NKG Infrastructure Ltd. Vs Deputy Director Directorate of Enforcement (Appellate Tribunal Under SAFEMA Delhi)
The Appellate Tribunal under SAFEMA dismissed the appeals challenging the provisional attachment under the Prevention of Money Laundering Act (PMLA) arising from a DJB contract scam involving M/s NKG Infrastructure Ltd. and its associates. The case stemmed from a CBI FIR alleging criminal conspiracy, corruption, and manipulation of tender conditions, where ineligible bidders were favoured through forged performance certificates and fabricated documents, resulting in an inflated contract (₹38 crore vs ~₹14 crore estimate).
The Tribunal noted that substantial proceeds of crime were generated and siphoned, including illegal commissions, bribes to public officials, and diversion of funds through subcontracting arrangements. Statements of key persons and documentary evidence clearly established fraudulent execution of the project and laundering of funds.
On the issue of attachment, the Tribunal rejected the contention that properties (including joint property with spouse) could not be attached, holding that under PMLA, attachment of “equivalent value” property is permissible when actual proceeds are dissipated or untraceable. It clarified that attachment was limited to the accused’s share (₹1.63 crore out of ₹3.5 crore property) and not the spouse’s independent share.
The Tribunal further held that source of acquisition or timing of purchase (even if prior to offence) is irrelevant when attachment is for equivalent value. Finding strong material linking the appellants to laundering activities, and valid “reason to believe” by authorities, the Tribunal upheld the attachment and dismissed all appeals.
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
A batch of these appeals have been preferred to challenge the order dated 17.09.2024 passed by the Adjudicating Authority confirming the Provisional Attachment Order (“PAO”) dated 26.03.2024.
