ILC Iron & Steel Pvt. Ltd. Vs Joint Director (Appellate Tribunal Under SAFEMA Delhi)
Tribunal Upholds Attachment: FDs of ILC Iron & Steel Treated as ‘Value of Proceeds of Crime’ Owing to Deep Shareholding Links
The Appellate Tribunal under SAFEMA/PMLA dismissed the appeal filed by ILC Iron & Steel Pvt. Ltd., challenging the attachment of five Fixed Deposits totaling ₹5.34 crore, which the ED had treated as “value of proceeds of crime” arising from a massive illegal-mining scam involving ₹113.51 crore loss to the Government.
The ED’s case is rooted in a CBI chargesheet (2013) against M/s ILC Industries Ltd. & its Director K. Somsekhar, alleging conspiracy, illegal iron-ore procurement, forged documentation, wrongful export & offences under IPC & PC Act. Based on the ECIR, ED attached the FDs standing in the name of the appellant-company.
The Appellant argued that:
- It is a separate legal entity independent of ILC Industries Ltd.
- The ED wrongly believed that its current account belonged to ILC Industries due to a bank’s clerical error, later clarified by Kotak Mahindra Bank.
- No funds were ever received from ILC Industries Ltd., nor did the appellant benefit from any proceeds of crime.
- Both companies had distinct business operations & turnovers (₹364.28 crore for the appellant).
The Tribunal rejected these contentions, holding that shareholding & control structure clearly demonstrated inter-linkage:
- ILC Industries Ltd. holds 49.90% in the appellant-company.
- Vaishnavi Mining (owned by influential MLA Anand Singh) holds another 49%.
- The remaining 1.1% is held by a close relative of the accused director.
Given this “deep financial & management integration,” the Tribunal found that even without direct proof of fund-transfer, the appellant-company formed part of the same group through which proceeds could be layered or parked. The absence of attachable assets in the accused company strengthened the case for attaching the appellant’s assets as “equivalent value” under PMLA.
