FINAL ORDER

24.11.2025

By these two appeals 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 01.12.2022 passed by the Adjudicating Authority confirming the Provisional Attachment Order dated 07.06.2022.

Brief facts of the case:

2. It is a case where an FIR was registered by the CBI, Bank Securities and Fraud Cell, New Delhi on a written complaint by the bank officials for commission of offence under Section 120-B read with Sections 420,465,467,468 & 471 of IPC, 1861 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. The main allegations were made against M/s Shakti Bhog Foods Ltd. and its directors, apart from unknown public servants and consequent to the scheduled offence, ECIR was recorded by the respondents. The case is involving an amount of Rs.3269.42 Crores. The amount aforesaid was towards the loan taken by the accused from consortium banks led by the SBI and thereafter company failed to discharge its liability and declared it to be non-performing assets.

3. During the course of investigation, it was found that M/s Shakti Bhog Foods Ltd. in association with Kewal Krishan Kumar, Raman Bhuraria, CA, Devki Nandan Garg, Ashok Kumar Goel and others were directly involved in paper sale purchase transactions without conducting any actual business transactions. It resulted in false inflation of M/s Shakti Bhog Foods Ltd. financials which were presented to the consortium banks, with an intention to cheat/fraud the banks to borrow enhanced loan. Instead of utilizing the borrowed funds for the purpose it was obtained, the accused diverted it to many entities which in turn came to the appellants also and accordingly their properties were also subjected to provisional attachment. It was found that the loan funds availed by M/s Shakti Bhog Foods Ltd. from the lender banks were diverted into bank accounts of shell entities operated and controlled by Ashok Kumar Goel, Devki Nandan Garg, Shri Bhagwan Garg, appellant Mahesh Kumar and Devender Kumar, Entry Operators. It was layered, siphoned off and rotated through the bank accounts of the shell entities. The bogus purchases were booked by M/s Shakti Bhog Foods Ltd. in the books of accounts as genuine purchases without any actual procurement of inventory.

4. It was revealed that Devki Nandan Garg, Ashok Kumar Goel, Shri Bhagwan Garg, Mahesh Agro Pvt. Ltd. and SKK Agro Pvt. Ltd. acquired proceeds of crime in the form of commission/fee and were assisting in the offence of money laundering. They directly and indirectly utilized proceeds of crime to acquire various movable and immovable properties either in their names or in the names of their family members. It is coupled with the fact that one of them, namely, Devki Nandan Garg disposed of his movable and immovable properties by way of sale or gift to his family members to save it from attachment. Apprehending transfer of the properties by the recipient of the proceeds of crime which includes the appellants, an order for provisional attachment of properties was caused.

The Provisional Attachment Order has been confirmed by the Adjudicating Authority and aggrieved by the aforesaid, these appeals have been preferred by the appellants.

5. The learned counsel for the appellants raised two issues for challenge to the impugned order without refuting the allegations and, therefore, we are not required to deal with any other issue than raised by the appellants.

Arguments of counsel for the appellants:

6. The learned counsel for the appellants submitted that the impugned Provisional Attachment Order has been passed after invoking Section 5(1) of the Act of 2002 without recording any apprehension of alienation of property under attachment. It is despite the mandate of Section 5(1)(b) of the Act of 2002. It is also when the respondents caused Provisional Attachment Order invoking second proviso to Section 5(1) of the Act of 2002. The s