The Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) has slashed the alleged proceeds of crime (POC) against Dalmia Cement from an initial ₹793.34 crore to just ₹92.52 crore in a money laundering case pursued by the Enforcement Directorate (ED).
The Tribunal returned the finding while partly allowing the appeal filed by the company against a decision of the adjudicating authority that had confirmed ED’s provisional attachment of assets worth ₹377 crore.
The case traces back to a 2011 Central Bureau of Investigation (CBI) case against former Andhra Pradesh Chief Minister YS Jagan Mohan Reddy and Dalmia Cement. ED alleged that Dalmia invested ₹95 crore in Jagan’s Bharathi Cements at inflated premiums to secure illegal favours, including a limestone mining lease, yielding ₹709.34 crore in extraction value.
It is the ED’s case that shares were later sold to French firm PARFICIM SAS for ₹139 crore, with ₹55 crore allegedly routed back via cash and hawala to Reddy, while the company kept the remaining amount (₹84 crore) to itself.
Tribunal member V Anandarajan ruled that the ₹84 crore that Dalmia got from the sale of share in Bharati Cements does not qualify as proceeds of crime.
However, the Tribunal upheld the finding of ₹92.52 crore from mining profits after deducting extraction costs as proceeds of crime.
“As a result, the total proceeds of crime would stand reduced to ₹92.52 crore only as against ₹793.34 crore as quantified in the PAO [Provisional Attachment Order],” the tribunal said.
Dalmia had sought asset substitution for its productive properties, citing business harm. On this, the Tribunal held that there is no specific provision under the PMLA allowing the Appellate Tribunal to permit the substitution of attached assets.
At the same time, the Tribunal noted that the enforcement agency itself had not strongly opposed the possibility of replacing the attached properties with alternate security. The order clarified that if the ED decides to release the properties upon receiving adequate security, the Tribunal’s decision would not prevent such an arrangement.
Senior Advocate Pramod Kumar Dubey with Advocates Mahesh Agarwal, Mayank Tripathy, Kajal Dalal, Sandeep Khairwal, Rajiv Choubey, Ayush and Nishant Nandan appeared for Dalmia Cement.
ED was represented through Advocates Nidhi Raman and Nikunj Bindal.
[Read Order]