Mumbai Jumbo Covid Centre Scam: PMLA Appellate Tribunal Upholds Attachment of Lifeline Hospital Partner's Flat

The Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) has recently upheld the Enforcement Directorate's (ED) attachment of a flat belonging to Rajeev Salunkhe, a partner of Lifeline Hospital Management Services, in the alleged Rs. 32.44 crore Mumbai Jumbo Covid Centre scam.

Chairman Justice Munishwar Nath Bhandari dismissed Salunkhe's appeal challenging a May 2024 order of the Adjudicating Authority. The order had confirmed the provisional attachment of his property to the extent of Rs. 1.54 crore.

The case arose from an August 2022 FIR alleging irregularities in contracts awarded for operating Jumbo Covid Centres during the pandemic.

According to the ED, Lifeline Hospital Management Services secured contracts for the Worli and Dahisar centres despite lacking prior experience in healthcare services. The agency alleged that between September 2020 and June 2022, the firm received more than Rs. 32 crore from the BMC through invoices supported by fictitious bills, fabricated attendance records and false staffing data.

The ED further alleged that the firm deployed substantially fewer staff than required while claiming payments based on higher staffing levels. These allegations led to a money-laundering probe and the attachment of properties linked to the firm's partners.

Before the tribunal, Salunkhe argued that the attached flat had been purchased in 2016, before the alleged commission of the scheduled offences. He contended that the property therefore had no nexus with the alleged proceeds of crime.

He also submitted that the source of funds used to purchase the flat had been fully disclosed and was unrelated to the alleged criminal activity. Salunkhe further argued that the property was jointly owned with his wife, who was not an accused in the case, and therefore her share could not be attached.

Rejecting the challenge, the tribunal held that disclosure of the source of funds may be relevant when a property is alleged to be directly or indirectly derived from proceeds of crime.

"In any case, disclosure of source remain material when it is taken to be a proceeds of crime, either direct or indirect. However, it would not be so relevant when the property is attached for the “equivalent value” or “value thereof”. Though disclosure of source is a material defence, but cannot be accepted if the provisional attachment is for the value thereof; otherwise, it would give room to the accused to launder and route the proceeds elsewhere if the other property cannot be attached.”

The tribunal reiterated that the PMLA permits attachment of properties of equivalent value where the actual proceeds of crime are unavailable or untraceable. Relying on precedents, it held that even properties acquired before the commission of a scheduled offence may be attached in such circumstances.

On the issue of joint ownership, the Tribunal noted that the attachment was limited to Rs. 1.54 crore and not the entire value of the flat. It held that the wife's share remained unaffected. The appeal was accordingly dismissed.

For Appellants: Advocates Parmesh Bali, Bhrigu Dhamini

For Respondent: Advocates Nattasha Garg