Dalmia Cement (Bharat) Limited Vs Deputy Director (Appellate Tribunal Under SAFEMA Delhi)
PMLA Tribunal: Share Investment Not ‘Proceeds of Crime’; Attachment Restricted To Mining Profits – Productive Assets Can Be Released Against Security
The Appellate Tribunal under SAFEMA (PMLA) partly allowed the appeal filed by M/s Dalmia Cement (Bharat) Ltd. against the order confirming attachment of properties under the Prevention of Money Laundering Act (PMLA).
The case arose from a CBI investigation alleging that companies including the appellant invested funds in companies controlled by Y.S. Jagan Mohan Reddy as quid-pro-quo for favours granted by the Andhra Pradesh Government, including mining leases. Based on these allegations, the Enforcement Directorate (ED) provisionally attached 1180 immovable properties worth about ₹377.26 crore as “proceeds of crime.”
The Tribunal examined two principal allegations:
1. Quid-pro-quo investment in Bharathi Cements: The Tribunal held that investment by the appellant in shares of Bharathi Cements could not be treated as “proceeds of crime.” The shares were later sold to a foreign company (PARAFICIM) for substantial profit, and the buyer was acknowledged by ED itself as an innocent third party. Hence, the transaction was considered a genuine commercial investment, and profits from the share sale could not be treated as proceeds of crime
2. Illegal mining lease and profits from limestone extraction:On the second allegation relating to mining rights, the Tribunal observed that the sequence of events in granting and transferring mining licences indicated possible collusive arrangements linked to the alleged conspiracy. Therefore, profits derived from the mining activity could prima facie constitute proceeds of crime and attachment to that extent was justified.
However, during the proceedings the ED itself revised the computation of alleged proceeds of crime from ₹793.34 crore to ₹176.52 crore, after deducting extraction costs. Since the Tribunal held that share-sale proceeds were not tainted, the remaining proceeds of crime were restricted only to ₹92.52 crore representing mining profits
FULL TEXT OF THE ORDER OF APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
The present appeal arises from the order dated 22.09.2025 passed by the Adjudicating Authority (AA) under the Prevention of Money Laundering Act, 2002 (PMLA) in Original Complaint (OC) No. 235/2025, confirming the attachment of property made by the Directorate of Enforcement (ED) vide Provisional Attachment Order (PAO) dated 31.03.2025.
