Diamond Liquors Pvt. Ltd. Vs Deputy Director (Appellate Tribunal Under SAFEMA Delhi)
₹24.25 Cr Investment Treated as Proceeds of Crime: Tribunal Upholds ED Attachment in Delhi Excise Policy
The Appellate Tribunal under SAFEMA upheld the provisional attachment of properties linked to M/s Diamond Liquors Pvt. Ltd., Gautam Malhotra, and associated entities in connection with the Delhi Excise Policy scam. The case stemmed from allegations of kickbacks and cartelization in the 2021–22 excise policy, where proceeds of crime were allegedly generated and routed through layered transactions.
The key dispute centered on ₹24.25 crore invested in M/s Nova Garments (now Diamond Liquors), which the appellants argued was merely “used” in the conspiracy and not “derived” from criminal activity. Rejecting this contention, the Tribunal held that under PMLA, “property” includes not only assets derived from crime but also those used in the commission of the offence. The investment, being integral to cartelization and policy manipulation, was held to be part of the proceeds of crime.
The Tribunal further ruled that:
- The definition of “property” under Section 2(1)(v) is wide enough to include assets used in criminal activity.
- The ₹24.25 crore investment enabled illegal control over liquor trade and was thus intrinsically linked to the offence.
- Bribe payments (₹2.5 crore) also fall within money laundering if given with the intent to facilitate illegal gains.
Relying on judicial precedents, the Tribunal emphasized that money laundering is a continuing offence and targets both derivation and use of tainted funds. Accordingly, it found no merit in the appeals and confirmed the attachment orders.
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
The batch of three appeals have been filed under Section 26 of the Prevention of Money Laundering Act, 2002 (in short `the Act of 2002’) to challenge the order dated 20.12.2023 passed by the Adjudicating Authority confirming the Provisional Attachment Order dated 03.07.2023. The
appellant M/s Diamond Liquors Pvt. Ltd. was earlier known as M/s Nova Garments Pvt. Ltd. and accordingly titled in the impugned order.
