P. Jose Kunjippalu Vs Deputy Director (Appellate Tribunal under SAFEMA, New Delhi)
No Bribe Allegation Needed: Disproportionate Assets Can Themselves Trigger PMLA, SAFEMA Tribunal Upholds ₹1.01 Crore Attachment
Summary:
The appellant, P. Jose Kunjippalu, was a public servant who worked as Assistant Commissioner of Income Tax, Circle-1, Palakkad Range. The CBI registered FIR No. RC 16(A)/2014 on 26 November 2014 alleging commission of an offence u/s 13(2) r.w.s. 13(1)(e) of the Prevention of Corruption Act, 1988.
According to the CBI, during the relevant check period, the appellant’s known income was ₹1,07,41,168, while he & his wife acquired properties worth ₹1,46,03,843 & incurred expenditure of ₹62,09,946. The alleged disproportionate assets were quantified at ₹1,00,72,621, representing 93.78% of the known lawful income.
Based on the scheduled offence disclosed in the CBI FIR, the ED registered an ECIR, conducted investigation & recorded statements u/s 50(2) & 50(3) of PMLA. It issued a PAO on 30 March 2022, attaching properties to the extent of the alleged proceeds of crime. The Adjudicating Authority confirmed the attachment on 7 September 2022.
The Tribunal had earlier disposed of the appeal on 17 March 2025. The Bombay High Court set aside that order on 10 June 2026 & permitted the appellant to seek reconsideration or expungement of observations. The Tribunal therefore heard the appeal afresh on merits.
Issue before the Tribunal
The principal issue was whether possession of assets disproportionate to known sources of income u/s 13(1)(e) of the PC Act could constitute a scheduled offence capable of generating proceeds of crime & supporting proceedings u/s 3 of PMLA, even without a specific allegation of acceptance of bribe.
The Tribunal also examined whether properties allegedly acquired from lawful sources, assets belonging to the appellant’s wife, bank or demat accounts stated to have been seized by the CBI & alleged defects in computation justified interference with the attachment.
Appellant’s submissions
Appearing in person, the appellant argued that an offence u/s 13(1)(e) necessarily presupposed receipt of bribe or illegal gratification. Since the FIR contained no specific allegation of bribe, no scheduled offence or money-laundering offence could arise.
He contended that mere possession of disproportionate assets did not establish concealment, layering, projection or use of proceeds of crime u/s 3 of PMLA. There was no allegation that he had actively laundered any property.
The appellant also disputed the shortened check period from 1 January 2011 to 23 March 2014, though he had entered government service in 1989. He maintained that properties acquired through lawful income or bank loans could not be attached as tainted assets.
It was further submitted that the CBI had already seized his bank & demat accounts. Therefore, the ED’s attachment of equivalent-value properties reflected non-application of mind.
The appellant also challenged inclusion of cash deposits in the disproportionate-assets computation & asserted that certain attached properties belonged independently to his wife. He relied upon a discharge application filed before the criminal court, while admitting that it had been dismissed & the dismissal was under challenge.
ED’s contentions
The ED opposed the appeal, submitting that section 13(1)(e) of the PC Act was expressly a scheduled offence under PMLA. Unexplained acquisition, possession & enjoyment of disproportionate assets could amount to processes connected with proceeds of crime.
It maintained that attachment was restricted to the quantified disproportionate assets & was supported by reasons to believe that the properties might be alienated if not immediately secured.
Tribunal’s findings & legal reasoning
The Tribunal rejected the contention that a specific bribe allegation was essential. An offence u/s 13(1)(e) is distinct from offences relating to acceptance of illegal gratification. It is attracted when a public servant possesses assets disproportionate to known lawful sources.
Section 3 of PMLA covers direct or indirect involvement in concealment, possession, acquisition, use or projection of proceeds of crime as untainted. The alleged acquisition & possession of unexplained properties, coupled with their projection as lawful assets, prima facie satisfied the statutory framework. The Tribunal’s reasoning concerned the statutory scope of Section 3; TaxGuru has separately discussed the provision and its explanation in its material on the Prevention of Money Laundering Act, 2002.
The Tribunal emphasised that its finding was only prima facie, since final determination of the scheduled offence remained with the criminal court. However, dismissal of the appellant’s discharge application supported existence of a prima facie case & no favourable appellate order had been produced.
Regarding lawful property, the Tribunal found that the attachment was limited to ₹1,00,72,621, being the quantified disproportionate portion, rather than the entire assets. Known income, housing loan & related repayments had been considered in the computation. Expenditure incurred by the appellant was also legitimately relevant in determining disproportionate assets.
The appellant failed to produce any order showing prior attachment by the CBI. Similarly, despite challenging alleged cash deposits, he did not furnish the relevant bank statements. Unsupported oral assertions could not displace the investigation record.
The argument concerning the wife’s independent property was also rejected because no sufficient material established that the attached value fell outside the alleged disproportionate-assets computation.
Finding valid reasons to believe, a surviving scheduled offence & apprehension of alienation, the Tribunal upheld the PAO & dismissed the appeal.
Practical implications
The decision clarifies that PMLA action based on disproportionate assets does not depend upon proof of a specific bribe transaction. Section 13(1)(e) is independently a scheduled offence.
At the attachment stage, the ED need only establish a prima facie link between unexplained wealth & the scheduled offence. Final guilt remains subject to criminal trial.
A claimant asserting lawful acquisition, independent ownership by a spouse or prior attachment by another agency must produce bank records, loan documents, income evidence & formal seizure orders. Bare assertions will not suffice.
The central principle is that unexplained possession & projection of disproportionate assets as lawful property can itself sustain PMLA attachment, even without a separately identified bribe payment.
FULL TEXT OF THE JUDGMENT/ORDER OF APPELLATE TRIBUNAL UNDER SAFEMA
1. By way of this appeal, the appellant has challenged the order dated 07.09.2022 passed by the Adjudicating Authority confirming the Provisional Attachment Order (“PAO”) dated 30.03.2022. This appeal was earlier disposed of by this Tribunal vide order dated 17.03.2025. However, the order was challenged before the High Court of Bombay. The order dated 17.03.2025 of this Tribunal was set-aside by the High Court of Bombay vide its order dated 10.06.2026 with the liberty to the appellant to file appropriate application before the Tribunal seeking either modification or expungement of the observations made by it qua the appellant and to hear the appeal on merits. The prayer of the appellant is to hear the appeal on merit and decide it. The prayer has been accepted and accordingly the appellant argued the appeal at length for passing order on merits.
Brief facts of the case
2. It is a case where an FIR bearing No. RC 16(A)/2014 was registered by the CBI, Cochin on 26.11.2014 against the appellant for the offence punishable under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988 (in short “the PC Act”). It was alleged that the appellant, Shri P. Jose Kunjippalu while working as a public servant in the capacity of Assistant Commissioner, Income Tax Circle-1, Palakkad Range along with his wife Smt. Rosy Jose amassed assets disproportionate to his known sources of income. It was found that during the check-period, the total income of the appellant was Rs.1,07,41,168/- while he acquired the properties worth of Rs.1,46,03,843/- and incurred expenses of Rs.62,09,946/-. Thereby he was found to be in possession of disproportionate assets of a sum of 1,00,72,621/-. It was 93.78% above to his known source of income.
3. The respondent – Enforcement Directorate recorded the ECIR finding a predicate offences disclosed in the FIR and caused investigation. They recorded the statement under Section 50(2) and Section 50(3) of the Prevention of Money Laundering Act, 2002 (in short “the Act of 2002”) and caused the provisional attachment of the properties to the extent of the proceeds of crime. After causing provisional attachment of the properties, the appellant was served with a notice by the Adjudicating Authority to file reply to the notice disclosing the source of income etc. The appellant filed the reply to the notice. The Adjudicating Authority, however, confirmed the PAO passed against the appellant. Aggrieved by the order aforesaid, the present appeal has been filed.
Arguments of the appellant:
4. The appellant, appearing in person, submitted that no predicate offence exists in the matter so as to provisionally attach the properties belonging to the appellant. Elaborating the argument, it was submitted that the FIR was registered for the offence under Section 13(1)(e) of the PC Act. It is for acquisition of the property disproportionate to known sources of income. Thus, necessarily it would involve a case of bribe. The fundamental allegation of bribe does not make against the appellant and thereby the allegation for possession of assets disproportionate to the known source of income cannot be made out. The Adjudicating Authority failed to consider this aspect of the matter while confirming the PAO. It is more so when the check-period was reduced by the respondent making it between 01.01.2011 to 23.03.2014, though, the appellant entered into the government service in the year 1989.
5. The appellant, further, submitted that a discharge application was filed by him raising many issues to deny the allegations. It was submitted that allegation for under Section 13(1)(e) of the PC Act would not make out or involve a case of money-laundering. In fact, no allegation exists against the appellant for involving himself in the case of money-laundering. The properties in the hands of the appellant have yet been attached by the respondent in ignorance of the fact aforesaid. Thus, on the aforesaid ground also, the impugned order deserves to be set-aside.
6. The argument was raised on computation of the amount taking into consideration even the property acquired by the known source or by the legal means. It could not have been made subject to provisional attachment of the properties. The respondent failed to consider this aspect of the matter while provisionally attaching the properties belonging to the appellant and his wife. The ground has been taken in application filed before the Court for discharge, though, the appellant in person fairly conceded that the discharge application has been dismissed by the Court. A challenge to the order has been made by him.
7. The appellant, further, raised the argument in reference to Section 5(1) of the Act of 2002. It is to allege that the provisional attachment of the property can be caused when it is involved in the money-laundering and likely to be dealt with. A case of the nature to fall under Section 5(1) of the Act of 2002 was not made out. Yet, not only the provisional attachment of the properties was caused but even the attachment order has been confirmed by the Adjudicating Authority without considering even the legal issues raised by the appellant.
8. It was with the further submission that there was no element of cash deposit in the bank account, however, it was taken for determining the amount of disproportionate assets in an erroneous and illegal manner. Thus, on the aforesaid ground also, the impugned order deserves to be set-aside because the case was not made out to cause provisional attachment of the properties under Section 5(1) of the Act of 2002.
9. The appellant, further, submitted that CBI seized the bank and demat accounts. However, ignoring the aforesaid, the PAO was caused for the value equivalent to the proceeds. It was in ignorance of the attachment caused by the CBI and therefore also the impugned order has been passed without application of mind.
10. The appellant lastly submitted that the provisional attachment involves even the property belonging to his wife, who was having independent source. An order in this regard be passed favourably to the appellant and accordingly interference in the impugned order be caused.
11. The appellant in person did not raise any other arguments than referred above despite an opportunity given to him by this Tribunal. The appellant closed his arguments with the prayer to allow the appeal.
Ld. Counsel for the respondent:
12. Ld. Counsel for the respondent vehemently contested the appeal on all the grounds raised by the appellant. Elaborate arguments were made by the Ld. Counsel for the respondent and would be referred while recording finding on each issue raised by the appellant. It is to avoid repetition of the same facts and for the sake of brevity.
Findings of the Tribunal:
13. We have considered the rival submissions of the parties and scanned the record carefully. The brief facts pertaining to the registration of the FIR for commission of offence under Section 13(1)(e) of the PC Act has been given in the opening paras. The appellant was found in possession of the properties disproportionate to his known sources of income and accordingly an FIR was registered by the CBI. It was found that the total income of the appellant was of Rs.1,07,41,168/- while he and his wife acquired properties worth of Rs.1,46,03,843/- and incurred expenses of Rs.62,09,946/-. The disproportionate asset was found to be of Rs.1,00,72,621/- which was 93.78% of more than of his known/legal source of income.
14. In the investigation under the Act of 2002 also, the fact about the possession of disproportionate asset to the known sources of income was found in the hands of the appellant. The appellant, Shri P. Jose Kunjippalu purchased the property for a value of Rs.60,00,000/- from Smt. Nazhat U Mulla on 11.02.2011 with the payment of stamp duty of Rs.2,82,600/-. The registration fee of Rs.30,780/- was paid separately. The property was found to be in possession of the appellant at the end of check-period. It was, further, revealed that he had taken housing loan of Rs.39,10,000/- from SBI for purchasing of the said property and thereby the loan account was considered towards the income. Out of it, repayment of Rs.18,15,854/- was made. The transaction aforesaid was taken into consideration by the investigating agencies to determine the value of disproportionate assets.
15. The statement of the appellant was also recorded under Section 50(2) and Section 50(3) of the Act of 2002. The provisional attachment of the properties was caused to book the amount to the extent of disproportionate assets and has been confirmed by the Adjudicating Authority. The appellant has questioned the attachment of the properties on the ground that a case for money-laundering would not be made out for the offence under Section 13(1)(e) of the PC Act. It does not allege acceptance of bribe by the appellant and in the absence of such an allegation, the assets could not have been taken towards the disproportionate assets so as the case of money-laundering under Section 3 of the Act of 2002.
16. The argument aforesaid was contested by the respondent.
17. We have considered the rival submissions of the parties and find that Section 13(1)(e) of the PC Act is a scheduled offence under the Act of 2002 where the allegation remains different than given under Sections 7, 8 and other provisions of the PC Act. If anyone is found in possession of asset disproportionate to his known source, it would not only to make out an offence under the PC Act but even under Section 3 of the Act of 2002. At this stage, it would be gainful to quote Section 3 of the Act of 2002 and is quoted thus:
3. Offence of money-laundering.—Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering.
2 [Explanation.—For the removal of doubts, it is hereby clarified that,—
(i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:—
a. concealment; or
b. possession; or
c. acquisition; or
d. use; or
e. projecting as untainted property; or
f. claiming as untainted property, in any manner whatsoever;
(ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.]
18. The perusal of the provisions quoted above shows that whoever directly or indirectly indulges in acquisition, possession or use and projecting the tainted property to be untainted then to be guilty of money-laundering. It can be in the case of concealment and acquisition apart from use of such property. It is also when one is involved in commission of scheduled offence. The perusal of the allegation against the appellant would reveal not only a scheduled offence but offence under Section 3 of the Act of 2002 punishable under Section 4 of the Act of the 2002. The appellant has tried to project assets disproportionate to his known sources of income to be untainted while it becomes tainted in absence of the source and otherwise the appellant was involved not only in the concealment but possession of such properties.
19. In the light of the aforesaid, we are unable to accept the first argument raised by the appellant. At this stage, it may be clarified that a case of disproportionate asset for commission of offence under Section 13(1)(e) of the PC Act does not require or pre-supposes an allegation of bribe or acceptance of undue benefit etc. If such allegation is made, the matter can be tried separately for such an offence under different provisions of the PC Act. It would be quite different than the offence under Section 13(1)(e) of the PC Act. Therefore, the second part of the first argument is also not acceptable for causing interference in the impugned order.
20. The appellant in person referred to the discharge application moved by him not only questioning the allegation but even the determination of the disproportionate assets. It is with fair admission that the said application has already been dismissed by the competent Court, though with the further statement that the aforesaid order has been challenged by the appellant. However, we don’t find any favourable order to discharge the appellant from the allegation. In fact, the dismissal of the discharge application goes against the appellant and proves that a prima facie case against the appellant for the offence under the PC Act. The word “prima facie” has been used cautiously because final word on the allegation would be recorded on completion of the trial. In case of a definite finding by this Tribunal, it may cause prejudice to the appellant and therefore even finding a case against him for commission of offence, it is recorded with use of prima facie. In any case, dismissal of the discharge application has not improved the case of the appellant in any manner.
21. The appellant has questioned the attachment of the properties on the ground that it was purchased by the legal means and therefore could not have been subject to the attachment. It could not have been taken said to be tainted properties. The argument has been raised in ignorance of the fact that the appellant has acquired the properties of greater amount than his income from legal means and therefore the provisional attachment of the properties is only for the value of Rs.1,00,72,621/- only and after taking note of the expenses of Rs.62,09,946/-. The disproportionate asset was found to be of a sum of Rs.1,00,72,621/-. The provisional attachment of the properties has been caused only to the extent of disproportionate assets and not for the assets found to be proportionate to the income of the appellant. However, if the appellant has spent money on himself then it is to be taken into consideration while determining the disproportionate assets. The discharge application has been dismissed by the Court, thus, we would not like to cause finding contrary to the opinion recorded by the Trial Court and therefore even for this argument, a cause for interference in the order is not made out.
22. The appellant raised the argument even in reference to Section 5(1) of the Act of 2002 to submit that there was no “reasons to believe” to say that the appellant has caused offence so as to provisionally attach the properties. It is more so when the attachment of the property was caused earlier by CBI. The appellant in person was asked to refer the order to show that even CBI caused attachment of the properties. The appellant in person failed to demonstrate any order to this effect despite an opportunity. Thus, his oral statement could not be accepted and in the absence of it, we don’t find any illegality in the provisional attachment of the properties. It was caused finding predicate offence and apprehension of alienation of the properties, if it is not attached immediately. Thus, the argument in reference to Section 5(1) of the Act of 2002 is also not made out.
23. The appellant thereupon stated about the cash deposit alleged against him. It was with the submission that no cash was ever deposited in the account, thus, the allegation to this effect was not made out. To verify the truth of the statement, the appellant was asked to refer the bank statement to find out whether any cash was deposited by him in the bank account or not. The appellant fairly conceded that bank statement has not been submitted to question the finding on that issue. In the absence of any document, we cannot record our finding on the issue, rather, we find failure of the appellant to produce document which may go favourable to him.
24. The appellant’s last argument was in regard to the property belonging to his wife which has also been subject to the attachment. It is said to have been acquired his wife by her own source. The issue aforesaid was found to be of no substance in the light of the amassed disproportionate assets and dismissal of the discharge application. Thus, even the last ground is not made to cause interference in the impugned order.
25. In light of the discussions made, we don’t find any case to cause interference in the impugned order. Thus, appeal fails and is dismissed.
