TaxTMI 
TaxTMI 
TaxTMI 
2020 (11) TMI 755
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....amix Realty. The applicants are seeking modification of the ex parte ad interim order dated 21st March, 2018, vide which status quo in respect of the attached properties was directed to be maintained, which were directed to be released upon acquittal of the present applicants vide order dated 21st December, 2017 passed by the learned Special Judge, CBI, New Delhi. 2. The pleas raised in these applications are almost similar and therefore, these applications are being disposed of by this common order. 3. At the hearing, while addressing his submissions in Crl.M.A. 10885/2020, Mr. Vijay Aggarwal, learned counsel appearing for the applicants submitted, that in FIR bearing No. RC DAI 2009 A 0045, registered on 21st October, 2009, by the Central Bureau of Investigation for the offences under Sections 120-B of IPC and Section 13(2) r/w Section 13(1)(d) of the Prevention of Corruption Act, 1988 ("PC Act"), the present applicants i.e. respondent No.17- M/s Conwood Construction & Developers (P) Ltd. and respondent No.15/ M/s Dynamix Realty were not named. However, based on the allegations of CBI, the Enforcement Directorate (henceforth referred to as the "ED") registered a case No. ECIR/3....
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....h respect to the transaction in dispute and applicants were arrayed only on the basis of civil liability and a bare perusal of the complaint under Section 45 PMLA confirms that no money originated from Eversmile Construction Co. Pvt. Ltd and Conwood Construction & Developers (P) Ltd. during the flow of funds of Rs. 200 crore from Dynamix Realty to Kusegaon Fruits and Vegetables (P) Limited. 6. Learned counsel submitted that the present case is contradictory to the complaint filed by the ED under Section 5 (5) of the PMLA before the learned adjudicating authority, wherein the applicant/Company has been arrayed as respondent only on the concept of civil liability, being partners of Dynamix Realty and the fact that the companies were roped in on the concept of civil liability was known to the complainant, however, the complainant arrayed the applicant/company in the present case on the allegation that the applicant/company had knowledge of the alleged transactions. 7. Learned counsel for the applicants submitted that the ED had taken actual physical possession of the properties since September, 2014, which are various shops/offices and were "stock in trade" and situated in Building ....
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....attached property could be subjected to auction without there being any fault on the part of the present applicant. 12. It was submitted by learned counsel that the properties have been attached by the ED as a "bailee", who is bound to take all the necessary steps and actions to ensure that the value of the property attached is not reduced. Learned counsel strenuously submitted that the present situation is also affecting the rights of the applicant/company, as the assets/properties of the applicant cannot be developed and put to use for business and also that applicant/company is apprehensive of any coercive action under the Insolvency and Bankruptcy Code, 2016 and applicant's properties will become subject of auction causing irreparable damage and loss, despite the fact that the present applicant has been acquitted of all the charges by the learned Special Court. 13. Learned counsel for the applicant/ company submitted that the ED has to prima facie establish that the applicant had committed the offences and they had a nexus or a link in relation to criminal activities which constituted proceeds of crime and the property constituting the value of any such property. The attached....
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....ed, and to reach the conclusion that upon that evidence the order of acquittal should be reversed. No limitation should be placed upon that power, unless It be found expressly stated in the Code. Put in exercising the power conferred by the Code and before reaching its conclusions upon fact, the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial Judge as to the credibility of the witnesses, (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial, (3) the right of the accused to the benefit of any doubt, and (4) the slowness of an appellate Court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses. To state this, however, is only to say that the High Court in its conduct of the appeal should and will act in accordance with rules and principles well known and recognised in the administration of justice." 20. In other words, it was held that the High Court would be slow to interfere because it is the trial court which had the advantage of seeking the demur of seeing the presumptio....
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....lty and Leisure Pvt. Ltd., had deposited a sum of Rs. 34,51,20,750/- on 1st October, 2014 with the department and on vide communication of 12th May, 2015, it had requested the ED to invest the said amount into "Fixed Deposit Receipts". However, no reply to the said communication was received by the applicant from the ED. Learned counsel submitted that the following accounts of applicant- M/s Dynamic Realty have been attached:- S.No. Account Number / Description of the Sundry Debtors Name & Address of the bank / Sundry Debtors Balance as on 24.08.2011/ Amount with the Sundry Debtors as on 22.08.2011 in Rupees 1. 05211011000957 OBC, Rajnigandha Shopping Centre, Gokuldham, Goregaon, Mukund Link Road, Film City Road, Goregaon(E), Mumbai Rs. 429368.71/- 2. 05211131000530 do Rs. 424252.00/- 3. 0062002900000018 PNB, PNB House, Sir PM Road Fort, Mumbai-01 Rs. 380257.07/ 4. 006200PS00006526 do Rs. 20,00,000/ 5. 02122320001852 HDFC Bank Ltd., Conwood House Yashodham, Gen A.K. Vaidya Marg, Goregaon (East), Mumbai400063 Rs. 366046.63 6. M/s Grace Works Realty & Leisure Pvt. Ltd. 462, Senapati Bapat Marg, Lower Parel, Mumbai-400013 Rs. 690241500 .00 7. M/s Mys....
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....consideration and therefore, until the present appeal under Section 378 Cr.P.C. is heard and decided, these applications be not decided, as it would be abuse of the process of law. 24. Learned ASG pointed out that another application Crl.M.A. 9402/2018 seeking similar relief has already been filed by the applicants- respondent No.16 & 17 and reply dated 10th August, 2018 to the said application has already been filed and, therefore, the instant applications are not maintainable. 25. Learned ASG submitted that the learned Special Judge while passing the impugned order failed to appreciate the fact that the offence of money laundering is a standalone offence and on the basis of acquittal of applicants/respondents in the scheduled offence, investigated & prosecuted by the CBI, acquitted the respondents from the offence of money laundering also. Learned ASG further submitted that that the facts of the present matter are intrinsically connected to that of CRL. L.P.No. 185/2018 (CBI vs. A Raja & Ors), as both matters arise out of a common judgment. The acquittal and release of attached properties in this case was merely followed by the acquittal of applicants in the CBI matter and acco....
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...., flat, etc., and is under joint ownership, the authorized officer may accept the equivalent value of fixed deposit to the extent of the value of the share of the concerned person in the property estimated by the authorized officer, to be involved in money laundering; and" 29. Learned ASG contended that it is only after examining the material on record, this Court had passed the order dated 21st March, 2018 directing status quo with respect to the attached properties. It is next submitted by learned ASG that no prejudice is caused to the applicants, whose properties have been attached after following the due process of law, as they continue to be the owner of the attached property and are therefore liable to fulfil the liability arising out of the same. Learned ASG submitted that the prayer of applicants to release the attached properties/amounts on furnishing of indemnity bond and reliance placed upon various decisions in support thereof, is of no avail to the case of applicants as the said decisions were passed in the peculiar facts and circumstances of those cases. 30. Learned ASG submitted that the impugned order of 21st December, 2017 passed by the learned Special Court, vid....
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....CBI respectively. Learned counsel submitted that the allegations of petitioner/ED that the individuals involved in the scheduled offence had complete control over the affairs of the present applicant companies, is without any basis as there is no evidence to show that the present applicant was involved in the day to day affairs of the firm M/s Dynamix Realty. Further it is submitted by learned counsel that no money either in the forward trail or in the reverse trail has reached the present applicants. 35. Learned counsel for the applicants have drawn attention of this Court to sub Rule (5) and (6) of Section 8 of PMLA which reads as under:- "(5) Where on conclusion of a trial for any scheduled offence, the person concerned is acquitted, the attachment of the property or retention of the seized property or record under sub-section (3) and net income, if any, shall cease to have effect. 6. Where the attachment of any property or retention of the seized property or record becomes final under clause (b) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity of being heard to the person concerned, make an order confiscating such property." 36. Learned co....
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.... Vinod K. Goenka, respondent No. 3 respectively and that the applicant/respondent No. 17 is a partner in the firm- M/s Dynamix Reality, respondent No. 15 in this petition. It stated that respondent No. 17 and the present applicant namely, M/s Conwood Constructions & Developers Pvt. Ltd. is also a DB Group company under the control of Sh. Shahid Usman Balwa, respondent No. 2 and Vinod K. Goenka, respondent No. 3 respectively. 41. The case of the prosecution is that M/s Dynamix Realty was a partnership firm and a partnership was entered into by M/s D.B. Realty Ltd., M/s Eversmile Construction Company Pvt. Ltd. and M/s Conwood Construction Developers Pvt. Ltd. specifically in order to develop a Slum Rehabilitation Project at Mumbai. The partnership deed did not provide for any other related project or a project relating to farm and agriculture business or cinematography work. None of the companies, firms involved in the entire transactions, purportedly claimed as loan of an amount of Rs. 200 crores, had the main objective of lending money. The companies could lend money only for the purposes incidental to the main objects and lending money could not be the main object of the company.....
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....m the respondent no. 17, being the partner of respondent No. 15. It is stated that the attachment of the proceeds of crime from the respondent No. 17 was done considering the above explained arrangements amongst the said companies and that the said attachment was done duly following the procedure provided under the provisions of the PMLA. The stand of prosecution is that the assets from the said applicants were attached on the basis of the fact that the firm- respondent No. 15 had received proceeds of crime and the active role of the respondent No. 16 and 17 can be deciphered from the fact that respondent No. 16 and 17 along with respondent No. 18 were partners in M/s Dynamix i.e. respondent No. 15 and accordingly, the applicant / respondent No. 17 as a partner is liable for receiving proceeds of crime as well as for the commission of offence of money laundering as defined under Section 3 of the PMLA. It is stated that as a matter of fact the individuals involved in the scheduled offence had complete control over the present applicant. 45. This Court has carefully gone through the record. 46. These applications were listed before this Court on 17th August, 2020, at the time when ....
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....rry an impression that he will not get a fair opportunity of hearing. This Court assures that everyone will be given an effective hearing. However, at the same time it goes without saying that irrelevant and repetitive arguments need to be avoided. 46. In the end, this Court has only one thing to say that no doubt there may be delay in filing the applications for early hearing; no doubt the documents are voluminous in nature; no doubt the evidence runs into thousands of pages; no doubt one of the judgment also runs into 1552 pages, but that does not mean that this should deter this court in hearing the criminal leave petitions. The judicial discipline demands that the Judge should do his duty and must not succumb to pessimism and it is not expected from him to sit leisurely with his pen down and to say that he will not hear the cases because the record is voluminous and the time at his disposal is limited. It will be a folly not to make an attempt and to sit idle abdicating one's duty. It is advisable to perform one's duty irrespective of the fact whatever conclusion the petitions reach. This Court, therefore, will not fail in its duty and expects all the learned counsels to coop....
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....020 and 13784/2020 [in Crl.L.P.185/2020] pending before this Court. Arguments on the said applications were heard in part on behalf of respondents by this Court. However, hearing of the petition was deferred because of lock down due to Covid-19. This Court had, thereafter started hearing arguments in these applications. During the hearing of these three applications [Crl.M.A.1731/2020, 1820/2020 and 13784/2020 in Crl.L.P.185/2020], another application [Crl.M.A. 14230/2020] seeking the same relief was filed by respondent No.5 on 14th October, 2020 and arguments were heard on the said application as well. 52. Thereafter, on 20th October, 2020, two writ petitions [W.P.(C) No. 7978/2020 and W.P.(C) No.8071/2020] were filed before this Court. The relief sought in these writ petitions was more or less same as sought in the applications [Crl.M.A.1731/2020, 1820/2020, 13784/2020 and Crl.M.A.14230/2020 in Crl.L.P.185/2020], which were already in the process of being heard. This Court had then started hearing arguments in W.P.(C) No. 7978/2020 on behalf of Mr.Vijay Aggarwal, learned counsel for the petitioner. 53. On 3rd November, 2020, two more writ petitions [W.P.(C) No. 8617/2020 and W.....