Partly allowed

FPA-PMLA-2983/LKW/2019 of Shri Atul Gupta v. The Deputy Director Directorate of Enforcement, Lucknow

ATFP4 Apr 2024FPA-PMLA-2983/LKW/2019

Case brief

AI extract

What is this about?

The tribunal set aside the confirmation of provisional attachment of House No. 644-A by the Adjudicating Authority. The appellants were bona fide purchasers via auction, title registered before attachment, and were not named as accused or given an opportunity of hearing.

What did the court decide?

The provisional attachment order and its confirmation are set aside in respect of House No. 644-A, Kanpur Housing Society. Respondent may seek further attachment of other properties of the accused.

FPA-PMLA-2983/LKW/2019 of Shri Atul Gupta Vs. The Deputy Director Directorate of Enforcement, Lucknow — ATFP (2024) — LawSathi Research

¶1

APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

¶2

1. FPA-PMLA-2983/LKW/2019
Shri Atul Gupta	... Appellant
2. MP-PMLA-11676/LKW/2023(Exem.) MP-PMLA-11675/LKW/2023(Stay) MP-PMLA-11673/LKW/2023(Exem.) FPA-PMLA-5854/LKW/2023
Mrs. Alka Gupta	... Appellant
3. MP-PMLA-11680/LKW/2023(Exem.) MP-PMLA-11679/LKW/2023(Stay) MP-PMLA-11677/LKW/2023(Exem.) FPA-PMLA-5855/LKW/2023
Mrs. Kaamya Gupta	... Appellant
Versus
The Deputy Director Directorate of Enforcement, Lucknow	… Respondent

¶3

Advocates/Authorized Representatives who appeared

¶4

For the Appellant : Mr. S.M. Amin, Advocate For the Respondent : Mr. Chandra Prakash, Advocate CORAM JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI BALESH KUMAR : MEMBER

¶5

FINAL ORDER 04.04.2024

¶6

1. The batch of appeals have been filed to challenge the

¶7

order dated 31.08.2018 passed by the Adjudicating Authority. By the impugned order, the provisional

¶8

FPA-PMLA-2983/LKW/2019,

¶9

FPA-PMLA-5854-5855 /LKW/2023

¶10

Page 1 of 11

¶11

attachment order for various properties was confirmed. However, this appeal has been filed only in reference to House number 644-A, Lakhanpur Co-operative Housing Society, Kanpur Nagar measuring 198.43 sq. mtr.

¶12

The learned counsel for the appellants submitted that House no. 644-A in Lakhanpur, Kanpur was attached in reference to the crime committed by Abhishek Shrivastava. Though, the appellants had purchased the said property in auction conducted by the UCO bank pursuant to the default committed by Abhishek Shrivastava. The attachment was made subsequent to the auction in which the property was purchased by the appellant.

¶13

The appellants are in no way connected with the crime committed by Abhishek Shrivastava. The allegation against Abhishek Shrivastava and his family members is that by way of criminal conspiracy, he committed forgery and cheated the bank by using forged documents to

¶14

FPA-PMLA-2983/LKW/2019,

¶15

FPA-PMLA-5854-5855 /LKW/2023

¶16

Page 2 of 11

¶17

obtain the loan on the property already attached with different banks, namely UCO Bank for the property in question.

¶18

The FIR was registered by CBI, Lucknow against Sivansh Pathak based on the information that Shri Pathak and Abhishek Shrivastava have caused wrongful loss to the Bank of India, Kakori branch, Lucknow and other Banks.

¶19

A case of cheating for obtaining loan after mortgaging the property in question though it was otherwise under mortgage with the UCO bank and the account of the accused was declared N.P.A. and thereby the property was auctioned. Since the appellant was a bona fide purchaser of the property pursuant to the auction conducted by the UCO bank, much prior to the attachment, it could not have been subjected to the attachment.

¶20

FPA-PMLA-2983/LKW/2019, FPA-PMLA-5854-5855 /LKW/2023

¶21

Page 3 of 11

¶22

The learned counsel for the appellants submitted that after auction of the property of House number 644-A, Lakhanpur Housing Society, a sale certificate was issued in favour of the appellant on 18.10.2017. The sale deed was thereupon registered in favour of the appellant on 28.12.2017. The attachment of the property was made by the order dated 17.03.2018, ignoring the fact that the said property now exist in the name of the appellant.

¶23

The respondent even failed to issue show cause notice to the appellant to provide an opportunity of hearing though the appellant was a person interested. He could know about the attachment of the property when it reached to the office of the registrar and accordingly preferred this appeal on many grounds which includes the ground in reference to the violation of principle of natural justice. The appellant was holding the property of House number 644-A, Kanpur Housing society but he was not served with the notice even by the Adjudicating Authority.

¶24

FPA-PMLA-2983/LKW/2019, FPA-PMLA-5854-5855 /LKW/2023

¶25

Page 4 of 11

¶26

The appeal was preferred being aggrieved by the attachment so as the order of the Adjudicating Authority to confirm the attachment. The appellant is not involved in laundering of money and thereby even he has not been named as accused either in FIR or in the ECIR. The respondent were not even knowing that property has been purchased by the appellants out of the auction conducted by the UCO bank. The prayer is to cause interference in the impugned order in reference to the property of House number 644-A, Kanpur Society.

¶27

The contest to the appeal has been made by the counsel for the respondent. It is submitted that property of House number 644-A, Lakhanpur Co operative Society was purchased by Sanjai Shrivastava, son of Sh. Ramesh Srivastava on 18.10.2014 under a registered sale deed. The property was mortgaged by said Sanjai Srivastava to UCO Bank, Lakhanpur branch, Kanpur to obtain loan of Rs. 62 lakhs.

¶28

FPA-PMLA-2983/LKW/2019, FPA-PMLA-5854-5855 /LKW/2023

¶29

Page 5 of 11

¶30

The plot No. 644 came in the name of Sanjai Shrivastava, Shivam Shrivastava, Suneel Shrivastava and Shobit Shrivastava for 99.2 square meter through the sale deed dated 30.05.2015. It was mortgaged to UCO Bank to obtain loan of Rs. 91.65 lakh by four title holders of the house. Though, part of it was earlier mortgaged by Sanjai Shrivastava to obtain the loan. A default was committed in repayment of loan and while the property was under mortgage, the title holder executed an agreement to sale of part of the property for area measuring 99.2 sq. mtr. in favour of Surendra Gupta. It was with the motive to cheat and commit fraud because the property was under mortgage with the UCO Bank.

¶31

The learned counsel for the respondent further submitted that the accused Sanjai Shrivastava and Abhishek Shrivastava committed further fraud by availing loan from the United Bank of India against house number 644-A and property of House no. 644 while it was under mortgage with the UCO bank.

¶32

FPA-PMLA-2983/LKW/2019, FPA-PMLA-5854-5855 /LKW/2023

¶33

Page 6 of 11

¶34

It was by preparing forged documents and when this was revealed by the subsequent bank who advanced the loan, i.e. United bank of India, an FIR was lodged.

¶35

The housing loan of Rs. One crore was availed from United Bank of India for the House number 644-A, while it was under mortgage with the UCO bank. Pursuant to the FIR and subsequently ECIR, the properties of the accused were attached. The accused were involved in many other cases though it may not be of the appellant. It was for the commission of cheating and forgery.

¶36

However, if the property in question was auctioned by UCO Bank prior to the attachment and appellants are not framed as accused, then this Tribunal may pass an appropriate order.

¶37

We have considered the rival submission of the parties and perused the record. The present appeal is in the hands of a person who was not a party before the Adjudicating

¶38

FPA-PMLA-2983/LKW/2019, FPA-PMLA-5854-5855 /LKW/2023

¶39

Page 7 of 11

¶40

Authority. He was not served the show cause notice for confirmation of the attachment of House Number 644-A, Lakhanpur Co-operative Society, Kanpur despite that it was existing in the name of the appellants pursuant to its purchase on auction conducted by the UCO bank. The sale certificate and sale deed in favour of the appellants were registered prior to the provisional attachment order.

¶41

The accused are involved in many offences as would be borne out from the perusal of the impugned order. The appellant is not named as accused either in FIR or ECIR. In fact, no allegation has been levied against him even in the provisional attachment order or in the order passed by the Adjudicating Authority.

¶42

He was not been given show cause notice by the Adjudicating Authority before passing the final order. The impugned order confirming the attachment is in reference to many properties of the accused. However, the present

¶43

FPA-PMLA-2983/LKW/2019, FPA-PMLA-5854-5855 /LKW/2023

¶44

Page 8 of 11

¶45

appeal is only in reference to 644-A, Lakhanpur Housing Society.

¶46

We are not thus touching with the other properties attached by the respondents.

¶47

The learned counsel for the respondent had given brief facts of the case to show how the accused committed the offence of cheating and fraud in obtaining loan from many banks. It is a fact that the property in question was earlier mortgaged with the UCO Bank by the accused and where their account were declared to be “Non Performing Assets”. It was obviously due to default in making the payment of installment. The UCO Bank accordingly auctioned the property and was purchased by the appellant on remaining successful bidder. The sale was confirmed in his favour with issuance of sale certificate dated 18.10.2017 followed by a sale deed dated 28.12.2017. The provisional attachment order is 17.03.2018, i.e. subsequent to purchase of the property

¶48

FPA-PMLA-2983/LKW/2019,

¶49

FPA-PMLA-5854-5855 /LKW/2023

¶50

Page 9 of 11

¶51

by the appellant. The respondent were expected to find out in whose name the property exist at the time of its attachment. In fact, in the investigation pursuant to the FIR by the United Bank of India for the mortgage of the house in question was required to find out the status of the property in question. In that case, they could have made known that after auction, the property now exist in the name of the appellant so as to serve a notice to them for providing an opportunity of hearing being the person interested. It is otherwise a fact that no allegation exist against the appellants for laundering of money. It is not even proceeds of crime.

¶52

The Adjudicating Authority and for that respondent otherwise acted in violation of principle of natural justice in passing the impugned order dated 31.08.2018 confirming the attachment of the property of 644-A of Kanpur Housing Society without hearing the appellant and without any allegation against them for any offence. The property in the hands of accused should have been

¶53

FPA-PMLA-2983/LKW/2019, FPA-PMLA-5854-5855 /LKW/2023

¶54

Page 10 of 11

¶55

attached but for that it should be having the property in question. The appellants have paid full consideration to the bank after auction yet property has been attached.

¶56

We accordingly cause interference in the order of the provisional attachment order and its confirmation for House number 644-A of Kanpur Housing Society, Kanpur and set aside the order in respect of that property.

¶57

The respondent however be at liberty for further attachment of the property of the accused involved in the case, if it is available and it may be for the value thereof or take any other appropriate action for which this order would not come in their way.

¶58

The appeals are disposed of with the aforesaid.

¶59

(Justice Munishwar Nath Bhandari) Chairman

¶60

(Balesh Kumar) Member

¶61

New Delhi, 4^th April, 2024

¶62

¶63

FPA-PMLA-2983/LKW/2019, FPA-PMLA-5854-5855 /LKW/2023

¶64

Page 11 of 11

FPA-PMLA-2983/LKW/2019 of Shri Atul Gupta v. The Deputy Director Directorate of Enforcement, Lucknow

Case brief

What is this about?

What did the court decide?

FPA-PMLA-2983/LKW/2019 of Shri Atul Gupta v. The Deputy Director Directorate of Enforcement, Lucknow

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

All orders in this case

Similar cases