Attachment of Property Under PMLA Equivalent to Proceeds of Crime Upheld as Appellant Failed to Justify Its Purchase

Case Details: Dinesh Pratap Singh v. Deputy Director, Directorate of Enforcement - [2024] 168 taxmann.com 392 (SAFEMA-New Delhi)

Judiciary and Counsel Details

• Justice Munishwar Nath Bhandari, Chairman & Balesh Kumar, Member
• Kanhaiya Singhal, Adv. for the Appellant.
• N.K. Matta, Adv. for the Respondent.

Facts of the Case

In the instant case, an FIR was registered alleging the distribution of higher compensation on the acquisition of land for widening of the road in a fraudulent manner.

During the investigation, it was found that various accused persons, including the appellant, then Special Land Acquisition Officer, in connivance with other revenue officers, distributed exorbitant and unjustified compensation to farmers with the intention of getting monetary benefits, misappropriated government funds by way of granting compensation on acquisition of land at a non-agricultural rate for agricultural land which resulted into loss to the Government.

The ED recorded an ECIR, and properties of the appellant and his wife ‘A’ were provisionally attached under section 5(1) of PMLA, 2002. The Prosecution complaint was filed before the Adjudicating Authority, which confirmed the provisional attachment order vide the impugned order.

On appeal, the appellant submitted that the properties attached were not obtained or purchased out of “proceeds of crime”. It was noted that the value of any such property would apply when proceeds of crime are not available, siphoned off or vanished. In that case, the attachment can be of property of the equivalent value.

Appellate Tribunal Held

The Appellate Tribunal held that the appellant failed to submit any document to justify the purchase of property apart from his agricultural income. Accordingly, in the absence of proof of source to acquire property, the Adjudicating Authority rightly attached it as the total value of proceeds was available with the appellant having vanished. Other properties and “value of any other property” were attached.

Further, the Appellate Tribunal held that since the ingredient of section 3 of the Act was satisfied, there was no merit in the instant appeal, and, thus, the same was to be dismissed.

List of Cases Reviewed

• Hygro Chemicals Pharmtek Pvt. Limited v. Union of India & Ors [MANU/TL/1003/2023], (Para 18)
• Vijay Madanlal Chaudhary and other v. Union of India and others, 2022 SCC OnLine SC 929, (Para 34), followed
• Seema Garg v. Deputy Director, Directorate of Enforcement, 2020 SCC OnLine P&H 738
• Surendra Singhi v. The Joint Director, Directorate of Enforcement, Hyderabad. FPA PMLA-1928/HYD/2017
• Suman Chattopadhyay v. Directorate of Enforcement, Govt. of India, 2022 SCC OnLine Cal 1807
• Kaushalya Infrastructure Development Corporation Ltd. v. Union of India, MANU/JH/0630/2021, (Para 28), distinguished

List of Cases Referred to

• Radheshyam Kejriwal v. State of West Bengal (2011) 3 SCC 581 (para 7)
• Singh v. Union of India 2021 SCC OnLine AP 983 (para 7)
• HDFC Bank Limited v. Govt. of India, Ministry of Finance 2021 SCC OnLine Pat 4222 (para 7)
• Suman Chattopadhyay v. Directorate of Enforcement, Govt. of India 2022 SCC OnLine Cal 1807 (para 7)
• Union Public Service Commission v. Bibhu Prasad Sarangi, (2021) 4 SCC 516 (para 7)
• Prakash Corporates v. Dee Vee Projects Limited 2022 INSC 180 (para 21)