Partly allowed

FPA-PMLA-3020/LKW/2019 of The Regional Manager, Upsda v/s The Deputy Director Directorate of Enforcement, Lucknow & Ors.

ATFP28 Apr 2020FPA-PMLA-3020/LKW/2019

Case brief

AI extract

What is this about?

The Appellate Tribunal modified an adjudicating authority's order confirming provisional attachment under PMLA. The Tribunal excluded a State Authority (UPSDA), who was only the property lessor, from the order's conclusion that defendants committed scheduled offences or possessed proceeds of crime.

What did the court decide?

The impugned order holding that defendants committed scheduled offences and possessed proceeds of crime was modified to exclude the appellant by replacing the term 'defendants' with 'defendants other

FPA-PMLA-3020/LKW/2019 of The Regional Manager, Upsda v/s The… — Money Laundering | ATFP (2020)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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Date of decision: 28.04.2020

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MP-PMLA-5991/LKW/2019 (Exem.) MP-PMLA-5992/LKW/2019 (COD) In

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FPA-PMLA-3020/LKW/2019

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The Regional Manager, UPSDA … Appellant/Applicant

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Versus

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The Deputy Director Directorate of Enforcement, Lucknow & Ors.

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… Respondents

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Advocates/Authorized Representatives who appeared

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For the Appellant : Mr. Rajesh Raina, Advocate For the Respondent no.1 (ED) : Mr. Naveen Kumar Matta, Advocate

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CORAM SHRI G. C. MISHRA : ACTING CHAIRMAN

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JUDGMENT

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FPA-PMLA-3020/LKW/2019

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The present appeal has been filed by the Regional Manager, Uttar Pradesh State Development Authority (UPSDA) against the order dated 07^th March, 2019 passed by the Adjudicating Authority, PMLA in O.C. No. 1028/2018 confirming the Provisional Attachment Order (PAO) 01/ALSZO/2018 dated 14.09.2018 in ECIR/02/VSI/2012.

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It is to mention here that the appellant, UPSDA herein is mentioned as Uttar Pradesh State Industrial Development Corporation (UPSIDC) at Varanasi and cited as defendant no.4.

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It is the contention of the present appellant that it is a State Authority and has been erroneously shown to have committed the scheduled offences. It is also the contention of the appellant that the FPA-PMLA-3020/LKW/2019 Page 1 of 5

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impugned judgment does not distinguish between the appellant and other respondents.

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The CBI, ACB, Lucknow had registered a case against the respondent no.2, unknown official of District Industry Centre (DIC) and unknown official of Northern Coalfields Limited, Singrauli, Madhya Pradesh for the alleged commission of offences under Section 120-B, 420 of IPC & Sections 13(2) r/w 13(1)(d) of PC Act, 1988. On the basis of above, the Enforcement Directorate (ED) registered ECIR bearing no.02/VSI/2012.

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It is the contention of the appellant that there is nothing on record to show that they have committed the scheduled offences. The only facts mentioned against the appellant is that they are the lessor of the property over which the other defendants i.e. defendant no(s). 1 to 3 before the Adjudicating Authority and arrayed as respondent no(s). 2 to 4 in the present appeal are lessees.

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It is the contention of the appellant that it has no concern or connection with the alleged commission of offences by the respondent no(s). 2 to 4. On the basis of the contention raised in the memo of appeal, the appellant has prayed to quash/set-aside/modify the impugned order dated 07.03.2019 in favour of the appellant.

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The Enforcement Directorate (ED has filed its reply in the appeal in which it has been repeatedly stated that the appellant is made as a party in O.C. to put forth its objection, if any, as it was the lessor of the property over which the respondent no(s). 2 to 4 had rights as lessee and that the respondent no(s). 2 to 4 i.e. M/s. Fertico Marketing and its Directors have committed the scheduled offences and generated the proceeds of crime. The ED on the basis of the grounds stated in the

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FPA-PMLA-3020/LKW/2019

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Page 2 of 5

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reply prayed that the confirmation order dated 07.03.2019 of Adjudicating Authority may be modified in relation to the contention of the appellant that he has committed no scheduled offence in the instant matter.

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Heard both parties on 13.03.2020 and gone through the materials placed on records. During the course of hearing, the learned counsel appearing for the appellant vehemently raised objection to the specific observations made in the impugned order, wherein, the Adjudicating Authority has concluded that the defendants have committed the scheduled offences, generated the proceeds of crime and laundered them.

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On perusal of the impugned order & PAO, it is seen that nowhere there is any allegations made by the ED that the present appellant has committed the scheduled offences or has generated proceeds of crime or laundered any proceeds of crime. In fact, it is admitted in the written reply to the appeal filed by ED that this appellant has been made as a party as it was the lessor of the property over which the defendants no(s) 1 to 3 has rights as lessee and the ED has got no objection if the order of the Adjudicating Authority is modified in relation to the contention of the appellant.

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During the course of the hearing, the learned counsel for the appellant submitted that the appellant has no other grievance except the modification of the observation made by the Adjudicating Authority as reflected above.

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On perusal of the concluding para of the impugned order it is seen that the Adjudicating Authority has made the observation which is reproduced below:

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“17. It is accordingly held that the property which has been attached under Section 5 is involved in Money Laundering.

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FPA-PMLA-3020/LKW/2019

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Page 3 of 5

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The Defendants are in possession of “Proceeds of Crime” within the meaning of provisions of Prevention of Money Laundering Act, 2002 and accordingly it is ordered that the attachment of the property shall continue during the pendency of the proceedings relating to any offence under this Act before a court or under corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and become final after an order of confiscation is passed under subsection (5) to sub-section (7) of section 8 or section 58B or sub-section (2A) of section 60.

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18. The Provisional Attachment Order is confirmed and Complaint is allowed.

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Conclusion:

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On a thorough perusal of the PAO, Complaint, relied upon documents, the investigations conducted by the ED and the statements recorded u/s 50 of the PMLA and on careful consideration of the arguments advanced on behalf of the Complainant and Defendants undersigned comes to the prima facie conclusion that the Defendants have committed the Scheduled Offence, generated proceeds of crime and laundered them. No doubt the properties attached are proceeds of crime or value thereof and are involved in money laundering. Undersigned therefore orders confirmation of the above Provisional Attachment Order. This order shall continue during the pendency of the proceedings relating to any offence under this Act before court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India as the case may be and become final after an order of confiscation is passed under sub-section (5) to sub-section (7) of section 8 or section 58B or sub-section 2A of section 60.”

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On perusal of the materials available on record, it is seen that the Impugned Order has not disclosed as to how the present appellant is a party to the alleged commission of crime or has the possession of proceeds of crime or generated the proceeds of crime and laundered them even remotely. The implication of the present appellant along with other defendants by the Adjudicating Authority is neither proper nor legal.

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In view of the contentions raised by the appellant and the respondent no.1 and after going through the materials on record, the impugned order is modified to the extent that wherever there is an observation made by the Adjudicating Authority in the impugned order holding that the defendants are in possession of the proceeds of crime or that the defendants have committed the scheduled offences, generated proceeds of crime and laundered them, the said word “defendants” shall

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FPA-PMLA-3020/LKW/2019

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Page 4 of 5

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exclude the present appellant i.e. defendant no.4 in O.C. No.1028/2018. The order be stand modified accordingly.

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The appeal is accordingly disposed of.

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(G. C. Mishra) Acting Chairman

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New Delhi, 28^th April, 2020

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‘AS’

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FPA-PMLA-3020/LKW/2019

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FPA-PMLA-3020/LKW/2019 of The Regional Manager, Upsda v/s The Deputy Director Directorate of Enforcement, Lucknow & Ors.

Case brief

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FPA-PMLA-3020/LKW/2019 of The Regional Manager, Upsda v/s The Deputy Director Directorate of Enforcement, Lucknow & Ors.

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