Quashed

FPA-PMLA-478/DLI/2013 of Shri Vinod Kumar Gupta v/s The Joint Director, Directorate of Enforcement, Delhi

ATFP23 Jul 2018FPA-PMLA-478/DLI/2013

Case brief

AI extract

What is this about?

The appellant challenged attachment orders under the PMLA regarding property acquired via consultation fees received from money laundering. The Tribunal quashed the orders, holding the ED failed to prove a nexus between the appellant and the crime, especially given the appellant was already discharged by the Criminal Court for lack of evidence.

What did the court decide?

Impugned orders of attachment and provisional attachment order set aside and quashed; properties released forthwith. No costs.

FPA-PMLA-478/DLI/2013 of Shri Vinod Kumar Gupta v/s The Joint… — Money Laundering | ATFP (2018)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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Date of decision 23^rd July, 2018

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MP-PMLA-1503/DLI/2015(Misc.) MP-PMLA-1014/DLI/2014(Stay) &

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FPA-PMLA-478/DLI/2013

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Shri Vinod Kumar Gupta ... Appellant/Applicant

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Versus

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The Joint Director, … Respondent Directorate of Enforcement, Delhi

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Advocates/Authorized Representatives who appeared

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For the appellant : Shri Vinod Kumar Gupta, Appellant For the respondent : Shri Atul Tripathi, Advocate

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CORAM

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JUSTICE MANMOHAN SINGH : CHAIRMAN

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JUDGEMENT

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MP-PMLA-1503/DLI/2015(Misc.), MP-PMLA-1014/DLI/2014(Stay) & FPA-PMLA-478/DLI/2013

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The appellant has filed the present appeal under Section 26 of the Prevention of Money Laundering Act, 2002 against the Order dated 22.02.2013 in Original Complaint No. 160/2012 passed by the Adjudicating Authority.

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The complainant has issued provisional attachment order no. 01/2012 dated 30.09.2012 under section 5(1) of the PMLA attaching the property of the appellant comprising of :-

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i) Office No. 507, Shakuntla Building, 59, Nehru Place, New Delhi (herein referred as „the said property).

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FPA-PMLA-478/DLI/2013

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Page 1 of 8

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ii) Account no. 629401139789 of the appellant with ICICI Bank, Nehru Place, Delhi having made cash deposit of Rs.20,000/- after 1^st March, 2007.

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On 16.9.2009, CBI received a complaint from State Bank of India, Sansad Marg, New Delhi alleging the commission of criminal offences by Dr. Kewal Krishan Sood, Promoter of M/s. Raghubir Hospital Pvt. Ltd. and consequently an FIR NO. BD1/2009/E/0019 was registered by the CBI.

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On 15.11.2010, after the completion of investigation, CBI filed the chargesheet in the Court of CMM, Tis Hazari Court, Delhi u/s 120B r/w 420, 467, 468 and 471 of IPC against the followed accused persons:-

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Dr. Kewal Krishan Sood

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M/s. Raghubir Hospital Pvt. Ltd.

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Anubhav Sood

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Hemant Sharma

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The main charges as levelled in the charge-sheet are that Dr. K.K. Sood has dishonestly availed a term loan of Rs.6.50 Crore from SBI by submitting forged performa invoices and receipts issued by M/s. Gaurav Medical Equipments and M/s. Anubhav Construction Co.

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During the period 01.03.2007 to 15.06.2007, an amount of Rs.5.63 crore was disbursed by the SBI including a sum of Rs.3.63 crore for purchase of two machines manufactured by M/s. Siemens Ltd. purported to be supplied by M/s. Gaurav Medical Equipments which during investigation was found to be not installed and invoices were fake.

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It was further found during investigation that the entire loan disbursed to M/s. Raghubir Hospital Pvt. Ltd. was routed through the account of M/s. Gaurav Medical Equipments and M/s. Anubhav Construction Co. in the accounts maintained with Nainital Bank, Ghaziabad opened by Dr. K.K. Sood and he siphoned off the said funds for personal gain.

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The investigation made by CBI also revealed the acquisition of various properties by financing from the banks and the loan amount paid from the

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FPA-PMLA-478/DLI/2013

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Page 2 of 8

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proceeds of disbursement of the loan made by SBI to M/s. Raghubir Hospital Pvt. Ltd.

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As the commission of offences mentioned in the charge sheet filed by the CBI are scheduled offences under PMLA, the complainant have registered an ECIR no. ECIR/11/DZ/2011/DD(SC)/VM on 28.11.2011 in the Delhi Zonal Office u/s 3 & 4 of PMLA.

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On 04.08.2012, the complainant has recorded the statement of Dr. Kewal Krishan Sood u/s 50 of PMLA, in pursuance to the order dated 21.07.2012 of CMM as Dr. Kewal Krishan Sood was in judicial custody in Central Jail, Tihar, New Delhi.

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Dr. K.K. Sood, inter alia stated that in the year 2003-2004, he had taken land for M/s. Raghubir Hospital Pvt. Ltd. because GDA had passed a resolution that no Nursing Home/ Hospital will be run in the residential area; that he had applied a loan of Rs.20 crore through Shri V.K. Gupta, CA but an amount of Rs.6.50 crore only was sanctioned by State Bank of India.

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Dr. K.K. Sood further stated that for obtaining a loan in the beginning all the documents were prepared by Shri Kapil Aggarwal of M/s. B. Agarwal & Co. and in the year 2003 to 2005 he had given Rs.30 lacs in cash, for preparing the document, to him and later on a dispute arose between him and M/s. B. Agarwal & Co. as Shri Kapil Agarwal, as CA was asking for more money, but he left him and given the job to Shri V.K. Gupta, CA that one Gaurav and Hemant Sharma were together and prepared all the documents on behalf of Dr. K.K. Sood and later on Shri Hemant Sharma was arrested by the CBI.

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The complainant has also recorded the statement of Shri Naresh Kumar Sharma, DGM, SBI u/s 50 of the PMLA who inter alia deposed regarding the factum of sanctioning of loan, its disbursement and detail of the properties pledged against the loan. He also corroborated the transfer of funds to by M/s.

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FPA-PMLA-478/DLI/2013

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Page 3 of 8

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Gaurav Medical Equipments and M/s. Anubhav Construction on the basis of invoices and vouchers submitted by M/s. Raghubir Hospital Pvt. Ltd.

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The complainant has also recorded the statement of Chief Manager, Nainital Bank who deposed regarding the accounts of Dr. Kewal Krishan Sood, his wife Neeta Sood, his son Anubhav Sood and M/s. Raghubir Hospital Pvt. Ltd. and the funds received and withdrawn from these accounts.

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Case against the appellant

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The entire case of the complainant rests upon complaint u/s 5(5) of PMLA in ECIR No. ECIR/11/DZ/2011/AD (VM) filed consequent to provisional attachment order alleging that the appellant had contravened the provision of Section 3 of the PMLA and thus, „the said property‟ is liable to be attached.

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The complainant has also issued summon to the appellant and statement of Shri V.K. Gupta, Company Secretary (now appellant) was recorded u/s 50 of the PMLA and the appellant inter alia stated that for purchase of „the said property‟ in his name at Nehru Place, the payment was made from ABN Amro Bank and State Bank of Patiala, Nehru Pace, New Delhi; that a sum of Rs.35 lacs was paid for the purchase of the property; that he pre-mature the FDR amounting to Rs.25 Lacs approximately and he took loan from ABN Amro Bank for Rs. 5 Lacs and remaining Rs.5 Lacs as temporary loan from his relatives and office; that out of only Rs. 15 lacs received from Dr. K.K. Sood (through cheques only) for his professional charges were used for purchase of this property; that the payment of Rs. 17 Lacs was made through cheques and Rs.18 lacs in cash to the seller for purchase of this property.

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In the complaint, it was alleged that the statement of appellant was again recorded on 31.08.2012 in which the appellant inter alia stated that in Jan, 2006 he submitted the papers of Dr. K.K. Sood to State Bank of India for obtaining a loan of Rs.6.50 crore; that after seeing the statement dated 04.08.2012 of Dr. K.K. Sood, the appellant stated that “that Dr. K.K. Sood had paid him Rs.70 Lacs in cash”; that during the course of investigation the

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FPA-PMLA-478/DLI/2013

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Page 4 of 8

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appellant submitted the document of „the said property‟ and stated that he had purchased „the said property‟ for Rs.35 Lacs paying Rs.16 Lacs through cheque and Rs. 19 Lacs in cash to the seller, Shri Rishi Goswami.

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The complainant alleged that from the investigation conducted, it revealed that the appellant assisted Dr. Kewal Krishan Sood in getting the term loan from SBI, Nehru Place, Delhi and in turn appellant received Rs. 70 Lacs in cash from Dr. Kewal Krishan Sood which is “Proceed of Crime” in term of section 2(u) of PMLA.

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It was further alleged that the appellant has invested part of total of Rs.70 Lacs in cash which he received from Dr. Kewal Krishan Sood for purchase of „the said property‟ and rest of the amount was deposited in the bank account no. 629401139789 of appellant maintained with ICICI Bank, Nehru Place, New Delhi in different instalments and thus, the appellant has committed an offence u/s 3 of PMLA.

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The appellant has filed the detailed reply to the notice issued by the adjudicating authority denying the allegations made by the complainant along with all the relevant documents providing sources of income from which the above mentioned property has been acquired by the appellant.

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Admittedly, in the prosecution complaint filed under section 44 read with section 45 of the PMLA, 2002 for the offences punishable under sections 3 & 4 of the said Act, the appellant was one of the accused party.

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After trial, the Special Judge given the Judgement dated 11^th May, 2018. The judgement has been passed after recording the evidence of the party. In the said judgement, it has been held that no corroborative evidence has been collected from ED to show that the appellant has received sum of Rs.30 lacs in cash from the accused party. There is no material on record to frame the charge under sections 3 & 4 of the PMLA against the appellant and the appellant was accordingly discharged.

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FPA-PMLA-478/DLI/2013

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Page 5 of 8

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There is no denial that the appellant before the adjudicating authority submitted the detail of funds available/received in his account for deposit (FDR), which were later on encashed for purchase of property at 507, Shakuntla Building, 59, Nehru Place, New Delhi. The appellant has an availability of funds amounting to Rs.29.94 lakh in his Bank account during the period 01.04.2006 to 31.07.2007, out of which Rs.19.50 lakh was deposited as FDR and later on encashed for purchase of above said property. Record shows that no cash was ever deposited/ used for preparation of FDR or for purchase of property as alleged by complainant.

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The appellant has furnished to the adjudicating authority entire detail of sources of funds used for purchase of property, the destination of which was from long term savings and loans. The same has not been rebutted by the respondent and no adverse observation has been made by the adjudicating authority. So it may stand proved that the property attached by the complainant has not been purchased by any cash.

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It is true that the complainant has made the allegation that Dr. K.K. Sood paid a sum of Rs.70 lakh in cash to the appellant after getting the loan. It is alleged that the appellant has purchased the above said property for Rs.35 lakh and rest of the amount i.e. Rs.35 lakh was deposited in his ICICI Bank Account no. 629401139789 at Nehru Place, New Delhi. However, the ground situation is different as the appellant has opened the said account in October, 2011 and only a sum of Rs.20,000/- has been deposited in cash on July 28, 2012 ( which was also withdrawn from other bank account). The total of Debit/credit in the said account since its opening is Rs.380,282/- out of which Rs.40,000/- was transferred from the saving bank account of State Bank of Patiala, Nehru Place, New Delhi of the appellant. So, only a sum of Rs.340,282/- (Rs.320, 282/- by cheque and Rs.20,000/- by cash) has been deposited in the said account. (Page 290-338 of Paper Book submitted by complainant). So, presumption cannot be drawn that a sum of Rs.35 lakh in cash has been deposited in the said account

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FPA-PMLA-478/DLI/2013

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Page 6 of 8

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without conclusive and cogent evidence. Prima-facie, it has to be established by the respondent on the basis of allegation made in the complaint.

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It is admitted position that the appellant has submitted to the adjudicating authority entire detail of the said Bank Account (Para 57-58 at page no. 106-107 of appeal). The same has not been rebutted by the complainant and no adverse observation has been made by the adjudicating authority. So even prima facie, established that no cash (except Rs.20,000/- on July 28, 2012) has ever been deposited in the said account.

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As already mentioned that the appellant has already been discharged due to insufficient evidence gathered by the ED. No charge has been framed against the appellant in the prosecution complaint who has been discharged by the judgement.

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There is no force in the submission of the learned counsel for the respondent that on the date of execution of loan agreement and submitting the title documents, there is a presumption that being a consultant, he might be aware that the title documents are forged and fabricated.

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As per ground reality, all professionals such like - advocates, solicitors, consultants, chartered accountants, doctors, surgeons used to receive their professional charges from their respective clients against service provided. The presumption under section 5(1)(a) cannot be drawn ipso facto that they have in their possession the proceed of crime received as professional charges and on the basis of presumption, their movable and immovable properties can be attached unless link and nexus directly or indirectly towards crime with the accused is established within the meaning of section 2(1)(u) of the Act. In the absence as mentioned above, they are to be treated as innocent persons. If the argument of the respondent is accepted that a mere possession of money paid by the accused as service charges to the professionals without any link and nexus, then the movable and immovable properties of most of the professionals

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FPA-PMLA-478/DLI/2013

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may be attached and after confirmation, the same is vested with the State. The same is not intention and scheme of the Act. Mechanical orders of such nature by the respondent and adjudicating authority cannot be passed blindly. They have to apply their mind and consulting well established law. Section 5 and 2(u) of PML Act, 2002 have to be read together when any order of attachment is passed. Unless link and nexus of proceed of crime is established under section 2(1)(u), the proceedings under PML Act, 2002 can not be initiated.

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After hearing, I am of the view that no case is made out on merit. The impugned order against the appellant is totally perverse and against the law. The respondent has not prima facie established that the appellant has any link in the nexus in the crime.

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The prosecution complaint against the appellant has already been dismissed. The appellant has merely received the consultation fee from the accused party at the time of receiving the said fee. The appellant was not aware that he is receiving the consultation fee which may be part of proceed of crime.

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Both the orders i.e. the impugned order and the PAO against the appellant are set aside and quashed.

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The properties attached by the said order are accordingly released forthwith.

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No costs.

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(Justice Manmohan Singh) Chairman

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New Delhi, 23rd July, 2018 „skb‟

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FPA-PMLA-478/DLI/2013

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FPA-PMLA-478/DLI/2013 of Shri Vinod Kumar Gupta v/s The Joint Director, Directorate of Enforcement, Delhi

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FPA-PMLA-478/DLI/2013 of Shri Vinod Kumar Gupta v/s The Joint Director, Directorate of Enforcement, Delhi

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