Partly allowed

FPA-PMLA-1851/DLI/2017 of Vineet Gupta v/s The Deputy Director Directorate of Enforcement, Delhi

ATFP15 Sept 2017FPA-PMLA-1851/DLI/2017

Case brief

AI extract

What is this about?

The Tribunal addressed an appeal against a property attachment order under the PMLA. While declining to rule on merits, it granted interim relief maintaining status quo of the immovable property and prohibited its sale or disposal during pendency.

What did the court decide?

Status quo of attached property maintained; order directed that appellant shall not sell, dispose of or create any third party interest in the property.

FPA-PMLA-1851/DLI/2017 of Vineet Gupta v/s The Deputy Director… — Money Laundering | ATFP (2017)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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MP-PMLA-3770/DLI/2017 (Stay) &

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FPA-PMLA-1851/DLI/2017

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Vineet Gupta … Appellant

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Versus The Deputy Director Directorate of Enforcement, Delhi

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… Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellant	: Dr. Sushil Gupta, Advocate Mr. Sanjay Gupta, Advocate
For the Respondent	: Mr. Atul Tripathi, Advocate On behalf of Mr. Vikas Garg, Advocate
CORAM
JUSTICE MANMOHAN SINGH	: CHAIRMAN
SHRI G.C. MISHRA	: MEMBER

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ORDER 15.09.2017

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FPA-PMLA-1851/DLI/2017

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The appellant has filed the appeal under Section 26 of the Prevention of Money Laundering Act, 2002 against the order dated 31^st May, 2017. Issue notice to the respondent. Mr. Atul Tripathi, learned counsel for the respondent accepts the notice, he seeks four weeks time to file the reply. Let the same be filed within four weeks with an advance copy to the learned counsel for the appellant who may file the rejoinder within four weeks thereafter.

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List the appeal for final disposal on 02^nd February, 2018.

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MP-PMLA-3770/DLI/2017 (Stay)

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The learned counsel for the appellant is pressing for Interim Order. The prayer is opposed on behalf of respondent. Counsel for the appellant has made few submissions which are outlined as under:

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FPA-PMLA-1851/DLI/2017

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Page 1 of 5

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a). His first submission is that the property attached is at B-175, Shalimar Garden, Village Pasorda, Extn-II, Ground Floor, Sahibabad, Ghaziabad, U.P. which was purchased by the appellant’s father in 1999. Under the MOU it came in favour of the appellant no. 1 in the year 2012. He submits that the property in question is not proceeds of alleged crime as the FIR in present case was registered in November, 2016.

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b). The next submissions is that the property was attached in lieu of the value thereof by the respondent who was aware as the said property does not involve in the Money Laundering which was purchased in 1999 i.e. 17 years before which is not in dispute. He submits that the impugned property could not have been attached under section 5 of the Act as no charge-sheet under section 173 has been filed prior to the date of attachment order was passed and till date. No report under section 173 is filed and his clients was always willing to give an undertaking not to sell or disposed of or create any third party interest in the said attached property but despite of that attachment order was passed clearly contrary to the provision of Section 5 of the PMLA, 2002.

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Brief facts are that the appellant no. 1 was posted as Vice-President with Axis Bank. The appellant no. 2 is the wife of the appellant no. 1. The allegation against the appellant no. 1 was that he has facilitated two people for concealing their black money against which he has allegedly received a one kg. Gold brick and Rs. 8 Lacs in cash.

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He was arrested and is in judicial custody. He was raided by I.T. officials and ED but nothing incriminating was recovered by them. The said fact has not been denied by the respondent.

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Section 5(1) of the Prevention of Money Laundering Act, 2002 which reads as under:

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FPA-PMLA-1851/DLI/2017

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Page 2 of 5

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Attachment of property involved in money-laundering .-

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5[(1) Where the Director, or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that-

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(a) any person is in possession of any proceeds of crime; and

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(b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed:

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Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country:

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Provided further that, notwithstanding anything contained in¹ [first proviso], any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act.].

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Under the provisional attachment order, his resident was attached on 27.01.2017. The said order was confirmed by Adjudicating Authority in the impugned order, the same has been challenged before us. After confirmation order, ED wishes to take the possession of the house (wherein his wife and daughter are residing). The appellants have undertaken not to sell and dispose the said house till the trial is over in prosecuting complaint.

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As far as the first proviso is concerned, it is a mandatory provision wherein it is mandated that no such order or attachment shall be passed

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FPA-PMLA-1851/DLI/2017

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Page 3 of 5

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unless in relation of the schedule offence, a report has been filed under section 173 of the Code of Criminal Procedure 1973. In the present case no report has been submitted in the schedule offence under section 173 of the Code of Criminal Procedure, 1973, thus, under said first proviso the property in question could not have been attached.

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The second proviso mandates that if the property is involve in money laundering then it can be attached subject to the condition that there must be material that if such property (involve in the money laundering) is not attached immediately, under this chapter the non attachment of the property is likely to frustrate any proceedings under this Act.

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In the facts of the present case, it is doubtful as whether the second proviso would be applicable, firstly, there is no material to show that the appellants are likely to dispose the property. Secondly, the property was not purchased from the alleged proceed of crime as the same was purchased by the father of appellant no.1 in 1999. Thirdly, there is no material on record to show that the appellant no. 1 has taken any step to dispose of the property and, therefore an immediately order of attachment is to be passed otherwise non-attachment is likely to frustrate the proceedings. Nothing specifically recorded backed by even prima-facie evidence that the property is likely to be sold in order to frustrate the proceeding under this act. The appellants have now given the undertaking not to sell property till the further orders.

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Therefore, prima-facie case is made out by the appellant for grant of interim order sought. The arguments of Mr. Atul Tripathi, learned counsel for the respondent cannot be accepted at this stage that the appellants are not entitled to any relief in view of facts recorded by us. As far as merit of the case is concerned, the same is to be decided by the Special Court and we are not expressing any opinion. As far as

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FPA-PMLA-1851/DLI/2017

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Page 4 of 5

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immovable property is concerned, it is directed that both parties shall maintain the ‘Status-quo’ of the attached property till the next date of hearing.

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The attachment order of immovable property shall continue. The appellant shall also not sell, dispose or create any third party interest in any manner directly or indirectly.

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List on 02^nd February, 2018.

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Copy of the order be given ‘ dasti ’ to both the parties.

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(Justice Manmohan Singh) Chairman

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(G.C. Mishra) Member

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New Delhi, 15^th September, 2017

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‘AS’

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FPA-PMLA-1851/DLI/2017

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Page 5 of 5

FPA-PMLA-1851/DLI/2017 of Vineet Gupta v/s The Deputy Director Directorate of Enforcement, Delhi

Case brief

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FPA-PMLA-1851/DLI/2017 of Vineet Gupta v/s The Deputy Director Directorate of Enforcement, Delhi

Case brief

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