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FPA-PMLA-1344/KOL/2016 of Shri Deepak Kumar Sen v/s The Deputy Director Directorate of Enforcement, Delhi

ATFP14 Dec 2016FPA-PMLA-1344/KOL/2016

Case brief

AI extract

What is this about?

The Tribunal disposed of an appeal against the confirmation of provisional attachment of an appellant's property. It held that since the appellant received money from the accused that was proceeds of crime, he must deposit the equivalent value with the government to get the property restored, finding no evidence of direct involvement in the scam by the appellant.

What did the court decide?

The appellant was directed to deposit Rs. 1.25 crore with the respondent within sixty days; upon payment, the impugned property shall be restored to him forthwith.

FPA-PMLA-1344/KOL/2016 of Shri Deepak Kumar Sen v/s The Deputy… — Money Laundering | ATFP (2016)

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APPELLATE TRIBUNAL FOR FORFEITED PROPERTY NEW DELHI

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Date of judgment: 14 .12.2016

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FPA-PMLA-1344/KOL/2016

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Shri Deepak Kumar Sen … Appellant/Applicant Versus The Deputy Director Directorate of Enforcement, Delhi … Respondent

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… Respondent

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Advocates/Authorized Representatives who appeared

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For the appellant : Shri Dipak Kumar Sen For the respondent : Shri S.A. Saud, Advocate CORAM JUSTICE MANMOHAN SINGH : CHAIRMAN SHRI G.C. MISHRA : MEMBER SHRI B.K. BANSAL : MEMBER

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JUDGMENT

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FPA-PMLA-1344/KOL/2016

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In this appeal, the appellant namely Shri Deepak Kumar Sen has appealed under Section 26 of the Prevention of Money Laundering Act, 2002 against the order dated 9^th May, 2016 of the Adjudicating Authority in original complaint No. 545 of 2016 confirming the provisional attachment order No. ECIR/KLZO/01/2013/AD dated 21^st December, 2015.

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The property under attachment is Flat No. HA-115, Sector III, Salt Lake City, Kolkata which is owned by Shri Deepak Kumar Sen. This property was rented out by the appellant to Shri Sudipta Sen, Chairman of Saradha Group of Companies in the year 1999. Later on, in the year 2008, the appellant agreed to sell this property to Shri Sudipta Sen for a total consideration of Rs. 1.5 crore. Out of said Rs. 1.25, the appellant received a sum of Rs. 1.25 crore during 2008-2012 of which Rs. 116.28 lakh received in cheques and Rs. 8.72 Lakh in cash. A cheque dated 07.01.2012 for the balance amount of Rs. 25 lakh issued by Shri Sudipta Sen was dishonoured by the bank. The money was paid from the accounts of Saradha Group

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FPA-PMLA-1344/KOL/2016

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of Companies. The aforesaid premises were proposed to be registered in the name of Mr. Subhajit Sen son of Shri Sudipta Sen and Ms. Priyanka Sen, daughter of Shri Sudipta Sen.

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Consequent upon registration of cases against Saradha Group of Companies and Mr. Sudipta Sen under the Prevention of Money Laundering Act, 2002 several properties including the property of the appellant in this case were provisionally attached under the provisional attachment order No. ECIR/KLZO/01/2013/AD dated 21^st December, 2015 which were confirmed under the impugned order dated 9^th May, 2016.

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It is the case of the appellant that he constructed the flat way back during 1986-1997 out of his own sources including his retirement benefits, rental income and house building loans etc. and was not related in any way to the business of Mr. Sudipta Sen; that no registered agreement was ever executed between him and Shri Sudipta Sen and that the ownership of the property still vests in the appellant. On 23.11.2016, the appellant appeared before us in person and made a suggestion that in case the attached property is returned to the appellant he was willing to deposit a sum between Rs. 95 lakh to Rs. 1 crore subject to the final outcome of the merits of the case. On this suggestion, the learned counsel for the respondent has sought instructions from the Directorate of Enforcement. During the course of hearing, the learned counsel for the respondent produced a letter bearing no F.No KLZO/01/PMLA/2013 dated 29.11.2016 raising objection to the suggestion offered by appellant. The verbatim of the letter are reproduced as under;

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“2. I am directed to inform you that the Provisional Attachment Order in respect of entire property situated at HA-115, Salt Lake City, Kolkata was issued on the basis of reasonable belief that funds amounting to Rs. 1.25 crore were transferred to the Appellant from the accounts of Saradha Group of Companies for purchase of the attached property and thus the property, itself is proceeds of crime.

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3. further, a Prosecution Complaint has been filed in the instant case before the Ld. Special Court under PMLA vide which, it has been prayed for confiscation of attached properties including the attachment of property under present Appeal.

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4. Therefore, the prayer of the Appellant may be opposed.”

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We have heard both the parties and considered the materials available on record. It is an admitted fact that the appellant has received a sum of Rs. 1.25 crore from Shri Sudipta Sen, Chairman of Saradha Group of Companies who had allegedly mobilised money from the

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FPA-PMLA-1344/KOL/2016

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common public under false promises of high returns and failed to return the invested money to the investors and thereby committed offence under Section 420 I.P.C, a schedule offence under PMLA 2002 and thereby a case of money laundering has been initiated against Shri Sudipta Sen and Saradha Group of Companies. The above said amount of Rs. 1.25 crore is alleged to be a part of proceeds of crime at the hands of Shri Sudipta Sen and Saradha Group of Companies which was utilised for payment to the appellant for purchase of the impugned property for a total consideration of Rs. 1.5 crore as per an agreement between the appellant and Shri Sudipta Sen. The value of this property thus gets covered under the definition of ‘proceeds of crime’ as per definition under Section 2 (u) of the PMLA 2002 which is reproduced below:

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“proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the country, then the property equivalent in value held within the country].”

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The appellant in his appeal while praying for setting aside, cancelling or withdrawing the impugned order dated 09.05.2016 has also inter-alia prayed that an order may be passed directing the appellant to pay back the said amount of Rs. 1.25 crore after deducting unrealised rent, depreciation of the building, municipal taxes, unpaid electric bills consumed by Mr. Sudipta Sen and cost for repairing for the said premises etc. and on such payment being made the possession of the property may be restored to him free from all encumbrances. The appellant also made a similar suggestion on 23.11.2016 during the course of hearing before this Tribunal and offered to deposit a sum between Rs 95 lakh to 1 crore. It is noticed that the appellant had made a similar prayer and suggestion before the Adjudicating Authority as well however, there are no findings or specific orders on this aspect in the impugned order dated 09.05.2016.

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We find that the above suggestion basically amounts to swapping of the monetary sum received by the appellant in lieu of the attached property. We are inclined to go in for the same keeping in view that the purpose of the Prevention of Money Laundering Act would be served if the proceeds of crime or the value of the property is made available to the Government, although there is no material on record to show that the appellant was involved in any manner directly or indirectly in the scam in question and the property was acquired by

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FPA-PMLA-1344/KOL/2016

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the appellant with the proceeds of crime. In the instant case, the old age of 78 years of the appellant with responsibilities of a still older ailing mother of 105 years old also way in our mind while going in for the above solution. As regards the amount to be deposited by the appellant, we find that as per the stated facts, the total consideration for the sale of impugned property was Rs. 1.5 crore, but out of that there is reliable evidence of receipt of Rs. 1.25 crore only (including receipts through cheques and cash) which has also been admitted by the appellant. In so far as the remaining sum of Rs. 25 lakh is concerned, though the appellant received a cheque for the same but the cheque was not honoured by the bank. Thus, the appellant did not receive the said amount of Rs. 25 lakh through banking channel, a fact which has been admitted by both the parties. The OC No. 545/2016 as well as the impugned order dated 09.05.2016 only alleged about high probability of this amount of Rs. 25 lakh being transferred by Shri Sudipta Sen to the appellant in cash in the following words;

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“It is highly probable that the remaining or outstanding money of Rs. 25 lakhs which is being claimed by Shri Deepak Kumar Sen might be given to him in cash by Shri Sudipta Sen.”

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But no evidence of such a cash transaction has been brought out or discussed in the impugned order. While talking about monetary cash transactions no degree of probability can be relied upon as a substitute for documentary or other evidence. In this regard, no conclusion can be arrived at only on the basis of surmises and/or conjectures. Therefore, this amount of Rs. 25 lakh cannot be taken into account for determining the amount to be ordered to be deposited by the appellant for swapping the impugned property.

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The appellant’s claim for allowing him deduction on account of unrealised rent, depreciation of the building, municipal taxes, unpaid electricity bills, cost of repair work etc. of the impugned property is also not acceptable as the value of the property or the proceeds of crime as received by the appellant cannot be abated or set off on account of any reasons including expenses incurred or losses suffered on the property during the period of attachment. Therefore, the entire amount of Rs. 1.25 crore received by the appellant would be liable to be deposited with the Government in the above discussed swapping arrangement.

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In view of the above, the appeal is disposed of by modifying the impugned order to the effect that the appellant shall deposit a sum of Rs. 1.25 crore (Rupees one crore twenty five lakh only) with the respondent within sixty days of the receipt of this order which will remain

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FPA-PMLA-1344/KOL/2016

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attached during the pendency of the proceedings relating to any offence under PMLA 2002 before a court or under corresponding law of any other country, before the Competent Court of Criminal Jurisdiction outside India, as the case may be; and become final after an order of confiscation is passed under sub-Section (5) or sub-Section (7) of Section 8 or Section 58B or sub-Section (2A) of Section 60 of the PMLA 2002. The said amount shall be deposited by the respondent in a fixed deposit of an appropriate tenure as deemed fit and shall be renewed from time to time and kept alive. The said deposit shall be subject to the final outcome at the case which is pending the criminal jurisdiction. On the appellant making the above said deposit of Rs. 1.25 crore with the respondent within the above stipulated period the impugned property viz Flat No. HA-115 Sector III, Salt Lake City, Kolkata shall be restored to the appellant forthwith and without any delay.

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The appeal is disposed of accordingly.

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(Justice Manmohan Singh) Chairman

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(G.C. Mishra) Member

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(B.K. Bansal) Member

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New Delhi,

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14^th December, 2016

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FPA-PMLA-1344/KOL/2016

FPA-PMLA-1344/KOL/2016 of Shri Deepak Kumar Sen v/s The Deputy Director Directorate of Enforcement, Delhi

Case brief

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FPA-PMLA-1344/KOL/2016 of Shri Deepak Kumar Sen v/s The Deputy Director Directorate of Enforcement, Delhi

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