PMLA Tribunal Upholds ED Attachment, Rejects Plea That Predicate Offence Was Not Scheduled When Committed

The Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) has recently upheld the Enforcement Directorate's attachment of property belonging to Delhi builder Gopal Krishan Aggarwal.

It rejected his contention that proceedings under the anti-money laundering law could not continue because the predicate offence was not a scheduled offence at the time it was allegedly committed.

Chairman Justice Munishwar Nath Bhandari dismissed Aggarwal's appeal against the Adjudicating Authority's August 2023 order confirming the provisional attachment.

The tribunal held that the alleged money laundering was a continuing offence and that the ECIR registered in 2015 was valid.

"The ECIR has not been quashed in any of the proceedings on the ground raised by the appellant i.e. at the time of commission of offence, it was not predicate offence thus ECIR could not have been recorded, rather ECIR is still alive, coupled with the fact that the appellant has been convicted, apart from others for the predicate offence. When the ECIR has not been quashed, I cannot cause interference in the impugned order on the ground urged by the appellant", it observed.

“It is more so when the relevant period to look into the commission of offence under the Act of 2002 is at the time when it is revealed making out a case within the four corners of the Act of 2002 which in the present matter would be in the year 2015.”, it added.

The case arose from a 2006 Delhi High Court direction ordering a CBI inquiry into an alleged nexus between Municipal Corporation of Delhi officials, builders and politicians over widespread unauthorised construction.

Following the inquiry, the CBI registered an FIR alleging criminal conspiracy, cheating and corruption against MCD officials, including Executive Engineer Avinash Chandra Garg.

According to the tribunal's order, Aggarwal purchased a property at Gali Arya Samaj in January 2005. The order states that he and Mamta Nehra subsequently constructed a four-storeyed building without a sanctioned plan. Show-cause and self-demolition notices were issued in his name, followed by a demolition order.

The tribunal observed that the demolition order was allegedly not handed over for execution by Avinash Chandra Garg, allowing the unauthorised construction to remain.

Aggarwal was later convicted in the predicate offence. In 2023, the Adjudicating Authority confirmed the Enforcement Directorate's provisional attachment of the property.

Before the tribunal, Aggarwal argued that the ECIR could not have been registered in 2015 because the predicate offence was not included in the PMLA schedule when it was allegedly committed. He also contended that the alleged offence was not a continuing one.

The tribunal rejected those submissions. Referring to Vijay Madanlal Choudhary v. Union of India and Pradeep Nirankarnath Sharma v. Department of Enforcement, it reiterated that what matters is when a person deals with the proceeds of crime, not when the predicate offence was allegedly committed.

Finding no reason to interfere with the Adjudicating Authority's order, the tribunal dismissed the appeal and upheld the attachment of the property.

For Appellant: Advocates Rajiv Mohan, Sachit Sharma,

For Respondent: Advocate Chandra Prakash