Smt. R. Booma Vs S. P. Rajendran (Appellate Tribunal Under SAFEMA Delhi)
SAFEMA Tribunal Upholds PMLA Attachment in Gold Loan Fraud; Grants Limited Relief for Court Security Deposit
The Appellate Tribunal under SAFEMA substantially upheld the attachment of movable and immovable properties belonging to S.P. Rajendran and R. Booma in a PMLA case arising out of a ₹6.33 crore gold loan fraud on the South Indian Bank. The ED alleged that the appellants, in collusion with a bank-approved gold appraiser, fraudulently obtained loans by pledging spurious gold ornaments and that ₹82 lakh earned as commission constituted the proceeds of crime, which was invested in various properties. The Tribunal found that most of the attached assets had either been acquired from the alleged proceeds of crime or loans relating to those assets had been repaid using the tainted funds.
The Tribunal rejected the appellants’ contention that properties acquired prior to the scheduled offence could not be attached, holding that even pre-existing or otherwise untainted properties may be attached as the “value of the proceeds of crime” where the actual proceeds are unavailable. It distinguished the Supreme Court’s decision in Pavana Dibbur and relied on its earlier decision in Sadanand Nayak as well as the Punjab & Haryana High Court’s judgment in Dilbag Singh. The Tribunal also rejected the challenge to the reliance placed on the appellant’s statement recorded under Section 50 of the PMLA, observing that the subsequent allegation of coercion was only an afterthought and that such statements, including retracted statements supported by other material, are admissible evidence.
However, the Tribunal granted limited relief regarding the ₹50 lakh security deposit lying with the Judicial Magistrate as a bail condition. Holding that the amount was already under the custody of the criminal court, it found that the ED had failed to establish the statutory requirement that the property was likely to be concealed, transferred or dealt with so as to frustrate confiscation proceedings. Accordingly, the attachment was set aside only in respect of the security deposit, while the attachment of the remaining properties was upheld, with liberty reserved to the ED to invoke Section 5(1) afresh if circumstances subsequently warranted.
Cases Discussed
- Aditya Krishna v. Directorate of Enforcement, 2025 SCC OnLine Del 435
- Abhishek Banerjee v. Enforcement Directorate (SC), (2024) 9 SCC 22
- Pavana Dibbur v. Enforcement Directorate (SC), (2023) 15 SCC 91
- Vijay Madanlal Choudhary v. Union of India (SC), 2022 SCC OnLine SC 929
- Rohit Tandon Vs. Directorate of Enforcement (SC), 2018 (11) SCC 46
- Directorate of Enforcement, Telstar Travels Pvt. Ltd Vs. Enforcement Directorate (SC), (2013) 9 SCC 549
- Tarun Kumar vs. Assistant Director, SLP (Crl.) No.9431 of 2023
- Dilbag Singh @ Dilbag Sandhu v. Union of India & Ors. (Punjab & Haryana HC), CWP-22688-2024 (Order dated 13.11.2024)
- Sadanand Nayak v. Dy. Director, FPA-PMLA-5612/BBS/2023
- Suma Sooraj v. Deputy Director, Directorate of Enforcement, FPA-PMLA-3182/COCHIN/2019
- Seema Garg vs. Deputy Director, Directorate of Enforcement, 2020 (2) RCR (Criminal) 701
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
These appeals have been filed against the order of the Adjudicating Authority (“AA”) established under the Prevention of Money Laundering Act, 2002 (PMLA) dated 28.11.2016, whereby, the Provisional Attachment Order (PAO) No. 12/2016 dated 10.06.2016 attaching certain movable and immovable properties in the names of the appellants herein was confirmed.
