TaxTMI 
TaxTMI 
2021 (5) TMI 269
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....ing referred in short as 'HDRUA Act'). This F.I.R. was lodged against several persons including 'M/s Sobha Developers Limited'. The applicant/accused is the Vice-Chairman as well as Managing Director of 'M/s Sobha Developers Limited'. 3. The above said F.I.R. was lodged by the Police on receipt of a complaint/letter by the District Town Planner, Gurugram. By virtue of above mentioned letter, bearing Memo No.13490 dated 13.12.2019, it was reported to the police that by violating the terms & conditions of the licence granted for the development of a colony an offence was committed by the applicant/accused. In nut-shell, the facts set out vide above said letter were as under: "With reference to the subject mentioned above, and upon examination of reports received from credible sources it has been observed that the several serious offences have been committed by the developer/joint developer in the colony namely International City situated in Sector-106, 108, 109, Gurugram Manesar Urban Complex. It involves three licences i.e. license No.58 of 2013, 79 of 2014 and 190 of 2008. (I) Prima-facie it has been observed that Sobha Developers Limited had set up a limited c....
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....omia Developers and finally Eumonia Developers entered into joint development agreement with Sobha Developers Limited so that property remains with Sobha Developers Limited so that they can sell those plots in the market at higher rates. It is not only violation of the bilateral agreement but it is fraud with the Development of Town and Country Planning, Haryana. ii) Although, the joint development rights stands created with Sobha Developers Limited and QVC Realty Company Limited in license No.190 of 2008 but Sobha Developers limited is also acting as joint developer in another license No.58 of 2013 and 79 of 2014 as the compliances under Rule 27 of Rules, 1976 have been made by Sobha Developers Limited and accordingly the bank account in which the amount against internal development works is credited is also maintained by Sobha Developers Limited. Meaning thereby that the entire project is being developed by Sobha Developers Limited which is not in accordance with the terms and conditions of the licenses granted to individual land owners/land owning companies in collaboration with Chintels India Limited. (V) In view of the above, you are directed to initiate pena....
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.... Prakash Gurbaxani, both Managing Directors of 'M/s QVC Realty Company Limited' and Ashok Solomon, Director of 'M/s Chintels India Limited', were joined in the investigation and it came into the notice of the investigating agency that 'M/s Sobha Developers Limited' had entered into an agreement to sell 59 plots belonging to 'NPNL' Scheme and for that purpose Limited Liability Partnerships were formed by 'M/s Sobha Developers Limited'. These LLPs were formed by 'M/s Sobha Developers Limited' with 'M/s Eunomia Developers' and thereafter, Eunomia Developers had executed Joint Development Agreements (hereinafter being referred in short as 'JDAs') with 'M/s Sobha Developers Limited' and 'M/s Chintels India Limited' and finally 'M/s Sobha Developers Limited' along with 'M/s Chintels India Limited' with the consent of 'M/s Eunomia Developers' sold 59 plots to various buyers at higher rate. Since in the opinion of investigating agency nothing was to be recovered from the possession of accused and the punishment prescribed for the offence, for which the accused were prosecuted, was less than seven years the accused were not arrested and the charge sheet was filed on 01.11.2019 against the a....
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....pplementary charge-sheet under section 173 (8) of Cr.P.C. 11. I have heard learned counsel for the applicant/accused as well as learned Special Public Prosecutor for the Directorate of Enforcement and perused the record carefully. 12. At the very out set, it is relevant to mention here that the applicant/accused claiming himself to be a resident of Bengaluru had invoked the jurisdiction of section 438 of Cr.P.C. and sought protection from the Courts at Bengaluru. That petition when came up before the Hon'ble High Court of Bengaluru, was dismissed on merit by virtue of order dated 10.3.2021. It is also pertinent to mention here that while dealing with above mentioned petition, the Hon'ble High Court of Bengaluru dealt with the question of territorial jurisdiction of the High Court of Bengaluru to entertai the petition under section-438 of Cr.P.C. and observed that the above mentioned petition for anticipatory bail under section-438 of Cr.P.C. was maintainable before that Court, and that the Court was having power to grant transit anticipatory bail. However, finding no merit in the plea of applicant, the application for anticipatory bail was dismissed on merit. 13. The order....
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....190 of 2008 wherein the land measuring 149.093 acres was involved. According to learned counsel for the applicant/accused the area of the land to be developed vide Licence No.58 of 2013 was 3.947 acres and with regard to Licence No.79 of 2014, 13.376 acres. 17. The learned counsel for the applicant/accused has also argued that at the initial stage of investigation, there was no loss caused to the State Exchequer and, therefore, section-420 IPC was dropped from the chargesheet but subsequently, with malafide intentions further investigation was conducted with regard to other licences and it was reported to the investigating agency that with regard to Licence No.58 of 2013 development fee was not paid to the State and this way a financial loss was caused to the State, amounting to an offence punishable under section-420 IPC. 18. It has further been argued by learned counsel for the applicant/accused that in the instant case, the question of invoking the jurisdiction of Directorate of Enforcement is also involved as by dropping of the offence punishable under section-420 IPC, in the initial charge-sheet, there was no offence alleged to have been committed by the accused, which c....
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.... applicant/accused has also argued that the applicant/accused is a law abiding, peace loving citizen of India and that the applicant/accused has already joined investigation on several occasions and that is why before filing of first charge-sheet he was not arrested. According to learned counsel for the applicant/accused, now with malafide intentions, in the name of further investigation of the case, there are chances of arrest of the applicant/accused and that is why the applicant/accused has been forced to knock the door of this Court to seek protection under section-438 of Cr.P.C. 22. The thrust of the argument of learned counsel for the applicant/accused has also been on the points that for the violation of conditions of licence, the Company of the applicant/accused cannot be held liable because there was no direct agreement between the applicant/accused and the Government, as this agreement was between the Government and 'M/s Chintels India Limited' in whose favour the licences were issued. While referring to Annexure-5, i.e. the letter dated 8.7.2011 issued by the Director General, Town and Country Planning, Haryana Chandigarh with regard to the application of 'M/s Chintel....
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....sold the above said plot to several buyers, such buyers were not bound by such condition. As per learned counsel for the applicant there was no legal duty of such buyers to sell the said plot on the same price without booking any profit on which they had purchased from the developer. 25. According to learned counsel for the applicant/accused, once theplots were sold by the developer without booking any profit under 'NPNL' Scheme to the buyers and those buyers later on entered into agreement for further development and construction of Villas/houses etc., the buyer who after further development and construction booked the profit, cannot be held responsible for the violation of terms and conditions of licence. 26. On the basis of above mentioned arguments, learned counsel forthe applicant/accused has pleaded that in the instant case custodial interrogation of the applicant/accused is not at all required and that evidence to be collected by the investigating agency is either already in the custody of investigating agency or the same is available in the form of record in the banks as well as other offices and therefore, detaining of the applicant/accused is not likely to serve any....
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....umventing the terms and conditions of the licence as well as agreement between developer and the State, was executed with the active connivance and participation of the Company of the applicant/accused and that the profit too was booked by the Company of the applicant/accused. 31. The learned Special Public Prosecutor has further argued that in the instant case one of the most interesting fact which has been revealed during the course of investigation is that firstly all the plots which were supposed to be allotted under 'NPNL' Scheme, i.e. 212 plots were not made available under that Scheme and out of these 212 plots, only 93 plots in the developed area were made available, and secondly that out of these 93 plots, 59 plots were allotted to 'M/s Sobha Developers Limited'. According to learned Special Public Prosecutor even the money for the purchase of those 59 plots was made by the same Company, who subsequently entered into an agreement for further development of above said plots by constructing Villas etc. and thereafter sold the same to various buyers by booking huge profit. As per learned Special Public Prosecutor by doing so the very purpose of the 'NPNL' Scheme which was ....
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....SLP (Crl.) No.7523 of 2019) decided on 05.9.2019. (iii) Sanjay Chandra versus Central Bureau of Investigation, (2012) 1 Supreme Court Cases 40. (iv) State represented by the C.B.I. versus Anil Sharma, decided on 03.9.1997 (S.C.) 35. I have given my due consideration to the facts and circumstances of the instant case and the arguments addressed by learned counsel for the parties. In the instant case, at the very outset, it is pertinent to mention here that with regard to factual aspect, by and large, there is no disagreement between the applicant/accused and the prosecuting agency. There is no denial of the fact that 'M/s Chintels India Limited' was issued a licence i.e. Licence No.190 of 2008 for the development of land measuring 149.093 acres and that subsequently two more licences were issued in favour of the above said Company. It is also an admitted fact that no financial loss was caused to the State Government by non-payment of fee etc. or otherwise, pertaining to Licence No.190 of 2008 which was bearing major part of the colony, to be developed by the developer. It is more than 90% of the total land to be developed by the developer. 36. Besides this, i....
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....bulous link between the huge sums of money handled by the respondent No.1 and any arms deal or intended arms deals, there is no attempt on the part of the respondent No.1 to disclose the source of the large sums of money handled by him. There is no denying the fact that allegations have been made that the said monies were the proceeds of crime and by depositing the same in his bank accounts, the respondent No.1 had attempted to project the same as untainted money. The said allegations may not ultimately be established, but having been made, the burden of proof that the said monies were not the proceeds of crime and were not, therefore, tainted shifted to the respondent No.1 under Section 24 of PML Act, 2002. For the sake of reference, Section 24 is extracted hereinbelow: 24. Burden of proof. - When a person is accused of having committed the offence under section 3, the burden of proving that proceeds of crime are in tainted property shall be on the accused." 39. With regard to cases pertaining to money laundering, Hon'ble Supreme Court of India in the case of P. Chidambaram versus Directorate of Endorcement (supra) observed that "in a case of money-laundering where it ....
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.... developer and the State Government, and also a condition precedent for the development of the colony for which the licence was issued to 'M/s Chintels India Limited'. While granting licence for the development of piece of land for a colony with the above mentioned condition the basic object of the Government was, firstly not to deprive the economically weaker section from having a plot in the developed colony on subsidize price and secondly to facilitate the person who may not be otherwise belonging to economically weaker section but eligible for a plot on a price lesser than the the market price. If by doing any act in the name of entering into tripartite agreement or by entering into LLPs, the above said section of the society has been deprived of their valuable right assured by the Government, the very purpose of granting licence for the development of a colony to a developer stands frustrated. It is exactly what is alleged to have taken place in the instant case. 42. In the present case, the developer i.e. 'M/s Chintels India Limited' firstly entered into an agreement for the development of a colony with 'M/s Sobha Developers Limited' and 'M/s QVC Realty Company Limited' an....
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....efinitely a financial loss caused to the State Exchequer. If by doing some illegal act a loss has been caused to the State Exchequer, in my opinion, the offence punishable under section-420 IPC can be validly invoked. Once the offence punishable under section-420 IPC is attracted with regard to the acts of the applicant/accused the offence under section-420 IPC being a scheduled offence, the provisions of Prevention of Money Laundering Act stands attracted in the instant case. 46. In the above mentioned given facts and circumstances, in my opinion, this argument of learned counsel for the applicant/accused does not hold good that the applicant/accused cannot be prosecuted for any scheduled offence under the Prevention of Money Laundering Act. 47. It is also pertinent to mention here that this fact cannot be ignored that the manner in which the instant offences have been committed in itself leads to the conclusion that a well thought-of and meticulously designed scheme was executed by the applicant/accused with the help of sister concerns. In order to unearth the above mentioned scheme/design and to track-down the money trail, as well as the sources from which money was genera....