SAFEMA Tribunal Upholds Property Attachment: Failure to Establish Source of ₹10.25 Crore Proves Decisive in PMLA Proceedings

Background and Origin of the Case

The Appellate Tribunal Under SAFEMA at New Delhi recently delivered a significant ruling in Dyani Antony Paul Vs Deputy Director, arising from an order dated 23.06.2021 passed by the Adjudicating Authority that had confirmed a Provisional Attachment Order (PAO) originally issued on 30.06.2016 under the Prevention of Money Laundering Act, 2002.

The underlying criminal matter traces its origins to an FIR registered on 21.12.2013 at Ankola Police Station, Uttara Kannada District, Karnataka. The FIR was filed against one Mr. Vivek Kumar and three unidentified individuals under Section 302, Section 353, and Section 307 read with Section 34 of the Indian Penal Code, 1860, along with Section 25 and Section 27 of the Arms Act, 1959. The case involved the murder of Shri R.N. Nayak, a prominent industrialist and cooperative sector leader from the Ankola region.

How the Money Trail Led to the Appellant

Investigations conducted pursuant to the registration of an Enforcement Case Information Report (ECIR) revealed a disturbing network of financial transactions tied to the commission of the scheduled offence. It emerged that the financial arrangements for the crime were orchestrated from Dubai by one Mr. Hajee Ameen Basha, acting on the directions of Shri Bananje Raja @ Rajkumar @ BR @ Hemant Hegde, described as an underworld operative functioning from foreign soil.

The funds originating from Dubai were routed into India through hawala channels and thereafter distributed locally through intermediaries, with Smt. Chandrika Shetty, wife of Mr. Hajee Ameen Basha and resident of Mangalore, serving as the local conduit for disbursement.

During search operations conducted on 20.03.2014 at the Mangalore residence of Smt. Chandrika Shetty, the police recovered and seized Nokia and Samsung mobile handsets, along with cash amounting to ₹1,52,700/-. These handsets were subsequently forwarded to the Central Forensic Science Laboratory (CFSL), Hyderabad for forensic data retrieval.

What the Forensic Analysis Uncovered

The CFSL's examination of the seized devices proved to be the critical turning point. The retrieved data contained numerous SMS messages exchanged between Mr. Hajee Ameen Basha (communicating from Dubai) and Smt. Chandrika Shetty, providing detailed instructions regarding the collection and disbursement of funds.

Two specific SMS messages proved particularly significant:

  • SMS at Sl. No. 91: Received in inbox from Basha (+971506542384) on 04/07/2013 at 7:54:31 (device time), reading: "95G 937106 +919663611986 Kadri, Shivabhag"
  • SMS at Sl. No. 113: Received from the same sender on 14/07/2013 at 12:25:03 AM, again referencing mobile number "9663611986"

Inquiries by the Enforcement Directorate established that mobile number 9663611986 was registered in the name of Mr. Dyani Antony Paul, with his residential address recorded as Vailakanni Cottage, Mugrody Road, Konchady, Mangalore-575008.

Statements Recorded During Investigation

Statement of Mr. Dyani Antony Paul

Mr. Dyani Antony Paul's statement was recorded on 23.09.2015 under Section 50(2) and Section 50(3) of the Prevention of Money Laundering Act, 2002. His key disclosures included:

  1. He was operating a business called J.C. Enterprises, Mangalore, engaged in Xerox services, travel, and a Reliance Telecom franchise, and also assisted his elder brother Mr. Lawrence Paul in Dubai-based business activities.
  2. His brother Mr. Lawrence Paul was the Managing Director of M/s. Sea Bird Shipping Agency, Burdubai, UAE; Proprietor of M/s. East and Gulf International, FZCO, Jabel Ali Industrial Area, Dubai; and also Proprietor of M/s. Smart Look Tailoring LLC, Dubai.
  3. Approximately ₹10.25 crore had been transferred by Mr. Lawrence Paul to his bank accounts in Mangalore, and these funds were used to acquire multiple properties in the names of the appellant, his brother, and his sister-in-law Mrs. Anita Dorine Fernandes.
  4. Although Mr. Lawrence Paul had been residing in Dubai for over 22 years, profits from his business had reportedly accumulated only during 2012 to 2014.
  5. When confronted with the SMS extracts, the appellant acknowledged ownership of the mobile number but denied receiving any funds through non-banking (hawala) channels and claimed ignorance of both Mr. Hajee Ameen Basha and Smt. Chandrika Shetty.

No documentary evidence was submitted to support any of the above claims.

Statement of Mr. Lawrence Paul

Mr. Lawrence Paul's statement was recorded on 29.02.2016 and 01.03.2016 under Section 50(2) and Section 50(3) of the Act. His submissions included: