FEMA, BANKING & INSURANCE: The properties of the appellant, accused of money laundering, were provisionally attached by the Enforcement Directorate (ED), and this attachment was upheld by the Adjudicating Authority. In situations where the proceeds of crime have been siphoned off or have disappeared, it is permissible for the authorities to attach properties of equivalent value. The appellant was unable to substantiate the purchase of the property in question, as the total value of the proceeds had vanished. Thus, the Adjudicating Authority’s decision to attach the property was deemed appropriate. Consequently, the appellant’s appeal against the order confirming this attachment is dismissed.

APPELLATE TRIBUNAL SAFEMA, NEW DELHI

Dinesh Pratap Singh v. Deputy Director, Directorate of Enforcement

JUSTICE MUNISHWAR NATH BHANDARI, Chairman
AND BALESH KUMAR, Member

Case Numbers:
MP-PMLA-12006 & 12008 (DDN) OF 2023
Misc. MP-PMLA-8145 & 8146 (DDN) OF 2021
Misc. MP-PMLA-7332 & 7334 (DDN) OF 2020 (Stay)
FPA-PMLA-3631 & 3632 (DDN) OF 2020

DATE: NOVEMBER 5, 2024

JUDGMENT OVERVIEW:
This judgment pertains to the attachment of property involved in money laundering under Section 5, in conjunction with Section 3, of the Prevention of Money Laundering Act, 2002. An FIR was registered alleging the fraudulent distribution of inflated compensation in relation to land acquisition for road widening. The investigation revealed that various accused, including the appellant, colluded with revenue officers to unlawfully distribute exorbitant compensation, resulting in significant loss to government funds.

KEY FINDINGS:

  1. An ECIR was recorded by the ED, leading to the provisional attachment of the appellant’s property under Section 5(1) of the PMLA. The Adjudicating Authority confirmed this attachment.
  2. The appellant contended that the properties attached were not procured with proceeds of crime, asserting that judgment should rest upon the value of the property detained. However, it was ruled that in instances where proceeds of crime are untraceable, it is valid to attach properties of equivalent value.
  3. The appellant failed to provide documentation justifying the property acquisition apart from agricultural income. The absence of credible evidence establishing the source of income renders the attachment lawful.
  4. Previous rulings from various courts reinforce that the definition of “proceeds of crime” encompasses situations where property value is taken into consideration when the original proceeds are absent.
  5. Due to the excessive delay in adjudication caused in part by the COVID-19 pandemic, the statutory period for confirmation of the provisional attachment was deemed unaffected, as the Supreme Court had ruled that certain timelines would be excluded.

CONCLUSION:
As the requisite legal provisions under Section 3 of the PMLA were satisfied and no merit was found in the appellant’s arguments, the appeal is denied.

CASE REVIEW:
Precedents from cases such as Hygro Chemicals Pharmtek Pvt. Limited v. Union of India & Ors and Vijay Madanlal Chaudhary v. Union of India have been referenced to substantiate the conclusions of this judgment.

ORDER:
The appeal fails and is hereby dismissed.