Bhalla & Anor v Barclays Bank Plc

A detained cash investigation under the Proceeds of Crime Act 2002 continues after forfeiture proceedings have begun, at least until those proceedings, including any appeal, conclude. The expression “cash detained under section 295” includes cash that has previously been detained under that section. A production order may therefore be made during the forfeiture phase. The court must apply the statutory safeguards, including reasonable grounds relating to the investigation, possession or control of the material, its likely substantial value, and the public interest. A suitably limited order may be proportionate where it assists investigators to establish the provenance or intended unlawful use of detained cash.

HM Revenue and Customs investigated £90,000 in cash seized from Sanjit Bhalla and subsequently detained under section 295 of the Proceeds of Crime Act 2002. Forfeiture proceedings had also been commenced before the magistrates’ court. The investigators sought an order requiring Barclays Bank Plc to produce statements and ledger entries for a limited period relating to an account held by Lanoss Ltd.

The central issue was whether the cash remained subject to a detained cash investigation after the forfeiture application had been made. If it did not, the statutory power to make a production order would be unavailable.

The court granted the production order against Barclays Bank Plc.

1. Section 341(3A) of the Proceeds of Crime Act 2002 defines a detained cash investigation by reference to an investigation into the derivation or intended unlawful use of cash detained under section 295. Properly construed, “cash detained under section 295” includes cash which is or has been detained under that section. The phrase is not confined to cash currently detained under section 295.

2. The statutory context supported that construction. Confiscation and money-laundering investigations are not expressly limited by the commencement of proceedings. By contrast, section 341(3) expressly limits a civil recovery investigation in specified circumstances. Parliament’s decision not to impose an equivalent limitation on detained cash investigations indicated that the investigation could continue after forfeiture proceedings had begun.

3. Section 298(4), which requires cash to remain detained while forfeiture proceedings and any appeal continue, did not displace the continuing character of the detained cash investigation. Reading section 341(3A) narrowly would create an artificial division between an investigative phase and a litigation phase, contrary to the legislative scheme and the purpose of the amendments.

4. The statutory requirements in section 346 were satisfied. There were reasonable grounds for suspecting that the cash was recoverable property or intended for unlawful conduct; for believing that Barclays possessed or controlled the material; and for believing that the material would be of substantial value to the investigation. Production was also in the public interest because it could establish the provenance of the cash and test the explanations given for it.

5. The order was proportionate because it was confined to the relevant account and a limited period. All statutory preconditions were therefore met, and the order was made.

First-instance decision. The judgment records that forfeiture proceedings had been commenced before the Uxbridge Magistrates’ Court, but no decision of that court was under appeal.