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2016 (10) TMI 1086
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....nt was filed under Section 5(5) of the Prevention of Money Laundering Act ("PMLA") by the Respondent before the Adjudicating Authority in respect of Provisional Attachment Order No. 11/2016, dated 11-6-2016 passed by him for adjudication under Section 8 thereof and sought confirmation of provisional attachment of certain properties of the Appellant. On 11-7-2016 the Adjudicating Authority issued show cause notice to the Appellants, under Section 8 of the PMLA. It was stated at the bottom of the notice that :- "Notice along with Relied upon documents (RUD) shall be served by the complainant directly to all defendants as per law. Only Advance notice has been sent to defendants". The Advance notice referred above was received on 18-7-2016. However, the copy of complaint and the relied upon documents were served by the complainant only on 2-8-2016 upon the Appellant. 3. As the documents supplied along with the complaint were incomplete, the appellant filed an application on 23-8-2016 seeking supply of complete set of documents relied upon in the complaint. The same was opposed by the complainant by filing a reply on 6-9-2016. The Adjudicating Authority rejected the applic....
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....e also required to be supplied. (b) Statement was recorded of Mr. Ami Raghunathan on 11th March, 2016 and 12th March, 2016 (filed as Annexure-VII) with the complaint. The said statement shows that various documents have been referred on the basis of which the statement has been recorded but none of those documents have been supplied. Further it has not been clarified whether Annexure-VII is the total statement of Mr. Ami Raghunathan or statements on other dates were also recorded. The complainant should therefore, be directed to disclose whether the statement as Annexure-VII is the only statement of Mr. Ami Raghunathan or there were other statements recorded in respect of investigating into ECIR/03/MBZO/2016 and not only such statements but the documents referred and/or attached with them are also required to be supplied. (c) Statement was recorded of Mr. A.K. Ravindranath Nedungadi on 121h March, 2016 and 5-5-2016 (filed as Annexure-VIII) with the complaint. The said statement shows that various documents have been referred on the basis of which the statement has been recorded but none of those documents have been supplied. Fur....
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....d as Annexure-X) with the complaint. The said statement shows that various documents have been referred on the basis of which the statement has been recorded but none of those documents have been supplied. Further it has not been clarified whether Annexure-X is the total statement of Mr. S.P. Govindan Nair. The complainant should therefore, be, directed to disclose whether the statement as Annexure-X is the only statement of Mr. S.P. Govindan Nair or there were other statements recorded in respect of investigating into ECIR/03/MBZO/2016 and not only such statements but the documents referred and/or attached with them are also required to be supplied. (f) Statement was recorded of Mr. P.S. Sashidharan on 1st April, 2016 (filed as Annexure-XI) with the complaint. The said statement shows that various documents have been referred on the basis of which the statement has been recorded but none of those documents have been supplied. Further it has not been clarified whether Annexure-XI is the total statement of Mr. P.S. Sashidharan. The complainant should therefore, be directed to disclose whether the statement as Annexure-XI is the only statement of Mr. ....
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.... Mr. Gulati dated 29-4-2016 refers to documents in answers to various questions including Question No. 10 or 11 which is not part of statement. The complainant should therefore, be directed to disclose whether the statement as Annexure-XIV is the only statement of Mr. Satvinderpal Singh Gulati or there were other statements recorded in respect of investigating into ECIR/03/MBZO/2016 and not only such statements but the documents referred and/or attached with them are also required to be supplied. (j) Statement was recorded of Mr. Anil Pisharody on 4h May, 2016 (filed as Annexure-XV) with the complaint. The said statement shows that various documents have been referred on the basis of which the statement has been recorded but none of those documents have been supplied. Further it has not been clarified whether Annexure-XV is the total statement of Mr. Anil Pisharody. The complainant should therefore, be directed to disclose whether the statement as Annexure-XV is the only statement of Mr. Anil Pisharody or there were other statements recorded in respect of investigating into ECIR/03/MBZO/2016 and not only such statements but the documents referred an....
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.... Annexure-XVIII is the total statement of Mr. Srirangam Ranganthan Gopalan. The complainant should therefore, be directed to disclose whether the statement as Annexure-XVIII is the only statement of Mr. Srirangam Ranganthan Gopalan or there were other statements recorded in respect of investigating into ECIR/03/MBZO/2016 and not only such statements but the documents referred and/or attached with them are also required to be supplied. (n) Statement was recorded of Mr. Manoj Kumar on 21st June, 2016 (filed as Annexure-XIX) with the complaint. The said statement shows that various documents have been referred on the basis of which the statement has been recorded but none of those documents have been supplied. Further it has not been clarified whether Annexure-XIX is the total statement of Mr. Manoj Kumar. The complainant should therefore, be directed to disclose whether the statement as Annexure-XIX is the only statement of Mr. Manoj Kumar or there were other statements recorded in respect of investigating into ECIR103/MBZO/2016 and not only such statements but the documents referred and/or attached with them are also required to be supplied. (o) &n....
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....SL (United Spirits Ltd.). 8. It is submitted that M/s. Endeavour Estates Pvt. Ltd., was another company of M/s. UB Group and the directors are dummy acting at the behest of M/s. UB Group. The said company was formed for purchasing certain land which was then sold at the instance of M/s. UB Group. 9. It is averred that all the defendants/appellants herein are interconnected and inter-related and are privy to all the documents which have been submitted by them/their employees during the course of investigation. All the documents so submitted are directly and/or indirectly routed through M/s. UB Group. Thus, it would be incorrect to state that the documents supplied to them along with the Complaint and PAO are incomplete. 10. It is also submitted that the preliminary investigation conducted under Prevention of Money Laundering Act, 2002, in the subject complaint is limited to the Provisional Attachment of the properties as mentioned in the Original Complaint. All the documents which are relevant and connected to the subject case have been supplied and most of the documents referred to, are within the knowledge and possession of the appellants. It is also allege....
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.... submitted by Vijay Mallya to IDBI & is readily available with them. The documents were submitted by M/s. KAL to IDBI. The same are readily available with them. The bank statements are with M/s. KAL and the utilization certificate are issued by their Chartered Accountant. Investigation is going on in the subject case. There is non-cooperation on the part of Mr. Vijay Mallya, and hence, parting of the information at this stage will jeopardise the investigation. The informations are available with M/s. KAL 05 Any further statement recorded of Ms. Mythili Balasubramanium on 14-3-16 & 15-3-16 No further statements have been recorded. II. Shri A. Raghunathan :- Employee of Mr. Vijay Mallya, Ex-CFO of M/s. KAL & Presently Advisor of M/s. UBHL Sr. No. Description of documents Action 01 Only two statements are referred and not other statements. The present complaint is limited to attachment of certain properties. Hence, all the statements relevant to the said attachments were enclosed. The investigation process is still going on and further attachments may also follow and the relevant statements required will be used. This is only for confirmatio....
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....HL & the same are available with them Q. 8. Infusion of funds in M/s. KAL by various group companies Details were provided by UBHL & the same are available with them Q. 27. Details of holdings of Mr. Vijay Mallya & his family members Details were provided by UBHL & the same are available with them Q. 28. Assets of M/s. USL- Annexure C Details were provided by UBHL & the same are available with them III. Ravi Nedungadi : Employee of Mr. Vijay Mallya, Group President & CFO of M/s. UB Group and One of The Director of M/s. KAL. Sr. No. Description of documents Action 01 Only two statements are referred and not other statements. The present complaint is limited to attachment of certain properties. Hence, all the statements relevant to the said attachments were enclosed. The investigation process is still going on and further attachments may also follow and the relevant statements required will be used. This is only for confirmation of the Provisionally attached property. Further, it is the discretion/prerogative of the investigating agency to decide as to which statements to be referred or otherwise....
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....able with them Q. 27. Details of holdings of Mr. Vijay Mallya & his family members Details were provided by UBHL & the same are available with them Q. 28. Assets of M/s. USL- Annexure C Details were provided by UBHL & the same are available with them IV. Shri Yogesh Agarwal : Ex-CMD of IDBI Bank Ltd. Sr. No. Description of documents Action 01 [Page No. 81 to Q. 1. Any further statement recorded Statement relevant to this complaint has been supplied 02 Q. 4. Note dated 4-11-09 for releasing of 200 crores The same is within the knowledge of M/s. KAL & is irrelevant 03 [Page 89 Q. 2.  Copy of Minutes of meeting dated 27-11-09 of the EC of the Board The same are irrelevant. It related to criteria of sanctioning of loan by IDBI 04 [Page 90 Q. Copy of recall letter dated 13-5-2010 Letter is available with M/s. KAL as they have received this letter. Q. Credit Appraisal Report The same is irrelevant to the present PAO 05 [Page 93] Q. 3. Refers to the Appraisal note of R. Sridhar The same is irrelevant to the present PAO V. Mr. Sudersa....
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....ils are not relevant to the present Provisional Attachment Order. IX. Mr. Satvinder Singh Gulati : - Head Corporate Affaris of M/s. LKP Finance Ltd. Sr. No. Description of Documents Action taken 01 Q. 4. Details of dealings with group company of UB Group Q. 8. Details of loans taken from other entities. Q. 10. Details of OCDs & equity shares purchased/sold of M/s. KAL Q. 14. Refers to 3 letters, however none of these letters has been supplied. Q. 15. Refers to copies of ledger A/cs & balance sheet of LKP Finance Ltd. The details are not relevant to the present Provisional Attachment Order. X. Mr. Anil Pisharody :- Employee of Mr. Vijay Mallya & One of the Directors of various Companies which are directly/indirectly controlled by Vijay Mallya Sr. No. Description of Documents Action taken 01 [130 TO 135] The said statement is dated whereas Mr. Pisharody was examined by DoE on various dates, however DoE has only disclosed part of the statements and not full statement of Mr. Pisharody Only those statements which are relevant to this OC have been relied upon. The investigation is still progress and ....
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....ed/controlled by Mr. Vijay Mallya. 13. In the course of arguments advanced before the Adjudicating Authority on 8-9-2016, it was submitted on behalf of all Appellant that they were ready and willing to pay the Respondent the cost of photocopying the documents and hence, no prejudice would be caused to the Respondent. 14. It is submitted by Mr. Rajeev Awasthi, learned advocate appearing on behalf of respondent that copies of all the relied upon documents mentioned in the Original Complaint have been provided to the appellant. The petitioner has asked for various other documents/statements which are:- (a) Either not mentioned at all in the Original Complaint (OC), or (b) not relied upon in the OC; and (c) not relevant to the present attachment order or the properties under attachment. Most of said documents have been submitted by the appellant himself or its employee or the companies controlled (directly or indirectly) by Mr. Vijay Mallaya. 15. It is also submitted by Mr. Rajeev Awasthi that the appellant is deliberately adopting a delaying tactics to scuttle ....
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....s the first stage under the PMLA where issue of a notice to the concerned person(s) is provided. Section 8(2) of the PMLA provides that adjudication is required to be done by the adjudicating authority taking note of all the relevant materials placed before him on record. 18. It is subsequent to issue of notice under Section 8(1) of the Act, and prior to submission of the reply to the notice that the appellant has sought the copies of the complete documents as referred above. Their contention is that in the absence of the complete documents, their right of giving an effective reply to the charges against them is prejudiced. Reference is also made to Section 6(15) of the Act providing that the Adjudicating authority though not bound by the Code of Civil Procedure shall be guided by the principles of natural justice. 19. The framework of attachment and adjudication provided under the PMLA provides for issue of a Notice at the stage of adjudication. As a natural corollary, the evidence/statements/documents, etc. on which the charges are based and which the appellants are required to meet are also to be supplied to the persons required to show cause. Here, it is also re....
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....anything, it must carry with it a right in the accused man to know the case which is made against him. He must know what evidence has been given and what statements have been made affecting him: and then he must be given a fair opportunity to correct or contradict them." 24. A Division Bench of the Hon'ble Bombay High Court in Writ Petition No. 1703 of 2013 (Lalit Kumar Modi v. Special Director, DoE & Anr.) pronounced judgment on 6-2-2014. This judgment follows the Supreme Court judgment in [Kanwar] Natwar Singh v. Director of Enforcement (2010) 13 SCC 255 = 2010 (262) E.L.T. 15 (S.C.), and in effect holds that (A) a noticee is entitled to information or documents relied upon in the show cause notice of the Adjudicating Authority, meaning thereby information or documents which are the basis on which the show cause notice is issued, (B) every document relied upon in the show cause notice ought to be furnished to the noticee, (C) if the show cause notice does not refer to any document except the complaint, then to decide whether a document was relied upon it is necessary to read the complaint itself as the complaint has in effect been incorporated in the show cause notice, an....
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....laim the protection of the law as a right. However, this submissions have no relevance to the present issue under consideration. 27. His next submission is that some of the documents are already in the possession of the Group Companies of the appellants, therefore, they are not obliged to serve the copies of the same to the appellants, as all of them are controlled by Mr. Vijay Mallya and most of the documents, even if are lying with one of the Companies, the same can be obtained from the other Company. The said submission of Mr. Rajiv Awasthi has no force, as all the Companies are different entities in the eye of law. In case the complaint is filed against all the Companies, the documents referred in the complaint and the statements recorded leading to the complaint which also referred to the accused parties are entitled to receive the documents in view of the settled law on this issue which are in the possession of the competent authority. Here it is necessary to clarify that the appellants are entitled to receive the documents and copies of the statements only pertaining to attachment of properties that are the subject matter of the present complaint and which are to ....
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..../appellants are involved in money laundering or not and that the grievance regarding non-furnishing of documents seems to be initiated as to delay the adjudication. We do not agree with the findings given by the Adjudicating Authority, as the confirmation of attachment of properties is a serious matter. Without giving any opportunity to the accused party to raise its defence in the matter, there would be a grave injustice. We are of the view that no harm would be caused to the Respondent and/or the Adjudicating Authority if the relied upon documents of the subject matter are supplied to the accused party, particularly, when the said party agrees not to delay the adjudication and to bear all expenses. We are of the view that unless the Rule prohibits such entitlement this cannot be denied when valuable rights of the parties for defence of confirmation of attached properties are involved. Neither the respondents have made such a claim/submission nor the Adjudicating Authority has held to this effect. Thus, the impugned order suffers from infirmity. 30. It cannot be said that the documents relied upon or referred to in the matter may not be supplied simply on the grounds th....