Benami Attachments on ARC Group Restored: SAFEMA Appellate Tribunal’s Detailed Findings Explained

Background and Procedural History

A series of departmental appeals were filed before the Appellate Tribunal under SAFEMA at New Delhi under Section 46(3) of the Prohibition of Benami Property Transactions Act, 1988 (“Act of 1988”). These appeals challenged the common order dated 19.03.2025 passed by the Adjudicating Authority, which had declined to confirm multiple Provisional Attachment Orders (PAO) issued under the Act.

The Tribunal ultimately allowed the Department’s appeals, set aside the Adjudicating Authority’s order, and confirmed the provisional attachments in relation to the properties treated as benami, mainly in the name of M/s ARC Agrochemical LLP and other ARC group entities.

Search Operation and Discovery of Alleged Benami Structure

On 15.02.2022, a search and seizure operation was carried out at the premises of:

  • Shri Ramesh Chaurasia
  • Shri Achal Chaurasia
  • ARC group of entities

The material collected during the search indicated that the ARC group, controlled by the Chaurasia family (father and sons), was allegedly running extensive online betting and gambling operations across India and overseas, generating substantial unaccounted cash.

The group’s activities were:

  • Concealed behind ostensibly legitimate fronts such as:
    • Gaming sites
    • Video game portals
    • Gaming centres
    • Cyber cafes
  • Operated through multiple websites including:

The operation allegedly generated large volumes of unaccounted cash, which was then introduced into the formal financial system through layered routing and accommodation entries under different heads rather than as income from betting or gambling.

Organisational Structure of the Betting Network

The ARC group’s online betting and gambling business operated under the brand “GAME KING” and followed a structured hierarchy:

  1. Super Area Managers (SAMs) – senior trusted associates in charge of large regions
  2. Area Managers (AMs) – reporting to SAMs, handling sub-regions
  3. Agents/Shopkeepers – dealing directly with individual players or “clients”
  4. Clients/Players (Child IDs) – end-users placing bets

Each person in the chain:

  • Was allotted a unique “GK” (Game King) ID and password
  • Had their access created and controlled centrally by promoters Shri Ramesh Chaurasia and Shri Achal Chaurasia

The collection and flow of funds worked as follows:

  • Players purchased “points” required for betting by transferring cash to Agents or AMs
  • Agents/AMs passed the cash upwards to SAMs or directly to the group
  • Points were credited in the IDs of SAMs, then passed down the hierarchy to AMs, Agents and ultimately to players
  • Commissions were paid at various levels (e.g., 2–3% commission to some SAMs such as Shri Vinod Chhatre, as admitted in statements)

This system generated continuous cash inflows which, according to the Department, were never disclosed in income-tax returns filed by individuals or entities of the ARC group.

Role of ARC Agrochemical LLP and Other Entities

One central entity under scrutiny was M/s ARC Agrochemical LLP, described by the Department as a benamidar. The Tribunal noted the following findings of the Initiating Officer:

  • ARC Agrochemical LLP claimed to be engaged in Agriculture and Animal Husbandry Services
  • However, the LLP did not disclose any income from betting or gambling
  • For F.Y. 2017-18, original returns showed only a meagre income of Rs. 17,62,220/- from “sale of services”
  • For subsequent years, agricultural income was introduced only through revised returns filed after:
    • Notices under Section 148 of the Income Tax Act, 1961, and
    • Issuance of PAOs under Section 24(4) of the Act of 1988

ARC Agrochemical LLP had:

  • No genuine, commensurate business operations
  • Substantial funds flowing into its accounts as:
    • Unsecured loans
    • Partner’s capital
    • Share premium
    • Claimed agricultural income
  • These funds were used to acquire:
    • Listed securities and mutual funds
    • Agricultural land in Dhanaura, Uttar Pradesh

The Department alleged that these inflows were merely layered accommodation entries intended to integrate unaccounted cash from illegal betting and gambling into the group’s books and investments.

Investigation Findings and Modus Operandi

Evidentiary Basis

During the search and subsequent inquiries under Section 19 of the Act of 1988, the Initiating Officer relied on:

  • Physical and digital evidence seized from the ARC group
  • Statements of key persons, including:
    • Smt. Purvi Ashara (Head of Accounts for ARC group)
    • Shri Vinod Chhatre (long-time SAM in the betting network)
    • Shri Lal Ramakar Singh alias Guddu
    • Shri Shivbhai Chaurasia (main cash handler in Mumbai)
    • CA Sameer Chaudhary (Tax Auditor)
    • Shri Hanuman Tatar (Director in Authentic Finance Pvt. Ltd. – an ENSO group entity)
  • Bank/depository/broker statements and reconciliation of entries
  • Excel files and Google Drive documents, including a sheet titled “Octonwards Final”

The material indicated:

  • Regular cash collection from betting and gambling activities
  • Cash being converted into accounted funds through accommodation entries arranged by professionals like CAs and company secretaries
  • Detailed “Hisab” (cash accounting) showing monthly cash delivered to various entry providers and corresponding cheque/bank credits into ARC group concerns, including ARC Agrochemical LLP

Authentic Finance Pvt. Ltd. (AFPL) and Capital Introduction

A notable feature of the structure was the role of Authentic Finance Pvt. Ltd. (AFPL), an entity of the ENSO group: