PMLA Appellate Tribunal Upholds ED Attachment Of Bhushan Airways' ₹30.90 Cr Cessna Aircraft
The tribunal upheld the attachment of the aircraft in ED’s money-laundering case linked to the Bhushan Power & Steel bank fraud investigation
The Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) on February 18 upheld the attachment of a Cessna aircraft of Rs. 30.90 crore belonging to Bhushan Airways Services Pvt Ltd, dismissing its appeal against the Enforcement Directorate's action in the money-laundering case linked to Bhushan Power & Steel Ltd.
A bench comprising Members G.C. Mishra and V. Anandarajan rejected the appeal challenging the Adjudicating Authority's order dated November 23, 2022, which had confirmed the provisional attachment of the aircraft issued on June 8, 2022.
The case originates from a CBI FIR dated April 5, 2019 involving Bhushan Power & Steel, where allegations of large-scale bank fraud and diversion of funds amounting to about Rs. 47,204 crore were investigated. The ED registered an ECIR on April 25, 2019 and initiated proceedings under the PMLA.
According to the ED, funds siphoned from Bhushan Power & Steel were routed through multiple entities and used for acquisition and repayment of a Cessna aircraft valued at around Rs. 30.90 crore. The agency alleged that a portion of the funds was directly diverted, while the remaining loan component was repaid using tainted money routed through group companies.
The appellant argued that there was no direct nexus between the alleged proceeds of crime and the aircraft and argued that certain funds had been disclosed before income tax authorities.
Rejecting these submissions, the tribunal held that there was sufficient material to establish a clear money trail linking the proceeds of crime to the acquisition of the aircraft.
The tribunal noted that mere declaration of income before tax authorities cannot absolve liability under the PMLA, as projecting tainted funds as legitimate income does not constitute a valid defence. The tribunal observed:
“It appears that subsequent to the said investigation by that Department, additional income may have been declared by the appellant. The same cannot absolve the appellant of the consequences under the PMLA. Even otherwise, mere declaration of income from tainted sources as untainted income from legitimate sources for the purposes of income tax cannot constitute a defence under the PMLA.”
Dismissing the appeal and upholding the aircraft's attachment, the tribunal said:
“Accordingly, the arguments advanced on behalf of the appellant fail, and are hereby rejected. No other arguments were pressed by the Ld. Counsel for the appellant. Consequently, we do not find any reason to interfere with the impugned order.”
For Appellant: Advocates Ujjwal Jain, Mayank Sharma, Rohit P. Aakash Tiwari, Mrijunjay Pratap Singh
For Respondent: Advocate Anubha Bhardwaj