AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (3) TMI 1620
X X X X Extracts X X X X
X X X X Extracts X X X X
....018 filed by Sh. Krushna Chandra Das, FPA-PMLA-2258/ BBS/2018 filed by Smt. Rasmita Das, FPA-PMLA-2317/ BBS/2018 filed by Smt. Rasmita Nath, FPA-PMLA-2318/ BBS/2018 filed by Sh. Sangramjit Nath, FPA-PMLA-2272/BBS/2018, Sh. Siba Prasad Gocchi and FPA-PMLA-6529/BBS/2023 filed by Smt. Madusmita Gocchi. The aforementioned six Appellants have filed the Appeals u/s. 26 of The Prevention of Money Laundering Act, 2002 (PMLA) challenging the Order dated 04.04.2018 (Impugned Order) passed by the Ld. Adjudicating Authority under PMLA confirming the Provisional Attachment Order No. 19/2017 dated 12.10.2017 (PAO) in ECIR No.02/BBSZO/2016. 2. Ld. Adjudicating Authority vide the Impugned Order has confirmed the provisional attachment of the following immovable properties: - S. No. Description Name of Owner Cost Valuation Report 1. A 31/2 storied green coloured building at Gandarpur Mouza near petrol pump Siba Prasad Gochhi 60000/- +12311/- =72311/- 1,13,21,000/- 2. Land at Gandarpur Mouza Siba Prasad Gochhi 40000/- +7913/- =47,913/- 3. Land at Gandarpur Mouza, Cuttack (1/6th share each) Siba Prasad Gochhi Madhusmita Gochhi 266667/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....,000/- 25. Land at Gandarpur Rasmita Das 24,00,000/- +1,68,407/- =25,68,407/- 26. Land at Bhubaneswar Sahar Unit 27 Mouza Area Ac 0.040 dec. purchased on 09.09.2016 Rasmita Nath 18,24,000/- +91,200/- +36,752/- =19,51,952/- 27. Land at Bhubaneswar Sahar Unit 27 Mouza Area Ac 0.048 dec. purchased on 09.09.2016 Rasmita Nath 2200000/- +1,10,000/- +44,272/- =23,54,272/- 3. Ld. Counsel for the Appellant Sh. Krushna Chandra Das stated that the Appellant is engaged in transportation and construction business and is also having income from agriculture. The Appellant's income as well as the income tax document has not been contested by the Respondent. The income derived by the Appellant is over a period of 20 years for which Krushna Das produced the income tax returns from the FY 1997-98 to 2015-16. The Respondent Directorate has considered income of Krushna Das as Rs. 2,44,89,781 whereas the income of Krushna Das up to 31.03.2016 is Rs. 3,16,05,732. Thus, the legally sourced income of Rs. 1,31,05,751 is not considered. It has also been contended by the Ld. Counsel that the FIR which is relied by the Respondent Di....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Krushna Das and Rasmita Das are not involved in any offence under the PMLA. In ECIR name of Rashmita Das does not appear either as an accused or suspect. The attachment of the properties acquired prior to December 2015 is illegal and shows non application of mind. The amendments in PMLA were introduced with effect from 15.02.2013. The offences alleged were at the relevant time specified in Part B of the Schedule in PMLA and hence the valuation involved for the offence ought to be over Rs. 30,00,00/-. This aspect is not examined and applied, consequently the complaint is illegal and contradictory to the provisions of the PMLA. 5. Ld. Counsel for the Appellant Sh. Sangramjit Nath stated that he is an A-Class contractor and doing his business under the Government Organization since long and that no charge- sheet was yet filed against him till the completion of the proceedings before the Ld. Adjudicating Authority, though the same is kept open under section 173(8) of Cr.P.C. by the police. The property at serial no. 26 and 27 of the Table in paragraph 2 above were purchased by him in the name of Smt. Rasmita Nath (wife of Shri Sangramjit Nath) on 09.09.2016. All the payments were m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....submitted by the Appellants that the 3 and ½ storied building possessed by Sri Siba Gochhi and his wife is overvalued by the Respondent without following the definition provided in the Act. Though the building was constructed in the year 2006, the building was valued on the rate prevailing in the year 2013, which is completely against the meaning of "value" defined under the Act. Thus, the valuation is shown on the higher side to mismatch the income of the Appellants. As per the estimate on the basis of which loan was granted, the value of ground floor was Rs. 13,70,000/- and first floor was Rs. 9,32,000/- and escalation cost for second floor was 15% more than the first floor i.e. Rs. 10,71,800/- and escalation cost for third floor (half) was 15% more than second floor cost i.e. Rs. 6,16,285/- and the value of land was Rs. 72,311/- in total, the cost of the building is Rs. 40,22,396/-. 8. Ld. Counsel for the Respondent stated that the prosecution complaint under PMLA has been filed against Sh. Krushna Das, Shri Sangram Nath and Shri Siba Gocchi and none has been discharged yet. The names of the male Appellants appear in Chargesheets No. 83 PS Chauliaganj dated 17.06.2016 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....24,00,000/- debited for a land purchase. She claimed the funds came from personal savings and loans, but could not provide supporting evidence. Scrutiny of her bank accounts showed transfers linked to her husband's businesses, raising concerns of money laundering. When questioned about the discrepancy between her income and property investments, she could not provide a satisfactory explanation. 11. Ld. Counsel for the Respondent submitted that Sri Sangramjit Nath is a suspect in cases involving extortion, tender-fixing, and the Arms Act. His statement was recorded on 27.02.2017 under PMLA. He was absconding from February 2016 to January 2017, after an arrest warrant was issued in connection with FIR filed by Sri Saroj Dehury, alleging extortion and tender-fixing by Nath and others on behalf of the Dhal Samanta brothers. Sh. Sangramjit Nath had stated that he worked as a contractor and owned multiple vehicles and properties, including two immovable properties purchased in his wife's name in 2016. However, his income tax returns showed earnings far below his investments, with a total of Rs. 1.55 crore in properties against Rs. 47 lakhs in earnings. Nath could not explain this ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r transportation business, "Trinath Road Carrier." Regarding the purchase of properties, she stated that the full payment for plot No. 808 was made in cash, while for plot No. 525 (Sabak), the cash was deposited in a bank and transferred to the seller. She claimed the sources of investment in these properties and the construction of a building were from her transportation business and house rent. However, when asked about discrepancies between her reported income and the investments made, she could not provide any explanation. 14. We have considered the rival submissions and the material on record. It is not disputed that a number of cases have been filed against the Appellants S/Sh. Krushna Chandra Das, Sangramjit Nath and Siba Prasad Gocchi by Odisha Police for the alleged extortion, dadabati collection, tender-fixing and violation of Arms Act. The Respondent Directorate filed ECIR No.02/BBSZO/2016 on 03.06.2016, on the basis of Chauliaganj PS Case No.12 dated 18.01.2016 and Chauliaganj PS Case No.58 dated 05.04.2016. For Case No.12 Chargesheet No.83 PS Chauliaganj dated 17.06.2016 and for Case No.58 Chargesheet No.92 PS Chauliaganj dated 30.06.2016 were filed. Since cases wer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....have any source of income. 16. A common question has been raised by the Appellants that the PAO was issued on 12.10.2017 without any reason to believe since no chargesheet had been filed against them either on or before the date on which the PAO was issued. Also, the PAO could have only been issued under second Proviso to Section 5(1) of PMLA as there was no basis for apprehension of alienation of properties by them. The argument is that the PAO issuing authority viz. the Joint Director did not have the reason to believe on the basis of material in his possession so as to show that if the impugned properties are not immediately attached then the non-attachment is likely to frustrate further proceedings under this Act. It is on record that there are 28 set of documents on the basis of which the Joint Director formed reason to believe so as to provisionally attach the impugned properties. Besides including the statements under Section 50 of the Appellants, the statements of Sh. Bhagabanban Sahu, Sh. Bharat Bhushan Swain, Sh. Sharad Kumar Sahu, Smt. Laxmipriya Swain, Sh. Pravat Swain, Smt. Suprava Sahoo and Sh. Saroj Kumar Dehury were already available with the Joint Director. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the belief and are not extraneous or irrelevant to the purpose of the section. So, if there are reasonable grounds to believe, whether those grounds are adequate or not, is not a matter for the court to look into. In the present case such rational connection exists. Although the court cannot investigate about the sufficiency of the material, the court can certainly examine whether there was any material in possession of the officer concerned and whether the material had any nexus with the formation of the belief. In the present case the reasonable belief formed by the Joint Director is based on the material available before him. Thus, there is a well-established link or nexus between the belief formed and the material available. It cannot be said there was no basis for formation of the belief. The submission that the reasonable belief formed by Joint Director u/s. 5(1) is baseless or ill-founded is not sustainable. The Joint Director in the present case has shown the generation and existence of the proceeds of crime. The Joint Director has also shown that how the proceeds of crime are utilized and/or applied. Thus, he has formed the belief as to the involvement of the Defendants ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uthorities at the stage are obliged to prove the fact beyond doubt that the property in possession was in fact proceeds of crime. All that the Authority is required to show is that there was "substantially probable cause" to form opinion that the property under attachment is proceeds of crime." The objective of the provisions of the Statute at the stages of provisional attachment and confirmation thereof is to secure the proceeds of crime or the assets involved in money laundering so as to make that available for the purpose of confiscation. 19. The Appellants have also contested that few of the properties attached were acquired before December, 2015. In this regard the definition of proceeds of crime as given in Section 2(1)(u) of PMLA is wide in its meaning so as not only to include any property derived or obtained relating to a scheduled offence but also to include value of any such property besides the property equivalent in value held within the country where the proceeds of crime are taken or held outside the country. The male Appellants herein have indulged in criminal activities over a number of years and generated the impugned properties. The attachment made and conf....
X X X X Extracts X X X X
X X X X Extracts X X X X
....operties. The transport firm of Sh. Gochhi was closed in 2006. Sh. and Smt. Gochhi could not give evidence with regard to the income generated from the transportation business, rent and hiring of vehicles. It is also noted that these two Appellants had repaid most of their loans. We observe that the Appellants have failed to account for the source of income to repay the loans. The loan which they obtained from the Urban Cooperative Bank with regard to an immovable property is not covered among the impugned attached properties. Smt. Gochhi, the Appellant herein also could not give evidence to corroborate the source of funding of the properties in her name. 22. It is on record that Sh. Krushna Chandra Das the Appellant has been using the alias of Kuni Das. His attempt to retract from the statements cannot stand, in view of his declaration in the statements that he was fully aware of the answers to the questions put to him which he has stated without coercion and in sound state of mind. He also chose to remain unavailable at the material time of investigation. The statements of both Sh. Saroj Dehury and Sh. Bhagaban Sahoo corroborate his involvement in criminal activities. The appe....