Dismissed

FPA-PMLA-2088/CHD/2017 of M/s Golden Processors v. The Deputy Director, Directorate of Enforcement, Chandigarh

ATFP12 Sept 2024FPA-PMLA-2088/CHD/2017

Case brief

AI extract

What is this about?

In this appeal under s. 26 PMLA, the Appellate Tribunal heard submissions regarding the freezing of the appellant firm's bank accounts linked to a money laundering case. The court partially directed the release of Credit Accounts while retaining the freeze on saving/current accounts pending criminal trial.

What did the court decide?

Respondent directed to defreeze Credit Accounts but saving/current accounts remain frozen; prosecution merits unaffected; un-relied documents to be released.

FPA-PMLA-2088/CHD/2017 of M/s Golden Processors Vs. The Deputy… — Money Laundering | ATFP (2024)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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FPA-PMLA-2088/CHD/2017

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M/s Golden Processors … Appellant

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Versus

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The Deputy Director, Directorate of Enforcement, Chandigarh

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… Respondent

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Advocates/Authorized Representatives who appeared

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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 appeal u/s 26 of the Prevention of Money Laundering

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Act, 2002, is filed by the appellant 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 appellant firm, during the search conducted on 07.04.2017.

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In the present appeal, Ld. Counsel for appellant submitted the appellant M/s Golden Processors is a partnership concern of Sh. Sudhir Chadha which has been carrying out 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 premises of the appellant as under:

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S. Bank Name Appellant A/c No. Amount

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FPA-PMLA-2088/CHD/2017

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M/s Golden Processors v. E.D., Chandigarh 2

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No.
1.	Karnataka Bank	M/s Golden Processors	45270001003	18,78,79,177.06
				(Debit)

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As per sanction letter dated 07.03.2017 of Karnataka Bank Ltd., the said firm was allowed Over-Draft facility to the tune of Rs. 19.00 crores, pre-shipment/post shipment facility to the extent of Rs. 5.00 crores, Inland import LC facility of Rs. 6.00 crores and credit line for forward contract facility to the extent of Rs. 10.00 lacs by Karnataka bank Ltd. The same were enhanced by the bank from time to time which speaks volume for robust nature of business of the appellant.

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Ld. Counsel for the appellant submitted that the appellant M/s Golden Processors is neither charge-sheeted for the predicate offence after investigation of the police/CBI, nor it is arrayed as an accused in prosecution complaint under PMLA.

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He pointed out that Cash Credit account of this company is frozen by respondent ED and hence, the said account could not be operated. He further submitted that there is negative balance in the Cash Credit account and thus, question of freezing this account does not arise. Prayer is accordingly made to allow the present appeal and thereby direct the respondent ED to release the above bank account.

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

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FPA-PMLA-2088/CHD/2017

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M/s Golden Processors v. E.D., Chandigarh 3

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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. 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 account, cash and lockers including foreign currency etc. were seized.

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Ld. Counsel for the respondent also stated that Sh. Sudhir Chaddha, the partner of M/s Golden Processors,committed the fraud along with his other associates& his firms purchased many properties out of the proceeds of crime. Furthermore, the bank account of the appellant might have been used for 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 defreeze the Credit Accounts (CC & BC Account) and appellant is at liberty to clear its outstanding loan liability, if any, with direction to appellant not to dispose of the properties on whose collateral the CC Accounts have been secured.Karnataka Bank is hereby restrained from releasing more credit into the said CC Account. However, the saving and current account will remain frozen till final disposal of criminal trials.

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However, seeing the fact that prosecution complaint is already filed, the present appellant (if arrayed as an accused) is entitled to

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FPA-PMLA-2088/CHD/2017

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M/s Golden Processors v. E.D., Chandigarh

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the copies of all relied upon documents/seized material and he has right to apply for release of 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 appeal is 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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Appeal Dismissed.

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

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(Rajesh Malhotra) Member

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(G.C. Mishra) Member

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‘AB’

FPA-PMLA-2088/CHD/2017 of M/s Golden Processors v. The Deputy Director, Directorate of Enforcement, Chandigarh

Case brief

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FPA-PMLA-2088/CHD/2017 of M/s Golden Processors v. The Deputy Director, Directorate of Enforcement, Chandigarh

Case brief

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