TaxTMI 
TaxTMI 
2019 (9) TMI 942
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....he said property. It is admitted position that the appellant was not arrayed in the FIR nor any charges are frame. She is also not accused in the prosecution complaint. She, in the present appeal, is seeking relief to release only the property which is acquired by her by virtue of divorced decree passed in her favour. By the said decree by mutual consent, the said House No. M-4/9, DLF Phase-II Gurgaon has come to her. She is not involved in money laundering. 3. S/Shri Shivraj Puri, RaghurajPuri, Rajender Chand, Sanjay Gupta, Gaurav Jain and Smt. DeekshaPuri had committed various offences punishable under various provisions of the Indian Penal Code, 1860 (IPC) pursuant to which FIR No. 341.2010, was registered at PS: DLF Phase-II, Gurgaon under Section 420/467/471 and 120B IPC,[which are scheduled offences under the Prevention of Money Laundering Act, 2002]. During the course of police investigations, S/Shri Shivraj Puri, RaghurajPuri, Rajender Chand, Sanjay Gupta and Gaurav Jain were arrested by the officers of the Haryana Police, Gurgaon, but Smt. DeekshiPuri could not be arrested by Haryana Police and was declared a Proclaimed Offender. The accused persons entered into a cr....
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.... as genuine the aforesaid forged documents or electronic records which they knew or had reason to believe, to be forged documents or electronic records, (vi) During the year 2009-2010 Shri Shivraj Puri was entrusted with funds amounting to Rs. 405,51,41594.91 in his capacity as the then Relationship Manager, CITI Bank, DLF Phase II, Gurgaon, and he had committed breach of trust in respect of the said property/amount so entrusted to him, and (vii) During the year 2009-2010 ShivrajPuri, knowingly or having reason to believe that the offence of cheating and forgery have been committed, caused certain evidence connected with the said offence, namely, I-Phone, to disappear with the intention to save the offenders from legal punishment. Police investigations further revealed that ShivrajPuri, in criminal conspiracy with Shri Sanjay Gupta, and the others solicited and obtained investments from various Citi Bank customers and also non-Citi Bank customers mainly Hero Corporate and others. The investment, thus mobilized was deposited in • PremNath's Custodian Account No. 5011666247, • Other family linked accounts, • Accounts of 2 ot....
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....unt and fraudulently prepared hand written deposit receipts and were issued to the investors on printed Citi Bank Stationery; with the intention to show that the said Scheme was floated by the Citi Bank. iv) The said Custodian Account was fraudulently used as a conduit to subsequently transfer funds to various Accounts of the accused/suspect persons or their relatives maintained with various Brokerage Companies, viz. Religare Securities Ltd, Bonanza Portfolio Ltd, India Infoline, etc, and that the said investors were kept in dark that their funds were being invested in such a manner. v) As per prosecution case, the internal investigations got made by CITI Bank inter-alia disclosed that it was as early as March, 2009, that Shri Shivraj Puri had been convincing CITI Gold customers, whose accounts were managed by him, to invest in the "exclusive" high return (rate of return of at least 1.5% per month), capita guaranteed financial products, supposedly authorized by CITI Bank and managed by Brokerage Houses. These representations by Shri Shivraj Puri were bogus and no such product was actually offered by CITI Bank. Funds were drawn from customers' accounts either by wa....
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....fer any such product. The internal review disclosed high inflows of Rs. 405 Crores and outflows of Rs. 401 Crores in an individual CITI Gold savings account no. 5011666247 held in the name of Sh. PremNath& Others and opened & operated by Shri Shiv Raj Puri. vii) The Investigation Audit of the aforementioned CITI Bank Scam was conducted by M/s. Lalit Jain & Co., a Chartered Accountant Firm which examined the transactions in Custodian account No. 5011666247 and other accounts of the family members/relatives of Shri Shivraj Puri& also the account of Religare Securities Ltd & Bonanza Portfolio Ltd and analysed the inflow and outflow of funds in the said Custodian account and other accounts by making flow charts. The flow chart No. 2 showing the Commissions given to the parties from the Custodian account mentioning names of G2S Management Consultants, BG Financial Services, Archana Gupta (w/o Sanjay Gupta) etc. It also reflects the amounts received from parties including G2S Management Consultants & BG Financial Services. 6. The Crime Branch of Haryana Police filed an application before the court seeking attachment of the following immovable properties alongwith the immovable propert....
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....he basis of charge-sheet under Section 173(2) of Cr.P.C. 1973 submitted on 28.03.2011, 01.06.2011 and24.12.2011 by Haryana Police, Gurgaon in FIR No. 341/2010 dated 27.12.2010 of PS L DLF Phase-II, Gurgaon, in the Court of the Hon'ble CJM, Gurgaon and documents provided by the Haryana Police, Gurgaon against the ex-husband of the appellant and other third party in the ECIR No. ECIR/04/DZ/2011 dated 22.03.2011 registered in Directorate of Enforcement, New Delhi. 8. It is in the case of respondent - ED that during the course of instant investigations conducted so far under PMLA, statements of various persons, connected with this case, including the accused/suspect persons have been recorded in Directorate of Enforcement. 9. The relevant evidence, collected, is mentioned as below:- (i) Statement of Shri Shivraj Puri, was recorded u/s 50 of PMLA, 2002 on 16/08/2012, 14.09.2012 wherein he inter-alia stated, that there was an alert in May 2008, identified by Citi India FRMU through the banking early alerts tracing system, regarding unusual activity in his and his ex-wife Smt. NidhiUppal's staff accounts; on 27-10-2009, he as Relationship Manager of Citi Bank, DLF Phase-II,....
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....1166247 with CITI Bank, DLFII, Gurgaon, Shri Shiv Raj Puri suggested to them that in view of their old age they should nominate someone to take care of the affairs of this Account, and in this context, he suggested that his mother SmtDeekshaPuri could be a nominee in the said account, which was accepted by them, since they completely trusted him; at the suggestion of Shri Shivraj Puri, the earlier Account was closed and a fresh Account was opened, in which context Shri Shivraj Puri made them signed some blank Accounts Forms; however, subsequently when the cheque book of the new account was received, he was surprised to see that Smt. DeekshaPuri was named as a Joint Account Holder, instead of being made a nominee, as was agreed to by them; they both, therefore told Shri Shivraj Puri that they did not want SmtDeekshaPuri to be a Joint Account Holder and ask him to immediately close the above Account. 12. The details of the respondent's investigation as well as recording of the statement of the witnesses are mentioned at page nos. 9 to 29 of the impugned order. 13. The Relevant Part of Investigation done by ED has been reproduced hereunder:- 2.10. That, the aforemention....
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....are Golf Course Road, Sec-62 Gurgaon, 1240 Sqft (Shiv Raj Puri) SCB 53110532540 264182 dt 31.07.2010 16,66,560/- Urban Square Sec- 62 Gurgaon 103296 dt 01.06.2010 9,52,320/- Total Amount 26,18,880/- Commercial site, A-512 Urban Square Golf Course Road, Sec- 62 Gurgaon, 1220 Sqft (Shiv Raj Puri) SCB 53110532540 261481 dt 31.07.2010 16,39,680/- Urban Squarre Sec-62 Gurgaon 103292 dt 01.06.2010 9,36,960/- Total Amount 25,76,640/- C-4 Haridwar Green, Vill- Aneki, Hatampur 3850 Sqft (Shiv Raj Puri) SCB 53110532540 DD003037 dt 3.9.10 5,00,000/- Arrow infra Ltd 335885 dt 1.9.10 5,00,000/- 335888 dt 20.9.10 13,29,250/- 391902 dt 1.11.10 87,05,295/- Total Amount 1,10,34,545/- EMAAR MGF Emerald Hills-Emerald Plaza-2, Office Space-027 Gurggaon, 637 Sqft (Shiv Raj Puri) HDFC 00441930004342 DD 666115 dt 4.12.09 5,00,000/- Emerald Plaza, Gurgaon SCB 53110532540 808306 dt 10.03.10 2,86,952/- 808332 dt 20.3.10 2,86,952/- 746836 dt 25.1.10 73,903/- 261489 dt 17.10.10 18,13,533.48/....
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....71662- ShivrajPuri AmulyaJeevan LIC 25.01.11 50,400/- 50,400/- 15. 333071661- ShivrajPuri JeevanAnand LIC 14.09.09 1,05,177/- 2,10,344/- 16. 333071663- -do- 23.09.09 70,741/- 1,41,582/- ShivrajPuri (c) Bank Accounts S. No. Name of A/c Holder A/c No. Balance in Rs. 1. PremNath/ SheitaPremnath/Deekshapuri (Citbank) 5011666247 3,85,49,544.46 2. DeekshaPuri/RaghurajPuri/ ShivrajPuri (SCB) 52205911540 3,23,204.64 3. PremNath (Citibank) 5003111247 3,040.00 4. PremNath (Citibank) 5005551244 5,11,326.31 5. PankajPremnath (Citibank) 5680510247 2,75,613.20 6. PankajPremnath (Citibank) 5680510248 29,312.35 7. PankajPremNath (RBS) 1188658 5,74,024.26 8. PankajPremNath/RamalPremnath (RBS) 1048314 (INR) 5,391.33 9. RaghurajPrui (Citibank) 5755573247 10. RaghurajPuri (HFL) RRAJPURI 55,310 11. RaghurajPuri (HDFC) 00441600003335 7,946.66 12. RaghurajPuri (Axis) 131010100380546 72,805.60 13. ShivrajPuri (HFL) RAJSHIV 34,66,40....
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.... 7.3.11 11.458 285.561 5011666247 3011666255 Premnath UTI-OFDG 30.1109 13.84 491329.48 5011666247 3011666255 Premnath UTI-OFDG 31.3.10 12.76 268025.078 5011666247 3011666255 Premnath UTI-OFDG 31.3.10 23.89 4060027.627 5011666247 3011666255 Premnath UTI-OFDG 30.9.10 15.07 829462.508 5011666247 3011666255 Premnath UTI-OFDG 30.9.10 28.22 442948.264 111154244 3111154219 Metcamholdi ngPvt. Ltd Franinda Dynamic Paralia Fund of Funds Growth 30.6.10 37.8102 66119.724 111154244 3111154219 Metcamholdi ng Pvt Ltd FEF Growth 30.6.10 33.208 57215.129 5011666247 3680510252 PankajPrem nath FEF Div Pay Out 29.4.10 19.967 500826.363 5011666247 3680510252 -do- CICI POPO CHIP 29.4.10 14.3 174825.175 5011666247 3680510252 -do- Trandindia Dynamic Fund of Funds DIV 29.4.10 34.3169 101990.554 5011666247 3680510252 -do- -do- 29.7.10 34.9593 171628.15 5011666247 3680510252 -do- -do- 31.8.10 35.1591 241758.179 5011666247 3680510252 -do- FQ O....
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....ING OF STATEMENTS OF WITNESSES 5.1 That, ShriBinuSoman, Assistant Vice President, CITI bank in his statements recorded on 19-05-11 and 27.09.2012 inter-alia stated that he has been working with CITI Bank since Dec, 2006 and based at CITI Bank, Gurgaon office; that Shri Shiv Raj Puri while working as Relationship Manager in CITI Bank, DLF PH-II, Gurgaon opened a Saving Bank Account No. 501166247 in the name of ShriPremnath, ShielaPremanth and DeekshaPuri who were his grandfather, grandmother and mother respectively; that Shri Shiv Raj Puri operated above account by using blank signed transaction forms obtained from ShriPremnath and also by forging signatures of DeekshaPuri in the transaction form; the signatures of DeekshaPuri were also forged by Shri Shiv Raj Puri in the account opening form; that he used to transfer the amount from account No. 50011666247 to Brokerage Houses like Religare, Bonanza, India Infoline etc., that Shri Shiv Raj Puri sourced two types of investors, one from the CITI Bank account holders and other direct investors; that Shri Shiv Raj Puri misused his official capacity as RM and misled the CITI bank customers to invest in the purported investment s....
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....puted Rajeev Girdhar for this, who visited the bank and confirmed about the scheme; that it seems that no action was taken against Rajeev Girdhar, since he is still working with the company; that as far as he knew, Hero Corporate Service, Mr AnupamBhasin, Satyam Auto components (Mr Yogesh Jindal), Arrow Infra Ltd, Shri Sunil kantMunjal, Mayar Infrastructure Ltd, hero Exports (Mr Bharat Goel), Spade Financial, Munjal Investment (Mr Bharat Goel), were the investors, who invested in the scheme of Shiv Raj Puri in Citibank, as they or their relatives were known to Sanjay Gupta, that M/s G2S management Consultants was a partnership firm between Sanjay Gupta, Ganpat Singh and he himself, having 1/3 shares, made at the instance of Sanjay Gupta to undertake the project financing consultancy; that this company had not owned any property and had not been audited; that there was no association between G2S Management and M/s B G Financials except that Sanjay Gupta was a partner in both these companies and funds of Rs. 50 lakh was given by B G Financials to G2S Management for the purchase of property in the name of his wife Kiran Jain; that bank account of this firm has been attached with the G....
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....tors. 9.2 The funds received were then transferred to stock brokers and deployed in the securities market. Here, Citibank and Shivraj managed the funds and securities of the clients and acted as a portfolio manager without being registered as such under SEBI (Portfolio Managers) Regulations, 1993 with SEBI thereby violating the provisions of regulation 3 of SEBI (Portfolio Manager) Regulation, 1993 read with Section 12 (1) of SEBI Act, 1992. 9.3 Further, through such fraudulent activity these entities have engaged in the act of deceiving investors (read Citibank clients) and then channelized the funds in the securities market for personal (speculative) gain." 7.2.2 That, as per para 7.7 of the said report, as reproduced hereunder, Citibank was also held equally responsible for such irregularities:- "7.7 Citibank customers had entrusted their funds to Citibank and it was Citibank that has employed the relationship manager to manage their assets. Here Shivraj, as the relationship manager has acted on behalf of Citibank. Customers, entrusted their funds, not to the relationship manager, but to Citi bank in good faith with the knowledge that the same....
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....w of amount in Citibank account was Rs. 4,05,51,41,595/-, the outflow of amount from the Citibank was Rs. 4,01,65,92,050/-. 7.3.2 That from the report, it has been revealed that funds of investors were operated as under:- S.N. Name of entitles A/c No. Amount Rs. In lakh 1. Custodian Account -Citibank 5011666247 39583.66 2. Religare Securities Ltd 13042.52 3. Bonanza Portfolio Ltd 17631.72 4. Shiv Raj Puri (HDFC Bank) 41930004342 2459.27 5. Shiv Raj Puri (Standard Chartered Bank) 53110532540 4148.80 6. DeekshaPuri (HDFC Bank) 41930006474 3688.16 7. DeekshaPuri Citibank 5201116246 1413.43 8. DeekshaPuri & Rajender Chand (Citi Bank) 5202814249 40.00 9. RaghurajPuri (HDFC BANK) 44160000335 5840.00 10. RaghurajPuri, (Citi Bank) 5755573247 839.89 11. RaghurajPuri, S R P & D Puri (Standared Charted bank) 52205911540 744.5 12. RaghurajPuri (Axis Bank) 131010100380546 390.00 13. PankajPremNath (CitiBank) 5680510247 818.29 14. Normans Martin (Citibank) 0004083245 604.78 15. Sheila PremN....
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....me to be untainted properties. The payments made by him to the concerned persons/sellers/banks are part of proceed of crime and from the fraudulent acts committed by him as he was not having other source of income except his salary. Therefore, the competent Authority of Directorate of Enforcement, have reason to believe that Shri Shivraj Puri, Shri Sanjay Gupta and ShriGaurav Jain have committed an offence of "money laundering" as defined under section 3 of the PMLA and invested the proceeds of crime so generated by them in various immovable/immovable properties including bank accounts, and thus such properties were liable for attachment under the PMLA. Accordingly, the following properties involved in money laundering have been attached vide Provisional Attachment Order as shown against each:- (A) PROVISIONAL ATTACHMENT ORDER No. 01/2012 DATED 22.10.2012. S.No. Details/particulars Owned/held in the name of Recorde Value/in Rs. 1. Account No. 5011666247 of Citi Bank, DLF, Phase-II, Gurgaon ShriPremNath, Smt Sheila PremNath, Smt, DeekshaPuri 10,90,47,779.43 2. Plot of lant at No. C2/1056, PalamVihar, Gurgaon SmtArchana Gupta W/o Shri S....
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....23010200017310 in Axis Bank) 6. MGF Emrald Hills-Emerald Plaza-2, Office Space027, Gurgaon, (637 Sqft) 29,61,340,48/- (Deposited in the company's A/c No. 504181948 in HSBC Bank and No. 152801001 in Dutch Bank) 7. EMAAR MGF Emrald Hills-Emerald Plaza-2, Office Space027, Gurgaon, (637 Sqft) 29,61,340,48/- (Deposited in the company's A/c No. 504181948 in HSBC Bank and No. 152801001 in Dutch Bank) Total Rs. 7,04,99,665.97 14. The provisional attachment order was passed attaching various properties of the accused persons. Thereafter, an Original complaint No. 257/2014 dated 31.12.2013 has been filed before Adjudicating Authorities, PMLA, In respect of above Provisional Attachment Order seeking confirmation of attachment of all the aforesaid seven properties issued vide said PAO by the impugned order which is under challenged. 15. The funds for purchase of following immovable properties, in his name, were generated from various brokerage accounts through the investments made therein under the aforesaid scheme and payments were made from his Standard Chartered Bank (SCB) A/c No. 53110532540 and HDFC Bank A/c No. 00441930004342 his reply to question ....
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....3/- 261488 dt 10.10.10 18,13,533.48 Total Amount 29,61,340.48 16. The appellant has stated that her husband has also cheated her. The said property was purchased prior to the date of offence. Therefore, it cannot be said that the said property is also acquired from the proceed of crime. It is stated when he made his statement under Section 50, he had already gifted the said property to her. The said property is part of settlement which was recorded before court. 17. Her case is that the House No. M-4/9, DLF Phase-II Gurgaon is not involved in money-laundering and further there is no reason to believe that the non attachment of the said property is likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings under the Act. 18. It is stated by her that she is the prime victim of the disgraceful act of the accused - Sh. ShivrajPuri (herein referred as ex-husband of the Appellant) and his family who have cheated her and caused greater damage to her than others with whom he had defrauded. 19. Prior to involving her hus....
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....at the Citibank accused ShivrajPuri had also forged the signatures of the appellant in May, 2009 and had filed a divorce application in Gurgaon Court. There was no Bank Account or property or investment or insurance policy bought by the accused with appellant as the Joint Holder or Nominee or Beneficiary. All the Bank Accounts of appellant were investigated by both Citibank and ED and no objectionable transaction was found that is why none of the appellant's accounts were attached. Objectionable transactions were however found between the accounts of ShivrajPuri and VandanaMandhana and in the list of accounts and investments attached - Mrs.VandanaMandhana was the nominee in most accounts and investments. The accused has also admitted these statements in his statements to Police. Copies of LIC policy of ShivrajPuri dated September,2009 with VandanaMandhana named as his wife, Confession Statement of Mrs.VandanaMandhana to Citibank dated 03 Jan, 2011 have been submitted before the Hon'ble Court for their review. It is also important to note that ShivrajPuri and Mrs.VandanaMandhana are legally married on date. 24. The appellant was separated from the accused in 2009 and was not awar....
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....s from his account to the savings account of VandanaMandhana but no such objectionable transfer / transaction was found when the bank accounts of NidhiUppal were investigated. 29. It is the specific case of appellant that she was not aware about the involvement of the accused till Citibank informed her on9th December, 2010. The Complete case is about how ShivrajPuri forged a SEBI Circular dated 1st Jan 2010and allied fraudulently allured investors through that to invest money for getting high returns by opening an account in the name of Premnath Custodian account No. 501166247 at Citibank Gurgaon Branch on 27th Oct, 2009 and the investigation has been done for the period 27th Oct, 2009 till 09 August, 2012.There was no transaction in the said Citibank account till November, 2009. 30. The Appellant was removed from the aforesaid premises by the Gurgaon Police on 09th June 2011without any notice. The premises was locked. Her belongings including her Education & Experience Certificates, clothes and her personal belongings were inside the house. The possession was taken by the ED. 31. Admittedly, in the FIR no. 341/201 dated 27th December, 2010 registered as PS DLF Phase-II un....
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....by ShivrajPuri - 29th October, 2009 through Standard Chartered Bank DD no. 050661 amounting to INR 93 lacs. 34. The said fact has not been denied by the respondent. It is evident that the property was not bought before the scam started as the Citibank Account which is the basis of the entire scam itself was opened on 27th October, 2009 and there were no transaction in the account till November, 2009. 35. It is correct that the Appellanthad placed an application before the Ld. Spl. Judge, PMLA, Gurgaon to take note that one of the property (M-4/9 DLF Phase-2 Gurgaon) being discussed in the case belongs to her and no adverse decision should be taken without giving a chance to the appellant to produce the facts, which is filed in order to claim her legal right. The Gurgaon Court only observed with respect to appellant's plea "as non-maintainable being premature'. As per para No.5 of the Gurgaon Court Order "Keeping in view the above said two provision of Section 8 of the Act, the application in hand is premature because it will only be decided after conclusion of the trial "whether the property in question is involved in the money laundering or is a proceeds of money laundering ....