Disposed

FPA-PMLA-2102/CHD/2017 of M/s Parenda Creations Pvt. Ltd. v. The Deputy Director, Directorate of Enforcement, Chandigarh

ATFP12 Sept 2024FPA-PMLA-2102/CHD/2017

Case brief

AI extract

What is this about?

The Tribunal set aside the freezing order regarding the appellant's Credit and Bank Accounts but retained the freeze on savings/current accounts. The ED is directed to defreeze credit lines while prohibiting the bank from releasing new funds, pending disposal of criminal trials.

What did the court decide?

Respondent ED to defreeze Credit Accounts; Appellant liable to clear outstanding; Direction not to dispose of mortgaged properties; Savings/Current account to remain frozen.

FPA-PMLA-2102/CHD/2017 of M/s Parenda Creations Pvt. Ltd. Vs. The… — Money Laundering | ATFP (2024)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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FPA-PMLA-2102/CHD/2017

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M/s Parenda Creations Pvt. Ltd. … Appellant

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Versus

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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 appeal u/s 26 of the Prevention of Money Laundering 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, during the search conducted on 07.04.2017.

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In the present appeal, Ld. Counsel for appellant submitted that appellant firm is a company registered under the Companies Act, 1956, wherein Sh. K.N. Kirpal is the Director of the company. The company has been engaged in the business activity of

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FPA-PMLA-2102/CHD/2017 M/s Parenda Creations Pvt. Ltd. v. E.D., Chandigarh 2

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manufacture and export of the Ready-Made garments from last many years.

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On the basis of FIR No. RCBD No. 1/2016 filed by CBI as per complaint of Indian Overseas Bank, Sector-7, Chandigarh, the following bank account was seized, the details of which are as under:

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S. No.	Bank Name	Appellant	A/c No.	Amount
1.	UCO Bank	M/s Prenda Creations Pvt. Ltd.	53440210003541	8990.72

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The appellant firmhas been maintaining its account with the Indian Overseas Bank, Sector-7, Chandigarh since 2011. The appellant has also been availing credit facilities from the Indian Overseas Bank branch, Chandigarh as under:

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Term Loan 1.00 lakh Cash Credit 7.50 crores

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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 marketvalue of Rs.45.75lakhs
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 havingmarketvalue of Rs.74.08lacs
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 marketvalue 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 havingmarket

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FPA-PMLA-2102/CHD/2017 M/s Parenda Creations Pvt. Ltd. v. E.D., Chandigarh 3

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value of Rs. 10.78 lacs.

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8	No. 511401541 dated 18.09.2014 havingfixed value of Rs. 13.23 lacs
9	Fixed deposits to be obtained Rs. 48.00 lacs.

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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.

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Furthermore, the Director of the firm Sh. Kaushal Nath Kirpal is not named as accused in CBI, but accused in ED complaint case. 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 the director of the appellant firm Mr. K.N. Kirpal who is the father of the main accused Mr. Gaurav Kirpal along with other coaccused persons committed the fraud with Syndicate Bank to the tune of Rs. 321 crores. He pointed out that that certain bank accounts were identified belonging to the accused firm and their associate companies as a result of information provided by Indian Overseas Bank and also as a result of searches conducted by the respondent ED.

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FPA-PMLA-2102/CHD/2017 M/s Parenda Creations Pvt. Ltd. v. E.D., Chandigarh 4

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In view of the above, certain bank accounts of the accused firm and their associates were identified which might have been used for money laundering and the operation of transaction in these bank accounts were frozen to stop the further transfer of the amount and properties linked with it, suspected as proceeds of crime.

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Ld. Counsel for the respondent also stated that the appellant 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, we have given our thoughtful consideration to the same. 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.Indian Overseas 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 is entitled to 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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FPA-PMLA-2102/CHD/2017 M/s Parenda Creations Pvt. Ltd. v. E.D., Chandigarh 5

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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) (G.C. Mishra) Member Member

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‘AB’

FPA-PMLA-2102/CHD/2017 of M/s Parenda Creations Pvt. Ltd. v. The Deputy Director, Directorate of Enforcement, Chandigarh

Case brief

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FPA-PMLA-2102/CHD/2017 of M/s Parenda Creations Pvt. Ltd. v. The Deputy Director, Directorate of Enforcement, Chandigarh

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