David George K. Vs Deputy Director (Appellate Tribunal Under SAFEMA Delhi)
SAFEMA Tribunal Upholds PMLA Attachment in PRD Mini Nidhi Scam; Holds Failure to Explain Source of Assets Justifies Attachment
The Appellate Tribunal under SAFEMA dismissed the appeal filed by David George K., upholding the attachment of his properties in connection with the PRD Mini Nidhi Ltd. deposit scam. The ED’s investigation revealed that the company had mobilised over ₹105.9 crore from depositors, while ₹44.82 crore remained payable. The Tribunal noted that the appellant was allegedly involved in siphoning investors’ funds through bogus staff loans and diversion of cash, and that he had not seriously disputed the allegations of his involvement in the scheduled offences or the quantified proceeds of crime.
The appellant argued that the attached properties had been acquired from legitimate sources such as gifts from family members, bank loans, agricultural income, personal savings and earlier purchases, with some assets having been acquired well before the alleged crime period. The Tribunal rejected these contentions, holding that the appellant had failed to satisfactorily establish the source of funds for acquisition of the properties or repayment of the loans. It observed that several cash deposits, gifts and bank transactions remained unexplained and that, under Section 24 of the PMLA, the burden lay on the appellant to prove that the assets were not linked to proceeds of crime.
The Tribunal further reaffirmed that properties acquired prior to the commission of the scheduled offence can also be attached as “equivalent value” where the actual proceeds of crime are unavailable, relying on the Punjab & Haryana High Court’s decision in Dilbag Singh and the Delhi High Court’s decision in Arun Suri. Finding no error in the Adjudicating Authority’s reasoning and concluding that the appellant had failed to discharge the statutory burden of proof, the Tribunal dismissed the appeal and sustained the provisional attachment of the properties.
Cases Discussed
- Arun Suri vs Directorate Of Enforcement (Delhi HC), MISC. APPEAL (PMLA) 13/2026 & CM APPL. 10455/2026, decided on 16.02.2026
- Dilbag Singh @ Dilbag Sandhu Vs. Union of India & Ors. (Punjab & Haryana HC), CWP 22688-2024 dated 13.11.2024
- Vijay Mandanlal Choudhary Vs. Union of India (SC), 2022 SCC Online SC 929
- Seema Garg Vs. Directorate of Enforcement (Punjab & Haryana HC), 2020 SCC Online P&H 738
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
By this appeal under Section 26 of the Prevention of Money Laundering Act, 2002 (in short “the Act of 2002”), a challenge has been made to the order dated 14.11.2024 passed by the Adjudicating Authority confirming the Provisional Attachment Order dated 28.06.2024.
