Back
2025 Supreme(Online)(ATFP) 433
APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
1. FPA-PMLA-1786/COCHIN/2017 Abdul Majeed … Appellant
2. FPA-PMLA-1787/COCHIN/2017 Ali Sathar Haji … Appellant
3. FPA-PMLA-1788/COCHIN/2017 Shakkeela T. … Appellant Versus The Deputy Director, Directorate of Enforcement, Cochin … Respondent Advocates/Authorized Representatives who Argued For the Appellant : Mr. N.C. Radhakrishnan, Advocate, For the Respondent: Ms. Nidhi Raman & Ms. Ridhi Kapoor, Adv.
CORAM SHRI G.C. MISHRA : MEMBER SHRI RAJESH MALHOTRA : MEMBER
The attachment of properties under PMLA can occur even if acquired before the alleged predicate offence, with the burden of proof resting on the appellants to demonstrate legitimate purchase sources.
Headnote:(A) Prevention of Money Laundering Act, 2002 - Section 3 - Appeals against the order of the Adjudicating Authority confirming the attachment of properties alleged to be proceeds of crime. Properties were claimed to be acquired prior to predicate offence but not substantiated. Legislative intent emphasizes recovery of proceeds of crime regardless of property acquisition timelines. (Para 6)
(B) Burden of Proof - Under Section 24 of PMLA, appellants failed to demonstrate legitimate source for property acquisition, with previous criminal behavior weighing against their claims. Lack of evidence supported accusations of coercion. (Para 7)
Facts of the case:
The appellants challenged the properties attached by the Enforcement Directorate (ED), alleging they were acquired legally. The properties under dispute were tied to alleged fake currency transactions involving substantial sums drawn from illicit activities.
Findings of Court:
Court upheld ED’s action, confirming properties were rightly categorized as proceeds of crime under PMLA due to conclusion drawn from circumstantial evidence.
Issues: Whether properties are proceeds of crime, whether appellants discharged burden under Section 24 of PMLA, and whether ED had the authority to attach properties.
Ratio Decidendi: The court upheld the ED’s authority to attach properties under PMLA, emphasizing legislative intent, that properties could be attached even if purchased prior to alleged offences and found the appellants failed to provide adequate proof of legitimate income.
Result: Appeals dismissed.
FINAL ORDER
05.06.2025 Dictated By:
Rajesh Malhotra Present appeals u/s 26 of Prevention of Money Laundering Act, 2002 (PMLA, 2002) are filed by the appellants against the Order dated 07.04.2017 passed by the Adjudicating Authority in Original Complaint No. 667/2016, whereby the properties attached by ED vide PAO No. 03/2016 dated 10.11.2016 were confirmed. The details of the properties of the present appellants are as under:
I. Property in the name of Abdul Majeed Building no, 9/232 (old no. 8/358A) NAMED “Mannuparambil House” in Maranchery Village situated in the property referred in the gift deed 3111/15, Ponnani SRO, Malapuram, Kerala Sy. No. 179/3-5.463 Are, in the name of Abdul Majeed valued at Rs. 6,00,000/-.
II. Property in the name of Shakeela w/o Abdul Kalam and Ali Sathar Haji:
The property in the deed 2608/2015, Vazhakad SRO, in Pulikal Village, Vazhakad, Malapuram, Kerala valued at Rs. 8,25,000/-, Re. Sy. Nos. 57/1-17.03 Are, 61/1-4.30 Are, 56/1 -0.15 Are (Total Area 21.48 Are) which jointly held by Shakeela w/o Abdul Kalam along with Ali Sathar Haji.
2. As per the facts of the case, National Investigation Agency, Cochin received information on 11.03.2010 regarding detection of fake Indian Currency notes to the tune of Rs. 24,16,000/- by DRI, Cochin from the baggage of Gopinath K.. NIA registered FIR No. 655/2010 u/s 489(C) IPC and subsequently case was sent to CB-CID where the case was re- registered as Crime No. 447/CR/OCW-II-10/EKM and Section 486(B) of IPC was also added. Later-on, investigation was taken over by NIA as per order No. 11034/36/2011-IS-IV dated 06.01.2012 issued by Ministry of Home Affairs, Government of India. NIA recorded FIR No. 03/2012/ NIA/HYD dated 28.01.2012 and thereafter filed chargesheet on 14.02.2014 before the Hon’ble Special Court for NIA, Ernakulam against Abdul Majeed @ PRO Majeed @ Babu and Abdul Kalam @ Azad for commission of offence 120-B IPC r.w.s. 489(B) & 489(C) IPC and substantive offences thereunder. On 01.06.2015, NIA filed another chargesheet against Mohammad Rafi.
Accordingly, the Directorate of Enforcement, Cochin recorded ECIR No. 3/CZ/2012 dated 14.12.2012 against Gopinath K. and Abdul Majeed and initiated investigation for the offence of money laundering and to track the trail of proceeds of crime. During investigation, ED recorded the statements of the accused persons/suspected persons and others. On the basis of material collected during investigation, ED attached the properties including the properties of the present appellants vide PAO No. 03/2016 dated 10.11.2016, and thereafter, filed the Original Complaint along with relied upon documents & statements before the Adjudicating Authority for confirmation of the PAO. The Adjudicating Authority after going through the allegations coupled with the incriminating material annexed with the complaint issued the Show Cause Notice to the defendants. After receiving the respective replies and hearing the rival submissions, the Adjudicating Authority confirmed the PAO vide order dated 07.04.2017.
Aggrieved by the said order, appellants filed the present appeals.
3. During the course of hearing, Ld. Counsel for the appellants submitted that the respondent ED doesn't have power to provisionally attach the property of the appellant, as no offence is made out under section 3 of PMLA, 2002. He argued that there is no material available on record to show that the property attached was acquired out of the proceeds of the crime and the alleged tainted money was already seized by the DRI official, then there remains no question of utilizing the fake money or proceeds of crime for the acquisition of the property in question. He further stated that the Adjudicating Authority failed to appreciate that the properties attached were legally belonging to the appellants and the source for acquisition of the properties were properly explained, and thus, it cannot be treated as any proceeds of crime. He pointed out that the Adjudicating Authority f
