2025 Supreme(Online)(ATFP) 13407

APPELLATE TRIBUNAL FOR FORFEITED PROPERTY
Munishwar Nath Bhandari, Chairman, V. Anandarajan, Member
Shri Arun Kumar Sahu Shalini Sahu Shri Piyush Kumar Sahu Shri Tushar Sahu Laxmi Sahu Revti Sahu Ranu Sahu Shri Pankaj Kumar Sahu Poonam Sahu – Appellant
Versus
The Deputy Director Directorate of Enforcement Raipur – Respondent
FPA-PMLA-6918/RP/2023

Under PMLA, 'proceeds of crime' includes property of equivalent value even if acquired before the scheduled offence, when direct proceeds are unavailable. Scheduled offence continues to exist unless court discharges or acquits.

Headnote:(A) Prevention of Money Laundering Act, 2002 - Sections 2(1)(u), 3, 26 - Indian Penal Code, 1860 - Sections 384, 120-B, 204, 353 - Prevention of Corruption Act, 1988 - Sections 7A, 12 - Attachment of properties - Proceeds of crime - Definition of “proceeds of crime” under Section 2(1)(u) includes three limbs: first, property derived or obtained directly or indirectly from criminal activity relating to scheduled offence; second, “the value of any such property” allowing attachment of equivalent value when direct proceeds are unavailable or vanished; third, property equivalent in value held within country or abroad if proceeds taken outside India - Properties acquired prior to commission of scheduled offence can be attached under second limb as “value of any such property” - Mere omission of scheduled offence in charge sheet does not extinguish predicate offence if not discharged or acquitted by competent court - Statements under Section 50 of PMLA, 2002 are admissible - Reliance on diary entries and unexplained cash transactions is permissible. (Paras 26-28, 30)

(B) Interpretation of statutes - Definition of “proceeds of crime” must be read holistically; second limb not redundant - Attachment of untainted property of equivalent value is permissible to prevent siphoning of proceeds - Object of PMLA to combat money laundering justifies such interpretation. (Paras 27-28, 17-18 of quoted order)

Facts of the case:
Appellants, family members of a government officer (Ranu Sahu), challenged provisional attachment of properties under PMLA, 2002, based on allegations that Ranu Sahu received bribe money (Rs.5.52 Crores) as part of a syndicate operating coal extortion in Chhattisgarh. The Enforcement Directorate attached properties of Ranu Sahu and her relatives, including those acquired before her posting as Collector. Appellants argued that properties were acquired from disclosed sources (agriculture, business) and prior to crime, thus not proceeds of crime. They also contended that no scheduled offence existed because the original FIR under Section 384 IPC was not included in the charge sheet. The Tribunal examined statements of appellants and witnesses, noting unsecured loans were actually circular entries for cash, and income from agriculture was insufficient.

Findings of Court:
The Tribunal upheld the attachment, holding that the definition of “proceeds of crime” permits attachment of properties of equivalent value where direct proceeds are not available, even if acquired before the crime. The Tribunal relied on the judgment in Vijay Madanlal Choudhary and Delhi High Court in Axis Bank and Prakash Industries to interpret the second limb. Regarding the scheduled offence, the Tribunal noted that the Supreme Court in Saumya Chaurasia had already held that the offence under Section 384 IPC was not dropped; a separate FIR was registered in Chhattisgarh. The appellants’ arguments about source of income were rejected because statements and evidence showed cash payments and dummy loans.

Issues: 1. Whether properties acquired prior to the commission of the scheduled offence can be attached as “proceeds of crime” under Section 2(1)(u) of PMLA? 2. Whether absence of the scheduled offence in the charge sheet vitiates PMLA proceedings? 3. Whether the appellants had adequately disclosed legitimate source of income for the attached properties?

Ratio Decidendi: The Tribunal held that the second limb of the definition “the value of any such property” allows attachment of any property of equivalent value (including pre-crime properties) when directly derived proceeds are not available. This interpretation is necessary to prevent money laundering. Scheduled offence exists as long as it is not finally absolved by discharge, acquittal, or quashing; mere omission in charge sheet does not terminate it. The appellants failed to prove legitimate source as evidence showed cash payments and circular entries.

Result: Appeals dismissed.

FINAL ORDER

16.10.2025

FPA-PMLA-6918-6924&6932-6933/RP/2023

The batch of appeals have been preferred under Section 26 of the Prevention of Money Laundering Act, 2002 (in short `the Act of 2002’) to challenge the order dated 09.10.2023 passed by the Adjudicating Authority confirming the Provisional Attachment Order dated 08.05.2023.

Brief facts of the case:

2. It is a case where an FIR was registered by the Kadugodi Police Station Whitefield, Bangalore on 12.07.2022 for commission of offence under Section 186,204,353 and 120-B IPC against Suryakant Tiwari, a resident of Raipur along with others. The offence under Section 384 IPC was added with the permission of the court vide Addendum dated 03.09.2022.

3. The Central Board of Direct Taxes (CBDT) issued an Office Memorandum (O.M.) on 13.09.2022 titled as “sharing of information with ED in the case of M/s Jai Ambey Group of Raipur (Suryakant Tiwari Group)” based on the report of DGIT, Investigation, Bhopal.

4. As per the O.M., Mr Suryakant Tiwari colluded with Chhattisgarh State Government officials to carry out the offences of large-scale illegal extortion punishable under Section 384 read with 120-B of IPC. The CBDT disclosed the need of Enforcement Directorate to investigate the matter for contravention of Section 3 of the Act of 2002.

5. According to the FIR and the documents received by the Income Tax Department, a search and seizure operation was conducted at the premises of Suryakant Tiwari and his associates. Various evidences in the form of handwritten diaries, papers and digital evidences were collected which revealed cash transaction by a syndicate operated and coordinated by Shri Suryakant Tiwari along with his associates and other individuals. The syndicate was collecting un-authorized cash over and above the legal amount fixed against the Coal Delivery Order to be issued by SECL (South Eastern Coalfields Limited) for various entities carrying out lifting and transportation of coal throughout the State of Chhattisgarh.

6. The syndicate operated by Suryakant Tiwari and his associates were involved in illegal collection of Rs. 25/- for every ton of coal transportation from mines with the active involvement of State Mining Officials/District Officials and Network Agents stationed in the coal belt. The syndicate operated in a well-planned conspiracy for giving coal delivery orders only after illegal payment to the syndicate. Suryakant Tiwari was assisted by the Government official like Smt. Saumya Chaurasia, Deputy Secretary, CMO (Chhattisgarh Administrative Officer), Sameer Vishnoi, Indian Administrative Services Officer and associates like Rajnikant Tiwari, Roshan Singh, Nikhil Chandrakar, Sheikh Moinudeen Qureshi, Hemant Jaiswal, Joginder Singh etc.

7. The collected money was to be distributed amongst the accused and even to settle the bribe money to the Government Officers and politicians to fund election expenditures. The investigation revealed that large portion of money has been channelized into layered transactions to project it as untainted money and brought into the main stream by investing in the properties, coal washeries and other assets.

8. In terms of the permission received from the learned Court of Metropolitan Magistrate, Bangalore, section 384 IPC was added in the FIR but while filing the charge sheet on 08.06.2023, it was not for the offence under Section 384 IPC and thereby cognizance of offence was taken for offence under Section 204 and 353 of IPC only. The ECIR was recorded on 29.09.2022 when the offence under Section 384 IPC was existing with its addition in the FIR though while filing the charge sheet much later on 08.06.2023, it was not filed for the offence under Section 384. However, it was with the endorsement that Suryakant Tiwari and its syndicate are operating in the state of Chhattisgarh thus, the offence under Section 384 IPC be taken up by Chhattisgarh State Police. An FIR was thus registered by the Chhattisgarh State Police on 17.01.2024 vide FI

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