Dismissed

FPA-PMLA-734/DLI/2014 of Nishi Sarkar v. The Deputy Director Directorate of Enforcement, Delhi

ATFP19 Jul 2025FPA-PMLA-734/DLI/2014

Case brief

AI extract

What is this about?

The Tribunal dismissed the appellant's appeal against the confirmation of provisional attachment of a residential property under PMLA. The court held the property was proceeds of crime due to unexplained funding and rejected requests for substitution with cash and waiver of occupation charges, as the Rules do not permit such substitution for immovable property.

What did the court decide?

The appeal was dismissed; applications for substitution of property with cash and waiver of occupation charges were also rejected.

FPA-PMLA-734/DLI/2014 of Nishi Sarkar Versus The Deputy Director… — Money Laundering | ATFP (2025)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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MP-PMLA-11214/DLI/2023 (Misc.) MP-PMLA-7489/DLI/2020 (Stay) MP-PMLA-5329/DLI/2018 (Misc.) MP-PMLA-1291/DLI/2014 (Stay) FPA-PMLA-734/DLI/2014

Nishi Sarkar

… Appellant

Versus

The Deputy Director Directorate of Enforcement, Delhi

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… Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellant	:	Sh. R.D. Tyagi, Adv. Sh. Pranab Tyagi, Adv.
For the Respondent	:	Sh. Aditya Singla, Adv. Sh. Sahil Parashar, Adv.
CORAM
SHRI BALESH KUMAR	:	MEMBER

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FINAL ORDER

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19.08.2025

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This Order disposes of the Appeal No. FPA-PMLA-734/DLI/2014 filed by Sh. Nishi Sarkar against the Order dated 04.08.2014 (Impugned Order) passed by the Ld. Adjudicating Authority under the Prevention of Money Laundering Act, 2002, (PMLA) in the Original Complaint (OC) No. 273/2014. The Impugned Order confirmed the Provisional Attachment of the property House No. 1898-A, Gali No. 18, Govindpuri Extension, Kalkaji, New Delhi valued at Rs. 11,00,000/- made vide the Provisional Attachment Order (PAO) No. 02/2014 dated 10.03.2014 in ECIR No. ECIR/08/DLZO/2013 registered by the Respondent Directorate. The allegation against the Appellant related to having placed domestic helps as bonded labour with employers in as much as they were paid salaries below the minimum wages stipulated by the Minimum Wages Act, 1948, of NCT, Delhi vide Notification No. F.12(1to 29)/92/mw/Lab dated 15.02.1994, so as to earn commissions and thereby having committed

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FPA-PMLA-734/DLI/2014 Page 1 of 9

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offence of money-laundering. The Appellant had generated funds which resulted in the purchase of the impugned property.

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2. Ld. Counsel for the Appellant argued that the role of the Appellant has truthfully come out in the statements tendered under Section 50 of PMLA that the Appellant provided domestic help to the needy persons. The Appellant received only a small amount of the commission for his services. The allegations made against the Appelant are false and fabricated. He further submitted that the manner of working of the alleged bonded labor is not covered by the definition of the bonded labour. The domestic helps were spending maximum time with the employer who was taking the service from them. The Respondent Directorate failed to record the statement of the said labourers.

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3. Ld. Counsel for the Appellant contended that the calculation of the proceeds of crime has been done in a mechanical manner. He stated that the impugned property was purchased by the Appellant on 23.04.2013 for Rs. 11,00,000/- after disposing of his property in Faridabad. The finding of the Ld. Adjudicating Authority that the said property was purchased from the illegal sources of income is contrary to the facts. The Appellant has already explained about the funding of the purchase of his property at 228, First Floor, Block A, DDA Flat, Kalkaji, New Delhi for an amount of Rs. 2,00,000/-. He therefore pleaded that even the property which has been attached is from legal sources of income of the Appellant. He drew attention to the copy of the sale deed which was submitted to show the genuine purchase of the impugned property.

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4. Ld. Counsel for the Appellant also argued that the Eviction Notice issued under Section 8 (4) of PMLA was stayed by this Tribunal on 19.12.2014 subject to Appellant depositing Rs. 10,000/- per month as charges for use and occupation of this impugned property with effect from FPA-PMLA-734/DLI/2014 Page 2 of 9

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01.11.2014. This Order was continued vide Order dated 05.10.2018 of this Tribunal. On 21.08.2020, the Appellant contended that he has already deposited Rs. 2,00,000/- whereas the total proceeds of crime (POC) is little more than Rs. 9,00,000/-. This Tribunal directed the Appellant to make further deposit of Rs. 2,00,000/- by 30.09.2020 and to continue depositing Rs. 10,000/- per month towards the use and occupation charges as earlier ordered by this Tribunal on 19.12.2014. The continued payment was ordered on 01.10.2020. It was also noted that the Counsel for the Respondent had informed that Rs. 2,00,000/- was deposited by the Appellant. Ld. Counsel for the Appellant vide his Application No. 11214 of 2023 prayed for waiver of the occupation charges since he had already deposited Rs. 3,70,000/- till date. Ld. Counsel for the Appellant prayed for disposal of the Application dated 14.03.2024 for allowing to deposit the proceeds of crime amount as determined in the OC after adjusting the amount of Rs. 3,70,000/- already deposited. Ld. Counsel for the Appellant pleaded that the substitution of the attached immovable property may be allowed on his depositing the balance amount of Rs. 6,24,290/- as the total POC estimated by the Respondent Directorate is Rs. 9,94,290/-. Ld. Counsel contended that for another accused Sh. Nitai Majumdar the attached Maruti Van was released on his payment of Rs. 20,000/-. Ld. Counsel for the Appellant contended that there is no bonded labor in India as was observed by the Hon’ble Supreme Court in a matter. Ld. Counsel for the Appellant prayed for allowing the Appeal.

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5. Ld. Counsel for the Respondent argued that the Appellant in his own statements under Section 50 of PMLA admitted that he started Pooja Domestic Servant Service in the year 2000. He used to charge a commission of Rs. 1,000/- to Rs. 1,500/- for each placement in the year

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FPA-PMLA-734/DLI/2014 Page 3 of 9

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He raised his commission to Rs. 5,000/- to Rs. 6,000/- in the year 2005 and the current charges were between Rs. 18,000/- to Rs. 20,000/from each employer. The wages were fixed by common consent of the employer, domestic help and the Appellant. The wages varied from Rs. 1,500/- to Rs. 2,000/- in the year 2000 which increased to Rs. 4,000/- to Rs. 5,000/- per month in the year 2005. The Appellant admitted having arranged placements of about 35 servants for each year for a period of 9 to 10 years, which, however, came down after the raid. He denied having done the placements of a minor for whom he contended to be around 20 years. He was unable to explain in his Income Tax Returns (ITRs), the commissions ranging from Rs. 4,75,812/- to Rs. 8,32,680/-. The Appellant did contend that he often sent wages of deployed servants to the families in villages. He contended that the DDA Flat was purchased by him in 2003 for Rs. 2,00,000/- financed from his vegetable business and sale of ancestral land share in West Bengal. He had also contended that the impugned property was purchased through sale of land in Faridabad. 6. Ld. Counsel for the Respondent further argued that the prosecution of the Appellant lodged under the scheduled offence and under the provisions of PMLA are still to be finalized and concluded. Ld. Counsel also submitted that the proceeds of crime have been worked out during the course of investigation in a detailed manner as reflected in the impugned order. Ld. Counsel also stated that the rescued labourers had been declared bonded labor by SDM Hauz Khas, New Delhi vide Order No. 9111-9117 dated 23.11.2011. Ld. Counsel also contended that the Appellant had bought the plot in Faridabad in the year 2000 for an amount of Rs. 1,60,000/- on installments which were arranged to be paid from the business of Pooja Domestic Servants Service, which was nothing but proceeds of crime. Ld. Counsel pleaded that the Impugned Order has

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FPA-PMLA-734/DLI/2014 Page 4 of 9

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held the impugned property as proceeds of crime and the allegation of money-laundering has been upheld on prima facie basis. Ld. Counsel also argued that the Application of the Appellant for substitution of the impugned property cannot be allowed in view of there being no provision under the statute or the Rules thereunder for substitution of the immovable property, unlike the Rules for movable property whereby the attached property can be appropriately substituted. Ld. Counsel in this regard cited Sub-Rule 2, Rule 5 of The Prevention of Money Laundering (Taking Possession Of Attached Or Frozen Properties by the Adjudicating Authority) Rules, 2013. Ld. Counsel for the Respondent therefore pleaded that in view of the pending trials the attached property needs to be kept secure for confiscation under the PMLA. Ld. Counsel for the respondent, therefore, pleaded that the Appeal may be dismissed.

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7. I have considered the rival submissions and the material on record. I find that the Appellant has not disputed conducting his business of M/s Pooja Domestic Servants Service. It is also admitted by him in statements that the business of his firm related to placement of domestic helps with various employers. From the facts, it is obvious that the wages which were being paid by the employers to the domestic helps were fixed in consultation with the Appellant. The investigations in the scheduled offence as corroborated by further investigations in money-laundering offence bring out that the wages were less than those prescribed under the Minimum Wages Act as applicable at the relevant point of time. It is also on record that the such employment was also of children below the prescribed age. The Appellant has denied being instrumental in employment of children, however, no evidence to this effect has been placed. It is also on record that the trials of the scheduled offence and the money-laundering offence are yet to be completed.

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FPA-PMLA-734/DLI/2014 Page 5 of 9

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8. The Appellant has put up a defense against the finding in the Impugned Order that the property which has been attached is proceeds of crime. In this regard, Section 2 (1) (u) may be considered and is therefore reproduced below;

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““proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the country [or abroad];

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[Explanation.- For the removal of doubts, it is hereby clarified that “proceeds of crime” including property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence;]”

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The Respondent has alleged that the impugned property comprising of House No. 1898-A, Gali No. 18, Govindpuri Extension, Kalkaji, New Delhi is not only owned by the Appellant but was also purchased by him for Rs. 11,00,000/- on 23.04.2013. It is noted that the Appellant has failed to explain the source of funding the amount of Rs. 11,00,000/-. His contention that the said property was purchased after sale of his plot of land in Faridabad fails to account for the entire amount of Rs. 11,00,000/-. While the Appellant has placed copies of the sale deeds for the impugned property as executed between himself and Sh. Sachin Valecha and Sh. Manoj Kumar Valecha as well as that between Valechas and Sh. Harsh Choudhary, the previous vendor, there is nothing on record as to show the sale of the plot of land which the Appellant has claimed to be his own in Faridabad. Therefore, the contention of the Appellant that the sale of plot of land in Faridabad had funded his purchase of the impugned property cannot be accepted. It therefore follows that the impugned property to the extent of Rs. 9,94,290/- was funded out of the proceeds of crime generated by the Appellant through his domestic servant business.

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FPA-PMLA-734/DLI/2014 Page 6 of 9

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9. The Appellant has also argued that since vide Order dated 19.12.2014 of this Tribunal he has already deposited a large sum of money as user and occupation charges at the rate of Rs. 10,000/- per month, the total amount already deposited by him may be deducted so as to allow him to deposit the remaining amount and the impugned property be released to him. In this regard, Ld. Counsel for the Respondent has already stated that the Sub-Rule 2, Rule 5 of The Prevention of Money Laundering (Taking Possession Of Attached Or Frozen Properties by the Adjudicating Authority) Rules, 2013, does not permit the substitution of the impugned property by either cash or any other form of asset. In this regard, the provision is cited below;

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“5. Manner of taking possession of immovable property.-

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(1) Where the immovable property confirmed by the Adjudicating Authority is in the form of a land, building, house, flat, etc., a notice shall be issued to the Registrar having jurisdiction of the area along with the provisional attachment order and order of the Adjudicating Authority confirming such attachment requiring the Registrar not to transfer or create any interest in such property until further orders and a copy of the order confirming the attachment shall be affixed at a conspicuous part of the property;

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(2) Where the immovable property confirmed by the Adjudicating Authority is in the form of land, building, house, flat, etc., and is occupied by the owner, the authorized officer shall issue a notice of eviction of ten days so as to prevent the person from enjoying such property and after issuing of such notice if the premises is not vacated within the stipulated time, such occupant shall be evicted and the possession shall be taken by seeking the assistance of the local Authorities in terms of section 54 of the Act;”

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10. Since, the impugned property has been occupied by the Appellant as owner of the immovable property, provisions of the aforementioned Rule is squarely applicable in his case. It is clear that there is no scope in

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the said provision as to allow for substitution of the attachment of the said FPA-PMLA-734/DLI/2014 Page 7 of 9

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property through payment of full proceeds of crime. This is in contrast to Sub-Rule 2 of Rule 4 prescribed in relation to the movable property. The Sub-Rule is cited below;

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“4. Manner of taking possession of immovable property-

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(1) Where the attached property confirmed under sub-section (3) of section 8 of the Act is a movable property, the authorized officer shall take physical possession of such and deposit it in a warehouse or a storage place.

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(2) Where the attached property confirmed by the Adjudicating Authority, is liable to speedy and natural decay or the expenses of maintenance is likely to exceed its value, the authorized officer shall sell such property with the leave of the concerned Special Court or Adjudicating Authority, as the case may be, and deposit the sale proceeds in the nearest Government Treasury or branch of the State Bank of India or its subsidiaries or in any nationalized bank in fixed deposit and retain the receipt thereof:

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Provided that where the owner of the property furnishes the fixed deposit receipt of a nationalized bank equivalent to the value of property in the name of Director of Enforcement, the authorized officer may accept and retain such fixed deposit receipt as security and send a report to the Special Court or Adjudicating Authority, as the case may be, for information or appropriate action.

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Provided further that where the movable property is a mode of conveyance of any description, the authorized officer, after obtaining its valuation report from the Motor Licensing Authority or any other authority, as the case may be, may accept and retain the fixed deposit receipt of a nationalized bank equivalent to the value of the movable property as security in the name of Director of Enforcement and send a report to the Special Court or Adjudicating Authority, as the case may be, for information and appropriate action”.

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These provisions clearly bring out that how the Motor Vehicle was allowed

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to be substituted by payment of cash as security in the case of another FPA-PMLA-734/DLI/2014 Page 8 of 9

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accused. In view of the aforementioned, the contentions of the Appellant made in his Applications filed on 24.03.2023 and 14.03.2024 are rejected and the Applications are dismissed.

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11. It is also to be observed that his earlier Application praying waiving of the occupation and user charges due to Covid and having already paid Rs. 3,70,000/- also cannot stand. The occupation and user charges were imposed by this Tribunal on 19.12.2014 in lieu of allowing the Appellant to continue with the possession of the impugned property as the Appellant had been served Notice under Section 8 (4) of PMLA. Payment of such charges allowed the Appellant to continue to enjoy the attached property. It is also necessary to keep in view that the provisions of the statute provide for attachment of the property so as to secure it till its confiscation if the Appellant is convicted for the offence of money-laundering. I, therefore, also dismiss the Application dated 27.02.2023.

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12. In view of the aforementioned discussions and findings, I find the Appeal to be devoid of merit and therefore, dismiss the said Appeal. Pending Applications, if any, are also accordingly disposed of.

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(Balesh Kumar) Member

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New Delhi 19^th August, 2025

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‘ST’

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FPA-PMLA-734/DLI/2014 Page 9 of 9

FPA-PMLA-734/DLI/2014 of Nishi Sarkar v. The Deputy Director Directorate of Enforcement, Delhi

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FPA-PMLA-734/DLI/2014 of Nishi Sarkar v. The Deputy Director Directorate of Enforcement, Delhi

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