PMLA Appellate Tribunal Upholds Attachment Of Kerala Businessman's ₹2.55 Crore Assets In Invest Bank Fraud Case

The Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) has upheld the provisional attachment of assets worth Rs. 2.55 crore belonging to a Kerala businessman accused of laundering proceeds of an alleged Rs. 83.36 crore fraud involving the UAE-based Invest Bank.

Chairman Justice Munishwar Nath Bhandari dismissed an appeal filed by Abdurahiman Chenoth Thiruthummal against a June 2024 order of the Adjudicating Authority. The order had confirmed the provisional attachment of his properties by the Enforcement Directorate (ED).

Abdurahiman operated a petroleum refinery business under the firm Hexa Oil & Gas Services LLC in the UAE. He obtained loan and credit facilities from Invest Bank, Sharjah, amounting to 68.159 million UAE Dirhams for business development.

He defaulted on four installments, prompting bank officials to inspect the business premises. They found that none of the loan amount had been invested in the business and had instead allegedly been diverted.

He later issued post-dated cheques worth 70 million AED, but all were dishonoured due to insufficient funds. The outstanding liability stood at 42.898 million UAE Dirhams, approximately Rs. 83.36 crore.

According to the ED, he later fled the UAE to Kerala, where the embezzled funds were allegedly transferred. In December 2023, the agency searched six premises in Kerala. It recovered incriminating documents and electronic devices before attaching properties worth Rs. 2.55 crore.

Challenging the attachment, the businessman argued that he had left the UAE shortly after the loan process began. Therefore, he claimed he could not be held responsible for loans granted between October 2017 and January 2018.

He also relied on a power of attorney executed in favour of Shiju Shahul to contend that he was no longer responsible for the company's day-to-day affairs.

He further argued that the ingredients of cheating under Section 415 of the IPC were not made out and that the attached properties had been purchased before the alleged offence, leaving them unconnected to the proceeds of crime.

The tribunal was not persuaded. It noted that the criminal case arising from the ECIR was still pending. It also questioned why Thiruthummal had issued post-dated cheques worth 70 million AED if he had no role in obtaining or handling the loan. The bench further noted that the Abu Dhabi Federal Court had already passed a decree against him for 41 million AED, along with interest, in a civil suit filed by the bank. It observed that he had not contested those proceedings.

Observing that the power of attorney did not absolve him of liability for his own acts, the Tribunal held that he remained responsible for obtaining the loan. It also rejected his contention that properties acquired before the alleged offence could not be attached. It reiterated that when the proceeds of crime are unavailable or untraceable, the ED is empowered to attach properties of equivalent value. Finding no merit in the appeal, the Tribunal upheld the attachment order.

For Directorate of Enforcement, Cochin: Advocate Nidhi Raman,