Dismissed

FPA-PMLA-2415/BNG/2018 of Shri Satish Chour v. The Deputy Director Directorate of Enforcement, Bangalore

ATFP22 Apr 2024FPA-PMLA-2415/BNG/2018

Case brief

AI extract

What is this about?

Appeal filed by family members against the confirmation of property attachment under PMLA following the death of the main accused in the predicate corruption case. The Tribunal held that abatement of criminal proceedings is not acquittal and upheld the attachment under Section 8(7) of PMLA.

What did the court decide?

Appels to set aside the order confirming the attachment of the movable and immovable properties were dismissed and the original order was upheld.

FPA-PMLA-2415/BNG/2018 of Shri Satish Chour Vs. The Deputy… — Money Laundering | ATFP (2024)

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APPELLATE TRIBUNALUNDER SAFEMA AT NEW DELHI

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(1) FPA-PMLA-2414/BNG/2018 Shri Girish Chour Appellant (2)FPA-PMLA-2415/BNG/2018 Shri Satish Chour. …Appellant (3) FPA-PMLA-2416/BNG/2018 Smt. Sumangala Chour. … Appellant Versus The Deputy Director Directorate of Enforcement, Bangalore. … Respondent

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Advocates/Authorized Representatives who argued For the Appellant :Mr. Arindam Ghosh, Adv.

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For the Respondent :Mr. Mrinal Kumar, Adv.

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CORAM SHRI RAJESH MALHOTRA : MEMBER

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FINAL ORDER

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22.04.2024

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Present appeals under Section 26 of the Prevention of Money Laundering Act, 2002 are filed against the impugned order dated 01.06.2018 passed by the Adjudicating Authority in Original Complaint No. 876/2018, vide which the following attached properties in PAO No. 16/2017 dated 28.12.2017 were confirmed for attachment:

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Immovable Property

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SCHEDULE A.

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Sr. No.	Particulars of properties	In whose name the property stands.	Date of acquisition of the property	Value as per the registered sale deed (in Rs.)
1.	Residential site admeasuring 60x40 Sq Feet at 74 in Sy. No. 899/1D, Mangalgiri Niwas, Gyang Bhavdi, Vijayapura,	Smt. Sumangala Chour (wife)	In 1995	80,000
	A two stories building (GF &FF) on the above said site along with Car Shed and Compound Wall		In 1997	14,45,098.85
2.	A residential site in Sy. No. 433/D, Bajra Hanuman Nagar Mahal Bagayat Area, Vijayapura	Shri Satish Chour	08.10.2007	2,45,100
3.	Agriculture land of 4 Acres and 05 Guntas in Sy. No. 39/2A at Aliabad Village, Vijayapura.	Shri Girish Chour and Shri Satish	04.04.2008	1,74,000

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FPA-PMLA-2414/BNG/2018 Girish Chour& Others v. ED Bangalore

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4.	Agriculture land of 1 Acres and 25 Guntas in Sy. No. 39/2B at Aliabad Village, Vijayapura.	Shri Girish Chour and Shri Satish Chour	04.04.2008	69,000
5.	Agriculture land of 2 Acres and 18 Guntas in Sy. No. 39/2k at Aliabad Village, Vijayapura	Smt. Sumangala Chour	28.06.2009	1,58,000
Cons Elect	truction of Farm House and other facilit rification in theproperties above at Sr. No. 03	ies like serv to 05.	ant house, sh	ed for Grapes,
Farm	House			10,24,334.83
Hous	e for servant/workers and water tank			2,92,372
One	shed for production of grapes			2,20,497.73
6.	Agriculture land 5 Acres in Sy. No. 45/1 at GugadhadiVillage,Vijayapura.	Shri V.M. Chour	18.08.2010	2,00,000
7.	A site admeasuring 30x40 Sq Feet Sy. No. 220, KanakdasBadavane, Vijayapura.	Shri V.M. Chour	16.02.2012	51,000
	Construction of Ground Floor			7,10,059
Tota	l Value of the Immovableproperties in Rs.			46,69,462/-

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Total Value of the Immovable properties in Rs.

Movable Property

SCHEDULE “B”

(i)

Sr. No.	A/C No./FD No.	Date of opening	Type of Accounts	Banks name with address	A/C Holders name	Balance available in Rs.
1.	20560419025	19.12.2008	SB	Allahabad Bank, Ebrahimpur Roja	ur	7,59,672/-
2.	50025133600	13.01.2010	FD	Road, Vijaypura	Cho	24,63,188/-
3.	501141111133	21.07.2012	FD		.M.	41,75,153/-
4.	52073954717		SB	SBI, Bagalkot	nam	77,757/-
5.	64003508639		SB	SBI, Vijayapura	ijaya	1,20,097/-
6.	08002200100873		SB	Syndicate Bank, Vijayapura	hri V	11,39,311/-
7.	912010013554841		SB	Axis Bank, BLDE	S	12,32,873/-
8.	912010002493678		SB	Engineering College Road, Vijayapura	our	10,22,196/-
9.	912040005979378				la Ch	2,32,721/-
10.	912040005981070	01.02.2012			anga	2,52,111/-
11.	912040005983144				Sum	2,72,989/-
12.	912040005984192		ts		Smt.	2,95,923/-
13.	912040043499061	22.08.2012	posi		. his	5,80,274/-
14.	912040043499809		d De		V.M ur& .	5,80,274/-
15.	912040043500543		Fixe		Shri Cho wife	5,80,275/-
			Total Amoun	t in Rs.		1,37,84,814/-

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Details of Bank Accounts

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(ii)

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Sr.	A/C No.	Bank Name	A/C holder’s	Amount in Rs.
No.			Name
1.	50100211688582	HDFC Bank, Solapur Road, Vijayapura	Smt. Sumangala Chour	5,00,000/-
2.	162110020798	Kotak Mahindra Bank,	Shri Girish	80,000/-

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Rajesh Malhotra

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Member

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FPA-PMLA-2414/BNG/2018 Girish Chour& Others v. ED Bangalore

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Total Amount in Rs.

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PMNM Dental College, Chour Hospital Road, Bagalkot 5,80,000/-

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Details of Articles

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(iii)

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Sr. No.	Type of Assets	Discriptions	Present Market Value (as on28.12.2007)
1.	Gold Jewellery& biscuits: 1330.1 Grams (600 gm biscuits + 730.1 gm Jewellery)	1207 grams seized from his residential premises vide Panchanama dated 08.11.2012 and 125.1 grams seized from the Locker No. 75 at Allahabad Bank, Vijayapura vide Panchanama dated 10.12.2012	= 600 X 2,965+ 730.1 X2,777= 17,79,000+20,27,487.7 =38,06,487.7/-
2.	Silver Jewellery& Biscuits	5.48 Kg. seized from his residential premises vide Panchanama dated 08.11.2012	5.48 X 40,667= 2,22,855.16/-
3.	Cash	An amount of Rs.11,00,900 was seized from his residential premises vide Panchanama dated 08.11.2012	11,00,900/-
4.	Cash	An amount of Rs. 30,00,000/- was seized from Locker No. 75, Allahabad Bank Vijayapura vide Panchanama dated 10.12.2012	30,00,000/-
5.	FDs	One FD A/c No. 02 dated 19.08.2008 for Rs. 1.5 Lakhs in the name of Shri V.M. Chour and one Cash certificate A/c No. 01 dated 19.07.2008 for Rs. 50,000/- with BasavasiriVividhoddeshagala Souhard SahakariNiyamit, Rajaji Nagar, RTO Office Back Side, Bagalkot Road, Vijayapura-586101 were seized vide Panchanama dated 10.12.2012	2,00,000/-
6.	FD	BasavasiriVividhoddeshagala Souhard SahakariNiyamit, Vijayapura vide its letter dated 13.12.2012 addressed to the Lokayukta Authority, Vijayapura provided a copy of FD A/c 46 dated 20.07.2011 in the name of Shri V.M. Chour.	5,00,000/-
Tot	al in Rs.		88,30,242.86/-

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As per the facts of the case KarnatakaLokayukta Police,Vijayapura had registered a FIR No. 20/2012 dated 08.11.2012 against Shri VijayanamMarilingappaChour, Joint Controller of State Accounts (Retd.), Zila Parishad Vijayapura for possession of disproportionateassets to the known sources of income to the extent of Rs.2,99,35,109/- and thereby commission of offence under Section 13 (1) (e) read with 13(2) of Prevention of Corruption Act,1988.

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On the basis of FIR, Directorate of Enforcement, Bengaluru registered ECIR/BGZO/01/2013 dated 03-02-2013 against the said accused. During investigation statement of V.M. Chour and

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Rajesh Malhotra Member

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FPA-PMLA-2414/BNG/2018 Girish Chour& Others v. ED Bangalore

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his family members was recorded. During investigation by respondent ED, Deputy Director found a reasonable believe that the part of the proceeds of crime involved in the Charge Sheet No. 09/2024 dated 10.11.2014 against V.M. Chour are in the form of immovable and movable properties total to Rs.2,78,64,518/-. Hence, vide PAO 16/2017 dated 28.12.2017 the properties were attached.Thereafter, Deputy Director ED filed a Complaint dated 27.01.2018 under Section 5 (5) of PMLA vide OC No. 876/2018. After perusal of the said Complaint, the relied upon documents, and Provisional Attachment Order, the Adjudicating Authority formed a reasonable believe that all the noticee have prima facie committed offence under Section 3 of PMLA, 2002 and accordingly, issued notice to show cause in terms of provision of Section 8(1) vide order dated 05.02.2018. All the defendants filed reply before the Adjudicating Authority and rejoinder to the said reply was also filed by the E.D. On 22.03.2018 complainant E.D. filed an application for impleading the LRs of deceased Defendant No. 1 Late Shri V.M. Chour. The said application was allowed. After hearing both the sides, the Adjudicating Authority confirmed the attachment vide impugned order dated 01.06.2018. Aggrieved by the said order, the appellants have filed the present appeals.

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During the arguments Ld. Counsel for the appellants submitted that after the passing of PAO 16/2017 dated 28.12.2017, OC No. 876/2018 dated 17.01.2018 was filed by respondent-ED before the Adjudicating Authority. During the Adjudication Proceedings Defendant No. 1 Shri V.M Chour expired on 24.01.2018. Ld. Counsel for the appellants pointed out that on account of death of Shri V.M Chour the

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Rajesh Malhotra Member

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FPA-PMLA-2414/BNG/2018 Girish Chour& Others v. ED Bangalore

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criminal proceedings arising out of Charge Sheet No. 09/2014 file by Karnataka Police also stood abated by the Session Court, Vijayapura, vide order dated 27.02.2018. He pointed out that on account of death of Shri V.M Chour, the present appellants filed objections in OC No. 876/2018 before the Adjudicating Authority on the ground that on account of abatement of Criminal proceedings pertaining to the schedule offence against Late Shri V.M Chour, the complaint does not survive for attachment in any manner. He contended that the Adjudicating Authority by ignoring the objections &written submissions filed by the present appellants wrongly confirmed the attachment of properties vide impugned order. He argued that since the schedule offence under Section 13 (1) (e) read with Section 13(2) of the PC Act against Late Shri V.M Chour stands abated on account of his death on 24.01.2018, the question of confirmation for attachment does not arise. He pointed out that present appellants are not arrayed as co-accused in said Charge Sheet case as co-accused under Section 109 IPC or 120B IPC. He submitted that deceased Sh. V.M Chour being the only person who could have explained his assets and sources of income, the appellants cannot be penalized by attaching the properties, in absence of any trial and consequent confiscation of properties of Shri V.M Chour& his family members. He further argued that the attached properties are not covered within the expression of proceeds of crime as defined under Section 2 (1) (u) of PMLA, in any manner in absence of proof of any crime. He contended that proceeds of crime by its definition are nonexistent, if the schedule offence which is alleged is not proved in criminal trial.In support his contention he also relied upon the judgment of Hon’ble Supreme Court of India in case, U.Subhadramma V. State of A.P. ,(2016) 7 SCC 797. In the said case it is held that criminal proceedings under Criminal Law Amendment Ordinance, 1944 could not

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Rajesh Malhotra Member

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FPA-PMLA-2414/BNG/2018 Girish Chour& Others v. ED Bangalore

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be continued against the properties of deceased accused and the trial should have abated. He submitted that in absence of any proof that the possession of properties in the name of the deceased accused Sh. VM Chour&his family members are acquired by any illegal means, the appellants are entitled for release of the properties. Prayer is accordingly made to allow the present appeals and thereby set aside the impugned order confirming the attachment.

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On the other hand, Ld. Counsel for the respondent submitted that Karnataka Police after conducting thorough investigation filed Charge Sheet No. 09/2014 dated 10.11.2014 before Hon’ble District Principal Session Court, Vijayapura against Shri V.M Chour for commission of offence under Section 13(1) (e) read with 13(2) of the Prevention of Corruption Act, 1988, as he was found in possession of the disproportionate assets to his known sources of income to the extent of Rs.2,99,35,109/-. Independent investigation was also conducted by respondent- ED and calculated the disproportionate assets acquired by Shri V.M Chourin his name and in the name of his family members to the extent of Rs. 2,78,64,518.86/-, after considering the replies and explanations given by them. Shri V.MChour and his family members failed to explain the disproportionate assets in their possession to their known sources of income, and hence, Provisional Attachment Order was passed on 28.12.2017 in PAO No. 16/2017. Thereafter, Original Complaint No. 876/2018 was filed before the Adjudicating Authority under Section 5(5) of PMLA, 2002. Appellants failed to give any cogent explanation even during the adjudication proceedings and accordingly, the attachment of properties was confirmed vide order dated 01.06.2018. The said order is well justified and reasonable on the basis of material on record. He pointed out that the death of Shri V.M Chour on 28.01.2018 does not affect the attachment in any manner. In support of his

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Rajesh Malhotra Member

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FPA-PMLA-2414/BNG/2018 Girish Chour& Others v. ED Bangalore

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contention he pointed out Section 8(7) of PMLA 2002 which states that “ where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a proclaimed offender or for any other reason or having commenced but could not be concluded, the Special Court on an application moved by the Director or a person claiming to be entitled to possession of a property in respect of which an order has been passed under sub-section (3) of section 8, pass appropriate orders regarding confiscation or release of the property, as the case may be, involved in the offence of money-laundering after having regard to the material before it”. Accordingly, he stressed that even if the criminal trial with respect to the predicate offence stands abated, even then the attached disproportionate assets can be confiscated in favor of Central Government under Section 8(7) of the Act, by Special Court under PMLA, on the basis of the prosecution complaint filed under Section 3 read with Section 4 of PMLA 2002 and going through the material collected by the police in Charge Sheet case pertaining of schedule offence. He further pointed out that there is nothing on record that Late Shri V M Chour obtained the prior permission from his Department for purchasing the immovable assets in his name and in the name of his spouse & other family members, in compliance with Karnataka State Civil Services Conduct Rules. He further submitted that the Trial Court can also appreciate the fact that accused Late Shri VM Chour has not revealed themovable and immovable assets and source of acquisition in his name and in the name of his family members in his annual property statement returns,which also gives rise to the presumption that Shri VM Chour amassed the disproportionate assets during Government Service, by abusing his power as a public servant. Prayer is accordingly, made to dismiss the present appeal and thereby uphold the impugned order dated 01.06.2018.

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Member

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FPA-PMLA-2414/BNG/2018 Girish Chour& Others v. ED Bangalore

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After hearing the rival submissions, I have given my thoughtful consideration to the same. I am not convinced with the submissions made by Ld. Counsel for the appellant as mentioned in para 3 above as abatement of proceedings against the deceased accused VM Chourdoes not amount to acquittal. Even otherwise, there is a specific provision under Section 8(7)of PMLA for confiscation of the property of deceased accused and his family members, which are illegally acquired and disproportionate to the known sources of income.Criminal Law Amendment Ordinance, 1944, was not having this specific statutory provision for continuing with the attachment & confiscation proceedings, after the death accused. The appellants failed to explain the various properties acquired by Late Shri VM Chour during the check period in his name and the name of his family members/appellants. I am satisfied with the objections raised by Ld. Counsel for respondent-ED, as mentioned in the preceding para.Accordingly, there is no merit in the present appeals for release of properties.

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In sequel to my discussion in preceding para,the present appeals are hereby dismissed being devoid of any merits and consequently the Order dated 01.06.2018 passed by the Adjudicating Authority is hereby upheld.

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AppealsDismissed.

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Pronounced on this 22^nd Day of April of 2024.

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(RAJESH MALHOTRA) Member

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‘PS’

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Rajesh Malhotra

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Member