PMLA Appellate Tribunal Upholds Attachment of Chennai Properties In Alleged FIEWIN Gaming Fraud Case

The Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) has upheld the attachment of two Chennai plots worth about ₹42.67 lakh.

The Enforcement Directorate (ED) alleged that the properties were linked to proceeds of crime generated through the FIEWIN online gaming application. The tribunal rejected a plea that the attachment proceedings had become redundant because a Special Court had already ordered confiscation of the properties.

Member V. Anandarajan held that confiscation under the PMLA can take place only after conclusion of the trial and a finding that the offence of money laundering has been committed.

“It cannot be even the appellant's case that the criminal trial in the present case concluded on the very day cognizance was taken by the Ld. Special Court,” the tribunal observed.

The appeal challenged an order of the Adjudicating Authority confirming the attachment of the two plots located at Melpakkam in Chennai.

The case arose from an FIR registered in 2023 on allegations that the FIEWIN gaming application induced users to deposit money by promising substantial winnings. According to the complaint, the promised winnings were not paid. One complainant alleged that he invested about ₹21.69 lakh through the application.

Following registration of the FIR, the ED initiated a money laundering investigation. It later attached the Chennai properties through a provisional attachment order. The Adjudicating Authority subsequently confirmed the attachment.

Before the tribunal, the appellant did not challenge the attachment on merits. Instead, it was argued that the proceedings before the Adjudicating Authority had become unnecessary because the Special Court had already ordered confiscation of the attached properties while taking cognisance of the prosecution complaint in October 2024.

The appellant contended that attachment proceedings are only an interim step pending confiscation. Since confiscation had already been ordered, further adjudication served no purpose, it was argued.

The ED opposed the plea. It contended that confiscation under the PMLA can be ordered only after conclusion of the trial and a finding that money laundering has been committed.

Examining the statutory scheme, the tribunal noted that once a provisional attachment order is issued and an original complaint is filed, the Adjudicating Authority must determine whether the property is involved in money laundering. It observed that the authority had followed the procedure prescribed under law before confirming the attachment.

“Therefore, in the present case, upon receipt of the original complaint, having had the reason to believe as required under section 8(1), the AA has rightly issued a notice, conducted the adjudication proceedings, and passed an order under section 8(2), and confirmed the attachment under section 8(3),” the tribunal held.

The tribunal further observed that the language of the PMLA makes confiscation contingent upon the conclusion of a trial and a finding that the offence of money laundering has been committed.

“On the other hand, as is evident from the clear language of section 8(5) as well as para 70 (xii) of the order of the Apex Court, confiscation of property is conditional upon 'conclusion of a trial of an offence under this Act' and only after 'the Special Court finds that the offence of money laundering has been committed',” it observed.

The tribunal noted that the Special Court's confiscation order had been passed on the same day cognisance was taken. It held that the attachment proceedings before the Adjudicating Authority could not be treated as redundant on that basis.

It also observed that it was not the appropriate forum to examine the legality of the confiscation order passed by the Special Court. That issue, it held, would have to be considered by the forum competent to hear a challenge to that order.

The tribunal further noted that the contention regarding the prior confiscation order had not been raised before the Adjudicating Authority.

Finding no infirmity in the order confirming the attachment, the tribunal dismissed the appeal.

For Appellant: Advocate Akshita Chand, Karan Kumar

For Respondent: Advocate Chandra Prakash, Abhinav Kumar