Disposed

FPA-PMLA-1713/CHN/2017 of Thiru S.K. Karthikeyanv v. The Deputy Director Directorate of Enforcement, Chennai

ATFP21 Jul 2025FPA-PMLA-1713/CHN/2017

Case brief

AI extract

What is this about?

The Appellate Tribunal under SAFEMA disposed of an appeal filed against the confirmation of a Provisional Attachment Order under PMLA. The court granted liberty to the appellant to lead defence and claim release of specific mortgaged properties before the Special Judge PMLA Court under Section 8(7) of PMLA.

What did the court decide?

Appeal disposed with liberty to lead defence and claim for release of specific mortgaged properties before the Special Judge under S. 8(7) PMLA.

FPA-PMLA-1713/CHN/2017 of Thiru S.K. Karthikeyanv v. The Deputy… — 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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FPA-PMLA-1713/CHN/2017 Thiru S.K. Karthikeyan

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… Appellant

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Versus

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The Deputy Director Directorate of Enforcement, Chennai … Respondent

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Advocates/Authorized Representatives who Argued

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For the Appellant : Mr. Bilal Mansoor, Mr. M.P. Parthiban, Advocate, For the Respondent: Ms. Anubha Bhardwaj, Advocate,

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FINAL ORDER 21.07.2025

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Present appeal u/s 26 of Prevention of Money Laundering Act, 2002 (PMLA) is filed by the appellant against the order dated 02.02.2017 passed by the Adjudicating Authority in Original Complaint No. 630/2016, whereby the properties attached by ED vide Provisional Attachment Order No.16/2016 (PAO) dated 17.08.2016 were confirmed. The properties of the

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present appellant are as under:

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SCHEDULE OF PROPERTIES

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V. Schedule I: All the piece and parcel of land with residential building thereon in Coimbatore Registration District, Coimbatore SubRegistration District, Coimbatore District, Coimbatore Taluk, in Coimbatore Town in Pulikulam village within Coimbatore Municipal Corporation limits, Race Course Road, the portion of land in T.S.Ward No.1, G.S.208, subsequent T.S.No.625 and 626 part (New TS No. 1440/1, 1440/2, 1441/1, 1444/1, 1444/2, 1445, 1446/1 and 1446/2 part) measuring 19044.87 Sq.ft. bounding on the North by Space between Plinth area of the building DAFFODIL and LAVENDER, South by East-West Inner Road, East by: Space between the plinth area of the building ASTER and DAFFODIL and Common recreation area, West by North-South Inner Road.

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Schedule II: 1.24% undivided share i.e. 236.16 Sq ft., share, right, title and interest in the Schedule I property and also the flat bearing block Daffodil 1"floor, Door No. B-110, Raheja Enclave, 236, Race Course Road, Coimbatore.

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Market/Guideline Value estimated at Rs.0.50 crores.

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FPA-PMLA-1713/CHN/2017 Thiru S.K. Karthikeyan v. ED, Chennai

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VI. In Coimbatore Registration District, Avanashi Sub-Registration District, Avanashi Taluk, Avanashi Panchayat Union, Velayuthampalayam village Patta No.557 Dry Lands in S.F.No.214/1 dry of 3.48 acres assessed at Rs.4.74 in which dry of 0.46 acres assessed at Re.1.00 and dry lands in 5.F.No.214/2 dry of 3.84 acres assessed at Rs.5.26 in which dry of 0.54 acres assessed at Re.1.00 and the total extent conveyed in this deed in both survey numbers together 1.00 acre assessed at Rs.2.00 together with 20 palm trees and 5 mango trees situated within the limits of Velayuthampalayam Panchayat. Boundaries of the property: North by: Panchayat Road in S.F.No.213; West by: Parts of Survey Nos.214/1 & 214/2; South by: No.53, Puduppalayam village lands; East by: Elango lands in No.58. Puduppalayam S.F.Nos.214/1 & 214/2 214/2.

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Market Value estimated at Rs.0.75 crores.

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VII. All the piece and parcel of land with residential building thereon in Coimbatore Registration District, Singanallur SubRegistration Office, Coimbatore District, Coimbatore Taluk, in Coimbatore Town in Uppilipalayam village within Coimbatore Municipal Corporation limits Door No.A-28, May Flower Sakthi Garden, Nanjundapuram Road, Coimbatore the portion of land in T.S.No.645, 646, 647, 648, 649, 650, 651, 652, 653, 654 and 669 part measuring 2973.60 Sq.ft.”

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As per the facts of the case,

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A. CBI, BS&FC Bangalore registered FIR No. RC-6(E)/2010 dated 07.10.2010. After investigation CBI filed charge sheet on 28.11.2011, before Ld. Special Judge, CBI Court, Coimbatore, against the accused persons namely S/Shri S. Arivarasu, G. Srinivasan, P. Venkatachalapathy, R. Selvakumar, R. Manoharan, R. Velumurugan and M/s Sri Pamba Spinning Mill Private Limited ( SPSMPL ), represented by its Director for the commission of offences under Section 120-B IPC read with Section 420, 467, 468, 471 of IPC and also under Section 7, 12 & 13 (2) read with 13 (1)(a)&(d) of Prevention of Corruption Act, 1988 and substantive offences thereunder. In this case, it is alleged that Shri G.

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FPA-PMLA-1713/CHN/2017 Thiru S.K. Karthikeyan v. ED, Chennai

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Srinivasan of SPSMPL filed an application with M/s Global Trade Finance Ltd. ( GTFL ) for limit of Rs. 10 Crores by furnishing false and fabricated financial statements and other documents. On the basis of the said documents, loan was sanctioned on 02.06.2007, which was subsequently enhanced to Rs. 15 Crore and Rs. 25 Crores on 18.10.2007 and on 15.03.2007 respectively. SPSMPL actually had no business transactions with its three debtor’s firms viz. M/s Sri Sri Agencies, M/s Sri Venkateshwara Cotton and M/s Harsha Cottons, but based on false/fake and fabricated sale bills/invoices drawn on non-functional, fictitious buyers/debtors, it had by cheating GTFL wrongfully obtained funds to the tune of Rs. 25 Crores, and thereafter, diverted it for the purposes other than intended and thereby causing loss of Rs. 28.06 Crores to GTFL.

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B. Another FIR No. RC-7(E)/2010 dated 07.10.2010 was also registered by CBI, BS&FC, Bangalore against the accused persons namely S/Shri S. Arivarasu, R. Selvakumar, G. Srinivasan, P. Venkatachalapathy, R. Manoharan, and M/s Paranthaman Spinning & Weaving Mills Private Limited, ( PSWMPL ) represented by its Director for the commission of offences under Section 120-B IPC read with Section 420, 467, 468, 471 of IPC and also under Section 7, 12 & 13 (2) read with 13 (1)(a)&(d) of Prevention of Corruption Act, 1988 and substantive offences thereunder. It was alleged that Shri R. Selvakumar in the capacity of the Managing Director of PSWMPL, a company registered under the Companies Act, 1956 had filed an application with GTFL, Coimbatore Branch seeking Trade Finance Limit of Rs. 15 Crores by furnishing false & fabricated financial statements and other documents. On the basis of the said documents, the Trade finance limit of Rs. 10 Crores initially sanctioned by GTFL to PSWMPL on 22.01.2008 and was later enhanced to Rs. 20 Crores. It was alleged that PSWMPL without any legitimate trade

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FPA-PMLA-1713/CHN/2017 Thiru S.K. Karthikeyan v. ED, Chennai

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transactions with its fictitiously conceived ten debtor firms viz. M/s Sri Sri Agencies, M/s Sri Venketeshwara Cottons, M/s Harsha Cottons, M/s Sri Sri Agencies India Pvt. Ltd., M/s Sri Venkateshwara Cottons Pvt. Ltd, M/s Harsha Cottons Pvt. Ltd., M/s East West Fabrics, M/s P.V. Enterprises, M/s Mithul Textiles and M/s Milan Tex Fabrics had furnished false/fake and fabricated sale bills/invoices drawn on non-functional, fictitious buyers/debtors to GTFL and diverted the funds for other purposes. S/Shri R. Selvakumar, G. Srinivasan, P. Venkatachalapathy and R. Manoharan were thus charged to have caused a wrongful loss of Rs. 23.85 Crores to GTFL and corresponding wrongful gain for themselves.

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C. CBI, BS&FC, Bangalore also registered the FIR No. RC-9(E)/2010 dated 07.10.2010 against the accused persons namely S/Shri S. Arivarasu, R. Manoharan, (Proprietor of BTM), R. Selvakumar, G. Srinivasan, K. Marutha Mutthu, V. Indu Nesan, K. Vignesh, A. Senthil Kumar and M. Ramakrishnan for the commission of offences under Section 120-B IPC read with Section 420, 467, 468, 471 of IPC and also under Section 7, 12 & 13 (2) read with 13 (1)(a)&(d) of Prevention of Corruption Act, 1988 and substantive offences thereunder. It was alleged that Shri R. Manoharan, the Proprietor of BTM had filed an application with GTFL, Coimbatore Branch seeking Trade Finance facility of crores by fraudulently furnishing gorged & fabricated financial statements and other documents. On the basis of the said documents GTFL had sanctioned trade finance Limit of Rs. 15 Crores on 16.05.2008 to BTM and Shri S. Arivarasu had received substantial funds as illegal gratification in his personal bank account with ICICI Bank Ltd., Udumalpet Branch. Further, BTM had no legitimate trade transactions with its fictitiously conceived six debtor firms viz., M/s Andavar Tex Yarns, M/s Gurudev Fabrics, M/s Kadamba Tex Yarn & Fabrics, M/s Millennium Yarns, M/s

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FPA-PMLA-1713/CHN/2017 Thiru S.K. Karthikeyan v. ED, Chennai

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Ajantha Fabrics and M/s Kumaran Tex Yarns, but false/fake and fabricated sale bills/invoices drawn on non-functional, fictitious buyers/ debtors were furnished to fraudulently obtain funds to the tune of Rs. 15 crores through Trade Finance by cheating GTFL which was diverted for other purposes. Shri R. Manoharan was thus charged to have caused a wrongful loss of Rs. 18.42 crores to GTFL and corresponding wrongful gain for themselves.

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On the basis of information qua the said FIRs, on 03.01.2011 the Directorate of Enforcement, Chennai, recorded ECIR No. 03/2011, 04/2011 & 06/2011 respectively against the said accused persons/ suspects for initiating the investigation for the offence of money laundering under PMLA, 2002.

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During investigation ED recorded the statements of the suspects and others under Section 50 of PMLA and also collected the documents from the investigation agencies and the other sources. Accordingly, ED attached the property of the appellants vide Provisional Attachment Order No. 16/2016 dated 17.08.2017 as mentioned in para no. 1 above, and thereafter, filed Original Complaint No. 630/2016 before the Adjudicating Authority for confirmation of the said properties.

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The Adjudicating Authority after going through the allegations mentioned in the OC coupled with the documents and the statements under Section 50 of PMLA, issued the Show Cause Notice to the defendants. After going through the replies and hearing the rival submissions, the Adjudicating Authority confirmed the PAO.

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Aggrieved by the said order appellant filed the present appeal.

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During the arguments Ld. Counsel for the appellant submitted that property at serial no 5 is in name of his father Sh. SK Kalidasan and

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FPA-PMLA-1713/CHN/2017 Thiru S.K. Karthikeyan v. ED, Chennai

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mutation of the property is not affected in the name of his LRs, till date. The properties at Sr. No. 06 & 07 are stated to be mortgage with Tamilnad Mercantile Bank. He pointed out that the liberty is already granted to the said Bank for auction of the said two properties with permission of Ld. Special Judge PMLA Court under Section 8 (7) of PMLA vide Order dated 29.05.2025.

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Prayer is accordingly made to disposed of the present appeal with liberty to lead defence and claim for the release the aforementioned properties as mentioned at para no. 1 above, before Ld. Special Judge.

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On the other hand, Ld. Counsel for the Respondent ED submitted that the Appeal be disposed of as per law, with direction to the Appellant to maintain status quo qua the properties.

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In view of the submissions made by LD. Counsel for Appellant, the present appeal is hereby disposed of, with liberty as aforesaid.

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Appeal Disposed of with liberty.

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Pronounced on this 21^st Day of July, 2025.

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(Rajesh Malhotra) Member

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‘AK’

FPA-PMLA-1713/CHN/2017 of Thiru S.K. Karthikeyanv v. The Deputy Director Directorate of Enforcement, Chennai

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FPA-PMLA-1713/CHN/2017 of Thiru S.K. Karthikeyanv v. The Deputy Director Directorate of Enforcement, Chennai

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