Disposed

FPA-PMLA-2479/DLI/2018 of Sanjeev Wadhwa v. The Deputy Director Directorate of Enforcement, Delhi

ATFP7 May 2024FPA-PMLA-2479/DLI/2018

Case brief

AI extract

What is this about?

The Appellate Tribunal disposed of 13 appeals challenging provisional attachment orders under the PMLA. While dismissing several appeals where appellants failed to prove legitimate sources of funds, the Tribunal allowed appeals where attachments of minor amounts relied solely on presumptions without specific evidence of nexus to criminal proceeds.

What did the court decide?

Appeals against provisional attachment orders were disposed of; some attachments confirmed, others set aside based on sufficiency of evidence regarding sources of funds.

FPA-PMLA-2479/DLI/2018 of Sanjeev Wadhwa Vs. The Deputy Director… — Money Laundering | ATFP (2024)

¶1

APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

¶2

Date of Order : 07.05.2024

¶3

1. MP-PMLA-4816/DLI/2018 (Stay) MP-PMLA-4817/DLI/2018 (Exem.) FPA-PMLA-2475/DLI/2018
Mrs. Mamta Jain	…	Applicant
Versus
The Deputy Director Directorate of Enforcement, Delhi	…	Respondent
2. MP-PMLA-4819/DLI/2018 (Stay) MP-PMLA-4820/DLI/2018 (Exem.) FPA-PMLA-2477/DLI/2018
Mrs. Bimla Wadhwa	…	Applicant
Versus
The Deputy Director
Directorate of Enforcement, Delhi	…	Respondent
3. MP-PMLA-4821/DLI/2018 (Stay) MP-PMLA-4822/DLI/2018 (Exem.) FPA-PMLA-2478/DLI/2018
Mrs. Bhawna Wadhwa	…	Applicant
Versus
The Deputy Director Directorate of Enforcement, Delhi	…	Respondent
4. MP-PMLA-4823/DLI/2018 (Stay) MP-PMLA-4824/DLI/2018 (Exem.) FPA-PMLA-2479/DLI/2018
Sanjeev Wadhwa	…	Applicant
Versus
The Deputy Director Directorate of Enforcement, Delhi	…	Respondent
5. MP-PMLA-4830/DLI/2018 (Stay) MP-PMLA-4831/DLI/2018 (Exem.) FPA-PMLA-2483/DLI/2018
Gurdeep Kumar Gujral & Sons	…	Applicant
Versus
The Deputy Director
Directorate of Enforcement, Delhi	…	Respondent

¶4

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶5

Page 1 of 36

¶6

6. MP-PMLA-4832/DLI/2018 (Stay) MP-PMLA-4833/DLI/2018 (Exem.) FPA-PMLA-2484/DLI/2018
Mrs. Sushila Gujral	… Applicant
Versus
The Deputy Director Directorate of Enforcement, Delhi	… Respondent
7. MP-PMLA-4834/DLI/2018 (Stay) MP-PMLA-4835/DLI/2018 (Exem.) FPA-PMLA-2485/DLI/2018
Mrs. Seema Gujral	… Applicant
Versus
The Deputy Director Directorate of Enforcement, Delhi	… Respondent
8. MP-PMLA-4838/DLI/2018 (Stay) MP-PMLA-4839/DLI/2018 (Exem.) FPA-PMLA-2487/DLI/2018
Mrs. Kajal Arora	… Applicant
Versus
The Deputy Director Directorate of Enforcement, Delhi	… Respondent
9. MP-PMLA-4840/DLI/2018 (Stay) MP-PMLA-4841/DLI/2018 (Exem.) FPA-PMLA-2488/DLI/2018
Parvesh Kumar Gujral & Sons	… Applicant
Versus
The Deputy Director Directorate of Enforcement, Delhi	… Respondent
Advocates/Authorized Representatives who	appeared
For the Appellants : Mr. Ms.	R K Rawal, (A.R.) Ruchika, Advocate
For the Respondent : Mr.	Priyank Khattar, Advocate
10. MP-PMLA-4881/DLI/2018 (Stay) FPA-PMLA-2512/DLI/2018
Ms. Soumya Jain (Minor)	… Applicant
Versus
The Deputy Director
Directorate of Enforcement, Delhi	… Respondent
FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/D	LI/2018 Page 2 of 36

¶7

11. MP-PMLA-4883/DLI/2018 (Stay) FPA-PMLA-2513/DLI/2018 Mrs. Swaran Lata Jain … Applicant Versus The Deputy Director Directorate of Enforcement, Delhi … Respondent 12. MP-PMLA-4885/DLI/2018 (Stay) FPA-PMLA-2514/DLI/2018 M/s Swaran Overseas Pvt. Ltd. … Applicant Versus The Deputy Director Directorate of Enforcement, Delhi … Respondent 13. MP-PMLA-4887/DLI/2018 (Stay) FPA-PMLA-2515/DLI/2018 Vinita Jain … Applicant Versus The Deputy Director Directorate of Enforcement, Delhi … Respondent Advocates/Authorized Representatives who appeared For the Appellants : Mr. Mehendra Pratap, Advocate For the Respondent : Mr. Priyank Khattar, Advocate CORAM JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI V. ANANDARAJAN : MEMBER

¶8

JUDGEMENT

¶9

This set of 13 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,

¶10

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶11

Page 3 of 36

¶12

Delhi under section 5(1) of the Act through which various immovable and movable properties of the appellants herein were attached.

¶13

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 vide FIR No: 76 dated 18.01.2015 was registered at Police Station, Kavi Nagar, District Ghaziabad (U.P.) under section 420 and other relevant provisions 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.

¶14

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

¶15

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶16

Page 4 of 36

¶17

out of India, Shri Manish Kumar Jain had also opened a firm, namely, Pacific Technology in Hong Kong, besides other entities.

¶18

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.

¶19

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.

¶20

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

¶21

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶22

Page 5 of 36

¶23

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.

¶24

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.

¶25

FPA-PMLA No.2475/DLI/2018

¶26

8. Mrs. Mamta Jain, the appellant in this appeal, is the wife of the main accused, Shri Manish Jain. Three immovable properties standing in her name, valued at a total of Rs.12,43,000/- have been attached by the respondents.

¶27

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶28

Page 6 of 36

¶29

9. The appellant argues that no enquiries were made by the complainant department with the appellant at any stage regarding the attached properties and arbitrarily, without any lawful cause, they proceeded to attach the same without any intimation to the appellant. There is neither any statement nor any document which speaks against the appellant or the properties attached. The submissions made by the appellant were ignored by the Ld. AA and no findings have been given on the same.

¶30

10. As regards the sources of acquisition of the properties in question, it is submitted that the properties have been purchased from the legitimate income of the appellant from her business and profession. The appellant is a graduate, is engaged in a lawful business, and is an income-tax assessee. Copies of the ITRs for Assessment Year 2013-14 to 2017-18 have been submitted to substantiate the claim. It is further contended that payments for the properties have been made through cheque/cash and are duly recorded in the sale deeds which are in the possession of the complainant Department.

¶31

11. In light of the above, it is prayed by the appellant that the impugned order dated 09.07.2018 passed by the Ld. AA in O.C. No.891/2018 be set aside.

¶32

12. The respondent, on the other hand, submits that the argument of the appellant that she was not in possession of proceeds of crime is far from the truth because appellant in connivance with accused Manish Jain has acquired proceeds of crime in the form of foreign exchange against fake import documents and remitted the same outside India to launder the said money in the garb of remittance against advance import

¶33

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶34

Page 7 of 36

¶35

in order to conceal fraudulent exports/imports. It is also contended that the aforementioned proceeds of crime have been used in acquiring properties which fall within the definition of „proceeds of crime‟ and have been attached following due process of law.

¶36

13. We have considered the submissions made from both sides and perused the material on record. One of the main contentions raised on behalf of the appellant is that she had her own independent sources of income out of which the properties in question were acquired. Having perused the case records and considered the verbal arguments presented before us, we do not find any evidence to substantiate the claim that the appellant had sufficient income from explained and legitimate sources to acquire the assets in question during the period when the same were acquired. No details as to the nature of business or profession carried on by the appellant have been submitted except stating that it was from “business as commission and professional income.” Income Tax Returns (ITRs) have been submitted by the appellant for the period 2013-2018 to substantiate her claim. At the outset, we note that the period of acquisition of the attached assets as per the impugned order was between 2008 and 2011. No ITRs for the corresponding period have been filed. Furthermore, upon perusal of the ITR copies for the period 2013 to 2018 which have been filed by the appellant, we find that for Assessment Year 2013-2014, which relates to the income earned in Financial Year 2012-2013, the appellant had declared an ad hoc amount of Rs. 3,00,000/- as business income. The accompanying documents indicate that the said income is claimed to be from a business in respect of which no regular books of account are maintained. For the next Assessment Year, i.e., 2014-15 which relates to income earned during 2013-14, the income declared from the said business or profession is Rs. 3,62,680/-.

¶37

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶38

Page 8 of 36

¶39

Again, no accounts were being maintained in respect of this business as per the details filed by the appellant herself. Similar is the situation with regard to the ITR for other assessment years. It is seen that for most of the years, round figures have been declared by way of income which also casts a doubt on the authenticity of the income declared. We also note that there is nothing to show whether the returns of the income filed by the appellant were selected for scrutiny by the Income Tax Department for any of these years. Notably, the Department selects only about 2 percent of the returns for scrutiny and the remaining 98% of the returns filed are accepted at face value, as declared by taxpayers. Above all, as already pointed out, the returns do not pertain to the period during which the assets attached were acquired. For all these reasons, reliance cannot be placed upon the ITRs filed by the appellant as evidence of having legitimate income for acquisition of the assets in question.

¶40

14. The appellant has repeatedly asserted that no link or nexus has been established by the respondents to connect the proceeds of crime with the appellant or the assets acquired by her. It is not necessary for the respondents to establish the existence of any such direct nexus or link between the proceeds of crime and the property sought to be attached. Under section 8 of the PMLA, 2002 once a notice has validly been served upon a person under section 8(1), it is for that person to indicate the sources of his/her income, earning or assets out of which or by means of which he/she has acquired the property. The presumptions mandated under section 23 and 24 of the Act are also against the appellant. Having given careful consideration to materials on record and the arguments presented before us on behalf of the appellant, we do not find that the appellant in the present case had presented any such proof either before the Ld. AA or even during the proceedings before this

¶41

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶42

Page 9 of 36

¶43

Appellate Tribunal to establish the legitimate sources of acquisition of the properties attached by the respondents. It is noteworthy that the appellant in this case is none other than the wife of the main accused Shri Manish Jain. The case is one which involves a web of interconnected transactions between multiple individuals and entities. There is every reason to believe that the proceeds of crime were parked and layered by the main accused in the form of immovable properties in the name of his wife among other persons and entitles of the group.

¶44

15. Accordingly, this appeal is dismissed and the attachment of the three properties standing in the appellant‟s name is hereby confirmed.

¶45

16. With the above order, Appeal No. FPA-PMLA No.2475/DLI/2018 shall stand disposed of, along with pending applications, if any.

¶46

FPA-PMLA-2477/DLI/2018

¶47

17. Mrs. Bimla Wadhwa, the appellant in this appeal, is the mother of Shri Rajiv Wadhwa who is one of the accused in the supplementary prosecution complaint filed on 09.05.2016. An amount of Rs. 70,824/standing to her credit in her account with the South Indian Bank, Rajouri Garden Branch has been attached.

¶48

18. The respondent Directorate contends that she is a housewife who is residing with her son Shri Sanjeev Wadhwa. She is not holding any position in any business entity and is dependent on her son. Thus, according to the respondent Directorate, “it is safe to say that the balance amount maintained in the said bank account in the name of

¶49

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶50

Page 10 of 36

¶51

Mrs. Bimla Wadhwa is likely from the income of her sons from their businesses.”

¶52

19. We have considered the facts of the case and the rival contentions of parties. We find that there was only a small amount of balance standing to the credit of the appellant in the bank account which has been attached by the respondents based on the presumption that since she was living with her son and was a housewife, the amount standing to her credit was out of the proceeds of crime generated by her sons. We do not find any justification for the attachment of such a meagre amount which could be available in the account of any person of middle-class economic status even out of day-to-day savings. On the face of it, the attachment of the bank account is purely based upon the presumption mentioned above, namely, that since the appellant was residing with her son, the amount in her bank account is “likely” to be from the income of her sons from their businesses. We do not find any justification for the action of the respondents. Accordingly, the attachment of the said amount standing to the credit in the bank account of the appellant is hereby set aside.

¶53

20. Consequently, this appeal is allowed and the order of the Ld. AA, insofar as it relates to the present appellant is set aside.

¶54

FPA-PMLA-2478/DLI/2018

¶55

21. Mrs. Bhawna Wadhwa, the appellant in this appeal, is the wife of Shri Sanjeev Wadhwa, brother of Rajeev Wadhwa who is one of the accused in the supplementary prosecution complaint filed on 06.10.2018. Two amounts, namely, Rs. 1,81,556/- and Rs. 7,60,099/-

¶56

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶57

Page 11 of 36

¶58

standing to her credit in the accounts maintained with the South Indian Bank, Rajouri Garden and the ICICI Bank, Patel Nagar respectively, have been attached.

¶59

22. It is contended on behalf of the appellant that the amounts attached represent her legitimate income from her profession, income from short-term capital gain and commission income. The bank accounts were duly disclosed in the ITRs. Copies of ITRs for the period 2014-18 have been filed to substantiate the contention.

¶60

23. It is further submitted that the complaint is completely silent on the money trail of the alleged proceeds of crime. There is nothing in the entire complaint to show that any proceeds of crime flowed to her. The complaint nowhere shows any link between the bank balances and the alleged proceeds of crime. No enquiries were made by the complainant department with the appellant in respect of the aforesaid bank balance at any stage and arbitrarily, without any lawful cause, the department proceeded to freeze the bank balance without even an intimation to the appellant. There is neither any statement nor any document which speaks against the appellant in respect of the said bank balances.

¶61

24. It is further submitted by the appellant that she is one of the directors of Kamakhya Forex Pvt. Ltd. One Shri Sunil Lamba, an employee of the company, looks after the day-to-day affairs of the company. It is contended that there are no allegations against the appellant in the O.C. and she is not named in any FIR or ECIR or complaint filed under PMLA, 2002.

¶62

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶63

Page 12 of 36

¶64

25. It is also submitted before us that the appellant had made the aforesaid submissions before the Ld. AA vide her reply dated 04 04 2018. However, the Ld. AA allowed the O.C. and confirmed the PAO. The impugned order has been passed mechanically, without application of mind. The Ld. AA failed to consider the sources of income out of which the appellant had acquired the properties attached. There is nothing in the complaint to show any nexus between any proceeds of crime and the provisionally attached property. It is further pointed out that even the allegations against her husband, Shri Sanjeev Wadhwa, pertain to the period 2007 to 2014, whereas he had resigned from P.R. Forex Pvt. Ltd. on 20.04 2005.

¶65

26. The respondents, on the other hand, submit that contrary to the appellant‟s claim that there was no nexus between proceeds of crime and property attached, there are huge inter-connected transactions between M/s P.R. Forex Pvt. Ltd., M/s Kamakhya Forex Pvt. Ltd, Sh. Pravesh Gujral, Sh. Subhash Arora, Sh. Gurdeep Gujral, Sh. Sanjeev Wadhwa, Sh. Rajeev Wadhwa and in names of family members of the said persons. It is to be pointed out that the present appellant, Mrs. Bhawna Wadhwa is the Director in one of the above-mentioned firms, i.e., M/s Kamakhya Forex Pvt. Ltd., which played a part in the routing of funds in the form of cash /RTGS.

¶66

27. We have carefully considered the rival contentions of the parties and perused the material on record. It is not denied, rather it is admitted, that the appellant was one of the directors of M/s Kamakhya Forex Pvt. Ltd. which is one of the entities, apart from M/s P.R. Forex Pvt. Ltd. through which the accused persons in the case had conducted their illicit operations. The respondents have pointed out that there are

¶67

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶68

Page 13 of 36

¶69

huge outward and inward remittances involving the present appellants and other individuals and entities which are suspicious in nature. The appellant has not presented any specific evidence with regard to the sources of acquisition of property which has been attached. The onus of proving the legitimacy of the transactions through which the balances in the bank account were acquired and the sources thereof was upon the appellant. However, we find that the submissions made by the appellant are of a broader nature, including existence or otherwise of reason to believe, absence of any allegations or charges personally against the appellant, absence of money trail etc. No specific evidence to substantiate the legitimacy of the sources of the funds in the individual bank accounts of the appellant have been presented before us, nor have the transactions therein been explained. Accordingly, we are of the view that the appellant has failed to discharge the burden of the proof which was cast upon her under the Act to explain the sources out of which the attached properties were acquired.

¶70

28. In light of the above discussions, the present appeal is hereby dismissed along with pending applications, if any.

¶71

FPA-PMLA-2479/DLI/2018

¶72

29. Shri Sanjeev Wadhwa , the appellant in this appeal, is the brother of Shri Rajeev Wadhwa, who is one of the accused persons in the supplementary prosecution complaint filed on 09.05.2016. Two amounts, namely, Rs. 36,033/- and Rs. 4,98,848/- standing to his credit in the accounts maintained with the HDFC Bank, Karol Bagh and the South Indian Bank, Rajouri Garden respectively, have been attached.

¶73

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶74

Page 14 of 36

¶75

30. It is contended on behalf of the appellant that the allegations made against the appellant are false and baseless. The appellant was in no way connected with the affairs of M/s Kamakhya Forex Pvt. Ltd. His wife Bhawna Wadhwa, and her father, Dharambeer Batra were the directors of the said company which also has been falsely implicated. Further, the appellant had resigned from the directorship of M/s P.R. Forex Pvt. Ltd. on 20.04.2005. The amounts attached represent the legitimate income of the appellant, being professional and commission income during the period 2014-2015. A copy of the ITR for 2014-15 enclosed to substantiate the claim.

¶76

31. It is further contended that the complaint is totally silent on money trail of any proceeds of crime. The complaint nowhere shows any link of the aforesaid bank balances with the alleged proceeds of crime. No enquiry was made by the complainant department with the appellant in respect of the bank balance at any stage and arbitrarily, without any lawful cause, they proceeded to freeze the aforesaid bank balances without any intimation to the appellant. There is neither any statement nor any document which speaks against the appellant in respect of the aforesaid bank balances. The appellant has been unnecessarily dragged into the matter. The appellant is not named in any FIR or ECIR or complaint filed under the Act. It is also pointed out that the appellant had made the above submissions before the AA vide his reply dated 04.04.2018. However, the Ld. AA proceeded to allow the Original Complaint and confirm the PAO mechanically, without application of mind. It is reiterated that both the respondent directorate as well as the Ld. AA failed to establish any money trail of the proceeds of crime and, as such, the PAO and the impugned order are liable to be set aside.

¶77

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶78

Page 15 of 36

¶79

32. The respondents have submitted that the appellant was initially one of the directors in P.R. Forex, and used to deliver the cash which was to be remitted outside to Manish Jain and his brothers. Further, he also controlled the business of M/s Kamakhya Forex, in which his wife was one of the directors. Cash used to be deposited in the accounts of Kamakhya Forex on his directions.

¶80

33. We have carefully considered the material on record and the arguments presented before us. The appellant Shri Sanjeev Wadhwa had incorporated the company M/s P R Forex Pvt. Ltd. which is one of the concerns through which the illegitimate foreign currency transactions were carried out by the principal accused. Further, as per the statement of Shri Rajeev Wadhwa, brother of the appellant and one of the accused persons in this group of cases, Shri Sanjeev Wadhwa was running the business of M/s Kamakhya Forex Pvt. Ltd. in which his wife Bhawna Wadhwa is a director. The above facts indicate that the appellant was very much a part of the operations carried out by the group. He was the founder of one of the key business entities of the group i.e., P R Forex Pvt. Ltd. and was associated with the business activity of another entity of the group in which his wife was a director namely, Kamakhya Forex Pvt. Ltd. Shri Rakesh Jain, brother of Shri Manish Jain had stated in his statement that among others, his brother received heavy cash from Shri Sanjeev Jain and that most of the firm, heavy cash was delivered by Sanjeev, Rajeev or their employees at their doorstep in Ghaziabad with instruction slip regarding outside remittance. The main accused, Shri Manish Kumar Jain in his statement stated that most of the remittance, were made on the directions of Shri Sanjeev Wadhwa.

¶81

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶82

Page 16 of 36

¶83

34. We also note that the property attached in this case comprises two bank accounts. It was incumbent upon the appellant to establish the legitimacy to source of the balances in the question. No such arguments have been presented or material such as bank account statements for the relevant period have been placed before us or the entries therein explained during the course of the hearing of the case. As such, we are of the view that the appellant has failed to discharge the onus which was cast upon him under the Act to bring cogent evidence to explain the sources of the acquisition of the assets.

¶84

35. In light of the above, the present appeal in hereby dismissed along with pending applications, if any.

¶85

FPA-PMLA-2483/DLI/2018

¶86

36. In this appeal, the attachment of balances of Rs. 6,98,975/- and Rs. 7,53,695/- standing in the HUF account in the name of Gurdeep Kumar Gujral & Son s in the South Indian Bank, Rajouri Garden Branch has been assailed.

¶87

37. It is contended on behalf of the appellant that they were never asked to furnish details of sources of the bank balances provisionally attached either through any written communication or when Shri Gurdeep Kumar Gujral attended the office of the complainant department. There is nothing in the complaint to show how the complainant has come to the conclusion that it represents proceeds of crime. There are no allegations that the defendant had obtained or received any proceeds of crime. The bank balances attached were legitimate income of the appellant, duly recorded in the books of account

¶88

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶89

Page 17 of 36

¶90

and declared in the ITRs. The applicable taxes have been paid. Copies of ITRs for certain years have been submitted to substantiate the claim. It is contended that the appellant had made the same submissions before the Ld. AA vide reply dated 04.04.2018. Even so, the Ld. AA proceeded to confirm the PAO mechanically and without application of mind. There are no allegations of any nature against the appellant in the OC filed by the ED. The authority failed to establish any money trail of the proceeds of crime and as such the PAO as well as the impugned order are liable to be set aside. The sources of income by means of which the appellant had acquired the properties attached were duly explained and there is nothing in the complaint to show any nexus between any proceeds of crime and the provisionally attached property. The appellant is not named in the FIR, the ECIR or the prosecution complaint.

¶91

38. According to the respondents, the accounts in the name of Gurdeep Kumar Gujral & Sons are likely to have been operated by Shri Gurdeep Kumar Gujral himself, who was one of the accused in the 2^nd supplementary prosecution complaint filed on 06.10.2018.

¶92

39. We have considered the contentions from both sides and perused the material on record. At the outset, we note that the appellant is an HUF of which the Karta is Shri Gurdeep Kumar Gujral, one of the accused in the case. The main accused, Shri Manish Kumar Jain had stated in his statement under Section 50 of the PMLA, 2002 that Shri Gurdeep Gujral, among others, worked with him during 2006-2010 and 2012-2014. The properties attached are balances available in banks. It was incumbent upon the appellant to present specific evidence to establish the legitimacy of the sources of the balances in the said accounts. However, the appellant has relied upon general arguments

¶93

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶94

Page 18 of 36

¶95

such as absence of reasons to believe, failure of establish a link or nexus with the proceeds of crime, absence of any charges against the appellant HUF etc. In addition, the appellant has sought to rely on copies of ITRs filed by the appellant between 2014-15 and 2017-18. The returns do not throw any light on the transactions in the bank accounts. Moreover, we also note that the allegations in this case pertain to transactions which relate 2007-2011 and 2012-2014 as such, the ITRs filed by the appellant which related to 2014-15 to 2017-18 are of very little value in coming to any meaningful conclusions.

¶96

40. In light of the above, the present appeal in hereby dismissed along with pending applications, if any.

¶97

FPA-PMLA-2484/DLI/2018

¶98

41. Mrs. Sushila Gujral , the appellant in this appeal, is the mother of Gurdeep Kumar Gujral, one of the accused in the 2^nd supplementary prosecution complaint filed on 06.10.2018. Three amounts namely Rs. 76,700/-, Rs.11,06,503/- and Rs. 22,13,023/- standing to her credit in the accounts maintained with the South Indian Bank, Rajouri Garden have been attached.

¶99

42. It is contended on behalf of the appellant that there are no allegations at all made against her in the OC and, except for her name being mentioned at Sl. No. 18 in the list of defendants, her name does not figure anywhere in the OC. The amounts in the five FDRs and the balance in the bank account represented legitimate income of the appellant from her commission income and professional receipts. The sources of the funds were legitimate, and the same were duly disclosed in

¶100

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶101

Page 19 of 36

¶102

the ITRs. It is further contended that the complaint is completely silent on money trail of the alleged proceeds of crime. The complaint nowhere shows any link of the aforesaid amounts in the bank with any alleged proceeds of crime. Further no enquiry has been made by the complainant department with the appellant at any stage and, arbitrarily, without any lawful cause, they proceeded it to freeze the bank balance and fixed deposits. There is neither any statement nor any document which speaks against the appellant and the appellant has been unnecessarily dragged into the matter. It is also submitted that the FDRs were seized from the residence of the appellant. On 12.08.2015, the appellant‟s son, vide letter dated 18.09.2015 had explained the source of the said FDRs. There is not even a whisper in the complaint about the explanations offered in respect of the seized FDRs. There is no justification to retain the seized FDRs beyond 180 days. There are no allegations against the appellant in the original complaint or the FIR or ECIR or the complaint filed under PMLA, 2002. It is further contended the appellant had made the above submissions before the Ld. AA vide her reply dated 04.04.2018. The order has been passed mechanically, without any application of mind and the submissions made by the appellant have been ignored by the Ld. AA which has not given any findings on the same. There is absolutely no basis or material to even remotely infer that the appellant has derived any property as a result of any criminal activity relating to a scheduled offence.

¶103

43. The respondents have pointed out that the appellant had no separate/personal source of income. Her likely source of income would be from the earnings of her sons, namely, Gurdeep Kumar Gujral and Parvesh Kumar Gujral, who were directors in P R Forex Ltd. The appellant had depended on her sons for her day-to-day expenses and

¶104

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶105

Page 20 of 36

¶106

properties purchased/invested in her name were actually proceeds of crime earned by her sons.

¶107

44. We have considered the rival submissions and perused the material on record. The legal arguments raised by the appellant including existence of reason to believe, absence of any charges against the appellant, absence of money trail etc., the same have already been dealt with in paragraphs 9 to 24 of this order and are not being repeated here. With regard to the sources of the FDR, it is stated that the same are from the business of the appellant and were duly disclosed in the ITRs. Details of the FDRs and their sources have been provided as below:

¶108

Date of Initial Purchase	Initial Value	Present Value
12.11.2008	Rs. 5,00,000/-	Rs. 11,06,503/-
12.11.2008	Rs. 10,00,000/-	Rs. 22,13,025/-
12.11.2008	Rs. 10,00,000/-	Rs. 22,13,025/-
16.03.2009	Rs. 10,00,000/-	Rs. 20,53,476/-
15.01.2011	Rs. 19,00,000/-	Rs. 32,08,277/-

¶109

45. From the above table, it can be seen that the present value of the FDRs represents the consolidated amount representing the initial investment amount and the interest accrued thereon. However, no explanation has been advanced as regards the amount initially invested which is quite substantial. The ITRs filed in respect of the appellant pertain to the years 2014-15 to 2017-18 which do not throw any light on the sources of the initial investments made in the year 2008. In view of the above, we are of the view that the appellant has failed to discharge the onus that was cast to explain the sources of the property found in her possession.

¶110

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶111

Page 21 of 36

¶112

46. In light of the above the appeal is hereby dismissed along with pending applications, if any.

¶113

FPA-PMLA-2485/DLI/2018

¶114

47. Mrs. Seema Gujral, the appellant in this appeal, is the wife of Gurdeep Kumar Gujral, who is one of the accused in the 2^nd supplementary prosecution complaint filed on 06.10.2018. Two amounts, namely, Rs. 6,35,821/- and 7,98,718/- standing to her credit in the accounts maintained with the South Indian Bank, Rajouri Garden have been attached.

¶115

48. It is contended on behalf of the appellant that there are no allegations made against the appellant in the OC and except for her name being mentioned at Sl. No. 19 of the lists of defendants, it does not figure anywhere in the OC. The amounts attached by the respondent directorate represent the legitimate income of the defendant from her business and profession. The appellant is engaged in lawful business and is an income-tax assessee. The sources of the bank balance were legitimate income of the appellant which was duly reflected in the ITRs. Copies of ITRs for the period 2014-2018 have been filed by the appellant to substantiate the claim. It is contended that the complaint is totally silent on the money trail of the alleged proceeds of crime. The complaint nowhere shows any link of the subject bank balances and the alleged proceeds of crime. No enquiries were made by the complainant department with the defendant at any stage, and arbitrarily, and without any lawful cause, the respondent proceeded to freeze the aforesaid bank balances without any intimation to the appellant. There is neither any statement nor any document which speaks against the appellant and the

¶116

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶117

Page 22 of 36

¶118

appellant has been unnecessarily dragged into the matter. The appellant had made these submissions before the AA vide reply dated 04.04.2018. Nevertheless, the AA proceeded to confirm the PAO. The appellant is not named in the FIR, the ECIR, or the prosecution complaint.

¶119

49. The respondents, on the other hand, have pointed out that her likely source of income would be from the earnings of his husband, Shri Gurdeep Kumar Gujral, one of the directors in P R Forex Ltd. and one of the accused persons in this group of cases.

¶120

50. We have considered the rival submissions and perused the documents before us. Upon perusal of the ITRs, it is seen that for the assessment year 2017-2018 which relates to the financial year 20162017, the appellant had disclosed a gross total income (income before claim of deductions under various incentive provisions of the Income-tax Act) to the extent of Rs.10,24,200/-. For the immediately preceding assessment year which relates to the financial year 2015-2016, the appellant had declared a gross total income of Rs. 9,75,887/- including a business income of 9,26,817/- before claiming depreciation. The same included profit as per profit and loss account (before claiming depreciation) to the tune of Rs. 9,70,902/-. Under the circumstances, it could not have been automatically presumed by the respondent directorate that the amount was unexplained and represented proceeds of crime or the value thereof. In their parawise reply to the appeal, in response to the appellant‟s contentions that there is no allegation against the appellant and that the amounts frozen were from legitimate sources, the respondents have merely stated that the arguments are wrong and that the appellant “has depended on her day-to-day life affairs on her husband Shri Gurdeep Gujral.” Having considered the matter, we are of

¶121

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶122

Page 23 of 36

¶123

the view that the appellant had presented relevant evidence to rebut the presumption under Section 24 and the respondents have failed to come up with any convincing argument other than stating that the appellants is the wife of Shri Gurdeep Kumar Gujral and the likely source of her income is from her husband. There is also no averment regarding in inter connected transactions involving the appellant other than bare statements. In light of the above, this appeal is allowed and attachment of the two amounts mentioned above in set aside. With this, the present appeal is disposed of along with pending applications, if any.

¶124

FPA-PMLA-2487/DLI/2018

¶125

51. Mrs. Kajal Arora , the appellant in this appeal is the wife of Shri Subhash Arora, who is one of the accused in the 2^nd supplementary prosecution complaint filed on 06.10.2018. Four amounts, namely, Rs. 50,00,000/-, Rs. 30,00,000/-, Rs. 10,08,852/- and Rs. 8,58,979/standing to her credit in the accounts maintained with the South Indian Bank, Rajouri Garden have been attached.

¶126

52. It is contended on behalf of the appellant that the appellant was not implicated in the statements of the main accused Shri Manish Jain recorded on 17.04.2014, 07.08.2014, 13.10.2014 & 15.10.2014. Similarly, statements of a large number of witnesses, including the employees of Shri Manish Jain, bank employees and others, were recorded and none of them made any allegation against the appellant. It is also contended that no investigation was made against Shri Ravinder Jolly and his 25 associates whose names and contact numbers were mentioned by Shri Manish Jain who stated that he had carried out transactions under the directions of these persons. The appellant is not a

¶127

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶128

Page 24 of 36

¶129

noticee in the Show Cause Notice issued by the DRI for violation of the provisions of the Customs Act. The appellant is not named in the FIR, the ECIR or in the prosecution complaint.

¶130

53. As regards source of the amounts attached, it is stated that the same were the sale consideration of Rs. 1,10,00,000/- of her property at the first floor, A-132, Lok Vihar, Pitampura, New Delhi Received from Shri Amit Kumar and Shri Mohit Kumar as per details below:

¶131

I) By means of cheque dated 01.09.2016 for Rs. 4,50,000/II) By means of cheques dated 01.09.2016 for Rs, 4,50,000/III) By means of Pay Order dated 30.08.2016 for Rs. 50,00,000/IV) By means of Pay Order dated 30.08.2016 for Rs. 50,00,000/-

¶132

54. It is contended that the appellant is an income-tax payer and all the income is reflected in relevant ITRs. Copies of ITRs for Assessment Years 2014-15 to 2017-18 have been furnished by the appellant to substantiate the claim. As per the same, the gross total income disclosed in the said Assessment Years was as follows:

¶133

a. 2014-15 : Rs. 9,32,645/b. 2015-16 : Rs. 9,66,192/c. 2016-17 : Rs. 9,28,403/d. 2017-18 : Rs. 5,48,386/-

¶134

55. The respondents, on the other hand, have submitted that the appellant had no separate/personal source of income. Her likely source of income would be from the earnings of her husband, Shri Subhash Arora, who was one of the directors of P R Forex.

¶135

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶136

Page 25 of 36

¶137

56. We have considered the rival contentions of the parties and perused the documents on record. Upon perusal of the statement of computation of income accompanying of the income tax return for assessment year 2017-18, we find that the appellant has disclosed a receipt of sales consideration of Rs. 1,10,00,000/- during the financial year 2016-17. However, against the same, a deduction of Rs. 1,08,29,428/- has been claimed towards purchase of „Flat‟ resulting in a capital gain of Rs. 1,70,572/- only (Rs. 1,10,00,000 - Rs. 1,08,29,428 = Rs. 1,70,572/-). It is therefore, evident that the sale consideration from the Lok Vihar, Pitampura property has been utilized by that appellant for purchase of another immovable property (Flat) and exemption from capital gains tax has been claimed in respect of the same. Only an amount of Rs. 1,70,572/- was therefore, available to the appellant for investment in the FDRs. As such, the sources of the FDRs in question have remained unexplained. Accordingly, we do not find any merit in the appeal and, dismiss the same.

¶138

FPA-PMLA-2488/DLI/2018

¶139

57. In this appeal, the attachment of an FD to the tune of Rs. 7,84,337 and the balance of Rs.5,14,048/- standing in the account of Parvesh Kumar Gujral & Sons in South Indian Bank, Rajouri Garden has been assailed.

¶140

58. It is contended on behalf of the appellant that the appellant was never asked to furnish details of the source of the bank balances provisionally attached either through any written communication or when they attended the office of the complainant department. The Chartered Accountant of the appellant was called a number of times by

¶141

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶142

Page 26 of 36

¶143

the complainant department and he fully cooperated and furnished voluminous documents called by the department. The balance of Rs. 5,14,048/- available in the bank account of the company maintained with the South Indian Bank, New Delhi and FD of Rs. 7,84,337 /- with the same bank have been attached by the complainant department. There is nothing in the complaint to show as to how the complainant has come to the conclusion that the amounts represent proceeds of crime. There are no allegations regarding the defendant having obtained or received any proceeds of crime. There is nothing in the complaint to show as to which particular proceeds of crime are generated from which scheduled offence and the manner of acquisition and projection of the alleged proceeds of crime. The complaint is totally silent to link the aforesaid balances with any proceeds of crime. The bank balances attached are the legitimate income of the defendant which was duly recorded in the books of accounts and declared in the ITRs. All the applicable taxes have been paid. The appellant has submitted copies of ITRs to substantiate the claim. It is also contended that the appellant had made the aforesaid submissions before the Ld. AA also vide their reply dated 04.04.2018. However, the learned AA proceeded to confirm the attachment without application of mind.

¶144

59. The respondents pointed out that the bank accounts and FDs in the name of Parvesh Kumar Gujral and Sons, are likely to have been operated by Shri Parvesh Kumar Gujral who is one of the accused in the 2^nd supplementary prosecution complaint.

¶145

60. We have given careful consideration to the rival contentions of the two parties and perused the documents on record. The appellant in the present appeal is an HUF of which Shri Parvesh Kumar Gujral is the

¶146

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶147

Page 27 of 36

¶148

Karta. Shri Parvesh Kumar Gujral was one of the directors of P R Forex Pvt. Ltd., one of the entities through which the fraudulent transactions were undertaken. A perusal of the impugned order reveals that there were huge interconnected transactions involving various individuals and entitles of the group, including both P R Forex Pvt. Ltd. and Shri Pravesh Kumar Gujral (individual). The appellant has produced copies of ITR, to establish the legitimacy of the funds available in the bank. Upon perusal of the ITRs filed by the appellant, it is seen that the appellant HUF had disclosed income to the tune of Rs. 3,88,340/- under Section 44AD of the Income-tax Act for the Assessment Year 2017-18 (relevant to financial year 2016-17). The said section 44AD of the Income-tax Act relates to presumptive taxation of certain eligible businesses where income is presumed to be 8% of the total turnover or gross receipts and books of account are not required to be maintained. Upon perusal of the said ITR, we do not find convincing reason to conclude that the sources of funds were legitimate. No other cogent evidences has been brought on record by the appellants to discharge their burden under Section 24. Accordingly, appeal is dismissed.

¶149

FPA-PMLA-2512/DLI/2018

¶150

61. Ms. Soumya Jain, who is the appellant in this appeal, is the daughter of Rakesh Jain, who is one of the accused in the 2^nd supplementary prosecution complaint filed on 06.10.2018. An amount of Rs. 34,823/- standing to her credit in the form of an FD in UP Cooperative Bank, Ghaziabad has been attached. The respondents have pointed out that Shri Rakesh Jain, the appellant‟s father and Shri Manish Jain, the main accused in these cases, purchased some

¶151

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶152

Page 28 of 36

¶153

properties (both movable and immovable) in their own names as well in the names of their family members.

¶154

62. It is contended on behalf of the appellant that the FDR of Rs. 34,823/- was in no way connected with the alleged proceeds of crime which are to the tune of Rs. 600 crores. It is contended that the appellant‟s mother, Mrs. Vinita Jain deposited a sum of Rs. 30,000/- in her name which was out of small savings, cash gifts on the occasion of festivals etc. There is no nexus between the amount and the alleged proceeds of crime. The respondent Directorate has also not disputed the source of the money. Furthermore, she was a minor, aged about 13 years at the relevant time. She is not named in the FIR or the ECIR, and no prosecution complaint has been filed against her.

¶155

63. Having considered the rival contentions and perused the impugned order, we find that no proper justification has been provided by the respondents for the attachment of the small amount of money in the account of the appellant. Moreover, the explanation provided by the appellant regarding the sources of the money has not been specifically disputed or rejected. As such, we find no justification for the attachment of the said FD with a balance of merely Rs. 34,823/- in the account of the appellant. Accordingly, the appeal is allowed and attachment of the said amount is hereby set aside.

¶156

FPA-PMLA-2513/DLI/2018

¶157

64. Mrs. Swaran Lata Jain, the appellant in this appeal, is the mother of Shri Manish Jain and Shri Rakesh Jain, the main accused in the prosecution complaints filed on 11.05.2016 and 06.10.2018. Eight

¶158

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶159

Page 29 of 36

¶160

different amounts, namely, Rs. 75,211/-, Rs. 86,967/-, Rs. 1,74,459/-, Rs. 1,81,168/-, Rs. 1,81,169/-, Rs. 88,504/-, Rs. 88,504/, and Rs. 61,573/- standing to her credit in the accounts maintained with the HDFC Bank, K.G. Marg, UP Co-operative Bank, Ghaziabad have been attached. The respondents have pointed out that Mrs. Swaran Lata Jain, Mrs. Vinita Jain w/o Rakesh Jain, Mrs. Sangeeta Jain w/o Neeraj Jain were shareholders in M/s Swaran Overseas.

¶161

65. It is contended that the appellant had filed her reply to the Show Cause Notice dated 21.02.2018 along with relevant documents. It was clearly mentioned in the reply that the FDRs are not recent. The appellant had made FDRs of her savings from time to time out of gifts received from her father and brothers on various family functions and festivals as per the custom in Hindu families. Besides, the amount also comprised savings which were made by the appellant and from the amount she received from her husband during his lifetime for monthly household expenses. She was about 74 years old when the action was initiated by the respondent directorate. The amounts attached were from the above sources as well as accrued interest redeposited upon maturity of earlier FDRs. The amounts relate to the period much prior to the date of the alleged offence which even as per the complaint filed by the directorate are alleged to have been committed in the year 2007 only. It is further submitted that the appellant has been an income-tax assesse for the last 30 years.

¶162

66. It has also been pointed out that two other FDRs, bearing numbers 2300450008408 of an amount of Rs. 81,896/- dated 10.03.2014 and 2300450008409 also of Rs. 81,896/- dated 10.03.2014, both issued by the UP Cooperative Bank, Ghaziabad branch were attached by the

¶163

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶164

Page 30 of 36

¶165

respondents showing them to be the property of Mr. Rakesh Jain whereas the said FDRs were in fact the property of the appellant and not her son, Shri Rakesh Jain. The appellant has nothing to do with the alleged crime and has been unnecessarily dragged into the matter because of complete non application of mind on the part of the respondent directorate as well as the Ld. AA. It is pointed out that the respondent filed a combined rejoinder to the replies filed by Defendants No. 3, 4, 5, 7 and 8 in the complaint. In the said rejoinder, the respondent has not disputed the contentions raised by the appellant and has merely reiterated the facts of the complaint with which the present appellant is in no way associated. Even so, the learned AA has confirmed the order. The said order of the Ld. AA is perverse in nature and has been passed in a stereotyped manner without application of mind. The authority has not appreciated that there is no nexus between the properties of the appellant, i.e., the FDRs and balances in the savings bank, and the alleged crime. The subject properties of the appellant are in no manner connected with either the predicate offence or the alleged proceeds of crime. The AA failed to appreciate that the directorate has nowhere mentioned how the properties of the appellant were connected or have any nexus with the alleged proceeds of crime. The rejoinder filed by the respondent was also completely silent on the matter. The sources of income given by the Appellant in her reply have not been disputed by the respondent directorate.

¶166

67. The respondents in their reply to the appeal have not specifically addressed the above issues raised by the appellant. They have relied upon the larger allegation against the group as a whole and the fact that the present appellant is the mother of Shri Manish Jain and Shri Rakesh Jain, the main accused.

¶167

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶168

Page 31 of 36

¶169

68. We have considered the rival contentions. No specific arguments have been presented by the respondents against the contention put forward on behalf of the appellant that the FDRs represented money deposited over the years by reinvesting matured FDRs as well as savings and gifts over the years, savings from amounts received from her late husband and that she has been an income-tax assessee for 30 years. We find that although there were eight FDRs in the name of the appellant, they were of relatively small amounts. In addition, there are two FDRs of Rs. 81,896/- each which have been attached in the name of Shri Rakesh Jain. It is the common contention of both the appellants, Smt. Swaran Lata Jain and Shri Rakesh Jain that these two FDRs also belong to Ms. Swaran Lata Jain. The respondents have not specifically contested the claim. Including these two FDRs, the total amount is Rs. 10,39,774, we do not find any justifications for the attachment made Accordingly, this appeal is allowed and the attachment is set aside.

¶170

FPA-PMLA-2514/DLI/2018

¶171

69. The appellant in this appeal is Swaran Overseas Pvt. Ltd. , having its office in Ghaziabad. Two different amounts, namely, Rs. 5,45,781/being the balance in ICICI Bank account in RDC, Ghaziabad Branch and an FDR of Rs. 6,00,000/- with the same bank have been attached.

¶172

70. It is contended on behalf of the appellant that the appellant is in the business of sale and purchase of foreign exchange, and also sells travel cards to persons travelling aboard. The appellant has been doing its business since its inception in 1994 and has nothing to do with the alleged offence. The travel cards are issued by the bank. In the present

¶173

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶174

Page 32 of 36

¶175

case, they were issued by the ICICI Bank for which the appellant has opened a current account with the said bank. For the purpose of issue of travelling cards, the bank kept FDR with it from the appellant as a pledge/security. The said account was opened was 25.06.2013 and since the beginning, such FDR was kept with the bank as security and was renewed from time to time. The attached FDR of Rs. 6,00,000/- is nothing but the FDR kept with the bank as security in the normal course of business. The appellant has been filing its ITRs since the start of operation and has been assessed to tax. There is no nexus between the alleged offence and the property of the appellant provisionally attached and it is nowhere mentioned in the complaint or even the Show Cause Notice dated 21.02.2018 that the properties of the appellant provisionally attached are related to the alleged offence or proceeds of crime. Even the respondent Directorate has not disputed the source of income stated by the appellant in its reply. The appellant is not named in the FIR or the ECIR or the prosecution complaint.

¶176

71. The respondents have contended that the said company was run by Manish Jain, Rakesh Jain and their brother Neeraj Jain. It is further contended that Manish, Rakesh and Neeraj Jain had opened many bank accounts in the name of the company for collecting large amounts of cash from Rajeev Wadhwa, Sanjeev Wadhwa, the Gujral brothers, and the same was remitted overseas to Hong Kong. Money in the form of commission was earned in the transaction.

¶177

72. Having considered the rival submission, we find sufficient ground for the attachment of the amounts. It is not denied that the company was being run by principal accused person. Perusal of the impugned order

¶178

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶179

Page 33 of 36

¶180

further reveals that Shri Manish Jain and Rakesh Jain used the premises of Swaran Overseas Pvt. Ltd. to carry out their illegal activities. Having considered the facts before us, we are of the view that there was sufficient justification for the attachment. Accordingly, this appeal is dismissed.

¶181

FPA-PMLA-2515/DLI/2018

¶182

73. Mrs. Vinita Jain , the appellant in this appeal, is the wife of Rakesh Jain, who is one of the accused in the 2^nd supplementary prosecution complaint filed on 06.10.2018. Six different amounts, namely, Rs. 32712/-, 92210/-, 26395/-, 15053/-, 90372/- and 81287/standing to her credit in the accounts maintained with the UP Cooperative Bank, Ghaziabad have been attached.

¶183

74. It is contended on behalf of the appellant that the appellant had filed her reply to the Show Cause Notice dated 21.02.2018 along with relevant documents and had clearly stated therein that the said notice was illegal and void ab initio. It was clearly stated that the amount of Rs. 3,38,029/- (aggregate) sought to be attached by the directorate is in no manner linked to the alleged offence and/or part of the alleged proceeds of crime. The appellant is 46 years old and married for the last 20 years and the amount is nothing but the result of small savings done by the appellant from time to time since her marriage and the said savings were converted into various FDRs. The appellant had received various gifts, including cash gifts, since the time of marriage in 1997 from relatives both from the parent‟s side and from the in-law‟s side on various occasions like birth of two children and festivals etc. It was stated in the reply affidavit that the appellant used to deposit the said gift amounts in

¶184

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶185

Page 34 of 36

¶186

FDRs and when the FDRs matured, the amount was invested in fresh FDRs along with the interest. The appellant has nothing to do with the alleged crime, and has been unnecessarily dragged into the subject matter. It is also pointed out that the directorate had filed a common rejoinder before the Ld. AA to the replies file by Defendants No. 3, 4, 5, 7 & 8. In the said rejoinder the respondent did not dispute the contentions raised by the appellant except repeating the facts of the complaint to which the appellant is in no way associated. Neither in the PAO nor in the complaint or the said rejoinder is it mentioned anywhere how the amount of the appellant sought to be attached is related to or has any nexus with the alleged proceeds of crime. However, the Ld. AA confirmed the PAO without considering the submissions made by the appellant. It is contended that the impugned order is perverse in nature and has been passed in stereotyped manner without application of mind. The source of income explained by the appellant in her reply affidavit before the Ld. AA has not been disputed by the respondent directorate.

¶187

75. The respondents, on the other hand, have pointed out that the appellant has no personal source of income of her own and the amount attached in the various accounts maintained in the name of Vinita Jain are nothing but the earnings of her husband, Rakesh Jain from his businesses and which constitutes proceeds of crime derived by the accused persons from illegal activities.

¶188

76. Having considered the rival contentions, we find that the amounts attached are minor which could be available with any person even of middle-class standing. There is no specific allegation of any proceeds of crime having flowed to the appellant. The respondents have relied upon the fact that the appellant is the wife of Shri Rakesh Jain and on the

¶189

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶190

Page 35 of 36

¶191

broader allegation against the group as a whole. In light of the above facts, we do not find any justification for the attachment made. Consequently, this appeal is allowed.

¶192

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

¶193

78. With the above, the 13 appeals listed above shall stand disposed of along with, pending applications, if any.

¶194

79. No order as to costs.

¶195

(Justice Munishwar Nath Bhandari) Chairman

¶196

(V. Anandarajan) Member

¶197

New Delhi, 7th May, 2024

¶198

„AK‟

¶199

FPA-PMLA-2475, 2477-2479,2483-2485, 2487-2488 & 2512-2515/DLI/2018

¶200

Page 36 of 36

FPA-PMLA-2479/DLI/2018 of Sanjeev Wadhwa v. The Deputy Director Directorate of Enforcement, Delhi

Case brief

What is this about?

What did the court decide?

FPA-PMLA-2479/DLI/2018 of Sanjeev Wadhwa v. The Deputy Director Directorate of Enforcement, Delhi

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

All orders in this case

Similar cases