Dismissed

FPA-PMLA-1946/BBS/2017 of Narendra Kumar Patel v. The Joint Director Directorate of Enforcement, Bhubaneswar

ATFP23 Apr 2024FPA-PMLA-1946/BBS/2017

Case brief

AI extract

What is this about?

The Appellate Tribunal dismissed appeals challenging the confirmation of property attachment under PMLA. The court held that money laundering is a continuing offence regarding possession, and prior acquisition does not bar attachment, while rejecting the argument that pending coronation of assets by police prewcluded PMLA proceedings.

What did the court decide?

The appeal was dismissed; the order dated 01.08.2017 confirming attachment of properties by the Adjudicating Authority was upheld.

FPA-PMLA-1946/BBS/2017 of Narendra Kumar Patel Vs. The Joint… — 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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1. FPA-PMLA-1946/BBS/2017 Narendra Kumar Patel

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2. FPA-PMLA-226/BBS/2024 Smt. Pushpanjali Patel

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3. FPA-PMLA-227/BBS/2024 Smt. Sarita Patel

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4. FPA-PMLA-228/BBS/2024 Shri Samir Kumar Patel … Appellants

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Versus

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The Joint Director Directorate of Enforcement, Bhubaneswar …Respondent

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Advocates/Authorized Representatives who argued

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For the Appellants :Ms. Rajdipa Behura, proxy counsel for Shri Philomon Kani, Advocate

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For the Respondent : Shri N.K. Matta, Advocate.

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FINAL ORDER

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23.04.2024

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Present appealsunder Section 26 of Prevention of Money Laundering Act, 2002 (for short PMLA, 2002) are filed by the appellants against the impugned order dated 01.08.2017 passed by the Adjudicating Authority in Original Complaint (OC) No. 727/2017 vide which it confirmed the attachment of properties attached by respondent-ED vide PAO No.05/2017 dated 24.03.2017.

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As per the facts of the case, on the complaint of Odisha Vigilance Police, Bhubaneswar Division, FIR No. 37 dated 30.09.2009 was registered at PS Bhubaneswar, District Khurda, Odisha, under Section 13(2) r/w 13(1)(e) of the Prevention of Corruption Act, 1988against appellant Narendra Kumar Patel and for abetment of said offence under Section 109 of IPC against his wife Pushpanjali Patel. After investigation, police filed Charge Sheet dated 25.03.2015 against the

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Rajesh Malhotra Member

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FPA-PMLA-1946/BBS/2017& FPA-PMLA-226-228/BBS/2024 Narendra Kumar Patel &Ors v. DOE, Bhubaneswar

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accused persons for possession of disproportionate assets to the known sources of income to the extent of Rs.89,08,365/- i.e. 101.43%, for the check period from 01.01.1997 to 10.07.2009.

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On the basis of said FIR, ECIR dated 25.03.2010 was registered by respondent-ED for conducting investigation under PMLA, 2002. During investigation by respondent-ED, statements of many persons, including the appellants, were recorded and it was concluded that the accused persons along with their family members have acquired huge property by layering, through relatives and known persons, and accordingly Provisional Attachment Order No. 05/2017 dated 24.03.2017 was passed for attaching the properties mentioned therein. Thereafter, respondent-ED filed OC No. 727/2017 before the Adjudicating Authority for confirmation of attached properties. The Adjudicating Authority after giving opportunities to both the sides for filing reply and rejoinder, confirmed the attachment vide impugned order dated 01.08.2017. Being aggrieved by the said order, appellants filed the present appeal.

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Arguments heard from both sides and documents perused. During the arguments, learned counsel for appellants submitted that a bare perusal of Para 3 (vi) of the impugned order reflects that investigation agency has taken the check period from 01.01.1997 to 10.07.2009. As per charge sheet, all the properties/assets were acquired by the appellants prior to the amendmentin Schedule, of PMLA i.e. w.e.f. 01.06.2009, whereby the Prevention of Corruption Act was also included in the schedule. Learned counsel for appellants accordingly stressed that the attached properties being purchased prior to the Amendment Act, 2009, are not covered within the definition of

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Rajesh Malhotra Member

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FPA-PMLA-1946/BBS/2017& FPA-PMLA-226-228/BBS/2024 Narendra Kumar Patel &Ors v. DOE, Bhubaneswar

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money laundering. She further contended that at the time of passing of the provisional attachment order by respondent-ED or issuing show cause notice by Adjudicating Authority, there was nothing on record to show that the appellants were attempting to either conceal, transfer or deal with the said assets in any manner which may result in frustrating any proceedings for confiscation under PMLA, 2002 and hence the impugned order passed by the Adjudicating Authority and PAO passed by the respondent-ED needs to be set aside. She further stressed that Adjudicating Authority failed to take the note of the fact that the properties confirmed for attachment under Section 8 of PMLA in OC No. 727 of 2017 are also subject matter of criminal proceedings initiated by State Vigilance, Odisha under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988. Accordingly, she argued that when the properties were already ` custodialegis’ in disproportionate assets case, there was no justification for passing the provisional attachment order by respondent ED and its confirmation by Adjudicating Authority vide impugned order dated 01.08.2017. Prayer is accordingly made to allow the present appeal and thereby release the attached properties.

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On the other hand, learned counsel for the respondent-ED submitted thatappellants during investigation failed to give any reasonable explanation with respect to the properties acquired by them during the check period. The said properties found in their possession were disproportionate to the known sources of their income, after giving all benefits. Ld. Counsel for the respondent argued that accumulation of assets by any public servant to the known sources of his &his family income is a criminal misconduct, which apparently points towards corrupt practices adopted by him for amassing wealth, while

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Rajesh Malhotra Member

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FPA-PMLA-1946/BBS/2017& FPA-PMLA-226-228/BBS/2024 Narendra Kumar Patel &Ors v. DOE, Bhubaneswar

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discharging his duties. Theabsence of any permission to purchase immovable property or intimation for the same, in contravention of CCS Rules is clearly points towards criminal misconduct.The possession of disproportionate assets acquired by any public servant in his own name or in the name of other family members is laundering of bribe money and covered within the definition of the proceeds of the crime which is a mischief, hence respondent-ED moved for attachment of properties. He contended that the offence under Section 3 is a continuing offence and hence the amendment of schedule for adding Section 13 of Prevention of Corruption Act, 1988, with effect from 01.06.2009 does not restrict respondent-ED to attach the properties. In support of his contention,he relied upon the judgment of Hon’ble Supreme Court of India in case Vijay Madan Lal Choudhary v. Union of India . He further pointed out that Joint Director on the basis of material in his possession formed the reasonable believe that an offence of money laundering was clearly made out during course of investigation by respondent-ED and as per F.I.R. registered for the commission of offence under Section 13(1) (e) r/w 13(2) of P.C., Act, 1988. He further argued that the complaint of Vigilance Police, Bhuvneshwar Division clearly reflects that accused Narinder Kumar Patel (herein appellant) and his wife Pushpanjali Patel were found for possession of disproportionate assets to their known sources of income to the extent of Rs. 89,08,365/- and this fact is also revealed during investigation by respondent-ED. He further contended that there is nothing on record that the assets in possession of the accused persons were already attached by Karnataka Police during investigation for commission of offence under Section 13 (1) (e) read with 13(2) of P.C Act. Therefore, in absence of any such information there was a

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Rajesh Malhotra Member

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FPA-PMLA-1946/BBS/2017& FPA-PMLA-226-228/BBS/2024 Narendra Kumar Patel &Ors v. DOE, Bhubaneswar

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reasonable believe on the part of respondent-ED for passing the Provisional Attachment Order under the apprehension that if the said attachment order is not passed, then the property may be alienated by the appellants. He further submitted that there is no requirement on the part of Adjudicating Authority to convey the reasons to believe for issuing the show cause notice to the parties before initiating the proceedings for confirmation of attachment under Section 8 of PMLA. 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 thoughtful consideration to the same. I am fully satisfied with the objections raised by Ld. Counsel for the respondent-ED for dismissing the present appeals as mentioned in the preceding para. I am not satisfied with the submissions made by Ld. Counsel for the appellants as reproduced in para-No.3 above. The appellants might have acquired the property before the amendment in schedule of the PMLA vide which Section 13 of the P.C Act was inserted therein with effect from 01.06.2009. This particular amendment does not give any right to the appellants to escape from the attachment of previously acquired properties, as money laundering is a continuing offence on account of possession, in view of judgment of Hon’ble Supreme Court of India,in Criminal Appeal No. of 2023 @SLP (Crl.) No. 9431 of 2023, Tarun Kumar V. Assistant DirectorDirectorate of Enforcement , in para 15 of the judgment held that-“ the offence of money laundering is not dependent or linked to the date on which the schedule offence or predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with the proceeds of crime. Thus, the involvement of the person in any of the criminal activities like

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Rajesh Malhotra Member

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FPA-PMLA-1946/BBS/2017& FPA-PMLA-226-228/BBS/2024 Narendra Kumar Patel &Ors v. DOE, Bhubaneswar

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concealment, possession acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so, would constitute the offence of money laundering under Section 3 of the Act.” . It is pertinent to mention here that before amendment in the Schedule of PMLA, 2002, w.e.f. 01.06.2009, the investigation agencies used to apply for attachment & confiscation of the proceeds of crime under the provisions of Criminal Law Amendment Ordinance, 1944. Therefore, the shifting of procedure of attachment & confiscation from the said Ordinance of 1944 to the amended schedule of PMLA, does not cause any prejudice to the appellants. Further, the material in possession of respondent-ED is sufficient to form an opinion for passing the Provisional Attachment Order on the basis of investigation conducted by respondent-ED coupled with F.I.R. registered against Narinder Kumar Patel. There is nothing on record that the properties which were proposed for confirmation of attachment by respondent-ED were already attached by Karnataka Police in previous investigation in criminal case under Section 13(1) (e) read with 13(2) of P.C Act. Even otherwise, respondent-ED is not expected to keep a watch on the properties of the appellants and to wait for an attempt for disposal of the same, before passing the Provisional Attachment Order and applying for confirmation. I am satisfied with the objection of Ld. Counsel for the respondent ED. Hence, I am of the considered view that the present appeals are liable to be dismissed being devoid of any merits

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In my observations in preceding para, the present appeals are hereby dismissed being devoid of any merits and thereby the order dated 01.08.2017 passed by the Adjudicating Authority for confirmation of properties is hereby upheld.

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Rajesh Malhotra Member

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FPA-PMLA-1946/BBS/2017& FPA-PMLA-226-228/BBS/2024 Narendra Kumar Patel &Ors v. DOE, Bhubaneswar

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Appeals Dismissed.

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Pronounced on this 23^rd Day of April, 2024.

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(RAJESH MALHOTRA)

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