Dismissed

FPA-PMLA-2476/DLI/2018 of Shri Rajeev Wadhwa v. The Deputy Director Directorate of Enforcement, Delhi

ATFP7 May 2024FPA-PMLA-2476/DLI/2018

Case brief

AI extract

What is this about?

The Appellate Tribunal under PMLA dismissed appeals against the confirmation of provisional attachment orders by the Adjudicating Authority. The court held that the evidence of inter-connected transactions was not effectively rebutted and the balance of interests favored continued attachment pending the trial.

What did the court decide?

Provisional attachment orders confirmed by the Adjudicating Authority were upheld and no interference was granted.

FPA-PMLA-2476/DLI/2018 of Shri Rajeev Wadhwa Vs. The Deputy… — Money Laundering | ATFP (2024)

¶1

APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

¶2

Date of Order: 07.05.2024

¶3

(1) MP-PMLA-4818/DLI/2018 (Stay) FPA-PMLA-2476/DLI/2018
Shri Rajeev Wadhwa	…	Applicant
Versus
The Deputy Director Directorate of Enforcement, Delhi	…	Respondent
(2) MP-PMLA-4825/DLI/2018 (Stay) MP-PMLA-4826/DLI/2018 (Exem.) FPA-PMLA-2480/DLI/2018
Kamakhya Forex Pvt. Ltd.	…	Applicant
Versus
The Deputy Director Directorate of Enforcement, Delhi	…	Respondent
(3) MP-PMLA-4827/DLI/2018 (Stay) MP-PMLA-4828/DLI/2018 (Exem.) FPA-PMLA-2481/DLI/2018
M/s. P.R. Forex Pvt. Ltd.	…	Applicant
Versus
The Deputy Director Directorate of Enforcement, Delhi	…	Respondent
(4) MP-PMLA-4829/DLI/2018 (Stay) FPA-PMLA-2482/DLI/2018
Parvesh Kumar Gujral	…	Applicant
Versus
The Deputy Director
Directorate of Enforcement, Delhi	…	Respondent
(5) MP-PMLA-4842/DLI/2018 (Stay) MP-PMLA-4843/DLI/2018 (Exem.) FPA-PMLA-2489/DLI/2018
Gurdeep Kumar Gujral	…	Applicant
Versus
The Deputy Director
Directorate of Enforcement, Delhi	…	Respondent
(6) MP-PMLA-4836/DLI/2018 (Stay) MP-PMLA-4837/DLI/2018 (Exem.) FPA-PMLA-2486/DLI/2018

¶4

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶5

Page 1 of 17

¶6

Subhash Arora … Applicant Versus The Deputy Director Directorate of Enforcement, Delhi … Respondent

¶7

Advocates/Authorized Representatives who appeared

¶8

For the Appellants : Mr. R K Rawal, (A.R.) Ms. Ruchika, Advocate For the Respondent : Mr. Priyank Khattar, Advocate

¶9

(7) MP-PMLA-4889/DLI/2018 (Stay) FPA-PMLA-2516/DLI/2018

¶10

Rakesh Jain … Applicant Versus The Deputy Director Directorate of Enforcement, Delhi … Respondent

¶11

Advocates/Authorized Representatives who appeared

¶12

For the Appellants : Mr. Mehendra Pratap, Advocate For the Respondent : Mr. Priyank Khattar, Advocate

¶13

CORAM JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI V. ANANDARAJAN : MEMBER

¶14

JUDGEMENT

¶15

This set of seven appeals arises out of the order of the learned Adjudicating Authority (“AA”) under the Prevention of Money Laundering Act, 2002 (“PMLA, 2002”) dated 09.07.2018 confirming the Provisional Attachment Order (“PAO”) passed by the Directorate of Enforcement, Delhi under section 5(1) of the Act through which various immovable and movable properties of the appellants herein were attached.

¶16

2. The relevant facts, as recorded in the impugned order passed by the Ld. AA are that on the basis of a complaint by the Deputy Director, Directorate of Revenue Intelligence (DRI), Lucknow Zonal Office, a case

¶17

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018 Page 2 of 17

¶18

vide FIR No: 76 dated 18.01.2015 was registered at Police Station, Kavi Nagar, District Ghaziabad (U.P.) under section 420, 467, 468,471 and 469 of the IPC against one Shri Manish Jain and others wherein it was alleged that during a search conducted by the DRI under the Customs Act, it was found that Shri Manish Jain, resident of Raj Nagar, Ghaziabad, was involved in making illegal foreign remittances to Hong Kong through banking channels by submitting fake import documents to the banks. As per the report, Shri Manish Jain and certain others operated through various fictitious entities and remitted more than Rs. 380 crores to Hong Kong from India during the period 2007-2011 in the garb of payment for import of computer parts and accessories. Investigations by the DRI further revealed that from 2012 to 2014, the above persons had remitted foreign exchange to the tune of over Rs. 100 crores to Hong Kong through bogus entities, namely, M/s Suntek Computers and M/s Shyam Trading Company which were controlled by Shri Manish Jain.

¶19

3. During the investigations, the DRI searched the residential and business premises of Shri Manish Jain and his associates on 07.08.2014 and seized certain incriminating documents including a large number of blank postal wrappers of Hong Kong Post, about 150 bogus PAN cards and about 100 voter identity cards with fictitious identities. In order to run the above-mentioned illicit operation of remitting foreign exchange out of India, Shri Manish Kumar Jain had also opened a firm, namely, Pacific Technology in Hong Kong, besides other entities.

¶20

4. On the basis of the above FIR and the information received from the DRI, an ECIR dated 10.08.2015 was registered by the Directorate of Enforcement (“ED”), Lucknow, which was further transferred to Delhi Zonal Office on 01.12.2015 for further investigation.

¶21

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶22

Page 3 of 17

¶23

5. During the course of the investigations conducted under PMLA, statements of various persons connected with the case, including the accused, other suspects and witnesses, were recorded under the PMLA, 2002 and relevant evidence was gathered from various sources, including banks, Sub-Registrars Offices, Transport Offices, the Income Tax Department etc.

¶24

6. From the records received from the DRI, it was seen that Shri Manish Kumar Jain, during his statements before the DRI under the Customs Act, 1962, had inter-alia admitted that he had remitted the foreign exchange acquired on the strength of bogus documents and remitted the same outside India with the connivance of forex dealers/agents such as Duggal Forex, P.R. Forex and M/s Kamakhya Forex Pvt. Ltd., all based in Delhi. For the said purpose, Shri Manish Jain had also set up his own concern, namely, M/s Pacific Technology in Hong Kong in 2004. Foreign exchange remittances were made into the HSBC account of the said entity. The foreign exchange remitted to the said HSBC account was further transferred to firms based in China/ Hong Kong/ USA/ India etc. He also admitted that the remittances were made on account of under-valuation made by Indian importers who imported mainly from Chinese firms and over-invoicing made by Indian exporters whose names and account numbers were provided to him to transfer the specified amount of money in the accounts of Chinese, Indian and other firms. A major portion of foreign exchange remitted to Hong Kong was received in India from importers, namely, M/s Brother Impex and M/s Shri Krishna Overseas of Delhi and others. Funds were also transferred into the accounts of various exporters in India from the accounts of companies in Hong Kong belonging to Shri Manish Jain.

¶25

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶26

Page 4 of 17

¶27

7. Consequent to the investigations, a Provisional Attachment Order (“PAO”) came to be passed by the respondent directorate on 18.01.2018, in which, various movable properties valued at Rs. 3,59,22,534/- and immovable properties valued at Rs. 12,43,000/- were provisionally attached. Thus, the total value of the properties provisionally attached was Rs. 3,71,65,534/-. An Original Complaint (O.C.) having been filed before the Ld. AA against Shri Manish Jain and 22 others by the Deputy Director, ED, Delhi Zonal Office as mandated by the Act, the Ld. AA, vide its Order dated 09.07.2018 confirmed the aforementioned PAO . Aggrieved by the said confirmation order of the Ld. AA, the appellants have filed the present appeals before this Appellate Tribunal.

¶28

FPA-PMLA-2476/DLI/2018

¶29

8. It is contended on behalf of the appellant Shri Rajeev Wadhwa that he is not named in the FIR filed by the Directorate of Revenue Intelligence (DRI). Only Manish Jain and his brother Rakesh Jain have been named in the said FIR. It is further contended that Shri Manish Jain, in his statements, had stated that he carried out the transactions under the directions of one Ravinder Jolly. He also disclosed the contact numbers of around 25 associates of Ravinder Jolly. However, no investigations appear to have been made by the respondent Directorate against the said Ravinder Jolly and his associates. Further, the DRI had issued Show Cause Notices (SCNs) for violation of the provisions of the Customs Act, 1962 and the appellant was not one of the noticees. The appellant is not named in the ECIR registered by ED. Shri Manish Jain did not name the appellant in his statement on 12.08.2015. He was arrested by ED on 14.10.2015 and in his statement recorded on that day, he made allegations against the appellant and several other persons. It is submitted before us that the appellant has been falsely implicated

¶30

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶31

Page 5 of 17

¶32

without any fault on his part, and all the allegations made against the appellant are false and baseless. No mobile phone or any incriminating document was seized from the appellant. No incriminating document reflecting any link between Manish Jain and the appellant was seized from any premises. The appellant has been framed with mala fide intentions. It is pointed out that the appellant and his brother Sanjeev Wadhwa had resigned from M/s P.R. Forex Pvt. Ltd. on 20.04. 2005. They had no role to play in any of the activities of the said company thereafter. The allegation that Rajeev Wadhwa and Subhash Wadhwa were directors of the said company at the relevant time is totally incorrect. It is also claimed that the attached properties were acquired out of explained sources, duly disclosed in the return of income.

¶33

9. The respondents have strongly contested the contentions raised on behalf of the appellants. It is pointed out that cash was delivered by Sanjeev Wadhwa and Rajeev Wadhwa or their employees at the doorstep of Manish Jain and Rakesh Jain at Ghaziabad with the instruction slip regarding further remittance out of India. Maximum remittances were sent from the accounts operated by Manish Jain for Rajeev Wadhwa, Sanjeev Wadhwa and Pravesh Gujral and these persons were further associated with many importers and exporters. A commission was earned by Rakesh Wadhwa from importers on the remittance. The statements of Shri Ram Sagar Sahani, driver of Manish Jain recorded on 07.03.2016, Shri Sunil Lamba recorded on 05.02.2016, Shri Ashok Gupta recorded on 20.01.2016, and Shri Rakesh Jain recorded on 27.01.2016 are relied upon by the respondents.

¶34

10. It is also pointed out that the appellant, Shri Rajeev Wadhwa is one of the accused in the Supplementary prosecution complaint filed on 11.05.2016.

¶35

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶36

Page 6 of 17

¶37

FPA-PMLA-2480/DLI/2018

¶38

11. The appellant Kamakhya Forex Pvt. Ltd. is a private limited company having its office in Karol Bagh, New Delhi. The directors of the company are Bhawna Wadhwa, wife of Sanjeev Wadhwa, and her father, Shri Dharambeer Batra. An amount of Rs. 2,52,514/-, being the closing balance in the account with South Indian Bank, Rajouri Garden branch, and another amount of Rs. 10,73,643/-, being the balance in the HDFC Bank, Karol Bagh branch, were attached by the respondent Directorate.

¶39

12. It is contended that the appellant, Kamakhya Forex Pvt. Ltd. was engaged in forex business and was duly authorized by the RBI through a valid license. It is also stated that the license has since been surrendered to the RBI on 10.10.2017 because of continuous harassment. Shri Sunil Lamba looked after the day-to-day affairs of the company. Shri Sanjeev Wadhwa is in no way connected with the affairs of M/s Kamakhya Forex Pvt. Ltd. It is also contended that on 04.02.2016 Ms. Bhawna Wadhwa received a telephone call from the complainant department directing her to come to their office immediately. There, she was humiliated and treated in a very high-handed manner and was made to sign various printed and written papers of which she was not provided copies. She was surrounded by eight officers of the Directorate and was made to write under tremendous stress and strain. Sri Sunil Lamba was subsequently telephonically directed to attend office on 05.02.2016. He did not receive any notice. He also was made to write a dictated statement. It is contended that Shri Sanjeev Wadhwa has nothing to do with the activities of Kamakhya Forex Pvt. Ltd. and has never been a director or an employee of the company. The complainant has also come to the incorrect conclusion that Shri Sanjeev Wadhwa is a director of P.R.

¶40

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶41

Page 7 of 17

¶42

Forex Pvt. Ltd. It is contended that Kamakhya Forex Pvt. Ltd. is an income tax payee since the date of its incorporation. In support of the contention, the appellant has submitted its income tax returns for the period 2014-18. It is contended that the company is not named as an accused either in the FIR or in the ECIR and there are no allegations against the company or its directors in the complaint though complaints have in filed against a number of other persons and entities by the Directorate. None of the directors or employees of Kamakhya Forex Pvt. Ltd. were at any stage asked to furnish details of the sources of the bank balances provisionally attached either through any written communication or when they attended the office of the complainant department in response to telephone calls. There is nothing in the complaint to show as to how the complainant has come to the conclusion that the bank balances represent proceeds of crime. There also is nothing in the complaint to show which particular proceeds of crime are generated from which schedule offence and the manner of acquisition and projection of the alleged proceeds of crime. The complaint is totally silent regarding the link or nexus of the bank balances attached with any proceeds of crime. The bank balances attached by the respondents were legitimate income of the company duly recorded in the books of accounts and declared in the income tax returns. All the applicable taxes have been paid. The appellant had made these submissions before the Ld. AA also vide reply dated 04.04.2018. The Ld. AA failed to establish any money trail or proceeds of crime. The submissions made by the appellant have been ignored by the Ld. AA, which has not given any findings on the same. The Ld. AA failed to consider the reply of the appellant. The appellant submits that the entire origin, basis and substratum of the proceedings is activated with malice in as much as there are no proceeds of crime within the meaning of Section 2(1)(u) of PMLA, 2002. There is absolutely no basis or material to even remotely infer that the appellant

¶43

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶44

Page 8 of 17

¶45

has derived any property as a result of any criminal activity relating to a scheduled offence which is the prerequisite for invoking Section 5 of PMLA, 2002. The impugned order has been passed mechanically without due application of mind. The appellant has prayed that the impugned order be set aside.

¶46

13. The respondents have submitted that during the course of the investigation, a third supplementary prosecution complaint dated 06.10.2018 has been filed in the instant case and fresh evidence in respect of the involvement of Mrs. Bhawna Wadhwa, Director or M/s Kamakhya Forex Pvt. Ltd., in the offence of money laundering gathered during the investigation has been submitted before the learned Special Court. It is also contended that remittances abroad were made by Sh. Manish Jain on the directions of Sanjeev Wadhwa who controlled the appellant company. Huge cash used to be deposited in the accounts of the appellant, among others, which was received from importers and subsequently remitted abroad to Hong Kong using accounts of companies operated by Sh. Manish Kumar Jain. The statement of Sh. Rakesh Jain recorded on 27.01.2016 and Sh. Manish Kumar Jain recorded on 07.08 2014, 13.10.2014 and 03.12.2015 are relied upon.

¶47

14. It is also pointed out that the appellant company is one of the accused in the second Supplementary prosecution complaint.

¶48

FPA-PMLA-2481/DLI/2018

¶49

15. The submissions made on behalf of appellant M/s P.R. Forex Pvt. Ltd. this company are mutatis mutandis the same as in the case of Kamakhya Forex Pvt. Ltd. It has been submitted that M/s P.R. Forex Pvt. Ltd. is engaged in forex business being authorised by the RBI through a

¶50

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶51

Page 9 of 17

¶52

licence. It is stated that the said license was subsequently surrendered in 2017 due to continuous harassment by the complainant department. The appellant is a private limited company. Sri Rajeev Wadhwa and Sanjeev Wadhwa resigned from the directorship of the appellant company on 20.04.2005. The allegations made against the appellant are false and baseless. Shri Parvesh Kumar Gujral, director of the company, in his various statements recorded by the complainant department, had explained the matter in detail. However, the said statements were suppressed by the complainant department. It is prayed by the appellant that the department may be directed to produce the said documents for proper appreciation of matters. The appellant has been an income taxpayer since the date of incorporation. Copies of acknowledgements for having filed income tax returns showing the tax amounts paid for the period 2014-18 have been submitted to substantiate the claim.

¶53

16. The respondents have strongly contested the submissions made on behalf of the appellants. It is submitted by them that huge cash used to be collected in the accounts of the appellant company, among others, which was received from importers and was subsequently remitted abroad to Hong Kong using accounts of fake companies operated by Manish Kumar Jain. A commission was earned by P.R. Forex and its directors on the overall transaction. The statements of Shri Ram Sagar Sahani, driver of Sh. Manish Jain recorded on 07.03.2016, the statement of Shri Rakesh Jain recorded on 27.01.2016, and that of Shri Manish Kumar Jain recorded on 07.08 2014 have been relied upon.

¶54

17. It is also pointed out that the appellant is one of the accused in the second Supplementary prosecution complaint.

¶55

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶56

Page 10 of 17

¶57

FPA-PMLA-2482/DLI/2018

¶58

18. It is contended that the appellant Shri Parvesh Kumar Gujral is not named in the complaint file by DRI, Noida. In the said complaint only Manish Jain and his brother Rakesh Jain have been named. The appellant company is also not named in the ECIR. The bank balance attached by the respondent directorate represents legitimate income recorded in the books of accounts.

¶59

19. The contentions on behalf of the respondent are identical to those against P.R. Forex Pvt. Ltd. and the evidence of the statements of Rakesh Jain and Manish Kumar Jain on various dates are relied upon. It is submitted that Parvesh Kumar Gujral was one of the directors of PR Forex who earned a commission on the foreign exchange remitted abroad through fraudulent means. Apart from Rajeev and Sanjeev Wadhwa, maximum remittances were sent out of India from accounts operated in the name of Parvesh Kumar Gujral.

¶60

20. It is also pointed out that the appellant is one of the accused in the Second Supplementary prosecution complaint filed on 06.10.2018.

¶61

FPA-PMLA-2486/DLI/2018

¶62

21. The submissions made on behalf of the appellant Shri Subhash Arora are mutatis mutandis the same as those made on behalf of Rajeev Wadhwa. For the sake of brevity, the same are not being repeated here. It is contended that the source of purchase of properties has been duly explained and it is evident from the income tax returns copies of which have been filed. It is contended that the bank account with a balance of Rs. 30,135 /- is duly accounted for by the appellant.

¶63

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶64

Page 11 of 17

¶65

22. The respondents have pointed out that Shri Subhash Arora was a director in P.R. Forex along with other accused persons who used bank accounts in the company's name for making outward remittances to Hong Kong and earning money as commission from importers. The statement of Shri Manish Kumar Jain on 14.10.2015, and 03.12.2015 and the statement of Shri Rakesh Jain recorded on 27.01.2016 are relied upon.

¶66

23. It is further pointed out that the appellant is one of the accused in the second supplementary prosecution complaint filed on 06.10.2018.

¶67

FPA-PMLA-2489/DLI/2018

¶68

24. The submissions made on behalf of the appellant Shri Gurdeep Kumar Gujral are mutatis mutandis the same as the ones made on behalf of Rajeev Wadhwa which have already been discussed in detail. It is contended that the properties attached by the respondent Directorate are neither proceeds of crime nor properties made from any proceeds of crime. It is further contended that the FDRs were attached by the complainant department on 12.08.2015, bank accounts were seized on 16.11.2017, and the PAO in respect of the properties was issued on 19.01.2018. Since the period of 365 days in respect of these FDRs expired on 12.08.2016, the same are liable to be released in terms of the judgement of the Hon‟ble Delhi High Court in Mahender Kumar Khandelwal versus Directorate of enforcement WP(C) No. 10993 of 2023 wherein it was held that on expiry of 365 days, the seizure is liable to be returned if investigations are not completed by the time. The appellant contends that investigations were continuing till 06.10.2018 in respect of the seized items.

¶69

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶70

Page 12 of 17

¶71

25. The respondent contends that the appellant, Shri Gurdeep Kumar Gujral, along with Bhavesh Kumar Gujral, Subhash Arora and the Wadhwa brothers used to run the business of P.R. Forex. Later Sanjeev and Rajeev Wadhwa resigned from the company and Subhash Arora was appointed as the director. The appellant Shri Gurdeep Kumar Gujral used to get a commission of Rs. 2000-3000/- per lakh from importers towards foreign remittance made to companies for undervalued exports. The respondents have relied upon the statement of Manish Jain dated 14.10 2015, and the statement of Shri Sunil Lamba recorded on 05.02.2016 under section 50 of the PMLA, 2002.

¶72

26. It is further pointed out that Shri Gurdeep Kumar Gujral is one of the accused in the second supplementary prosecution complaint filed on 06.10.2018.

¶73

FPA-PMLA-2516/DLI/2018

¶74

27. The amounts lying in 3 FDRs of Rs. 93,086/- Rs. 81,896/- and Rs. 81,896/- in the UP Cooperative Bank, Ghaziabad have been attached. It is contended on behalf of the appellant Shri Rakesh Jain that the first FDR had been acquired by the appellant from legitimate sources of income and he has been a regular income-tax payer for the last many years. The appellant is a shareholder as well as a director in the company Swaran Overseas Pvt. Ltd. since its incorporation in the year 1994 and has been drawing a salary from the said company. The appellant owns 25 per cent shareholding in the said company and the said company is in the business of money changing and holds a fullfledged money changers‟ licence. The other two FDRs belong to Mrs. Swaran Lata Jain and not to the appellant. The name of the appellant

¶75

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶76

Page 13 of 17

¶77

i.e., second name, was added in the said FDRs only out of love and affection. The FDRs are extremely old being the result of small savings done by the appellant's mother Mrs Swaran Lata Jain. The same were renewed from time to time.

¶78

28. The respondents contend that Shri Manish Jain, Sh. Rakesh Jain and their employees used to get huge amounts deposited in cash. They used to transfer the amounts in other accounts through RTGS etc., and further sent it abroad in foreign exchange, mainly to Hong Kong. They were paid a commission on the overall transaction. The respondents have relied upon the statement of Sh. Sushil Kumar Gupta (Oriental Bank of Commerce) recorded on 05.12.2015, statement of Sh. Ram Sagar Sahani (driver of Manish Jain) recorded on 07.03.2016, statement of Sh. Naman Jain (Axis Bank) recorded on 22.12.2015, and the statement of Sh. Rakesh Jain recorded on 27.01.2016.

¶79

29. It is also pointed out that the appellant Shri Rakesh Jain is an accused in the second supplementary prosecution complaint filed on 06.10.2018 and is the main accused, Shri Manish Kumar Jain.

¶80

CONSIDERATION AND FINDINGS

¶81

30. We have given careful consideration to the rival submissions of the parties to all these appeals and perused the documents on record. We note that prosecution complaints under PMLA, 2002 have been filed and proceedings arising out of the same are pending against all the appellants involved in these appeals. Evidence exists in the form of statements of witnesses, including that of the main accused and other accused persons apart from other evidence, which incriminate the appellants. On the other hand, other than bare denials, the appellants

¶82

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶83

Page 14 of 17

¶84

have not presented any credible evidence to discharge their burden of proof under section 24 of the Act.

¶85

31. Equally, the available evidence also points emphatically towards the existence of a complex web of interconnected transactions. Cash was delivered by Sanjeev Wadhwa and Rajeev Wadhwa or their employees at the doorstep of Manish Jain and Rakesh Jain at Ghaziabad with the instruction slip regarding further remittance out of India large remittances were sent from the accounts operated by Manish Jain for Rajeev Wadhwa, Sanjeev Wadhwa and Pravesh Gujral; remittances abroad were also made by the principal accused Shri Manish Jain on the directions of Sanjeev Wadhwa who was controlingthe affairs of Kamakhya Forex wherein his wife Bhawna Wadhwa was a director; huge cash used to be deposited in the accounts of Kamakhya Forex, which was received from importers, and subsequently remitted to Hong Kong using accounts of companies operated by Manish Jain; similar allegations also exist in respect of M/s P.R. Forex Pvt. Ltd; Pravesh Kumar Gujral and Subhash Arora were directors of P.R. Forex and earned a commission on the foreign exchange remitted abroad through fraudulent means; Manish Jain and Rakesh Jain used to get huge amounts deposited in cash and transferred the amounts to other accounts through RTGS etc., and remitted it abroad in foreign exchange, mainly to Hong Kong and were paid a commission on the overall transaction.

¶86

32. The web of transactions referred to in brief in the preceding para prima facie proves inter-connected transactions as laid down under section 23 of the Act, which has not been affectively rebutted by the appellants.

¶87

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶88

Page 15 of 17

¶89

33. Insofar as the legal position is concerned, it is by now well-settled that under PMLA, 2002 provisional attachment of property is an emergent measure to be taken by the designated authority upon being satisfied and having reason to believe that the proceeds of crime are likely to be concealed, transferred or dealt with in any manner, which may result in frustrating any proceedings relating to confiscation of such proceeds of crime. The purpose of such attachment is to protect and preserve the proceeds of crime until the guilt or innocence of the person, as the case may be, is established. It has been so held by the Hon‟ble Bombay High Court in Radha Mohan Lakhotia v. The Deputy Director, PMLA, Department of Revenue MANU/MH/1011/2010. Similarly, the Hon‟ble Supreme Court in Vijay Madanlal Choudhary & Ors. v. UoI & Ors., SLP (CRL.) NO. 4634 OF 2014 (Order dated 27.07.2022) , has observed that it is clear that the provision in the form of Section 5 provides for a balancing arrangement to secure the interest of the person as well as to ensure that the proceeds of crime remain available for being dealt with in the manner provided by the 2002 Act.

¶90

34. Under section 2(1)(d) of the Act, “attachment” has been defined to mean prohibition of transfer, conversion, disposition or movement of property. Attachment of property does not prevent the person from use and enjoyment of the property. In Dyani Antony Paul v. Union of India [2020] 122 taxmann.com 181 (Kar.), wherein a challenge to attachment under Section 5 of the Act was made on the ground of violation of right of property under Art. 300A of the Constitution, the Hon‟ble Karnataka High Court has held that provisional attachment order passed under section 5(1) of the Act or its confirmation under section 8(3), being intermediary stages before confiscation, the question of deprivation of property right does not arise.

¶91

FPA-PMLA-2476, 2480-2482, 2486, 2489 & 2516/DLI/2018

¶92

Page 16 of 17

¶93

35. Considering the factual as well as legal position we find that even the balance of interests referred to by the Hon‟ble Supreme Court in Vijay Madanlal Chaudhory (supra) lies firmly in favour of continued attachment of the property at this interim stage when prosecution complaints have been filed and are pending before the designated Special Court.

¶94

36. We also note that the value of property attached by the respondents in the present case is a mere fraction of the alleged proceeds of crime.

¶95

37. No other issues were argued before us from either side other than dealt with by us.

¶96

ORDER

¶97

38. In light of the above discussions, we do not find any grounds to interfere with the order of the Ld. Adjudicating Authority in the instant set of appeals.

¶98

39. Accordingly, all these appeals are hereby dismissed and shall

¶99

stand disposed of along with pending applications, if any.

¶100

40. No order as to costs.

¶101

(Justice Munishwar Nath Bhandari) Chairman

¶102

(V. Anandarajan) Member

¶103

New Delhi, 07th May, 2024 „AK‟