Sajab Infratech Pvt. Ltd. Vs Deputy Director (Appellate Tribunal under SAFEMA, New Delhi)
PMLA Attachment May Continue Without Taking Possession: Status Quo Protected, Subject to Supreme Court Orders in Amrapali Matter
Background of the Appeals
The appellants challenged an order of the Adjudicating Authority confirming provisional attachment of property under the Prevention of Money Laundering Act, 2002.
The appeals were filed under section 26 of PMLA. During the hearing, however, the appellants confined their request to protection of possession pending conclusion of the criminal trial.
Their counsel submitted, on instructions, that they would not press the challenge to attachment and its confirmation if possession of the property was not taken until the trial concluded. They requested maintenance of status quo, contending that no exceptional reason existed for taking possession.
The Tribunal disposed of the appeals on that basis. The attachment remained intact, while existing possession was protected subject to conditions and further judicial orders.
Appellants Sought Protection of Possession
The appellants proposed that the ultimate treatment of the attached property should remain subject to the trial’s outcome and the provisions of sections 8(5) to 8(8).
The Enforcement Directorate submitted that, if the appellants were not contesting the attachment orders and sought only protection against possession being taken, the Tribunal could pass an appropriate order.
The Department nevertheless insisted that the property should neither be alienated nor transferred during the pendency of the criminal trial.
Thus, the relief considered by the Tribunal concerned the immediate position regarding possession. It did not involve a merits determination setting aside the attachment or declaring the property unconnected with proceeds of crime.
Exceptional Grounds Required for Taking Possession
The Tribunal relied on Vijay Madanlal Choudhary & Others v. Union of India & Others, (2022) SCC OnLine SC 929.
Applying that judgment, it observed that possession could be taken where exceptional reasons existed. It therefore directed the parties to maintain status quo regarding possession as it existed on the date of the order.
At the same time, the Tribunal expressly declined to interfere with either the provisional attachment or its confirmation.
The result was that the property remained attached, but the attachment did not lead to an immediate change in possession under this order. The distinction between these consequences was central to the relief granted.
No Alienation or Transfer Until Conclusion of Trial
Protection of possession was accompanied by a clear restraint: the appellants could not alienate or transfer the property until conclusion of the trial.
The order therefore did not restore unrestricted authority to dispose of the asset. It preserved the existing possession while maintaining the property for the eventual statutory determination.
The Tribunal stated that, depending on the trial’s outcome, appropriate relief could be sought under sections 8(5) to 8(8), if the relevant case was made out and accepted by the Special Court.
It did not itself direct final release or confiscation. Those consequences remained to be determined through the applicable proceedings.
Property Belonged to Yuvraj Singh, Not the Amrapali Group
A significant clarification emerged during the hearing. Counsel for both sides stated that the attached property did not belong to the Amrapali Group. It belonged to Shri Yuvraj Singh, described in the order as a former director of Sajab Infratech Pvt. Ltd.
The Tribunal recorded this statement to clarify ownership of the property under attachment.
However, it also recognised that the attachment might have been based on alleged layering of proceeds of crime or receipt of such proceeds by the appellants. Recording ownership therefore did not amount to rejecting the alleged connection with proceeds of crime.
The parties further requested that the order remain subject to the outcome of the matter pending before the Supreme Court concerning Amrapali. The Tribunal accordingly directed that its order would be governed by the Supreme Court’s order in that pending matter.
Special Court to Decide Independently
The Tribunal expressly clarified that its order should not be treated adversely to the appellants.
Observations in the impugned orders would not bind the Special Court. That court was required to decide independently on the basis of the evidence led before it.
This safeguard was relevant because the appellants had chosen not to pursue their attachment challenge. The disposal did not itself determine criminal guilt or conclusively decide whether the property represented proceeds of crime.
The ED was also given liberty to apply in the disposed appeals for possession if it could establish a case of an exceptional nature. The possession protection was therefore conditional, rather than absolute.
Author’s Comments
Continuation of attachment and immediate taking of possession are distinct consequences. This order illustrates how possession may be preserved pending trial without disturbing the attachment itself.
The ownership clarification also requires careful reading. The finding recorded was that the property belonged to Yuvraj Singh rather than the Amrapali Group. That does not automatically resolve an allegation that its acquisition involved proceeds originating elsewhere.
Equally, the appellants’ decision not to press the attachment challenge should not be presented as an adjudicated admission of money laundering. The Tribunal expressly preserved the Special Court’s independent assessment of the evidence.
The additional qualification concerning the Supreme Court proceedings is material. Any account of the relief must state that the status quo arrangement remained subject to the Supreme Court’s orders in the pending Amrapali matter.
For practitioners, the order demonstrates a focused form of relief where preservation of possession is the immediate objective, while attachment, restrictions on transfer and final adjudication continue to operate.
Cases Discussed
- Vijay Madanlal Choudhary and Others v. Union of India & Ors., (2022) SCC OnLine SC 929 (Supreme Court) — relied upon concerning exceptional circumstances for taking possession of attached property.
FULL TEXT OF THE ORDER OF APPELLATE TRIBUNAL UNDER SAFEMA
The Appeals have been preferred under Section 26 of the Prevention of Money Laundering Act, 2002 (in short ‘the Act of 2002’) against the order passed by the Adjudicating Authority. By the impugned order, the Adjudicating Authority has confirmed provisional attachment of the property.
2. The Learned Counsel for the Appellants, on instructions, submits that he needs not to press the Appeals against the attachment of the property if possession of the property is not taken till conclusion of the trial. It is submitted that an order to maintain ‘status quo’ may be passed by this Tribunal. It is for the reason that no exceptional reason for taking possession exists. The release of property may be kept subject to the outcome of the trial and as per Section 8(5) to 8(8) of the Act of 2002.
3. The Learned Counsel for the Respondent submits that if the attachment of the property and its confirmation are not questioned rather Appellants are not pressing the Appeal to question those orders, and would be satisfied only if the possession is not taken, this Tribunal may pass an appropriate order on possession but property would be neither alienated nor transferred during the pendency of the trial in the criminal case.
4. I have heard the counsel for the parties. The Appeals have been preferred to challenge the provisional attachment order and its confirmation by the impugned order. The Counsel for the Appellants, on instructions, submits that their clients are not inclined to press the Appeals for challenge to the impugned order if the possession of the property is not taken. A reference to the similar orders passed by the Tribunal has been given and accordingly prayer is made that subject to the outcome of the trial in pursuance to ECIR, the attached property may be dealt with under Section 8(5) to 8(8) of the Act of 2002.
5. In view of the judgment of the Apex Court in the case of Vijay Madanlal Choudhary and Others v. Union of India & Ors. reported in (2022) SCC OnLine SC 929, the possession can be taken if exceptional reason exists. Accordingly, the Appeals are disposed of without causing interference in the provisional attachment order so as the order of its confirmation. The parties would, however, maintain status-quo in regard to the possession as is existing today. The Appellants would not alienate or transfer the property till conclusion of the trial. Subject to the outcome of the trial, the Appellant would be entitled for an order under Section 8(5) to 8(8) of the Act of 2002 if a case is made out and accepted by the Special Court.
6. It is made clear that this order would not be taken adverse to the Appellant and any observation in the impugned orders would not be binding on the Special Court rather it would pass the order independently and based on the evidence led before it.
Both the Counsels for the parties were fair to state that the property under provisional attachment does not belongs to M/s. Amrapali group but is of Appellant Mr. Yuvraj Singh, former director of M/s. SAJAB INFRATECH PVT. LTD. The statement aforesaid has been made for the purpose of clarity in regard to the properties under provisional attachment. The provisional attachment may have been caused finding layering of proceeds of crime or alleging Appellants to be recipient of the proceeds of crime but in any case the properties under provisional attachment does not belong to M/s. Amrapali group. The facts aforesaid is taken on record and accordingly a further prayer was to make this order subject to the final outcome of the matter pending before the Apex Court. Accordingly, this order would be governed by the order of the Supreme Court in pending matter of M/s. Amrapali.
7. The Respondent would however be at liberty to file an application in these disposed of Appeals to seek possession of the property, if a case of exceptional nature is made out.
8. With the aforesaid, the Appeals are disposed of.
