Allowed

FPA-PMLA-2363/MUM/2018 of Mahesh Narsidas Patel v. The Deputy Director, Directorate of Enforcement, Mumbai

ATFP8 May 2024FPA-PMLA-2363/MUM/2018

Case brief

AI extract

What is this about?

Appeal filed challenging confirmation of attachment of appellant's ancestral property. Appellant argued CBI closure report established no predicate offence. Court held without predicate offence, PMLA charges fail, and attachment of ancestral property unjustified. Appeal allowed; property directed to be released.

What did the court decide?

Attached property of the appellant, i.e., Mahesh Narsidas Patel, directed to be released.

FPA-PMLA-2363/MUM/2018 of Mahesh Narsidas Patel Vs. The Deputy… — Property and Title | ATFP (2024)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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MP-PMLA-11966/MUM/2023 Misc. FPA-PMLA-2363/MUM/2018

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Mahesh Narsidas Patel … Appellant Versus The Deputy Director, Directorate of Enforcement, Mumbai … Respondent

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Advocates/Authorized Representatives who Argued For the Appellant : Mr. Bakul Jain, Adv. For the Respondent : Mr. Mrinal Kumar, Adv. for E.D.

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CORAM SHRI V. ANANDARAJAN : MEMBER SHRI RAJESH MALHOTRA : MEMBER FINAL ORDER 08.05.2024

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Dictated by: Shri Rajesh Malhotra

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Present appeal is filed against the impugned order dated 24.04.2020

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passed by the Adjudicating Authority in OC No. 856/2017 vide which

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following property of the appellant was confirmed for attachment;

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Sl. No.	Details of property	Owner	Area	Value (Rs. lakhs) valuation dat	In and e
1	B-8, Sardar Patel CHS Ltd., Patel Baug, 55 Nehru Road, Vile Parle €, Mumbai – 400 057.	Shri Mahesh Narsidas Patel, Shareholder M/s Pushpak Bullions (P)Ltd.	540 Sq. ft. Carpet	235.62 11.11.2017

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As per the facts of the case, Anti-Corruption Branch of CBI, Mumbai

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registered FIR vide RC/BA1/2017/A/0009 dated 19.02.2017 against a company namely, M/s. Pushpak Bullions (P) Ltd. for commission of offences u/s 120B IPC r.w.s. 420/465/468 IPC and also r.w.s. 13(2) r.w. 13(1)(8) of PC Act, 1988 and substantive offences thereunder.

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Respondent-ED registered ECIR/MBZO-I/01/2017 dtd. 06.03.2017 and conducted investigation with respect to commission of offence under Prevention of Money Laundering Act, 2002. During investigation by respondent-ED, statement of many persons were recorded and thereafter property of appellant along with other persons were attached vide PAO No. 09/2017 dated 14.11.2017. Thereafter, respondent-ED filed Original Complaint No. 856/2017 before Adjudicating Authority, PMLA on

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Rajesh Malhotra Member Member

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V. Anandarajan

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FPA-PMLA-2363/MUM/2018

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Mahesh Narsidas Patel V. E.D., Mumbai

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12.12.2017 for confirmation of the said attachment. Provisional Attachment was confirmed by the Adjudicating Authority vide order dated 24.04.2018. Aggrieved by the said order, appellant filed the present appeal.

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During the arguments, Learned Counsel for the appellant pointed out that after thorough investigation, CBI filed closure report against the accused persons for commission of the predicate offence and the same was accepted by the concerned court vide order dated 29.06.2022. He pointed out that said order is not challenged by any person till date. Accordingly, he asserted that when there is no predicate offence, all the consequent proceedings under PMLA including attachment needs to be set aside in view of the judgment of Hon’ble Supreme Court of India in case of Vijay Madanlal Chaudhary vs. Union of India 2022 SCC online SC 929.

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He further pointed out that even otherwise in the present case, the ancestral house of appellant as mentioned in paragraph no. 1 above was attached by respondent-ED on the ground that same is tainted property, without appreciating the fact that the said house is an ancestral property of the appellant and not purchased from any proceeds of crime. He further contended that present appellant is not named as an accused in FIR registered by CBI which is already closed by way of closure report. He further pointed out that even otherwise, the main allegation was against the company M/s. Pushpak Bullions (P) Ltd. and present appellant was not having any active role in the said company. He is only a minority shareholder to the extent of 6.87% only. Accordingly, he asserted that even otherwise the question of attaching his ancestral property for want of any role in commission of alleged offence the attachment of his ancestral house needs to be set aside, as closure report is already accepted. Prayer is accordingly made to allow the present appeal.

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Rajesh Malhotra Member Member

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V. Anandarajan

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FPA-PMLA-2363/MUM/2018

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Mahesh Narsidas Patel V. E.D., Mumbai

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Learned Counsel for the respondent-ED admitted the factual position as narrated by Learned Counsel for the appellant with respect to acceptance of closure report. He submitted that issue of stand-alone offence under PMLA is still pending before Hon’ble Supreme Court of India and the judgment of Vijay Madanlal Chaudhary is likely to be reviewed in due course of time. He denied the fact that appellant has no major role in the affairs of M/s. Pushpak Bullions (P) Ltd. Prayer is accordingly made to dismiss the present appeal.

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After hearing the rival submissions, we have given our thoughtful consideration to the same. We are not inclined to accept the objection raised by Learned Counsel for the respondent-ED as mentioned in the preceding para, seeing the fact that closure report filed by CBI with respect to predicate offence is already accepted by the Special Judge vide order dated 29.06.2022. In absence of any predicate offence, the alleged commission of offence u/s 3 punishable u/s 4 of PMLA does not survive. Therefore, by continuing the attachment with respect to ancestral property of appellant is not justified.

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In sequel to our observations in the preceding para, the present appeal is hereby allowed and thereby the attached property of the appellant i.e.Mahesh Narsidas Patel is hereby directed to be released.

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Appeal allowed.

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Pronounced on this 8^th Day of May, 2024.

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(Rajesh Malhotra) (V. Anandarajan) Member Member

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‘AB’

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Rajesh Malhotra Member Member

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V. Anandarajan