Trivandrum Apollo Towers Pvt. Ltd. vs The Deputy Director Directorate of Enforcement Cochin

Headnote:(A) Prevention of Money Laundering Act, 2002 - Sections 8(1), 8(3), 17(1), 17(1A) - Show cause notice - Duty to supply relied-upon documents - The Adjudicating Authority is duty bound to serve all documents that it has 'relied upon' while forming its 'reason to believe' to the party concerned along with the show cause notice - Failure to supply such documents renders the order illegal and unsustainable - Non-supply of FIRs, which are fundamental documents forming the basis of the investigation, cannot be dismissed as 'ancillary' - The legal position laid down by the Delhi High Court in a cited case is applicable. (Paras 33-35)

(B) Appellate Tribunal - Power of remand - In the absence of any specific power of remand, the Appellate Tribunal cannot remand a matter back to the Adjudicating Authority - Consequently, where the impugned order is found to be procedurally invalid, the Tribunal must set it aside rather than remit. (Para 36)

Facts of the case:
The appellant company’s bank accounts were frozen and cash, movable assets, and digital devices were seized during search operations under Section 17(1) of the PMLA, 2002, conducted in connection with investigations against an accused person (Moosa Haji) for scheduled offences under Sections 406 and 420 of the IPC. The Adjudicating Authority confirmed the freezing and seizure by the impugned order dated 26.03.2025. The appellant contended that the relied-upon documents (RUDs), including FIRs, deposit certificates, balance sheets, and income tax returns, were never supplied to it along with the show cause notice in violation of Section 8(1) of the PMLA. The respondent argued that the SCN and OA disclosed the basis and that some documents were later provided.

Findings of Court:
The Appellate Tribunal found that the RUDs were not served with the show cause notice and that even after requests, fundamental documents like the FIRs were never supplied. The FIRs were not 'ancillary' but fundamental to the formation of the 'reason to believe'. The non-supply violated the statutory mandate as interpreted by the Delhi High Court. Since the Tribunal lacks the power of remand, the impugned order could not be sustained and was set aside.

Issues: Whether the impugned order confirming the freezing of bank accounts and seizure of assets is illegal for non-compliance with the mandatory requirement under Section 8(1) of the PMLA to supply all relied-upon documents to the party along with the show cause notice.

Ratio Decidendi: The Adjudicating Authority is required to serve all documents relied upon in forming the 'reason to believe' to the affected party at the stage of issuing the show cause notice. Failure to do so, especially where core documents like FIRs are withheld, renders the entire proceeding and the resultant confirmation order illegal and void. In the absence of a power of remand, the Appellate Tribunal must set aside such order. Result : Appeal allowed. The respondents are directed to return the seized properties and records and to de-freeze the bank accounts of the appellant company within six weeks of receipt of a certified copy of this order. No order as to costs.

Legal Category Hierarchy

1. Appeal against order under PMLA confirming freezing of accounts and seizure of assets. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 )

2. Appellant challenged lack of nexus and non-supply of documents; respondent defended procedural compliance and nexus. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 )

3. Appeal allowed; order set aside for non-supply of documents; directed return of assets and de-freeze accounts. (Para 36 , 37 , 38 , 39 , 40 )

4. Does non-supply of relied-upon documents along with show cause notice under Section 8(1) PMLA vitiate proceedings?

Yes, the Adjudicating Authority must serve all documents relied upon; failure renders the order unlawful, as held in JK Tyre. (Para 32 , 33 , 34 , 35 , 36 )

5. Does the Appellate Tribunal under PMLA have power to remand a matter to the Adjudicating Authority?

No, in the absence of a specific power of remand, the Appellate Tribunal cannot remand; it must set aside the order if procedurally defective. (Para 36 , 37 )

FINAL ORDER

27.10.2025

The present appeal arises from the order dated 26.03.2025 passed by the learned Adjudicating Authority (“AA”) under section 8(3) of the Prevention of Money Laundering Act, 2002 (PMLA) confirming the freezing the appellant‟s bank accounts and seizing cash and movable assets/digital devices belonging to the appellant company under sections 17(1) and 17(1)(a).

Facts in Brief

2. The relevant facts briefly are that various FIRs were registered against one Moosa Haji Charaparambil (Moosa Haji) and others under sections 406 and 420 of IPC for having collected large sums of money from the public promising to pay 15% returns on the investment. However, they did not fulfil the promise as a result of which the investors filed FIRs against them in various Police Stations.

3. Since the FIRs mentioned above disclosed offences comprising „scheduled offences‟ under the PMLA, the Enforcement Directorate (ED) registered an ECIR bearing number ECIR/KCZO/19/2024 and initiated investigations against the said Moosa Haji and others under the PMLA.

4. During the course of Investigation, search operations were conducted on 07.10.2024 under section 17(1) of the PMLA 2002 at various business and residential premises pertaining to the accused. During the search operation, the following properties/ records relating to the present appellant were also seized/frozen:

5. In addition to the above seizure, a freezing order was issued during the course of search under section 17(1) of PMLA, 2002, on 17.10.2024 at Hotel Dimora, Thiruvananthapuram, wherein the credit balance in the following bank accounts in the name M/s Trivandrum Apollo Towers Pvt. Ltd. were frozen:

6. Consequent to the seizures and freezing of accounts, an Original Application (OA) under section 17(4) was filed before the Adjudicating Authority as per the requirement of law. The Ld. AA initiated adjudication proceedings thereupon and vide the impugned order dated 26.03.2025, allowed the OA filed by the respondent directorate and thereby allowed retention/continued freezing of the cash, digital devices and documents and records seized and the bank accounts frozen during the searches conducted by ED.

7. Aggrieved by the said order, the appellants have filed the present appeal on various factual and legal grounds.

Arguments on behalf of the appellant

8. Detailed arguments were made by the ld. counsel for the appellant in support of the appellant‟s case. The case was argued on two main grounds. Firstly, it was contended that contrary to what has been alleged in the impugned order, the accused, Moosa Haji, did not have a substantial share-holding or other funds invested in the appellant company at time of seizure and, therefore, the funds of the company could not have been seized as proceeds of crime infused into the appellant company by him. Secondly, it was contended that the relevant relied-upon documents (RUDs), though specifically requested, were never provided to the appellant. Thus, rendering the impugned order illegal. These contentions are discussed in greater detail below. Certain other issues have also been raised including the validity of the grounds for formation of the „reason to believe‟.

9. With regard to the first of the above-mentioned grounds, it is contended that the Respondent has not demonstrated a clear nexus between the funds of the Appellant company and the proceeds of crime purportedly derived by Moosa Haji or the scheduled offence allegedly committed by him. It is submitted that the offences under Section 420 and 406 of IPC alleged against Moosa Haji are entirely extraneous to the legitimate business operations of the Appellant. There is no allegation that the business operations of the Appellant are linked to the scheduled offences committed by Moosa Haji, or that they were carried out using the proceeds of crime generated by Moosa Haji. As such, there is no link connecting the legitimate funds of the Appellant and the scheduled offence or the proceeds of crime

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2025 Supreme(Online)(ATFP) 13404

APPELLATE TRIBUNAL FOR FORFEITED PROPERTY
V. Anandarajan, Member
Trivandrum Apollo Towers Pvt. Ltd. – Appellant
Versus
The Deputy Director Directorate of Enforcement Cochin – Respondent
FPA-PMLA-764/COCHIN/2025

Under the PMLA, the Adjudicating Authority must supply all relied-upon documents with the show cause notice. Non-supply, especially of fundamental documents like FIRs, renders the confirmation order illegal and cannot be cured by later disclosure.

Legal Category Hierarchy

Table of Contents

4. Does non-supply of relied-upon documents along with show cause notice under Section 8(1) PMLA vitiate proceedings?

5. Does the Appellate Tribunal under PMLA have power to remand a matter to the Adjudicating Authority?

2025 Supreme(Online)(ATFP) 13404

APPELLATE TRIBUNAL FOR FORFEITED PROPERTYV. Anandarajan, MemberTrivandrum Apollo Towers Pvt. Ltd. – AppellantVersusThe Deputy Director Directorate of Enforcement Cochin – RespondentFPA-PMLA-764/COCHIN/2025

Under the PMLA, the Adjudicating Authority must supply all relied-upon documents with the show cause notice. Non-supply, especially of fundamental documents like FIRs, renders the confirmation order illegal and cannot be cured by later disclosure.

Legal Category Hierarchy

Table of Contents

4. Does non-supply of relied-upon documents along with show cause notice under Section 8(1) PMLA vitiate proceedings?

5. Does the Appellate Tribunal under PMLA have power to remand a matter to the Adjudicating Authority?

APPELLATE TRIBUNAL FOR FORFEITED PROPERTY
V. Anandarajan, Member
Trivandrum Apollo Towers Pvt. Ltd. – Appellant
Versus
The Deputy Director Directorate of Enforcement Cochin – Respondent
FPA-PMLA-764/COCHIN/2025