Disposed

FPA-PMLA-1911/KOL/2017 of Bipin Kumar Vohra v. Joint Director, Directorate of Enforcement Kolkata

ATFP12 Feb 2025FPA-PMLA-1911/KOL/2017

Case brief

AI extract

What is this about?

The Appellate Tribunal held that a confirmation order under PMLA passed before the 2018 amendment is not governed by the 90-day limit for filing a prosecution complaint. The appeal was disposed of because the prosecution complaint was already filed, and releasing properties would render the trial infructuous.

What did the court decide?

Appeal disposed with liberty to claim rights over properties if not covered under proceeds of crime definition.

FPA-PMLA-1911/KOL/2017 of Bipin Kumar Vohra Vs. Joint 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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FPA-PMLA-1911/KOL/2017 Bipin Kumar Vohra … Appellant

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Versus

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Joint Director, Directorate of Enforcement Kolkata … Respondent

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Advocates/Authorized Representatives who argued

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For the Appellant : Sh. Nitin Sangra, Saumya Sharma, Advocates, For the Respondent : Sh. Aditya Singla, Advocate.

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FINAL ORDER 12.02.2025

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Present appeal is filed by the appellant against the impugned order dated 04.08.2017 passed by the Adjudicating Authority in complaint no. 714/2017 vide which five properties attached in Provisional Attachment Order dated 17.03.2017, were confirmed, which are mentioned at page 3 & 4 of the impugned order.

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As per the facts of the case, CBI, Branch BSFC, Kolkata registered a FIR bearing no. RCBSK2014E0007 dated 14.08.2014 for commission of offences under Section 120B IPC r/w Section 420/467/471 IPC and substantive offences thereunder. The said FIR was registered on the basis of complaint lodged by DGM Central Bank of India, wherein it is alleged that M/s. Bengal India Global Infrastructure Ltd. and its Directors S/Sh. Bipin Kumar Vohra, Arjun Kumar Santhalia & Smt. Sanjukta Vohra and the Directors of M/s Bholanath Ingots (P) Ltd., M/s. Gouri Iron & Steels (P) Ltd., M/s Subhlabh Steels (P) Ltd. and Sri B.K. Newatia, Chartered Accountant & Partner of M/s. Jaikishan Chartered Accountants and unknown others. In pursuance of the conspiracy, they committed fraud with the said bank to the extent of Rs.2,72,78,072/- by using the forged documents, as genuine.

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FPA-1911/KOL/2017 Bipin Kumar Vohra v. ED, Kolkata

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As offence punishable under section 120(B) IPC, 420,467,471 of IPC are scheduled offences, a case bearing ECIR No. KLZO/06/2014 was recorded against the suspects on 24.10.2014 for conducting investigation under PMLA. During the investigation, ED recorded the statement of the suspects and other persons under section 50 of PMLA and also collected documents. On the basis of material on record, the Adjudicating Authority formed the reasonable belief that the funds received from the banks by the said accused company were used for re-paying the earlier loans to avoid the detection of earlier frauds, by circular trading, in order to transfer the funds back to their accounts for the purpose of repaying the earlier letter of credits. Accordingly, show cause notice was issued to all the defendants and after receiving the replies and rejoinders of the complainant and hearing the rival submissions, the Ld. Adjudicating Authority confirmed the attachment of properties vide order dated 04.08.2017. Being aggrieved by the said order, the appellant filed the present appeal. 3. During arguments, Ld. Counsel for the appellant submitted that first PAO was passed by the respondent ED on 03.05.2016 and thereafter OC 603/2016 was filed before the Adjudicating Authority for confirmation of the said attached properties. Ld. Adjudicating Authority confirmed the previous Provisional Attachment Order vide order dated 16.09.2016. Being aggrieved by the said previous order, the appellants and other filed the appeals (appeal no. 1512-1514, 1517, 1521/2016) before this Appellate Tribunal. The said appeals were allowed by this Appellate Tribunal vide order dated 10.10.2024, on the ground that the respondent ED failed to file the Prosecution Complaint against the said appellants within the prescribed statutory period of 90 days. He pointed out that the present case

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FPA-1911/KOL/2017 Bipin Kumar Vohra v. ED, Kolkata

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pertains to second Provisional Attachment Order dated 17.03.2017, vide which the properties were attached by the respondent ED. After passing of the second Provisional Attachment Order, respondent ED filed OC 714 of 2017 before the Adjudicating Authority for confirmation of the attachment. As the second Provisional Attachment Order was confirmed by the Adjudicating Authority dated 04.08.2017, it is under challenge in the present appeal. He stressed that the present appeal also needs to be allowed on the ground of parity, as the same legal issue is involved in the present appeal, as admittedly Prosecution Complaint has been filed on 16.01.2020. He stressed that on account of amendment of Section 8(3)(a) in the PMLA, 2002, with effect from 19.04.2018, the Prosecution Complaint needs to be filed within period of 90 days from the order of the Adjudicating Authority. This period expired on 18.07.2018. In support of his contentions, the appellant has cited the three judgments of this Appellate Tribunal namely, Bipin Kumar Vohra v. Joint Director, ED, Kolkata dated 30.01.2025; M/s Innova Thinklaps (P) Ltd.& Ors. v. The Deputy Director, ED, Jaipur, & Ors. dated 24.04.2024; Shri Subhash Chandra Sharma v. The Deputy Director, ED, New Delhi dated 20.12.2022, wherein the properties were released by this Appellate Tribunal on ground of non-compliance of the amended time limit prescribed under Section 8(3)(a) of PMLA, 2002. Prayer is accordingly made to allow the present appeal on ground of parity.

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No other ground is pressed by the Ld. counsel for the appellant.

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On the other hand, Ld. Counsel for the respondent ED submitted that when the second Provisional Attachment Order was confirmed by the Adjudicating Authority on 04.08.2017, then at that

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FPA-1911/KOL/2017 Bipin Kumar Vohra v. ED, Kolkata

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time, no limit was specified in section 8(3) of PMLA, 2002, for filing of Prosecution Complaint within 90 days. This particular statutory provision was incorporated w.e.f. 19.04.2018 by way of amendment. Accordingly, he stressed that the confirmation order dated 4.8.2017 cannot be covered on account of subsequent amendment.

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He further pointed out that the prosecution complaint is already filed in the year 16.01.2020, hence present appeal needs to be dismissed being infructuous, as the confirmed attached properties are already relied for confiscation. He argued that if the said properties are released then whole purpose of trial will become useless exercise.

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Prayer is accordingly made to dismiss the appeal being devoid of any merits.

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After hearing the rival submissions, I have given my thoughtful consideration of the same.

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The first issue is that- Whether the confirmation order dated 04.08.2017 will be governed by the post amended provision w.e.f. 19.04.2018 ?

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There is no dispute between parties with respect to factual position regarding the date of Provisional Attachment being 17.03.2017 and the date of confirmation vide impugned order dated 04.08.2017 and the filing of the Prosecution Complaint on 16.01.2020. Now, coming to the issue, whether the appeal needs to be allowed, in view of the assertion that the amended provision came into force w.e.f 19.04.2018 for filing Prosecution Complaint within 90 days or the same will be governed by the unamended provision, where no limit was prescribed. The purpose of attachment proceedings is to protect the property generated from the proceeds of crime or as value thereof in absence of direct proceeds of crime, till the conclusion of investigation by the ED pertaining to the offence of

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FPA-1911/KOL/2017 Bipin Kumar Vohra v. ED, Kolkata

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money laundering and the filing of prosecution complaint. Before the said amendment of 19.04.2018, the respondent ED was at liberty to file the prosecution complaint as per its convenience and the same was causing great hardship to the owners of the property. In order to check the same and to mobilize the ED for timely conclusion of investigation, this particular provision was inserted and the amended provision came into force w.e.f 19.04.2018 for filing Prosecution Complaint within 90 days. The said amendment is silent regarding the previous attachment and confirmation orders passed prior to 19.04.2018. Thus, in my view, the right already accrued in favor of the respondent ED on the basis of unamended provision cannot be taken away by way of amendment w.e.f. 19.04.2018, in absence of any clarification on this aspect in the Act of Amendment. Thus, I do not agree with the view taken in the final order passed by coordinate bench of this Appellate Tribunal, in case of Bipin Kumar

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Vohra and Ors. v. Joint Director, ED, Kolkata and Ors in appeal no. 1512-1514, 1517, 1521/2016 wherein the appeal was allowed on this preliminary legal issue that the subject properties will be released from attachment due to lapse of order of attachment by operation of law as per the amended provision under section 8(3) of PMLA. In my view, this conclusion is wrongly drawn without appreciating the fact that right has already accrued in the favor of ED as per pre-amended provision. I am consciously taking this divergent view, as this aspect was not considered and analyzed in the aforesaid final order passed by this Appellate Tribunal referred by the appellant in para no. 3 above.

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Now coming to second issue- Whether the filing of prosecution complaint after conclusion of investigation during the pendency of appeal will render the appeal infructuous or the impugned order of confirmation needs to be set aside ?

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FPA-1911/KOL/2017 Bipin Kumar Vohra v. ED, Kolkata

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In my view, the purpose of the attachment proceedings is to protect the property till the conclusion of the investigation of the offence of money laundering and filing of prosecution complaint, thus, even if it is presumed that the amended provision will be applicable retrospectively from the date of amendment, even then the said attached properties cannot be released at this stage, as prosecution complaint for commission of offence under Section 3 r/w Section 4 of PMLA is already filed on 16.01.2020. Further, the present attached properties are already cited in the list of properties for the purpose of confiscation in the said prosecution complaint. Therefore, technically the present appeal cannot be allowed on the said ground, as now this is the prerogative of the trial court/Ld. Special Judge, PMLA court. But if the appeal would have been disposed of before the filing of the said prosecution complaint then certainly the present appeal would have been allowed in view of the time restriction of 90/365 days (though, in my view, this restriction is not applicable to the facts of this case). At present, since the prosecution complaint is already filed and appellant is facing trial for commission of offence of money laundering, thus, if the conclusion of the trial proceedings results in conviction of the appellant and the properties are released before that, then the investigation and trial proceedings will become infructuous and nugatory, as the government will not be able to confiscate the said properties if the appellant disposes the same, in case appeal is allowed and the said properties are released by this appellate tribunal before the conclusion of trial.

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Now taking the situation where any appeal is allowed by this tribunal for not filing the prosecution complaint during statutory period of 90/365 days, but later on the ED concludes the investigation and files the prosecution complaint with request to

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FPA-1911/KOL/2017 Bipin Kumar Vohra v. ED, Kolkata

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confiscate the properties in case of conviction of the accused persons for commission of offence of money laundering, along with an application to direct the accused persons to maintain the status quo regarding the previously seized/frozen/attached properties, then the said application cannot be declined by the trial court, otherwise the whole criminal trial and prosecution complaint will be ineffective. Hence, in my view this issue also needs to be decided in favor of ED.

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Now coming to the final orders passed by this appellate tribunal and relied upon by the appellant in the case of M/s Innova Thinklaps (supra) and Shri Subhash Chandra Sharma (supra), are not applicable to the facts of the present case, as in these two cases, the prosecution complaint was not filed till the disposal of the appeals. However, in the present case, the prosecution complaint has been filed and the trial court proceedings have initiated before the disposal of the appeal, thereby making the impugned properties the case properties of trial court. Thus, the said final orders are not applicable to the facts of the present case.

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It is pertinent to mention here that previously, the investigation agency used to invoke the provisions of Criminal Amendment Ordinance, 1944 for confiscation of the properties in the cases pertaining to the Prevention of Corruption Act, after the conviction of the accused. The said ordinance was not effective as during the meantime the property was disposed of by the accused persons. There is also a specific provision under Section 451 of CrPC for custody and disposal of properties pending trial in certain cases and Section 452 of CrPC lays down about the disposal of property at the conclusion of trial, but the said provisions were also of limited scope. However, the PMLA Act has wide scope as per procedure enumerated in Chapter III of the PMLA Act. Therefore, intent of the

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FPA-1911/KOL/2017 Bipin Kumar Vohra v. ED, Kolkata

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legislature needs to be appreciated for protection of property till conclusion of trial under the PMLA Act.

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Accordingly, in sequel to my discussion in para no. 5 & 6 above, the question of allowing the present appeal on ground of parity does not arise. Hence, the present appeal is hereby disposed of with liberty to claim his right over the said properties as per law, if the same is not covered within the definition of proceeds of crime.

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Appeal Disposed of.

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Pronounced on 12^th Day of February, 2025.

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(Rajesh Malhotra) Member

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‘ST’

FPA-PMLA-1911/KOL/2017 of Bipin Kumar Vohra v. Joint Director, Directorate of Enforcement Kolkata

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FPA-PMLA-1911/KOL/2017 of Bipin Kumar Vohra v. Joint Director, Directorate of Enforcement Kolkata

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