AI Drafter 
TaxTMI 
TaxTMI 
2018 (5) TMI 993
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....aid SPL CC124/2014 was instituted on 24/03/2014 after the impugned order dt: 21/02/2013 passed by the Adjudicating authority in OC 158/2012, which is also under challenged before the High Court of Karnataka and it has been informed that the said proceedings have been stayed by the Hon'ble High Court. 3. The brief facts are that the Charge-sheet No. 04/2011, dated 07.07.2011 filed by Karnataka Lokayuktha Authorities under Section 173 of Code of Criminal Procedure (Cr. PC) in the Court of Learned XXII Additional City Civil & Sessions Judge & Special Judge for Lokayukta Cases at Bangalore, against many, her son was also named in the charge-sheet. In view of the above, the charge-sheet filed by Lokayukta alleges that the following accused persons have committed offences as mentioned below: SI. No Details of accused Sections invoked 1 Mr Katta Subramanya Naidu 7, 13(1)(d) r/w 13(2) Prevention ofCorruption Act, 1988 (PC Act) and 465, 471 r/w 120(B) of Indian Penal Code(IPC) ; 2 Mr K.S.Jagadish @ Katta Jagadish Naidu 8, PC Act, 1988 and 420, 465,468,120(B) of IPC | 3 Mr S.V.Srinivas 12 PC Act, 1988, 420, 465, 468,506 r/w 120(B) of IPC, 4 Mr ....
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....rector of Enforcement Directorate, the Adjudicating Authority, issued a show cause notice to the Appellant calling upon the Appellant to show cause as to why the provisional order of attachment passed by the Joint Director of Enforcement Directorate should not be confirmed. Thereafter on 18.02.2012, show cause notice the appellant herein filed his detailed reply. The Adjudicating Authority after hearing the arguments reserved its orders on 03.01.2013 on the same day. The Prevention of Money Laundering Amendment Act, 2012 came into force as it was published in the Gazette of India. 9. The Adjudicating Authority on 21.02.2013 confirmed the provisional order of attachment in respect of the property of the Appellant in terms of the amended Act as amended by 2012 amendment. 10. Against the order of the said Adjudicating Authority, the appellant herein has preferred the above appeal before the Appellant Tribunal, PMLA. 11. It is an admitted position that after a year i.e. on 24.03.2014, subsequently the respondent herein filed a complaint under Section 45(1) of the Act before the Principal City Civil and Sessions Judge and Special Court for Prevention of Money Laundering Act, Ba....
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....r that her son had issued post-dated cheques drawn in favour of M/s Embassy Properties Development Ltd., for various sums totaling to Rs. 72,00,835/- and another cheques for Rs. 4,38,900/- in favour of M/s Magarath Property Development. It was also informed to the Appellant that it is because of the post-dated cheques issued by her son they acknowledged receipts of the amounts under the construction agreement and also the consideration under the sale deed dated 19/08/2010, however, the cheques issued in favour of M/s Magarath Property Development for Rs. 4,38,900/- has been presented and dis-honored. A copy of the said notice is filed as ANNEXURE 'A-6' at page 192 and in the appeal. 17. When this Appellant received the said notice, her son S.V.Srinivas was in judicial custody. She handed over the said notice to her husband Sri SKV. Chalapathy who made enquiries with M/s Embassy Properties Development Ltd., and learnt that their son had issued post- dated cheques towards consideration for purchase of undivided interest in the land as well as for payment to be made to Embassy Properties Development Ltd for construction of the flat. Her husband thereafter agreed to pay payments due....
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....by this Appellant. In the provisional order of attachment, nothing was considered. 25. It is come on record that the entire amount for purchase of property referred to as Sl.No.32 in para 2 of the complaint by this Appellant has been paid by this Appellant's husband who also paid the balance 20 lakhs to Embassy Properties Development Ltd on 15/07/2013. For the proof of payment has placed the account statement of her husband before this Tribunal by filing as MP No. 1594/2015. 26. It is evident from record that the Appellant's husband has paid a total sum of Rs. 72 lakhs to Embassy Properties Development Ltd out of his separate income. No doubt earlier, the cheques were issued by her son S.V. Srinivas but the same were bounced. In fact no amount was made in the said property by Mr. S.V. Srinivas- son of the appellant. 27. Even the Appellant herein in order to clear any aspersion on the source of funding for the purchase of the above said property and in order to show her bona-fide had also filed an application under section 11 of PMLA r/w Order 16 Rule (1)(2) of the Code of Civil Procedure before the Adjudicating Authority to issue summons to M/s Embassy Properties Developme....
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....ven prime facie not established against the Appellant of receiving proceed of crime is not made out and requirement of section 5(1) of PMLA was not satisfied. The first requirement of the section 5(1) is regarding being in possession of proceeds of crime on the date of the provisional attachment, i.e. 25/09/2012 as none of amount has even used by the appellant for purchasing the said property. Admittedly, her husband is admittedly not involved in any matter. Both husband and wife-appellant here no link or nexus in the crime allegedly committed by others. 33. Similarly Accused No.1 and Accused No. 8 in FIR 57/2010 resulting in charge sheet numbered as SPL CC 135/2011, i.e. Mr. Katta Subramnaya Naidu and M. Gopi respectively challenged FIR 57/2010 resulting in charge sheet numbered as SPL CC 135/2011 before the Hon'ble High Court of Karnataka in Criminal RP 432/2013 and CrlP 2313/2016 respectively. 34. The Hon'ble High Court of Karnataka by a common order dt: 03/11/2016 allowed Criminal RP 432/2013 and CrlP 2313/2016 and quashed FIR 57/2010 resulting in charge sheet numbered as SPL CC 135/2011, as against Mr. Katta Subramnaya Naidu and M. Gopi. The prosecution has challenged th....