K.Balasubramanian Vs the State

The writ petitioner has assailed an order dated July 27, 2023 passed by the Appellate Tribunal exercising jurisdiction under the Prevention of Money Laundering Act, 2002 in MP-PMLA-9302/KOL/2022 (Stay) FPA-PMLA-4541/KOL/2022 (Shri K.Balasubramanian vs. The Assistant Director, Directorate of Enforcement, Kolkata and others).

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Learned advocate appearing for the writ petitioner has submitted that, the appellant suffered an order dated March 02, 2021 directing freeze of his bank account. He has submitted that, the appellant was proceeded under section 120B/420 of Indian Penal Code, 1860 and sections 7/12 of the Prevention of Corruption Act by a First Information Report (FIR) dated August 18, 2017. After investigation a charge sheet had been submitted on December 29, 2017.

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Referring to the facts of the case, learned advocate for the writ petitioner has submitted that, as on the date of the order of freeze of the money available in the bank account of the writ petitioner was that of the proceeds received from the National Highway Authority of India (NHAI) in respect of acquisition of land made by NHAI. He has referred to the statement of the bank account of the writ petitioner in this regard.

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With regard to the alleged receipt of illegal gratification, he has contended that, the sum alleged to be received is Rs.31,54,000/- which the writ petitioner had received with regard to an agreement for sale. Subsequently, such amount had been refunded both by cheque and cash. He has contended that the sum of Rs.19.00 lakhs had been refunded by bank transfer and balance in cash. He has contended that, the writ petitioner was falsely implicated in the police case and that the provision of Prevention of Money Laundering Act was incorrectly invoked.

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Learned advocate appearing for the writ petitioner has contended that, both the Adjudicating Authority as also the Appellate Authority

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failed to appreciate the facts in their correct perspective and erred in directing continuance of the order of attachment.

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Learned advocate appearing for the respondent has contended that, the writ petitioner is being correctly proceeded under the Act of 2002. She has referred to the statement of accounts of the bank account of the writ petitioner and contended that, illegal gratification was received by the writ petitioner over a period of time by bank transfer. The present bank account frozen contained the proceeds of the crime and therefore, the order of freeze was directed to be continued.

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An FIR was registered by the Central Bureau of Investigation (CBI) on August 18, 2017 under sections 120B/420 of the Indian Penal Code and sections 7/12/13(2)/13(1)(d) of the Prevention of Corruption Act in which the charge sheet No.3 dated December 29, 2017 was filed under sections 120B/420 of the Indian Penal Code,1870 and Sections 7/12 of the Prevention of Corruption Act against the then Deputy Chief Engineer, Andaman and Lakshadweep Harbour Works, at Port Blair, the writ petitioner as Junior Engineer of such organization and M/s A. Manikam & Sons represented by its partners Mr. A. Manickam, Mr. M.Muraleedharan and Mr. M.Mohan, the enlisted contractor.

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It is stated in such charge sheet that, the then Deputy Chief Engineer and the writ petitioner by abusing their official position as public servant, entered into criminal conspiracy amongst themselves and with M/s A.Manickam & Sons, enlisted contractor represented by its

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partners and in furtherance of such criminal conspiracy cheated the Andaman and Lakshadweep Harbour Works and obtained illegal gratification to the tune of Rs.41.54 lakhs for giving unfair favour to the contractor. Such contractor had been awarded work amounting to Rs.11,42,92,405/- and such contractor had paid illegal gratification of Rs.31,54,000/- by fund transfer from their bank account to the writ petitioner. Such contractor had also paid illegal gratification of Rs.10.00 lakhs through fund transfer to the then Deputy Chief Engineer.

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Sections 120B/420 of the Indian Penal Code and Sections 7 & 12 of the Prevention of Corruption Act being within the purview of Act of 2002 as a scheduled offence, the Enforcement Directorate (ED), Kolkata recorded an ECIR dated March 03, 2020 subsequent to which investigation under the Act of 2002 were initiated. Searches had been conducted upon six bank accounts held in the name of the accused persons.

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The Assistant Director, Enforcement Directorate, Kolkata had filed an application before the Adjudicating Authority under section 17(4) of the Act of 2002 on March 26, 2021 against the writ petitioner for continuation of the order of freeze served under Section 17(1-A) of the Act of 2002. The Adjudicating Authority, had passed an order dated December 06, 2021 after issuing a show cause notice dated April 01, 2021 and after considering the response of the writ petitioner.

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Being aggrieved by the order dated December 06, 2021 passed by the Adjudicating Authority exercising jurisdiction under the Act of 2002, in OA No.467/2021, the writ petitioner had preferred an appeal there from before the Appellate Tribunal being MP-PMLA-9302/KOL/2022 (Stay) FPA-PMLA-4541/KOL/2022. The Appellate Tribunal had dismissed the appeal by the impugned order dated July 27, 2023.

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Records produced before us has established that, a sum of Rs.31,54,000/- had been received by the writ petitioner by way of bank transfer from the enlisted contractor commencing from March 18, 2010 to till April 25, 2011.

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This fact of receipt of money has not been denied by the writ petitioner at every stage of adjudication proceedings commencing from its reply to the show cause notice till the Appellate Authority.

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The writ petitioner has however contended that, the sum of Rs.31,54,000/- had been received pursuant to an agreement for sale entered into between the writ petitioner and the enlisted contractor on December 25, 2010 and that the writ petitioner had refunded the sum of Rs.19.00 lakhs by way of bank transfer and the balance by way of cash. Moreover, the writ petitioner had received a sum of Rs.49,45,740/- by way of bank transfer from NHAI on July 31, 2020 in respect of land acquisition proceedings and that the proceeds of such acquisition was lying in the bank account when it was frozen.

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The bank account of the writ petitioner has established that he received a sum of Rs.14,04,000/- from the enlisted contractor prior to the so called agreement for sale. He had also received a sum of Rs.11,54,000/- from the enlisted contractor before December 25, 2010 being the date of the so called agreement for sale. Such agreement for sale has no mention of such payments. The sale agreement had been disbelieved, rightly so, by the Adjudicating Authority as also by the Appellate Authority on the ground that, the money transaction in relation thereto was not established. More particularly, writ petitioner had acted in violation of the Income Tax Act in claiming to refund the consideration for sale of land, by cash in excess of Rs.20,000/-

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Bank account in respect of which the initial freeze order was passed and continued by the Appellate Authority, was used for the purpose of receiving the illegal gratification. Such bank account contained the proceeds of the crime within the meaning of the Act of 2002. Therefore, it was imperative that, the proceeds in such bank account remains frozen till a decision is arrived at with regard to the crime alleged against the writ petitioner.

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Writ petitioner was heard at every stage of the proceedings. Writ petitioner filed a written reply to the show cause notice. Writ petitioner preferred the appeal before the Appellate Authority. The order of the Adjudicating Authority as also ofthe Appellate Authority are well reasoned. No portion thereof has been established to be perverse.

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