New Delhi: The Appellate Tribunal has overturned the Enforcement Directorate’s (ED) attachment of nearly Rs 180 crore worth of properties owned by Nationalist Congress Party (NCP) leader Praful Patel and his wife in Mumbai.
The tribunal, in its order dated 3 June, found that the ED ignored crucial facts, such as the Bombay High Court’s order on ownership transfer, and acted beyond the provisions of the Prevention of Money Laundering Act (PMLA), contradicting allegations in the FIR and the Enforcement Case Information Report (ECIR).
Seven properties worth nearly Rs 180 crore belonging to Patel, his wife Varsha Patel and their company Millenium Developers were attached by the ED in 2022 as part of an investigation into a money laundering case arising out of a 1994 FIR against now-slain Iqbal Memon alias Iqbal Mirchi — a fugitive and an aide of Dawood Ibrahim.
On 5 January 2023, the adjudicating authority approved the attachment of these residential properties from the 12th to 15th floors in Ceejay House in Mumbai’s Worli area, which were owned by Patel and his family.
The development comes months after the Central Bureau of Investigation (CBI) closed a case related to alleged irregularities in the leasing of aircraft by Air India when Patel was the minister of civil aviation under the United Progressive Alliance government.
Patel, a former close aide of the undivided NCP’s president Sharad Pawar, joined hands with Ajit Pawar to create a vertical split in the party last year and joined Maharashtra’s ruling alliance, the Mahayuti, which also includes the Eknath Shinde-led Shiv Sena and the BJP.
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‘Out of mala fides, ulterior motives’
In the appeal filed before the tribunal, the Patels detailed that 25 years after the initial FIR against Memon, the ED filed a money laundering probe and summoned Praful Patel in October 2019.
The court noted that the Patels had purchased the land in question in 1963, and Ceejay House was built there by their company, Millenium Developers. The total land bought by the Patels included a parcel illegally possessed by M. K. Mohammad, who eventually got possession through a court order after paying Rs 7 lakh.
However, Mohammad transferred the land parcel to Memon’s wife, Hazra Memon, in 1990.
The Patels then bought the parcel from Hazra Memon in exchange for 14,000 square feet of carpet area in Ceejay House. The agreement was made in November 2004 and was based on a Bombay High Court.
Calling the attachment of the Patels’ properties a case of double attachment in the same ECIR, the tribunal noted that the ED in 2019 had already attached the 14,000 square feet that Memon’s wife got as part of the settlement, saying it was “proceeds of crime”. Hence, attaching the Patels’ whole property was illegal.
According to the tribunal, the ED decided to attach the property purely because it was purchased from Memon’s wife while ignoring the “relevant facts” on the course of ownership and how it ended up being owned by Patels.
The tribunal noted that the ED’s attachment further ignored the fact that all the transfer of ownership took place based on a consent decree approved by the Bombay High Court.
“It was also in ignorance of the fact that the transaction with Hazra Memon was pursuant to the orders of the Bombay High Court. It was after a consent decree for recognition of the adverse possession of M.K. Mohammad. The transaction with Hazra Memon was under the aegis of the Court Receiver and the order of the Bombay High Court,” the coram (bench) comprising appellate tribunal chairman Munishwar Nath Bhandari and member Balesh Kumar wrote in the judgment.
Moreover, the coram noted that the 14,000 square feet of property, which is alleged to be the proceeds of crime, was transferred to Hazra Memon through a consent decree and subsequently attached.
“In view of the above, the provisional attachment order was passed against the appellants with ulterior motive and out of mala fides,” said the judgment.
The tribunal also came down heavily on the ED’s action and said that allegations that properties owned by the Patels violated the permitted Floor Space Index (FSI) in Mumbai were beyond the scope of the agency as it does not amount to a scheduled offence under PMLA.
“It is reflected from the fact that going contrary to the allegations contained in the FIR and ECIR, the respondents alleged construction of the building in violation of the FSI permissible under the municipal laws. The argument in reference to it has been raised in ignorance of the offences in the schedule appended to the Act of 2002. The alleged violation of the FSI for the construction of the building does not constitute a scheduled offence and thus would not come under the purview of the Enforcement Directorate but only with a view to harass the appellants, a plea in reference to the above violation is taken (sic),” the judgment added.
“This on the face of the record, the ulterior motives of the respondents get proved,” the judgment said.
Questioning the basis of allegations that the Patels had helped Memon in money laundering, the tribunal noted that those claims remained unproven.
“The allegation is, however, made that the appellants have supported Iqbal Mirchi, against whom a number of cases were registered and was a fugitive offender without any material thereby the allegations remain for the sake of it. The respondents, however, took note of the fact that Hazra Memon has ultimately got a carpet area of 14000 sq. ft. in Ceejay House in lieu of the small part of the plot in dispute on which M/s Millennium Developers constructed the building,” the judgment added.
(Edited by Richa Mishra)
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