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Judgment
FPA-PMLA-2568/LKW/2018
The appellant has filed the present appeal against the order dated 13.08.2018 whereby the Adjudicating Authority has confirmed the PAO dated
28.03.2018 for attachment of Appellantâ€s residential property No.144, Golf Links, New Delhi â€" 110003, ad-measuring 350 sq. mts.
The brief facts are that the work of “Expansion of apron, Construction of additional Taxiway, Extension of Runway and allied works at Varanasi
Airport†was awarded to M/s. Brite-Aricon (Consortium) [a joint venture of two companies, namely M/s. B.R. Arora & Associates Pvt. Ltd. and
M/s. Aricon Developers Pvt. Ltd.].
It is alleged on behalf of the appellant that the work was executed to satisfaction of Airport Authority of India (for short AAI) and completed on
20.08.2010. Copy of Performance Certificate dt 11.12.2010 for satisfactory completion was issued by AAI. The same is placed on record.
After about one year after completion of aforesaid work, the CBI, ACB, Lucknow registered an FIR dated 15.07.2011 alleging that during
execution of above work AAI suffered loss of Rs.25,74,865/- due to submission of fake bills cement and bitumen and lesser quantity of recron used in
PQC.
On the basis of said FIR, the Enforcement Directorate, Lucknow, registered ECIR dated 30.09.2013 for suspected Proceed of Crime of Rs. 25.74
lacs.
The FIR / ECIR does not name the appellant as accused.
In the FIR, it is mentioned that AAI had suffered loss of Rs.25,74,065/- during arguments on appellantâ€s bail application the CBI counsel stated
that AAI has suffered loss to the tune of Rs.63,00,000/-. The loss figure was subsequently changed to Rs.93,63,712.60/-.
However in the charge sheet, the CBI Court found that all charges against the appellant, except charge under section 420 IPC, are baseless. By
order dated 14.04.2015 the CBI Court discharged the appellant from offence under section 120B, 468, 471 of IPC and section 13(2) r/w 13(1)(d) of
PC Act.
The CBI Court has framed charges against other six (6) accused for offence of forgery, cheating, criminal conspiracy and Prevention of Corruption
Act namely Bhupinder Singh, Prabhat Chandra Gopalan, Dilip Kumar, J.L. Marandi and Giri Raj Sharma.
In the meanwhile the disputes arising out of the aforesaid work contract executed between the Contractor - M/s. Brite-Aricon (Consortium) and
the Employer - AAI were referred for arbitration and after carefully examining all claims / counter-claims and documents, the finding of the Sole
Arbitrator are as under:-
“Admittedly, as per the completion certificate recorded by the Respondent, the work was completed as per specification and satisfactory,
and there was no noticeable defects expect a few given in the Annexure. Subsequent Performance Certificate issue on 11.12.2010
reinforces the possession of the satisfactory execution of the workâ€.
The Sole Arbitrator after going through the facts, arguments and documents placed before the AT passed an award dated 09.05.2016 allowing
compensation of more than Rs.4.50 Crore plus interest, in respect of claims made by the Contractor â€" M/s. . Brite-Aricon (Consortium). Relevant
portion from the arbitral award are extracted hereunder for ready reference: -
“Further, as per the observations of Manager Engg. AAI recorded on 22.03.2011 of pg 5 of the EOT case (Ex C-174), AAI suffered no
loss as the Apron was put in operation much later on 15.11.2010 and Runway Painting Drawing was not yet permitted even after 2 years of
its construction…†(at Page no. 565 of the appeal paperbook)
Finding of the Arbitrator
“4.5 ....... as per the completion certificate recorded by the respondent, the work was completed as per specifications and satisfactorily
and there were no noticeable defects except a few given in the annexure. Subsequent Performance Certificate issued on 11th Dec 2010
reinforces the position of satisfactory execution of work. Further, there is no denial that as per observations and recommendations of the
DRB (Headed by Executive Director of AAI itself) given vide Report dated 7th Nov. 2012, the defects were apparently of minor nature since
the Apron was in use for quite long, and as such the respondent was advised to take steps to remedy the situation and close accounts for the
work by 4th Jan 2013, but no action appears to have been taken in this regardâ€
The satisfactorily execution of above work was also confirmed by the Chairman, AAI who appeared before the CBI Court, and recorded his
statement as PW-1, on 18.05.2015.
Apart from the above, from time to time, the AAI officials who were associated with the above work have given statements to the effect that
whenever cement, bitumen was delivered at site by the Contractor, the details were duly verified and entered in the related register. The same were
named as under:-
(i) Shri Bhupender Singh
(ii) Shri Giriraj Sharma
(iii) Shri Dilip Kumar
(iv) Shri Jonas Lal Marandi
(v) Shri Prabhat Chand Gopalan
It has come on record that AAI used to make payments on the basis of measurement and that cement, bitumen and recron were delivered and
brought to site for execution of above work is also proved from the statements of AAI officials Sh. Jonas Lal Marandi, Sh. A.C. Srivastava and Sh.
H.C. Pant recoded by the Directorate under section 50 of the PML Act, 2002.
It is the case of the appellant that during course of inquiry under the Act, relevant documents were submitted to prove that the appellant neither
received nor laundered the alleged POC of Rs.93,63,712/-, however both authorities i.e. respondent and adjudicating authority have ignored the said
evidence and have not dealt with in any order.
It is rightly alleged on behalf of the appellant that the appellant had discharged the burden of proof under section 24 of the PML Act, 2002 by
showing that the very allegation that AAI has suffered to the tune of Rs.93,63,712/- is complete baseless for the reason that payments in respect of
the above work were made on the basis of measurement and not on the basis of vouchers of materials. There is no denial nor any contrary
evidence/material produced.
Without prejudice to his contentions, on behalf of appellant it was submitted before the Adjudicating Authority that if upon considering the case on
merits if the Adjudicating Authority finds that the PAO is valid then the appellant may be permitted to furnish security by way of Fixed Deposit
Receipt (FDR) for appropriate amount which may be attached in lieu of the residential house property, which is worth crores of rupees and is being
used as appellantâ€s residence since the year 1996.
It is alleged on behalf of the appellant that after hearing arguments from both sides the Adjudicating Authority reserved its orders on the complaint
however, when the final order came to be passed without going into the merits of the case, particularly to the effect that the accused have already
secured an amount of Rs.1.24 Crores with the CBI Court.
It is matter on record that before the Adjudicating Authority, the appellant had submitted that the property has been attached against the alleged
POC of Rs.93,63,712/- as the said amount was not available in the bank account of M/s. Brite-Aricon (Consortium) and since no property is found in
the name of M/s. Brite-Aricon (Consortium) therefore the property of appellant is attached in lieu of equivalent value of POC of Rs.93,63,712/-.
The said findings are wholly without application of mind. No material is placed on record on behalf of respondent if any investigation in this is
done. How can the property worth Rupees Fifty Crores is attached against the proceed of crime of Rs. 93,63,712/- (more than the amount which was
also secured with the CBI Court) allegations. The arbitrator has found in his award that there was no loss. This tribunal express no final opinion on the
issue except the alleged amount has already been secured. If ED wishes to take the possession of said amount, ED can move the petition before the
CBI court for the said purpose. It is apparent that by overlooking the facts, statements and documents, and without holding proper investigation under
PML Act, the respondent arbitrarily passed PAO dated 28.03.2018 and attached the aforementioned residential property of the appellant, to the extent
of Rs.93,63,712/- in order to secure the value.
It has come on record that the appellant was not the Contractor in respect of the work awarded by AAI who has also not submitted any voucher
nor received any payment from AAI.
There is no justification the appellant has been singled out and only his property has been attached when all the other six accused persons had
given list of their movable / immovable properties to the respondent.
The impugned order suffers from complete non-application of mind and the same is liable to be set-aside on account of discrimination attitude
adopted by the respondent as in the Chargesheet there were seven accused including appellant and all the accused furnished the list of movable and
immovable property, why pick and choose the appellant who was discharge from all the sections 120B, 468, 471 of IPC and section 13(2) r/w 13(1)(d)
of PC Act. whereas all six accused facing the trial under sections as alleged were not considered/ taken in to account.
The appellant has produced documents to show that the residential property situated at 144, Golf Links, New Delhi was acquired by the appellant
way back in the year 1993, i.e. much prior to the award of contract by AAI.
The property under attachment was purchased by the appellant on 30.09.1993 whereas the POC was allegedly generated between the year 2008-
2010. As such the property under attachment is not “Proceed of Crime†which is now not denied on behalf of the respondent. Counsel for the
respondent has supported both order. It is argued by him that the said property was attached equivalent to value thereof. This tribunal does not agree
with the argument of the learned counsel for the respondent.
The respondent is not entitled to attach the immovable property more than the value of proceed of crime. It is the duty of the respondent to trace
the proceed of crime by investigation. If the agency is failed to trace out the proceed of crime then on the basis of investigation report, the person
concerned must be given an opportunity to secure the proceed of crime. Against Rs. 93,63,712/- as alleged proceed of crime, the property worth more
than Rs. Fifty crores could not have been attached for equivalent value thereof otherwise it amounts abuse of process of law and the case of
harassment and mental torture to the person concerned.
The main purpose under this Act is to secure the proceed of crime till the final order is passed by the Special Court. In the present case, there is
no material on record to show that IO has not made any efforts in this regard. One is failed to understand why the IO was not able to trace out the
proceed of crime from other six alleged accused.
It is evident that the Adjudicating Authority mechanically confirmed the PAO and directed that as soon as the FDR to the extent of
POC is offered, attached the immovable property under attachment will be released.
The proceedings before the Adjudicating Authority and before this tribunal are civil in nature. The main object is to secure the proceed of crime.
The entire alleged proceed of crime has already been secured in the CBI court. The party concerned is not supposed to secure the same amount of
alleged proceed of crime with every agency. It has to be secured at one place. Incase courts grant the permission, the possession of proceed of crime
can be retained by ED after such order is passed.
The alleged POC of Rs.93,63,712/-, is already secured with the CBI court, in the form of FDRs. The total amount is secured is Rs.1.24 Crore.
The appellant alone has secured Rs.64 Lakhs while the balance 60 Lakhs has been secured by the other six accused pursuant to the bail orders
passed by the High Court of Judicature at Allahabad. The appellant has also filed an additional affidavit on 25.10.2018 in this regard.
The said deposit of Rs. 64 Lakh has been deposited by the appellant in addition to the surety amount, as evident from High Courtâ€s order.
Therefore, the apprehension of respondent is completely baseless. The High Courtâ€s order dated 19.12.2013 in the bail application filed by the
appellant has been filed who agree and undertakes that till the matter is finally decided, the said amount be treated as alleged proceed of crime and the
appellant undertakes not to withdraw the same.
Procedure prescribed under Section 5 of the PMLA was not followed by the Adjudicating Authority as no copy of reason to believe are produced
nor filed by the respondent recorded if any at the stage of Section 5(1) and 8(1) of the Act. In the present case prima facie as per material produced
on record show that the appellant was/is not involved in any provisions of money laundering.
Copy of reason to believe were not produced before this tribunal nor any copy was served. The same were not re-produced in the notice issued
under section 8(1) of the Act nor those are either mentioned in the counter-affidavit or annexed therewith. Counsel of respondent submits that there is
no requirement to record the reasons to believe separately. The same are to be mentioned in the provisional attachment order only.
PMLA is a preventive measure and not a punitive measure. In the present case inspite of admitted fact that the amount in far excess of the
alleged POC is secured with the CBI Court, the appellant cannot be compelled to again secure the amount. The attachment of appellant premises was
not called for. The immovable worth more than 50 crores could not have been attached against the alleged proceed of crime.
In view of the above, the impugned order dated 13.08.2018 and the complaint (O.C. No. 953 / 2018) alongwith order of PAO dated 28.3.2018 are
quashed with regard to appellant. The appeal is disposed of accordingly. It is clarified that this order shall have no bearing when the complaints
pending before the Special Court will be decided on merit. The attachment of the house/property at 144 Gold Links, New Delhi is lifted forthwith.
No costs.