FPA-PMLA-2745/BBS/2018 of Bijay Kumar Pattanaik v/s The Joint Director, Directorate of Enforcement, Bhubaneshwar

ATFP24 Apr 2019FPA-PMLA-2745/BBS/2018

Case brief

AI extract

What is this about?

The tribunal rejected the stay appeals of property attachment orders in money laundering cases. It ruled that a registered sale deed does not verify the source of funds and found no prima facie case to support the appellants' claims that properties were purchased from legitimate sources.

What did the court decide?

Stay petitions of attachment orders rejected; one appeal admitted for final hearing.

FPA-PMLA-2745/BBS/2018 of Bijay Kumar Pattanaik v/s The Joint… — Money Laundering | ATFP (2019)

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

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DATE OF DECISION: 24.04.2019

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1. MP-PMLA-5214/BBS/2018 (Stay) & FPA-PMLA-2691/BBS/2018 Smita Pattanaik & Anr. … Appellants 2. MP-PMLA-5348/BBS/2018 (Stay) & FPA-PMLA-2745/BBS/2018 Bijay Kumar Pattanaik … Appellant 3. MP-PMLA-5350/BBS/2018 (Stay) & FPA-PMLA-2746/BBS/2018 Sipra Pattanaik … Appellant 4. FPA-PMLA-2654/BBS/2018 Smt. Tilottama Satapathy … Appellant Versus The Joint Director, Directorate of Enforcement, Bhubaneshwar ... Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellant Nos. 1 & 2	:	Shri Ninad Laud, Advocate Shri Subhash Acharya, Advocate Shri Aditya Pratap Swain, Advocate
For the Appellant No. 3	:	Shri Ashutosh Kumar, Advocate
For the Appellant No. 4	:	Shri Biswambhar Dash, Advocate
For the Respondent	:	Shri Neeraj Atri, Advocate
For the Respondent No.1 (ED)	:	Shri A.K. Pati, Assistant Director
CORAM SMT. ANANYA RAY	:	MEMBER
JUDGMENT

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FPA-PMLA-2691, 2745, 2746 & 2654/BBS/2018

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Page 1 of 7

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MP-PMLA-5214, 5348 & 5350/BBS/2018 (Stay) & FPA-PMLA-2654/BBS/2018

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All the above appeals have been filed against the impugned order No. O.C. 938/2018 dated 11.09.2018 in which various properties have been attached on the ground that they belong to the main accused Shri Triveni Kumar Mohanty or was purchased from the finances of Triveni Kumar Mohanty, layered through these appellants. Each of the stay petitions are dealt separately as below:

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1. FPA-PMLA-2691/BBS/2018, MP-PMLA-5214/BBS/2018

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(Stay) of Mrs. Smita Pattanaik. The main pleading of the appellant was that she had a flat in NA Majestic Department, Jharpada, Bhubaneshwar which was bought in 2009 from one Mr. Ashok Chawla which was later sold for a consideration amount of Rs. 30,00,000/-. The purchase of the property at Majestic Department as per the sale deed dated 04.01.2011 shows that while an amount of Rs. 3,09,000/was paid through cash, an amount of Rs. 5,21,592/- was paid through cheque towards the total cost of the property which is Rs. 8,30,592/-. Hence, all the amount has been paid by the appellant for purchase of the said property and therefore it cannot be said that the main accused Shri Mohanty had paid for it. They relied on the judgment of the Supreme Court in the case of Vimal Chand Ghevarchand Jain

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versus Ramakant Eknath Jadoo (2009) 5 SCC 713 para 19 which states “………..it therefore carries a presumption that the transaction was a genuine one” and para 2 “The deed of sale being registered one and apparently containing stipulations of transfer of rights, title and interest by the vendor in favour of the vendee, the onus of proof was upon the defendant to show that the said deed was in fact not executed or otherwise does not reflect the true nature of transaction”.

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FPA-PMLA-2691, 2745, 2746 & 2654/BBS/2018

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Page 2 of 7

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In response, the respondent stated that the purchase was done by Mr. Triveni Kumar Mohanty and he had paid two cheques amounting to Rs. 3,00,000/- and 5,00,000/- respectively bearing cheque No. 444134 dated 22.08.2009 and cheque No. 444135 dated 08.09.2009 to the seller of the said flat in Majestic Apartment Shri Ashok Chawla. The respondents have relied on an undated letter written by Triveni Kumar Mohanty to Shri Ashok Chawla confirming the above which has been also signed by Shri Ashok Chawla. They have also relied on another letter again undated from Triveni Kumar Mohanty to Uttam Builders wherein he requests that the sale deed may be made in the name of his wife whose address is given below instead of “me i.e. Mr. Triveni Kumar Mohanty. If the sale deed is made in favour of Mrs. Smita Pattanaik…….. I have no objection and will be no claim from my side.” That these above two communications from Triveni Kumar Mohanty conclusively proves that the flat was originally purchased by him from his funds in 2009 but the sale deed was registered much later in 2011 in the name of Smita Pattanaik.

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I have heard both the parties also. Today we are only hearing the stay petition wherein, it is to be seen whether the appellant has been able to make out a prima facie case in their favour. The submissions of the respondent as recorded above have not been disputed by the appellant. Their reliance on the sale deed and the Supreme Court‟s judgment is misplaced as the sale deed is a conveyance deed for selling or buying a property and does not go into the source of money which is being used for the sale/purchase of the property. Whether it is through cash or cheque, is not material right now. As brought out by the details given by the respondent which has not been contested and the fact that the purchase of the flat took place in 2009 but the sale deed was entered into only in 2011 strengthens the contention that the flat was bought FPA-PMLA-2691, 2745, 2746 & 2654/BBS/2018 Page 3 of 7

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Page 3 of 7

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by Shri Triveni Kumar Mohanty. The reliance on the Supreme Court‟s judgment as quoted supra does not help them as in that case, the issue before the Hon‟ble Supreme Court was whether the registered sale deed confers ownership rights or not of the property and it was held by the Supreme Court that the said sale deed in that case did confer the rights and the presumption was that the transaction was a genuine one. In the present case we are not dealing with any such dispute. In this case the moot point is whether the property was purchased from the proceeds of crime of the main accused Mr. Triveni Kumar Mohanty which having replied to in the affirmative I do not find any reason to stay either the impugned order or the eviction notice.

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2. FPA-PMLA-2745/BBS/2018, MP-PMLA-5348/BBS/2018 (Stay) & FPAPMLA-2746/BBS/2018, MP-PMLA-5350/BBS/2018 (Stay) These two appeals have been filed by husband and wife. The learned counsel for the appellant states that legally the impugned order is ex facie wrong and illegal in as much as it has relied on erstwhile Section 24 of PMLA which has been amended in 2013 which has not been taken into consideration. He also stated that the appellants in this case are victims themselves and they have filed a writ petition in the Orissa High Court alongwith many others. Moreover, the appellant Mr. Bijay Kumar Pattanaik has moved many authorities as well as Registrar of Companies, Orissa for inspection of the company Star Yogic Resorts & Leisures Limited, on the ground that it‟s functioning was contrary to the provisions of the Companies Act, 1956 and were violating its provisions by collecting money from the public, misappropriating it and not repaying the same. That the properties of the appellants attached were legally procured and the source of money was, the retirement benefits of Mr. Pattanaik who retired from FCI in 2002, thereafter he worked for some other companies and the

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FPA-PMLA-2691, 2745, 2746 & 2654/BBS/2018

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Page 4 of 7

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remuneration that he got from them etc. The learned counsel for the appellant relied on the following judgments:

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i) Gujarat High Court judgment dated 16.02.2017 in the case of Jafar Mohd. Hassanfatta & Ors. Vs. Deputy Director & Anr. Para 42 wherein the court held “…….there is no legal presumption in Section 24 that- (a) the concerned property is proceeds of crime, (b) the person accused has knowledge that the property is proceeds of crime and (c) the person is involved in or is guilty of money laundering for possessing or having any concern with the proceeds of crime”

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ii) Supreme Court of India judgment dated 09.07.2008 in the case of Noor Agha vs. State of Punjab.

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That the ECIR records that Shri Ashok Kumar Rout is the master mind of the fraud cases but his culpability has nowhere been examined in the case.

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In reply, the respondent has stated that Mr. Pattanaik is an accused in the FIR, that in his statements dated 14.11.2017 and 16.11.2017, he has stated that he was collecting deposits both in cash and cheque from general public for investments in the companies of Triveni Kumar Mohanty either directly or through other collection agents working under him, that he was getting a salary of Rs. 25,000/- per month. Mr. Pattanaik had further stated that he had invested Rs. 11,00,000/- with Mr. Triveni Kumar Mohanty and was receiving an interest of Rs. 55,000/- per month as commission during the period 2007 to 2010. He also accepted that during the marriage of his daughter, Mr. Triveni Kumar Mohanty had contributed Rs. 3,00,000/- to him. That he had purchased a plot of land in 2010 in Bhubaneshwar for Rs. 14,00,000/- and had also invested between the period November 2010 to May

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FPA-PMLA-2691, 2745, 2746 & 2654/BBS/2018

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Page 5 of 7

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2017, an amount of Rs. 32,62,721/- in various bank/post office towards term deposit, RD, etc.

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I have heard both the parties today. As the stay petitions are listed, I have to only see whether the appellants have been able to make out a prima facie case in their favour. There are certain dates which needs to be kept in mind in this case which are as follows:

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i) Retired from FCI in 2002- retirement benefits received to the tune of Rs. 15,29,234/-.

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ii) Worked with Mr. Triveni Mohanty from November 2006 to December 2010.

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iii) In June 2010, he became Director of M/s. Star Yogic Resorts & Leisures Ltd. of which the MD was Shri Triveni Kumar Mohanty.

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iv) That he resigned in December 2010 after Mr. Triveni Mohanty was arrested.

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v) After his resignation, he wrote letters to the Registrar of Companies to probe the activities of the company in which he was the Director.

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vi) He joined many others to file writ petitions in Orissa High Court against the company and its management.

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The dates/period above shows that while he had got his retirement benefits in 2002, he says that he has invested the same in 2010 (immoveable property) and from 2010 to 2017 in moveable properties, which belies any rationale that for eight years he did not use his retirement benefits. It also shows that he was in the services of Mr. Triveni Mohanty (main accused) for four years from November 2006 to December 2010 and was in his pay rolls and fully aiding Mr. Mohanty in getting deposits etc. and resigned soon after

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FPA-PMLA-2691, 2745, 2746 & 2654/BBS/2018

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Page 6 of 7

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Mr. Triveni‟s arrest. His complain to the Registrar of Companies, filing of a writ petition in Orissa High Court etc. appears to be a ploy to protect himself and play the victim card which he never thought of doing earlier when he was involved with Mr. Triveni Kumar Mohanty in the offences that he has been accused of in the FIR. With regard to the appeal by his wife, Mr. Pattanaik has categorically stated in his statement dated 08.02.2018 that she was not educated enough and it was he who was planning, managing and executing including all financial, legal, statutory requirements of her. He also stated that he was filing her (his wife) income tax return exaggerating her income so as to accommodate his earnings. From the above it is my considered view that no prima facie case exists in favour of the appellants and hence the stay petition is rejected.

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3. FPA-PMLA-2654/BBS/2018 In this case, the appellant has not filed any application for either stay of the impugned order nor the eviction notice under Section 8(4). Hence, no interim orders. The appeal is admitted.

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Matter to be listed for final hearing.

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(Ananya Ray) Member

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New Delhi, 24^th April, 2019

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„A‟

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FPA-PMLA-2691, 2745, 2746 & 2654/BBS/2018

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