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2026 (4) TMI 68
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....PMLA-4196/PTN/2021, MP-PMLA-4531/PTN/2024 Exemp. MP-PMLA-4530/PTN/2024 Stay MP-PMLA-4529/PTN/2024 Exemp. FPA-PMLA-1964/PTN/2024, MP-PMLA-9457/PTN/2022 Stay MP-PMLA-9456/PTN/2022 Exemp. FPA-PMLA-4626/PTN/2022, MP-PMLA-1710/PTN/2024 Stay MP-PMLA-1709/PTN/2024 Exemp. FPA-PMLA-784/PTN/2024, MP-PMLA-1712/PTN/2024 Stay MP-PMLA-1711/PTN/2024 Exemp. FPA-PMLA-785/PTN/2024 and MP-PMLA-1714/PTN/2024 Stay MP-PMLA-1713/PTN/2024 Exemp. FPA-PMLA-786/PTN/2024 For the Appellants : Mr. Rajesh Kumar, Ms. Rupali Singh, Mr. Arnav Saha, Mr. Akshat Aggarwal, Mr. Kumar Vaibhav, Mohd. Asaab, Mr. Rajat Jain, Advocates For the Respondent : Mr. Pankaj Pandey, Ms. Komal Bharti, Mr. Mithunesh S. Ms. Vartika Gupta, Mr. Abhimanyu Kaul, Advocates FINAL ORDER This Order disposes of the aforementioned fifteen Appeals through this common Order. 2. The first eleven Appeals mentioned afore at Serial No. 1-11 above, have been filed by Legal heirs of Late Smt. Manorma Devi (deceased on 13.02.2017), her relatives and associates namely, Smt. Archana Lal (daughter), Smt. Kalpana Karn (daughter), Dr. Aseem Kumar (Grandson being son of Shri Bimlendra Prasad Karn and Smt. Bandana Karn), Dr. Pranav Kumar (son), S....
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....w of funds cannot be held as proceeds of crime unless the Act is made applicable retrospectively. Further since Smt. Manorma Devi died in 2017 and the criminal action initiated against her were abated, the properties owned by her also could not have been attached. In support of the argument, he cited the Judgments of the Hon'ble Supreme Court in the matter of U. Subhadramma and of the Hon'ble High Court of Delhi in the matter of Rajiv Gandhi Ekta Samiti. 5. Ld. Counsel for the Appellant contended that the allegation against late Smt. Manorma Devi cannot stand since she belonged to well to do family, had income from property and agriculture inherited from husband, family pension from the Government and ran a co-operative society which employed hundreds of persons and manufactured and sold products worth crores of rupees. She also received funds from her son Dr. Pranav Kumar, reputed doctor in Australia. Ld. Counsel further stated that the Adjudicating Authority confirmed the attachment in a mechanical manner, without recording any reasons for the rejection of the submissions which had been made by the Appellants. He also contended that PAO I & II were issued on 29.05.2020 & 30.06....
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.... Smt. Manorama Devi. Further, certain amount was transferred from SMVSSL account for payment of the property. The amount of cash which was received with regard to shops in Uttaranchal Plaza was from the Appellant's own money which she gave to Late Smt. Manorma Devi to invest in business and to return as and when required. Ld. Counsel submitted that the 5 immovable properties amounting to Rs. 53,07,000/- in the name of the Appellant were attached by the Respondent. The Appellant is a software engineer and working as a software trainer since 2006 and also doing Mithila painting, embroidery, stitching, etc., which were generating her a considerable income and were reflected in her Income Tax Returns. Her husband, Sh. Diwakar Kumar Karn is a government employee in CISF. They have agricultural income from their native place. With so much income, the allegation that the Appellant could not buy properties and land is preposterous and liable to be quashed on this ground alone. Ld. Counsel submitted that neither the Appellant nor her husband was aware of the alleged fraud conducted by the SMVSSL and the Bank officials. 8. Ld. Counsel for the Appellant submitted that the Appellant Dr. Ase....
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.... 2010 and 2012 that he had shifted to Ranchi, Jharkhand and had set up a practice there. He had purchased two flats in Sai Aastha apartments in Ranchi after starting work there. He joined Seva Sadar hospital in Ranchi and was running a private clinic on main road Ranchi, besides going to Khunti daily for medical work. Since he had left Australia, his money (provident fund) was released by the Australian taxation office and was transferred to his mother's account as the Appellant directed them to do so. There is evidence in form of trails of emails which is already with the authority, to verify his claim. This money was used to purchase two flats in Sai Apartments. Money was transferred by Late Smt. Manorma Devi directly to the seller's account to finalise the deal. As a doctor, the Appellant had substantial income during the relevant period i.e., when the said properties were acquired as can be seen from his Income Tax Returns submitted to the concerned authorities in Australia. 10. Ld. Counsel further submitted that it is pertinent to note that Gardenia Glamour, Ruby, flat no. 102 was bought by Late Smt. Manorma Devi and was from the Appellant's money transferred from A....
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....d that due to untimely death of the husband of Smt. Seema Kumari, her mother-in-Law Smt. Manorma Devi used to pay extraordinary attention to Smt. Seema Kumari and her minor daughter. Late Manorma Devi made every effort to keep her daughter-in-law happy. The Appellants also shifted to Bhagalpur into the shelter of her grandmother who provided every kind of facility to them from her own fund. As Late Smt. Manorma Devi was very fond of her granddaughter, she out of affection gifted her a car. As she was a minor the car was purchased in the name of her mother Smt. Seema Kumari. Ld. Counsel for the Appellants submitted that the Appellants were never a member of the NGO ran by grandmother and therefore she had no interest in the activities of NGO and also has no knowledge whatsoever. The attached property was purchased in the name of Ms. Astha Lal by her grandmother and her mother from the money she received as insurance claim and terminal benefits. 12. Ld. Counsel for the Appellant submitted that the Appellant Smt. Puja Kumari is the wife of Shri Amrendra Kumar Yadav, who is the Complainant in the FIR which formed the very basis of the PAO I dated 29.05.2020. The attachment of 6 immo....
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....ited. Ld. Counsel for the Appellant submitted that a part of the investment was made by the Appellant and a part by the Society. The Appellant had initially invested a sum of Rs. 1 lakh and Rs. 9 lakh in cash on 13.09.2011. The payments were made at the camp office of the said project developer. The said developer had issued one regular receipt and one receipt on the plain paper. In both the receipts the date of issue is the same and the description of the amount and the project are mentioned. It also needs to be stated that the signatory in respect of both the aforesaid receipts is one and the same. Ld. Counsel for the Appellant submitted that pursuant to the summons issued, the Appellant had stated that the value of the Flat was Rs. 31 lakhs and that a sum of Rs. 10 lakh was paid in cash in the year 2011 at the camp office of the said developer and the sources thereof were explained as Rs. 2. 25 Lacs from her own savings and the balance of Rs. 7.75 lakhs through the money received from her mother Smt. Savita Choudhary in cash. It is submitted that the payment of Rs. 2.25 Lacs was made by the Appellant from her own savings. It is submitted that the Appellant is assessed to Income ....
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..... Ld. Counsel for the Appellant submitted that the Appellant and her husband have not been made an accused in both PMLA and Scheduled offence. Hence, there exists no valid reason to keep the Appellant's property attached. 14. Ld. Counsel for the Appellant Shri Pranav Kumar Ghosh submitted that SMVSSL besides doing the banking activities, was also working for the upliftment and welfare of women of the under privileged families. That in the course of its activities SMVSSL became a well-known and established organisation operating in Bihar. The Appellant was doing auditing and personal I.T. work for SMVSSL. In the year 2014, the Appellant required an amount around Rs. 25,00,000/- for purchasing a Flat No. 106, B-wing, First Floor, Arc Gallery, Pune. The Appellant had applied for a loan from SMVSSL vide Loan Application dated 13.8.2014 for Rs. 25,00,000/-. The said loan amount was approved by SMVSSL after making the Appellant a member of SMVSSL. Thereafter, the said amount was credited into the account of the Appellant vide cheque no. 541755 of the Bank of Baroda, on 15.09.2014. Ld. Counsel for the Appellant submitted that the amount of Rs. 25 lakh was credited to the Appellant's Ba....
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....at the cash gift received from Late Smt. Manorama Devi by Smt. Bandana are proceeds of crime and are liable to be attached. Ld. Counsel for Appellant submitted that she received some money from her mother which was transferred to her account from the Account of SMVSSL which she used in purchase of the attached property. Ld. Counsel for the Appellant submitted that it can also be seen from the bank accounts of Late Smt. Manorama Devi that her son, who is a reputed doctor in Australia transferred around 158,779.10 Australian Dollars (80 to 82 lakhs rupees) to her. Further, when Late Smt. Manorama Devi died there was loan of Rs. 92 Lakhs in her name from Srijan Samiti which was re-paid by her daughters. Ld. Counsel for the Appellant submitted that the Appellant had an average income and hence was not able to pay all the amount at once for the purchase of the attached property and therefore she took the help of her mother Late Smt. Manorma Devi. It is pertinent to mention that she and her husband the Appellant Shri Bimlendra Prasad Karn have an annual income of approximately Rs. 11 to Rs. 12 Lakhs and they have been paying tax and filing their returns for past 15 years. They have duly ....
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.... sister-in-law, i.e., of Smt. Archana Lal. The Appellant duly returned Rs. 4,00,000/- to Sh. Pranav Kumar son of Late Smt. Manorma Devi and hence the property attached cannot be claimed as proceeds of crime. 18. Ld. Counsel for the Respondent stated that the PAO I & II as well as the Impugned Orders I & II have arisen from the common ECIR No. PTZO/04/2018 dated 24.05.2018. The ECIR was lodged by the Respondent Directorate in view of the scheduled offences which had been invoked in seven FIRs filed by CBI between 2017 and 2019. Perusal of the Impugned Orders reveal the alleged modus operandi of siphoning of huge funds from the Government Treasury after their illegal transfer to bank accounts of a co- operative society namely, Srijan Mahila Vikas Sahyog Samiti Ltd. (SMVSSL), Bhagalpur. The scam was spread over several districts including Bhagalpur, Banka and Saharsa as a result of collusion of government officials, bank officials, office bearers of SMVSSL and few other individuals. The scam began in the year 2003-04 when funds flowed into the bank account of SMVSSL from the bank accounts of different State Government Departments. From the bank accounts of SMVSSL, the money was tra....
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....en attached in view of PMLA having come into effect on 01.07.2005. Ld. Counsel cited the judgment of the Hon'ble Supreme Court in the matter of Vijay Madanlal Choudhary to state that it is the date of the activity or process of dealing with the proceeds of crime that is relevant for determining whether the property can be attached or not. Ld. Counsel for the Respondent contended that even if the prosecution proceedings in these matters of scheduled offence and money-laundering offence have abated due to the demise of the Appellant Late Smt. Manorama Devi, the present proceedings shall continue till its termination in view of Section 72 of PMLA. Ld. Counsel submitted that the question about the compliance to Section 5(1) and Section 8(1) has been elaborately settled for the present set of appeals in the course of discussions in the Impugned Orders. Ld. Counsel for the Respondent rejected outright the plea taken by the Appellants that there was no requirement of license from the RBI to indulge in the activities of collecting deposits and disbursing loans. Ld. Counsel argued that the Appellants failed to produce any permission from the RBI as to allow SMVSSL to indulge in such activit....
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....nerated such funds. Even, her tuition fees cannot explained the said properties. Ld. Counsel contended that her husband Shri PK Lal being Government employee in RITES also could not have helped her to aggrandize such huge amount of property. Ld. Counsel stated that return of Rs. 24,50,000/- to the account of SMVVSL in March, 2017 reflected her close nexus. Ld. Counsel therefore concluded that the Appellant Smt. Archna Lal gained from handling the proceeds of crime by obtaining the same from her mother and SMVSSL. 22. Ld. Counsel for the Respondent submitted that during investigation, it has been gathered that Flat No. Emerald-2/602 Gardenia Glamour Phase II Project, Noida worth Rs. 25,00,000/- is in the name of Smt. Kalpana Karn, W/o- Shri Diwakar Kumar Karn. The amount of Rs. 23,50,000/- was paid from the account of SMVSSL and Rs. 1,50,000/- was paid in cash. Further, two more properties at Khata No. 353, Khesara-1 at Sabour (Area 5 Kattha) worth Rs. 27,000/-& Sub Plot No. Minjumale Plot no. 2 to 11, Basauri Satwa, Mauja-Jalathar, P.S. Jasidih, Deoghar (Jharkhand) Area-5005 Square Feet worth Rs. 51,000/- were given to the Appellant by her mother Late Smt. Manorma Devi. Further ....
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....asad Karn, Maternal Grand-Mother Late Smt. Manorma Devi, Sh. P K Lal, Smt. Archana Lal and Smt. Kalpana Karn. In 2010, Rs 6.50 lakhs had been deposited in cash in the Appellants account no. 10010100002991 of Bank of Baroda. The Appellant was asked to give the payment details for his MBBS which revealed that proceeds of crime either in cash or in the form of direct transfers from the accounts of SMVSSL have been utilized not only for acquisition of property but also towards payment of fees of medical study. Ld. Counsel contended that moreover, in view of the fact that funds from the accounts of the SMVSSL have been siphoned off by way of cash withdrawals/transfers to the bank accounts of family members of Late Smt. Manorma Devi, it is logical to conclude that amount of Rs. 23,34,000/- paid by Late Smt. Manorma Devi is proceed of crime. 24. Ld. Counsel for the Respondent submitted that investigation under PMLA revealed that the claim that an amount of Rs. 92,50,000/- was transferred to Late Smt. Manorma Devi from the account of Dr. Pranav Kumar for purchase of flats, is only an after-thought, in order to conceal the tainted money. Neither any documentary proof nor any evidence has....
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....ector 3, Vasundhara, Ghaziabad in the name of Ms. Aastha Lal, daughter of Smt. Seema Kumari. An amount of Rs. 13,50,000/- was paid by Smt. Seema Kumari, mother of Aastha Lal through RTGS. Ld. Counsel submitted that Ms. Aastha Lal was 9 years old and had no independent source of income when the flat was purchased. Statements were recorded under section 50 of PMLA on 10.07.2019 and 05.03.2020 of Smt. Seema Kumari, daughter-in- law of Late Smt. Manorma Devi wherein she stated that the properties at Khata No. 353, Khesara-1 at Sabour (Area 5 Kattha) worth Rs.27,000/- and at Sub Plot No. Minjumale Plot no. 2 to 11, Basauri Satwa, Mauja-Jalathar, P.S. Jaisidih, Deoghar (Jharkhand) Area-5005 Square Feet, was gifted by her mother-in-law Late Smt. Manorma Devi/ Late Shri Pranay Kumar, her husband. However, there was no gift deed in her name. She further stated that her mother-in-law late Smt. Manorma Devi was operating the bank account maintained in her name and she used to sign the cheques as per instructions of her mother-in-law. Ld. Counsel for the Respondent submitted that during investigation it was revealed that huge funds were withdrawn in cash from the account of Srijan Mahila Vikas....
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.... Arun. The investigations have also revealed that from an account of SMVSSL amount of Rs. 18 lakhs was received in the accounts of Shri Arun Kumar Thakur, Neil Aryan and Akansha Arun. Further transfers of Rs. 7.5 lakhs from the account of SMVSSL was received in the accounts of Akanksha Arun, Neil Aryan and Smt. Bharti Thakur. Ld. Counsel also stated that for the purchase of flat no. Emerald 1/101 Gardenia Glamour, Phase II, Noida, payment of Rs. 25 Lakhs was received from SMVSSL. Cash of Rs. 1 lakh was also received by Gardenia. Ld. Counsel alleged that illegal cash was deposited with SMVSSL and Late Smt. Manorma Devi so as to obtain in lieu payments through banking channels by means of RTGS/Cheques so as to make the tainted money appear legal. 28. Ld. Counsel for the Respondent submitted that during investigation, it was revealed that the amount of Rs. 25,00,000/- was transferred to the account of the Appellant Sh. Pranav Kumar Ghosh on 16.09.2014. The date of registration of the flat no. 106, Wing-B, Arc Glory, Pune is 22.08.2014. The possession of the property was given on 28.04.2015. On scrutiny of the agreement dated 22.08.2014, it is revealed that the value of the property....
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....er, he avoided appearing on subsequent dates so as to frustrate the proceedings under PMLA. The Appellant is knowingly in possession of proceeds of crime and said proceeds of crime are invested in the immovable property to project tainted property as untainted. 29. Ld. Counsel for the Respondent submitted that Flat No. S1 worth Rs. 36,83,000/- at Sector 1/501, Vasundhara, Ghaziabad has been acquired jointly in the name of Smt. Bandana Karn and her husband Shri Bimlendra Prasad Karn. The payment of Rs. 30,00,000/- was paid from the account of Srijan Mahila Vikas Sahyog Samiti Limited through demand draft 748093 drawn on the Indian Bank, on 17.04.2013. Balance amount of Rs. 6,83,000/- was paid in cash from own source. However, no document has been produced regarding source of cash payment. No document has been submitted regarding loan. Ld. Counsel contended that it is an afterthought to cover up and mislead. Late Smt. Manorma Devi managed to shrewdly cover up the scam so as to avoid detection during her life time. Nevertheless, the same does not wipe out the fact the Appellants are in possession of proceeds of crime. 30. Ld. Counsel for the Respondent submitted that during inve....
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....he investigations under PMLA encompassed not only recording of statements of persons involved but also obtaining and analysing the bank accounts. Moreover, reports were called for and obtained from the Builders and the Developers from whom the immovable properties were purchased. From the evidence collected during the investigation, the inference that SMVSSL became a tool for embezzlement and misappropriation of the Government funds in collusion with the Government Officials, Bank Officials and other individuals, inescapable. 33. To appreciate that the persons involved were dealing with the proceeds of crime and not merely flow of funds, it is necessary to look at the definition of proceeds of crime under section 2(1)(u) of PMLA, which is as follows;- "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the country, then the property equivalent in value held within the country] [or abroad]; [Explanation.--For the removal of doubts, it is hereby clarified that "proceeds of....
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....n of the scheduled offence. In other words, the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money-laundering under the 2002 Act - for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in tranches until fully exhausted. The offence of money-laundering is not dependent on or linked to the date on which the scheduled offence or if we may say so the predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provisions (Section 3, as amended until 2013 and were in force till 31.07.2019); and the same has been merely explained and clarified by way of Explanation vide Finance (No. 20) Act, 2019. Thus understood, inclusion of clause ....
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....with the following directions: I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purpose of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022. III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining with effect from 01.03.2022 is greater than 90 days, that longer period shall apply. IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1966. Section 12A of the Commerci....
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.... directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence. 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." 37. Ld. Counsel for the Appellants argued that since Smt. Manorma Devi expired on 13.02.2017, the proceedings for the scheduled offences shall abate against her and in view of that the attachments made of her properties need to be vacated. In this regard, Section 72 of PMLA is reproduced below;- "Section 72 Continuation of proceedings in the event of death or insolvency - 1) Where-- (a) any property of a persons has been attached under section 8 and no appeal against the order attaching such property has been preferred; or (b) any appeal....
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....e Appellants and have their properties attached by the Respondent Directorate. The judgment referred by the Ld. Counsel for the Appellant has been dealt with by the Hon'ble Supreme Court in its judgment dated 05.10.2017 in the matter relating to Ravi Sinha, Sandeep Malik and Kamal Malik as reported in 2017 SCC OnLine SC 1241. Relevant paragraphs 22 and 23 are being reproduced: "22. In the present case, there is one fact, which makes the present case different from the case of U. Subhadramma v. State of A.P. [U. Subhadramma v. State of A.P., (2016) 7 SCC 797 : (2016) 3 SCC (Cri) 236] i.e. in the present case, Ravi Sinha, the son of Dr S.B. Sinha was himself accused in large number of cases. In one case, he had already been convicted and fined. In another case relating to the similar fodder scam i.e. RC No. 36 of 1996, the trial is going on. There is a specific allegation that he had received payment but did not supply medicine worth Rs 9.75 lakhs in RC Case No. 39 of 1996, in which he has been convicted. Allegation was against him that the company was paid a sum of Rs 5.90 lakhs and there was non-supply of medicine. The appellant himself in his Appeal No. 1561 of 2008 has f....