Tribunal Upholds ₹96 Crore PMLA Attachment Linked to Illegal Granite Mining into 511 Properties

P Senthil Kumar Vs Directorate of Enforcement (Appellate Tribunal Under Safema At New Delhi)

Illegal Granite Mining Proceeds Laundered into 511 Properties – Tribunal Upholds ₹96 Crore Attachment under PMLA

Background

The appellants, a group of 13 individuals including C. Panneer Mohamed, C. Rabeek Raja, R. Kasaniya Begum, & their family members, challenged the order dated 17.04.2018 passed by the Adjudicating Authority confirming the Provisional Attachment Order (PAO No. 21/2017) under the Prevention of Money Laundering Act, 2002 (PMLA). The attachment involved 511 immovable properties with a registered value of ₹17.46 crores & guideline value of ₹96.05 crores, allegedly purchased from illegal granite mining proceeds.

Facts of the Case

• Multiple FIRs (Nos. 156/2012, 166/2012, 183/2012, 397/2013 & 19/2015) were filed in Madurai district alleging illegal granite quarrying between 2005–2012, causing a loss of ₹450 crores to the Government.
• ED registered ECIR No. 03/CEZO/2014 based on these predicate offences.
• Illegal extraction was scientifically established by Total Station Survey, showing unlicensed mining by M/s Madurai Granite Exports, M/s RR Granites, & M/s MR Granites, linked to the appellants.
• ED found that proceeds from these offences were laundered through property purchases in the names of family members & associates.

Appellants’ Contentions

1. Properties untainted: Purchased from legitimate quarrying income, duly reflected in ITRs & VAT returns.

2. No proceeds of crime: State had not accepted the Collector’s report; thus, “crime not crystallized.”

3. Pre-PMLA assets: Attachments cover properties purchased before 01.07.2005 & before quarrying licence (20.04.2006)—outside PMLA scope.

4. No mens rea: Appellants not directly or indirectly involved in money-laundering.

5. Procedural defect: Adjudicating Authority merely reproduced ED’s complaint without independent reasoning; relied on Delhi HC ruling in Kankipati Rajesh (2023) condemning “templated orders.”

6. Delay: Attachment issued after three years from ECIR—barred by limitation.

ED’s Counter

• Income & ITRs inconsistent with massive property acquisitions.
• Appellants & family members filed belated or manipulated ITRs after registration of ECIR to project tainted wealth as legitimate.
• Investigation revealed layering, inter-family transfers, & cash transactions intended to conceal illicit granite profits.
• Properties valued at ₹17.46 crore (registered) & ₹96.05 crore (guideline) represent laundered proceeds of the ₹ 450 crore crime.

Tribunal’s Findings

1. On “Non-application of mind” & Remand request

• The Tribunal held the Adjudicating Authority’s order was reasoned & based on evidence; mere length or reproduction of the complaint does not vitiate findings.
• No statutory power to remand exists under PMLA (relying on Joint Director, ED v. Devas Multimedia Pvt. Ltd., Karnataka HC, 2020).
• Issues decided against appellants.

2. On Properties Purchased before 01.07.2005 / Quarry Licence

• Rejected appellants’ argument of retrospective application.
• Cited Vijay Madanlal Choudhary (SC, 2022) & Prakash Industries Ltd. (Del HC, 2022) – even pre-PMLA properties can be attached if representing “value equivalent” of proceeds of crime.
• Therefore, attachments valid even for earlier acquisitions.

3. On Scheduled Offence Inclusion (post-2009 amendment)

• Tribunal reiterated that money-laundering is a continuing offence; what matters is when tainted property is projected as untainted, not when predicate offence occurred.
• Relied on Dyani Antony Paul v. Union of India (2023) & Vem Krishna Keerthan v. ED (2022) – laundering after 2009 remains punishable regardless of when predicate act occurred.

4. On Individual Appeals

• K. Murugesan: Though joint owner, failed to prove independent source of funds—attachment upheld.
• P. Senthil Kumar: Claim of dormant partnership rejected; his association with MR Granites established.
• No relief granted to any appellant.

Held

• All appeals dismissed.
• Provisional Attachment Order No. 21/2017 confirmed.
• Tribunal affirmed that illegal granite mining proceeds were laundered into 511 properties.
• Money-laundering is a continuing offence, & attachment u/s 5(1) valid even for properties of equivalent value acquired earlier.

Key Takeaways

• PMLA can attach equivalent value property even if acquired before 01.07.2005.
• Continuing nature of money-laundering validated by Vijay Madanlal Choudhary (SC).
• “Templated” reasoning allegation rejected; no remand power vested in Tribunal.
• Granite mining scam of Madurai—properties worth ₹96 crore treated as proceeds of ₹450 crore crime.

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

Present appeals under Section 26 of Prevention of Money Laundering Act, 2002 (hereinafter PMLA) are filed by the appellants against the order dated 17.04.2018 passed by the Adjudicating Authority in Original Complaint No. 852/2017 (OC), whereby the properties attached by ED vide Provisional Attachment Order No. 21/2017 (PAO) dated 30.10.2017 were confirmed. The details of the said properties are mentioned at internal page no. 67 to 139 of the Provisional Attachment Order in Schedule I to Schedule III and the said details is not reproduced herein for the sake of brevity. However, the total properties of the Appellants along with registration value and the guidelines value prescribed by Govt. of Tamil Nadu are tabulated as under:

Sl. No.	Name of the person	No. of documents	Total Registration Value (in crores)	Guideline value as per Govt. of Tamil Nadu
1	C. Panneer Mohamed	105	1.45	13.23
2	C. Rabeek Raja	108	4.11	36.36
3	R. Kasaniya Begum	138	1.79	19.57
4	R. Yasar Arabat, S/o C. Rabeek Raja	30	6.87	9.49
5	R. Rahuman, S/o Ch. Rabeek Raja	27	2.24	6.83
6	C. Nagoor Hanifa	11	0.08	3.41
7	K. Heeralal	30	0.39	3.71
8	H. Sheela Begam @ Asma Begum	17	0.24	1.27
9	C. Azad Mohamed	22	0.17	1.39
10	C. Rajkapoor	7	0.06	0.30
11	C. Anwar Ali	16	0.06	0.49
	Total	511	17.46	96.05

2. As per the facts of the case, the FIR no. 156/2012 dated 06.08.2012 was lodged at P.S. Keelavalavu, District Madurai, Tamil Nadu against the accused persons for the Commission of offences punishable under Sections 120-B of IPC read with 304, 447, 379, 434, 420, 467, 468 & 471 of IPC and also Section 6 r.w.s. 3 & 4 of the Explosive Substances Act, 1908 and also r.w.s. 3(1)(ii)(iii) of TNPPDL Act, 1992, and the substantive offences thereunder. The said FIR was registered against S/Shri Paneer Mohamed, C. Rabeek Raja and Others for illicit quarrying out granites and for causing huge damage to human life and property by setting up explosives in Keelavalavu village. After investigation, police filed final report u/s 173 Cr.P.C. against the accused persons on 01.10.2013 against M/s Madurai Granite Exports, C. Paneer Mohamed, C. Rabeek Raja and 19 other accused persons. As per chargesheet, the accused persons trespassed into the nearby areas of Governments Rocky Poramboke land and carried out mining works by using deadly explosive substances to misappropriate the multi-coloured granite stones in an illegal manner during the period prior to and between 2005 to 2012, quarried at non-licensed Government land and selling illegally dug multi colored granite stone causing loss to the Government exchequer to the extent of Rs. 277.42 Crores and illicit gains for themselves.

On the basis of police investigation, the Directorate of Enforcement, Chennai Zone recorded the ECIR No. 03/CEZO/2014 on 30.06.2014 for initiating investigation pertaining to the offence of money laundering and to check the trail of proceeds of crime.

Four more FIR No. 166/2012, 183/2012, 397/2013 & 19/2015 were registered and charge-sheet were filed in first three FIRs, against the same accused persons, for similar offences in different Police Station totalling the loss to the Government exchequer to the Rs. 450 crores.

As per the police investigation, the illegal granite mining scam took place in Madurai District, Tamil Nadu by M/s Madurai Granite Exports, M/s RR Granites, M/s MR Granites and others and the same are as follows:

Shri U. Sagayam, IAS., was appointed as Special Officer/Legal Commissioner by the Hon’ble High Court to probe into the Granite Mining Activities. He was earlier the District Collector of Madurai District and during his tenure as District Collector, he had received various Complaints and Petitions on illegal mining of granite stones and he had conducted enquiry and submitted a report to the Principal Secretary, Industries Department, Government of Tamil Nadu, Chennai, vide Report dated 19.05.2012, wherein he had detailed the enquiries conducted by him and also made various recommendations to curb the illegal mining scam.

Shri Anshul Mishra, District Collector, Madurai, the Successor to Shri U. Sagayam, constituted 18 District Level Teams vide Proceedings No.318/2012/Kanimam dated 1.8.2012 with each Team comprising officials from the Revenue Department, Geology & Mining, Rural Development Department etc. for the purpose of conducting initial survey and assessment of mining in all granite quarries located in Madurai District.

Shri Atul Anand, Commissioner of Geology and Mining, Chennai, vide Order dated 4.8.2012 & 13.8.2012, provided the technical strength to the inspection team by ordering Deputation of Officers of Geology & Mines to assist the Special Team with Special Gadgets including Total Station (GPS enabled).

As per the Orders of the District Collector, the Comprehensive Survey and Inspection of all the granite quarries permitted by the Government was carried out to detect violations of lease conditions and norms. The Inspection was carried out from 02.08.2012 and a preliminary report was furnished by each of the teams at the end of August 2012. As per the said report, out of 175 Leased Quarries, 86 Quarries were found to have flagrantly violated the lease conditions as on date and the lease holders have carried out illicit quarrying in adjacent Government poromboke lands and un-leased patta lands etc. M/s Madurai Granite Exports, M/s RR Granites, M/s MR Granites are among the 86 Quarries Inspected by the Special group in August 2012.

With regard to the quantification of loss on account of such illicit quarrying and illegal mining, a scientific and systematic survey was done using “Total Station Survey Instrument” by authorized officials.

The Collector of Madurai, intimated the actions taken by the Special Investigation Team including conducting survey, filing of FIR etc. and requested the Commissioner of Geology and Mines to suspend the mining operations in respect of 51 granite quarries immediately. The said list of 51 included M/s Madurai Granite Exports, M/s RR Granites, M/s MR Granites.

The Government of Tamil Nadu, based on the letters of Collector of Madurai and Commissioner of Geology & Mines, vide Order in GO No. MS.No. 232-Industries (MMB-1) Department dated 14.12.2012, suspended the mining activities of M/s Madurai Granite Exports, M/s RR Granites, M/s MR Granites.

During the investigation conducted by ED under PMLA, it is revealed that the experts from the Department of Geology and Mining, based on the scientific and systematic study using “Total Station Survey had furnished a report named as “Evaluation Report for each quarry they have inspected and verified.

Inspection team inspected the quarry of M/s Madurai Granite Exports, a Proprietorship Concern of Shri C. Panneer Mohammad, wherein they noticed and reported the various general violations during their inspections and categorically quantified the total value of granite extracted illegally to the tune of Rs.277.43 crores. Inspection Team of Geology and Mining in the said violation report have specified about the methodology of the above-mentioned quantification including adoption of the values, quantification of stock in hand, dependents of data of District Mines Office on transport permit etc. The evaluation report also states that the evaluation works carried out, ascertained that the lessee M/s Madurai Granite Exports, has indulged in illicit quarrying of granite to the tune of 69358.14 M³.

Similarly, Inspection Team inspected the quarry of M/s MR Granites, a partnership firm of Shri C Rabeek Raja and Shri P Senthil Kumar, at Survey No. 245(P), 246(P), 247(P) & 167(P) of Keelavalavu where they quantified the value of illegally extracted granite to the tune of Rs.97.27 crores for illicit quarrying of granite to the extent of 24317.26 M³.

Inspection Team inspected the quarry of M/s RR Granites, a partnership firm of Shri P Rajasekaran & Shri C Rabeek Raja, where they quantified the value of illegally extracted granite to the tune of Rs.46.53 crores for illicit quarrying of granite to the extent of 23262.59 M³.

Inspection Team inspected the other quarries of Shri C Panneer Mohammad and others, where they quantified the value of illegally extracted granite to the tune of Rs.17.59 crores for illicit quarrying of granite to the extent of 8795.75 M³.

Inspection Team inspected the quarry of Shri C Anwar Ali and others, where they quantified the value of illegally extracted granite to the tune of Rs.10.74 crores for illicit quarrying of granite to the extent of 5357.67 M³.

During investigation under PMLA, the IO of ED recorded the statements of the suspects/accused persons and others under Section 50 of PMLA and also collected the relevant documents from the various sources.

After investigation, on the basis of material, the Deputy Director, ED formed the reasonable believe that the persons accused in the aforementioned FIRs committed the Scheduled Offences and have caused the wrongful loss to the Govt. exchequer estimated to the tune of Rs. 449.56 crores and corresponding wrongful gain to themselves, during the period between 2001 to 2012 by illegal quarrying, and thereafter, the accused person sold the granites in the international/ domestic market in excess of the declared quantity and realized the sale proceeds. The pecuniary benefits obtained by the aforesaid persons were reinvested in acquisitions of immovable properties in their own names and in names of their firms, as well as, in obtaining mining lease license in the name of firms, and thereby, resulting in the additional accruals. They acquired 511 properties as mentioned from internal page from 67 to 139 of PAO No. 21/2017 dated 30.10.2017, in part III of the appeal paper book. The details of holders of the said properties are mentioned in table at para no 1 above.

Accordingly, the properties were attached by ED vide PAO No. 21/2017 dated 30.10.2017 and thereby filed the Original Complaint No. 852/2017 before the Adjudicating Authority along with relied upon documents and statements, for confirmation of PAO.

The Adjudicating Authority being satisfied with the allegations made in the OC coupled with the relied upon documents and statements under Section 50 of PMLA, issued the Show Cause Notice to all the defendants. After receiving their respective replies and hearing the rival submissions the Adjudicating Authority confirmed the PAO vide its order dated 17.04.2018.

Aggrieved by the said order, appellants filed the present appeals.

3. The appellants in appeals at serial no. 3 to 13 have filed the separate appeals on the following common grounds:

i) The attached properties were not purchased out of any proceeds of crime and are untainted properties.

ii) The PMLA proceedings were initiated on the basis of FIRs filed against granite quarry operators in and around Madurai district. The investigation was initiated, on the basis of Survey Report and District Collector was appointed to investigate and file a report. There were two stages of investigation carried out and report submitted to Government of Tamil Nadu. However, Government of Tamil Nadu has not accepted such reports and contemplating to appoint a fresh committee for conducting investigation scientifically. In the circumstances, there is no Crime involved or established. Such crime is not even crystallized so as to entertain a reasonable belief that there is proceeds of Crime in the present case so as to invoke Provisions of PMLA.

iii) Section 3 of PMLA is not at all applicable to the present case, in as much as the Appellants have neither directly, nor indirectly attempted to indulge or knowingly assist or actually got involved in the activity connected with the proceeds of crime and also, they are not involved in projecting or claiming such proceeds of Crime as untainted property.

iv) The properties attached were purchased out of income earned from the Quarrying Operation. Even in the Complaint it has been admitted that during the period from 2005 to 2012 the foreign exchange was earned by appellants, which is valid proof to show the source of income. The Appellants have earned the above said legitimate foreign exchange, the value of properties purchased by them is very negligible, when compared to the income earned by them. The above said foreign exchange earned is in addition to the income derived out of the local sales as well. The Appellants have duly filed the statutory Returns under Sales Tax/VAT Act during the entire operation and paid Sales Tax/VAT on the sales of Granite Stones and since the properties were purchased from the legitimate proceeds/income out of sale of the Granite both by way of exports and sale in local market. Such sales were duly accounted for and duly monitored by the Government Departments under Mines and Minerals Act. Therefore, there is no proceeds of Crime involved in the present case and the Provision under Money Laundering Act is not at all applicable.

v) The Provisional Attachment Order has not recorded any reason for ordering provisional attachment of the properties. On the other hand, the Appellants have purchased the properties out of income earned and declared in the Income Tax Returns. The value of properties purchased 10 were proportionate, or less than the Income declared in the Income Tax Returns. Further, the Appellants were also earning agricultural income during period in the dispute and some of the properties were purchased out of such agricultural income. Therefore, PMLA is not applicable to the present case. Hence, the order of attachment is not sustainable.

vi) The Complainant has not produced any evidence with regard to any transaction involved in Money Laundering. Even assuming without admitting that the properties purchased were out of proceeds of crime, the same alone cannot be reason to invoke the provisions under PMLA. In the OC, it has been categorically admitted that during the periods from 2008-09 to 2013-14, total sales and receipts has been shown as Rs.24.87 Crores in the statutory records. When compared to the said value of receipts of Rs.24.87 Crores, the purchase value of the properties attached was Rs.1.48 Crores only. Thus, there is no money laundering involved in the present case, and therefore, the attachment order is not sustainable since purchase of properties were only out of amounts received from the sale of the Granite Blocks accounted in the statutory records.

vii) Attachment of Properties purchased prior to the Quarrying Permit dated 20.04.2006 in any case is not sustainable. The Complainant/ Respondent has attached the properties purchased during the year 2002, 2003, 2004 and 2005 as well which is beyond the scope of the present proceedings. The present proceeding has been Initiated on the basis of the FIRs filed regarding the Quarry started on the basis of the document dated, 20.04.2006 by which the Govt of Tamil Nadu has permitted the Appellant to start quarrying. Therefore, the properties purchased prior to 20.04.2006 cannot be brought under the purview of PMLA and hence the attachment of properties from Serial No.1 to 55 11 under Schedule III of Complaint is not sustainable. When the value of such properties is removed from the total value arrived at by the Complainant, the value of properties purchased after the Quarrying Operation are well within the value and income declared by the Appellant. Therefore, there is no transaction involved in the present case for attracting the offence of money laundering.

vii) The allegation at para 15 of the Complaint is not sustainable. The averment regarding property involved in Money Laundering is misplaced in as much as such transaction took place in the year 2003 dated, 23.05.2003. It is submitted that the events took place prior to or the purchase of the property prior to the quarrying operation in the year 2006 cannot be brought under the preview of Money Laundering at all. The present case is relating to the quarrying operation started in the year 2006 and hence, reliance cannot be placed on the transaction took place in the year 2003 to allege Money laundering. Further, it is submitted that excepting the transaction took place in the year 2003 which is beyond the scope of money laundering, not even a single event or transaction has been referred to substantiate the allegation of money laundering. The entire proceedings are on the basis of surmise and conjecture and not substantiated by any material evidence or by any oral evidence. Hence, the entire proceedings are without any basis and not sustainable.

ix) The attachment of properties purchased prior to 01.07.2005 in any case cannot be effected. The offence alleged against the Appellants in the relevant FIR was inserted as Scheduled offence under PMLA, 2002, only with effect from 01.07.2005. Therefore, there is no authority for the Complainant to attach the property purchased prior to 01.07.2005 and the provisions of PMLA is not at all applicable. Since the issue 12 involved in the present case is relating to illegal quarrying operation. The offence of illegal quarrying operation came to be inserted in the scheduled offence only in the year, 2009. Therefore, the provisions of money laundering can be applied only with effect from the year 2009 and therefore, the properties purchased prior to the year 2009 is not at all sustainable. Moreover, many of the properties attached by the Complainant are not sold or purchased and they are in agreement stage. Therefore, the attachment of those properties are not sustainable.

x) The proceedings in the present case suffers from laches. The case under PMLA was registered in the year, 2014 and the present attachment order was passed after the period of more than 3 years and hence the order of attachment under Section 5(1) of PMLA is barred by limitation.

However, during the arguments, Ld. Counsel for the appellants instead of arguing on the merits of the appeals confined their arguments to the extent that the impugned order runs into 116 pages and bare perusal of the same reveals that pages upto 108 is a complete reproduction of the contents of the original complaint no. 852/2017 filed before the Adjudicating Authority for confirmation of PAO No. 21/2017 dated 30.10.2017. He pointed out that pages 108 to 116 of the impugned order are again the summary of the contents reproduced in pages 1 to 108. He stressed that the Adjudicating Authority concluded for confirmation of PAO pertaining to large number of properties and many factual and legal issues in just 10 lines spread over from pages 115 to 116, which is absolutely a non-application of mind by the Adjudicating Authority, and hence, the impugned order needs to be set aside. In support of his contention, he relied upon the 13 judgement of Hon’ble High Court of Delhi, in case Kankipati Rajesh v. Adjudicating Authority, PMLA & Ors., 2023 SCC OnLine Del 2526. Para 10

“10. However, this Court would like to specifically note that it appears that the Respondent No. 1 has failed to take into consideration the observations of this Court in the U.S. Awasthi (supra) case where the use of such disconcerting language as contained in paragraph 8 of the impugned order, has been frowned upon by this Court. Repeated use of templated paragraphs, as though the principles of natural justice are mere rhetoric, is not permissible. The present order shall be treated as a warning to the concerned authority to not use such language as extracted below in the order, failing which the Court would be constrained to direct action to be taken. For the sake of reference and clarity, the objectionable paragraph in the impugned order is again extracted below:

“It is always open the accused of the alleged offenders to make more noise about the so called violation of principles of natural justice and such noise can be heard quite often in these type of matters with a view to drag the proceedings and scuttle the efforts of the authorities concerned to pin down the offenders to the crime in furtherance of the provisions of the Act. Ultimately, it boils down to the fact that interference by this Authority on the ground of violation of principles of natural justice at every stage for the asking,  would ultimately end in stifling the efforts of the authorities  in implementing the provisions of the PMLA for it is  enacted.”

He also relied upon the judgment of Hon’ble Delhi High Court in case of State Bank of India v. Deputy Director, Directorate of Enforcement, 2003 Del 1800 wherein in para 5 of judgment it is held that –

“5. Use of identical templated paragraphs could reflect as non-application of mind by the Adjudicating Authority concerned and hence ought to be avoided. The Adjudicating Authority is cautioned about passing such templated order.”

He further contended that Appellants are not inclined to argue the case on merits, in view of the fact that the impugned order is not passed by the Adjudicating Authority on the merits of the case and 14 hence any submissions on merit in the present Appeals will tantamount to conferring original jurisdiction upon this Appellate Tribunal which is not permissible under the statue and under the principles of natural justice. Prayer is accordingly made to remand back all the Appeals to the Adjudicating Authority for passing the fresh order on the merits of the case.

He was directed to also argue the appeals on the merits of the case, however, he refused for the same, in view of the aforesaid contention.

4. Ld. Counsel for the Appellant K. Murugesan argued that he is neither charge-sheeted in predicate offence, nor he is arrayed as an accused in prosecution complaint under PMLA. No role is assigned to him by Respondent ED. He pointed out that he purchased one property vide sale deed dated 15.12.2006 for sum of Rs. 3,23,700/-measuring 1.98 Hectares along with C. Panner Mohammad. He pointed out that by ignoring the joint ownership his share is also attached by the Respondent ED, without appreciating the fact that he has not received any proceeds of crime and the 50% of the payment was made by him from his licit source of income. Prayer is accordingly made to set aside the attachment qua the share of his property.

5. Ld. counsel for the appellant P. Senthil Kumar argued that the appellant is merely a dormant partner in M/s M.R. Granites and that he has never carried out any day-to-day activities of administration of the business on behalf of the firm. In fact, he left the firm soon after the initial formation. Further, he stated that the appellant was arrayed as Accused no.22 in the chargesheet, however, his role was nowhere discussed in the chargesheet, also, no documentary evidence was ever produced against him that to show his involvement in the granite 15 quarrying operations, except for the partnership deed wherein he was only a dormant partner. Further, he pointed out that the District Collector constituted teams to inspect and conduct survey wrt the granite quarrying operations and the team submitted a report which was challenged by Thiru C. Rabeek Raja, Proprietor, of M/s M.R. Granites in Writ Petition in W.P. (MD) No. 2631 of 20134 before the Hon’ble Madurai Bench of Madras High Court, wherein he categorically admitted himself as a proprietor. Moreover, he cited that a new high-level expert team was constituted for evaluating the quarry, which concluded that there was no illegal quarrying in the area and hence, there is no offence committed under PMLA consequently.

6. During the arguments, Ld. Counsel for the Respondent ED pointed out the role of the accused persons/Appellants as mentioned in para no. 2 above. He argued that the income and immovable properties shown in the ITRs of the Appellants and their firms are inconsistent with the acquisition and possession of immovable properties held in their respective names. He pointed out the inter-se relation of the Appellants as brothers & sisters, their respective spouses, children and partners, as under:

“i. Shri Panneer Mohamed, S/o Chellakkannu Rowther

ii. Shri C. Rabeek Raja, S/o Chellakkannu Rowther

iii. Shri C. Nagoor Hanifa, S/o Chellakkannu Rowther

iv. Shri C. Azad Mohamed, S/o Chellakkannu Rowther

v. Shri C. Rajkapoor, S/o Chellakkannu Rowther

vi. Shri C. Anwar Ali, S/o Chellakkannu Rowther

vii. Smt. H. Sheela Begam @Asma Begum, D/o Chellakkannu Rowther

viii. Smt. S. Shakeela Begam, D/o Chellakkannu Rowther

ix. Smt. S. Rani, D/o Chellakkannu Rowther

x. Shri K. Heeralal, Husband of Sheela Begam @ Asma Begam

xi. Smt. R. Kasaniya Begaum, W/o Shri C. Rabeek Raja

xii. Smt. P. Phyrose Begam, W/o Shri C. Panneer Mohamed

xiii. Shri R. Yasar Arabath, S/o Shri C. Rabeek Raja

xiv. Sri R. Rahuman, S/o Shri C. Rabeek Raja

xv. Shri P. Senthil Kumar, partner

xvi. Shri P. Rajasekaran, partner”

He pointed out that the said persons/appellants have filed ITRs in order to project the part of proceeds of crime derived out of the commission of the scheduled offences as untainted properties, and thereby, laundering the proceeds of crime which is apparent for the following reasons –

a) All of them have chosen to show only a part of immovable properties held in their respective names during the relevant periods and have not shown/declared all the immovable properties in their respective names.

b) The value of the immovable properties as declared in the respective Income Tax Returns, by the above individuals is different from that of the registered documented value.

c) Shri C. Panneer Mohamed, Proprietor of M/s Madurai Granite Exports, Shri C. Rabeek Raja, Proprietor of M/s M.R. Granites, Smt. R. Kasaniya and Shri C. Nagoor Hanifa had not filed any Income Tax Returns since 2013-2014 and Shri C. Azad Mohamed, Shri C. Rajkapoor and Shri C. Anwar Ali had not filed their Income Tax Returns since 2012-2013.

d) The Gross income declared by all the above individuals is not in tune with the huge immovable properties registered in their respective names.

e) Shri C. Panneer Mohamed, Shri C. Rajkapoor, Shri C. Azad Mohamed, Shri C. Anwar Ali and Shri C. Nagoor Hanifa, being younger brothers of Shri C. Rabeek Raja had stated in their voluntary statements that their respective Income Tax Returns were prepared/filed by Shri C. Rabeek Raja and that all their respective immovable property documents were available with/in the custody of Shri C. Rabeek Raja. Shri Nagoor Hanifa has specifically stated vide his voluntary statement dated 12.02.2017 that his signatures were forged by Shri C. Rabeek Raja and others.

f) Shri R. Yasar Arabath and Shri R. Rahuman, (both sons of Shri C. Rabeek Raja and Smt. R. Kasaniya Begum, both accused in the Scheduled Offences under various FIRs registered by Madurai District Police Station as detailed above), had filed all their Income Tax Returns for the period from 2013-2014 to 2016-2017 only on 31.07.2017 and 01.08.2017, only after the registration of cases by Madurai District Police of Tamil Nadu and Enforcement Case Information Report by Directorate of Enforcement against their parents and others, which is an afterthought by both of them in order to project the proceeds of crime derived by their parents as untainted properties. In spite of the same the income declared by them in the said IT Returns are not in tune with the value of the properties acquired by them. Both Shri R. Yasar Arabath and Shri R. Rahuman had never produced any evidences to support their claim that they had purchased all the properties held in their respective names out of their own income from agriculture and from their granite business. For same reasons, both Shri R. Yasar Arabath and Shri R. Rahuman refrained from appearing for the summons issued to them on 03.10.2017 with the specific requirement to produce their immovable property documents.

g) In specific, Shri R. Yasar Arabath had not produced any evidential documents to show his legal sources of income to pay the Seigniorage Fee of Rs. 3,17,57,000/- paid vide Document No.2675/2014 registered with the Sub-Registrar Office of Kariapatti, Tamil Nadu and the same has not been reflected in any of his Income Tax Returns.

h) Verification conducted with various Sub-Registrar Offices in Tamil Nadu revealed that Shri C. Panneer Mohamed, Shri C. Rabeek Raja, Smt. R. Kasaniya, Shri C. Nagoor Hanifa, Shri C. Azad Mohamed, Shri C. Rajkapoor, Shri C. Anwar Ali, Shri K. Heeralal and Smt. Sheela Begaum @ H. Asma Begam have all purchased and sold large number of immovable properties, apart from possessing huge numbers of immovable properties in their respective names and have earned income out of such transactions, during the period of crime committed in the said FIRs/Final Reports filed by the Madurai District Police of Tamil Nadu.

Shri K. Heeralal and his wife Smt. Sheela Begaum @ H. Asma Begam had neither produced any Income Tax Returns filed by them, nor evidenced their legal sources of income to acquire such huge immovable properties in their respective names.

Shri P. Rajasekaran and Shri P. Senthilkumar, never produced any records or documents as required in the summons issued to them under the provisions of Section 50(2) & (3) of PMLA, 2002.

Accordingly, Ld. counsel for the respondent ED stressed that from the investigation as set out above, it is clearly evident that the persons accused in the FIRs/Charge Sheets, viz., Shri C. Panneer Mohamed, Proprietor of M/s Madurai Granite Exports, Shri C. Rabeek Raja, Proprietor of M/s M.R. Granites and partner of M/s R.R. Granites, Smt. R. Kasaniya, Shri C. Nagoor Hanifa, Shri C. Azad Mohamed, Shri C. Rajkapoor, Shri K. Heeralal, Shri C. Anwar Ali, Shri I. Nazer, Smt. Sheela Begaum @ H. Asma Begam, Shri P. Senthilkumar and Shri P. Rajasekaran, along with the other accused persons accused in the FIRs/Final Reports as detailed above filed by the Madurai District Police, have committed “scheduled offences” by illegal mining of granite from State Govt. land & the land reserved for village community and trading of the same and have caused wrongful loss to the tune of Rs. 450 Crores to the Government Exchequer and corresponding wrongful gain to themselves. The said proceeds of crime were laundered by them by taking new mining lease lands, purchase of properties etc. Accordingly, their properties were rightly attached by ED under Section 5(1) of PMLA, 2002 and further for adjudication and confiscation in terms of Section 8 of PMLA. He pointed out that the experts from the Department of Geology and Mining, based on the scientific and systematic study using “Total Station Survey” had furnished a report named as “Evaluation Report” for each quarry they have inspected and verified. Ld. counsel for the respondent ED contended that the pecuniary benefits obtained illegally by the aforesaid persons were re-invested in acquisition of the immovable properties in their own names and in the names of their family members as well as in mining lease licenses in the name of the proprietary concerns owned by them and thereby resulting in additional accruals.

Ld. counsel for the respondent argued that from the foregoing, it is established that Shri C. Panneer Mohamed was possessing the property of 35 cents of land with a Power of Attorney issued by Smt. S. Manimegalai in the year 2003, that he had paid an amount of Rs.6,60,000/- to Smt. S. Manimegalai vide Sale Deed Settlement Receipt executed on 23.05.2003 which was not registered. Shri C. Panneer Mohamed further made an agreement for sale with Shri C. Azad Mohamed in the year 2005, which was not through. After the investigation was initiated under the provisions of PMLA, 2002, Shri C. Panneer Mohamed had decided to dispose of the property without involving himself in the transaction. Shri C. Panneer Mohamed joined hands with Smt. S. Manimegalai and got his power of attorney cancelled and another power attorney was issued to Shri P. Bilal Mohamed. In order to keep the transaction under control Shri C. Paneer Mohamed made a sale agreement with Shri P. Bilal Mohamed in the name of his (Panneer) wife, Smt. P. Phyrose Begam, which was subsequently cancelled only after the sale of the property to Shri S. Siddique Raja. The sale consideration shown on the Document was only Rs.10,50,000/-, whereas the Guideline value is Rs.1,02,00,000/-and the Fair Market Value would be much higher. All the transactions were made only in cash, and hence, the quantum of cash transacted among themselves is not known. Shri C. Panneer Mohamed in conspiracy with Smt. S. Manimegalai and others had transferred the landed property of 35 Cents at Melur into the name of Shri S. Siddique Raja in order to escape the clutches of law, which is nothing but an act of laundering the proceeds of crime derived by him out of the commission of the said scheduled offences. Therefore, it stands to reason that the subject landed property is nothing but property involved in Money laundering.

Ld. counsel for the respondent ED submitted that it is evident that the persons as named above, used the proceeds of crime in acquisition of the assets in the form of 511 Immovable properties in the names of the aforesaid persons and their family, which are totally valued at Rs.17.46 Crores (approximately) as per the registered documented value, and the Guideline value prescribed by the Government of Tamil Nadu is to the tune of Rs. 96.05 Crores (Approx.).

He argued that from the investigation as set out above and from the documents gathered during the investigation and from the statements recorded, it is evident that all the appellants have acquired the proceeds of crimes derived by these persons arrayed as accused in the FIRs/Final Reports as detailed above filed by the Madurai District Police, in the illegal quarrying of granite slabs/blocks and trading of the same to the tune of Rs.450 Crores, and have laundered the proceeds of crime investing in acquisition of immovable properties. Thus, the above said properties are involved in money laundering are rightly attached, being much less than the total proceeds of crime.

Ld. counsel for the respondent ED argued that the Quarry lands along with structures therein, available in the names of Shri C. Panneer Mohamed, Shri C. Rajkapoor, Shri P. Rajasekaran and Shri C. Anwar Ali, totally valued at Rs.95 Lakhs as detailed vide SCHEDULE-1 (@para 17@ pg. 67-69 of PAO), were used to generate and launder the crime proceeds as detailed above and as such the same are properties involved in money laundering and are liable for attachment under Section 5(1) of PMLA.

Accordingly, Ld. Counsel for the respondent contended that Shri C. Panneer Mohamed in conspiracy with Smt. S. Manimegalai and others have transferred the land, which was in his possession under power of attorney, in order to escape the clutches of law, which is nothing but an act of laundering the proceeds of crime derived by him out of the commission of offences in FIRs/Chargesheets of Madurai District Police of Tamil Nadu. Therefore, it stands to reason that the subject landed property as detailed in SCHEDULE-II (@para 17@pg. 69,70 of PAO) is nothing but property involved in Money laundering.

Prayer is accordingly made to dismiss the present Appeal being devoid of any merits.

7. On the basis of respective pleadings following issues arise for decision:-

i) Whether the matter needs to be remanded to the Adjudicating Authority for passing fresh order in OC No. 852/2017?

ii) Whether the attachment order passed by the ED and the confirmation order passed by the Adjudicating Authority are without any reason, seeing the fact that the appellants have purchased most of the properties out of income earned and declared in ITRs?

iii) Whether properties purchased prior to the enactment and coming into force of PMLA Act i.e. 01.07.2005 are not covered under PMLA?

iv) Whether the property purchased prior to the quarrying permit dated 20.04.2006 are not covered under PMLA, being untainted properties?

v) Whether the impugned order is liable to be set-aside, qua the properties at Serial no 1 to 55 under Schedule III of complaint, as the alleged predicate offences under Section 420, 467, 471, 120-B of IPC and Section 3 & 4 of Explosive Substances Act were inserted in the list Schedule Offences under PMLA, w.e.f. 01.06.2009?

vi) Whether the impugned order needs to be set-aside on the ground that the illegal mining is not a Scheduled Offence?

vii) Whether the appellants are not directly or indirectly attempted to have indulged in or knowingly not assisted or actually not involved in the activity connected with the proceeds of crime and further not involved in projecting or claiming such properties as proceeds of crime as untainted property, considering the fact that the attached properties were purchased out of income earned from the quarrying operation, during the period from 2005-2012 to the extent of USD 6710183 equivalent to Rs. 35 Crores?

viii) Whether the PAO and its confirmation vide impugned order needs to be set aside on account of laches?

ix) Whether the property of appellant K. Murugesan jointly owned with appellant C. Panneer Mohmad purchased vide sale deed dated 15.12.2006, needs to be released to the extent of his share i.e. 50%, seeing the fact that he is neither accused in charge sheet case pertaining to predicate offence, nor arrayed as accused in prosecution complaint under PMLA?

x) Whether the appeal filed by the appellant P. Senthil needs to be allowed as he was previously the dormant partner in M/s M.R. Granites, in absence of attachment of any property in his name in the present case?

Now, we will decide the above issues one by one in the following paragraphs.

8. Issue no. i) & ii), are taken up together being interconnected. We are of the view that the police/CBI are meant to conduct the investigation for the commission of the predicate/schedule offence and ED is not empowered to re-investigate the same. It has to see only the following points during its investigation for money laundering: –

i) Prima facie incriminating evidence against the culprits for commission of the schedule offence;

ii) Quantum of proceeds of crime generated by commission of crime/predicate offence;

iii) Proceeds of crime are laundered, or likely to be laundered;

iv) If proceeds of crime are laundered, then the mode of layering of the same, or the trail of POC;

v) If proceeds of crime are already dissipated, then the other properties of the culprits which can be attached, in absence of direct/ indirect POC;

vi) The claimants/vendees of attached properties are genuine, or part & parcel of conspiracy.

The first two points can be inferred by the ED on the basis of allegations made in the FIR and/or Police report under Section 173 CrPC and ECIR recorded by it. The ED has to confine its inquiry/ investigation qua the remaining five points mentioned above. ED is not required to conduct any investigation for the predicate offence. However, ED cannot arrive at different conclusion qua the predicate offence, while conducting investigation for PMLA, as it is not a supervisory investigating agency qua the predicate offence. The above six points are sufficient to form ‘Reason to Believe’ for passing Provisional Attachment Order for attaching the properties by ED and filing the Original Complaint before the Adjudicating Authority for confirmation of the PAO. The Adjudicating Authority after perusal of OC and relied upon documents, if satisfied with the same can issue SCN to the defendants to lead their defence by filing reply.

In the present case, many FIRs were registered against the accused persons, including the appellants for carrying out illegal excavation of granite stones from the unleased State Government land or the land reserved for common use of the community, which was adjoining to their lease lands. Final Reports are already filed by the police in the said FIRs, wherein they were arrayed as accused persons. The reason to believe for passing the PAO is recorded by the Deputy Director, ED, from para 14 to 18 of the Provisional Attachment Order dated 30.10.2017, along with the details of the properties at internal page no. 64 to 139. Now, coming to the impugned order, passed by the Adjudicating Authority, the AA reproduced the reason to believe found by Deputy Director, ED, in para 12 to 18 of the impugned order from internal page no. 21 to 27. The Adjudicating Authority after reproducing the respective replies filed by the defendants and the rejoinders filed by ED made the discussions regarding the incriminating facts and material from internal page number 91-99 of the impugned order for confirmation of the PAO. Thereafter, the Adjudicating Authority confirmed the PAO as concluded in para 11 at page 99 of the impugned order dated 07.04.2018. Therefore, we are of the view that the contention of the appellants regarding the reasons to believe not being cited in the order does not hold good, as is evident from the record that there exists ample material against the appellants and they have committed predicate offence, thus, the property is rightly confirmed for attachment. The impugned order is a reasoned order and is based on the facts revealed in the investigation. The length of the order does not decide the credibility of the discussion and findings given in the order. We agree with the contention of Ld. counsel for the appellant that from the investigation as set out above, it is clearly evident that the persons accused in the FIRs/Charge Sheets, viz., Shri C. Panneer Mohamed, Proprietor of M/s Madurai Granite Exports, Shri C. Rabeek Raja, Proprietor of M.R. Granites and partner of R.R. Granites, Smt. R. Kasaniya, Shri C. Nagoor Hanifa, Shri C. Azad Mohamed, Shri C. Rajkapoor, Shri K. Heeralal, Shri C. Anwar Ali, Shri I. Nazer, Smt. Sheela Begaum @ H. Asma Begam, Shri P. Senthilkumar and Shri P. Rajasekaran, along with the other accused persons accused in the FIRs/Final Reports as detailed above filed by the Madurai District Police, have committed “scheduled offences” and have caused wrongful loss to the tune of Rs. 450 Crores to the Government Exchequer and corresponding wrongful gain to themselves. Further, by committing the said scheduled offences, the aforesaid appellants, along with the other accused persons subsequent to the wrongful gain in each of the said Mining Lease agreements, sold the granites in the international/domestic market in excess of the declared quantity and realised the sale proceeds. The Quarry lands available in the names of Shri C. Panneer Mohamed, Shri C. Rajkapoor, Shri P. Rajasekaran and Shri C. Anwar Ali, which were used to generate and launder the crime proceeds and as such the same are properties involved in money laundering, and are rightly confirmed for attachment and further adjudication and confiscation in terms of Section 8 of PMLA. Further, the experts from the Department of Geology and Mining, based on the scientific and systematic study using “Total Station Survey” had furnished a report named as “Evaluation Report” for each quarry they have inspected and verified. It is revealed in the investigation that the pecuniary benefits obtained illegally by the aforesaid persons were re-invested in acquisition of the immovable properties in their own names and in the names of their family members as well as in mining lease licenses in the name of the proprietary concerns owned by them and thereby resulting in additional accruals. Moreover, as pointed out by the Ld. counsel for ED, after the investigation was initiated under the provisions of PMLA, 2002, Shri C. Panneer Mohamed had decided to dispose of the property without involving himself in the transaction. Shri C. Panneer Mohamed joined hands with Smt. S. Manimegalai and got his power of attorney cancelled and another power attorney was issued to Shri P. Bilal Mohamed. In order to keep the transaction under control Shri C. Paneer Mohamed made a sale agreement with Shri P. Bilal Mohamed in the name of his (Panneer) wife, Smt. P. Phyrose Begam, which was subsequently cancelled only after the sale of the property to Shri S. Siddique Raja. The sale consideration shown on the Document was only Rs.10,50,000/-, whereas the Guideline value is Rs.1,02,00,000/- and the Fair Market Value would be much higher. All the transactions were made only in cash and hence the quantum of cash transacted among themselves is not known. Shri C. Panneer Mohamed in conspiracy with Smt. S. Manimegalai and others had transferred the landed property of 35 Cents at Melur into the name of Shri S. Siddique Raja in order to escape the clutches of law, which is nothing, but an act of laundering the proceeds of crime derived by him out of the commission of the said scheduled offences. Therefore, it stands to reason that the subject landed property is nothing but property involved in Money laundering. The proceeds of crime are then utilized in acquisition of the assets in the form of 511 Immovable properties in the names of the aforesaid persons and their family, which are totally valued at Rs.17.46 Crores (approximately) as per the registered documented value, and the Guideline value prescribed by the Government of Tamil Nadu is to the tune of Rs. 96.05 Crores (Approx.). Moreover, the appellants have not given any proper defence to negate the above conclusions made out in investigation and thus, the burden of proof has not been discharged by them. Therefore, there is no ground to remand this matter to the Adjudicating Authority for passing the fresh order. Even otherwise, the Hon’ble High Court of Karnataka in recent case titled as Joint Director ED v. M/s Devas Multimedia Pvt. Ltd. in Miscellaneous Second Appeal No. 24 of 2020 has held that this Appellate Tribunal ATFP is not empowered to remand any matter to the Adjudicating Authority for passing the fresh order, in absence of any specific provision in this regard in PMLA, 2002.

Hence, issue no. 1 & 2 are accordingly hereby decided against the appellants and in favour of respondent ED.

9. Now, we will decide issue no. iii) & iv) being inter-connected. The contention of the appellants that properties purchased by the appellants prior to the enactment and coming into force of PMLA are not covered within the definition of proceeds of crime, as the PMLA cannot be applied retrospectively, is devoid of any merits. To analyze this issue, it would be gainful to refer to the definition of “proceeds of crime” given under Section 2(1) (u) of the Act of 2002 and is quoted thus-

2. Definitions -(1) In this Act, unless the context otherwise requires, -xx xx xx xx xx xx xx xx xx xx xx

(u) “proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property’ [or where such property is taken or held outside the country, then the property equivalent in value held within the country] [or abroad];

[Explanation.— For the removal of doubts, it is hereby clarified that “proceeds of crime” include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence].

xx xx xx xx xx xx xx xx xx xx xx

The perusal of the definition reveals three limbs of the definition out of which first part refers to the property acquired or derived directly or indirectly by a person relating to the criminal activity to a scheduled offence. The second part includes “the value of any such property”. The second part is generally mixed with third party for giving interpretation.

However, an elaborate judgment on the issue has been given by the Delhi High Court in the case of Prakash Industries Ltd. v. Directorate of Enforcement reported in 2022 SCC OnLine Del 2087 and in this regard, Para 105 of the judgment in the case of Prakash Industries Ltd. (Supra) are quoted hereunder:-

“105. It would be pertinent to recall that properties which were acquired prior to the enforcement of the Act may not be completely immune from action under the Act in light of what this Court had held in Axis Bank. As was explained by the Court in Axis Bank, the expression proceeds of crime envisages both ―tainted property as well as ―untainted property‖ with it being permissible to proceed against the latter provided it is being attached as equal to the “value of any such property” or “property equivalent in value held within“` the country or abroad”. However, both the italicised categories would be liable to be invoked in cases where the actual tainted property cannot be traced or found out. It is only where the respondents are unable to discover the tainted property that they can take the statutory recourse to move against properties which may fall within the ambit of ―value of any such property or ―property equivalent in value held within the country or abroad‖. To the aforesaid limited extent, properties purchased prior to 01 July 2005 may also become vulnerable and subject to action under the Act. However, enforcement action against such properties would have to satisfy the tests and safeguards as propounded in Axis Bank with the learned Judge observing that in such a situation it would have to be established that the person accused of money laundering had an interest in such property at least till the time that he indulged in the proscribed criminal activity. The learned Judge further observed that bona fide rights acquired by third parties prior to the commission of the predicate offense would stand saved.”

Further, this Tribunal has also given an elaborate judgment on the issue in the case of Sadananda Nayak v. The Deputy Director, Directorate of Enforcement, Bhubaneswar in FPA-PMLA-5612/BBS/ 2023 on 14.10.2024, where all the judgments on the issue have been considered and thereby this issue was decided in favour of ED.

Further, in view of the para 68 of the judgment of Hon’ble Supreme Court of India in the case of Vijay Madanlal Chaudhary v. Union of India, 2022 SCC OnLine SC 929, wherein, it is held that-

“68. It was also urged before us that the attachment of property must be equivalent in value of the proceeds of crime only if the proceeds of crime are situated outside India. This argument, in our opinion, is tenuous. For, the definition of “proceeds of crime” is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property. If the property is taken or held outside the country, even in such a case, the property equivalent in value held within the country or abroad can be proceeded with. The definition of “property” as in Section 2(1)(v) is equally wide enough to encompass the value of the property of proceeds of crime. Such interpretation would further the legislative intent in recovery of the proceeds of crime and vesting it in the Central Government for effective prevention of money-laundering.”

The paras quoted above show a detailed discussion to the interpretation to the definition of “proceeds of crime”. The judgment of the Apex Court in the case of Smt. Pavana Dibbur v. The Directorate of Enforcement reported in 2023 SCC OnLine SC 1586 has also been considered. However, findings given by three judges Bench of the Apex Court in the Vijay Madanlal Choudhary v. Union of India (supra) has been relied to give interpretation to the definition. In the light of the above, we find no force in the first argument when the proceeds out of crime was not available with the appellant, the property of equivalent value has been attached. In the light of the aforesaid, second limb of the definition of “proceeds of crime” has been applied to attach the property of equivalent value. Thus, this ground raised by the appellants cannot be accepted.

Hence, issue no. 3 & 4 are accordingly hereby decided against the appellants and in favour of respondent ED.

10. Issue no. v) & vi), are taken up together being inter-connected. The appellants asserted regarding the non-application of PMLA due to amendment of 2009 w.e.f. 01.06.2009. With regard to the same, we find that the relevant date is a date when the tainted property is projected to be untainted and as a consequence to it, the ECIR is recorded showing offence under Section 3 of the 2002 Act. The relevant date to find out the scheduled offence and the offence of money laundering is when it is projected to be untainted property to make out an offence under section 3 of the Act of 2002. The issue aforesaid has been decided in the case of Dyani Antony Paul v. Union of India reported in (WP No. 38642/2016) dated on 21 February, 2023. The relevant paras of the judgment quoted hereby: –

77. Article 20of the Constitution prohibits conviction except for violation of a law in force at the time of commission of an offence. In other words, there cannot be prosecution under the PML Act for laundering of money acquired by committing the schedule offences prior to the introduction of the PML Act. Therefore, the time of commission of scheduled offences would not be relevant in the context of the prosecution under the PML Act. What would be relevant in the context of prosecution is the time of commission of the act of money laundering. The question would be, whether a person involved in money laundering as provided under Section 3 of the PML Act has indulged in the said act or not has to be decided by the competent authority. What is the date of laundering of money will have to be decided on facts of each case and there cannot be any prescribed straight jacket formula. This is an important fact which the authority will have to examine and it is a mixed question of law and fact.

78. A person acquiring assets through illegal means who comes before the society and claims that said money was acquired by proper means, then he would be guilty of the offence of money laundering. A person might have committed an offence long back and the proceeds of it is being placed, layered or sought to be integrated to the main stream of economy, then also, he is said to have committed the offence of money laundering. Incorporation of certain offences in the Schedule is to bring it within the net of PML Actnamely, proceeds of that crime within the provisions of the Act. For constituting an offence under Section 3 of PML Act, it is the connection of transaction to proceeds of crime which is sufficient and not the crime.

The relevant date to find out offence of money laundering is when proceeds is projected to be untainted property. The issue aforesaid has been decided even in the case of Vem Krishna Keerthan v. Directorate of Enforcement reported in CRIMINAL PETITION No.9314 of 2022.

“38. In respect of the second argument, it should be borne in mind that the offence of money laundering is a continuous offence. The date of commission of the scheduled offence may not be relevant to prosecute a person for the offence of money laundering at a later point of time. Even after the date of commission of the scheduled offence, the accused might be in possession of the proceeds of crime. He/she may continue to use or conceal such proceeds of crime or project/claim them as untainted property. Therefore, if a person continues to deal with proceeds of crime, even after the commission of the scheduled offence, he/she may be prosecuted under the PMLA.”

We further fortify our view in this regard, in lieu of the judgment of Hon’ble Supreme Court of India in the case of Vijay Madanlal Chaudhary v. Union of India, wherein it is held that-

42. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The process or activity can be in any form — be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Thus, involvement in anyone of such process or activity connected with the proceeds of crime would constitute offence of money-laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence — except the proceeds of crime derived or obtained as a result of that crime.

43. Needless to mention that such process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled offence). It would be an offence of money-laundering to indulge in or to assist or being party to the process or activity connected with the proceeds of crime; and such process or activity in a given fact situation may be a continuing offence, irrespective of the date and time of commission of the scheduled offence. In other words, the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money-laundering under the 2002 Act — for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in trenches until fully exhausted. The offence of money-laundering is not dependent on or linked to the date on which the scheduled offence or if we may say so the predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provision (Section 3, as amended until 2013 and were in force till 31.7.2019); and the same has been merely explained and clarified by way of Explanation vide Finance (No. 2) Act, 2019. Thus understood, inclusion of Clause (ii) in Explanation inserted in 2019 is of no consequence as it does not alter or enlarge the scope of Section 3 at all.

Regarding the fact that illegal mining is not a scheduled offence and thus, impugned order should be set aside merely on this ground does not hold good, as there are many other predicate offences committed by the appellants which fall under the scheduled offences as mentioned above and hence, PMLA proceedings won’t get affected merely because one of the many offences committed is not covered under the scheduled offence. Hence, issue no. 5 & 6 are accordingly decided against the appellants and in favour of respondent ED.

11. Coming to issue no. vii), the contention that the attached properties were purchased out of the income earned from quarrying operations during the period from 2005-2012 and thus these properties should not be attached does not hold good in light of the fact that firstly, as per investigation the properties were bought using illegal acquired money by excavating granite from the State Government Land or Community Land, as mentioned in para no. 2 above. Shri C. Panneer Mohamed in conspiracy with Smt. S. Manimegalai and others have transferred the land, which was in his possession under power of attorney, in order to escape the clutches of law, which is nothing but an act of laundering the proceeds of crime derived by him out of the commission of offences in FIRs/Chargesheets of Madurai District Police of Tamil Nadu. Therefore, it stands to reason that the subject landed property as detailed in SCHEDULE-II (@para 17@pg. 69,70 of PAO) is nothing but property involved in Money laundering and secondly, even if it is assumed that the properties were bought using the legal money, still the same can be attached as “value thereof” in case the POC is not available, which is about Rs. 450 crores and the attached properties are quite less in value. Hence, issue no. 7 is accordingly hereby decided against the appellants and in favour of respondent ED.

12. Coming to issue no. viii), the contention regrading laches in passing the PAO and prayer for setting aside of the order under Section 5(1) of PMLA on that ground does not hold good in the present case, because the mandate of time period for passing the PAO has not been provided under Section 5(1), rather the time period is provided for confirmation of the PAO. Hence, this is no ground for setting aside the impugned order. Hence, issue no. 8 is accordingly hereby decided against the appellants and in favour of respondent ED.

13. Now, coming to issue no. 9, the appellant K. Murugesan jointly owned one property with appellant/accused C. Panneer Mohmad vide Sale Deed dated 15.12.2006. The fact that whether Sh. K. Murugesan in fact purchased the said property out of investment from his own pocket or whole property was purchased by Sh. Paneer Mohammad cannot be ascertained by this Appellate Tribunal as appellant has not filed his saving bank statements to show that he was having sufficient savings to purchase the property. Moreover, ED has contended that the actual value of the property was much more than the value recorded in the Sale Deed and even the Circle Rate of the property was much higher than the sale consideration mentioned therein. Therefore, this issue needs to be decided by the Trial Court after examination and cross examination of rival witnesses. Hence, issue no. 9 is accordingly hereby decided against the appellant Sh. K. Murugesan and in favour of respondent ED.

14. Now, coming to issue number 10, it is pertinent to mention here that the appellant P. Senthil Kumar has not pointed out any property attached by ED in the present OC number 852/2017. It seems that appellant P. Senthil Kumar has filed the present appeal in view of the allegations mentioned against him in the PAO No. 21/2017 and the OC No. 852/2017, being the partner in M/s M.R. Granites. He has stressed that, he was only dormant partner in the said partnership firm as appellant Sh. Rabeek Raja was looking after the affairs of M/s MR Granites. The property of present appellant Sh. P. Senthil Kumar accused in FIR no.158/2012 is attached by ED in another PAO No. 06/2018, which is subject matter of OC No. 930/2018. Hence, he has no locus standi in the present appeal. Accordingly, his appeal needs to be disposed of with liberty to lead his defence in the criminal case as per law.

15. In sequel to our discussion in the preceding paras no.8 to 13, the present appeals at Sl. No. 2-13 are hereby dismissed being devoid of any merits. The appeal at Sl. No.1 of appellant P. Senthil Kumar is disposed of with liberty as mentioned in the preceding para no.14. The pending applications, if any, in any appeal stands disposed of accordingly.

Appeals at 8l. No. 2 to13 Dismissed.

Appeal at 8l. No. 1 Disposed of with Liberty.

Pronounced on this 29t^h Day of October, 2025.