TaxTMI 
TaxTMI 
2020 (7) TMI 425
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....asis of a written complaint dated 17/07/2009 lodged by one Niranjan Sahoo, alleging that he had been cheated and defrauded by alluring to invest Rs. 10,000/- in the attractive investment Scheme of M/s. Fine Indisales Pvt. Ltd (hereinafter referred as to M/s. "FIPL"). It is further alleged that he has been the receiving end of such deceptive Scheme once again and deposited of Rs. 40,000/- therein. He also introduced 20 other persons to invest in such schemes. But he had neither received the said financial product nor the product voucher as per the agreement with M/s. FIPL and the said M/s. FIPL collected huge amounts of money from the public and ultimately duped huge amount from innocent public by giving false assurance of high return for their deposit of money. Thus, he requested for an investigation regarding the money circulation scheme which culminated into registration of a case by the said police station. Subsequently, the investigation of the aforesaid P.S. Case No.118/2009 dt. 17.07.2009 got transferred to CB, CID of Odisha as per order No.189/CID dated 18.07.2009 by registering CB, CID Case No.17 dated 18.07.2009 against officials of M/s. FIPL under the aforesaid sections. ....
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....ney, stained with the sweat, tears and blood of multitudes of innocent people has since been moved around and subjected to Machiavellian layering through a myriad of shell companies and bogus transactions. The money collected from such scheme immediately got transferred to different bank accounts of individuals as well as firms under the management and control of the Promotors/Directors/Shareholders of the said M/s. FIPL which is nothing but an act of sheltering the said "proceeds of crime" as envisaged under Section 2 (u) of the PML Act. The Forensic Audit conducted by the CBI during the course of investigation reveals that the total money invested by the depositors adds up to Rs. 703, 50, 00,079/-. The modus operandi adopted while transferring such prodigious sum of ill-gotten wealth with the singular intention of concealing the original source of funds and to project the tainted money as untainted ex facie constitute the offence of money laundering. 7. Scrutiny of the books of account of FIPL further reveals that about Rs. 152 Crores were transferred to one M/s. Eve Industries which were further layered by laundering the same to one M/s. Great Entertainments and further to th....
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....s also discovered during investigation that the following persons were the Directors of M/s. Lemon Entertainment Ltd. during the relevant time when the transactions of Rs. 25 crores took place as mentioned above. The directorship of the accused company has been given hereunder: Sl. No. Name of the Director Period From To 1 Mohammad Arif 30/09/2008 18/08/2017 2 Wali Mohammad 02/09/2004 24/02/2012 3. Sameer Ahmed Khan 30/09/2008 Continuing The said Wali Mohammad was again made a director of M/s. Lemon Entertainment Ltd. on 30.9.2014 and is continuing as such. Similarly, one Nelsan Ekka became a director on 18.08.2017 and is continuing as such. The Petitioner, Mohammad Arif, was also an Additional Director of the company from 10.07.2008 to 30.09.2008 but ceased to be a director seeing the adverse wind. It is thus evident from the above facts that the Petitioner was a director of the said errant company during that point in time when the "proceeds of crime" were laundered into the books of the Company. 8. During the said relevant period, the Petitioner Mohammad Arif and his father Zaheer Ahmed collectively held 934820 shares betw....
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.... petitioner is made only when Special Court (PMLA) and court of the District and Sessions Judge, Khurda, Bhubaneswar have taken cognizance of case under Section 3 of PMLA, which is impermissible. There ought to be a presumption of innocence of the Petitioner until proved otherwise and any other view of the matter would be violative of Article 21 of the Constitution. He further contended that the present Petitioner had cooperated in investigation as and when he was required. He also submitted that the presence of "knowledge" as prescribed under Section 3 of the Act of the offence having been committed is the sine qua non for the culpability of the petitioner. 11. On the other hand, the Ld. Counsel for the Prosecution Shri Agarwal strenuously contended that the investigation thus far reveals the crystal-clear involvement of the petitioner in the "money trail" and in the offence of "money laundering." There is sufficient materials/evidence on record which discloses a prima facie case against the petitioner for commission of offence of "money laundering." The petitioner has played a key role in masking the tainted money as untainted hence a specific role is attributable to the petit....
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....at in view of Section 44(d) of the PML Act and Section 173(8) of the Cr.P.C, the prosecution was well within its rights to have filed a subsequent complaint pursuant to further investigation. 12. Heard rival contentions of the parties, perhaps both sides in the argument, who have probably overstated their cases. Yet, this sort of delinquency about which society was almost ignorant or perhaps indifferent deserved a proper factual presentation. It, prima facie, appears from a cursory look on the evidence on record that dishonesty, untruth and greed has eroded the faith of common investors. The multiple use of corporate vehicles as mentioned hereinabove have exerted significant influence on the directors of M/s. Lemon Entertainment Ltd. and their relatives, who are running Hamra Samay TV News Network Pvt. Ltd., Ruby Buildwell Pvt. Ltd., Aliff TV Network Pvt. Ltd., Lemon News Media Pvt. Ltd. and BPL Media Ltd. A close scrutiny of the statement of bank account of Axis Bank A/c. No.0200010200044907 of M/s. Lemon Entertainment Ltd. reveals that around Rs. 14 crores has been transferred to the accounts of M/s. Hamra Samay TV News Network Pvt. Ltd, which in turn has transferred, approxim....
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.... Prevention of Money Laundering Act, 2002 was passed in furtherance of United Nations resolution (June 1998) to curb and deter economic offences. The said Act came into force on 1st July, 2005 which is modeled after the Criminal Justice Act of the United Kingdom, it imposes criminal liability on those who know or suspect that someone is involved in laundering the proceeds of crime and fail to report it. The act money laundering involves the process of placement, layering and integration of "proceeds of crime" as envisaged under Section 2 (u) of the Act, derived from criminal activity into mainstream fiscal markets and transmuted into legitimate assets. It has been realized globally that laundering of tainted money having its origins in large scale economic crimes pose a solemn threat not only to the economic stability of nations but also to their integrity and sovereignty. 16. Two types of offences have been contemplated under the PML Act: (a) the actual commission of a scheduled offence which generates tainted wealth or proceeds from the scheduled crime and (b) the laundering of the "proceeds of crime" so generated. The Act, is amply clear, that even though a person may not hav....
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....y of such offence and the accused is not likely to commit any offence while on bail. In the case of Gautam Kundu vs. Manoj Kumar,(2015) 16 SCC 1. the Supreme Court while dealing with the issue has held as follows: "The conditions specified under Section 45 of the PMLA are mandatory and needs to be complied with which is further strengthened by the provisions of Section 65 and also Section 71 of the PMLA. Section 65 requires that the provisions of CrPC shall apply in so far as they are not inconsistent with the provisions of this Act and Section 71 provides that the provisions of the PMLA shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. PMLA has an overriding effect and the provisions of CrPC would apply only if they are not inconsistent with provisions of this Act. Therefore, the conditions enumerated in Section 45 of PMLA will have to be complied with even in respect of an application for bail made under Section 439 of Cr.P.C. That coupled with the provisions of Section 24 provides that unless the contrary is proved, the Authority or the Court shall presume that proceeds of crime ....
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....ials during investigation. The power of "investigation" therefore is not limited to the police under the Cr. PC. It is a fundamental feature of the prosecution as found in a host of other special statutes like Foreign Exchange Regulation Act,1973, Customs Act, Prevention of Food Adulteration Act. In the instant case Enforcement Directorate has been endowed with the said necessary powers. In fact, to bring a quietus to the issue, the Parliament has amended Sub-Section 1 of Section 44(1) of the Act by way of an insertion Finance (No.2) Act 2019 No. 23 of 2019 dated 1.8.2019., the explanation to the inserted reads as under: "Explanation-For the removal of doubts, it is clarified that-(i) The jurisdiction of the Special Court while dealing with the offence under this Act, during investigation, enquiry or trial under this Act, shall not be depended upon any orders passed in respect of the scheduled offence, and the trial of both sets of offences by the same court shall not be construed as joint trial; (ii) The complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or do....
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....d sovereignty of a nation. The International Monetary Fund estimates that laundered money generates about $590 billion to $1.5 trillion per year, which constitutes approximately two to five percent of the world's gross domestic product. The Supreme Court of India has consistently held that economic offences are sui generis in nature as they stifle the delicate economic fabric of a society. These offences permeate to human consciousness posing numerous questions on the very integrity of the business world. The offences, such as this, are committed with a deliberate design with an eye on personal profit and often shown to be given scant regard for a sordid residuum left behind to be borne by the unfortunate "starry eyed" petty investors. The perpetrators of such deviant "schemes," including the petitioner herein, who promise utopia to their unsuspecting investors seem to have entered in a proverbial "Faustian bargain" and are grossly unmindful of untold miseries of the faceless multitudes who are left high and dry and consigned to the flames of suffering. 23. The abuse of financial system, like in the instant case, has great potential to negatively impact a country's macro....