Mumbai: In a major relief for NCP leader Praful Patel, the Appellate Tribunal for SAFEMA, which addresses cases under the Prevention of Money Laundering Act (PMLA), in an order dated June 3, quashed the attachment of several flats he owns on the 12th to 15th floors of Ceejay House in Worli, Mumbai, worth over Rs 180 crore.
Observing that attachment of properties linked to Patel, his wife, Varsha, and their company, Millennium Developers Pvt. Ltd. was a case of double attachment which goes against the principles of law’, a PMLA appellate tribunal in Delhi asked the agency to release the properties.
The ED had attached seven flats in Ceejay House owned by Patel, his wife and their company in 2022. This attachment was later confirmed by the PMLA's adjudicating authority. The ED alleged that the properties were acquired from the widow of the late drug lord Iqbal Mirchi through illegal transactions.
In its order, the Tribunal said that the FIRs on which the ED registered its money laundering case never named Patel or his wife as an accused in the matter. According to the sources the ED is reviewing the order. An appeal against a tribunal order lies before the High Court.
In 2022, the ED provisionally attached seven units on four floors of Ceejay House in Worli, allegedly linked to Patel. This move came as part of their investigation into a money laundering case involving Iqbal Mirchi, a close associate of Dawood Ibrahim. It was noteworthy that the first time the agency treated assets associated with the politician as 'proceeds of crime' in the context of money laundering connected to Iqbal Mirchi and former DHFL promoters Kapil and Dheeraj Wadhawan.
After ED’s adjudicating authority (AA) confirmed the attachment, Patels and their company, M/s Millennium Developers Pvt. Ltd., in which Praful Patel and Varsha held shares to the extent of 42.33% and 57.67% respectively, appealed against the decision.
The ED had argued property in possession of the Patel’s company was nothing but out of the proceeds of crime. The agency had argued that Patel had entered into a transaction with Hazra Memon, Iqbal Memon’s widow, to occupy the area which was acquired by her out of proceeds from crime. Thus, if the Patels had taken over the property acquired by the proceeds of crime, it was rightly subjected to attachment independent to the area of 14000 sq. ft. belonging to Hazra Memon already attached by the ED.
Millennium Developers utilised the Floor Space Index (FSI) of an adjacent plot during the redevelopment of Ceejay House, which had been transferred to Hazra by a court decree from the previous owner. Subsequently, in 2004, Praful Patel entered into an agreement with Hazra Memon to acquire an area of land measuring 19,628.31 sq. ft., upon which a temporary structure of 5,700 sq. ft. was erected. This arrangement was made under the Court decree and was in exchange for a built-up area of 14,000 sq. ft. in the redeveloped building known as Ceejay House.
The tribunal however held that the proceeds of crime shifted on the said area of 14000 Sq. ft. taken by Hazra Memon in consideration of the plot of land of M K Mohammad (the erstwhile owner) and it is for that reason alone that the respondents attached the said property of Hazra Memon.
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. In fact, with exchange of the property and that too under the decree of the Court, the area came to the appellant no more remain to be proceeds of crime otherwise it would be a case of double attachment going against the principles of law.
The proceeds of the crime were traced to Hazra Memon, i.e., a 14,000 square foot area was attached. This attachment was confirmed by the Adjudicating Authority(AA), followed by further confirmation by this Appellate Tribunal. However, in this case, there was no valid reason to attach the property belonging to the appellant, contrary to the court's decree," the order further adds.
The tribunal also held that the violation of the FSI was not a subject matter of the ED"s money laundering case ECIR. The arguments were made in ignorance of the fact that violation of alleged FSI is not subject matter of FIR and ECIR and it could not have been under the ECIR being not a scheduled offence under the Act of 2002. The arguments in this regard shows an exercise not appropriate to the facts of the case and under the provisions of law,
In July, 2023, Ajit Pawar broke ranks with the NCP and joined the Eknath Shinde government as deputy chief minister in Maharashtra. Praful Patel who joined the Ajit Pawar faction was also present at the oath-taking ceremony.
