Disposed

FPA-PMLA-645/MUM/2014 of Sudesh Madhukar Kulkarni v/s The Deputy Director Directorate of Enforcement, Mumbai

ATFP1 Aug 2018FPA-PMLA-645/MUM/2014

Case brief

AI extract

What is this about?

The Tribunal disposed of the appeal and stay application challenging provisional attachment under PMLA. Relying on the ongoing criminal trial, it permitted the attachment to remain till the Special Court's final decision while directing the appellant to deposit monthly rental charges. It reserved rights regarding the stay and refund if the criminal charges are dropped.

What did the court decide?

Attachment to remain till Special Court decision; appellant to deposit Rs. 181/month as rent; no stay on attachment order.

FPA-PMLA-645/MUM/2014 of Sudesh Madhukar Kulkarni v/s The Deputy… — 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 1^st August, 2018

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MP-PMLA-1191/MUM/2014(STAY)

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FPA-PMLA-645/MUM/2014

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Sudesh Madhukar Kulkarni … Appellant/Applicant

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Versus

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The Deputy Director Directorate of Enforcement, … Respondent Mumbai

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Advocates/Authorized Representatives who appeared

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For the appellant : Shri Amit Sheth, Advocate and Shri Suresh A. Malkhani, Advocate For the respondent : Shri Vikas Garg, Advocate

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CORAM

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JUSTICE MANMOHAN SINGH : CHAIRMAN SHRI G.C. MISHRA : MEMBER

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JUDGEMENT

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MP-PMLA-1191/MUM/2014(STAY) & FPA-PMLA-645/MUM/2014

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The above mentioned appeal has been filed against the Order dated 21^st August, 2014 .

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The appellant is arrayed as Defendant no. 6 in the provisional attachment order.

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The relevant paras 10 to 15 of the appeal are read as under:-

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“10. The Appellant Original Defendant No. 6 submits that the property involved in the Original Complaint No. 299/2014 is the property not owned by the Appellant Original Defendant No. 6 but the said property is tenancy property and the Appellant Original Defendant No. 6 is the Tenant and the said property cannot be confiscated in the provisions of Prevention of Money-laundering Act, 2002. A copy of tenancy agreement dated 5.3.2016 and rent receipts are annexed herewith and marked Exhibit “E”. (Colly.)”

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FPA-PMLA-645/MUM/2014

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Page 1 of 4

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“11. The Appellant Original Defendant No. 6 submits that the property at Room No.3, Ambulkarwadi, Gokhale Road, South Dadar, Mumbai-28 shown at Para No.21 of Provisional Attachment Order No.5/2014 dated 27/3/2014 is the property of tenancy rights under Pagdi System. It is submitted that the tenancy property being residential property cannot be attached under the provisions of Prevention of Money-laundering Act, 2002. It is submitted that the contents in Para 21 of the Provisional Attachment Order to the extent of tenancy is admitted and rest of the contents are denied. A copy of Provisional Attachment Order dated 27.3.2014 is annexed herewith and marked Exhibit “F”.

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“12. The Appellant Original Defendant No. 6 submits that no opportunity is given to the Appellant Original Defendant No. 6 to substantiate his claim by way of filing written submission. It is submitted that the onus to disprove the contents of the complainant is heavily upon the Appellant Original Defendant No. 6. Therefore, principle of natural justice to be adopted to give a proper opportunity. It is submitted that in the instant case notice served by the Adjudicating Authority on 10/6/2014 to appear on 25/6/2014 to show cause as to why Provisional Attachment Order should not be confirmed, however, law provides in view of section 8 (1) that Adjudicating Authority may serve a notice not less than 30 days but the Adjudicating Authority instead of giving 30 days notice given a fifteen days notice which shows that there is violation of principle of natural justice. It is submitted that the Hon’ble Chairperson has granted adjournment till 24/7/2014 from the day of first hearing i.e. 25.6.2014 and when on 24.7.2014 application for time to file written submission was submitted by the Appellant Defendant No. 6 the learned Chairperson, K. Raamamoorthy had declined to grant time without assigning any reasons and the learned Chairperson had posted the matter for pronouncement of judgment by saying reserve for judgment without declaring the proposed date for pronouncing the judgment, therefore, the judgment dated 21^st August, 2014 pronounced in absence of Appellant Original Defendant No. 6 which violates the principle of natural justice.”

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“13. The Appellant Original Defendant No. 6 states that the statement recorded by the Assistant director on 8/02/2010 at Mumbai, though under coercion, but he made it clear that the alleged above said property is the tenancy property for which he has made local payment of Rs. 3,25,000/(Rupees Three Lakhs Twenty Five Thousand only) which is bifurcated as Rs.2,85,000/- by pay order to the out going tenant and Rs.50,000/- by way of issuing cheque bearing 417099 drawn on Bank of Maharashtra, Dadar Branch in the name of landlady B.G. Ambulkar. It is submitted that the total figure of Rs.2,85,000.00 + 50,000 = 3,35,000/- written as 3.25 Lakh under coercion. A copy of statement of Appellant recorded on 8/02/2010 is annexed and marked Exhibit “G”.

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“14. The Appellant-Defendant No. 6 states that the property in question did not purchased by this AppellantDefendant No. 6. It is submitted that the Appellant-

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FPA-PMLA-645/MUM/2014

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Page 2 of 4

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Defendant No. 6 was owned a property known as Flat No. 406, adm. 565 sq. ft built up area situated on 4^th floor, of B-wing Avantika Co-operative Hsg. Scty. Manisha Nagar, at Village Kalwa, Bombay-Pune Road, Thane (W). It is submitted that the above said property has been sold in the year 2005 by the Appellant-Defendant No. 6 for valuable consideration of Rs.6,50,000/-. It is submitted that the said amount received by the Appellant in instalments as i) Rs.1,00,000/- in cash before execution of agreement for sale on 17.1.2005, ii) Rs.50,000/- dated 22.11.2004 by way of cheque, iii) Rs.1,00,000/- cash on 15/02/2005 and Rs.4,00,000/- by way of pay order dated 15/02/2005. A copy of agreement for Sale dated 17/01/2005 duly registered and bank statement of bank of Maharashtra is annexed herewith and marked as Exhibit “H” (Colly.).”

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“15. The Appellant-Defendant No. 6 states that the payment received by him from above said sale agreement has been paid by him at time executing tenancy agreement. It is submitted that the amount received from sale agreement was kept reserve for investing in house property. It is submitted that the Appellant-Defendant No. 6 executed the tenancy agreement on 05/03/2006 and made the payment out of reserved for the investing in house property.

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The impugned order was challenged by the appellant before us. Vide Order dated 16^th April, 2015, the detailed order was passed by this Tribunal in the application for interim stay under section 35 of the Act. The operative part of the said Order is read as under:-

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“ Consequently taking into consideration the prima facie case, balance of convenience and the irreparable loss which will be caused to the appellant/applicant in case of dispossession of the applicant from Room No. 39, 3^rd Floor, Ambulkar Sadan, Gokhale Road, South Dadar, Mumbai-400028, the dispossession of the appellant is stayed from the said premises subject to the applicant depositing Rs.181/- per month with the respondent from 1^st September, 2014 when the applicant became liable to restore the possession to the respondent on confirmation of provisional attachment order. The arrear of the charges be deposited by 15^th of May, 2015 and the future charges for the subsequent months be continue to be deposited by the applicant by 15^th day of subsequent English month.

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With this direction an interim stay is granted in favour of applicant against the dispossession during the pendency of the appeal till this order is vacated or modified on account of any grounds raised by the respondent in future and the present application for stay is disposed of. It is also ordered that during the pendency of the appeal, the applicant shall not surrender the tenancy rights in favor of the landlord without the prior permission of this Tribunal nor shall part with the possession of the premises to any other persons or legal entity without the persmission of this Tribunal nor will create any third party rights during the pendency of this appeal.”

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FPA-PMLA-645/MUM/2014

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Page 3 of 4

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The matter thereafter listed from time to time in the connected appeals though the appellants are different in common order. The suggestion was made on the last few dates that the attachment order already passed in respect of Room No. 39, 3^rd Floor, Ambulkar Sadan, Gokhale Road, South Dadar, Mumbai-400028 may continue till the final outcome of the criminal complaint which is pending before the Special Court. The counsel for the respondent has no objection. The counsel for the appellant states that this Order may be passed without prejudice to the right and contention of the appellant.

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The counsel for the appellant agrees to deposit Rs.181/- per month with the respondent till the final outcome of the matter before the Special Court. The said suggestion is agreeable to the learned counsel for the respondent.

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Accordingly, the appeal is disposed of. In case the proceedings pending before the Special Court are decided in favour of the appellant, who would be entitled to file appropriate application as well as refund of the rental amount which is being deposited as user and occupation

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charges as well as release of flat in question.

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No costs.

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(Justice Manmohan Singh) Chairman

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(G.C. Mishra) Member

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New Delhi,

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1^st August, 2018.

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‘skb’

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FPA-PMLA-645/MUM/2014

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Page 4 of 4

FPA-PMLA-645/MUM/2014 of Sudesh Madhukar Kulkarni v/s The Deputy Director Directorate of Enforcement, Mumbai

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FPA-PMLA-645/MUM/2014 of Sudesh Madhukar Kulkarni v/s The Deputy Director Directorate of Enforcement, Mumbai

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