2020 (12) TMI 1098
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....ivil) No.940 of 2017 and, also the nature of accusation, gravity of offence and, punishment provided for the offence and, the fact that the investigation has been going on qua other accused and matter involves huge amount of Rs. 6,000/- Crores, has rejected the bail application. 3. This case is one of the classic cases which would reveal the true story that how a real estate company/builder in active connivance and collaboration with the financial institution, government authorities and functionaries can defraud, cheat, dishonestly misappropriate and diverted the funds to the extent of thousand crores collected from home/flat buyers and shatter their cherished dream to have their own house, a dream of every middle call person of this country and leave them completely high and dry. 4. Amrapali Group of Companies entered into real estate business and construction of houses/flats and other real estate projects such as commercial spaces. They offered to construct approximately 4200 flats/houses in various projects. In their brochure, they assured delivery of possession within thirty six months with world class amenities in Noida and Greater Noida. Allotment-cum-Flat Buyers Agreements....
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....ress of the home/flat buyers entertained the petitions filed under Article 32 of the Constitution of India as huge public interest was involved in the matter. The real estate business thrives and survives on the money of the flat/home buyers and, the money is to be invested in constructing and delivering possession of the homes/flats to the buyers who has invested the money. The Supreme Court made endeavour to see that the management of these group of companies completed the projects and delivered the possession of the homes/flats to the buyers from whom they had collected the money ranging 40-100% of the total sale consideration. In view thereof, on 22.11.2017 the Supreme Court directed the builder to deposit 10% of the dues to Noida Authorities and also asked the builders regarding date of possession in respect of flats/homes where occupancy certificate and no objection certificate had been granted by the authorities. The Court granted liberty to the flat owners to complete the finishing work. The amount was not deposited nor any promise got extracted from the builders. 8. In order to protect the predominant interest of the home buyers, the Supreme Court directed the Amrapali Gr....
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....directed to handover original documents of Amrapali Group of Companies, but he did not hand over the documents required by the Forensic Auditors and the Supreme Court noted non-cooperation of the Directors and Statutory Auditors in this regard. The Supreme Court directed the police to seize the records and hand it over to the Forensic Auditors. The Forensic Auditors in their report noted that there were more than 26 companies to whom money had been diverted and these bogus/sham companies were created by the Amrapali Group of Companies. The Supreme Court in its order dated 13.11.2018, inter alia, in paragraphs 17 and 20 observed as under:- 17. It is a case where we find ourselves in a situation that the money of Greater Noida and Noida Authorities has not been paid, buyers have also been duped. Other financial institutions have not been paid. Construction has not been completed. Money paid by buyers has been diverted for the creation of various companies and assets have been created. All these assets are accountable and have to be sold as it is not the independent investment made by these directors. It is a patent and blatant fraud which appears to have been played, the way in whi....
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.... Mr. Sudit K. Parikh [Address : Ballard House, 2nd Floor, Adi Marzban Path, Ballard Pier, Fort, Mumbai - 400 001] to explain the valuation report on the basis of which Rs. 140 crores had been withdrawn by M/s. J.P. Morgan. Let the Registry send a communication to Mr. Sudit K. Parikh to appear before this Court on the next date of hearing. It was pointed out that shares of Amrapali Zodiac were ultimately purchased for Rs. 140 crores by M/s Neelkanth and M/s Rudraksha. It is pointed out by forensic auditors that there are two persons, namely, Chandan Kumar, who is a peon of Mr. Anil Mittal, Statutory Auditor, and working in his office and another one is Vivek Mittal, who is the nephew of Mr. Anil Mittal, and is doing petty jobs of sub- contractors and having a monthly income of Rs. 15,000/-. It is stated by the learned counsel appearing on behalf of M/s J.P. Morgan that in one company, Chandan Kumar and Atul Mittal were Directors. M/s Neelkanth and M/s Rudraksha are the private limited companies in which the abovementioned persons are named as Directors. They are not having the capacity to give an amount of Rs,140 Crores to be paid to M/s J.P. Morgan. This is a serious kind of fr....
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....projects in question stand cancelled and rights henceforth, to vest in Court Receiver; (iii) We hold that Noida and Greater Noida Authorities shall have no right to sell the flats of the home buyers or the land leased out for the realization of their dues. Their dues shall have to be recovered from the sale of other properties which have been attached. The direction holds good for the recovery of the dues of the various Banks also. (iv) We have appointed the NBCC to complete the various projects and hand over the possession to the buyers. The percentage of commission of NBCC is fixed at 8 percent. (v) The home buyers are directed to deposit the outstanding amount under the Agreement entered with the promoters within 3 months from today in the Bank account opened in UCO Bank in the Branch of this Court. The amount deposited by them shall be invested in the fixed deposit to be disbursed under the order of this Court on phase-wise completion of the projects/work by the NBCC. (vi) In view of the finding recorded by the Forensic Auditors and fraud unearthed, indicating prima facie violation of the FEMA and other fraudulent activities, money laundering, we direct Enforcement Dire....
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....shall continue to do so in future on completion of projects or in part as the case may be. We direct the Noida and Greater Noida Authorities to take appropriate action to do the needful in the matter. The Water Works Department of the concerned area and the Electricity Supplier are directed to provide the connections for water and electricity to home buyers forthwith. 12. In view of the finding recorded by the Forensic Auditors and fraud unearth, looking at the prima facie violation of the FEMA and other fraudulent activities of money laundering, the Supreme Court directed the Enforcement Directorate and concerned authorities to investigate and fix liability on persons responsible for such violation and submit progress report to the Court. The police was also directed to submit a report of investigation made by them. 13. Thus, it is evident that but for the Supreme Court intervention, at expenses and cost of its valuable time, efforts and labour, the thousands of flat buyers would have been left high and dry by the promoters of the Amrapali Group of Companies in which the present accused-applicant has been the Managing Director throughout and, is the king-pin of the fraud, cheati....
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.... over the general provisions of the Cr.P.C. in case of any conflict. 18. The economic crime of such scale and magnitude are carefully and meticulously planned and executed. It is well settled that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. While granting bail, the court has to keep in mind the nature of accusations, magnitude and gravity of offence and nature of evidence in support of the accusations. 19. The Supreme Court in the case of Y.S. Jagan Mohan Reddy vs CBI: (2013) 7 SCC 439 in paras 34 and 35 in respect of granting bail in economic offences having deep rooted conspiracy and large public money involved has held as under:- "34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. 35. Economic offences constitute a class apart and need to be visited with a differen....
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....ion of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. It has also to be kept in mind that for the purpose of granting bail, the legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the court dealing with the grant of bail can only satisfy itself as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt. 25. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep-rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as a grave offence affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country." 21. In judgment rendered in the case of State of Bihar Vs. Amit Kumar (2017) 13 SCC 751, it has been held that while considering the bail involving socio-economic off....
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....tempt is made to project the proceeds of crime as untainted money and also that the allegations may not ultimately be established, but having been made, the burden of proof that the monies were not the proceeds of crime and were not, therefore, tainted shifts on the accused persons under Section 24 of the 2002 Act. 22. It is not necessary to multiply the authorities on the sweep of Section 45 of the 2002 Act which, as aforementioned, is no more res integra. The decision in Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra [Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra, (2005) 5 SCC 294 : (2005) SCC (Cri) 1057] and State of Maharashtra v. Vishwanath Maranna Shetty [State of Maharashtra v. Vishwanath Maranna Shetty, (2012) 10 SCC 561 : (2013) 1 SCC (Cri) 105] dealt with an analogous provision in the Maharashtra Control of Organised Crime Act, 1999. It has been expounded that the Court at the stage of considering the application for grant of bail, shall consider the question from the angle as to whether the accused was possessed of the requisite mens rea. The Court is not required to record a positive finding that the accused had not committed an offence under the ....
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....utam Kundu v. Directorate of Enforcement, (2015) 16 SCC 1 : (2016) 3 SCC (Cri) 603] and State of Biharv. Amit Kumar [State of Bihar v. Amit Kumar, (2017) 13 SCC 751 : (2017) 4 SCC (Cri) 771] . Thus, it is evident that the above factors must be taken into account while determining whether bail should be granted in cases involving grave economic offences. 25.As already discussed supra, it is apparent that the Special Court, while considering the bail applications filed by Respondent 1 both prior and subsequent to the filing of the investigation report and complaint, has attempted to account not only for the conditions laid down in Section 212(6) of the Companies Act, but also of the general principles governing the grant of bail. 26. In our considered opinion, the High Court in the impugned order has failed to apply even these general principles. The High Court, after referring to certain portions of the complaint to ascertain the alleged role of Respondent 1, came to the conclusion that the role attributed to him was merely that of colluding with the co-accused promoters in the commission of the offence in question. The Court referred to the principles governing the grant of bai....
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....nt for dealing with money-laundering. Section 5 of the Code of Criminal Procedure, 1973 clearly lays down that the provisions of the Code of Criminal Procedure will not affect any special statute or any local law. In other words, the provisions of any special statute will prevail over the general provisions of the Code of Criminal Procedure in case of any conflict. 29. Section 45 of PMLA starts with a non obstante clause which indicates that the provisions laid down in Section 45 of PMLA will have overriding effect on the general provisions of the Code of Criminal Procedure in case of conflict between them. Section 45 of PMLA imposes the following two conditions for grant of bail to any person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule to PMLA: (i) That the prosecutor must be given an opportunity to oppose the application for bail; and (ii) That the court must be satisfied that there are reasonable grounds for believing that the accused person is not guilty of such offence and that he is not likely to commit any offence while on bail. 30. The conditions specified under Section 45 of PMLA are mandatory an....