Dismissed

FPA-20/BOM/2015 of Charuben K. Shah v/s Competent Authority, Bombay

ATFP4 Sept 2018FPA-20/BOM/2015

Case brief

AI extract

What is this about?

This is the second hearing where the APP concerned about three stay applications filed against the approval of the disposal of three properties belonging to the Appellants as mentioned in Section 9 of the appeal.

What did the court decide?

The stay petitions filed by the appellants in all three appeals were rejected.

What the court decided

FPA-20/BOM/2015 of Charuben K. Shah v/s Competent Authority, Bombay — Money Laundering | ATFP (2018)

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APPELLATE TRIBUNAL FOR SAFEMA, FEMA, PMLA, NDPS, PBPT ACT AT NEW DELHI

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DATE OF DECISION: 04.09.2018

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MP-74/MUM/2015 (Stay) & FPA-18/BOM/2015 Varsha Rajnikant Shah … Appellant MP-75/MUM/2015 (Stay) & FPA-19/BOM/2015 Varsha Rajnikant Shah … Appellant & MP-76/MUM/2015 (Stay) & FPA-20/BOM/2015 Charuben K. Shah … Appellant Versus Competent Authority, Bombay … Respondent

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Advocates/Authorized Representatives who appeared

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For the appellants : Shri Sachin Jolly, Advocate For the respondent : Shri Siddhartha Majumdar, Inspecting Officer CORAM SMT. ANANYA RAY : MEMBER

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JUDGMENT

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MP-74/MUM/2015 (Stay), MP-75/MUM/2015 (Stay) & MP76/MUM/2015 (Stay)

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All the three stay petitions in the above three appeals were heard. Vide the impugned order nos. as below, the properties as mentioned against each of them were forfeited to Central Government under Smugglers & Foreign Exchange Manipulators Act, 1976 (SAFEMA).

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MP-74/MUM/2015 (Stay), MP-75/MUM/2015 (Stay) & MP-76/MUM/2015 (Stay)

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Page 1 of 5

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i. Order No. 1/SAFEMA/MUM/2015 dated 30.06.2015- property 17, Sadhna Colony, Opposite SP Stadium, Navrangpura, Ahmedabad,

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ii. Order No. 2/SAFEMA/MUM/2015 dated 30.06.2015- property 1, Ground Floor, Bhagwati Chambers, CG Road, Opposite SP Stadium, Navrangpura, Ahmedabad,

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iii. Order no. 3/SAFEMA/MUM/2015 dated 30.06.2015- property 16, Alaap-I, Opposite Mayur Pankh Soceity, Near octroi Naka, Satellite, Ahmedabad

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The learned counsel for the appellant argued that they have a strong prima facie case in their favour. He stated that the appellants are all relative of one Mr. K.B. Shah who was the COFEPOSA detenue. However, the adjudication order has not established the nexus between the properties belonging to the appellants which have been ordered to be forfeited by the impugned orders and the crime/offence of Mr. Shah, that the source of money for acquiring all the three properties as above has been duly explained. He stated:

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A. With regard to the property at (i) above i.e. 17 Sadhna Colony, the said property was purchased for a consideration of Rs. 26,25,000/- and the source of the purchase consideration was

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a. Rs. 20,00,000/- from Kalupur Commercial Cooperative Bank

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b. Rs. 6,25,000/- withdrawn from partnership firm Swasthik Corporation.

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B. With regard to the property at (ii) above i.e. 1, Ground Floor, Bhagwati Chambers, CG Road, Opposite SP Stadium, Navrangpura,

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MP-74/MUM/2015 (Stay), MP-75/MUM/2015 (Stay) & MP-76/MUM/2015 (Stay)

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Page 2 of 5

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Ahmedabad, it was purchased for a consideration of Rs. 2,50,000/which was taken as loan from Kalupur Commercial Bank.

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C. With regard to property at S. No. (iii) of para 1 ante i.e., 16, Alaap-I, Opposite Mayur Pankh Soceity, Near Octroi Naka, Satellite, Ahmedabad, it was purchased for a consideration of Rs. 16,00,000/and the said amount was paid by the two joint owners by contributing a sum of Rs. 8,00,000/- each which was withdrawn by them from the capital of their partnership firm M/s. Swasthik Corporation.

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On the question of nexus, they relied on the judgment of Hon’ble Supreme Court in the case of Aslma Mohd. Merchant vs. Competent Authority [(2008) 14 SCC 186] and Fatima Mohd. Amin vs. UOI [(2003) 7 SCC 436] .

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Hence, they sought a stay of the above three impugned orders. They did not plead any undue/financial hardship.

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In response, the learned representative of the respondent stated that:

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a. With regard to the property at 1 above, the appellant has stated that Rs. 20,00,000/- was taken as loan from Kalupur Commercial Cooperative. However no original documents was ever produced with regard to the sanction of the loan or its disbursement. Moreover, it is apparent from their bank statement that they have repaid the entire loan within three years between 1996 and 1999 in lump sum payments although in their income tax return, an income of only Rs.

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MP-74/MUM/2015 (Stay), MP-75/MUM/2015 (Stay) & MP-76/MUM/2015 (Stay)

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Page 3 of 5

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2,72,071/- was shown for five years from 1991-92 to 199899. With regard to the balance amount of Rs. 6,25,000/which is stated to have been withdrawn from the partnership firm of Swasthik Corporation the year wise income of the said company from 1990-91 to 1998-99 for the appellant is only Rs. 1,34,744/-. The gap has not been explained by the appellant.

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b. With regard to the second property i.e. Ground Floor, Bhagwati Chambers, CG Road, Opposite SP Stadium, Navrangpura, Ahmedabad he stated that in this case also no documents were provided regarding the loan sanctioned or its disbursement to purchase the said property and only an uncertified copy from the bank asking the appellant for regular repayment of the loan of Rs. 2,50,000/- was produced which was without any corroboration that this loan was for the purpose of the present property.

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c. With regard to the third property i.e. 16, Alaap-I, Opposite Mayur Pankh Soceity, Near octroi Naka, Satellite, Ahmedabad the learned counsel for the respondent stated that as per the certificate submitted by the chartered accountant of the appellant i.e. Charuben Kamlesh Shah, the share of the appellant in the said company i.e. Swasthik Corporation from the year 1990-91 to 1998-99 comes to only Rs. 96,912/-. The contention of the appellant that they withdrew their capital from Swasthik Corporation and for that amount purchased the property jointly is not borne out with any documents. He referred to the adjudication order

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MP-74/MUM/2015 (Stay), MP-75/MUM/2015 (Stay) Page 4 of 5 & MP-76/MUM/2015 (Stay)

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No. 3/SAFEMA/ MUM/2015 dated 30.06.2015 were an analysis of the statement of OD account of Swasthik Corporation with Canara Bank has been done which shows that the firm took an overdraft from its OD account and disbursed Rs. 80,000/- to the appellant (along with others) on 14.05.1997 but within two days i.e. on 16.05.1997 an amount of Rs. 14,32,66/- was deposited in the said OD account for which there is no explanation.

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On the basis of above, he submitted that this is an arguable case and there is no prima facie case in favour of either of the appellants and hence the stay petitions need to be rejected.

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I have examined the case and considered the submissions made by both the sides. From the discussions above, it is clear that it is an arguable case which has to be argued by both the sides on the basis of evidences/documents. Hence, I do not find that there is a prima facie case in favour of the appellants. The judgments cited by the appellants, one pertain to the NDPS Act and the other pertains to SAFEMA. However, it is a well laid down principle that precedent value of a judgment is only when the facts are identical. That needs an in depth analysis which could be done at the time of final hearing. The appellants have not pleaded any undue/financial hardship. I accordingly reject the stay petitions in all the above three appeals.

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The main appeal to be now listed for final hearing.

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(Ananya Ray) Member

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New Delhi, 04^th September, 2018 ‘A’

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MP-74/MUM/2015 (Stay), MP-75/MUM/2015 (Stay) & MP-76/MUM/2015 (Stay)

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Page 5 of 5

FPA-20/BOM/2015 of Charuben K. Shah v/s Competent Authority, Bombay

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FPA-20/BOM/2015 of Charuben K. Shah v/s Competent Authority, Bombay

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