SAFEMA Tribunal Orders Rs. 284.92 Crore Security for CIG Realty Assets

CIG Realty Fund Vs Deputy Director (Appellate Tribunal under SAFEMA)

Tribunal Permits Sale of Attached CIG Realty Properties to Secure Rs. 284.92 Crore Through Escrow

Summary: The Appellate Tribunal under SAFEMA at New Delhi permitted CIG Realty Fund to sell properties attached under the Prevention of Money Laundering Act, 2002 (PMLA), subject to depositing the sale consideration through an escrow arrangement until Rs. 284.92 crore is secured. The amount comprises Rs. 189.92 crore identified as proceeds of crime and an additional Rs. 95 crore directed by the Tribunal. Complete lifting of the attachment was made conditional on deposit of the entire amount.

The order was passed by Chairman Justice Munishwar Nath Bhandari on October 12, 2026, in M/s CIG Realty Fund v. Deputy Director, Directorate of Enforcement, New Delhi, Appeal No. FPA-PMLA-5526/DLI/2023.

Background of the attachment

The appeal challenged the Adjudicating Authority’s order dated December 2, 2022, confirming a provisional attachment order dated June 16, 2022.

The proceedings arose from allegations of cheating investors, misappropriation, forgery and criminal breach of trust involving Unitech Limited, associated entities and individuals connected with CIG Realty Fund.

According to the investigation recorded in the order, Rs. 244.92 crore from Unitech’s homebuyer and loan funds was diverted to CIG Realty Fund through interconnected transactions. Investments were channelled through Auram Asset Management Private Limited to acquire interests in landholding companies.

After accounting for approximately Rs. 55 crore relating to properties already sold, ED identified a balance of Rs. 189.92 crore as proceeds of crime remaining with CIG Realty Fund.

The attachment covered interests in land parcels and approximately 777 flats, villas, plots, shops, office spaces and other properties, including assets under construction. The appellant also referred to attachment of a bank balance of Rs. 1,23,69,335.

Fund highlights interests of other investors

CIG Realty Fund argued that its schemes contained investments from numerous bona fide investors, besides Unitech and its subsidiaries.

It submitted that investors held units representing proportionate beneficial interests in the schemes, while underlying property interests were held through investee companies. Attaching the entire property pool therefore affected investors whose funds were unrelated to the alleged diversion.

According to the scheme-wise position presented by the appellant, Unitech’s remaining investment represented 17.68% in Scheme I, 27.16% in Scheme II and 80.32% in Scheme IV.

Across these schemes, the balance corpus was Rs. 684.35 crore. Unitech’s share was stated to be Rs. 189.92 crore, while other investors accounted for Rs. 494.43 crore.

The appellant also relied on SEBI’s order dated December 29, 2023, directing liquidation of investments, redemption of units and return of investors’ money.

Proposal to substitute monetary security

The fund initially argued that attachment should have been confined to Unitech’s units rather than the underlying properties.

It proposed selling the properties and depositing the amount attributable to Unitech’s proportionate interest in the net proceeds. It sought an arrangement that would protect ED’s identified amount while enabling other investors to recover their investments.

The appellant also submitted that the properties had remained attached for a considerable period and that possible encroachments could complicate their sale.

ED acknowledged that attachment of the entire properties affected other investors. It agreed to an appropriate arrangement securing Rs. 189.92 crore, but sought an additional amount because the funds had remained with the appellant for a long time.

Tribunal directs additional Rs. 95 crore

The Tribunal observed that investments in the schemes came from several entities and that attachment of all the properties affected their rights.

It considered an arrangement under which money could be secured and placed in fixed deposits, avoiding complications associated with eventual realisation through property sales.

Although the appellant expressed willingness to accept a reasonable addition of between 10% and 20%, the Tribunal directed an addition of 50% to Rs. 189.92 crore.

That addition worked out to Rs. 94.96 crore, which the Tribunal rounded to Rs. 95 crore. The total amount required to be secured consequently became Rs. 284.92 crore.

Escrow mechanism governs property sales

The appellant sought immediate release of the properties, followed by phased deposits. ED instead proposed an escrow mechanism linking release to actual sales and receipt of consideration. The appellant accepted that proposal.

The Tribunal permitted sales after opening an escrow account in the names of the appellant and ED. The entire sale consideration must enter that account until the stipulated total is deposited.

Attachment would stand lifted to the extent of each sale, and ED would release the documents relating to the property sold.

ED would transfer the money received through escrow to its account and create fixed deposits, subject to the final outcome of the trial.

Complete release after deposit

On deposit of the full Rs. 284.92 crore, the provisional attachment would be lifted entirely without further condition.

ED was permitted to monitor sales to secure the amount at the earliest, within an outer limit of one and a half years from receipt of the order.

The appeal was disposed of on these terms. The order establishes a conditional sale-and-deposit arrangement while preserving the deposited funds pending the trial’s outcome.

FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

This appeal has been filed to challenge the order dated 02.12.2022 passed by the Adjudicating Authority confirming the Provisional Attachment Order (“PAO ”) dated 16.06.2022.

Brief facts:

2. The impugned order was passed by the Adjudicating Authority against 31 defendants Page 1 issue pertaining to the appellant and accordingly, the facts related to the appellant would be referred. It is a fact that several FIRs were registered against M/s Unitech Limited and its group companies. The relevant FIR in the present case is FIR No. 473/2017, registered at Police Station, Saket, Delhi. The allegations were made against Shri Ramesh Chandra, Shri Sanjay Chandra and Shri Deepak Bajaj, Managing Director of CIG Realty Fund, Unitech Realty Investors Private Limited (now known as “Auram Asset Management Private Limited”) in association with unknown co-accomplices, for criminal conspiracy to cheat the investors by way of misappropriation of money through forgery and criminal breach of trust.

3. Based on the FIR disclosing the predicate offence, an ECIR was recorded by the respondent. The investigation was thereupon conducted under the Prevention of Money Laundering Act, 2002 (in short “the Act of 2002 ”).

4. In the investigation, it was revealed that, out of the funds of the Homebuyers/ loan funds of Unitech Limited, Rs.244.92 Crore were criminally diverted to CIG Realty Fund on the directions of Shri Sanjay Chandra and others. The diversion of funds was made under a complex web of interconnected transactions. The fund aforesaid was invested through M/s Auram Asset Management Private Limited (in short “M/s AAMPL”) to acquire various land holding companies. M/s AAMPL was having S/Shri Ramesh, Sanjay and Ajay Chandra as their directors and beneficial owners. They were designated as Advisor and Manager of CIG Realty Fund. On the investment in CIG Realty Fund, the units were allotted to M/s Unitech Limited in proportion to their total investment.

5. The CIG Realty Fund had launched five different schemes out of which scheme I, II & IV are still active. These schemes are running beyond their prescribed time-limit and therefore SEBI vide its order dated 28.03.2019 has taken adverse view to the activities of M/S AAMPL and has imposed penalty on them. SEBI vide letter dated 17.06.2022 has informed that 139 investors have lodged complaints against CIG Realty Fund.

6. During the course of the investigation, respondent recorded the ‘reasons to believe’ that ‘proceeds of crime’ to the tune of Rs.189.92 Crore exist with the CIG Realty Fund, out of Rs.244.92 Crore received by them. The funds were used to acquire the immovable properties. T he provisional attachment of properties has been confirmed by the Adjudicating Authority. Being aggrieved by the order of provisional attachment of the properties and its confirmation, the present appeal has been preferred to challenge the order.

Arguments of the Ld. Counsel for the appellant:

7. Ld. Counsel for the appellant submitted that in the Provisional Attachment Order (“PAO”) No. 16 of 2022, the Enforcement Directorate (“ED”) has attached properties worth of Rs.189.92 Crore along with bank balance in the account of CIG Realty Fund to the tune of Rs.1,23,69,335/ -. This provisional attachment includes approx. 777 units, flats/villas/plots/ shops / office -spaces (including under construction) and other land assets held by CIG Realty Fund. The scheme -wise particulars of the attached land parcels and bank accounts have been given in Table-A and Table-B of the impugned order.

8. As per ED’s case, CIG Realty Fund has launched four (4) schemes namely, CIG Realty Fund-I, CIG Realty Fund -II, CIG Realty Fund-III and CIG Realty Fund -IV; out of which CIG Realty Fund number III has been fully liquidated. The fund size and number of investors in each fund are mentioned below

9. M/s Unitech Ltd. had invested in the units, under various folios of CIG Realty Fund. The details of investments made by M/s Unitech Ltd.

10. As per the ED’s computation, out of the total investment of Rs.244.92 Crore by M/s Unitech Ltd. and its subsidiaries in CIG Realty Fund, Unitech Limited has sold the properties allotted by the CIG Realty Fund, equivalent to Rs.55 Crore approx. Therefore, a balance of Rs.189.92 Crore of investment by Unitech was lying with CIG Realty Fund. ED, therefore could have attached the units of equivalent value in different schemes instead attaching the land parcels.

11. CIG Realty Fund, in its schemes, collected funds from the many bonafide investors. M/s Unitech Ltd. invested in 11 companies under CIG Fund Scheme No.1; CIG Fund II invested in five investee companies; and CIG Fund IV invested in four investee companies. These investee companies paid consideration for the allotment of 777 properties (land/flats/villas/ plots/shops/office-spaces) to M/s Unitech Ltd. and its affiliates. On p ayment of consideration, transferrable allotment letters were issued to the investee companies of the CIG Fund schemes.

12. The land parcels and other assets attached under PAO No.16/2022, neither belong entirely to the appellant’s fund nor to M/s Unitech Limited. It is owned by the investee companies who have invested funds in each of the CIG’s schemes. Each investee company paid monies under the scheme and acquired units in different schemes. T he investors, including M/s Unitech Limited, thus hold only units in the schemes. Neither the funds under different schemes nor the Unitech holds the underlying land directly, thus, the land property was wrongly attached.

13. The individual share of each investee company in the assets attached scheme-wise, as reflected in Table -A of the respective Applications, read with the Annexures to the PAO are quoted hereunder:

14. It is further submitted that M/s Unitech Ltd. is yet to deliver 777 properties /flats /villas /plots /shops /office-spaces, for which consideration was received by the Company from the investee companies between 2006 and 2009. M/s Unitech Ltd. had to deliver these properties within a period of 3-4 years.

15. The SEBI order dated 29.12.2023, filed by a group of investors is not limited to the UCO Bank, LIC, Indian Overseas Bank, LIC Housing Finance, HCL, Serum Institute, Bilakhia Holdings but also to the Parle Biscuits, under SEBI VCF regulations 1996. It is to direct CIG Realty Fund to provide opportunity for the exit, in the funds, as provided under said regulations. Therefore, SEBI vide order dated 29.12.2023 has directed CIG Realty Fund to liquidate its investments and redeem the units of all investors and return their money to them.

16. Since M/s Unitech Ltd. has invested the money in the units of the CIG Realty Fund directly to the tune of INR 105 Crores (Fund-I 25 Crores + Fund-II 30 Crores + Fund-IV 50 Crores) and also acquired other units from the investors by making payments to the tune of INR 132.08 Crores (Fund-I 81.75 Crores + Fund-II 48.43 Crores + Fund-IV 1.9 Crores). Therefore, the ED should have made attachment only of the units held in the name of M/s Unitech Ltd. and its subsidiaries, not the land parcel of the investee companies of CIG Realty Fund.

17. The scheme-wise position of the units held by M/s Unitech Limited and by other bonafide investors, and the manner in which the proceeds of sale will flow, is given as under and is depicted in the charts appended hereto:

18. A unit would represent a proportionate beneficial interest in the scheme, and every unit holder of the same class is entitled to be treated alike. If the sale proceeds were to be applied wholly or disproportionately towards the interest attributed to Unitech Limited, the bonafide investors – holding 82.32% in Scheme I, 72.84% in Scheme II and 19.68% in Scheme IV would be made to bear the burden, far in excess of their own interest. Such an outcome would defeat the parity between unit holders of the schemes and would frustrate the exit directed by SEBI vide its order dated 29.12.2023. It was therefore submitted that any amount to be deposited with the ED must be confined to pro rata share of M/s Unitech Limited in the net proceeds.

19. Therefore, the Tribunal is requested to release the property in the name of investee companies so that it can be sold and after selling the property, the investments of the investors can be returned as per their share in the units.

20. To safeguard the attachment of Rs.189.92 Crore, CIG Realty Fund is willing to give an undertaking that the entire amount attributable to Unitech Limited’s with pro rata interest in each scheme – being 17.68% in Scheme I, 27.16% in Scheme II and 80,32% in Scheme IV, and approximately 28% of the fund as a whole – in the net proceeds available for distribution – i.e. the proceeds after payment of government dues, taxes on gains, statutory levies, fees and other permitted deductions – would be deposited with the ED and/ or before this Tribunal, in such manner and at such intervals as this Tribunal may direct.

21. This leaves a balance of 777 properties/ flats/ villas/ plots/ shops/ office-spaces, for which CIG Realty Fund’s subsidiaries paid a total consideration of Rs.348.41 Crore (which was received by M/s Unitech Ltd. between 2006-2010). This was in addition to Rs.275.02 Crore paid in consideration by CIG Realty Fund’s subsidiaries to Unitech for the land parcels.

22. Ld. Counsel for the appellant prayed for acceptance of Rs.189.92 Crore towards proceeds of crime for release of the properties under attachment. The properties purchased based on the investment does not belong to one entity but to multiple entity and thereby the provisional attachment of the entire property is not otherwise legally sustainable. To safeguard the interest of the victims, the amount of proceeds of crime would be deposited with the ED after sale of the property. It may be kept in the Fixed Deposits (“FD”) making subject to final outcome of the Trial. It would otherwise serve the purpose of the attachment. With the aforesaid appeal can be disposed of.

23. Ld. Counsel for the appellant, however, submitted that the properties were purchased long back and are under attachment. Thus, would not be available immediately for receiving sale consideration for the reason that there can be possibility of encroachment on lands. Thus, to make an equitable order, payment may be directed in such a manner, which may make it workable.

Arguments of the Ld. Counsel for the respondent:

24. Ld. Counsel for the respondent submitted that the provisional attachment of the property was caused after recording of the ECIR. It is to protect the interest of the victims, who invested the money in M/s Unitech Limited. However, in the facts and circumstances of the case and to safeguard the interest of the investors, let the appellant deposit a sum of Rs.189.92 Crore with the ED for release of properties under attachment. It is looking in to the fact that, the investment in the funds was made by the different entities, however on account of the provisional attachment of the entire property, the rights of others are also affected. However, while passing equitable order, the prayer was made to add reasonable amount over and above Rs.189.92 Crore. If such an order is passed with the appropriate direction, the ED would proceed to do the needful.

25. Ld. Counsel for the respondent further submitted that only for reason that the property was under provisional attachment, the allegation of encroachment on the land parcel may not be accepted and for the sake of argument if at all it is presumed that there exists encroachment on the land then it is illegal, rather, on the deposit of Rs.189.92 Crore with an additional amount to be decided appropriately by the Tribunal. The appellant would be at liberty to deal with the properties

26. The arrangement given aforesaid would not only protect the rights of the investors by safeguarding the amount diverted by M/s Unitech Ltd., but would also remain purposeful because realization of the amount with sale of the property may involve complication and otherwise takes time. Therefore, only the ED has agreed for an appropriate arrangement which would advance the cause of the victims and otherwise protect the equivalent amount quantified as proceeds of crime. Rather, if addition to the aforesaid amount is made as per the prayer of the respondent, it would be over and above the amount secured towards the proceeds of crime. Accordingly, Ld. Counsel for the respondent prayed for passing an equitable order to secure the rights of the parties.

27. Ld. Counsel for the respondent prayed that an appropriate order be passed by this Tribunal.

Findings of the Tribunal:

28. I have considered the rival submissions of the parties and perused the record carefully. Detail facts pertaining to the FIR No. 478/2017 has been given in the opening paras. At this stage, it would be necessary to clarify that apart from the aforesaid FIR, many other FIRs were registered against the accused company and its promoters. In the FIR against CIG Realty Fund, Unitech Realty Investors Private Limited (now known as M/s AAMPL), the main allegation was for cheating the investors. It was by way of diverting their funds instead of using it for the purpose for which it was taken. Money was for investment purpose in different schemes floated by the appellant company. The present appeal is arising out of FIR No. 478/2017, thus, fact relevant to the aforesaid has been narrated. The initial diversion of the funds was of Rs.244.92 Crore in the appellant company, CIG Realty Funds. However, it was found that out of aforesaid funds, an amount of Rs.55 Crore was earned out of sale of the properties allotted by CIG Realty to the subsidiaries companies and has been accounted leaving the balance of amount of Rs.189.92 Crore.

29. I am not required to go deep in regard to the allegation other than to take note of the fact that the investment under different schemes floated by the company was not made by one entity but several other entities and therefore prayer was made for causing interference in the provisional attachment of all the properties on a proportionate basis. On account of attachment of all the properties, rights of the other entities invested in the funds of appellant company under different schemes have also been affected. Though, for the aforesaid, those entities could have approached the respondent – ED or this Tribunal. However, now the issue can be settled in view of the fact that the appellant companies are willing to deposit a sum of Rs.189.92 Crore with addition of appropriate amount, so that the properties can be released. The amount so deposited by the appellant can be kept under FD to safeguard the interest of the victims who invested their money with the accused company and otherwise it would be difficult to recover the amount for the benefit of the victims, as the sale of the properties may cause complication and therefore the ED has agreed to accept this proposal. However, with the request to make addition on the amount of Rs.189.92 Crore as funds aforesaid was lying with the appellant company for long time. Ld. Counsel for the appellant opposed the prayer, however, accepted it with the reasonable addition. It may be 10% to 20% over and above the amount to be deposited. In that case, the deposit of amount would be made in the phases, to which initial contest was made by the respondent but ultimately left on the Tribunal to pass an appropriate order.

30. In the light of the discussions made above and finding an agreement between the parties to secure the amount of proceeds of a sum of Rs.189.92 Crore with the addition of an appropriate amount over and above the proceeds, though, initially, a contest to the aforesaid was made by the Ld. Counsel for the appellant, however, to make the proposal equitable, they had agreed to add a reasonable amount between 10% to 20% on Rs.189.92 Crore. Ld. Counsel for the respondent submitted that aforesaid amount is on the lower side. On the aforesaid, both the parties prayed for passing an appropriate order by the Tribunal. Thus, the issue was left open for an appropriate order.

31. In view of the above, and as prayed by the parties, I allow addition of an amount to the extent of 50% to the original amount of Rs.189.92 Crore. The amount aforesaid comes to Rs.94.96 Crore (say Rs. 95 Crore). The appellant would accordingly deposit an amount of Rs.189.92 Crore with addition of Rs.95 Crore.

32. Ld. Counsel for the appellant submitted that the property was acquired long back and remained under the provisional attachment, thus even encroachment may exist on the land parcels. The appellant prayed for immediate release of the properties with the agreement that amount of Rs.189.92 Crore would be deposited within six months from the date of release of property and remaining amount of Rs.95 Crore in another six months. The proposal aforesaid was opposed by the Ld. Counsel for the respondent and submitted that let the appellant sell the properties by opening an Escrow Account in the name of the appellant and the ED with an arrangement that the proceeds on sale of the properties would first come in Escrow Account till it match the amount of Rs.189.92 Crore + Rs.95 Crore. The provisional attachment would stand lifted to the extent of sale as and when it takes place. On deposit of the complete amount, as given above, the respondent would make a formal order for the release of the properties. On receipt of the amount referred above in the Escrow account, it would be taken in the account of ED to be kept in the FD, making it subject to final outcome of the trial. The respondent-ED would release property documents on sale of the property concern.

33. The proposal aforesaid was accepted by the Ld. Counsel for the appellant and accordingly the appellant would be at liberty to sell the properties under attachment, after opening an Escrow Account with an arrangement that entire sale consideration would be kept in the Escrow Account in the name of the appellant and the ED, till the entire amount is deposited i.e. Rs.189.92 Crore + Rs. 95 Crore. On the receipt of the aforesaid amount in the Escrow Account, the ED would take it in their account and will create FD making it subject to final outcome of the trial.

34. On the deposit of the amount given above, the provisional attachment would be lifted entirely without any condition. The ED would however be at liberty to monitor the sale of the properties to secure the required amount at the earliest which would not be later than a year and half, from the date of receipt of the copy of this order.

35. With the aforesaid, the appeal is hereby disposed of. The provisional attachment of the properties and its confirmation would be governed by the directions given above.