TaxTMI 
TaxTMI 
2019 (1) TMI 1181
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....r is common and hence by this order, I propose to decide all the three appeals by single order. 4. It is admitted position that the appellants are neither arraigned in any schedule offence nor in any charge-sheet. 5. The Appellants rely on the grounds of appeal filed by M/s. Kalyani Charitable Trust showing so called money trail at page 57 of the said appeal. Sh. Nilesh Thakur as proprietor of M/s. PRS Enterprises; M/s. P.R. Developers and Director of M/s. Accord Infrastructure Pvt. Ltd. Sh.Nitish Thakur/Sh.Nilesh Thakur is a prank contrived to justify invoking Section 13(1)(e) of P.C Act against the public servant Sh. Nitesh J. Thakur. This aspect has been addressed by Appellants in the said appeal. The grounds are inter-alia reproduced below:- B. For that the respondent could not proceeded for attachment against the appeal when admittedly the appellant was not held to be possessing any property on behalf of the public servant and was not arraigned as an accused in the charge-sheet filed by ACB against the public servant which in turn means that the monies received by the appellant were not part of the disproportionate assets of the public servant and the donations ....
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.... the scheduled offence" which is a "proceed of crime". In the absence of any such material the order is liable to be set aside on this short ground. G. For that the source of the funds is admittedly emanating from M/s. S.D. Corporation, M/s. Shapoorji Pallonji, who are not proceeded against in the attachment order or in the OC, hence it could not be averred that monies given by such entities to any person including M/s. PRS Enterprises or M/s. PRS Developers etc. are emanating from any activity relating to any "scheduled offence", hence such monies could not be "proceed of crime" and therefore the instant proceedings under PMLA are void abinitio. The impugned orders are liable to be set-aside on this short ground. H. For that admittedly M/s. S.D. Corporation, M/s. Shapoorji Pallonji and or M/s. Strategic Infrasol LLC were neither involved in any scheduled offence nor party to the instant proceedings under PMLA, hence money flown from such legal entities were not result of any activity relating to any scheduled offence, hence could not be "proceed of crime" simply because it has come in the account of M/s. PRS Enterprises or M/s. PRS Developers, Proprietary concern....
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....he reason for such belief to be recorded in writing), on the basis of material in his possession, that - (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, W.P.(C) 5537/2018 Page 8 of 11 he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed." 16. A plain reading of Section 5(1) of the PML Act indicates that an order of provisional attachment can be passed only where the concerned officer has reasons to believe on the basis of material in his possession that: (a) any person is in possession of proceeds of crime; and (b) such proceeds are likely to be concealed, transferred, or dealt with any manner which would result in frustrating any proceedings relating to confiscation of such proceeds of crime. The expression "proceeds of crime" is defined under clause (u) of Section 2 (1) of the PML Act as under....
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....AND WHEREAS, the following amounts have been used in the commission of scheduled offence and are proceeds crime in terms of Section 2 (u) and 2 (v) of PMLA, 2002:- S.No. Amount in Rs. Remarks 1. 2,45,00,000 Investment in M/s GCL By M/s HEPL and lying in Corporation Bank, Bhowanipur Branch, Kolkata A/c No.510101003473693 of M/s GCL. 2. 11,86,710 Lying as fixed deposits No.015340100288/8 dated 04.07.2017 3. 1,26,540 Lying in A/c No.0153201100424 4. 7,160 Lying in A/c No.0153201002578 Total 2,58,20,410 19. The said assumption that any amount used in commission of a scheduled offence would fall within the expression proceeds of crime as defined under Section 2(1) (u) of the PML Act is fundamentally flawed. In the present case, the allegation against HEPL is that it had obtained allocation of coal block on the basis of misrepresentation. However, it is not disputed that mining of the coal from the block had not commenced, therefore, HEPL did not derive or obtain any benefit from the coal block. The ED has also not indicated any reason, which could lead one to believe W.P.(C) 5537/2018 Page 11 of 11 that HEPL ....
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....does not care about the settled law. No doubt, if additional material is recovered by the ED against the party, only then the said exercise can be done subject to the condition that ED must pass the specific order of reasons to believe and copy thereof must be served to the party giving such information, otherwise it amounts illegal act. In the present case, no order of reasons to believe is produced before this Tribunal nor any copy was served to the appellants. 13. As is revealed from the appeal of M/s. Kalyani Charitable Trust, it was not permissible in law for Competent Authority to disjoint and issue attachment order separately against M/s. Shapoorji Pallonji and later disjoint and separate attachment order for Kalyanis in the chart. Such attachment order is a dictate of malafide, non-application of mind and unsustainable. 14. Appeal no.1211 of 2016 arising out of Original Complaint no. 512 of 2015. Shapoorji Pallonji & Co. Pvt. Ltd., ....Appellant/Org. Defendant No. 12 V/s. 1. Dy Director, Directorate of Enforcemen...Respondent No.1/ Org. Complainant 2. Ravindra G. Sapkal, 3. Kalyani Charitable Trust, 4. Kalyani Educ....
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....up advanced an aggregate sum of Rs. 61,42,00,000/- (Rs. 61.42 Crores) to Kalyani Group as loans and advances as per the case of appellant. The advances made by the Nilesh Thakur Group in Respondent No. 3 [i.e. Kalyani Charitable Trust] was to the tune of Rs. 41.80 Crores. Similarly the advances made by the Nilesh Thakur Group in the Respondent No. 4 (i.e Kalyani Education Pvt. Ltd.) was to the tune of Rs. 18.57 Crores. The remaining amount was advanced to Respondent No. 2 ( i.e Ravindra Sapkal, Proprietor of Ravindra Constructions). 14.3 Out of the aforesaid amount of Rs. 61.42 Crores advanced to Kalyani Group, the Kalyani Group purchased various properties and invested the amount in fixed deposits and made some construction. The amounts advanced by the Nilesh Thakur Group to the entities of the Kalyani Group are shown as loans and advances in the Books of Accounts of the Nilesh Thakur Group. This is also acknowledged by Respondent No. 1 in clause 7.1 of the Original Complaint No. 512 of 2015 ("O.C. 512/15"). 14.4 Respondent No. 1 (Director of Enforcement) issued a Provisional Attachment Order No. 18 of 2015 (PAO No. 18/15) on the basis of the second FIR (ECIR No.....
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....oup says that it was donation and Nilesh J. Thakur has stated that it was investment 17. These are two versions between the parties otherwise all group parties to the appeals admit that the money was owned by SPCL and was clean and untainted. It appears that there is an inter-se disputes between appellants and Nilesh J. Thakur. The stand of SPCL is that it was merely an investment and SPCL has to recover the said amount from Nilesh J. Thakur. Nilesh J. Thakur stand is that it was an investment and he is entitled to recover the entire amount with interest in order to reduce his liabilities towards decretal amount. Thus, all these are relevant to determine the civil disputes between the parties. 18. The appellants are running educational institutions and the Respondent has issued the impugned attachment order and complaint on the erroneous premise of "any property" of"any person" without focusing its attention as to first pre-requisites in law of existence of any "proceeds of crime" and availability of "material" to lead to "reasons to believe" as required under Section 5 of PMLA. 19. In the present case, one fact is very clear that Adjudicating Authority has not at all cons....