The Appellate Tribunal under the Prevention of Money Laundering Act has held that an allegation of bribery or acceptance of an undue benefit is not a prerequisite for prosecuting a public servant for possessing assets disproportionate to known sources of income under Section 13(1)(e) of the Prevention of Corruption Act, 1988.
The Bench of Justice Munishwar Nath Bhandari (Chairman) and V. Anandarajan (Member) observed that possession, acquisition, concealment or use of assets allegedly disproportionate to a person’s known sources of income may also attract the offence of money laundering under Section 3 of the PMLA.
The Tribunal consequently dismissed the appeal filed by former Income Tax Assistant Commissioner Shri P. Jose Kunjippalu and upheld the attachment of properties valued at ₹1,00,72,621. The properties were attached by the Directorate of Enforcement to the extent of the alleged disproportionate assets.
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The proceedings originated from an FIR registered by the Central Bureau of Investigation, Cochin, on November 26, 2014. The case was registered under Section 13(2), read with Section 13(1)(e), of the Prevention of Corruption Act.
According to the investigating agencies, the appellant, while serving as Assistant Commissioner of Income Tax, Circle-1, Palakkad Range, allegedly amassed assets disproportionate to his known sources of income along with his wife.
During the relevant check period, his total income was calculated at ₹1,07,41,168. The properties acquired were valued at ₹1,46,03,843, while expenditure of ₹62,09,946 was allegedly incurred. On that basis, the disproportionate assets were quantified at ₹1,00,72,621, representing approximately 93.78% of the known sources of income.
Since Section 13(1)(e) of the Prevention of Corruption Act was a scheduled offence under the PMLA, the Enforcement Directorate recorded an Enforcement Case Information Report and initiated a money-laundering investigation.
The ED recorded statements under Sections 50(2) and 50(3) of the PMLA and issued a Provisional Attachment Order on March 30, 2022. The Adjudicating Authority subsequently confirmed the attachment through its order dated September 7, 2022.
Bombay High Court Had Remanded Matter to Tribunal
The appeal against the confirmation order had earlier been disposed of by the Tribunal on March 17, 2025. That decision was challenged before the Bombay High Court.
On June 10, 2026, the High Court set aside the Tribunal’s earlier order and granted liberty to the appellant to seek modification or expungement of observations made against him. It also directed that the appeal be considered on its merits.
Following the High Court’s order, the appellant requested a fresh hearing on the merits. The Tribunal accepted the request and heard him at length before delivering the present decision.
Appellant Claimed Absence of Bribery Allegation
Appearing in person, the appellant argued that no predicate offence capable of triggering the PMLA had been established. He contended that the CBI case was based on possession of disproportionate assets and did not contain any allegation that he had accepted a bribe.
According to him, a disproportionate-assets allegation would necessarily require proof of bribery or receipt of an illegal benefit. In the absence of such an allegation, he maintained that neither the Prevention of Corruption Act offence nor the money-laundering charge could be sustained.
He also argued that the check period had been limited to January 1, 2011, to March 23, 2014, even though he had joined government service in 1989.
The appellant further contended that no independent act of money laundering had been attributed to him. He claimed that properties acquired from lawful sources had also been included while computing the allegedly disproportionate assets and attaching property under the PMLA.
Reliance was also placed on Section 5(1) of the PMLA. The appellant maintained that the necessary conditions for provisional attachment had not been satisfied and that there was no material demonstrating that the properties were likely to be concealed, transferred or otherwise dealt with in a manner that could frustrate confiscation proceedings.
The appellant additionally submitted that the CBI had already seized his bank and demat accounts. He contended that the ED nevertheless attached other properties of equivalent value without considering the action allegedly taken by the CBI.
He also disputed the allegation concerning cash deposits and objected to the attachment of property belonging to his wife, claiming that she had an independent source of income.
Disproportionate Assets Offence Distinct From Bribery Offences
Rejecting the principal argument, the Tribunal held that Section 13(1)(e) of the Prevention of Corruption Act is a scheduled offence under the PMLA and operates independently of offences relating to bribery or acceptance of undue advantage.
The Tribunal explained that the allegation involved in a disproportionate-assets case is different from allegations contemplated under Sections 7 and 8 and other bribery-related provisions of the Prevention of Corruption Act.
“A case of disproportionate asset for commission of offence under Section 13(1)(e) of the PC Act does not require or pre-supposes an allegation of bribe or acceptance of undue benefit,” the Tribunal observed.
It added that where a specific bribery allegation is made, the accused may separately be prosecuted under the relevant provisions of the Prevention of Corruption Act. Such prosecution would be distinct from an offence concerning possession of assets disproportionate to known sources of income.
Possession and Acquisition Covered Under Section 3 of PMLA
Referring to Section 3 of the PMLA, the Tribunal observed that money laundering is not confined to the projection of proceeds of crime as untainted property. The provision also encompasses concealment, possession, acquisition and use of proceeds of crime.
According to the Tribunal, the allegations against the appellant prima facie disclosed not merely a scheduled offence but also activities covered by Section 3 of the PMLA.
The Tribunal observed that the appellant allegedly attempted to present assets disproportionate to his known sources of income as untainted. In the absence of an explained lawful source, the assets were alleged to be tainted, while their possession and concealment could constitute processes or activities connected with proceeds of crime.
It therefore declined to accept the argument that a disproportionate-assets prosecution, without an accompanying bribery charge, could not support proceedings under the PMLA.
Dismissal of Discharge Application Went Against Appellant
The appellant also referred to the discharge application filed by him before the criminal court, through which he had challenged both the allegations and the computation of disproportionate assets.
During the hearing, however, he acknowledged that the competent court had already dismissed the discharge application, although that decision had subsequently been challenged.
The Tribunal noted that no favourable order discharging the appellant had been produced before it. It held that the dismissal of the discharge application indicated the existence of a prima facie case under the Prevention of Corruption Act.
The Bench clarified that it was deliberately limiting its finding to the prima facie stage because the final determination of guilt would be made only after completion of the criminal trial. A definitive finding by the Tribunal could otherwise prejudice the appellant in the pending prosecution.
Attachment Limited to Alleged Disproportionate Amount
The Tribunal also rejected the contention that properties acquired through lawful means had wrongly been attached.
It noted that the investigating authorities had considered the appellant’s known income, the value of properties acquired and the expenditure incurred before calculating the alleged disproportionate assets at ₹1,00,72,621.
According to the order, the provisional attachment was limited to the value of the alleged disproportionate assets and did not cover the portion of assets considered proportionate to the appellant’s lawful income.
The Tribunal further held that personal expenditure could legitimately be considered while determining the value of disproportionate assets.
The order also referred to the purchase of a property for ₹60 lakh on February 11, 2011. Stamp duty of ₹2,82,600 and registration charges of ₹30,780 were reportedly paid for the transaction. A housing loan of ₹39.10 lakh had been obtained from the State Bank of India, of which ₹18,15,854 was repaid. These transactions were taken into account by the investigating agencies while calculating the alleged disproportionate assets.
No Evidence of Prior Attachment by CBI Produced
Addressing the challenge under Section 5(1) of the PMLA, the Tribunal recorded that the appellant was asked to produce an order showing that the CBI had already attached the properties.
Despite being granted an opportunity, he could not produce any such attachment order. The Tribunal therefore refused to accept the assertion solely on the basis of an oral statement.
It held that the ED’s provisional attachment was based on the existence of a predicate offence and the apprehension that the properties could be alienated unless immediately attached. Accordingly, it found no illegality in the action taken under Section 5(1).
Similarly, when the appellant denied that cash had been deposited into his bank account, the Tribunal asked him to produce the relevant bank statements. He acknowledged that the statements had not been placed on record. In the absence of documentary material, the Tribunal declined to return a finding in his favour.
The claim concerning the wife’s independently acquired property was also rejected in view of the alleged accumulation of disproportionate assets and the dismissal of the discharge application.
Finding no ground to interfere with the Adjudicating Authority’s confirmation order dated September 7, 2022, the Tribunal dismissed the appeal and sustained the attachment of properties to the extent of ₹1,00,72,621.
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