TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 203
X X X X Extracts X X X X
X X X X Extracts X X X X
....2010 Attached 2. Flat No. 0458- T1-TF-0004, Abhilasha Home- 1, Sushant City, Gegal, NH-8, Ajmer Lata Manga 5,21,550/ 26.12.2008 & exchanged with s.no. 1, on 24.02.2010 Attached 2. As per the facts of the case an FIR was registered by Central Bureau of Investigation (CBI), Jaipur against Shri Muzaffar Ali Bohra (D-1), the then Accounts Assistant in the Office of the Divisional Finance Manager, North Western Railway, Ajmer, (presently posted at FA & CAO, Chittaranjan Locomotive Works, Chittranjan) for the offence punishable under Sections 120-B IPC read with Section 201, 409, 420, 467, 468, 471, 477A of Indian Penal Code, 1860 and also r/w Section 13(2) r/w Section 13(1)(c) & (d) of the Prevention of Corruption Act, 1988 for alleged embezzlement of government funds and also against Shri Ashok Kumar Mangal S/o Shri Om Prakash Mangal, the then Assistant Divisional Finance Manager in the Office of the Senior Divisional Finance Manager, North Western Railway. Ajmer (retired since 31.12.2011) for the commission of offences punishable under section 120-B IPC read with Section 201 & 435 of Indian Penal Code. CBI Jaipur filed a Chargesheet No. 01 dated 23.01.2012 in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Ali Bohra admitted that he had given Rs. 50 to 60 lacs to Shri Ashok Mangal, the then Assistant Divisional Finance Manager and Smt. Lata Mangal w/o Shri Ashok Mangal, as they were having knowledge of fraud being committed by him. Shri Muzaffar Ali Bohra also kept the gold coins and jewellery in custody of Smt. Lata Mangal which was later-on seized by RPF from their lockers. The money and gold coins found in locker of Smt. Lata Mangal and Shri Ashok Mangal were part of embezzled money. The cash money was deposited in Ajmer Co-operative Thrift and Savings Society (hereinafter ACTS) accounts of Smt. Lata Mangal and Shri Ashok Mangal, as he tendered the amounts to both of them from time to time. He also himself deposited some embezzled amount in the ACTS accounts of Smt. Lata Mangal and Shri Ashok Mangal. Shri Muzaffar Ali Bohra further stated that he opened a Cricket Academy in Ajmer and Shri Ashok Mangal was holding the post of President and he was himself Secretary. Shri Muzaffar Ali invested around Rs. 76 lacs in various activities like maintenance of Railway Cricket ground, Ajmer, purchase of cricket kits for players, organising yearly Cricket Tournament and bear all its expenses.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ouple from August 2006 to April 2011. Out of Rs. 50 to 60 lacs given by Mr. Bohra to Shri Ashok Mangal and Smt. Lata Mangal, previously, ED passed the PAO No. 02/2016 dated 30.09.2016 vide which the property of Smt. Lata Mangal was attached valued at Rs. 5.12 lacs. The said PAO No. 02/2016 was confirmed by the Adjudicating Authority vide its order dated 20.02.2017 in Original Complaint No.655/2016. During further investigation by ED, Shri Ashok Mangal could not provide any satisfactory explanation towards Rs. 2,42,000/- burnt by him at the time of search at his residence by RPF. He also spent Rs. 15 to 16 lacs in the marriage of their daughter Ms. Bhumika Mangal. From 2006 to 2012, Shri Ashok Mangal and Smt. Lata Mangal invested Rs. 48,69,292/- in three immovable properties and Rs. 2,40,000/- for purchase of Alto car. Accordingly, on the basis of statement of Shri Muzaffar Ali Bohra, wherein he stated that out of sum of Rs. 4,16,12,945/- embezzled by him, he gave about Rs. 50 to 60 lacs to Shri Ashok Mangal and Smt. Lata Mangal, the ED calculated the total proceeds of crime transferred to the present appellant as Rs. 60 lacs. Out of said POC of Rs. 60 lacs, the property of Smt. Lat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t in different Sections/ Departments. They were on cordial terms. During the period 1990 till 2011, Shri Ashok Mangal was posted in and out of Ajmer several times. Shri Muzaffar Ali Bohra used to act as a family friend and assist Smt. Lata Mangal for any family need including the cash deposits and withdrawals with the bank. His wife, Smt. Lata Mangal used to give bearer cheques to Shri Muzaffar Ali Bohra and he used to withdraw cash for them and he also used to deposit family savings to the accounts of appellant and other family members. The said savings deposit by Shri Muzaffar Ali Bohra cannot be presumed as proceeds of crime, as alleged, being the own money of the appellant and their family members. He further stressed that there was no reason to believe on the part of the Adjudicating Authority for issuance of the Show Cause Notice to the appellant. The said show cause notice is silent regarding any such reason for issuing the same. There is nothing on record that the properties acquired by the appellant were purchased from part of any proceeds of crime, as alleged. The statement of Shri Muzaffar Ali Bohra u/s. 50 of PMLA is apparently false & incorrect to implicate the appella....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as already been recovered, it would be illegal or amount to an unjust enrichment for the Government to confiscate the property pertaining to the Appellant. That in addition the accounts of the Appellant have been frozen with funds to the extent of Rs. 6.55 Lakhs (Please see Charge Sheet dated 23.01.2012). He has repeatedly claimed that the transaction relating to Flat No. 0458-T1-SF-005, Abhilasha Home Gegal, NH-8, Ajmer is a genuine and bona fide transaction. It has also been submitted to the Deputy Director and before the Ld. Adjudicating Authority that the property has been bought out of a legitimate source of income. As a matter of fact, no evidence has been brought forth by the Deputy Director to stake his claim that the three cash deposits of Rs. 20,000/- and Rs. 10,000/- on 22.12.2008 and 23.12.2008 respectively and Rs. 40,000/- on 06.04.2009 into the account of the Appellant has been made by Mr. Muzaffir Ali Bohra for the purchase of the said flat. The only evidence that has been stated as part of the rejoinder to the preliminary attachment order is that the only cash withdrawal between 23.12.2008 and 06.04.2009 is Rs. 5,000/- and the deposit amounts to Rs. 75,000/- evid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed to the proceeds of crime, regardless of the person holding that property. The law on this issue now stands settled by the landmark judgment of the Hon'ble Supreme Court in the case of Vijay Madanlal Choudhary and Ors. vs. Union of India & Ors., MANU/SC/0924/2022. The relevant text from the judgment is quoted hereunder: "65... The sweep of Section 5(1) is not limited to the Accused named in the criminal activity relating to a scheduled offence. It would apply to any person (not necessarily being Accused in the scheduled offence), if he is involved in any process or activity connected with the proceeds of crime. Such a person besides facing the consequence of provisional attachment order, may end up in being named as Accused in the complaint to be filed by the authorised officer concerning offence Under Section 3 of the 2002 Act. 69. We find force in the stand taken by the Union of India that the objectives of enacting the 2002 Act was the attachment and confiscation of proceeds of crime which is the quintessence so as to combat the evil of money-laundering. The second proviso, therefore, addresses the broad objectives of the 2002 Act to reach the proceeds of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e accounts of appellant and other family members. It is strongly contended that the said savings deposit by Shri Muzaffar Ali Bohra cannot be presumed as proceeds of crime, as alleged, being the own money of the appellant and their family members. However, Sh. Muzaffar Ali Bohra has specifically stated in his statement u/s. 50 of PMLA that the said defrauded amount was also used for purchasing gold coins, LIC bonds and cricket kit and other sports material of cricket academy in possession of Smt. Lata Mangal from time to time. Shri Muzaffar Ali Bohra admitted that out of proceeds of crime, he had given Rs. 50 to 60 lacs to Shri Ashok Mangal, the then Assistant Divisional Finance Manager and Smt. Lata Mangal w/o Shri Ashok Mangal, as they were having knowledge of fraud being committed by him. Shri Muzaffar Ali Bohra also kept the gold coins and jewellery in custody of Smt. Lata Mangal, which was later-on seized by RPF from their lockers. The money and gold coins found in the locker of Smt. Lata Mangal and Shri Ashok Mangal were part of embezzled money. The cash money was deposited in Ajmer Co-operative Thrift and Savings Society (hereinafter ACTS) accounts of Smt. Lata Mangal and Sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stigation conducted by ED, during the period from April-2006 to April, 2011, Sh. Ashok Mangal got total income Rs. 21,31,901/- (Net salary: Rs. 14,91,546/-, PF: Rs. 5,85,000/-, Arrears: Rs. 55,355/-) as difference of Rs. 5,34,429/- of salary as undervalued; Rs. 67,520/- of PF as undervalued; & Rs. 55,355 of arrears as not calculated; needs to be added in his net salary. Hence, it is stressed that there is miscalculation during the investigation. We are not satisfied with the contention of Ld. Counsel for the appellant in this regard. Sh. Ashok Mangal has two bank accounts i.e. BOB salary account no. 25290100004379 & ACTS SB/MCD Account No. G-72 which reveals that during the period from 04.10.2006 to 10.01.2011, Sh. Ashok Mangal had deposited cash amount total Rs. 6,27,000/- in his said bank accounts, whereas he was having only source of income from his salary. Hence, those deposits are nothing, but clearly the part of embezzled money received from Sh. Muzaffar Ali Bohra. The Immovable and Movable properties acquired by Appellant and his wife Lata Mangal were acquired by them using "Proceeds of Crime" to the extent of Rs. 60 lacs as stated by Mr. Bohra. Sh. Ashok Mangal & Smt. Lata ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2,55,476/-. That it is submitted that an amount of Rs. 4.86.200/- has already been recovered from the Appellant herein as demonstrated from the Charge Sheet dated 23.01.2012. That the definition of proceeds of crime also includes the value of the property in question and since an amount greater than the amount that is under question has already been recovered, it would be illegal or amount to an unjust enrichment for the Government to confiscate the property pertaining to the Appellant. That in addition the accounts of the Appellant have been frozen with funds to the extent of Rs. 6.55 Lakhs (Please see Charge Sheet dated 23.01.2012). However, the ED has rightly scrutinized the accounts of the Appellant and his wife Lata Mangal like Income and expenditure & investments as per the documents availed by banks & NW Railway offices, CBI Jaipur, RPF, Ajmer etc. and statements of various persons recorded under PMLA. The ED has rightly calculated the net salary details of Appellant and his wife Lata Mangal, which credited in their salary accounts from 2006 to 2011. However, the bonus & arrears (as not calculated in OC) and PF & net salary (as under-valued in previous OC) have been adde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y acquired or derived directly or indirectly by a person relating to the criminal activity to a scheduled offence. The second part includes "the value of any such property". The second part is generally mixed with third part for giving interpretation. However, an elaborate judgment on the issue has been given by the Delhi High Court in the case of Prakash Industries Ltd. v. Directorate of Enforcement reported in 2022 SCC OnLine Del 2087 and in this regard, Para 105 of the judgment in the case of Prakash Industries Ltd. (Supra) are quoted hereunder:- "105. It would be pertinent to recall that properties which were acquired prior to the enforcement of the Act may not be completely immune from action under the Act in light of what this Court had held in Axis Bank. As was explained by the Court in Axis Bank, the expression proceeds of crime envisages both ―tainted property as well as "untainted property" with it being permissible to proceed against the latter provided it is being attached as equal to the "value of any such property" or "property equivalent in value held within the country or abroad". However, both the italicised categories would be liable to be invo....