Dismissed

FPA-PMLA-2003/BBS/2017 of Shri Bharat Bhushan Swain v/s The Joint Director Directorate of Enforcement, Bhubaneswar

ATFP13 Feb 2019FPA-PMLA-2003/BBS/2017

Case brief

AI extract

What is this about?

The Appellate Tribunal dismissed an appeal against the confirmation of a Provisional Attachment Order. The court held that sufficient reason to exist under Section 5(1) PMLA 2002 was satisfied regarding the seized cash, as the appellant failed to discharge his burden under Section 24 PMLA 2002 despite his acquittal in a related criminal case.

What did the court decide?

The appeal was dismissed with no costs awarded to the appellant.

FPA-PMLA-2003/BBS/2017 of Shri Bharat Bhushan Swain v/s The Joint… — Money Laundering | ATFP (2019)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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Date of decision : 13.02.2019

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FPA-PMLA-2003/BBS/2017

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Shri Bharat Bhushan Swain … Appellant

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Versus

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The Joint Director Directorate of Enforcement, Bhubaneswar

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… Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellant	: Mr. Rahul Shyam Bhandari, Advocate
	Mr. Saswat Kumar Acharya, Advocate
For the Respondent	: Mr. Naveen Kumar Matta, Advocate
CORAM
JUSTICE MANMOHAN SINGH	: CHAIRMAN
SHRI G. C. MISHRA	: MEMBER

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JUDGMENT

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FPA-PMLA-2003/BBS/2017

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The present appeal has been preferred by Sh. Bharat Bhusan Swain, the appellant against the order passed by Adjudicating Authority in Original Complaint (O.C.) No. 733/2017 dated 01.09.2017 in Provisional Attachment Order (PAO) 11/2017 dated 29.03.2017 arising out of ECIR/02/BBSZO/2016 dated 03.06.2016. The appellant is Defendant no.4 in the O. C.

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The appellant has prayed for setting aside the order dated 01.09.2017 passed by the Adjudicating Authority and passed any of other(s) as may be deemed fit and proper in the fact and circumstances of the case.

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FPA-PMLA-2003/BBS/2017

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Page 1 of 10

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As it reveals from the record that the present appellant, a special class contractor undertaking various govt. projects alleged to have been involved in many criminal activities including attempt to murder, extortion (“dada-bati”), tender fixing, offences under Arms Act, etc. for which five FIRs lodged against him and others by Chauliaganj Police Station, Cuttack, Odisha since the year 1982 and was lodged in Jail under Judicial custody. In the present case He was again arrested in March 2016 for the extortion, tender fixing and offences under Arms Act, under 1959 was sent to Judicial custody for 7 months till 20^th October, 2016 on the basis of FIR lodged by Sh. Saroj Dehury at the aforesaid police station.

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The O.C. no. 733/2017 was filed against 10 defendants including the present appellant who has been arrayed as defendant no. 4 as these defendants alleged to have committed offences u/s 120B, 302, 307, 364(A), 384, 386, 387, 411, 419, 420, 471, 489(B) of IPC and sections 25 and 27 of Arms Act, 1959. As these offences are scheduled offences under paragraphs 1 & 5 respectively of schedule under PMLA and that as prima facie case of offence of money laundering under section 3 of PML Act, 2002 and punishable under section 4 of PMLA, 2002, so the Enforcement Directorate registered ECIR/BBSZO/02/2016 dated 03.06.2016 and that the case was taken up for the investigation. During the course of investigation statement of various persons including the appellant u/s 50 of PMLA, 2002 have been recorded. The statement of the present appellant has also been recorded.

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It is seen from the handwritten copy of the seizure list dated 01.02.2016 that an amount of Rs. 12,44,000/- cash seized from the FPA-PMLA-2003/BBS/2017

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Page 2 of 10

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house of the appellant by the local police on 01.02.2016 during the course of investigation in Chauliaganj PS case no. 12 dated 30.01.2014 registered u/s 341/323/326/506/34 IPC r/w section 25/27 of Arms Act, 1959 turned to 341/323/326/307/506/34 of IPC r/w Section 25 and 27 of Arms Act, 1959.

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It is also seen from the record that a plain paper FIR was drawn by Sh. Ajay Kumar Das, IIC, Chauliaganj PS, Police Commissionrate, Bhubansewar on 03.02.2016 at 2pm. In the said plain paper FIR the fact of involvement of the present appellant in extortion etc. and the seizure of Rs. 12,44,000/- have been reflected. Consequent thereto a regular case was registered vide PS case no. 27/16 u/s 387/120B/34 IPC r/w 25(1-AA)/ 27 of Arms Act against the present appellant and others. Thus, Rs. 12,44,000/- has been made as a proceeds of crime under this PS case no. 27/16.

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It is also revealed from the record that charge sheets in PS case no 12 dated 30.01.2014 and 27/16 dated 03.02.2016 were filed. The present appellant has been acquitted in PS. Case no. 12 dated 30.01.2014 corresponding to G.R. case no. 199/2014 by ld. Chief Judicial Magistrate cum Asst. Sessions Judge, Cuttack vide judgment dated 24.03.2017 passed in S.T. no. 18/2017 in which there is a direction from the ld. Court to return seized cash, if any. Nowhere in the said judgment there is mention of seizure of Rs. 12,44,000/-. Even the seizure list on which the appellant is heavily relying on has not been exhibited as an evidence for prosecution. It is seen from the copy of the judgment of learned Chief Judicial Magistrate cum Asst. Sessions Judge, Cuttack that the said amount of Rs. 12,44,000/- has never been exhibited as a material object in the case. The appellant has not filed the

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FPA-PMLA-2003/BBS/2017

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Page 3 of 10

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copy of the charge sheet filed in connection with PS Case no. 12 dated 30.01.2014 showing that Rs. 12,44,000/- was part of the said criminal case. On the other hand it is revealed from the plain paper FIR dated 03.02.2016 and charge sheet in PS case no. 27/2016 that Rs. 12,44,000/- is found mentioned.

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There is no material placed before us by the appellant that the Plain Paper FIR registered vide FIR no. 27/2016 against the appellant and others in which charge sheet bearing no. 83 dated 17.06.2016 interalia involving the cash of Rs. 12,44,000/- is released by the Trial Court. Nor there is any submission made by the appellant that they have filed any application before the trial court to release that amount on the ground that the same is neither seized nor involved in PS case no. 27/2016.

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The appellant has filed a copy of Final Form under Section 173 CrP.C. filed before SDJM, Cuttack in the matter of FIR No. 27 dated 03.02.2016 for commission of offences under Section 387/120(B)/34IPC read with Section 25(1-B)(a)/25(1-AA)/27 of Arms Act. In the said Final Form, the present appellant has been cited as Accused No.3. The brief facts stated therein are that during search of the house of the appellant, while investigating Chauliaganj PS Case No.12 dated 18.01.2016, on 01.02.2016 cash of Rs. 12,44,000/- have been seized and that he failed to give an satisfactory account regarding the possession of the seized amount and that it is ascertain that the money came from tender fixing and that the associates are also collecting Dada-bati from different businessman, contractors, nursing home owners, real estate owners, etc., under the money and muscle power of their boss Sh. Susant Kumar Dhal Samant and Sh. Susil Kumar Dhal Samant.

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FPA-PMLA-2003/BBS/2017

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Page 4 of 10

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It is pertinent to mention here that the Enforcement Directorate has registered the ECIR against the appellant & others on the basis of above FIR no. 27/2016 wherein the aforesaid amount of Rs. 12,44,000/has been shown as extortion money by the local Police. There is no material placed before us that the criminal Trial in charge sheet nos. 83 dated 17.06.2016 arising out of FIR no. 27/2016 is disposed of.

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It is revealed from the record that during the course of investigation under PMLA the statement of the appellant was recorded. On the question regarding the source of such cash found from his residence, the appellant Shri Bharat Bhushan Swain stated that the cash was withdrawn from his Bank Account prior to the search action. But, he could not give the details of the Bank Account from which such cash was withdrawn. It is further seen from the record that the total investments in immovable properties is much more than his net income.

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The Appellant has filed his written submissions so also the respondent. We have gone through the written submissions of both the parties. We have heard the learned counsels appearing for the parties and also gone through the material placed on record. In view of the following we do not find any merit in the appeal:

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(A). The appellant has challenged the P.A.O., O.C. and the Impugned Order inter alia on the ground that the sum of Rs. 12,44,000/- shown as seizure made in the present case by the respondent for the purpose of Provisional Attachment was not seized in the present case and said cash was seized arising out of another FIR vide Chauliaganj PS Case no. 12 dated 30.01.2014 corresponding to G.R. Case no. 199/2014 and that in FPA-PMLA-2003/BBS/2017

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this FIR dated 30.01.2014 a seizure list dated 01.02.2016 was prepared reflecting therein that the amount of Rs. 12,44,000/- was seized in that case.

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(B). The second important issue raised by the appellant that the respondent has not assigned any „reason to believe‟ as contemplated under PMLA to attach the aforesaid amount of Rs. 12,44,000/-.

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(C). We have considered the entire material made available to us. The respondent has registered ECIR/02/BBSZO/2016 dated 03.06.2016 on the basis of PS Case no. 27/16 dated 03.02.2016 registered against the appellant & others for commission of offences under section 387/120B/34 IPC r/w 25(1-AA)/ 27 of Arms Act.

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(D). On perusal of the papers it appears that the aforesaid amount of Rs. 12,44,000/- has been seized on 01.02.2016 at 04:35 AM during course of investigation of Chauliaganj PS Case no. 12 dated 30.01.2014 from the house of the appellant and the appellant could not show/produce any document regarding procurement of such huge amount at his house.

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(E). On 03.02.2016 a Plain Paper FIR was drawn by Shri Ajay Kumar Das, IIC, Chauliaganj Police Station wherein the seizure of the aforesaid amount has been reflected. The said Plain Paper FIR has been registered as PS Case no. 27/16 dated 03.02.2016 under the aforesaid sections and Charge Sheet has been filed against several persons including the appellant who is cited as accused no. 3. In the said Charge Sheet, the aforesaid amount has been shown as seized from the house of the appellant on 01.02.2016. The appellant has not produced any evidence FPA-PMLA-2003/BBS/2017

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Page 6 of 10

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that he has been acquitted in the criminal case arising out of PS Case no. 27 dated 03.02.2016.

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(F). That the appellant has not produced any material such as copy of charge sheet arising out of PS Case no. 12 dated 30.01.2014. The present appellant has been acquitted in PS. Case no. 12 dated 30.01.2014 corresponding to G.R. case no. 199/2014 by ld. Chief Judicial Magistrate cum Asst. Sessions Judge, Cuttack vide judgment dated 24.03.2017 passed in S.T. no. 18/2017 in which there is a direction from the ld. Court to return seized cash, if any. Nowhere in the said judgment there is mention of seizure of Rs. 12,44,000/-. Even the seizure list on which the appellant is heavily relying on has not been exhibited as an evidence for prosecution. It is seen from the copy of the judgment of learned Chief Judicial Magistrate cum Asst. Sessions Judge, Cuttack that the said amount of Rs. 12,44,000/- has never been exhibited as a material object in the case. On the other hand it is revealed from the plain paper FIR dated 03.02.2016 and charge sheet in PS case no. 27/2016 that Rs. 12,44,000/- is seized in this case.

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(G). The appellant has failed to discharge the burden of proving that

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the amount which was seized from the possession of the appellant was not proceeds of crime or untainted amount as required under Section 24 of the PML Act. Instead of discharging their burden, the appellant concentrated his arguments on the technical point that the said amount was seized in PS Case no. 12 dated 30.01.2014 in which he has already been acquitted and direction has been issued to release the aforesaid amount.

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FPA-PMLA-2003/BBS/2017

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Page 7 of 10

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(H). The appellant has relied on following judgments in his written submission in support of his contention that there are no reasons to believe in attaching the aforesaid amount and confirmation of the same by the Adjudicating Authority. The judgments cited are:

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(i) Kranti Associates Pvt. Ltd. and Anr. Vs. Masood Ahmed Khan reported in (2010) 9 SCC.

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(ii) Calcutta Discount Company Vs. ITO (1961) 2 SCR 241.

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(iii) Tata Chemicals Ltd. Vs. Commr. Of Customs, (2015) 11 SCC 628 (para15).

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(iv) M. P. Industries Ltd. Vs. ITO (1970) 2 SCC 32.

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(v) ITO Vs. Lakhmani Mewal Das (1976) 3 SCR 956.

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(vi) K. Munivelu Vs. Government of India AIR 1972 AP 318.

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(vii) Paresha G. Shah Vs. State of Gujarat, 2016 (1) Guj LH 329.

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(viii) SheoNath Singh Vs. Appellate Assistant CIT (1972) 3 SCC 234.

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(I). We have gone through the said judgments cited by the appellant, the PAO, the OC and the impugned order. The said judgments have explained the expression „reason to believe‟ in the context of the respective Acts and we are respectfully agree with the views expressed by the Hon‟ble Supreme Court and High Court in the aforesaid judgments. But the same are not applicable in the present case in view of the fact that the respondent has sufficiently explained the reason to believe that why the said amount is required to be attached under Section 5(1) of PMLA, 2002. It is not denied by the appellant that the aforesaid amount has been seized from the possession of the Appellant, secondly, the said FPA-PMLA-2003/BBS/2017

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amount is reflected in the FIR No. 27/2016 and the charge sheet dated 17.06.2016, thirdly, there is no material placed by the appellant that the said criminal case is disposed of in his favour.

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(J). The learned Adjudicating Authority has also explained the reasons to believe, in confirming the PAO, from page 73 to 80 and 83 to 93 of the Impugned Order.

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(K). In view of the above, we are satisfied that there are sufficient reasons explained by the respondent as well as Adjudicating Authority in attaching the amount involved in this appeal and confirmation of the same respectively.

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(L). The respondent has filed their written synopsis quoting the different date of the events and submitted that the appellant has not discharge the burden as required under Section 24 of the PMLA. The respondent has relied upon following judgments in support of their submissions:

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(i) V. K. Agarwal, Assistant … Vs. Vasantraj Bhagmanji Bhatia & Ors. on 07^th April, 1988 AIR 1106, 1988 SCR (3) 450.

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(ii) Mr. Radha Mohan Lakhotia Vs. The Deputy Director on 05^th August, 2010.

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(M). We have considered the contention of the respondent. We are in agreement with the submission of the respondent that the appellant failed to discharge his burden as required under Section 24 of the PMLA.

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FPA-PMLA-2003/BBS/2017

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(N). The technical objection raised by the appellant is that he has been acquitted in the criminal case in PS case no. 12 dated 30.01.2014 in which the aforesaid amount has been seized. Secondly, it is also submitted by the appellant that the seizure of aforesaid amount in PS case no. 27 dated 03.02.2016 is illegal. In this regard, the Appellant ought to have moved the concerned Trial Court to get the aforesaid amount released in his favour.

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We have considered the material placed on record and after hearing the learned counsels for the parties and on the grounds stated above we do not find any merit in the appeal. There is no ground to interfere with the findings in the impugned order.

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