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PMLA Attachment Upheld for Supplying Cheaper Water Instead of Rail Neer

Case Law Details

TaxGuru Citation
2025 taxguru.in 11246
Case Name
Ambuj Hotel & Real Estate Pvt. Ltd Vs Deputy Director (Appellate Tribunal under SAFEMA Delhi)
Date of Judgement/Order
Only available for paid members
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Ambuj Hotel & Real Estate Pvt. Ltd Vs Deputy Director (Appellate Tribunal under SAFEMA Delhi)

Cheap Bottles, Costly Consequences – Supplying Cheap Water, Claiming Rail Neer Rates- Rail Neer Scam: Tribunal Confirms ₹1.35 Cr Attachment Against Caterer

The Appellate Tribunal under SAFEMA/PMLA dismissed the appeal filed by M/s Ambuj Hotel & Real Estate Pvt. Ltd. challenging the confirmation of attachment of ₹1,35,71,122 (FD + current account balances) arising from the alleged Rail Neer scam, where private caterers supplying PDW (packaged drinking water) on Rajdhani/Shatabdi trains were found supplying cheaper water brands while claiming reimbursement at Rail Neer rates.

The Appellant argued that the dispute was purely contractual under the Master License Agreement with Indian Railways, that Rail Neer supply was inadequate, & that circulars permitted BIS-approved alternative PDW brands. They relied on the Delhi High Court decision in Sandeep Silas to argue that sanction for prosecution against officials was quashed, so no criminality survived against licensees. They further contended that no loss was caused to Railways since Rail Neer was sold elsewhere & Railway profits had increased.

The Enforcement Directorate opposed, highlighting that a CBI surprise check on 22.08.2014 revealed widespread non-supply of Rail Neer despite adequate stock. Under Clause 1.3.4 of the catering agreement, Rail Neer was mandatory except where IRCTC lacked supply, & even then, alternative brands required prior written approval—which the Appellant never obtained. ED showed that the Appellant lifted only 5,170 cartons, claimed reimbursement of ₹1.45 crore, but the actual eligible amount was only ₹9.30 lakh, implying a wrongful gain & loss of ₹1,35,71,122.

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Author Info

CA Vijayakumar Shetty
Qualification: CA in Practice
Company: Shetty & Co, Chartered Accountants, Mangalore
Location: Mangalore, Karnataka
Articles Published: 6,941

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