Dismissed

FPA-PMLA-1872/DLI/2017 of Shri Anirudh Narian Aggarwal v. The Deputy Director, Ed Delhi

ATFP20 Jun 2024FPA-PMLA-1872/DLI/2017

Case brief

AI extract

What is this about?

Appellant challenged the Adjudicating Authority's order retaining seized gold and diamonds under PMLA, arguing he was not charged and money was declared under IDS. The Appellate Tribunal dismissed the appeal, holding the property remains case property pending trial and the appellant's defense was doubtful due to lack of invoices and timing relative to demonetization.

What did the court decide?

Release of seized gold bars and diamonds to the appellant.

FPA-PMLA-1872/DLI/2017 of Shri Anirudh Narian Aggarwal Vs. The… — Money Laundering | ATFP (2024)

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BEFORE RAJESH MALHOTRA, MEMBER; SINGLE BENCH: APPELLATE TRIBUNAL UNDER SAFEMA; AT NEW DELHI.

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FPA-PMLA-1872/DLI/2017

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Shri Anirudh Narian Aggarwal … Appellant

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Versus

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The Deputy Director, ED Delhi … Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellant : S/Sh. RP Thakur, Awanish Kumar, Sanket Ambali, Advocates,

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For the Respondent : Sh. Munindra Dwivedi, Advocate.

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FINAL ORDER

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20.06.2024

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Present appeal U/s 26 of Prevention of Money Laundering Act, 2002, is filed against the impugned order dated 14.06.2017 passed by the Adjudicating Authority, in Original Application no.78/2017 vide which respondent-ED was permitted to retain the documents and articles seized from the possession of appellant Anirudh Narain Aggarwal, detailed as under:

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(i) Five bars of metal yellow in colour,

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(ii) Five pieces of precious stones appear to be diamond,

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(iii) One hand written note/pieces of paper showing weight and quality of precious stone.

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As per the facts of the case, F.I.R No.416/2016 dated 29.11.2016 was registered by the Delhi Police, into alleged case of fraudulently converting demonetized black money into Gold by way of depositing the same in the accounts of front companies having bank account with Axis Bank, Kashmere Gate, Delhi. The offence registered by Delhi Police being a Scheduled offence under PMLA,

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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an ECIR/11/DLZO/2016 dated 30.11.2016 was registered by the ED and started investigation.

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During investigation, it is revealed that as a result of demonetization of currency notes of 500/and 1000/denomination announced by the Government of India on 08.11.2016, persons having large amount of such notes were looking for avenues to convert their unaccounted demonetized money into monetized form or into bullion/gold using the bank accounts of the front companies.

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One Nitin Gupta, Mohit Garg and others conceived the entire scheme and collected the cash from prospective buyers including Sh. Prateek Bansal, who was one of the prospective buyers, who has given Rs. 12 crores (approx.) to Sh. Nitin Gupta for purchasing gold. Sh. Prateek Bansal collected this money from various prospective-buyers, like Anirudh Narain Aggarwal, Ravi Aggarwal (respondents in the case) and others. For this purpose, Nitin Gupta got in touch with Mohit Garg, a person from whom he was taking RTGS in the past also. Mohit Garg got in touch with Rajeev Singh Kushwaha his friend and associate who had been facilitating his transactions in the past also. Both of them agreed to the proposal of Nitin Gupta for a commission @ 15% of total cash deposits. They further connived with the Branch Manager and Manager Operations of Axis Bank Kashmere Gate, Delhi and deposited huge amount of money into the accounts of three front companies controlled by Rajeev Singh Khushwaha namely M/s Sunrise Trading, M/s Himalaya International and M/s RD Traders. After

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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the cash was deposited, RTGS were sent into the accounts of M/s Beagle Marketing another front company of Rajeev Singh and transferred the money to the accounts of importers/suppliers of gold namely, M/s Tusar Jewellers, M/s Aadi Traders, M/s Sidhhi Vinayak, M/s Ganesh Traders and M/s Maa & Sons etc., who in turn showed sale of gold to M/s Beagle Marketing from which they had received RTGS at the prevailing rate. Such gold/diamond was received by Nitin Gupta, Mohit Garg & Prateek Bansal and was distributed to the persons including Sh. Ravi Agarwal and Sh. Anirudh Agarwal who had provided cash to Prateek Bansal and gold bars were also given to bank official namely Sh. Shobhit Sinha, Operation Manager and Sh. Vineet Gupta, Branch Head, as commission.

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During investigation statement of various persons including Sh. Ravi Agarwal and Sh. Anirudh Narain Aggarwal were recorded under Section 50 of PMLA and on the basis of the revelations made by Shri Anirudh Narain Agarwal, search was conducted on the residential premises of Sh. Anirudh Pratap Agarwal, and five gold bar of 1 kg. each and five pieces of diamond were recovered under panchnama dated 18.02.2017 and valuation done at the same time.

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The said jewelryappears to be bought out of proceeds of crime received by Shri Anirudh Pratap Singh.Accordingly, Original Application No. 78/2017 was filed before the Adjudicating Authority for permission to retain the said articles under Section 17 (4) of the PMLA, 2002.

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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On notice by the Adjudicating Authority, he filed reply raising the objections for retention on the various grounds as mentioned therein. During the proceedings present appellant took a plea that sum of Rs.15 crores was given to him by his father out of his life savings in the year 2016. He declared the said amount in Income Declaration Scheme of 2016 of the Government of India. Out of said amount Rs.12 crores was declared under IDS, 2016 by his wife, whereas Rs.3 croreswere declared by HUF of which respondent No.2 is the Karta. The said declaration was made in September, 2016. After declaration in the IDS present appellant gave about Rs.7.47 crores to Shri Prateek Bansal in the month of October, 2016 for purchasing diamonds. After accepting money in October, 2016 Prateek Bansal delayed the delivery of diamonds on one or the other pretext. In the meantime, on 08.11.2016, the demonetization was announced by Government of India. After constant follow-up with Mr. Bansal, he was delivered five diamonds and 499 grams Gold. The source of money used in buying the seized property was duly declared under IDS, 2016, before the search and seizure.

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On the other hand, respondent-ED objected the reply before the Adjudicating Authority,on the ground that the said articles/Gold & Diamonds is required for further investigation in the matter and accordingly, it sought permission to retain the seized property, till the conclusion of investigation.

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After hearing the rival submissions,Ld. Adjudicating Authorityimpugned order dated 14.06.2017, permitted respondent-

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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ED to retain the Jewelryetc. and OA No. 78/2017 was allowed accordingly.

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Aggrieved by the said order, present appeal is filed by the appellant.

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During the arguments, Ld. Counsel for the appellant submitted that appellant is not named in the F.I.R. registered by the police. He pointed out that till date, no charge sheet is filled by the police against any of the accused persons. He further pointed out that search & seizure was conducted by respondent-ED on 18.02.2017, and thereafter, Original Application No. 78/2017 was filed before the Adjudicating Authority for permission to retain the seizedGold bars and Diamonds. He contended that Adjudicating Authority granted the permission to retain the said articles vide impugned order dated 14.06.2017, without appreciating the factual position. He pointed out that even prosecution complaint under PMLA is filed by respondent-ED on 30.06.2018 i.e. with delay of 406 days from the date of seizure. He further argued that after disclosure of cash under Income DisclosureScheme on 22.09.2016, the cash in hand of the appellant cannot be termedas laundered money. He further argued that appellant gave money for purchasing the diamonds to Prateek Bansal in the month of October, 2016, and thus, the delivery of the Gold bars and diamonds after the date of monetization cannot be presumed to be fake transaction. Prayer is accordingly, made to allow the present appeal, and thereby direct respondent ED to release the seized jewellery in favour of the appellant.

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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On the other hand, Ld. Counsel for the respondent-ED submitted that as per F.I.R 416/2016 dated 29.04.2016 were registered on the specific information that three persons namely Devendra Kumar Jha, Mohit Garg and, Raj Kumar Sharma travelling in white colored Honda City Car No. DL-2FV-0036 were intercepted and search of the car was taken. After search, four bags containing old denomination notes of Rs.1000/- totaling to Rs.3.70 Cr. were recovered. On interrogation by the police, the said persons failed to produce any proof of the ownership and disclosed that they are doing the business of exchange of old demonetized currency into new currency with the conspiracy and collusion of the Bank officials (Vineet Gupta and Shobhit Sinha). Since the aforesaid offences committed by the accused persons are among the Schedule offences under Schedule appended to the PMLA, 2002, and thus, on the basis of the aforesaid information/documents, a prima facie case for commission of an offence of Money Laundering under section 3 of the Prevention of Money Laundering Act, punishable under Section 4 of the said Act, appears to have been made out against the above named suspected accused persons. Accordingly, an ECIR No. 11/2016 was recorded in ED on 30.11.2016 and investigation was undertaken against the said persons. An investigation was initiated in terms of PMLA, 2002 with a view to identify the accused involved in the offence of Money Laundering and properties/assets derived from the offence of Money Laundering including proceeds of crime, as defined under Section 2(1) (u) of PMLA, 2002. The demonetization policy was announced by Government of India on 08.11.2016. At that time,

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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there was a great anxiety among the people, who had unaccounted money in the form of old currency notes Rs.500/- & Rs.1000/which was no more legal tender. There was a surge in the number of people wanting to convert old currency notes into gold/legal tender, but Bullion Traders wanted payments in RTGS/transfer of money through banking channel for the gold sale.Some people who knew Mohit Garg, an Entry Operator, contacted him for this purpose. Mohit Garg was working as an Entry Operator with assistance of Rajeev Singh Kushwaha, who had various fictitious companies namely M/s Himalaya International, M/s RD Trader, M/s Beagle Marketing and M/s Sunrise Trading. Mohit Garg discussed with his friends Rajeev Singh Khushwaha& others to take illegal advantage of demonetization policy. They all agreed to convert unaccounted demonetized currency into monetized form by way of depositing in front company/firm of Rajeev Singh Khushwaha for this they have charged 15 % of total deposit. Rajeev Singh Khushwaha and Mohit Garg were known to Vineet Gupta, Branch Manager and Shobhit Sinha, Operation Manager of Axis Bank, Kashmere Gate Branch. They contacted bank official in Axis Bank to get special facilities/assistance to put those money which had no legal tender into the banking system to make it a legal tender, through their fictitious company having current accounts in Axis Bank, Kashmere Gate Branch. The scrutiny of bank account statements of the companies’ firms namely M/s Sunrise Trading Company, M/s Himalaya International, M/s RD Traders and M/s Beagle Marketing Pvt Ltd. revealed that during the period of 10.11.2016 to 21.11.2016 demonetized currency up-to the tune

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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of Rs. 39.26 crore has been deposited by Rajeev Singh Khushwaha and his associates with the active collusion of Sh. Vineet Gupta,Branch Head, Axis Bank, Kashmere Gate. It is revealed that Imran Khan (Driver of Rajeev Singh Kushwaha), Ram Charan (Casual Labourer) and Anil (Peon of Rajeev Singh Khushwaha) were made director/proprietor/authorized signatory of the firm/company run by Rajeev Singh Khushwaha. Vineet Gupta and Shobhit Sinha, had given Mohit Garg/Rajeev Singh, special privilege for depositing the amount in account of fictitious firm. Nitin Gupta, Prateek Bansal and others collected unaccounted demonetized cash from prospective buyers like Ravi Agrawal, Anirudh Agarwal and others. These amounts were given to Mohit Garg and his associates for arrangement of RTGS. For the above arrangement/assistance of transfer/RTGS of demonetized money through banking channels, Mohit Garg and Rajeev Singh Khushwaha charged a commission @ 15% of total cash deposits from Nitin Gupta.Rajeev Singh Khushwaha and his associates deposited huge amount of money into the accounts of three front companies controlled by Rajeev Singh Khushwaha namely M/s Sunrise Trading, M/s Himalaya International and M/s RD Traders. Further for layering, money was sent into the accounts of importers/suppliers of Gold who in-turn reflected sale of Gold to M/s Beagle Marketing from which they had received RTGS at the prevailing rate.Such Gold was received by Nitin Gupta, Prateek Bansal & other middleman and was sold at premium rate to the persons like Anirudh Agrawal and others, who had provided unaccounted demonetized cash. From the above modus operandi

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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applicant has bought five kg gold and 5 pieces of diamond against old demonetized currency which is proceed of crime and liable to attachment under Section 5 or AdjudicationU/s 8 of PMLA.

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Ld. Counsel for the respondent further argued that during Investigation it is revealed that Shri. Anirudh Agarwal had given Rs. 7.47 Crore demonetized currency to Prateek Bansal for the sole purpose to convert these demonetized currencies in monetized form. These demonetized currencies were deposited in the fictitious firm’s bank account at Axis Bank, Kashmere Gate with the active connivance of Rajeev Singh Khushwaha, Mohit Garg and bank officials Vineet Gupta and Shobhit Sinha. Finally, that amount transferred to Bullion Traders account and gold & diamond procured against that demonetized currency by Prateek Bansal and handed over to Anirudh Agarwal.On the basis of statement recorded under Section 50 of PMLA and information gathered from various source residential premises of Sh. Anirudh Agarwal was searched under Section 17 of PMLA on 17.02.2017 and 5kg Gold and 5 pieces of diamond recovered and seized which fall squarely under the definition of proceeds of crime as defined under Section 2(1) (u) of the PMLA.

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Section 2 (u) in the Prevention of Money Laundering Act, 2002

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“Proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property”

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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For the purpose of investigation, OA No. 78/2017 was filed before Hon’ble Adjudicating Authority for retention of seized valuables under Section 17(4) of PMLA and vide order dated 14.06.2017 aforesaid OA was confirmed by Adjudicating Authority, PMLA.Provisional Attachment Order 01/17 dated 27.01.2017 under second proviso of Section 5(1) of PMLA has been issued attaching properties worth Rs. 3.40 crores that were involved in money laundering. The same has been confirmed by the Adjudicating Authority vide order dated 31.05.2017. Another Attachment Order No. 11/2017 dated 06.10.2017 for attaching property worth Rs. 8.47 Crore was issued for adjudication.

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Further a prosecution complaint dated 01.02.2017 under Section 44 read with 45 of PMLA has been filed in the Special PMLA Court, Delhi against Rajeev Singh Khushwaha, Vineet Gupta and Shobhit Sinha for the offence of money laundering under Section 3 and punishable under Section 4 of PMLA. Ld. Special Judge, of PMLA Court vide its order dated 25.02.2017 has taken cognizance of the complaint and the trial is in progress. He further contended that order dated 14.06.2017 for retention of valuables passed by Adjudication Authority in the matter of OA No. 78/2017 accordance with the law and due consideration of all the facts and circumstances. During Investigation it is established that appellant had given demonetized currency to Prateek Bansal for procurement of Diamond/Gold. Diamond and Gold seized from applicant was part of proceeds of crime generated through depositing demonetized currency in the bank account of fictitious firms. It is well established not only statement recorded under Section 50 of

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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Prevention of Money Laundering Act, but also corroborated by bank account statement, CDR and CCTV footage. While passing the said retention order, Adjudicating Authority has given due consideration to all the facts, circumstances and evidence. Therefore, the said retention order is both legal and proper.This is false submission of the appellant hence denied. It is submitted that during investigation appellant failed to produce any invoice or other supporting document which show the genuiness of gold and diamond purchased by him. In fact,appellant himself stated that he has purchased gold and diamond from Prateek Bansal without any invoice. It is submitted that gold and diamond seized from applicant was procured from Prateek Bansal use in fake bank account for which he has given commission, it is also revealed that this gold was bought by him in at premium rate @Rs. 55,00,000 per Kg. and diamond for Rs. 2.72 crore which real value as per Government approved valuer was Rs. 1,01,53,000/- this shows dishonest intention at the part of applicant. Prayer is accordingly made to dismiss the present appeal being devoid of any merits.

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After hearing the rival submissions, I have given my thoughtful consideration to the same. The fact that if no charge sheet is filed by the police against any person after the registration of FIR, as submitted Ld. Counsel for appellant, even then, the appellant is not entitled to any relief, till the filling and acceptance of the closure report. In case any closure report is accepted, then certainly the consequences will follow, in prosecution complaint case under PMLA. This Appellate Tribunal cannot release the property on this ground at this stage.

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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As far as the amount of Rs. 7.47 crore in the hand of appellant Anirudh Narian Agarwal is concerned, the same is apparently for part of sum of Rs. 15 crores,

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disclosed by him before Income Tax Authority under Income Declaration Scheme on 22.09.2016. However, there is nothing to doubt the allegation of respondent ED that the present appellant agreed to give RTGS entry to the Jewellers at the instance of main accused persons, as mentioned in para no. 2 above. The defense of appellant for giving the order for jewellery in the month of October, 2016 and the delivery of jewellery after demonetization declared on 08.11.2016 is apparently doubtful, facilitate the main accused persons to convert the demonetize currency notes in the denomination of Rs. 500/- and Rs. 1000/-, in lieu of commission in pursuance to conspiracy. This fact is apparent in absence of any invoice in the month of October, 2016 and giving the RTGS entry after demonetization. Under these circumstances there is no reasonable ground to allow the present appeal, even on this ground.

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The fact that search was conducted on 18.02.2017 and impugned order for retention was passed on 14.06.2017, but complaint was filed on 30.06.2018 is also no ground to allow the present appeal, after the filling of prosecution complaint under PMLA, as all the sighted and relied upon articles and documents become the case property of the said case. Therefore, this Appellate Court cannot allow the appeal on this ground.

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Rajesh Malhotra Member

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FPA-PMLA-1872/DLI/2017 Anirudh Narian Agarwal v. The Deputy Director, ED, Delhi

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In the light of my discussion in the preceding para the present appeal is hereby dismissed, with liberty to claim the seized material/articles from Ld. Special Judge PMLA Court, in case of acquittal of the appellant, otherwise the consequences will follow. It is made clear that nothing expressed herein will affect the right of the either party.

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Appeal dismissed.

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Pronounced on this 20^th day of June, 2024.

RAJESH MALHOTRA

MEMBER

‘PS’

Rajesh Malhotra Member

FPA-PMLA-1872/DLI/2017 of Shri Anirudh Narian Aggarwal v. The Deputy Director, Ed Delhi

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