Tribunal upholds ED attachment of Karti’s property in INX Media case

The agency has claimed that funds generated as proceeds of crime due to the approval granted by FIPB to INX Media were laundered in a well-planned scheme involving multiple individuals

An appellate tribunal that deals with money laundering cases has upheld the Enforcement Directorate’s attachment of a coffee estate belonging to senior Congress leader and former finance minister P Chidambaram’s son Karti Chidambaram in connection with the INX Media money laundering probe.

Karti Chidambaram argued that the property was acquired in 1994, much before the alleged crime was committed (2007-08) and not from the proceeds of crime as alleged by ED (Vipin Kumar/HT PHOTO)

The ED has alleged that P Chidambaram and his son Karti were the beneficial owners of several shell companies incorporated in India and abroad for transferring bribes for a Foreign Investment Promotion Board (FIPB) approval given to the INX Media group during the former’s tenure as the Union finance minister.

The agency has claimed that funds generated as proceeds of crime due to the approval granted by FIPB to INX Media were laundered in a well-planned scheme involving multiple individuals. It has attached assets worth ₹53.93 crores in 2018 in the case. Earlier, in October last year, the ATFP had dismissed a similar appeal by Karti against the attachment of his share in a Jor Bagh house and bank accounts in Chennai. He had then challenged attachment of the remaining Rs11.95 crores attached, linked to the coffee estate.

Opposing the attachment of the estate –– known as Swathi estate –– Karti had argued through his lawyer Arshdeep Singh that the property was acquired in 1994, much before the alleged crime was committed (2007-08) and not from the proceeds of crime as alleged by ED.

However, admitting the ED’s argument, the appellate tribunal for forfeited property (ATFP) said in its judgment passed on January 15 that the agency “can attach the property of equivalent value to the value of the proceeds of crime” in cases where proceeds of crime acquired directly or directly is not found available.

“It is not disputed that the attached property was acquired in 1994 by the appellant (Karti) i.e. much prior to the commission of crime. However, the record would reveal that the attachment has been made under the second limb of the definition of the ‘proceeds of crime’ under the (prevention of money laundering) act of 2002. The argument has been raised in ignorance of the definition of ‘proceeds of crime’ having three limbs out of which the second limb of the definition can be applied when the proceeds of crime acquired or derived directly or indirectly out of the predicate offence is not found available with the person and cannot be otherwise traced out, having been siphoned off. In such a case, the respondent can attach the property of equivalent value to the value of the proceeds of crime and in the instant case, the second limb of the definition of ‘proceeds of crime’ has been applied. In that case, the property acquired prior to commission of crime can be attached for equivalent value to the proceeds,” said Justice Munishwar Nath Bhandari and member Gopal Chandra Mishra of ATFP in the judgement, reviewed by HT.

Karti’s legal team refused to comment on the matter.