Dismissed

FPA-PMLA-619/LKW/2014 of Shri Shafaat Ejaz Siddiqui & Ors. v. The Deputy Director, Directorate of Enforcement, Lucknow

ATFP8 Apr 2025FPA-PMLA-619/LKW/2014

Case brief

AI extract

What is this about?

Single Bench allowed an appeal filed under Section 26 PMLA against the confirmation of a provisional attachment order. The Member held that charges in the predicate offence were pending and no legal issues for setting aside the attachment were raised, dismissing the appeal and the application for substitution.

What did the court decide?

Appeal and application for substitution of attached property dismissed.

FPA-PMLA-619/LKW/2014 of Shri Shafaat Ejaz Siddiqui & Ors. Vs… — Money Laundering | ATFP (2025)

¶1

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

¶2

FPA-PMLA-619/LKW/2014 Shri Shafaat Ejaz Siddiqui & Ors. … Appellants

¶3

Versus

¶4

The Deputy Director, Directorate of Enforcement, Lucknow

¶5

… Respondent

¶6

Advocates/Authorized Representatives who Argued For the Appellants : Mr. Anuuj Taandon, Mr. Amit Garg, Advocates For the Respondent : Mr. Abhimanyu Kaul, Advocate

¶7

FINAL ORDER

¶8

08.04.2025

¶9

The present Appeal has been filed by the Appellant under Section 26 of the Prevention of Money Laundering Act, 2002, against the Order dated 09^th July, 2014, passed by the Adjudicating Authority in O.C. No. 260/2014, whereby it confirmed the PAO no. dated for attachment of property. The details of the property in Table A, Table B, Table C are as under:-

¶10

TABLE “A”

¶11

Cash of Rs. 65.87 lacs seized by the Anti-Terrorist Squad (ATS), U.P. Police, Lucknow from the residences of prime suspect and his relatives during search operations and later-on taken over by the Income Tax Department.

¶12

TABLE “B”

¶13

IMMOVABLE PROPERTY

¶14

S.No.	Type of property	Registration details		Details of property	Value of the propertyRs.
1.	Residential house	Property registered Deputy Registration Lucknow on 20-06-20 S.No.-7323	with (IV), 11 at	Situated in Mohalla-Madeyganj Ward-Triveni Nagar, Lucknow bearing Khasra No. 68 and Plot No. 38	10,50,000
2.	Residential plot	Property registered Deputy Registrar Lucknow on 16-08-20 S.No.-10460	with (IV), 11 at	Situated in Mohalla-Madeyganj, Ward-Triveni Nagar, Lucknow bearing Khasra No. 30 and Plot _No. 37 _	4,90,000

¶15

TABLE “C”

¶16

Details Of Bank Accounts in which Proceeds of Crime are lying as Balance

¶17

S.N .	Account Number and Bank	Name of Account _Holder _	Balance in Rs.
1	00781930009530 HDFC Bank, Hazratganj, Lucknow	Shafaat Ejaz Siddiqui	1,043.64
2	00781930011503 HDFC Bank, Hazratganj, Lucknow	Rahat Ejaz Siddiqui	5,348.08
3	00788640000075 HDFC Bank, Hazratganj, Lucknow	M/s. Lucky Brothers	45,000.00
4	00781930011739 HDFC Bank, Hazratganj, Lucknow	Shabnam Ejaz	27,247.91

¶18

FPA-PMLA-619-Lucknow-2014 Shafaat Ejaz Siddiqui & Ors. v. ED, Lucknow

¶19

¶20

5	126301500078 ICICI Bank, Nirala Nagar, Lucknow	Shafaat Ejaz Siddiqui	4,003.00
6	_089001000029 (NRE) ICICI Bank, Jaunpur _	Ejaz Ahmad (NRI)	_40,644.84 _
7	_089001075026 ICICI Bank, Jaunpur _	Ejaz Ahmad (NRI)	3,027.00
8	021401528024 ICICI Bank, Gomti Nagar, Lucknow	Rahat Ejaz Siddiqui	500.23
9	021401528029 ICICI Bank, Gomti Nagar, Lucknow	Shafaat Ejaz Siddiqui	6,086.00
10	00781930011677 HDFC Bank, Hazratganj, Lucknow	Mohd. Galib Shaikh	75,000.00
		Total	2,07,901.00 (approx)

¶21

The application for substitution of the attached property has also been filed by the Appellant.

¶22

As per the facts of the case FIR bearing No. 01/2011/, 02/2011, 03/2011 were lodged against the accused person namely (1) Shafaat Ejaz Siddiqui S/o Ejaz Ahmad, (2) Rahat Ejaz Siddiqui S/o Ejaz Ahmad, (3) Shafqat Ejaz Siddiqui S/o Ejaz Ahmad, (4) Danish Khan S/o Mansoor Ahmed, (5) Vinay Pratap Singh S/o Rameshwar Singh, (6) Tabish Mansoor S/of Mansoor Ahmed & other unknown persons for commission of offences punishable under Section 419, 420, 467, 468, 471 & 120B of IPC by the Anti-Terrorist Squad (ATS), UP Police, Lucknow. On 17^th August, 2011, at 03 premises located at Lucknow searches were conducted and as a result thereof, 263 Reliance WLL phone sets, Rs. 65.87 lakh in cash and others relevant items/documents were recovered and seized.

¶23

The said FIR reveals the following facts:-

¶24

“(a) That, the suspect persons, on the basis of forged documents obtained illegally, a total number of 263 Reliance WLL PCO phone connections which were activated during the period 18.04.2011 to 30.07.2011 and through the said pones earned illegal money by making calls on certain pre-fixed international numbers and putting on hold such calls in a manner discussed hereunder:

¶25

FPA-PMLA-619-Lucknow-2014 Shafaat Ejaz Siddiqui & Ors. v. ED, Lucknow

¶26

¶27

The suspect Shafaat Ejaz Siddiqui used to purchase M/s Reliance Communications Ltd. recharge coupons/vouchers for Rs 7080/- which had a call value of Rs 15,000/- as per scheme provided by the service provider. Thereafter, he used to call simultaneously on a number of pre-determined international numbers which were provided to him by two foreigners namely Jim Carry & Noor Aziz based in Saudi Arabia. The said numbers were similar to the premium numbers whose call rates were higher than normal international calls. By dialing several such international numbers simultaneously, the suspect used to put such calls on hold for very long periods. The idea behind putting such calls on hold for a long period was that M/s Reliance Communications Ltd. or the related service provider would pay to the corresponding international network the cost of such calls at higher rates and the suspect would get paid commission out of the payments made at higher rates to the foreign service provider, as per arrangements made by Jim Carry and Noor Aziz. The commission was received in various bank accounts of the suspect/his relatives etc., through Western Union money transfer and also allegedly by hawala.

¶28

(b) It was alleged that Mr. Jim Carry resident of Spain and Shri Noor Aziz resident of Pakistan presently in Saudi Arabia contacted the suspect persons, namely Shafaat Ejaz Siddiqui and Rahat Ejaz Siddiqui bath sons of Ejaz Ahmad, resident of Jaunpur and others in India, over Telephone/ Email and provided them with some International telephone numbers and directed them to obtain telephones/mobiles from Indian telecom companies on the basis of fake IDs/addresses and then make calls on the said international numbers from India incessantly and to put such international calls on hold. In return, they promised to make payment of a certain amount to such persons out of the payments made by the Indian Service

¶29

FPA-PMLA-619-Lucknow-2014 Shafaat Ejaz Siddiqui & Ors. v. ED, Lucknow

¶30

¶31

Provider to the Foreign Service Provider, as commission in lieu of holding of such calls.

¶32

(c) The said persons in India were also asked to open various bank accounts so that the amount paid as commission could be transferred by Jim Carry and Noor Aziz directly in the bank accounts of the account holders on regular basis. Accordingly, the prime suspect Shri Shafaat Ejaz Siddiqui S/o Ejaz Ahmad in criminal conspiracy with another suspect Shri Vinay Pratap Singh s/o Sh. Rameshwar Singh, who was proprietor of M/s Amba Traders, Lucknow, a distributer (direct sales agent-DSA) of Reliance Infocomm Ltd, got issued illegally, 263 Reliance WLL PCO connections by submitting forged/fictitious documents to the service provider and thereafter, made international calls as directed by Jim Carry resident of Spain and Shri Noor Aziz operating from Saudi Arabia. The suspect Shafaat also roped in the suspect Shri Danish Khan S/o Shri Mansoor Ahmed, Shri Tabish Mansoor S/o Mansoor Ahmed along with a number of other persons by promise of huge profits in future, in his said criminal activity. The Case Crime No-03/2011 of ATS reveals that as many as 112 WLL (wireless in local loop) phones of Reliance company were recovered and seized by the ATS from the residential premises of Shri Tabish Mansoor located at 536/265/3/7 New Madeyganj, Khadra, Lucknow. (d) During the course of investigations, the suspect Shafoat Ejaz Siddiqui S/o Ejaz Ahmad confessed before the police authorities in his statement dated 17.08.2011 as having made approximately 10000 such international calls and received Rs. 5.0 crores approximately in his own bank accounts and in the bank accounts of suspect persons namely Shri Rahat Ejaz Siddiqui (his brother), Shri Tabish Mansoor (his relative) S/o Mansoor Ahmed and Danish Khan (his relative) 5/o of Mansoor Ahmed, by

¶33

FPA-PMLA-619-Lucknow-2014 Shafaat Ejaz Siddiqui & Ors. v. ED, Lucknow

¶34

¶35

money transfer from abroad through Western Union and also through hawala.”

¶36

As the said FIR pursuant to commission of predicate offence as mentioned in Schedule of Prevention of Money Laundering Act, 2002. E.D. recorded ECIR no.15/PMLA/LZO/2012 on 04.05.2012 for initiating investigation for the offence of money laundering and to check the trail of proceeds of crime. On 11.11.2011, ATS, UP Police filed three charge sheets against the accused Shafaat Ejaz Siddiqui and Shri Vinay Pratap Singh. As per the said charge sheet Shafaat Ejaz Siddiqui in criminal conspiracy with the suspect Shri Vinay Pratap Singh proprietor of M/s Amba Traders, Lucknow, got issued 263 Reliance WLL/PCO connections illegally on the basis of forged/fictitious documents and made numerous international calls and kept such call on hold and for very long period and thereby received illegal money as commission from abroad.

¶37

During the investigation E.D. recorded the statements of the suspect/accused persons and other persons and also collected the documents and materials from various sources. The investigation revealed that proceeds of crime were received in the 10 bank accounts since 18^th April, 2011 as mentioned in para 8.1 of the impugned order. The scrutiny of bank accounts revealed that huge funds have been received including one NRE Account of Shri Ejaz Ahmad father of Shafaat Ejaz Siddiqui, and thereafter, the said funds were either withdrawn in cash or transferred to other bank account of suspect person. The total amount received from abroad in ten accounts was about Rs.3,98,81,696/-. The said foreign exchange representing the proceeds of crime were taken into consideration from 18^th April, 2011 onwards as Shafaat Ejaz Siddiqui obtained 263 Reliance WLL phones out

¶38

FPA-PMLA-619-Lucknow-2014 Shafaat Ejaz Siddiqui & Ors. v. ED, Lucknow

¶39

¶40

of which 251 such connections were activated between the period 18^th April, 2011 and 30.07.2011 and were used thereafter for commission of crime. Shri Shafaat Ejaz Siddiqui, his relatives and associates received the inward remittances from foreign companies such as ATC Avant Telecom Consulting AG-Switzerland, First Link Electronics-G.A. Telecom, Hongkong. The said foreign exchange represents the illegal money received as commission by obtaining WLL connections on the basis forged documents and commission of scheduled offences. The details of the total foreign inward remittances amount of Rs. 3,98,81,696/- in the total as mentioned in para 7 of the table.

¶41

The above amount of Rs. 1,79,71,404 was received in the NRE Accounts bearing No. 0890010000029 of Shri Ejaz Ahmad, father of Shafaat Ejaz Siddiqui, who was the NRI based in United Arab Emirates. The said remittances were sent by the companies situated outside India such as M/s. First Link Electronics Ltd., Switzerland, M/s. R.G. Telecom Ltd., Victoria-E, M/s. Goldex Telecom Ltd., Inonesia, M/s. Premium TLC, INC. Hongkong. Therefore, the said NRI account was misused to project the inward remittances of Rs. 1,79,71,404/- as a garb of income of NRI, but in-fact the same is proceeds of crime.

¶42

The manner of utilization of proceeds of crime is mentioned in details in para 11 of the impugned order and same is not reproduced herein. The said proceeds of crime received by the persons Appellant and his family members and friends were used to take over the movable and immovable properties as mentioned in details in para 1 above. Also, cash of Rs. 65.87 Lakh seized by ATS, U.P., Police. The said seized amount of Rs. 65.87 Lakh was handed over to the income tax department by the

¶43

FPA-PMLA-619-Lucknow-2014 Shafaat Ejaz Siddiqui & Ors. v. ED, Lucknow

¶44

¶45

ATS, U.P. Police and the said cash is also attached by the E.D. and confirmed by the Adjudicating Authority in total- A in para no. 1 above.

¶46

Accordingly, ED passed the Provisional Attachment Order No. 01/LKZO/2014 dated 21^st January, 2014 and thereafter filed O.C. No. 260/2014 before the Adjudicating Authority for confirmation of the said Provisional Attachment Order alongwith relied upon documents and the statement recorded under Section 50 of the Prevention of Money Laundering Act, 2002.

¶47

The Adjudicating Authority being satisfied with the allegations mentioned in the Original Complaint alongwith relied upon documents and statements under Section 50 of the PMLA, 2002 etc., issued the Show Cause Notice to the defendants. After receiving the replies and hearing rival submissions the Adjudicating Authority confirmed the Provisional Attachment Order vide its order dated 09^th July, 2014.

¶48

Aggrieved by the said the Appellants filed the present Appeal.

¶49

During the arguments the Ld. Counsel for the Appellant submitted that FIR were lodged against the said accused persons without any basis, as there is nothing on record as to with whom the cheating was committed by the accused persons. He stated that appellants carried out the legal business as per rules and regulations. In absence of any prima facie evidence for the alleged commission of offence of fraud and forgery of documents they are likely to be acquitted in due course. The Appellant Shafaat Ejaz Siddiqui was staying in UAE since more than 19 years and has business of laundering of clothes etc. and from this business income he used to send the money to the various accounts in India in favour of his family members and other siblings. He contended that there is nothing on record that the Appellant’s remittance was out of

¶50

FPA-PMLA-619-Lucknow-2014 Shafaat Ejaz Siddiqui & Ors. v. ED, Lucknow

¶51

¶52

any illegal proceedings of crime, as alleged. The concerned bank never objected for transfer of money, as there was no illegality or irregularity committed by the Appellant. The immovable properties purchased by the Appellant was for the same consideration of Rs.10.5 Lakh, which was not a huge amount seeing income of the Appellant his father and other family members. He further pointed out that his family members were not facing any Trial in the predicate offence and are unnecessarily dragged for Trial in prosecution complaint for money laundering, without any basis. He further argued that from case of Respondent E.D., substantial part of income of Appellant has gone into the account of Shri Vinay Pratap Singh. The case of Shri Vinay Pratap Singh was not intentionally considered by the E.D. The prayer was accordingly made to allow the present Appeal and thereby set aside the impugned order.

¶53

On the other hand, Ld. Counsel for the Respondent-E.D. strongly controverted the submission made by the Ld. Counsel for the Appellant and also pointed out the incriminating material as reproduced in paraNo. 2 above. His contention will be reflected in our discussion & findings in the following paras.

¶54

After hearing the rival submissions, I have given my thoughtful consideration of the same. Admittedly, the charge sheet are already filed against the present appellant & other accused persons for the commission of Scheduled Offence as detailed in para-No.-2 above. There is nothing on record that the present Appellant are acquitted in the said criminal cases pertaining to predicate offences. The investigation conducted by the E.D. also discloses the incriminating material against the present Appellant for commission of offence of money-laundering and thereafter layering of the proceeds of crime, as detailed in para-2 above.

¶55

FPA-PMLA-619-Lucknow-2014 Shafaat Ejaz Siddiqui & Ors. v. ED, Lucknow

¶56

¶57

As per evidence on record, the attached & confirmed properties are directly/indirectly acquired from the proceeds of crime, and hence, question of releasing same at this stage does not arise. The Appellant has not raised any legal issues to set aside the impugned order passed by the Adjudicating Authority on 09^th July, 2014.

¶58

In consequence to the preceding paras, the Appeal is dismissed as devoid of any merits. The question of substitution of the attached property by way of any cash deposit or fixed deposit does not arise, as the said property are directly/indirectly acquired were attached, but not attached as a value thereof. Even otherwise there is no specific provision of law for substitution of movable property/fixed deposit equivalent to the proceeds of crime hence the application is also dismissed. However, it is made clear that nothing expressed herein will affect the right of any party in criminal trial. Further, no coercive action qua the immovable property accepts under exceptional circumstances, in view of the judgment of Vijay Madanlal Choudhary vs. U.O.I. 2022 SCC OnLine SC 929.

¶59

Appeal and application for substitution are dismissed .

¶60

Pronounced on this 08^th Day of April, 2025.

¶61

(Rajesh Malhotra) Member

FPA-PMLA-619/LKW/2014 of Shri Shafaat Ejaz Siddiqui & Ors. v. The Deputy Director, Directorate of Enforcement, Lucknow

Case brief

What is this about?

What did the court decide?

FPA-PMLA-619/LKW/2014 of Shri Shafaat Ejaz Siddiqui & Ors. 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

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

All orders in this case

Similar cases