FPA-PMLA-1018/DLI/2015 of Corporation Bank v/s The Director, Financial Intelligence Unit- India
Case brief
What is this about?
The Tribunal examined penalties imposed on banks for allegedly failing to report suspicious transactions arising from sting operations. It ruled that mere discussions without intent to transact do not trigger reporting obligations. Crucially, the Court held that private sting operations without court sanction are inadmissible as evidence, especially when Section 65B certificates are missing. Consequently, major penalty orders under Section 13(2)(d) were quashed, while proceedings were modified under the lesser category of Section 13(2)(a), with refunds directed.
What did the court decide?
Impugned orders imposing major penalties under Section 13(2)(d) are set aside; matter modified to cover Sections 13(2)(a). Funds and Fixed Deposit receipts deposited as penalty are directed to be released forthwith with refunds.