2025 (1) TMI 1264 - AT - Money Laundering

SAFEMA Tribunal upholds provisional attachment of 52 properties in money laundering case despite appellants' bonafide purchaser claims

Smt. Shanti Devi Chaurasia, Mr. Saurabh Modi, Mr. Anurag Chaurasia, Mr. Anil Agarwal, Mr, Sunil Kumar Agarwal, Kailash Tiwari, Divya Tiwari, Shri Sameer Vishnoi, M/s. Sri Preeti Trumala Agro Farm Pvt. Ltd, M/s. Tejaswi Sunshine Pvt. Ltd, Smt. Preeti Godara, Smt. Shilpi Vishnoi, Meena Godara, Nirmala Godara, Smt. Radha Vishnoi, Tapasya Rai, Surya Prakash Punia, Shri Rajnikant Tiwari, Suryakant Tiwari, M/s. Indermani Minerals India Pvt. Ltd, M/s. KJSL Coal & Power Pvt. Ltd, Versus The Deputy Director Directorate of Enforcement Raipur

Smt. Shanti Devi Chaurasia, Mr. Saurabh Modi, Mr. Anurag Chaurasia, Mr. Anil Agarwal, Mr, Sunil Kumar Agarwal, Kailash Tiwari, Divya Tiwari, Shri Sameer ... ISSUES PRESENTED and CONSIDEREDThe Tribunal considered several core legal issues in the appeals challenging the order under the Prevention of Money Laundering Act, 2002 (PMLA). These issues included:1. Whether the Adjudicating Authority applied its mind in confirming the provisional attachment order.2. The existence of a predicate offence necessary for proceedings under the PMLA.3. The nexus between the appellants and the alleged proceeds of crime.4. Whether the appellants were bona fide purchasers of the attached properties.5. The adequacy of reasons to believe in the show cause notice issued by the Adjudicating Authority.6. Claims by some appellants that they were victims of extortion by the syndicate led by Suryakant Tiwari.ISSUE-WISE DETAILED ANALYSISI. Non-application of mind by the Adjudicating AuthorityThe appellants argued that the Adjudicating Authority failed to consider the factual and legal issues raised, particularly the disclosure of the source of funds used to acquire the properties. However, the Tribunal found that the Adjudicating Authority had considered the pleas and confirmed the attachment order based on the evidence presented, indicating that there was no non-application of mind.II. Absence of Predicate OffenceThe appellants contended that the absence of a predicate offence invalidated the proceedings under the PMLA. They argued that the charges under section 384 IPC were dropped, making the ECIR and subsequent proceedings untenable. The Tribunal, referencing a Supreme Court judgment in the case of Saumya Chaurasia, held that the predicate offence was not dropped but transferred to Chhattisgarh State Police, and thus the proceedings under the PMLA were valid.III. No Nexus between the Appellant and Alleged Proceeds of CrimeThe appellants claimed no involvement in the generation or concealment of the proceeds of crime, arguing that they were neither named in the FIR nor the ECIR. The Tribunal found that the involvement of the appellants was evident from the investigation, which revealed their role in layering and integrating proceeds of crime into legitimate assets. The Tribunal emphasized that the properties in question were acquired during the period of the alleged criminal activities.IV. The Appellants as Bona Fide PurchasersThe appellants argued that they were bona fide purchasers, having disclosed the sources of funds used for property acquisition. The Tribunal noted that despite claims of bona fide acquisition, the appellants failed to provide sufficient evidence to substantiate their claims. The Tribunal highlighted that properties acquired during the period of criminal activity, even if purchased before the registration of the FIR, could be subject to attachment if proceeds of crime were involved.V. Absence of Reasons to Believe in the Show Cause NoticeThe appellants challenged the show cause notice for lacking specific reasons to believe against each appellant. The Tribunal found that the Adjudicating Authority had provided adequate reasons to believe in the notice, applicable to all noticees collectively. It was not necessary to issue separate reasons for each appellant, especially when they were in possession of proceeds of crime.VI. Appellants as Victims of ExtortionSome appellants claimed to be victims of extortion by the syndicate led by Suryakant Tiwari, arguing that they were coerced into paying illegal levies. The Tribunal found this argument to be inconsistent with the appellants' actions, as no FIR was filed against the alleged extortionists. This claim inadvertently supported the respondents' case of systematic extortion by the syndicate.SIGNIFICANT HOLDINGSThe Tribunal upheld the confirmation of the provisional attachment order, dismissing the appeals. It reaffirmed the existence of a predicate offence and the nexus between the appellants and the proceeds of crime. The Tribunal emphasized the broad definition of 'proceeds of crime' under the PMLA, which includes properties acquired indirectly from criminal activities. It also clarified that properties acquired before the registration of an FIR could still be attached if they were linked to criminal proceeds.The Tribunal concluded that the appellants failed to provide credible evidence to substantiate their claims of bona fide acquisition and the absence of a nexus with the proceeds of crime. It found the arguments regarding the absence of reasons to believe and claims of extortion unconvincing, leading to the dismissal of the appeals.