AI Drafter 
TaxTMI 
TaxTMI 
2015 (11) TMI 1694
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....d lured unemployed persons for government jobs; that the accused persons had also deputed agents in Haryana, Punjab & other places for alluring unemployed persons who were offered jobs in M/s. Agrofed India after taking huge sums of money. The appointment letters were signed by Shri Paramjit Singh Sandhu or Sh. Gurmukh Singh; the jobs were allegedly given permanently by taking money from persons either directly or through agents. The FIR No. 168 dated 10 June, 2006 was registered at police station Mahesh Nagar, district Ambala and police had filed challans dated 7th August, 2006 and dated 6th October, 2006 under section 173 of CRPC, 1973 in the court of JNIC, Ambala and Shri Paramjit Singh Sandhu along with others has been charged of having committed the offence under section 467 of IPC which is a scheduled offence under Prevention of Money Laundering Act 2002 (in short PMLA). 2.2 It is alleged that Shri Paramjit Singh Sandhu had collected large amount of money from many persons assuring them that he was chairman of M/s. Agrofed India, an "under taking of Government of India" and he was offering government jobs and thus he cheated people by misrepresentation and collected money ....
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.... and share in profit from the partnership firm M/s. M.K.S. Fabrics on regular basis. Both the appellant as well as the partnership firm M/s. M.K.S. Fabrics are income tax assessees having income tax permanent account numbers and are regularly filing income tax returns which are placed on appeal record. He submitted that the appellant has purchased the attached immovable house property in question from Shri Gurmeet Singh by taking housing loan from PNB Housing Finance Limited to the extent of Rs. 8 lakhs and the balance Rs. 1.90 lakhs was met out of his legitimate earnings from the partnership firm and no proceeds of crime have been utilized for purchase of subject property. It was contended that that appellant is a bona fide purchaser who purchased the property in good faith after paying due consideration and he was not aware of the nefarious activities of Shri Paramjit Singh Sandhu or his wife Smt. Parminder Kaur or about the criminal cases proceedings against them. The appellant purchased the built up property on 1st February, 2008 as per the registered sale deed after taking housing loan from PNB Housing Finance Limited for which necessary due diligence was exercised by verifica....
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....rew our attention to the copy of legal opinion and Search Report specially to the following paragraph which shows that after taking into consideration of documents including Agreement to sell, Power of Attorney and Affidavit executed by Smt. Parminder Kaur confirming that subject property has been sold by her to Shri Gurmeet Singh, PNB Housing Finance Limited granted housing loan to the appellant:- "As requested, I have conducted the legal investigation of the above said property and made search of records in registration office and other offices as required in matter. I have answered all the queries in the Special Report which is enclosed. Chain of title relating to property is complete given below: I hereby certify that Smt. Parminder Kaur with Shri Paramjit Singh has got a clear, unencumbered, valid and marketable title over the above said property in favour of the prospective buyer son of Sh. Mohan Singh after due execution and registration of prospective buyer, a valid mortgage can be created by deposit of the following original documents- i) Original sale deed to be executed and registered in favour of the prospective buyer alongwith origin....
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....an affidavit duly attested by Notary Public, Amritsar to the effect that said general power of attorney is still intact and has not been revoked by her. Similarly Sh. Gurmeet Singh has submitted an affidavit duly attested by Notary Public, Ludhiana to the effect that Smt. Parminder Kaur is still alive and said general power of attorney has not been revoked by her." 5. The counsel submitted that the Agreement to sell coupled with General Power of Attorney, Will and transfer of possession of property etc. is equal to sale in terms of section 53A of the Transfer of Property Act since the consideration has already been paid by Shri Gurmeet Singh to Smt. Parminder Kaur and Smt. Parminder Kaur has given possession and enjoyment of the subject property to Shri Gurmeet Singh. In this connection he relied upon the judgment of Hon'ble Supreme Court in the case of Suraj Lamp and Industries Pvt. Ltd. v. State of Haryana and another (2012) 1 Supreme Court Cases 656 and judgement of Hon'ble Delhi High Court in the case of Asha M. Jain v. Canara Bank (2001) 94 DLT 841. 6. He contended that the appellant had no relationship or nexus with the accused Shri Paramjit Singh Sandhu or his ....
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....nance company that the appellant is purchasing the property from Shri Gurmeet Singh and the payment is to be made in favour of seller Shri Gurmeet Singh, on the request of appellant, PNB Housing Finance Limited made correction in the cheque and the cheque was issued in the name of seller Shri Gurmeet Singh. He submitted that the certificate of PNB Housing Finance Limited in this regard is filed and placed in the appeal paper book and drew our attention to the same which reads as follows:- "Dated: 19/01/2010 To Whom It May Concern It is certified that Sh. Sanjeev Sharma & Smt. Rajani Sharma availed Housing Loan of Rs. 11,00,000/-(Rs. 8,00,000/- for purchase of build up house and Rs. 3,00,000/- for repair renovation). Payment of Rs. 8,00,000/- was made to Sh. Gurmeet Singh s/o Sh. Mohan Singh (Power of Attorney holder of Smt. Parminder Kaur) vide Cheque No. 861685 Dated 28/01/2008. It is certified that correction in the Cheque is duly authorized by our office and was done at the request of the purchaser (Borrower) after following the due procedure." 8. The counsel submitted that the subject property is situated far away from the main city area a....
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....ellant. It was contended that sale of property to the appellant is not a valid sale; Agreement to sell dated 5th October, 2007 was merely an agreement to sell. It was an afterthought on the part of the Smt. Parminder Kaur to bring Shri Gurmeet Singh in the picture so as to show disconnect between her and Shri Sanjeev Kumar. He contended that there is no document to show that entire sale consideration was paid by Shri Gurmeet Singh and the actual possession of the property was ever given by Smt. Parminder Kaur to Shri Gurmeet Singh so as to even remotely argue that indeed the property was transferred to Shri Gurmeet Singh. He submitted that it was unimaginable that a property which is purchased by Shri Gurmeet Singh for Rs. 13,50,000/- on 15th October, 2007 was sold by him for at a much lower price at Rs. 9,90,000/- on 1st February, 2008. If the property was sold by Smt. Parminder Kaur to Shri Gurmeet Singh then her name would not have been found as seller in the sale deed dated 1st February, 2008 wherein Smt. Parminder Kaur was described as seller through Shri Gurmeet Singh who had signed the sale deed as her General Power Attorney holder. He contended that the sale deed dated 1st ....
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....t dated 2.3.2007 recorded under section 50 of PMLA 2002. (Presently the property is in custody of Shri Sanjeev Kumar s/o R.R. Sharma of Ludhiana who had purchased the house from Smt. Parminder Kaur as per enquiry conducted by officer of Directorate of Enforcement). (b) Plot No. 99, 100 and 101 in Silver Kunj Colony, Village Bhora, Jalandhar Bye-pass, Ludhiana purchased by Shri Paramjit Singh Sandhu in the year 2006 for ana amount of Rs. 7,20,000/- Plot No. 99 and 100 were purchased in the name of Shri Paramjit Singh Sandhu and plot No. 101 was purchased in the name Smt. Parminder Kaur W/o Shri Paramjit Singh Sandhu. (c) Plot No. 11 & 12 (shops) in D.M. Plaza, Village Bhora, Jalandhar Bye-pass, Ludhiana purchased by Shri Paramjit Singh Sandhu in the year 2006 for an amount of Rs. 1,77,000/-, Plot No. 11 was purchased in the name of Smt. Parminder Kaur W/o Shri Paramjit Singh Sandhu in M/s. D.M. Plaza, Jalandhar-bye-pass, Ludhiana for Rs. 75,000/- and plot No. 12 was purchased in the name of Smt. Palwinder Kaur also wife of Shri Paramjit Singh Sandhu for Rs. 1,02,000/-. 3. AND WHEREAS consequent to results of investigation conducted by officers of ....
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....ted money collected by Sh. Paramjit Singh Sandhu, fraudulently showing M/s. Agrofed India as a Govt. of India undertaking and employing a number of persons by taking huge sums of money. a) House No. 53-54, New Akash Nagar, Ludhiana which was purchased for Rs. 13,40,000/- in the name of Smt. Parminder Kaur wife of Sh. Paramjit Singh Sandhu as admitted by him in his statement dated 02-03-2007. The value as per registration deed was declared as Rs. 4,25,000/-. The said property had been sold to Sh. Sanjeev Kumar s/o R.R. Sharma of Ludhiana on 01-02-2008 for Rs. 9,90,000/- as per copy of the registration deed provided by Sh. Sanjeev Kumar defendant No. 4. ......................" 15. A careful consideration of the allegations made by the respondent in the provisional attachment order and original complaint shows that at the time of passing provisional attachment order attaching the subject property, the respondent No. 1 had recorded statement of accused Shri Paramjit Singh Sandhu u/s. 50 of PMLA who had stated that the property was purchased by him in the name of his wife Smt. Parminder Kaur in the year 2006. Thus, at the time of provisional attachment of subject pr....
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.... (f) Affidavit of Smt. Parminder Kaur dated 20th November, 2007 executed by appearing in person before the Executive Magistrate, Ludhiana. (g) The General Power Attorney dated 20th November, 2007 executed by Smt. Parminder Kaur in favour of Shri Gurmeet Singh duly registered with Sub-Registrar, Ludhiana. (h) Sale deed dated 1st February, 2008 for sale of subject property by Smt. Parminder Kaur through General Power Attorney holder Shri Gurmeet Singh in favour of Shri Sanjeev Kumar." 18. It was noted that Agreement to sell dated 5th October, 2007 has been executed on stamp papers of Rs. 300/- and it reveals that Smt. Parminder Kaur had agreed to sell the subject property for Rs. 13.5 lakhs to Shri Gurmeet Singh and she had received Rs. 5 lakhs in cash as earnest money and balance amount was to be paid by Shri Gurmeet Singh on registration of sale deed up to 5th November, 2007 and possession of the subject property was also to be handed over at the time of registry alongwith the documents. The agreement to sell dated 5th October, 2007 also reveals that the transaction between Smt. Parminder Kaur and Shri Gurmeet Singh has been made through M/s. Shiv and Adiy....
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.... Attorney executed by Smt. Parminder Kaur on dated 20th November, 2007 shows that she had handed over possession of the subject property to Shri Gurmeet Singh after receipt of the entire sale consideration. The affidavit of Smt. Parminder Kaur dated 20th November, 2007 has been executed after appearing in person for deposing before the Executive Magistrate, Ludhiana which is duly recorded at documents No. 207764 and the deponent Smt. Parminder Kaur is identified by Shri Jaspreet Singh, Advocate and the Affidavit reveals as follows: "1. That House No. B-32-E,14/6290 Plot No. 53-54 Area 249 square yards (two hundred forty nine square yards, boundaries of the same are East- Gali 20 feet wide- area 56 ft. West Surinder Pal area- 56 It. North Deen Dayal - area 40 feet South Gali 20 feet wide -area 40 feet out of Khasra No. 5//11-12/1-19/2-20/1-20/2-21/1-21/2/1-6/13/2-14/2-15-16/1-16/2-16-3-17/1-17/2-18/1-18/2/2-19/2-21/2-22/2-23/1-23/2-24/1-24/2/1-6//24/2/2-25/1-25/2/1/-7/25/2-10/5/2/-6/1-11/1/1-2/1-3/1-4/1-10/1 Khata No. 376/394 Jamabandi 2004-05 situated in village Bhaura. H. No. 88 Tehsil and District Ludhiana Abadi New Akash Nagar, which has been sold by me through an agree....
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....ay be used at the time of need. Witness Harpal Singh Vill. Mongli Tonda Ludhiana Smt. Parminder Kour Executor of the Will Witness Jaspal Former Sarpanch Vill. Jagirpur, Ludhiana" 21. In view of the above facts emerging from the above documents, as the facts that Shri Gurmeet Singh had paid entire sale consideration to Smt. Parminder Kaur for purchase of subject property and also got the possession of the property are not successfully refuted by the respondent, therefore, it cannot be inferred that there was no transaction of sale of subject property between Smt. Parminder Kaur and Shri Gurmeet Singh and Shri Gurmeet Singh was never handed over the possession of the subject property. Thus, considering the above discussed facts and circumstances and the judgment of Hon'ble Supreme Court in the case of Suraj Lamp and Industries Pvt. Ltd. v. State of Haryana (2012) 1 SCC 656, we are of the considered view that the finding returned by Adjudicating Authority that the principles laid down by Hon'ble Delhi High Court in the case of Asha M. Jain v. Canara Bank (2001) 94 DLT 841 are not appli....
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....and ITR of M/s. M.K.S. Fabrics, copy of housing loan from PNB Housing Finance Ltd. showing monthly repayment of housing loan etc. to show the source of payments of sale consideration for purchase of subject property which was out of housing loan taken from PNB Housing Finance Ltd. and out of drawing from partnership firm M/s. M.K.S. Fabrics where the appellant was partner. The appellant has purchased the property after due diligence which is evident from legal Opinion and Search Report dated 23rd January, 2008 by Shri Vijay Kumar Gupta, Advocate, Non-encumbrance Certificate issued by Sub-Registrar, Ludhiana and Special Report of Title dated 23rd January, 2008 issued by Shri Vijay Kumar Gupta, Advocate. There is no material on record to show that the appellant had repaid the housing loan out of proceeds of crime generated by the accused Shri Paramjit Singh. 24. Judgment dated 4.3.2011 of the Hon'ble High Court of Andhra Pradesh at Hyderabad in the case of B. Rama Raju S/o B. Ramalinga Raju v. Union of India (UOI), Ministry of Finance, Department of Revenue, represented by its Secretary, (Revenue) and Ors. in Writ Petition Nos. 10765, 10769 and 23166 of 2010 is referred to and....
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....e hands of the transferor. ............... 44. The contention that the definition of "proceeds of crime" (Section 2(u)) is too broad and is therefore arbitrary and invalid since it subjects even property acquired, derived or in the possession of a person not accused, connected or associated in any manner with a crime and thus places innocent persons in jeopardy, is a contention that also does not merit acceptance. In Attorney General for India and Ors. v. Amratlal Prajivandas and Ors. (1994) 5.SCC 54, a Constitution Bench of the Supreme Court considering the validity of provisions of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) observed: The relatives and associates are brought in only for the purpose of ensuring that the illegally acquired properties of the convict or detenu, acquired or kept in their names, do not escape the net of the Act. It is a well-known fact that persons indulging in illegal activities screen the properties acquired from such illegal activity in the names of their relatives and associates. Sometimes they transfer such properties to them, may be, with an intent to transfer the ownershi....
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.... Supreme Court concluded: The application of SAFEMA to the relatives and associates (in Clauses (c) and (d) of Section 2(2)) is equally valid and effective inasmuch as the purpose and object of bringing such persons within the net of SAFEMA is to reach the properties of the detenu or convict, as the case may be, wherever they are, howsoever they are held and by whomsoever they are held. They are not conceived with a view to forfeit the independent properties of such relatives and associates as explained in this judgment. 45. SAFEMA targets for forfeiture 'illegally acquired property' of a person (defined as a convict or detenue under specified enactments and relative or associate of such convict or detenue (the expression relative or associate also defined)). This is a 1976 enactment that provides for forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators. The Act, on the other hand, specifically targets the wider pathology of money-laundering in relation to a large number of scheduled offences enumerated from a variety of specified legislations. In the context of the objects sought to be achieved by the Act and the specificity o....