Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(ATFP) 13394

APPELLATE TRIBUNAL FOR FORFEITED PROPERTY
Balesh Kumar, Member, Rajesh Malhotra, Member
Smt. H. Sheela Begam @ Asma Begam v. The Deputy Director Directorate of Enforcement Chennai
FPA-PMLA-2357/CHN/2018

Advocates:
For the Appellants/Petitioners: A. Lakshminarayanan, Anand Padmanabhan, Ruchi, Arimadham Sharma
For the Respondents: Pankaj Pandey

Under PMLA, proceeds of crime includes value equivalent property, allowing attachment of assets acquired prior to enactment if actual proceeds dissipated; money laundering is a continuing offence independent of the scheduled offence date.

Headnote:(A) Prevention of Money Laundering Act, 2002 - Sections 2(1)(u), 3, 5, 8, 26 - Proceeds of crime - Definition includes property derived from scheduled offence and value of any such property - Property equivalent in value can be attached even if acquired prior to enactment - Offence of money laundering is independent and continuing - Burden of proof on accused to show licit source - Adjudicating Authority's order not templated if reasons given - No power to remand under PMLA.

(B) Criminal Procedure Code, 1973 - Section 173 - Final report - Effect of police investigation.

Facts of the case:
These appeals under Section 26 of PMLA challenged the order of the Adjudicating Authority confirming provisional attachment of properties. The appellants were involved in illegal granite mining in a district, causing loss of crores to the government. The Enforcement Directorate attached numerous properties. The appellants contended that the properties were purchased from legitimate income, that properties acquired before the Act or before the mining permit could not be attached, and that the impugned order was templated and lacked application of mind.

Findings of Court:
The Tribunal held that the Adjudicating Authority's order was reasoned and based on material evidence. The definition of proceeds of crime under Section 2(1)(u) includes value of property, allowing attachment of equivalent properties even if acquired prior to enactment, as per Prakash Industries and Vijay Madanlal. The offence of money laundering is continuing and not dependent on the date of the scheduled offence. The appellants failed to discharge the burden of proving a licit source. The Tribunal also held that there is no power to remand in the absence of a specific provision.

Issues: The main issues were whether the matter needed remand due to alleged non-application of mind; whether properties purchased prior to 01.07.2005 are immune from attachment; whether illegal mining not being a scheduled offence invalidates PMLA proceedings; and whether the share of a joint property owner should be released.

Ratio Decidendi: The term 'proceeds of crime' is wide enough to include property equivalent in value to the proceeds derived from a scheduled offence, and attachment of such equivalent property is permissible even if acquired before the Act came into force, provided the actual proceeds cannot be traced. The offence of money laundering is a continuing process and can be prosecuted irrespective of when the scheduled offence was committed, as long as the accused continues to deal with the proceeds. The burden lies on the person claiming property to be legitimate to prove the source.

Result: Appeals of all appellants except one dismissed; one appeal disposed of with liberty.

FINAL ORDER

29.10.2025

Dictated By: Rajesh Malhotra

Present appeals under Section 26 of Prevention of Money Laundering Act, 2002 (hereinafter PMLA) are filed by the appellants against the order dated 17.04.2018 passed by the Adjudicating Authority in Original Complaint No. 852/2017 (OC), whereby the properties attached by ED vide Provisional Attachment Order No. 21/2017 (PAO) dated 30.10.2017 were confirmed. The details of the said properties are mentioned at internal page no. 67 to 139 of the Provisional Attachment Order in Schedule I to Schedule III and the said details is not reproduced herein for the sake of brevity. However, the total properties of the Appellants along with registration value and the guidelines value prescribed by Govt. of Tamil Nadu are tabulated as under:

2. As per the facts of the case, the FIR no. 156/2012 dated 06.08.2012 was lodged at P.S. Keelavalavu, District Madurai, Tamil Nadu against the accused persons for the Commission of offences punishable under Sections 120-B of IPC read with 304, 447, 379, 434, 420, 467, 468 & 471 of IPC and also Section 6 r.w.s. 3 & 4 of the Explosive Substances Act, 1908 and also r.w.s. 3(1)(ii)(iii) of TNPPDL Act, 1992 , and the substantive offences thereunder. The said FIR was registered against S/Shri Paneer Mohamed, C. Rabeek Raja and Others for illicit quarrying out granites and for causing huge damage to human life and property by setting up explosives in Keelavalavu village. After investigation, police filed final report u/s 173 Cr.P.C. against the accused persons on 01.10.2013 against M/s Madurai Granite Exports, C. Paneer Mohamed, C. Rabeek Raja and 19 other accused persons. As per chargesheet, the accused persons trespassed into the nearby areas of Governments Rocky Poramboke land and carried out mining works by using deadly explosive substances to misappropriate the multi-coloured granite stones in an illegal manner during the period prior to and between 2005 to 2012, quarried at non-licensed Government land and selling illegally dug multi colored granite stone causing loss to the Government exchequer to the extent of Rs. 277.42 Crores and illicit gains for themselves.

On the basis of police investigation, the Directorate of Enforcement, Chennai Zone recorded the ECIR No. 03/CEZO/2014 on 30.06.2014 for initiating investigation pertaining to the offence of money laundering and to check the trail of proceeds of crime.

Four more FIR No. 166/2012, 183/2012, 397/2013 & 19/2015 were registered and charge-sheet were filed in first three FIRs, against the same accused persons, for similar offences in different Police Station totalling the loss to the Government exchequer to the Rs. 450 crores.

As per the police investigation, the illegal granite mining scam took place in Madurai District, Tamil Nadu by M/s Madurai Granite Exports, M/s RR Granites, M/s MR Granites and others and the same are as follows:

Shri U. Sagayam, IAS., was appointed as Special Officer/Legal Commissioner by the Hon’ble High Court to probe into the Granite Mining Activities. He was earlier the District Collector of Madurai District and during his tenure as District Collector, he had received various Complaints and Petitions on illegal mining of granite stones and he had conducted enquiry and submitted a report to the Principal Secretary, Industries Department, Government of Tamil Nadu, Chennai, vide Report dated 19.05.2012, wherein he had detailed the enquiries conducted by him and also made various recommendations to curb the illegal mining scam.

Shri Anshul Mishra, District Collector, Madurai, the Successor to Shri U. Sagayam, constituted 18 District Level Teams vide Proceedings No.318/2012/Kanimam dated 1.8.2012 with each Team comprising officials from the Revenue Department, Geology & Mining, Rural Development Department etc. for the purpose of conducting initial survey and assessment of mining in all granite quarries located in Madurai District.

Shri Atul Anand, Commissioner of Geology and Mining, C

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2025 Supreme(Online)(ATFP) 13394

APPELLATE TRIBUNAL FOR FORFEITED PROPERTYBalesh Kumar, Member, Rajesh Malhotra, MemberSmt. H. Sheela Begam @ Asma Begam v. The Deputy Director Directorate of Enforcement ChennaiFPA-PMLA-2357/CHN/2018

Under PMLA, proceeds of crime includes value equivalent property, allowing attachment of assets acquired prior to enactment if actual proceeds dissipated; money laundering is a continuing offence independent of the scheduled offence date.

APPELLATE TRIBUNAL FOR FORFEITED PROPERTY
Balesh Kumar, Member, Rajesh Malhotra, Member
Smt. H. Sheela Begam @ Asma Begam v. The Deputy Director Directorate of Enforcement Chennai
FPA-PMLA-2357/CHN/2018