Appellate Tribunal Quashes ED Attachment Of NCP Leader Praful Patel's Properties

An Appellate Tribunal in Delhi has quashed orders of attachment of properties of Nationalist Congress Party leader Praful Patel, his wife and his company in a money laundering case, as well as the order of Adjudicating Authority confirming the provisional attachment.

A coram comprising of Chairman, Justice Munishwar Nath Bhandari and Member Balesh Kumar allowed the appeals moved by Praful Patel, his wife Varsha Patel and his company Millennium Developers Pvt. Ltd.

On July 11, 2022, the Enforcement Directorate (ED) issued a provisional attachment order of seven properties belonging to the Patels worth about Rs. 180 crores. The properties in question were seven flats situated in Ceejay House, Worli, Mumbai.

The reason for the attachment given by ED was that the Patels purchased the properties from the wife of late Iqbal Mirchi, an underworld gangster and hence they constituted proceeds of crime.

The Adjudicating Authority under the Prevention of Money Laundering Act confirmed the provisional attachment order passed on January 05 last year.

Quashing ED's action as well as confirmation of provisional attachment, the Appellate Tribunal constituted under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act (SAFEMA) observed that the Patels have not been named in the FIR registered against Iqbal Mirchi, and that nothing was brought on record to show even remote connection of the Patels with the crime alleged to have been committed by Iqbal Mirchi.

The Tribunal noted that Iqbal Mirchi purchased many properties at various locations in Maharashtra and abroad apart from other parts of the country with the help of and in the name of his sons and his wife.

“The respondents failed to consider that on shifting of the proceeds of crime and its attachment by attaching the property of 14000 Sq. Ft. they could not have made further attachment of alleged proceeds in the hands of the appellant,” the Tribunal said.

It added that the Patels cannot be said to be in possession of the property out of the proceeds of crime once it was taken by them on consideration under a judicial decree and the consideration given to HazraMemon was subject matter to attachment separately.

The Tribunal further said that with exchange of the property that too under a judicial decree, the area came to the Patels no more remained proceeds of crime otherwise it would be a case of double attachment going against the principles of law.

“The proceeds of crime came to the HazraMemoni.e. 14000 Sq. Ft. area was attached and the attachment has been confirmed by the Adjudicating Authority followed by further confirmation by this Appellate Tribunal and in that case there was no reason to attach the property belonging to the appellant going against the decree of the court,” the Tribunal said.

“Once the consideration received by HazraMemon was attached in reference to the FIR and ECIR against Iqbal Mirchi and others, the respondents could not have attached the property belonging to the appellant, otherwise it would remain nothing but the double attachment of the property in reference to one and same ECIR,” the Tribunal said.

It concluded that the attachment of the properties at Ceejay House cannot be considered to be appropriate and legal.

“As per Section 8(2), the Adjudicating Authority is required to record its finding that property is involved in money laundering and only on recording of such an opinion, the order of attachment can be confirmed. It cannot be concluded that a property taken on consideration and the Court decree can be said to be involved in the money laundering, rather for that respondents have already taken recourse to attach 14000 sq. ft. area in the hands of HazraMemon,” the Tribunal said.

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