Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(ATFP) 50

APPELLATE TRIBUNAL FOR FORFEITED PROPERTY
MUNISHWAR NATH BHANDARI, CJ, G. C. MISHRA, Member
Yogesh Narayan Rao Deshmukh – Appellant
Versus
The Deputy Director Directorate of Enforcement, Mumbai – Respondent
MP-PMLA-5570/MUM/2024 | MP-PMLA-13566/MUM/2023 | MP-PMLA-9325/MUM/2022 | FPA-PMLA-4557/MUM/2022

Advocates:
For the Appellant : Mr. Vipul Agrawal, Mr. Arjun Kant
For the Respondent: Ms. Nidhi Raman, Mr. Akash Mishra

The confirmation of provisional attachment orders of properties can be valid under the Prevention of Money Laundering Act, even if acquired prior to alleged offenses, if tied to proceeds of crime.

Headnote:(A) Prevention of Money Laundering Act, 2002 - Section 5 - Provisional Attachment - Appeal challenging the confirmation of Provisional Attachment Order of eleven properties purchased amidst allegations of money laundering - Key consideration hinges on the relationship between property and proceeds of crime under PMLA. (Paras 12, 22, 28)

(B) Prima Facie Case - The tribunal finds substantial grounds indicating that the properties have been derived from criminal activities, despite the appellant's claims of legitimate acquisition prior to any alleged crime. (Paras 16, 21)

(C) Limitation Period - Confirmation of Provisional Attachment Order beyond a statutory period does not apply due to exclusion of COVID-19 related limitations, affirming the jurisdiction of the tribunal. (Paras 26, 27)

Facts of the case:
The appellant faced allegations concerning properties connected to fraudulent transactions with NIL (a trading platform), contradicting claims of legitimate land acquisitions. The Economic Offences Wing initiated investigations connecting substantial financial discrepancies involving the appellant, his corresponding business affiliations, and deceit against genuine investors.

Findings of Court:
The tribunal confirmed the attachment of properties, asserting they originated from proceeds of crime linked to manipulation of the trading exchange's operations, justifying the action taken by the Directorate of Enforcement.

Issues: The critical issues debated include the legitimate nature of property acquisitions and the application of statutory limitations in the context of provisional attachments under PMLA.

Ratio Decidendi: The tribunal ruled against the appellant’s arguments, clarifying that properties deemed connected to criminal activities could indeed face attachment, depending on their derived value from proceeds of crime. Furthermore, provisions allowing for extensions of limitation periods due to extraordinary circumstances apply, preventing automatic lapse of attachment orders or related proceedings.

Result: Appeal dismissed.

Table of Content
1. allegations of fraud and misappropriation in the case. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10)
2. arguments regarding misinterpretation of property legality and timing. (Para 11 , 12 , 13 , 14)
3. court's examination of proceeds of crime and definitions thereof. (Para 17 , 18 , 19 , 21 , 22 , 23)
4. clarifications on legal definitions and consequences of actions taken. (Para 24 , 25)
5. conclusion on the validity of the provisional attachment order. (Para 26 , 27 , 28 , 29)

FINAL ORDER

12.01.2026

By this appeal under Section 26 of the Prevention of Money Laundering Act, 2002 (in short `the Act of 2002’), a challenge has been made to the order dated 08.02.2022 passed by the Adjudicating Authority confirming the Provisional Attachment Order dated 03.06.2021. So far as the appellant is concerned, his eleven properties were provisionally attached.

Brief facts of the case:

2. It is a case where an FIR was registered by the Economic Offences Wing (EOW), Mumbai Police for the offence under Section 120-B, 467 and 471 IPC against M/s National Spot Exchange Ltd. (M/s NSEL) and its Directors apart from key officials of the company, 25 defaulters and others. The FIR was registered on a complaint of Shri Pankaj Ramnaresh Saraf, Director of M/s Vostok Far East Securities Ltd. The allegation was that payments were received towards trader’s contracts offered by M/s NSEL for various commodities. The complainant and other investors were cheated by M/s NSEL by creating a false impression of being a proper spot exchange with correct risk management system, thereby induce them to trade on the said exchange. It was further revealed that the certified warehouses of M/s NSEL lacked adequate capacity and in some cases, had no stocks at all. Consequently, genuine investors were defrauded of their investments due to serious misappropriation, as M/s NSEL allowed trading in commodities by sellers, without ensuring that goods of appropriate quantity and quality are stored in exchange- controlled warehouses. The aforesaid resulted in a case of cheating with criminal conspiracy.

3. After registration of the FIR, investigation was conducted and it was found that criminal breach of trust with the complainant has been caused for a sum of Rs.202 Lakhs and Rs.5600 Crores approx. with other investors. Finding a scheduled offence, ECIR was recorded by the respondents followed by an investigation. The investigation was conducted by the Enforcement Directorate in regard to the defaults of various companies.

4. M/s. Aastha Minmet India Pvt. Ltd, and M/s. Juggernaut Projects had received Rs. 1680.65 crores from M/s NSEL in their respective settlement accounts maintained with Axis Bank Ltd. whereas, these entities had paid Rs. 1494.33 crores to M/s NSEL against the sale and to buy TMT rods in T+2 and T+25 contracts executed through M/s NSEL. As per M/s NSEL records, the liability of Aastha Group of companies was to the tune of Rs. 242.66 Crores towards M/s NSEL on account of settlement of their said contracts.

5. Shri Mohit Agarwal, main controller of M/s. Aastha Minmet India Pvt. Ltd, and M/s. Juggernaut Projects in his statements under Section 50 of the PMLA, 2002, admitted that Aastha group had sold TMT rods through contracts launched on the NSEL platform without having physical stock of the same and the said sale transactions were only paper transactions where the funds received from NSEL through bogus sale transactions were diverted for the purpose of investing in real estate, vehicles, repayment of bank loans, interest on working capital, plant expansion etc.

6. As regards the Aastha group, one of the major defaulters of M/s NSEL, Shri Anjani Sinha stated that Shri Mohit Agarwal of the Aastha group had informed that the funds received from M/s NSEL were diverted for capacity expansion of their manufacturing plant of TMT bars at Kurnool, Andhra Pradesh, and for launching new plants at other locations.

7. On 08.11.2012 an LLP agreement was executed vide w

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