Neetu Gupta Vs Deputy Director (Appellate Tribunal Under SAFEMA Delhi)
SAFEMA Tribunal Sets Aside PMLA Attachment Order Against Director’s Wife, Remands Case for Fresh Adjudication
The Appellate Tribunal under SAFEMA set aside the Adjudicating Authority’s order confirming attachment of the property of Neetu Gupta, wife of late Bharat Bhushan Roshanlal Gupta, in a PMLA case arising from the alleged ₹33.12 crore and ₹27.46 crore bank frauds involving Spectra Motors Ltd. and Spectra Industries Ltd. The ED alleged that fraudulent Letters of Credit (LCs), supported by fake invoices and transport documents, were used to siphon bank funds, leading to attachment of the appellant’s immovable property valued at ₹13.13 crore.
The appellant contended that the attached property had been acquired long before the alleged offences, that her late husband had resigned from Spectra Industries in 2016, prior to the issuance of the disputed LCs during 2017-18, and that there was no money trail connecting either him or the appellant with the alleged proceeds of crime. It was further argued that the ED had failed to establish that any proceeds of crime had been transferred to the appellant or that attachment as “equivalent value” was legally justified. The appellant also challenged the Adjudicating Authority’s order as a non-speaking order, alleging that it merely reproduced pleadings without recording findings on the issues raised.
Accepting the procedural challenge, the Tribunal held that although the Adjudicating Authority had passed a detailed order, it had failed to record reasoned findings on the appellant’s specific contentions, particularly regarding the alleged absence of a money trail and the nexus between the attached property and the proceeds of crime. Holding that Section 8(2) of the PMLA requires a reasoned adjudication, the Tribunal set aside the impugned order and remanded the matter for fresh consideration, directing the Adjudicating Authority to examine every issue raised by the appellant and pass a speaking order after hearing both sides.
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
By this appeal under Section 26 of the Prevention of Money Laundering Act, 2002 (in short “the Act of 2002”), a challenge has been made to the order dated 29.07.2025 passed by the Adjudicating Authority confirming the Provisional Attachment Order (“PAO”) of the properties in the hands of different defendants which include the appellant. Aggrieved with the order of the Adjudicating Authority, the appeal has been preferred by the appellant raising many factual as well as legal issues.
Arguments of Ld. Counsel for the appellants:
2. The appellant is the wife of one of the accused, Late Shri Bharat Bhushan Roshanlal Gupta who was looking after M/s Spectra Industries Limited with other partners. The Assistant General Manager, Bank of India lodged an FIR on 07.02.2023 alleging the offence under Section 120B, 420, 406 & 477A of the Indian Penal Code, 1860 and Sections 13(1) & 13(2) of the Prevention of Corruption Act, 1988. It was alleged that Late Shri Bharat Bhushan Roshanlal Gupta, Shri Jaidev Gupta, Smt. Sheela Gupta and others along with partners of M/s Spectra Motors Ltd. defrauded the complainant bank for a sum of Rs.33.12 Crore. The account was declared to be Non-Performing Assets on 31.03.2018. However, the FIR aforesaid resulted in final report under Section 173 of the Criminal Procedure Code on the ground that the main allegation exists against Late Shri Vinod Kumar Gupta and Late Shri Bharat Bhushan Roshanlal Gupta, who are no more. They were the directors and the promoters of M/s Spectra Motors Ltd. and other Directors, namely, Shri Jaidev Gupta and Smt. Sheela Gupta were merely nominal directors and were not involved in the day-to-day business operations of M/s Spectra Motors Ltd..
3. The another complaint was given to EOB, CBI, Chennai. The CBI registered an FIR on 29.03.2023 against M/s Spectra Industries Limited and its director for the similar offences but it was not against M/s Spectra Motors Limited alone. The allegation against M/s Spectra Industries and its directors was for defrauding the complainant bank to the tune of Rs.27.46 Crore. The ECIR was recorded by the respondent thereupon followed by the investigation. It was found that Late Shri Vinod Kumar Gupta and Late Shri Bharat Bhushan Roshanlal Gupta apart from others were involved in issuance of fraudulent Letters of Credit (‘LCs’) in the name of fictitious entities namely, M/s Aassem Multitrade Pvt. Ltd., M/s Munirabad Trading Pvt. Ltd. M/s Peral Enterprises and M/s Blue Sea Commodities.
4. The accused were engaged in raising fake invoices and lorry receipts to claim funds against the LCs.. The lorry receipts and transportation invoices attached with LCs were found to be fraudulent. These fake documents were created by the accused and thereby LCs were misused by M/s Spectra Industries Ltd through its Directors to artificially inflate the company’s turnover despite the fact that M/s Spectra Industries Ltd. was not engaged in actual business, yet claim to be involved in manufacturing automobile spare parts and otherwise, the LCs were issued for the trading of fabric, a field area in which M/s Spectra Industries Ltd. had no expertise. The funds were routed back into M/s Spectra Industries Limited’s cash credit account as the company had no genuine income. Its loan account with Bank of India turned NPA with outstanding amount of Rs.24,77,79,992/-. The proceeds of crime was analyzed and assessed with different persons involved in commission of crime and for its laundering. The appellant’s immovable property has been attached for a sum of Rs.13,13,23,396/-. The Provisional Attachment Order has been confirmed and aggrieved with the order, this appeal has been preferred.
Arguments of the Ld. Counsel for the appellant:
5. Ld. Counsel for the appellant submitted that the property acquired much prior to the crime has been provisionally attached without showing its connection with the crime and thereby the provisional attachment of the property has been caused without any basis. The Adjudicating Authority failed to record the finding on it. It was specifically submitted that the property was acquired much prior to the crime. It has been provisionally attached despite the fact that the respondent failed to connect it with the crime. The Adjudicating Authority has failed to record its finding as to whether Late Shri Bharat Bhushan Roshanlal Gupta was involved in commission of crime and has acquired the proceeds at any time.
6. In view of the above, the Adjudicating Authority has failed to make adjudication of the issues raised by the appellant or otherwise to be decided to make an order in consonance to the Section 8(2) of the Act of 2002.
7. Ld. Counsel for the appellant, further, submitted that though the properties acquired even prior to the commission of crime can be provisionally attached for “value thereof” or “equivalent value” but it is when the proceeds of crime is layered or transferred to the person who has vanished or laundered it and is not found available for provisional attachment. The necessity is to prove that proceeds out of crime was laundered or transferred to the person who has vanished it and therefore not available, thus, to attach any other property of “equivalent value” or “value thereof”. In the instant case, the respondent has failed to demonstrate that any part of the alleged proceeds was ever laundered or passed on to Late Shri Bharat Bhushan Roshanlal Gupta or to the appellant. The aforesaid aspect has also been ignored by the Adjudicating Authority because no finding on it has been recorded.
8. Ld. Counsel for the appellant, further, submitted that the period of alleged crime is year 2017-2018 when LCs were issued showing it to be based on fraudulent invoices of lorry and transportation receipts. Late Shri Bharat Bhushan Roshanlal Gupta had resigned from M/s Spectra Industries Ltd. in the year 2016 itself i.e. prior to the commission of crime. An arbitration award was made between him and his brother managing M/s Spectra Industries Ltd. prior to the commission of crime. Late Shri Bharat Bhushan Roshanlal Gupta was not available to involve himself in fraudulent act of drawing the funds against the LCs and therefore any amount received by M/s Spectra Industries Ltd. could not have been attributed to Late Shri Bharat Bhushan Roshanlal Gupta so as to attach his property.
9. Ld. Counsel for the appellant, further, submitted that the impugned order has been passed by the Adjudicating Authority without recording findings in reference to the argument raised by appellant and therefore no reasoned order has been passed. It is despite a mandate given under Section 8(2) of the Act of 2002. Accordingly, the impugned order deserves to be set-aside even on the aforesaid ground.
10. Ld. Counsel for the appellant did not raise any other arguments than referred to above though, though, Ld. Counsel for the appellant was given opportunity to raise any other argument but Ld. Counsel restricted his arguments to the grounds narrated above.
Arguments of the Ld. Counsel for the respondent:
11. The appeal was contested by the respondent on all the grounds. Elaborate arguments were made to contest the issues raised by the appellant and would be referred while recording finding on each issue raised by the appellant.
Findings of the Tribunal:
12. I have considered the rival submission of the parties and perused the records. The appellant has raised many issues touching the facts of the case. It is to demonstrate that the property has been provisionally attached in ignorance of the fact that it had no connection with the commission of crime. It is with the further submissions that the appellant and her husband did not engage himself in issuance of the LCs and for that in any fraudulent act. The argument has been raised to show no justification for attachment of the property belonging to the appellant, who is none-else but the wife of Late Shri Bharat Bhushan Roshanlal Gupta, who resigned from the firm much prior to the issuance of the LCs. Ld. Counsel for the appellant even argued that the Adjudicating Authority has failed to record its finding as mandated under Section 8(2) of the Act, 2002. It should be after considering the issues raised by the appellant. However, other than reproduction of the pleadings, finding on each issue has not been recorded.
13. Since the last issue raised by the appellant is about non-speaking order under challenge, I am required to deal with the aforesaid question and if it is decided in favour of the appellant then it would be resulted in to remand of the case and therefore it would be unnecessarily to refer the other issues rather to remand the case to the Adjudicating Authority with a request to consider and record its finding on each issue raised by the appellant. Accordingly, I have taken up the last issue raised by the appellant for consideration at the first instance.
14. The case of the appellant is that the Adjudicating Authority has passed a non-speaking order inasmuch as no reasoning has been given for confirmation of Provisional Attachment Order; rather, none of the issues raised by the appellant have been dealt with. It is with the attribution that the impugned order is largely consists of the pleadings of the parties. To appreciate the argument, I have gone through the order and find that the Adjudicating Authority has passed detailed order, however, finding thereupon does not record reason in relation to each argument raised by the appellant. It is more so when the appellant has specifically stated that there is no money trail to show receipt of the proceeds of crime by her husband, Shri Bharat Bhushan Roshanlal Gupta and therefore how the properties have been connected with the crime.
15. Ld. Counsel for the appellant has raised many arguments which said to have been not considered by the Adjudicating Authority. I find substance in the argument of the Ld. Counsel for the appellant in regard to passing of non-speaking order by the Adjudicating Authority. Accordingly, I cause interference in the impugned order dated 29.07.2025 and is set-aside with remand of the case to the Adjudicating Authority to pass an order afresh after dealing with each issue raised by the appellant. The parties are directed to appear before the Adjudicating Authority on 25.08.2026. The statutory period would be counted from the date of first appearance of the parties before the Adjudicating Authority. The Adjudicating Authority is requested to deal with the issues raised before it out of which few of them have been referred in this order. The appellant would, however, be at liberty to raise all the relevant issues, as is made out and it is for the respondent to defend it.
16. With the aforesaid, the appeal is disposed of.
