Shravan Gupta Vs Deputy Director (Appellate Tribunal under SAFEMA, New Delhi)
PMLA: Property Bought Before Alleged Crime Can Be Attached for Equivalent Value, Rules Tribunal
Summary: The Appellate Tribunal under SAFEMA, New Delhi, has upheld the attachment of properties belonging to Shravan Gupta, rejecting his argument that assets purchased before the alleged offence could not be attached under the Prevention of Money Laundering Act, 2002 (PMLA).
In Shravan Gupta v. Deputy Director, Directorate of Enforcement, New Delhi, Appeal No. FPA-PMLA-1817/DLI/2024, decided on 4 November 2026, the Tribunal sustained attachment of properties valued at ₹16,57,89,060. It held that pre-existing properties could be attached as the “value thereof” where direct proceeds of crime were unavailable with the appellant.
Background: Attachment Arose from AgustaWestland Investigation
The proceedings originated from the investigation into alleged kickbacks concerning procurement of 12 VVIP/VIP helicopters from AgustaWestland International Limited.
Following a complaint from the Ministry of Defence, the CBI registered an FIR alleging cheating, criminal conspiracy and offences under the Prevention of Corruption Act. The Enforcement Directorate subsequently commenced its money-laundering investigation.
According to the ED, funds were routed through overseas entities under arrangements presented as engineering and consultancy contracts.
The ED alleged that entities controlled by the appellant received ₹28,69,94,450 in proceeds of crime. Properties belonging to him were provisionally attached on 14 March 2024, and the Adjudicating Authority confirmed the attachment on 23 August 2024.
Appellant Challenged Attachment of Pre-Existing Assets
The appellant argued that the attached properties had been acquired much before the alleged crime and had not been transferred for approximately 36 years.
He maintained that these assets were not purchased from criminal proceeds and therefore fell outside the definition of “proceeds of crime” under Section 2(1)(u).
He also submitted that the ED had traced the bank accounts of the overseas companies allegedly receiving the funds. Consequently, it should have proceeded against those entities rather than attaching his personal properties for equivalent value.
A further objection concerned the absence of a sufficient basis to apprehend that he would transfer the properties and frustrate confiscation proceedings.
Tribunal Applied the “Value Thereof” Principle
The Tribunal rejected a restrictive interpretation of Section 2(1)(u).
It explained that the statutory definition extends beyond property directly or indirectly obtained through criminal activity relating to a scheduled offence. It also encompasses the value of such property, subject to the applicable circumstances.
The Tribunal relied on authorities including Deputy Director, Directorate of Enforcement v. Axis Bank and Dilbag Singh v. Union of India, along with its earlier decisions.
These authorities supported attachment of other assets representing equivalent value where the actual proceeds were unavailable, including assets acquired before commission of the alleged offence.
Accordingly, the date of acquisition did not provide an automatic shield against attachment. The material distinction was between attachment as direct proceeds of crime and attachment as the value represented by those proceeds.
Overseas Routing Did Not Prevent Domestic Attachment
The Tribunal noted that the companies receiving the alleged proceeds were situated outside India. It accepted that the appellant was the ultimate beneficiary through entities under his control.
Since direct proceeds were not found available with him, attachment of his properties as “value thereof” was sustained.
The Tribunal also rejected the jurisdictional argument that the alleged transactions occurred abroad. It observed that the underlying allegations concerned offences committed within India in connection with helicopter procurement.
Routing funds through foreign entities did not, on those facts, deprive the ED of jurisdiction.
Evidence Supported Control over Foreign Entities
The appellant denied being a beneficiary, director, shareholder or authorised signatory of the entities concerned.
However, the Tribunal found sufficient material indicating actual control. This included statements recorded under Section 50, seized documents, emails, bank statements and trust-related records.
The material referred to instructions concerning financial transfers, representation of an overseas entity in legal proceedings and arrangements relating to foreign companies.
The Tribunal therefore rejected the contention that the proceedings rested merely on assumptions about corporate control.
Section 50 Statements Could Be Considered
The appellant also challenged reliance on statements recorded under Section 50, alleging lack of corroboration and contradictions.
The Tribunal referred to Supreme Court authorities concerning the validity and admissibility of such statements. It held that the statements could be considered and that corroborative documentary material was also available.
It further noted that the alleged contradictions had not been identified with sufficient particulars.
The appellant’s objections therefore did not displace the evidentiary basis supporting the attachment.
Appeal Dismissed; Attachment Sustained
The Tribunal dismissed the appeal and declined to interfere with the confirmation order.
The ruling highlights that property acquired before an alleged offence is not necessarily immune from PMLA attachment. Where the statutory basis for equivalent-value attachment is established, an asset need not itself have been purchased from criminal proceeds.
The decision concerns preservation of property through attachment. It does not constitute a final criminal conviction or an unconditional order of confiscation, which remains governed by the applicable proceedings and statutory requirements.
The proceedings originated from an investigation into alleged irregularities and kickbacks concerning the Government of India’s procurement of 12 VVIP/VIP helicopters from AgustaWestland International Limited. Following a complaint by the Ministry of Defence, the Central Bureau of Investigation registered FIR No. RC-217-2013-A-0003 dated 12 March 2013, alleging offences under Sections 420 and 120-B of the Indian Penal Code, 1860, and various provisions of the Prevention of Corruption Act, 1988. The investigation concerned allegations that the mandatory operational requirement relating to helicopter flying altitude was reduced from 6,000 metres to 4,500 metres, enabling AgustaWestland’s helicopter to become eligible for the procurement process. The Enforcement Directorate subsequently registered an Enforcement Case Information Report and commenced an investigation under PMLA into the alleged generation, movement and laundering of kickbacks. According to the Directorate, substantial payments were routed through foreign companies under arrangements described as engineering and consultancy contracts, although corresponding services were allegedly not rendered.
The Enforcement Directorate alleged that the appellant received ₹28,69,94,450 in proceeds of crime through foreign entities said to be under his control, including M/s Timekeeper Limited, M/s Hall Park Property Holdings Limited, M/s Itasca International Limited, M/s Natille Overseas Inc. and M/s Mayfair Trust Management SA. The investigation referred to transfers through M/s IDS Information Technology and Engineering Sarl, Tunisia, and M/s Interstellar Technologies Limited, Mauritius, as part of the alleged routing of funds connected with the helicopter procurement. Since the directly traceable proceeds were not found available with the appellant, the Directorate provisionally attached his properties valued at ₹16,57,89,060 as representing the “value thereof”. The attachment was confirmed by the Adjudicating Authority, leading to the appeal under Section 26 of PMLA.
The appellant disputed the attachment on several grounds. He contended that the properties had been acquired substantially before the alleged offences and had remained untransferred for approximately 36 years. According to him, property independently acquired before any criminal activity could not constitute proceeds of crime because there was no direct or indirect connection between its acquisition and the alleged kickbacks. He further argued that the Directorate had identified the foreign companies and their bank accounts through which funds were allegedly transferred and should therefore have proceeded against those entities rather than attaching his personal assets. The appellant also challenged the statutory satisfaction required under Section 5(1)(b), asserting that there was no material suggesting he intended to sell, transfer or otherwise deal with properties that had remained unchanged for decades. He additionally questioned the Directorate’s territorial jurisdiction because the alleged fund transfers involved foreign entities and accounts.
Examining the definition of “proceeds of crime” under Section 2(1)(u), the Tribunal rejected the appellant’s restrictive interpretation. It explained that the provision covers not only properties directly or indirectly derived from criminal activity relating to a scheduled offence but also the value of such properties. The Tribunal relied upon Deputy Director, Directorate of Enforcement Vs Axis Bank, 2019 SCC OnLine Del 7854, and Dilbag Singh and Others Vs Union of India and Others, 2024 SCC OnLine P&H 15453. These authorities distinguish properties directly obtained from criminal activity from other assets that may be proceeded against for an equivalent amount when the tainted assets cannot be traced or recovered. The Tribunal also considered the Supreme Court’s interpretation in Vijay Madanlal Choudhary Vs Union of India, which recognises the breadth of the statutory definition. On this reasoning, attachment of equivalent-value assets is not automatically prohibited merely because those assets were acquired before the commission of the alleged offence. The requirement remains that such attachment must satisfy the statutory conditions, including the value represented by the alleged criminal proceeds.
The Tribunal extensively considered its earlier decision in Sadananda Nayak Vs Deputy Director, Directorate of Enforcement, Bhubaneswar, FPA-PMLA-5612/BBS/2023, decided on 14 October 2024. That decision examined the separate components of the definition of proceeds of crime and explained that restricting attachment exclusively to assets acquired from criminal proceeds would undermine the equivalent-value mechanism. A person could otherwise transfer, dissipate or conceal the actual proceeds and retain unrelated assets beyond the reach of attachment proceedings. The Tribunal also referred to Prakash Industries Ltd. Vs Directorate of Enforcement, 2022 SCC OnLine Del 2087, and the competing interpretations in Seema Garg, Pavana Dibbur and other decisions reproduced in the order. Applying the reasoning of these authorities, it held that where the original tainted assets were not available, the Directorate could proceed against other properties representing their value, subject to the applicable safeguards. Accordingly, it rejected the contention that the date of acquisition gave the appellant an absolute defence against provisional attachment.
The appellant’s objection concerning the overseas location of the alleged fund recipients was also rejected. The Tribunal observed that the relevant foreign entities were not registered in India and that the allegedly diverted funds had been routed through their accounts. It accepted the Directorate’s position that the appellant was the ultimate beneficiary through entities under his control and that direct proceeds were not found available with him. On territorial jurisdiction, the Tribunal noted that the underlying allegations arose from offences allegedly committed in India in connection with the procurement of helicopters by the Government of India. The fact that alleged kickbacks were subsequently routed through companies and accounts abroad did not establish that the entire criminal activity occurred outside India. Consequently, the Tribunal found no basis to hold that the Enforcement Directorate lacked jurisdiction or that the investigation depended exclusively on the provisions relating to offences with cross-border implications under Section 2(ra).
Regarding ownership and control of the foreign companies, the appellant maintained that he was neither a director, shareholder, authorised signatory nor beneficiary of the entities allegedly receiving the proceeds. He argued that the Directorate had proceeded on assumptions and that personal liability could not arise merely from alleged corporate associations. The Tribunal, however, relied on documentary material and statements recorded under Section 50 of PMLA. These included statements of Vikrant Suri, Rakshit Jain and Dinesh Jain; bank account statements recovered during searches; emails; documents relating to Amrita Trust and Mayfair Trust; and communications concerning instructions for foreign financial transactions. The Tribunal particularly referred to Rakshit Jain’s representation of M/s Timekeeper Limited in proceedings before the Supreme Court of Mauritius on the appellant’s instructions, an arrangement concerning a USD 1 million transfer, and records relating to M/s Hall Park Property Holdings Limited. Taken together, the material was considered sufficient at the attachment stage to establish the appellant’s control over the relevant entities.
The Tribunal separately addressed the objection that statements recorded under Section 50(2) and Section 50(3) could not be relied upon without independent corroboration. The appellant cited Kunal Gupta Vs Enforcement Directorate, C.R.M. (SB) No. 84 of 2024, decided by the Calcutta High Court on 6 December 2024, and alleged contradictions in the recorded statements. The Tribunal referred to the Supreme Court decisions in Vijay Madanlal Choudhary, Rohit Tandon Vs Directorate of Enforcement, (2018) 11 SCC 46, and Abhishek Banerjee Vs Enforcement Directorate, (2024) 9 SCC 22, concerning the validity and evidentiary use of statements recorded by authorised PMLA officers. It also referred to Sanjay Jain Vs Enforcement Directorate, 2024 SCC OnLine Del 1656. The Tribunal held that the statements could be considered and that additional documentary evidence supported the Directorate’s allegations. It further observed that the appellant had not identified the alleged contradictions with sufficient particulars. The challenge concerning admissibility and corroboration therefore failed.
On the requirement of possible alienation under Section 5(1)(b), the Tribunal observed that property remaining available for transfer could be dealt with unless restrained through provisional attachment. It noted the appellant’s submission that the properties had remained untransferred for 36 years but held that this circumstance did not rule out the possibility of alienation. The Tribunal further observed that attachment restricted the appellant’s ability to transfer the assets while leaving possession with him, subject to the statutory procedure under Section 8(4) of PMLA. It therefore accepted the basis for maintaining attachment to preserve the properties for potential confiscation, subject to the outcome of the relevant proceedings.
The Tribunal also considered the appellant’s argument that mere receipt of alleged proceeds without knowledge would not establish the offence of money-laundering under Section 3 of PMLA. Referring to the statutory language and Explanation, it observed that processes or activities connected with proceeds of crime include concealment, possession, acquisition, use, projection as untainted property and claiming such property to be untainted. The Tribunal considered the documentary evidence and financial transactions relied upon by the Directorate sufficient to reject the appellant’s objection in the attachment proceedings. It also referred to the Delhi High Court’s order dated 4 November 2025 in Shravan Gupta Vs Directorate of Enforcement, Criminal M.C. No. 449 of 2021, which had recorded prima facie observations concerning the appellant’s involvement while considering non-bailable warrants. The Tribunal noted that the special leave petition filed against that order had been dismissed as withdrawn.
Ultimately, the Tribunal held that the appellant had failed to establish grounds for interference with the Adjudicating Authority’s confirmation of the provisional attachment. It rejected the objections concerning pre-existing ownership, equivalent-value attachment, territorial jurisdiction, corporate control, admissibility of Section 50 statements and the alleged absence of a basis for preserving the properties. The appeal was accordingly dismissed and the attachment of properties valued at ₹16,57,89,060 was sustained. The decision clarifies the Tribunal’s application of the equivalent-value mechanism under Section 2(1)(u): a property need not itself have been purchased with criminal proceeds to be considered for attachment where direct proceeds are unavailable and the statutory requirements are satisfied. However, the decision concerns the validity of attachment in PMLA proceedings. It does not constitute a final conviction for money-laundering or an unconditional order of confiscation.
Cases Discussed
- Deputy Director, Directorate of Enforcement Vs Axis Bank and Others (Delhi High Court); 2019 SCC OnLine Del 7854. Relied upon for the distinction between directly tainted property and equivalent-value property and the safeguards governing attachment.
- Dilbag Singh and Others Vs Union of India and Others (Punjab and Haryana High Court); 2024 SCC OnLine P&H 15453. Relied upon for its analysis of Section 2(1)(u), including the treatment of equivalent-value assets acquired before the alleged offence.
- Vijay Madanlal Choudhary and Others Vs Union of India and Others (Supreme Court); 2022 SCC OnLine SC 929; 27/07/2022. Applied for the interpretation of “proceeds of crime”, including attachment of property of equivalent value, and the validity of the Section 50 inquiry framework.
- Sadananda Nayak Vs Deputy Director, Directorate of Enforcement, Bhubaneswar (Appellate Tribunal under SAFEMA); FPA-PMLA-5612/BBS/2023; 14/10/2024. Earlier Tribunal decision extensively reproduced in the order; supports attachment of equivalent-value property when directly derived proceeds are unavailable.
- Prakash Industries Ltd. Vs Directorate of Enforcement (Delhi High Court); 2022 SCC OnLine Del 2087. Discussed in the reproduced authorities concerning properties acquired before the alleged crime and the interpretation of equivalent-value attachment.
- Seema Garg Vs Deputy Director, Directorate of Enforcement (Punjab and Haryana High Court); 2020 SCC OnLine P&H 738. Earlier interpretation of equivalent-value attachment examined and distinguished in the judgment of Dilbag Singh.
- Pavana Dibbur Vs Directorate of Enforcement (Supreme Court); Criminal Appeal No. 2779 of 2023. Considered in the extensive reproduced discussion on the scope of proceeds of crime and distinction between direct proceeds and equivalent-value property.
- Kunal Gupta Vs Enforcement Directorate (Calcutta High Court); CRM (SB) No. 84 of 2024; 06/12/2024. Cited by the appellant regarding evidentiary reliance on statements recorded under Section 50.
- Rohit Tandon Vs Directorate of Enforcement (Supreme Court); (2018) 11 SCC 46. Relied upon on admissibility of Section 50 statements and their evidentiary significance.
- Abhishek Banerjee Vs Enforcement Directorate (Supreme Court); (2024) 9 SCC 22. Discussed concerning statements under Section 50 and statutory inquiry safeguards.
- Sanjay Jain Vs Enforcement Directorate (Delhi High Court); 2024 SCC OnLine Del 1656. Referred to concerning admissibility of statements recorded under Section 50.
- Shravan Gupta Vs Directorate of Enforcement (Delhi High Court); Criminal M.C. No. 449 of 2021; 04/11/2025. Relied upon for its prima facie observations concerning the appellant’s involvement while adjudicating the validity of non-bailable warrants. The Tribunal recorded that the subsequent Supreme Court special leave petition had been dismissed as withdrawn.
