Dismissed

FPA-PMLA-2046/LKW/2017 of Sri Abhai Kumar Bajpai v. The Joint Director, Directorate of Enforcement, Lucknow

ATFP17 Mar 2025FPA-PMLA-2046/LKW/2017

Case brief

AI extract

What is this about?

This Single Bench of the Appellate Tribunal upheld an impugned order confirming the attachment of certain properties under the PMLA. The Tribunal rejected the appellant's explanation regarding the source of funds and dismissed the appeal as devoid of merits, noting it could not reassess the CBI evidence accepting the lower authority's findings.

What did the court decide?

The appeal filed under Section 26 of the PMLA, 2002 against the order confirming attachment of property is dismissed.

FPA-PMLA-2046/LKW/2017 of Sri Abhai Kumar Bajpai Vs. The Joint… — 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-2046/LKW/2017 Sri Abhai Kumar Bajpai … Appellant

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Versus

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The Joint Director, Directorate of Enforcement, Lucknow … Respondent

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Advocates/Authorized Representatives who Argued For the Appellant : Mr. Anuj Tandon, Adv. Mr. Rahat Bond, Adv. For the Respondent : Mr. Ritesh Aggarwal, Adv. Ms. Priyanshi Sharma, Adv.

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FINAL ORDER 17.03.2025

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Present Appeal under Section 26 of the Prevention of Money Laundering Act, 2002 (in short `PMLA, 2002‟) is filed by the appellant Abhai Kumar Bajpai against the order dated 13.09.2017 passed by the Adjudicating Authority in Original Complaint (O.C) No. 773/2017 whereby the properties attached by ED vide PAO No.03/2017 dated 05.04.2017 were confirmed. The detail of the property is mentioned at Serial No. 3 of the list of properties, which is as under:

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“ Apartment No.1, Block No.4, at Navsheel Apartments, situated at Plot No. 56, Cantt, Kanpur, UP valuing at Rs.93 lakhs .”

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As per the facts of the case, many Public Interest Litigations were filed by the complainants regarding the financial irregularities and misuse of public money allocated for the State of UP under the National Rural Health Mission (NRHM) Programme running into several thousand crores of rupees, before the Hon‟ble High Court of Allahabad, Lucknow Bench,

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FPA-PMLA-2046/LKW/2017 Abhai Kumar Bajpai Vs. Directorate of Enforcement, Lucknow

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Lucknow. On 15.11.2011, High Court directed that – “ We are prima facie convinced that gross irregularities financial and administrative appear to have been committed in the execution and implementation of NRHM including the matter of award of contracts, procurement of goods, article and etc. at various levels. We, therefore, direct the Director, CBI to conduct a preliminary enquiry in the matter of execution and implementation of the NRHM and utilization of funds at various levels during such implementation in the entire state of U.P and register regular case in respect of persons against whom prima facie cognizable offence is made out and proceed in accordance with law ”.

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Accordingly, CBI, New Delhi after making preliminary enquiries registered FIR No. RC-1(A)/2012-CBI/SC.II/NDLI dated 02.01.2012 in the matter of irregularities in the utilization of funds allotted to UP Small Scale Industries Corporation for supply/procurement of FRU KITS AND IUD KITS etc. under NHRM Scheme during the period 2010-2011, against Abhai Kumar Bajpai, the then MD of the Corporation, Dr. Raja Ram Bharti, the then DG (FW) Lucknow and others including Naresh Grover of M/s Surgicoin Medequip, Ghaziabad, for abusing their powers and misappropriating the huge amount allotted to the Govt. of UP and thereby caused loss of Rs.10 Crores by awarding tender worth of Rs.31.59 Crores to M/s Surgicoin Medequip, Ghaziabad, much higher than the prevailing market rates. After investigation, CBI filed charge sheet against the accused persons for commission of offences under Section 409, 420 IPC and 13(2)

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FPA-PMLA-2046/LKW/2017 Abhai Kumar Bajpai Vs. Directorate of Enforcement, Lucknow

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read with 13(1)(c)&(d) of the PC Act, 1988 and substantive offences thereunder.

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During investigation, CBI recorded the statement of Manvendra Chaddha , the representative of M/s Surgicoin Medequip Pvt. Ltd. under Section 164 Cr.P.C. before Magistrate wherein he stated that the independent charge of the Family Welfare portfolio was allotted to Shri Babu Singh Kushwaha. He along with Girish Malik met him through his friend. Babu Singh Kushwaha called Ram Prasad Jaiswal, his close associate and offered to award the work of FRU Kit and RO systems of 134 hospitals upon payment of commission of 15% and 7% of total project cost respectively. The total quantum of commission came to as Rs.6 crores. Out of the said amount, Rs.5.50 Crore was given to Ram Prasad Jaiswal and Babu Singh Kushwaha, the then Minister. The total amount of Rs.12.50 Crores was obtained from Naresh Grover and Rakesh Tandon and was distributed to the related persons. The main beneficiary of the two firms were Shri Girish Malik and Shri Manvendra Chaddha.

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On the basis of the said investigation, ED recorded ECIR No. 01/LKZO/2012 dated 14.04.2012, and thereafter, initiated investigation against the accused persons. During investigation, ED also recorded the statements of many persons under Section 50 of the PMLA, 2002. The statement of Ashok Katiyar and Sushil Katiyar reflects that Babu Singh Kushwaha agreed to allot the work of UPSIC to M/s Sugricoin Medquip Pvt. Ltd. on

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FPA-PMLA-2046/LKW/2017 Abhai Kumar Bajpai Vs. Directorate of Enforcement, Lucknow

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payment of 15% of total project. Abhai Kumar Bajpai herein appellant demanded 2% of the project cost as bribe for himself.

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During investigation, Abhai Kumar Bajpai , (present appellant) stated that Vikas Patra of Rs.6 lakhs were purchased by his wife Smt. Anita Bajpai in cash during the period from 28.01.2010 to 14.09.2010. Smt. Anita Bajpai is a house wife and she failed to explain the source of the said funds. He further stated that M/s Lakhdatar Industries was owned by Mr. Lakhdatar who gave loan of Rs.17 lakhs to Smt. Anita Bajpai wife of Abhai for purchase of flat. The amount of Rs.17 lakhs was received through RTGS in her Bank of Baroda A/c No.21860100001220. Mr. Lakhdatar left Ghaziabad and his present address is not known to him. He paid some interest to him, but the principal amount of Rs.17 lakhs is still outstanding. He further stated that M/s Surgicoin Medequip was a supplier under the NRHM Scheme with UPSIC, when he was its MD. Shri Rahul Sharma stated that he gave sum of Rs.46 lakhs to Abhai Bajpai in cheque, as he required the said money in cheque. He received back the said amount from Shri Abhai Kumar Bajpai in cash.

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Aditya Goel stated that at the instance of Abhai Kumar Bajpai, he prepared demand draft of Rs.30 lakhs in his favour and Shri Bajpayee promised to transfer his Flat No. 4/1, Navsheel Apartments, 56, Cantt Road, Kanpur in his favour. In this regard, no agreement was registered, but the total value agreed was Rs.55 lakhs.

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FPA-PMLA-2046/LKW/2017 Abhai Kumar Bajpai Vs. Directorate of Enforcement, Lucknow

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Sunil Chaddha also stated incriminating facts against Abhai Kumar Bajpai as mentioned at page 18 to 20 of the impugned order. Similar statements were also made by other persons interrogated by ED as mentioned in Page No. 13 of the impugned order. Investigation also revealed that Naresh Grover got created purchase invoices of FRU/FUD/NR kits from M/s Paras Traders of Gola Gokaran Nath of District Lakhimpur whereas M/s Paras Traders never dealt in said case, as it was a Welding material shop. No kits were purchased from the said shop for supplying to NHRM.

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During searches at factory and residential premises of Naresh Grover several incriminating documents were seized including letters written by Naresh Grover (then in judicial custody) directing his son to manipulate the accounts and records to defeat the allegation of supply of material at over valuation. He also directed his son to siphon the amount lying in the accounts at the earliest.

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Investigation revealed that A.K. Bajpai , the then MD (herein appellant) obtained huge bribe/commission from the award of contracts as detailed in para 27 of the impugned order. The said para also reflects that amount of Rs.30 lakhs was paid by Aditya Goel in advance on 16.12.2013 for the purchase of property situated at Apartment No. 1, Block No. 4 at Navsheel Apartments, Kanpur to Abhai Kumar Bajpai. Even after the expiry of 3 years, Aditya Goel has not initiated any suit for recovery of advance of Rs.30 lakhs and hence false defence was

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FPA-PMLA-2046/LKW/2017 Abhai Kumar Bajpai Vs. Directorate of Enforcement, Lucknow

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attempted by the appellant to camouflage and conceal the `proceeds of crime‟ in the hands of Abhai Kumar Bajpai. On the basis of material on record, ED attached the property vide PAO 03/LKZO/2017 dated 05.04.2017 and thereafter filed Original Complaint No.773/2017 before the Adjudicating Authority.

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The Adjudicating Authority after going through the allegations and relied upon material issued the show cause notice to the defendants. After receiving the replies of the defendants and hearing the rival submissions, the Adjudicating Authority confirmed the PAO vide its order dated 13.09.2017. Aggrieved by the said order, appellant filed the present appeal. 3. During the arguments, learned counsel for the appellant submitted that property of the appellant as mentioned at Serial No.3 (as detailed in Para No. 1 above) is wrongly attached by ED and confirmed by the Adjudicating Authority, without appreciating the true facts and the explanation given by the appellant. He contended that this property was purchased by the appellant after obtaining loan of Rs.46 lakhs from Rahul Sharma through proper banking channel. Rahul Sharma gave this loan by selling his ancestral property to Chaddha group for a sum of Rs.50 lakhs. The whole amount is already returned to Rahul Sharma. For repaying the said amount, appellant sold the said Flat to Aditya Goel and obtained sum of Rs.30 lakhs as part payment out of the total sale consideration of Rs. 55 lacs. In support of his contention, he contended that the sale agreement with Aditya Goel is not registered, but the total value agreed for

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FPA-PMLA-2046/LKW/2017 Abhai Kumar Bajpai Vs. Directorate of Enforcement, Lucknow

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payment was Rs.55 Lakh. He stressed that this fact is truly narrated by the appellant during his interrogation by ED and is also corroborated by the statement of Rahul Sharma. He further argued that possession of the attached property is still with Aditya Goel and he filed a suit for specific performance against the appellant, but on account of the restraint order dated 28.10.2010 passed by the High Court of Allahabad in Writ Petition No. 12897/2008 sale deed could not be executed. He further contended that the appellant is yet to get amount of Rs.25 lakhs from Aditya Goel, which will be tendered by him at the time of execution of sale deed. He further stressed that ED recorded false statement of Manvendra Chaddha and Girish Malik where in recorded the sum of Rs. 60 lakhs was paid to Shri S. K Singh. There is nothing on record the present any received any amount from the said two person or S. K. Singh. There is no documentary evidence to corroborate this fact. The role of Abhay Bajpayee was only supervisory in nature and the allocation of the tender was done by tender committee by selecting L-1 bidder. The allegation of demand of bribe by present appellant is false and incorrect. Prayer is accordingly made to allow the present appeal, as all the transactions are duly recorded through banking channel.

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Learned counsel for the respondent ED strongly opposed the contention of learned counsel for the appellant on the ground that there is nothing on record to show any loan agreement executed between Rahul Sharma and A.K. Bajpai for tendering

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FPA-PMLA-2046/LKW/2017 Abhai Kumar Bajpai Vs. Directorate of Enforcement, Lucknow

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and receiving sum of Rs. 46 lakhs respectively. No intimation was given to the department in this regard for friendly loan. He further stressed that every sale or purchase of immovable property either by a public servant or his wife or the family members has to be initiated with prior permission of the Department, as per Civil Services Conduct Rules, applicable to the public servants, but in the present case no such intimation was given by A.K. Bajpai. He also contended that the statements of Rahul Sharma and Aditya Goel does not inspire confidence and the rotation of proceeds of crime are apparent on record. Learned counsel for the respondent ED further pointed out that Trial Court conducting the trial of CBI case has already framed the charges against all the accused persons including the present appellant and this Appellate Tribunal cannot reassess the quality of evidence collected by CBI to check the prima facie case against them, seeing the fact that no criminal revision is filed by any accused against the order of framing of the charges. The suit for specific performance is filed by Aditya Goel just at the instance of the present appellant to create defence in his favour on account of friendly relations. Prayer is accordingly made to dismiss the present appeal being devoid of any merits.

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After hearing rival submissions, I have given my thoughtful consideration with the same. As per allegations, as mentioned in para no. 2 above, the present appellant Abhai Kumar Bajpai, the then MD of the Corporation, along with other co-accused persons committed criminal misconduct by abusing their powers and

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FPA-PMLA-2046/LKW/2017 Abhai Kumar Bajpai Vs. Directorate of Enforcement, Lucknow

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thereby misappropriated the huge as commissions for allocating the tender to M/s Surgicoin Medequip, Ghaziabad, much higher than the prevailing market rates, and thereby, caused loss of Rs.10 Crores by awarding tender worth of Rs.31.59 Crores. CBI filed charge sheet against the said accused persons for commission of predicate offences under Section 409, 420 IPC and 13(2) read with 13(1)(c)&(d) of the PC Act, 1988 and substantive offences thereunder. During investigation, CBI recorded the statement of Manvendra Chaddha , the representative of M/s Surgicoin Medequip Pvt. Ltd. under Section 164 Cr.P.C. before Magistrate wherein he exposed the modus operandi as detailed in para no. 2 above. During investigation, ED also recorded the statements of many persons under Section 50 of the PMLA, 2002. The statement of Ashok Katiyar and Sushil Katiyar reflects that Babu Singh Kushwaha agreed to allot the work of UPSIC to M/s Sugricoin Medquip Pvt. Ltd. on payment of 15% of total project. Abhai Kumar Bajpai herein appellant demanded 2% of the project cost as bribe for himself. The statement of Abhai Kumar Bajpai , (present appellant) recorded by ED as mentioned in para no. 2 is apparently false and incorrect, as till date the appellant has not returned the principal amount of Rs.17 lakhs to Mr. Lakhdar of Lakhdar Industries. The defence of obtaining loan of Rs.46 lakhs from Shri Rahul Sharma is also apparently introduced to explain the investment for purchasing the property. Appellant has not informed to his department for obtaining the loan from the said

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FPA-PMLA-2046/LKW/2017 Abhai Kumar Bajpai Vs. Directorate of Enforcement, Lucknow

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two persons. The statement of Aditya Goel for tendering Rs. 30 lakhs to appellant is also apparently false and incorrect in absence of any agreement to sell executed between them for Flat no. 4/1 Navsheel Apartments, 56, Cantt Road, Kanpur in his favour. Moreover, appellant has not obtained any permission from his department for purchase and sale of this property. Even after the expiry of 3 years, Aditya Goel has not initiated any suit for recovery of advance of Rs.30 lakhs and hence false defence was attempted by the appellant to camouflage and conceal the `proceeds of crime‟ in the hands of Abhai Kumar Bajpai. Moreover, Sunil Chaddha also revealed that Naresh Grover got created purchase invoices of FRU/FUD/NR kits from M/s Paras Traders of Gola Gokaran Nath of District Lakhimpur whereas M/s Paras Traders never dealt in said case, as it was a Welding material shop. No kits were purchased from the said shop for supplying to NHRM. Investigation revealed that A.K. Bajpai , the then MD (herein appellant) obtained huge bribe/commission from the award of contracts as detailed in para 27 of the impugned order.

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In view of the above incriminating material, I am of the considered view that ED rightly attached the property vide PAO 03/LKZO/2017 dated 05.04.2017. The Adjudicating Authority also rightly confirmed the PAO vide its order dated 13.09.2017 in OC no. 773/2017. Therefore, there is no merit in the contention of Ld. Counsel for appellant as mentioned in para no. 3 above. On the other hand, I am fully convinced on the submission made

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FPA-PMLA-2046/LKW/2017 Abhai Kumar Bajpai Vs. Directorate of Enforcement, Lucknow

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by the Ld. Counsel respondent ED, as mentioned in para no. 4 above. Moreover, this Appellate Tribunal is not empowered to reassess the incriminating evidence against the accused persons for commission of predicate offence as charges already framed against them, as pointed out by Ld. Counsel for respondent ED. 6. In sequel to my discussion in the preceding para, the present appeal is hereby, dismissed being devoid of any merits. However, it is made clear that nothing expressed herein will affect, the merits of the trial and the attached property will be disposed of as per final outcome of the criminal trials.

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Appeal dismissed . Pronounced on this 17^th day of March, 2025.

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(Rajesh Malhotra)

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Member

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„srd‟

FPA-PMLA-2046/LKW/2017 of Sri Abhai Kumar Bajpai v. The Joint Director, Directorate of Enforcement, Lucknow

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FPA-PMLA-2046/LKW/2017 of Sri Abhai Kumar Bajpai v. The Joint Director, Directorate of Enforcement, Lucknow

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