Dismissed

FPA-PMLA-1562/PTN/2016 of Sanoj Yadav v. Deputy Director, Directorate of Enforcement, Patna

ATFP17 Feb 2025FPA-PMLA-1562/PTN/2016

Case brief

AI extract

What is this about?

The Single Bench dismissed appeals against the confirmation of provisional attachment orders under PMLA. It held that the properties were acquired via cash without bank transactions, and the appellants failed to prove legitimate sources, leading to the presumption that they were proceeds of crime related to Arms Act offences. The trial under PMLA was directed to proceed.

What did the court decide?

The preliminary attachment orders were upheld; status quo maintained on properties until conclusion of criminal trial.

FPA-PMLA-1562/PTN/2016 of Sanoj Yadav Vs. Deputy Director… — Money Laundering | ATFP (2025)

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BEFORE RAJESH MALHOTRA, MEMBER, SINGLE BENCH; APPELLATE TRIBUNAL UNDER SAFEMA: AT NEW DELHI.

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I. FPA-PMLA-1562/PTN/2016

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Sanoj Yadav

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II. FPA-PMLA-1593/PTN/2016

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Smt. Sindhu Yadav … Appellants Versus Deputy Director, Directorate of Enforcement, Patna … Respondent

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Advocates/Authorized Representatives who Argued For the Appellant :S/Sh. Rajesh Mahale, Chandra Nand Jha,

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Devendra Kumar Singh, Advocates,

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For the Respondent:S/Sh. Chandra Prakash, Abhinav Kr. Advocates.

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FINAL ORDER

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17.02.2025

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Present two appeals are filed by the appellants under Section 26 of PMLA, 2002 (hereinafterAct of 2002) against the order dated 26.10.2016 passed by the Adjudicating Authority in Original Complaint No. 616/2016 vide whichProvisional Attachment Order No. 4/2016 dated 15.06.2016 for attachment of properties was confirmed. The details of said properties are as under:

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(i) Immovable properties of Sanoj Yadav :

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Sl. N.	Sale Deed No. & Date	Area Decimal (in Decimal)	Description Property	Total Value +Charges (in Rs.)
1.	882/20.03.2012	1 Acre 31.25 Decimal	Tauzi No. 413, Thana No. 146	78,873
2.	1230/11.04.12	2 Acre 62.50Decimal	Tauzi No. 413, Thana No. 146	1,66,744
			Total	2,45,617

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(ii) Movable property of Sanoj Yadav :-

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Hero Honda Super Splendor Motor Cycle bearing registration No.

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BR08 C6451 (Chassis No. MBLJA05EGB9F12653 & Engine No.JA05EBB9F12672) purchase value at Rs. 49,230/-.

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Immovable Property of Smt. Sindhu Devi , W/o Shri Sanoj Yadav:

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Sl. No.	Sale Deed No./ date	Area	Description of Property	value + n Rs.)
1.	Gift Deed No. 1896 dated 13.06.2015	2.6190 Decimal	Khata No. 17 Khesra No. 345	2,02,700
2.	Sale Deed No. 3782 dated23.12.2008	250 Decimal	Khata No. 95 Khesra No. 362	3,67,459
			Total	5,70,159

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FPA-PMLA-1562& 1593/PTN/2016Sanoj Yadav&Smt. Sindhu Yadav v. ED, Patna

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As per facts of the case Inspector General of Police vide letter dated 21.03.2013 informed ED regarding Registration of following FIRs against Sh. Sanoj Yadav resident of Shankarpur, Police Station Mufassil, Dist. Munger,for commission of offences under Arms Act 1959.

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Sl. No.	Name of the Police Station	FIR No. and Date	Charge No. and	Sheet Date	Sections	Scheduled Offences under PMLA
1.	Muffasil PS, Munger	52/09 05.03.2009	68/09 30.04.09 Supp. C 229/09 09.08.09	dated /S No. dated	25 (1-A), 25 (1- AA), 25 (1-B) AC, 26 (i) (ii) (iii) and 35 of the Arms Act 1959	25 and 26 of the Arms Act 1959
2.	Muffasil PS, Munger	299/09 30.04.2009	226/12 31.07.20	dated 12	25 (1-B) A, 26 (i) (ii) (iii) and 35 of the Arms Act 1959	25 and 26 of the Arms Act 1959
3.	Muffasil PS, Munger	305/09 09.12.2009	285/11 11.11.11 C/S No. dated 20.	dated Supp. 286/12 09.12	25 (1-A), 25 (1- AA), 25 (1-B) AC, 26 (i) (ii) (iii) and 35 of the Arms Act 1959	25 and 26 of the Arms Act 1959

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On the perusal of FIRs and chargesheets, it was revealed that Sh. Sanoj Yadav and others had been charged for commission of offences punishable under Section 25 & 26 of the Arms Act, which are scheduled offencesunder PMLA. Accordingly, ECIR No. PTZO/07/2013 dated 12.09.2013 was recordedby ED against them for conducting investigation of offence of money laundering under PMLA.

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As per the chargesheets filed in the three FIRs, it is revealed that Sh. Sanoj Yadav is a habitual offender and has been charged for sale, transfer and possession of Arms & Ammunition in District of Munger, Bihar. The gist of the same is as under:

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(i) Charge-sheet No. 68/09 dated 30.04.2009 revealed that the Police had unearthed an illegal mini gun factory at the bank of river Ganga in MirzapurBarhad, Munger where illegal arms were being manufactured. The Police recovered the equipment for manufacturing the arms and also some semi-finished arms from the

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FPA-PMLA-1562& 1593/PTN/2016Sanoj Yadav&Smt. Sindhu Yadav v. ED, Patna

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spot. After investigation, the Police filed the charge sheet against Shri Sanoj Yadav;

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(ii) Charge Sheet No. 226/12 dated 31.07.2012 revealed that the Police had seized semi-finished and finished illegal arms and ammunitions in MirzapurBarhad and Shitalpur villages in MungerDistrict. During investigation by the Police, it emerged that those arms and ammunitions were manufactured for sale to arms smuggler, Shri Manzi @ Manzar and ShriSajjad. It also emerged during investigation by the Police that ShriSanoj Yadav had been selling bullets of .32 bore and ShriSajjad had been selling 9MM pistol and bullets. Accordingly, Police filed the Charge Sheet;

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(iii) Charge Sheet No. 285/2011 dated 11.11.2011 pertains to unearthing four illegal mini gun factories near the river Ganga where finished and semi-finished huge arms and ammunitions were recovered. Investigation by the Police revealed that those arms and ammunitions were being manufactured for sale to ShriSanoj Yadav and other prospective buyers.

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During investigation ED recorded the statements of the suspects/accused persons and offence under Section 50 of PMLA and thereafter passed the Provisional Attachment Order No. 04/2016 dated 15.04.2016 with respect to the properties mentioned in para no.1 above. Thereafter, ED filed Original Complaint No. 616/2016 before the Adjudicating Authority for confirmation of the said properties.

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The Adjudicating Authority issued show cause notice to all the defendants and after going through the replies and respective arguments confirmed the Provisional Attachment Order dated 15.04.2016, vide its order dated 26.10.2016.

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FPA-PMLA-1562& 1593/PTN/2016Sanoj Yadav&Smt. Sindhu Yadav v. ED, Patna

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Aggrieved by the said order, appellants filed the present appeals.

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During the arguments, Ld. Counsel for the appellants contended that not even a single Arm, Ammunition orimplements of manufacture is seized by ED from the conscious possession of the appellant Sanoj Yadav. He was never in possession of any proceeds of crime as alleged. The grand total of moveable and immovable properties acquired by the appellants is just valued at Rs. 8.65 Lakhs by ED. He pointed out that admittedly first property was gifted to appellant Sindhu Devi by way of Registered gift deed dated 13.06.2015, whereas the second property was purchased by her prior to the first FIR registered against her husband Sanoj Yadav. Accordingly, he stressed that both the properties of Smt. Sindu Devi need to be released for want of any connection with any proceeds of crime qua the said FIRs. He further stressed that there is nothing on record that the two properties acquired by Sanoj Yadav were purchased out of any proceeds of crime. In support of his contention, he pointed out that the proceeds of crime wasnot quantified by ED during its investigation under PMLA and even the police chargesheets are silent on this aspect. In absence of any such investigation, the two properties of Appellant Sanoj Yadav also need to be released. He argued that the appellants produced the documentary evidence before the Ld. Adjudicating Authority that the appellant and his family members had sold three pieces of land during the year 199899 and had raised about Rs. 84,000/-. The income tax return of the appellant for the year 2012-13 shows an agricultural income of Rs.67,560/- and business income of Rs.81,000/-. The said ITRs are not disputed by the IT department. The cash in hand as per the ITR for the year 2012-13 alongwith the amountof Rs.84,000/- acquired from the sale of the three family properties as stated above were

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FPA-PMLA-1562& 1593/PTN/2016Sanoj Yadav&Smt. Sindhu Yadav v. ED, Patna

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more than sufficient to purchase these two properties.Therefore, it shows that the appellant Sanoj Yadav has sufficient means and savings to purchase the two properties during the year 2012-13. Accordingly, he contended that there is no basis for the allegation made by the ED that the balance sheets were manipulated, and thereby rejecting the ITRs for the year 2012-13. He submitted that the conclusion of ED that the business income of the appellant acquired through the agriculture, sale of cow and milk is not supported by the documentary evidence would not itself lead to a presumption thateither the income is falsely shown or that the income is a proceed of crime, in absence of any contrary evidence in this regard. The statements of the family members and relatives of the appellants were also discarded by ED. He further argued that it can't be expected of a rural agriculturist from a rustic place in Bihar to maintain documentary proof of sale of milk, cow and agricultural income. ED also wrongly raised the doubts about the genuineness of the gift deed in favour of appellant Sindhu Devi.Even if there is lacuna in the execution of the Gift Deed i.e., it is attested by one 'witness and not by the two witnesses as required by law would not by itself lead to the presumption that it is acquired through the proceeds of crime or it is a camouflage to transfer the property as alleged. The other ground on which the Gift Deed has been doubted by the ED by relying on the statements of the donors that Shri Sanoj Yadav had promised them to give the alternate land, but failed to keep up the promise is also not acceptable in law for the purpose of attaching the property. The prayer is accordingly made to allow the present appeals and thereby the set aside the impugned order passed by the Adjudicating Authority.

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On the other hand, The Ld. Counsel for the Respondent ED opposed the appeals on the ground thatit is an admitted fact that

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FPA-PMLA-1562& 1593/PTN/2016Sanoj Yadav&Smt. Sindhu Yadav v. ED, Patna

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appellant is facing trial in 3 criminal cases for commission of predicate/scheduled offence under Arms Act. Thus, said trials are yet to be concluded. He stressed that the appellant failed to prove the legitimate sources of income for acquiring the said properties and hence he is not entitled for any relief. He further argued thatseeing the business of the appellant Sanoj Yadav for manufacture, salepurchase of manufacturing of arms& ammunitions, it can safely be presumedthat the said assets were acquiredby appellantsfrom the illegal income of the arms and ammunition as three FIRs were registered against him during the period from 05.03.2009 to 09.12.2009. He further argued that even if, it is presumed that some of properties were acquired by him by way of gift or prior to the period of commission alleged offence, even then the said properties can be attached as value thereof. Prayer is accordingly made to dismiss the present appeals, being devoid of any merits.

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After hearing the rival submission, I have given my thoughtful consideration of the same.Ed is not supposed to conduct investigation pertaining to any scheduled/ predicate offence, as it is a prerogative of the concerned police. Therefore, question of effecting any recovery of arms and ammunition by the ED does not arise. ED has to initiate the investigation for the offence of money laundering, against the accused persons and his family members on the basis of FIRs registered by the police.

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It cannot be presumed that a person who sold his threepieces of land in the year 1998-99 will still be in possession of the said amount for purchasing the properties in the year 2008 to 2012, in absence of any bank statements in this regard. Perusal of the records reveals that during investigation statement of appellant Smt. Sindhu Devi was recorded by ED, on 09.03.2016 u/s 50 of the

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FPA-PMLA-1562& 1593/PTN/2016Sanoj Yadav&Smt. Sindhu Yadav v. ED, Patna

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PMLA, wherein sheadmitted that Shri Devendra Prasad Yadav and Shri Subodh Prasad Yadav had gifted her 2.6190 Decimal of land vide Gift Deed No. 1896 dated 13.06.2015 and she did not know the reason for giving gift to her by the said persons.

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In order to ascertain the authenticity of the said Gift Deed, ED recorded the statements of Shri Devendra Prasad Yadav and Shri Subodh Prasad Yadav u/s 50 of the PMLA on 26.02.2016. Both the persons, inter alia, stated that since the said land was in front of the house of Shri Sanoj Yadav and it was more useful to him, it was given as gift to Smt. Sindhu Devi against which Shri Sanoj Yadav had promised them to give another land which would be suitable for them. However, Shri Sanoj Yadav had not given them any land till that time.

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At page No. 3 of the Deed, they inter-alia, explained the reason of giving gift was that Smt. Sindhu Devi had won the hearts of all in the family and had spread the education in family. On being confronted with the said gift deed to explain the reason for giving the gift as mentioned therein, which are contradictory to their statements. They refused to offer any comment on it.

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Accordingly, ED concluded that the story of transferring immovable property by virtue of gift was created and was quite doubtful inasmuch as on the one hand, the elder brother Shri Devendra Prasad Yadav had sold one Decimal of land to his real brother at a consideration amount of Rs. 70,000/ and on the other hand, both the brothers had gifted 2.6190 Decimals of land having a value of Rs. 1,84,000/-. Circumstances were such that the same could not be true.The reason for giving the gift as mentioned in the Gift Deed was frivolous inasmuch as Smt. Sindhu Devi is not educated at all and she could only write her name. Because of her

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FPA-PMLA-1562& 1593/PTN/2016Sanoj Yadav&Smt. Sindhu Yadav v. ED, Patna

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inability to write, her statement was written by her brother-in-law Shri Appu Yadav (brother of Shri Sanoj Yadav).In view of these facts, it was rightly concluded by ED that the ownership of the said piece of land was transferred to Smt. Sindhu Devi/Shri Sanoj Yadav in the garb of Gift Deed by paying/taking the consideration money in cash which is further corroborated by the fact emerging from the statements of Shri Devendra Prasad Yadav, Shri Subodh Prasad Yadav and Shri Sanoj Yadav that even after lapse of eight months, neither Shri Devendra Prasad Yadav and Shri Subodh Prasad Yadav asked for a piece of land in lieu of the gifted land, nor Shri Sanoj Yadav reciprocated by giving any land to them. The aforesaid persons, willfully and knowingly created a Gift Deed in order to transfer the title of the said piece of land to Shri Sanoj Yadav/Smt. Sindhu Devi against receipt of the consideration amount in cash in order to frustrate the investigation against Shri Sanoj Yadav under the provisions of the PMLA. Shri Sanoj Yadav was aware that if the title of the said piece of land is transferred through a proper Sale Deed, the land may be confiscated under the provisions of the PMLA, thus in order to circumvent the due process of law, Shri Sanoj Yadav apparently got the Gift Deed created in favor of his wife by paying money in cash acquired out of his illegal source of income by committing criminal activities for commission of offences u/s 25 & 26 of the Arms Act, which are the schedule offences. Smt. Sindhu Devi had further stated that she had purchased 2.50 Acres of agricultural land from Md. Aslam and Md. Isha, R/o Mubarakchak. PS-Muffasil, Distt.-Munger vide Sale Deed No.3782 dated 23.12.2008 at a consideration amount of Rs. 3,20,000/-, out of which, Rs. 2,00,000/-, was given to her by her father Shri Nageshwar Prasad Yadav, R/o Vill Sajua, PS-Asarganj, Distt.-Munger, Bihar, and Rs. 1,20,000/- was arranged by sale of her jewelry, but she had no

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FPA-PMLA-1562& 1593/PTN/2016Sanoj Yadav&Smt. Sindhu Yadav v. ED, Patna

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documentary evidence with regard to the receipt of Rs. 2,00,000/given by her father or Rs.1,20,000/- as the sale proceeds of her jewelry. Investigation by ED revealed that Smt. Sindhu Devi had no independent sources of income and even the income of her father Shri Nageshwar Yadav (father-in-law of Shri Sanoj Yadav) was neither sufficient,norexcess to purchase the properties which raises the presumption that Shri Sanoj Yadav had acquired 2.50 Acres of land valued at Rs. 3,67,459/ out of the proceeds of crime committed under section 25 and 26 of the Arms Act. The scrutiny of the statement of bank accounts of Shri Sanoj Yadav did not reveal any transaction which could be relatable to the acquisition of immovable and movable properties, though they had purchaseddirectly or indirectly by paying in cash only. It was thus rightly inferred that such transactions were undertaken to utilize the proceeds of crime available in cash with him for acquisition of properties so as to project it as untainted. The nature of proceeds of crime generated out of scheduled offences alleged to have been committed by Shri Sanoj Yadav would obviously be in cash. The fact that one property was purchased in the name of Smt. Sindhu Devi on 23.12.2008 i.e. prior to the registration of first FIR No. 52/2009 dated 05.03.2009 is also no ground to presume that the said property was not acquired out of proceeds of crime, as Sanoj Yadav might be in this business since long before he was arrested by the police in the said FIR.

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Therefore, I am of the considered view that all the properties acquired by the appellants for sum of Rs. 8,65,006/- were acquired by them from the proceeds of crime, in absence of tendering any sale consideration from the bank accounts, coupled with the fact that appellants failed to prove any legitimate source of income by way of any oral or documentary evidence. Even otherwise, in terms of the provisions of Sections 3 and 4 of the PMLA, a Prosecution Complaint

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FPA-PMLA-1562& 1593/PTN/2016Sanoj Yadav&Smt. Sindhu Yadav v. ED, Patna

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in Special Complaint Case No. 03/2016 dated 31.08.2016 under section 45 read with section 44 of the Prevention of Money Laundering Act (PMLA), 2002 has been filed before the Hon'ble District and Sessions Court cum Special Court (PMLA), Patna. The Hon'ble Court had taken cognizance into the case on 31.08.2016; framed charges against the accused persons and the trial in the matter is going on. In view of this, all the properties attached under PMLA have become the case properties under the criminal trial before PMLA Court asthey are facing trial in the said case.

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Accordingly, I am not convinced with the submissions made by the Ld. Counsel for the appellant and accordingly, present appeals are hereby dismissed being devoid of any merits. However, it is made clear, that nothing expressed herein will affect the right of any party in any manner in the criminal trial. Moreover, till the conclusion of the trial, both the parties are hereby directed to maintain status quo qua the ownership and possession of the properties.

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Appeals Dismissed.

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Pronounced on 17^th Day of February, 2025.

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(RajeshMalhotra) Member

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‘ST’

FPA-PMLA-1562/PTN/2016 of Sanoj Yadav v. Deputy Director, Directorate of Enforcement, Patna

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FPA-PMLA-1562/PTN/2016 of Sanoj Yadav v. Deputy Director, Directorate of Enforcement, Patna

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