation Office (SFIO) can attach properties even if these are mortgaged with banks.
 
The ED has filed the case against Axis Bank, State Bank of India (SBI), IDBI Bank Ltd, and Punjab National Bank (PNB) among others, challenging law of import regarding nature of property that may be attached under the PMLA. 
 
The PMLA Appellate Tribunal had taken a view that the relevant statutory provisions of PMLA take a back seat, the enactments under which the third parties (the banks) lay a superior claim over the properties in question having   primacy. The ED felt that such view by the Tribunal was not only prone to misuse but would also render PMLA toothless and, thus, approached the Delhi HC.
 
During the hearing, it was argued that the process of attachment (for confiscation) under PMLA is in the nature of punishment for an offence and so cannot precede determination of guilt or adjudication of value of proceeds of crime by the court.
 
“In the present context, particularly under PMLA regime,” Justice Gauba said, “the confiscation of property (which is akin to forfeiture of property) is definitely not envisaged as a criminal sanction, this for the reason that the objective of the legislature clearly is to deprive the offender (of money-laundering) the enjoyment of ‘illegally acquired’ fruits of crime by taking away his right over property thereby acquired, it affecting his civil rights.
 
All the more so, because the jurisdiction to order attachment of the property is vested in the executive and its confirmation is left to decision of the quasi-judicial body i.e. adjudicating authority.” 
 
“The statutory authorities vested with the jurisdiction to provisionally direct or confirm attachment are, however, expected to assess, even if tentatively, the value of proceeds of crime so that it is ensured that only proceeds or assets of the offender of money-laundering of equivalent value are subjected to restraint, the evaluation undoubtedly open to variation or modification in light of evidence gathered till the probe is concluded,” the bench said.
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US ends Iran oil waivers for India, warns of sanction
US President Donald Trump announced on Monday he is ending the waiver given to India to buy Iranian oil and Washington has threatened sanctions if New Delhi does not not comply with the embargo.
 
Announcing the end of the waivers in Washington, White House Press Secretary Sarah Huckabee Sanders said: "Trump has decided not to reissue Significant Reduction Exceptions (SREs) when they expire in early May."
 
"This decision is intended to bring Iran's oil exports to zero, denying the regime its principal source of revenue."
 
Secretary of State Mike Pompeo later told reporters that the countries that do not abide by the embargo will face sanctions.
 
"Any nation or entity interacting with Iran should do its due diligence and err in the side of caution," he said.
 
Ending the waiver is a disappointment for India, which had hoped for an extension of the exemption beyond May 2 when it is scheduled to end. Foreign Secretary Vijay Gokhale had discussed extending the waivers when he met with US officials in Washington last month for the India-US Strategic Dialogue.
 
When the US tightened sanctions on Iran in November, India and seven other countries were given the exemptions enabling them to continue buying oil.
 
Asked if there would be wind-down period for the countries to complete pending transactions after the waiver ends next week, neither Pompeo nor other US officials addressed it directly only repeating that the waivers end on May 2.
 
To soften the impact on countries that lose the waivers, he said: "We stand by our allies and partners as they transition away from Iranian crude to other alternatives."
 
The US is increasing oil production and working with Saudi Arabia and the United Arab Emirates to ensure that there is no disruptions in oil supplies as a result of ending of the waivers, he said.
 
However, oil prices surged with first indications on Sunday night that the waivers would end. Brent crude, which serves as the benchmark for oil prices, surged more than 2.5 per cent to nearly $74 per barrel -- the highest in about six months -- on Monday.
 
India was reportedly importing about 1.25 million tonnes of oil per month from Iran, about half of what it had been importing before the restrictions.
 
Nearly 10 per cent of the total of 220 million metric tonnes of crude oil India imported during 2017-18 came from Iran.
 
In May last year, Trump withdrew from the 2105 international agreement with Iran on de-nuclearisation that had ended sanctions on that country. When Trump re-imposed tough sanctions on Iran in November, he but gave six-month temporary waivers to continue buying oil to also China, Japan, South Korea, Taiwan, Turkey, Italy and Greece.
 
India's vulnerability to US sanctions if it decides to continue buying Iranian oil will be through sanctions imposed on banks and oil tankers.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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AAR

4 weeks ago

Looks like BJP Govt had lobbied with USA to allow Iran Oil purchase until May election.

Private life insurers' APE grows 19% in March, LIC lags
In March 2019, private sector life insurance companies reported a 19 per cent year-on-year (y-o-y) growth in individual annual premium equivalent (APE), which has been gradually picking pace since November 2018, according to a Kotak Institutional Equities report.
 
APE is a measure used for comparison of life insurance revenue by normalising policy premiums into the equivalent of regular annual payments. 
 
The report said that individual APE growth for private life insurance players has picked up from (-)1 per cent to 16 per cent over the last six months. 
 
Almost all large players reported over 15 per cent growth, except HDFC Life, the report said.
 
Overall industry growth was lower at 10 per cent y-o-y as state-run Life Insurance Corp (LIC) remained sluggish with 6 per cent growth, the report said.
 
HDFC Life reported muted 1 per cent y-o-y increase in individual APE in March after witnessing marginal growth of 2 per cent in January and 6 per cent decline in February 2019. Overall APE was better at 6 per cent, as its group protection remained a segment of focus. Its business has been a bit volatile this year with (-)20 per cent to 37 per cent growth during the last ten month. 
 
ICICI Prudential Life saw growth of 14 per cent y-o-y in March in individual APE, up from 8-9 per cent over the last two months. Average ticket size in individual non-single segment was up 7 per cent y-o-y. 
 
SBI Life's individual APE growth was strong at 29 per cent y-o-y in March, especially in the backdrop of a flat January, and 15 per cent average growth for 2018-2019. Growth picked pace in the last two months. 
 
Max Life's growth in individual APE was strong at 15 per cent y-o-y, though lower than the 35 per cent growth in January 2019. The company has increased focus on ULIPs in recent quarters.
 
Birla SL reported 33 per cent y-o-y growth in individual APE, albeit lower than the high growth momentum of 67 per cent in the first 11 months of 2018-2019. 
 
Net mutual fund equity inflows revived in March 2019, the report said. After declining for four consecutive months till February 2019, momentum in equity mutual funds picked up in March 2019 likely due to positive market sentiment. 
 
The industry reported net equity inflows of Rs 9,500 crore in March, as compared to Rs 4,400 crore in February, Rs 5,500 crore in January. 
 
The gross flows of Rs 29,700 crore in March were the highest in 2018-2019. 
 
However, large redemptions of Rs 20,200 crore led to tapered net equity inflows. This is the highest inflow since the recent corrections in equity markets.
 
However, the gross Systematic Investment Plans (SIPs) were stable for the past six months at Rs 8000-8100 crore. The share of single premium for private players increased to 41 per cent as compared to 37 per cent in February 2019. 
 
Among major private players, Bajaj Allianz Life, HDFC Life and SBI Life maintain high share of single premium at 66 per cent, 68 per cent and 38 per cent, respectively, with the mix of single premium inching up for these players in March 2019. 
 
Bajaj Life and HDFC Life gained s ignificant market share in March 2019 whereas SBI Life lost 60 bps share. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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