Dismissed

FPA-PMLA-2086/CHD/2017 of M/s Sai Bhakti Impex Pvt. Ltd. v. The Deputy Director, Directorate of Enforcement, Chandigarh

ATFP12 Sept 2024FPA-PMLA-2086/CHD/2017

Case brief

AI extract

What is this about?

Appeals under PMLA against an adjudicating order freezing bank accounts and seizing properties from garment export firms. The Tribunal restrained the bank from further credits, de-froze credit accounts for liability clearance, but dismissed the appeal regarding property release citing pending criminal prosecution.

What did the court decide?

Credit accounts (CC & BC) de-frozen for liability clearance; Bank restrained from further credits; saving/current accounts frozen; release of seized properties denied; appellant given copies of relied

FPA-PMLA-2086/CHD/2017 of M/s Sai Bhakti Impex Pvt. Ltd. Vs… — Company and Corporate | ATFP (2024)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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1. FPA-PMLA-2086/CHD/2017
M/s Sai Bhakti Impex Pvt. Ltd.	…	Appellant
2. FPA-PMLA-2087/CHD/2017
Gaurav Kirpal	…	Appellant
3. FPA-PMLA-2093/CHD/2017
M/s Omkara Worldwide	…	Appellant
4. FPA-PMLA-2098/CHD/2017
M/s Best Exports	…	Appellant
Versus
The Deputy Director, Directorate of Enforcement, Chandigarh	…	Respondent

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Advocates/Authorized Representatives who argued

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For the Appellant : Mr. Saurabh Kapoor, Adv. Mr. Rishabh Kapoor, Adv. Ms. Madhvi Khandelwal, Adv. For the Respondent : Mr. Arjun Sawhney, Adv. Mr. Rohan Bhambri, Adv.

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CORAM SHRI G.C. MISHRA : MEMBER SHRI RAJESH MALHOTRA : MEMBER

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FINAL ORDER 12.09.2024

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Dictated by: Rajesh Malhotra

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Present appeals u/s 26 of the Prevention of Money Laundering

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Act, 2002, is filed by the appellants against the impugned order dated 12.09.2017 passed by the Adjudicating Authority in Original Application No.93/2017, whereby it allowed the respondent ED to retain/seize/freeze the documents, digital records, bank accounts etc., seized from the premises of various persons including the present appellants, during the search conducted on 07.04.2017.

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FPA-PMLA-2086, 2087, 2093 & 2098/CHD/2017,M/s Sai Bhakti Impex Pvt. Ltd., Gaurav Kirpal, M/s Omkara World Wide Pvt. Ltd. & M/s Best Exportsv. E.D., Chandigarh

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In the present appeals, Ld. Counsel for appellants submitted that appellant Sh. Gaurav Kirpal and his

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concerns/firms/companies have been carrying out the business activities of manufacture and export of Ready-Made Garments. On the basis of the FIR No. RCBD No. 1/2016 filed by CBI, search and seizure was conducted on the appellant as under:

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S. No.	Bank Name	Appellant	A/c No.	Amount
1.	Indian Overseas Bank	M/s Sai Bhakti Impex Pvt Ltd.	28402000012769	7,51,25,158.39 (Debit)
2.	Punjab National Bank	Gaurav Kirpal/Best Exports/Sai Bhakti Impex Pvt Ltd.	2416002100044150	0.00
3.	Punjab National Bank	M/s Sai Bhakti Impex Pvt Ltd.	575002100055631	15635.54
4.	Induslnd Bank	M/s Sai Bhakti Impex Pvt Ltd.	200002348623	22114.91
5	UCO Bank	M/s Sai Bhakti Impex PvtLtd.	02360210002575	1694.34
6.	State Bank of Patiala	M/s Sai Bhakti Impex Pvt Ltd.	0065215642487	209.95
7.	Deutsche Bank	M/s Sai Bhakti Impex Pvt. Ltd.	000017548690019	0.00
8.	Indian OverseasBank	Gaurav Kirpal	156501000003377	9236.00
9.	Induslnd Bank	Mr. Gaurav Kirpal & Mrs. Bhawna Kirpal	100042214415	0.00
10.	Induslnd Bank	Mr. Gaurav Kirpal & Mrs. Bhawna Kirpal	100042243231	0.00
11.	UCO Bank	Mr. Gaurav Kirpal	2360110028865	48916.89
12.	UCO Bank	Mr. Gaurav Kirpal	2360510011980	551.45
13.	Axis Bank	Mr. Gaurav Kirpal	324010100047269	108062.55
14.	Indian Overseas Bank	M/s Omkara World Wide Traders Pvt. Ltd.	28402000012902	31,26,152.05 (Debit)
15.	Indian Overseas Bank	M/s Omkara World Wide Traders Pvt. Ltd.	156502000000626	1981.19
16.	Indian Overseas Bank	M/s Omkara World Wide Traders Pvt. Ltd.	14190200000862	12,564.43
17.	Indusland Bank	M/s Omkara World Wide Traders Pvt. Ltd.	200999576405	0.00
18.	Indian Overseas Bank	M/s Best Exports	28402000012799	2,27,95,855.44 (Debit)
19	Punjab National Bank	Gaurav Kirpal/Best Exports/Sai Bhakti Impex Pvt. Ltd.	2416002100044150	0.00
20.	Punjab National Bank	M/s Best Exports	57500200055622	2951.54
21	Indusland Bank	M/s Best Exports	200002366344	12,888.22
22	State Bank of Hyderabad	Gaurav Kirpal/Best Exports/Sai Bhakti Impex Pvt. Ltd.	0062427618568	0.00

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FPA-PMLA-2086, 2087, 2093 & 2098/CHD/2017,M/s Sai Bhakti Impex Pvt. Ltd., Gaurav Kirpal, M/s Omkara World Wide Pvt. Ltd. & M/s Best Exportsv. E.D., Chandigarh

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The appellantshave been maintaining their accounts with the Indian Overseas Bank, Sector-7, Chandigarh since 2011. The appellants have also been availing credit facilities from the Indian Overseas Bank branch, Chandigarh as under:

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M/s Sai Bhakti Impex Pvt. Ltd.

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The same has been obtained by the appellant company on various terms and conditions including collateral security by mortgaging the properties as under:

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Sr. No.	Nature of Security
1	Equitable mortgage of land measuring 375.00 sq. yards at village Dhandhewal, Tehsil Nalagarh in the name of Mr. Gaurav Kirpal having market value of Rs. 45.75 lakhs
2.	Equitable mortgage of industrial building measuring 12.65 Bigha at village Dabota, Tehsil Nalagarh in the name of Mrs. Leela Kirpal wife of Sh. Kaushal Nath, resident of Nalagarh Distt. Solan having market value of Rs. 230.90 lacs.
3	Equitable mortgage of residential plot measuring 463 sq. yards situated at Hadbast No. 147, Jannat Colony, Village Malakpur Tehsil Ludhiana (West) in the name of Mrs. Bhavana Kirpal vide sale deed No. 7645 dated 12.11.2023 havingmarket value of Rs. 74.08 lacs
4	Equitable mortgage of vacant plot measuring 2 Bigha situated at Hadbast No. 96 Village Dhabhota Tehsil Nalagarh District Solan in the name of Gaurav Kirpal vide sale deed No. 1414 dated 11.09.2013 having market value of Rs. 28.00 lacs
5	Equitable mortgage of vacant plot measuring 275 sq. yards at Hadbast No. 180, Bhamia Ludhiana Punjab in the name of Mrs. Radhika Kirpal having market value of Rs. 44 lacs
6	Equitable mortgage of vacant plot measuring 253.11 sq. yards at Parvela City, Ludhiana in the name of Mrs. Radhika Kirpal having market value of Rs. 55.68 lacs
7	Equitable mortgage of vacant plot measuring 77 sq. yards at Hadbast No. 180, Bhamia Ludhiana (Punjab) in the name of Radhika Kirpal having market value of Rs. 10.78 lacs.
8	No. 511401541 dated 18.09.2014 havingfixed value of Rs. 13.23 lacs
9	Fixed deposits to be obtained Rs. 48.00 lacs.

M/s Best Exports

Cash Credit Limit

225.00 lacs

The same has been obtained by the appellant firm on various terms and conditions including collateral security by mortgaging the properties as under:

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FPA-PMLA-2086, 2087, 2093 & 2098/CHD/2017,M/s Sai Bhakti Impex Pvt. Ltd., Gaurav Kirpal, M/s Omkara World Wide Pvt. Ltd. & M/s Best Exportsv. E.D., Chandigarh

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Sl. No.	Nature of Security
1	Equitable mortgage of vacant plot no. 168, measuring 400.00 sq. yards at Parvela City, Ludhiana (Punjab) in the name of Mrs. Radhika Kirpal valued at FMV – Rs. 84,00,000/-
2	Equitable mortgage of vacant plot No. 26, measuring 110.00 sq. yards at Parvela at FMV – Rs.29.70 lacs.

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Furthermore, during the search conducted on the business premises of Mr. Gaurav Kirpal situated at 306, Industrial Area-A, Ludhiana wherein the following items were seized:

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Certain documents, viz. Annexure 1 (2 pages) of seizure memo

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[which contains the details of following seized articles]:

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1. Details of 3 Hard Disks,

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1. 1 Lenovo monitor with inbuilt CPU,

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1. One file containing bank account statements having 55 pages,

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1. One box containing photocopy of property documents having 425 pages,

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1. Bundle of loose sheets containing 157 pages relating of bank account statements, L/C documents, Blank letter heads,

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1. Red color file marked as bank account statements containing 133 pages,

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1. Pink colour file containing 9 pages having documents/invoices of various firms/companies.

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Further, following seizures were made during the search conducted on M/s Sai Bhakti Impex Pvt. Ltd.

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i. Khasra No. 196/214, Khasra No. 2106/682 at Village Dabhota, Tehsil Nalagarh, District Solan, H.P.

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ii. Land measuring 15 Marla comprised of Khewat/Khatuni No. 55/57 Min. Khasra No. 685/342/264 (0-15) situated at Village Thanthewal, Tehsil Nalagarh, District Solan, H.P. iii. Foreign currency amounting to 18100 New Zeland Dollars, 1905 England Pounds, 634 Singapore Dollars, 20 Hong Kong Dollars, 3090 Thai Baht, 50 UAE Dirham, 2088 US Dollar, 30 Australian Dollar, 18 Malaysian Ringitt& 1220 Russian Rouble were seized. Besides, the above certain loose

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FPA-PMLA-2086, 2087, 2093 & 2098/CHD/2017,M/s Sai Bhakti Impex Pvt. Ltd., Gaurav Kirpal, M/s Omkara World Wide Pvt. Ltd. & M/s Best Exportsv. E.D., Chandigarh

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sheets in three folders continuing 310 pages were also seized from the residential premises of Mr. Gaurav Kirpal.

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iv. One Toyota Fortuner bearing Registration No. CH01AE7171 in the name of M/s Sai Bhakti Impex Pvt. Ltd. along with RC & Insurance.

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He pointed out the details of fraudulent SWIFT messages through which liability was created against the Indian Overseas Bank qua the Proprietorship concern of appellant Mr. Dinesh

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Kumar i.e. M/s Vision Procon, which is detailed as under:

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Sr. No.	Date of Swift Messages	Buyers Credit (BC) Reference No.	Applicant Name	Beneficiary Name	BC Account	Amount in USD	Due date of BC
1	27.11.2015	284/MISCIN/56/15	Sai Bhakti Impex	Colour Wave (HK) Ltd	PNB, Dubai	3,372,680	01 Nov 2016
2	10.02.2016	284/MISCIN/09/16	Sai Bhakti Impex	Colour Wave (HK) Ltd	PNB, Dubai	3,494,330	16 Dec 2016

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He pointed out that cash credit accounts of the appellants have been frozen by respondent ED and hence, the said accounts could not be operated. He further submitted that there is negative balance in the cash credit accounts and thus, question of freezing these accounts does not arise.

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As regards the properties above, it is stated by the Ld. Counsel for the appellant that the said land/properties have been purchased much before the period of scheduled offence and was mortgaged with the Bank on the basis of which the cash credit limit was issued to the said appellants.Prayer is accordingly made to allow the present appeal and thereby direct the respondent ED to release the above bank accounts, vehicle and properties attached.

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On the other hand, Ld. Counsel for respondent ED submitted that during the course of investigation, certain bank accounts were

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FPA-PMLA-2086, 2087, 2093 & 2098/CHD/2017,M/s Sai Bhakti Impex Pvt. Ltd., Gaurav Kirpal, M/s Omkara World Wide Pvt. Ltd. & M/s Best Exportsv. E.D., Chandigarh

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identified belonging to the accused and their associate companies as a result of information and also as a result of searches conducted by the respondent ED. The bank officials of Indian Overseas Bank,Main Branch, Chandigarh fraudulently intercepted messages and issued letter of conformity/letter of undertaking to the foreign banks for the Buyers Credit (BC) extended by them.

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The Proprietor/Partner/Director of the

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concern/firm/company, Gaurav Kirpal along with others issued 24 Line of Credit (LOC) fraudulently through SWIFT messages to provide buyers credit facility which was to supposed to export goods but the same was granted to the aforesaid company through fraud. But as per the bank, there was no movement of goods & services or underlying commercial transaction between these fund transfers. The amount due on account of Buyers Credit was not paid to the bank before the due date resulting in liability of 321 crores. This was done in collusion with the accused companies and their directors/proprietors and have caused loss to the bank to the tune of USD 47.86 million equivalent to approximately Indian Rs. 321 crores. In view of the above, various documents, properties, bank accounts, cash and lockers including foreign currency etc. were seized.

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Ld. Counsel for the respondent also stated that the Gaurav Kirpal committed the fraud along with his other associates& his firms purchased many properties out of the proceeds of crime. Furthermore, the bank accounts of the appellantswere used for

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FPA-PMLA-2086, 2087, 2093 & 2098/CHD/2017,M/s Sai Bhakti Impex Pvt. Ltd., Gaurav Kirpal, M/s Omkara World Wide Pvt. Ltd. & M/s Best Exportsv. E.D., Chandigarh

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money laundering. Prayer is accordingly made to dismiss the present appeal being devoid of any merits.

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After hearing the rival submissions, the respondent ED is hereby directed to de-freeze the credit accounts (CC & BC Account) and appellant is at liberty to clear its outstanding loan liability, if any, with direction to not dispose of the properties on whose collateral the CC Accounts have been secured. Indian Overseas Bank is hereby restrained from releasing more credit into the said CC Account. However, the saving and current accounts, if any, will remain frozen till final disposal of criminal trials.

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After the completion of investigation, prosecution complaint is already filed by respondent ED, wherein present appellants along with other family members of Gaurav Kirpal are arrayed as accused persons. Even otherwise, the aforesaid properties are stated to be mentioned in the list of properties for the purpose of confiscation in case of conviction, in prosecution complaint case under PMLA. Therefore, the impugned order passed by Ld. Adjudicating Authority was just an interim order/step to protect the same, till the conclusion of trial. Therefore, we are not satisfied with the Ld. Counsel for the appellant and hence, the present appeal is liable to be dismissed being devoid of any merits.

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However, seeing the fact that prosecution complaint is already filed, the present appellant is entitled to the copies of all relied upon documents/seized material and he has right to apply for release of

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FPA-PMLA-2086, 2087, 2093 & 2098/CHD/2017,M/s Sai Bhakti Impex Pvt. Ltd., Gaurav Kirpal, M/s Omkara World Wide Pvt. Ltd. & M/s Best Exportsv. E.D., Chandigarh

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all un-relied documents (if any), if the same are not required for any further investigation.

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In sequel to our observation in the preceding para, the present appealsare hereby dismissed. Pending applications, if any, stands disposed of accordingly. It is made clear that nothing expressed herein will affect the merits of prosecution case under Prevention of Money Laundering Act, 2002.

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AppealsDismissed.

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Pronounced on this 12^th Day of September, 2024.

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(Rajesh Malhotra) (G.C. Mishra) Member Member

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‘AB’

FPA-PMLA-2086/CHD/2017 of M/s Sai Bhakti Impex Pvt. Ltd. v. The Deputy Director, Directorate of Enforcement, Chandigarh

Case brief

What is this about?

What did the court decide?

FPA-PMLA-2086/CHD/2017 of M/s Sai Bhakti Impex Pvt. Ltd. v. The Deputy Director, Directorate of Enforcement, Chandigarh

Case brief

What is this about?

What did the court decide?

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