AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 1824
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..... Ms. Rebecca John Sr. Advocate with Sh. Sushil Bajaj, Ms. Tarannum Cheema, Ms. Hiral Gupta and Sh. Manvendra Singh Advocates for accused Kanimozhi Karunanithi. Sh. Majid Memon and Sh. Rajneesh Chuni Advocates for accused Vinod Goenka. Sh. Manu Sharma and Sh. Babanjeet Singh Mew Advocates for accused A. Raja. Sh. Vijay Aggarwal, Sh. Mudit Jain, Sh. Ehtesham Hashmi and Sh. Ashul Agarwal Advocates for accused Shahid Balwa, Asif Balwa, Rajiv B. Agarwal, Kusegaon Fruits and Vegetables (P) Limited, Dynamix Realty, DB Realty Limited, Eversmile Constructions Company (P) Limited, Conwood Construction & Developers (P) Limited and Mystical Construction (P) Limited (earlier known as Nihar Constructions (P) Limited). Sh. Balaji Subramaniam and Sh. Abhir Datt Advocates for accused Sharad Kumar. Sh. Vijay Sondhi, Ms. Deeksha Khurana and Sh. Varun Sharma Advocates for accused Swan Telecom (P) Limited (now Etisalat DB Telecom (P) Limited). JUDGMENT The instant complaint case has been filed by Joint Director, Directorate of Enforcement, New Delhi, (hereinafter to be referred as "the complainant") under Section 45 of the Prevention of Money­Laundering Act 2002 (hereinafter to be referre....
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.... allocated to STPL for Delhi service area also. 5. However, there were allegations of irregularities and bribery in this process of issue of LOIs, grant of UAS licences and allocation of spectrum. Accordingly, case RC No. 45(A)/2009 was registered by the CBI on 21.10.2009 against unknown officials of DoT, Government of India, unknown private persons/ companies on the allegations of criminal conspiracy and criminal misconduct. 6. On completion of investigation, CBI filed charge sheet in this Court against twelve accused, including the then Minister, MOC&IT, A. Raja, on the allegations of criminal conspiracy and criminal misconduct in respect of issuance of LOIs, grant of UAS licences and allocation of spectrum by DoT to two companies, namely, Swan Telecom (P) Limited and Unitech group companies. One of the allegations in the charge sheet is that STPL, at the time of filing applications dated 02.03.2007, was an "Associate" of Reliance ADA group/ Reliance Communications Limited/ Reliance Telecom Limited, having existing UAS licences in all thirteen telecom service areas. As per UASL Guidelines, an existing licencee cannot have 10% or more equity in an applicant/ licencee company in ....
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.... 16. 11.08.2009 50 crore Total 209.25 crore 10. Thereafter, Kusegaon Fruits and Vegetables (P) Limited transferred an amount of Rs. 200 crore to Cineyug Films (P) Limited through banking channels by means of cheques as per following details: Sl. No. Date Amount 1. 23.12.2008 Rs. 10 Crore 2. 16.01.2009 Rs. 2 Crore 3. 28.01.2009 Rs. 8 Crore 4. 20.03.2009 Rs. 5 Crore 5. 06.04.2009 Rs. 25 Crore 6. 15.07.2009 Rs. 100 Crore 7. 07.08.2009 Rs. 50 Crore Total Rs. 200 Crore 11. Cineyug Films (P) Limited, in turn, transferred the aforesaid amount of Rs. 200 crore to Kalaignar TV (P) Limited through banking channels by means of cheques as per following details: Sl. No. Date Amount 1. 23.12.2008 Rs. 10 Crore 2. 28.01.2009 Rs. 10 Crore 3. 20.03.2009 Rs. 5 Crore 4. 06.04.2009 Rs. 25 Crore 5. 15.07.2009 Rs. 100 Crore 6. 07.08.2009 Rs. 50 Crore Total Rs. 200 Crore 12. The allegations, in brief, as per the CBI case, are that A. Raja with his co­accused, by abusing his official position, received illegal gratification of Rs. 200 crore from STPL, an ineligible company, for granting UAS licences and allocating spectrum....
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....07 49.90 lakh shares of STPL were allotted to M/s DB Infrastructure Pvt. Ltd. 6 10.01.2008 Letter of Intent (LoI) for UASL was issued. DoT issued a press release at 2:45 pm asking all applicants to assemble at DoT Headquarters within 45 minutes (3:30 pm) to collect LoIs. 13 applicants were ready with Demand Drafts drawn on dates prior to the notification of the cut­off date. STPL had been keeping demand drafts ready since early November, 2007 and October 2007. Further, STPL had got the first Financial Bank Guarantee (FBG) and Performance Bank Guarantee (PBG) for 2 circles as early as the first half of November, 2007, presumably due to prior knowledge about limited spectrum availability in Delhi circle, which was however subsequently changed for Delhi circle. 7 17.12.2008 STPL received share capital money totalling Rs. 3609 crores (Rs. 3228 crores directly from foreign investor and Rs. 381 crores indirectly from abroad through domestic company). 8 19.12.2008 Purported Share Subscription Agreement and Shareholders Agreement dated 19.12.2008 entered between M/s Cineyug Films Pvt. Ltd. (now known as M/s Cineyug Media & Entertainment Pvt. Ltd., hereinafter referred to as ....
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....rivate persons/companies. 13 30.12.2009 Entire equity of KTV was pledged to CFPL. 14 27.01.2010 Subscription and shareholders Agreement executed between CFPL and its promoters with KFVPL to acquire 49% equity in CFPL. For this, a sum of Rs. 6.25 crores had been paid till 15.07.2009. 15 31.08.2010 Assurance given by Promoters of CFPL for non disposal of 9,51,531 shares of M/s DB Realty Ltd. as additional collateral security for 8% OCRD of Rs. 200 crores, favouring KFVPL. 16 01.12.2010 Additional security given by Promoters of CFPL through pledging and issuing power of attorney for shares of M/s DB Hospitality Pvt. Ltd. held by them favouring KFVPL. 17 24.12.2010 On 23.12.2010, Shri A. Raja was directed to appear before the CBI for the purposes of investigation. Shri A. Raja was examined by CBI on 24.12.2010. 18 02.02.2011 Shri A. Raja was arrested by CBI. 19 20.12.2010 to 03.02.2011 Immediately after Shri A. Raja was summoned by CBI for the purposes of investigation, KTV started refunding the amount of Rs. 200 crores to Dynamix Realty through CFPL & KFVPL. Rs. 231.36 crores were transferred back by KTV to CFPL. 20 20.12.2010 To 03.02.2011 Rs. 225.08....
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....P) Limited (KFVPL): The investigation has revealed that Kusegaon Fruits andVegetables (P) Limited was under the control of Asif Balwa and Rajiv B. Agarwal and these two persons were holding 50% shares each. The purpose of this company was to use it as a corporate vehicle for the transfer of funds from Dynamix Realty to Cineyug Films (P) Limited. The financial analysis shown below clearly reveals the purpose of Kusegaon Fruits and Vegetables (P) Limited so as to become vehicle of transfer of funds from Dynamix Realty to Cineyug Films (P) Limited. The ratios given in the table below show that the transmission of funds was the primary activity of Kusegaon Fruits and Vegetables (P) Limited during the relevant period. (Rs. in crore) Particulars 2012 2011 2010 2009 2008 2007 Investments 6.25 6.25 ­ 28.50 ­ ­ Current Assets 3.07 3.15 221.41 3.00 0.01 0.01 Total Assets (A) 9.32 9.40 221.41 31.50 0.01 0.01 Investments 6.25 6.25 ­ 28.50 ­ ­ Loans & Advances 3.00 3.15 221.40 3.00 ­ ­ Total Financial Assets (B) 9.25 9.40 221.40 31.50 ­ ­ % Of Financial Assets to Total Assets (B/A) 99.21% 99.96% 100.....
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....cial year 2008­09, gross income was Rs. 47.54 crore approx. Total loan taken by Kalaignar TV (P) Limited was Rs. 158.05 crore approx. Total income was Rs. 47.54 crore approx. In the financial year 2009­10, gross income of Kalaignar TV (P) Limited was Rs. 63.12 crore and loss after tax was Rs. 1.36 crore approx. Total loan taken by Kalaignar TV (P) Limited was Rs. 245.59 crore approx. Total share capital of Kalaignar TV (P) Limited was Rs. 10.01 crore. Share Subscription and Shareholders Agreement dated 19 .12. 2008 between Kalaignar TV (P) Limited and Cineyug Films (P) Limited was not on stamp paper. Kalaignar TV (P) Limited along with promoters collected funds for the refund to Cineyug Films (P) Limited by taking money against future advertisement contracts from various parties as under:­ (i) From India Cements Limited An agreement entered on 12th January 2011 between India Cements Limited and Kalaignar TV (P) Limited for advertisement on the Kalaignar TV (P) Limited's channels for a period of Five Years commencing from January 2011 for total consideration of Rs. 60 crore. Company paid Rs. 60 crore to KTV through two cheques, both dated 18.01.2011, for Rs. 30....
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....ransferring the illegal gratification to Kalaignar TV (P) Limited, through intermediaries so as to make the transactions appear bonafide, which, in fact, were not. These financial transactions amongst the entities under the control of the accused individuals and related to the accused companies also establish that two intermediary companies namely Kusegaon Fruits and Vegetables (P) Limited and Cineyug Films (P) Limited were brought in to conceal the actual consideration and make the said transfer of funds appear as genuine business deal among the companies. 20. Investigation has further revealed that after allocation of UAS Licence to STPL, the companies and individuals connected with STPL had procured funds from a number of companies related to DBRL (a company under the control of Vinod K. Goenka, Shahid Usman Balwa, Rajiv B. Agarwal and Asif Balwa). Dynamix Realty did not have its own funds and had taken loans from various related entities. The maximum funds came from DBRL and other companies, which are DB Group companies. On 23.12.2008, Rs. 10 crore was taken by Dynamix Realty from Nihar Constructions (P) Limited, and Nihar Constructions Pvt. Ltd., in turn, had borrowed this am....
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....egaon Fruits and Vegetables (P) Limited had agreed to do so on the terms and conditions as mentioned in this MOU. 24. The Subscription and Shareholder Agreement dated 27.01.2010 and Undertaking dated 31.08.2010 between CFPL and KFVPL after receipt of funds of Rs. 206.25 crores inter alia, reveals as under:­ The Subscription and Shareholder Agreement was undated, signed by Karim Morani, Asif Balwa, Rajiv B. Agarwal and others. Undated Subscription and Shareholder Agreement (SSA) was entered into between Cineyug Films (P) Limited and Kusegaon Fruits and Vegetables (P) Limited , in which Kusegaon Fruits and Vegetables (P) Limited agreed to invest Rs. 62475000/­ towards the equity of CFPL and Rs. 200 crore as OCRD at 8%. Para 2.2 of this Agreement stated that subscription price shall be utilized by the Cineyug Films (P) Limited in expanding its business and till such time it is implemented, the funds may be invested so as to get reasonable returns. The Cineyug Films (P) Limited and Kusegaon Fruits and Vegetables (P) Limited had entered into an Undertaking on 31.08.2010, which relates to the OCRD against Rs. 200 crore and collectively named as transaction documents . T....
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....tered into between the said two companies : (i) ICD Agreement dated 15.07.2009 for Rs. 100 crores (ii) ICD Agreement dated 07.08.2009 for Rs. 50 crores 27. The Agreement dated 30.12.2009 to pledge shares entered into between KTV and pledgors in favour of Cineyug Films (P) Limited , inter alia, reveals that the parties have executed several loan agreements whereunder KTV has obtained loans of Rs. 200 crore, which are payable with interest. The pledgors are Ms. M.K. Dayalu, Ms. K. Kanimozhi and Sharad Kumar. 28. On 04.02.2011, Cineyug Films (P) Limited and KTV had agreed and accepted that pursuant to the repayment of loan and interest, the agreements relating to SSA and other agreements and loan documents stand terminated with immediate effect. Thus, proceeds of crime to the tune of Rs. 200 crore which was generated because of actions taken by A. Raja got ultimately parked with KTV under the cover of transfer of varying amounts of funds through agreements/ MOU relating to equity participation/ loan among a chain of inter­linked companies. 29. It is revealed during the course of investigation under the Act that KTV was incorporated in Chennai on 06.06.2007. The Directors of....
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....KTV. Had this amount been loan, as claimed by Cineyug Films (P) Limited and KTV, payment of interest should have started w.e.f. 31.03.2009 and tax should have been deducted on this amount and credited to Government account w.e.f. April, 2009 (time allowed to credit TDS to Government account). 32. The payment of so called interest started w.e.f. 07.05.2010, more than a year after the due date. This corroborates that Rs. 200 crore is, in fact, proceeds of crime generated by the offences committed by A. Raja, which was passed on to KTV in the garb of loan. 33. Documents submitted by KTV vide letter dated 27.08.2012, inter alia, revealed that details of funds paid back by KTV to CFPL and its sources are as under:­ Sl. No. Details of repayment made to CFPL Amount (Rs.) 1 Principal 2,000,000,000 2 Interest 313,630,137 Total Payment 2,313,630,137 Sources of funds Sl. No. Description Amount (Rs.) 1 AFPL 69,61,90,000 2 Advertisement Advances received from; The India Cement Ltd. 60,00,00,000 United Spirits Ltd. 24,50,00,000 3 Regular collection over payments 30,40,69,668 4 Open cash credit with Indian bank 46,83,70,469 Tota....
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....t only to project the refund of funds as business transactions but also to project the earlier receipt of funds as arising from bonafide business deal so as to conceal the true nature of bribe money. The reverse flow of the funds is summarized as under: KTV to CFPL CFPL To KFVPL KFVPL To Dynamix Realty Date Amount in Rs (crores) Date Amount in Rs (crores) Date Amount in Rs (crores) 20.12.2010 15.25 20.12.2010 12.19 23.12.2010 12 24.12.2010 10 24.12.2010 10 29.12.2010 10 27.12.2010 20 27.12.2010 20 30.12.2010 20 29.12.2010 10 29.12.2010 8 31.12.2010 7.95 04.01.2011 10 04.01.2011 10 10.01.2011 7.95 05.01.2011 10 05.01.2011 10 10.01.2011 12.06 11.01.2011 10 11.01.2011 10 17.01.2011 10 24.01.2011 65 24.01.2011 65 24.01.2011 65 29.01.2011 25 29.01.2011 25 01.02.2011 25 03.02.2011 50 03.02.2011 50 04.02.2011 50 03.02.2011 6.12 03.02.2011 4.89 12.02.2011 1.35 28.02.2011 2.24 Total 231.37 Total 225.08 Total 223.55 36. Investigation under the Act has further revealed, inter alia, that Dynamix Realty after receipt of proceeds of crime to the tune of Rs. 223.55 crore from ....
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....egaon Fruits and Vegetables (P) Limited and Cineyug Films (P) Limited, in the garb of legitimate financial transactions, that is, as loan/ share application money. Whereas, in fact, this payment was illegal gratification for and on behalf of A. Raja and his associates in lieu of illegal favours given to STPL for grant of UAS Licence. Investigation, as aforesaid, has further revealed that the return of Rs. 200 crore has been done, alongwith the additional amount, in order to show this illegal payment in the guise of legal and bonafide financial transactions. Thus, in the garb of loan it was, in fact, the illegal gratification, which was apparently projected as untainted property. Besides, the reverse flow of such amount further establishes the projection of proceeds of crime as untainted and is nothing but the process of laundering of money. The entire amount to the tune of Rs. 223.55 crore was, in fact, proceeds of crime and has already been attached by way of Provisional Attachment Order dated 30.08.2011 issued under Section 5(1) of the Act, which has been subsequently confirmed by the Adjudicating Authority on 10.01.2012 in terms of Section 8(3) of the Act. Appeals against the af....
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....hough the payment was made by Dynamix Realty, it was done for and on behalf, of STPL as has been revealed by unravelling of uncommon and unusual business practices adopted by the companies and individuals involved in the payment of the sum of Rs. 200 crore projected as commercial transactions amongst the companies. 47. Dynamix Realty did not have Rs. 200 crore to give as loan to Kusegaon Fruits and Vegetables (P) Limited. Kusegaon Fruits and Vegetables (P) Limited did not have Rs. 200 crore of its own to give it to Cineyug Films (P) Limited . Cineyug Films (P) Limited did not have Rs. 200 crore to advance it to KTV. Dynamix Realty sourced it from a number of sister concerns. Even these sister concerns did not have money to advance it to Dynamix Realty. In a few instances, money was borrowed from nationalized banks to give it to Dynamix Realty even when lending was not a prime objective of the business of any of these concerns. In fact, the funds were borrowed at a much higher rate of interest of 13 to 16 per cent but were purportedly lent to the next entity in the chain at a lower rate of interest of 7.5%, which defies prudent business practices. This corroborates that the transfe....
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....Raja constitute criminal acts under the provisions of IPC and PC Act as stated in the charge sheets filed by the CBI. The individuals and the firms/ companies involved in the transfer of Rs. 200 crore are inter connected. 51. For transfer of the illegal gratification amount of Rs. 200 crore from the beneficiary of illegal favour viz. STPL to the person who extended such favours, the complex process of layering such illegal gratification through a chain of inter connected companies/ firm and transmitting the base bribe amount with varying amounts was adopted. Hence, Rs. 209.25 crore moved from Dynamix Realty, a firm of DB Group to Kusegaon Fruits and Vegetables (P) Limited. After retention of balance amount by Kusegaon Fruits and Vegetables (P) Limited it transferred Rs. 206.25 crore to Cineyug Films (P) Limited . Kusegaon Fruits and Vegetables (P) Limited was a company closely connected with the DB Group and its business activity during the relevant period was primarily to transfer these funds. Cineyug Films (P) Limited , a company which was under the influence of DB Group, further retained Rs. 6.25 crore and transferred Rs. 200 crore to KTV. The retention of the aforementioned am....
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.... companies viz. DBRL, Eversmile Construction Company (P) Limited and Conwood Construction and Developers (P) Limited. Shahid Usman Balwa, Vinod K. Goenka, Asif Balwa and Rajiv B. Agarwal were authorized signatories in the said three companies/ firms. Shahid Usman Balwa and Vinod K. Goenka dictated every major financial transactions of the group companies, though on paper these companies seem to be run by the Board of Directors. 55. Asif Balwa and Rajeev B. Agarwal were also the directors/ stakeholders of Kusegaon Fruits and Vegetables (P) Limited and were also the authorized signatories of the said company. Asif Balwa and Rajeev B. Agarwal also represented Kusegaon Fruits and Vegetables (P) Limited for their 49% stake in Cineyug Films (P) Limited . Karim Morani was a director/ promoter of Cineyug Films (P) Limited and a signatory to all the agreements/ bank instruments in respect of the transactions in question, on behalf of Cineyug Films (P) Limited . 56. A. Raja and Ms. Kanimozhi have close association and interaction. They belong to the same political party being headed by Shri K. Karunanidhi, whose family started and owns KTV. KTV was started by the family of Shri K. Karunani....
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....rom the Ministry. Rajeev Agarwal is an old associate of Vinod K. Goenka who was looking after financial affairs of DB Group companies with Asif Balwa. It was STPL, a company represented by Shahid Usman Balwa and Vinod K. Goenka, which was illegally favoured by A. Raja. The proceeds of crime had moved both ways between Dynamix Realty a company closely associated with STPL and KTV a company closely associated with A. Raja through complex processes of money­laundering. 63. The proceeds of crime on its return to Dynamix Realty had become Rs. 223.55 crore through the processes of layering, indulged in by the accused persons, both legal and natural. The Dynamix Realty had dissipated and disseminated a large part of the said proceeds of crime through the network of DB Group companies including its owned/ partner companies. The investigations under the Act led to attachment of the said proceeds of crime of Rs. 223.55 crore from the DB Group companies viz. Dynamix Realty, DB Realty, Eversmile Construction Company (P) Limited, Conwood Constructions & Developers (P) Limited and Nihar Construction (P) Limited. 64. It is alleged that following facts lead to the culpability of the accused ....
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....s. Dynamix Realty and STPL are the companies of DB Group, owned and controlled by Shahid Usman Balwa and Vinod K. Goenka. Dynamix Realty paid Rs. 200 crore to KTV through two companies. These two companies are Kusegaon Fruits and Vegetables (P) Limited and Cineyug Films (P) Limited, which acted as carriers to pass on this amount ultimately to KTV. A large part of documentation was created as ex post rationalisation of such transactions to be bonafide business deals. Asif Balwa and Rajeev B. Agarwal were important functionaries of DB Group and owned and controlled Kusegaon Fruits and Vegetables (P) Limited. Karim Morani owned and controlled Cineyug Films (P) Limited. 70. Investigation under the Act has revealed that A. Raja was in contact with Ms. K. Kanimozhi. The pre­determined destination of the illegal gratification of Rs. 200 crore was KTV. Ms. K. Kanimozhi is one of the promoters and shareholders (20%) of KTV and was given funds by Ms. M. K. Dayalu to acquire 20% equity in KTV. Ms. M. K. Dayalu acquired 60% equity in KTV and balance 20% is with Sharad Kumar. Ms. K. Kanimozhi allowed the pledging of her 20% equity to Cineyug Films (P) Limited , alongwith other two promoter....
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.... partnership firm. The partners are Eversmile Construction Company (P) Limited, Conwood Construction & Developers (P) Limited and DB Realty Limited. Accordingly, assets representing the respective values of the proceeds of crime amounting to Rs. 223.55 crore have been attached under the Act from the assets of the firm Dynamix Realty, its three partners and Nihar Constructions (P) Limited. This attachment of the proceeds of crime has been confirmed by the adjudicating authority under the Act. A number of appeals before the Appellate Tribunal for PMLA and High Courts have been filed by the accused persons against the order of confirmation of the attachment by the adjudicating authority. 75. Thus, the offence of money­laundering has been established by the investigation carried out under the Act against the accused persons named in the complaint and the proceeds of crime amounting to Rs. 223.55 crore has been attached. Role of each Accused 76. The role of each individual accused/ company is as under: I. A. Raja: A. Raja in conspiracy with other accused persons, namely, Shahid Usman Balwa, Vinod K. Goenka and STPL, has given illegal favour to STPL. He altered the cut­off ....
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....nce with Ms. M. K. Dayalu, Ms. K. Kanimozhi and Sharad Kumar, was actually involved in parking the illegal gratification of Rs. 200 crore received from Shahid U. Balwa and Vinod K. Goenka in KTV. He was also actually involved in the process of refund of the proceeds of crime of Rs. 223.55 crore in order to wriggle out of the charges of crime. Thus, A. Raja has committed the offence of moneylaundering as defined under Section 3 of the Act. II. Shahid Usman Balwa & Vinod Goenka Shahid Usman Balwa and Vinod K. Goenka consciously used their group companies with the active association of Rajeev B. Agarwal and Asif Balwa in the scheme of projecting illegal gratification as untainted. The projection was made through a series of inter­connected financial transactions devised and used as layering process, which involved movement of varying amounts through inter linked companies. DB Group companies applied and received clearance from the Ministry of Environment and Forests as is reflected from the contents of the letter dated 08.10.2012 of Vinod K. Goenka. Promoters of DB Group were in regular contact with A. Raja since he assumed the office of Minister of Environment and Forests.....
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.... Asif Balwa & Rajiv Agarwal Rajiv B. Agarwal is an old associate of Vinod K. Goenka and has been working with him since 1993. Asif Balwa is a relative of Shahid Usman Balwa and is a person of his confidence. Both of them were looking after finances of DB Group companies including DB Realty Limited, Dynamix Realty, Conwood Constructions & Developers (P) Limited, Eversmile Constructions Company (P) Limited, Nihar Constructions (P) Limited and Kusegaon Fruits and Vegetables (P) Limited. Kusegaon Fruits and Vegetables (P) Limited is a company controlled by both the individuals. Both of them were holding 100% equity of Kusegaon Fruits and Vegetables (P) Limited, which was taken over by them from K. M. Goenka and Pramod Goenka in July, 2008, with a view to use this company as Special Purpose Vehicle for transfer of funds from DB Group to KTV. Asif Balwa was director of STPL when the company got licence. Rajiv B. Agarwal was looking after the process of getting UASL from DoT on behalf of STPL. Both of them did not appoint any director in Cineyug Films (P) Limited even after holding 49% equity of Cineyug Films (P) Limited. Both of them used Kusegaon Fruits and Vegetables (P) Limited....
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....then received the proceeds of crime from KTV and transfer back to Kusegaon Fruits and Vegetables (P) Limited. He entered into dubious documentation with Kusegaon Fruits and Vegetables (P) Limited and with KTV as to project the proceeds of crime as untainted. Karim Morani knowingly assisted in the projection of proceeds of crime as untainted. Hence, he has committed the offence of money­laundering in terms of Section 3 of the Act. V. Sharad Kumar Sharad Kumar is a promoter shareholder and director of KTV since its incorporation. He attended/ chaired all board meetings of KTV, wherein the decisions regarding financial transactions relating to Rs. 200 crore were taken. He signed most of the agreements with Cineyug Films (P) Limited, including agreement to pledge shares at the time of receipt of funds and for mobilization of funds for refunding the same. Sharad Kumar and P. Amirtham were responsible for and looked after AFPL, from which a large chunk of funds was mobilised and transferred to KTV for repayment. He worked in tandem with P. Amirtham to carry out the financial transactions connected with the receiving of illegal gratification in KTV and refund of proceeds of cr....
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....ther invested Rs. 2 crore approx in KTV out of the said amount. Ms. K. Kanimozhi attended Board meetings on 06.06.2007, 12.06.2007 and 20.06.2007 of the company. In these meetings, important decisions such as appointment of P. Amirtham as Director and general authorisation to Sharad Kumar and P. Amirtham on behalf of the Board of Directors were taken. She attended EOGM on 06.07.2007, 30.07.2007 and first AGM on 28.11.2008 of the company. She attended first AGM of the company in which profit and loss account of the company for the year were submitted and approved. Ms. K. Kanimozhi and A. Raja arranged the illegal gratification of Rs. 200 crore to be parked in KTV. Ms. K. Kanimozhi continued to retain 20% shareholding in KTV as promoter shareholder. She allowed to pledge her shares to CFPL in order to layer the receipt of illegal gratification of Rs. 200 crore and thus assisted in the projection of illegal gratification as untainted. During the meeting of Board of Directors on 28.12.2009, a resolution was passed that shareholders of KTV shall pledge their shares to Cineyug Films (P) Limited against the security of funds which was the illegal gratification from Dynamix Realty and ....
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....ited . He was responsible for managing affairs of AFPL in close association with Ms. M. K. Dayalu and Sharad Kumar with the intent to project the proceeds of crime as untainted. P. Amirtham was actually involved in utilization of the proceeds of crime of Rs. 200 crore and its refund amounting to Rs. 223.55 crore to Dynamix Realty through processes and activities so as to project the said amount of Rs. 223.55 crore as untainted. He has thus committed the offence of moneylaundering as defined under Section 3 of the Act. IX. Swan Telecom (P) Limited STPL was illegally allotted UAS Licences by committing the offences under IPC and PC Act as revealed in the charge sheets filed by the CBI. The consideration of Rs. 200 crore for the said illegal favour by A. Raja was arranged by the associated companies and individuals of the DB Group and transferred to KTV through layering process so as to project the same as untainted. The illegal favours were granted by altering the cutoff date for applying to DoT, by changing first­come first­ served policy, by over looking eligibility criteria of STPL and by arrangements for distribution of LOI on 10.01.2008. Promoters of this company V....
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....yug Films (P) Limited . Kusegaon Fruits and Vegetables (P) Limited received Rs. 225.08 crore from Cineyug Films (P) Limited on the return journey of the proceeds of crime from KTV to Dynamix Realty. Kusegaon Fruits and Vegetables (P) Limited received Rs. 225.08 crore from Cineyug Films (P) Limited on the return journey of the proceeds of crime from KTV to Dynamix Realty. Kusegaon Fruits and Vegetables (P) Limited, under the control of Asif Balwa and Rajiv B. Agarwal, acted as a company in the chain to transfer the proceeds of crime on its way to KTV and back. Kusegaon Fruits and Vegetables (P) Limited was used to transfer varying amounts and allowed to retain certain amounts at each stage of transfer so as to effectively layer the proceeds of crime and to project it as untainted. Kusegaon Fruits and Vegetables (P) Limited has knowingly assisted the layering of the transfer of proceeds of crime and has thus committed the offence of money­laundering as defined under Section 3 of the Act. XI. Cineyug Films (P) Limited Cineyug Films (P) Limited is owned and controlled by one of the accused persons Karim Morani and was used as special purpose vehicle for the trans....
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....olved and has thus committed the offences of money­laundering as defined under Section 3 of the Act. XIII. Dynamix Realty Dynamix Realty is a partnership firm of DB Realty Limited, Eversmile Construction Company (P) Limited and Conwood Constructions & Developers (P) Limited Dynamix Realty acted contrary to its main object and collected and diverted the funds of Rs. 200 crore to a group company Kusegaon Fruits and Vegetables (P) Limited for its ultimate transfer to KTV through Cineyug Films (P) Limited. Dynamix Realty was used to transfer Rs. 200 crore as illegal gratification to KTV for illegal favours extended by A. Raja to STPL, a DB Group company. Dynamix Realty transferred Rs. 209.25 crores to Kusegaon Fruits and Vegetables (P) Limited. Kusegaon Fruits and Vegetables (P) Limited paid back Rs. 223.55 crore to Dynamix Realty from 23.12.2010 to 28.02.2011. Proceeds of crime of Rs. 133.88 crore approx. have been attached from Dynamix Realty. Dynamix Realty by being actually involved in making payment of Rs. 200 crore to KTV and by receiving the refund of Rs. 223.55 crore from KTV through the layering process to project the proceeds of crime as untainted has th....
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....V. This amount was returned through the process of layering as Rs. 223.55 crore to Dynamix Realty. Thus, A. Raja has committed the offence of moneylaundering as defined under Section 3 by receiving and refunding of the proceeds of crime amounting to Rs. 223.55 crore in the period and manner as aforesaid in the complaint which is punishable under Section 4 of the Act. 78. Shahid U. Balwa and Vinod K. Goenka, after illegal favour of allotment of UASL to STPL, had paid illegal gratification of Rs. 200 crore to A. Raja through the process of layering from Dynamix Realty to KTV via Kusegaon Fruits and Vegetables (P) Limited and Cineyug Films (P) Limited. Shahid U. Balwa and Vinod K. Goenka had received back the said Rs. 200 crore through a process of layering from KTV as Rs. 223.55 crores in Dynamix Realty via Cineyug Films (P) Limited and Kusegaon Fruits and Vegetables (P) Limited. Shahid U. Balwa and Vinod K. Goenka controlled the companies and the firms of DB Group and thus, Shahid U. Balwa and Vinod K. Goenka have committed the offence of money­laundering as defined under Section 3 of the Act and Section 3 read with Section 70 of the Act being the persons responsible for the of....
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....older and Director of KTV, was actually involved in parking the illegal gratification of Rs. 200 crore in KTV by A. Raja and also in the refund of proceeds of crime of Rs. 223.55 crore to Dynamix Realty in the manner and period as aforesaid. Ms. M.K. Dayalu has thus committed the offence of money­laundering as defined under Section 3 of the Act and Section 3 of the Act read with Section 70 of the Act being the person responsible for the offence of money­laundering by KTV which is punishable under Section 4 of the Act. 83. Ms. K. Kanimozhi, a promoter shareholder of KTV, in association with A. Raja had arranged the illegal gratification of Rs. 200 crore to be parked in KTV and was actually involved in the refund of the same through the process of layering of Rs. 223.55 crore to Dynamix Realty in the manner and period as aforesaid. Thus Ms. K. Kanimozhi has committed the offence of money­laundering as defined under Section 3 of the Act and Section 3 of the Act read with Section 70 of the Act being the person responsible for the offence of money­laundering by KTV which is punishable under Section 4 of the Act. 84. P. Amirtham, authorized person & Director of KTV in a....
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....L by A. Raja through a process of layering. KTV refunded the proceeds of crime through the process of layering to Dynamix Realty as Rs. 223.55 crore in the manner and period as aforesaid in the complaint. KTV was thus actually involved and hence has committed the offence of money­laundering as defined under Section 3 of the Act which is punishable under Section 4 of the Act. 89. Dynamix Realty, after illegal allotment of UASL to STPL had paid illegal gratification of Rs. 200 crore to KTV on behalf of A. Raja through a process of layering and received back the same again through the process of layering from KTV as Rs. 223.55 crore. Dynamix Realty was thus actually involved and has committed the offence of money­laundering as defined under Section 3 of the Act in the manner and period as aforesaid which is punishable under Section 4 of the Act. 90. Eversmile Construction Company (P) Limited, one of the companies of DB Group, owned and controlled by Shahid U. Balwa, Rajiv B. Agarwal and Vinod K. Goenka, is owner partner of Dynamix Realty. Eversmile Construction Company (P) Limited is knowingly a party in parking the proceeds of crime Rs. 13.76 crore approx. Eversmile Constru....
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.... thereafter, charge was ordered to be framed against all accused vide order dated 31.10.2014, which was read over and explained to each accused, to which each one pleaded not guilty and claimed trial. PROSECUTION EVIDENCE 97. In support of its case, prosecution examined twentyfour witnesses. 98. PW 1 is complainant Sh. Himanshu Kumar Lal (H. K. Lal), Joint Director, Enforcement Directorate, Government of India, New Delhi. He deposed along the line of allegations in the complaint, reiterating the same in the witness box. He also proved documents Ex PW 1/A to 1/M­12. 99. PW 2 is Dr. Prabhakant, the then Joint Director, Enforcement Directorate. He supervised the investigation of the instant case since its beginning in 2010. He had passed the Provisional Attachment Order, Ex PW 2/A, in the instant case, attaching property worth approximately Rs. 200 crore, details of which are mentioned in the order itself. After passing the aforesaid Provisional Attachment Order, he also filed a complaint, Ex PW 2/B, before the Adjudicating Authority, which confirmed the attachment order vide its order Ex PW 2/C. He also proved other documents Ex PW 2/D to H. 100. PW 3 Sh. S. Ananda Prasad, S....
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....ition and he (Shyamm Kumar) would sign all the loan agreements to that effect. He further deposed that a sum of about Rs. 74.75 crore was transferred by Kolkata based companies to SMIL. He further deposed that the aforesaid fund was transferred to Anjugam Films (P) Limited for content acquisition. In this regard, he also tendered statements Ex PW 7/A and B to ED. He also proved letters Ex PW 7/C andD. 105. PW 8 is Sh. Anil Khemka, a Kolkata based businessman, engaged in providing accommodation entries. He deposed that sometime in December 2010, Sh. Amit Jain, a Delhi based Chartered Accountant, approached him seeking accommodation entries for Sh. M. K. Reddy, who, in turn, asked him to provide accommodation entries in favour of SMIL. He further deposed that he used to get cash on various dates from Sh. Reddy at his Kolkata office and thereafter, the cash was used to be rotated through a chain of companies, not necessarily controlled by him, and in this way, he provided accommodation entries of an amount of Rs. 43.75 crore approximately to SMIL. He further deposed that subsequently entries worth about Rs. 30 crore were reversed. In this regard, he tendered his statement Ex PW 8/E t....
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....1009274 of SMIL as Ex PW 13/A­1 to A­12. 111. PW 14 is Sh. Kamal Singh, Assistant Director, ED. He assisted in the investigation of the instant case, both as Enforcement Officer as well as, on his promotion, as Assistant Director. In the course of investigation of this case, he recorded statements, under Section 50 of the Act, of Sh. S. Ananda Prasad, Ex PW 3/F, Sh. Shyamm Kumar, Ex PW 7/A, Sh. Amit Kumar Jain, Ex PW 5/A, Sh. Sunil Parakh, Ex PW 6/B, and Sh. T. Sivasubramanian, Ex PW 14/A. He also proved a letter Ex PW 14/B, written by daughter of accused M. K. Dayalu. 112. PW 15 is Sh. Satyendra Singh, also an Assistant Director, ED. He assisted in the investigation of the instant case, both as Enforcement Officer as well as, on his promotion, as Assistant Director. In the course of investigation of this case, he also recorded statements, under Section 50 of the Act, of various witnesses as well as some accused and also seized documents. He has proved statements and documents Ex PW 15/A to V­5. 113. PW 16 is Sh. Chandru Taurani, Branch Manager, Standard Chartered Bank, Ville Parle, Mumbai. He has proved documents relating to account No. 23905026378 owned by Cineyug ....
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....e father­in­law was owner of SMIL, though it is not a company of Gemini group. He further deposed that in December 2010, Sharad Kumar intended to takeover SMIL and a meeting was called for this. He further deposed that he accordingly instructed his staff that they should take instructions from Sharad Kumar as the company would be taken over by him and thereafter there were transactions between SMIL and Anjugam Films (P) Limited. He also deposed that thereafter an amount of about Rs. 80 crore was transferred from SMIL to Anjugam Films (P) Limited. He further deposed that these transactions were carried on as per the instructions of Sharad Kumar. He also deposed that ED had recorded his statement. He also proved his statements and documents Ex PW 20/A­1 to K. 118. PW 21 is Sh. G. Rajendran, Vice President (Finance), Kalaignar TV (P) Limited, Chennai. He deposed that he appeared before ED on behalf of the company and tendered his statements and also various documents on its behalf. He deposed about the transaction of Rs. 200 crore between Kalaignar TV (P) Limited and Cineyug Films (P) Limited as a loan. He also deposed about transfer of money from SMIL to Anjugam Films (P....
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....ani as one of the directors of Cineyug Films (P) Limited, Ex PW 24/A­1 and A­2. He also proved various transactions, which took place from this account with Kusegaon Fruits and Vegetables (P) Limited and Kalaignar TV (P) Limited and also proved the documents relating thereto as Ex PW 24/A­3 to A­35 and B to D. 122. Thereafter prosecution evidence was closed. STATEMENT OF ACCUSED UNDER SECTION 313 CRPC 123. On closure of prosecution evidence, statement of accused was recorded under Section 313 CrPC, in which each one of them denied the allegations against him/ her as false. Every accused claimed that he/ she has been falsely implicated in this case. 124. Out of the nineteen accused, only thirteen expressed their desire to lead evidence in their defence. 125. However, only six accused examined witnesses in their defence. DEFENCE EVIDENCE 126. DW 1 is Sh. Humayun Ali Ahamed, Vice President (Operations), Kalaignar TV (P) Limited. He has been examined for P. Amirtham. He deposed that he joined Kalaignar TV (P) Limited in July 2007 as Vice President (Operations), on the asking of Sharad Kumar and used to report to Sharad Kumar, P. Amirtham, Chief Financial Officer,....
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....imited and has been examined for this accused. He deposed that the directors of the companies were not involved in day­to­day functioning of the company. He also deposed that the transactions between Cineyug Films (P) Limited and Kusegaon Fruits and Vegetables (P) Limited on one side and Cineyug Films (P) Limited and Kalaignar TV (P) Limited on the other side were legal and conducted on business principles. 132. Thereafter, defence evidence was closed. Final Arguments 133. I have heard the arguments at the bar in great detail and have carefully gone through the record. 134. It is submitted by Sh. Anand Grover, learned Sr. Advocate/ Spl. PP for ED, that for the favours shown by Sh. A. Raja to STPL in the matter of grant of UAS licences for thirteen service areas, illegal gratification of Rs. 200 crore was paid by DB group of companies, to which STPL also belongs, through its partnership firm Dynamix Realty. It is further submitted that a sum of Rs. 209.25 crore was transferred by Dynamix Realty to Kusegaon Fruits and Vegetables (P) Limited, a company controlled by Sh. Asif Balwa and Sh. Rajiv Agarwal, who were also directors in the companies belonging to DB group and thi....
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....both onward and return transactions took place in quick succession at great speed, indicating that the transactions were of dubious nature. It is further submitted that all these acts were committed by these entities to conceal the transfer of Rs. 200 crore of illegal gratification, meant for parking in Kalaignar TV (P) Limited, by giving it a colour of regular business transaction. It is further submitted that this amounts to an act of layering of proceeds of crime by distancing the ill­gotten money from its source. It is further submitted that the accused persons involved in the transfer of Rs. 200 crore, both ways, committed an offence of money­laundering as the tainted money was shown to be untainted by projecting it as a regular business transaction. The learned Sr. PP also invited my attention to the role of each entity as well as each accused by referring to the allegations as well as the evidence led on record. The evidence led on record has been extensively read at the bar to emphasize the fact that the transfer of Rs. 200 crore of illegal gratification and return thereof constituted an act of money­laundering and each accused and entity is responsible for that....
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...., Government of India, MANU/TN/1994/2013; 3) Radha Mohan Lakhotia Vs. The Deputy Director, PMLA, Directorate of Enforcement, 2010 SCC OnLine Bom 1116; 4) Hari Narayan Rai Vs. Union of India, 2010 SCC OnLine Jhar 1066; 5) Bhagirath Kanoria and Others Vs. State of M. P., (1984) 4 SCC 222; 6) Ramesh Chandra Mehta Vs. State of West Bengal, AIR 1970 SC 940; 7) K. I. Pavunny Vs. Assistant Collector (HQ), Central Excise Collectorate, Cochin, (1997) 3 SCC 721; 8) Ram Singh Vs. Central Bureau of Narcotics, (2011) 11 SCC 347; 9) Standard Chartered Bank and Others Vs. Directorate of Enforcement and Others, (2005) 4 SCC 530; 10) Iridium India Telecom Limited Vs. Motorola Incorporated and Others, (2011) 1 SCC 74; 11) R Vs. K, [2006] B. C. C. 362 ; 12) Kalwa Devadattam and Others Vs. The Union of India and Others, AIR 1964 SC 880; 13) Sunil Siddharthbhai Vs. Commissioner of Income Tax, Ahmedabad, Gujarat, (1985) 4 SCC 519; 14) R. Janakiraman Vs. State represented by Inspector of Police, CBI, SPE, Madras, (2006) 1 SCC 697; 15) Union of India Vs. Hassan Ali Khan and Another, (2011) 10 SCC 235; 16) Hiten P. Dalal Vs. Bratindranath Banerjee, (2001) 6 SCC 16; 17) M. S. N....
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....lias Kalu Vs. State of Bihar, (2013) 2 SCC 131; 14. C. Chenga Reddy and Others Vs. State of A. P., (1996) 10 SCC 193; and 15. Svenska Handelsbanken Vs. M/s Indian Charge Chrome and Others, AIR 1994 SC 626. 144. Sh. Majid Memon, learned Advocate for Vinod Goenka, invited my attention to the following case law: 1. Lal Shah Baba Dargah Trust Vs. Magnum Developers and Others, Civil Appeal No. 14565 of 2015 (SC); 2. P. Satyanarayana Murthy Vs. The Dist. Inspector of Police and Anr., Criminal Appeal No. 31 of 2009 (SC); 3. State Vs. Dindayal Agarwala and Ors., 1991 CriLJ 2786; 4. State of Madras Vs. C. V. Parekh and Anr., AIR 1971 SC 447; 5. Gunmala Sales Private Limited Vs. Anu Mehta & Ors., Criminal Appeal No. 2228 of 2014 (SC); 6. Jafar Mohammed Hasanfatta and Ors. Vs. Deputy Director and Ors., R/CR. RA/926/2016 (Gujarat High Court); 7. Director General, ESI & Anr. Vs. T. Abdul Razak etc., 1996 SCC (4) 708; 8. Chirag Harendrakumar Parikh Vs. State of Gujarat, R./CR. MA/17326/2015 (Gujarat High Court); 9. Commissioner of Income Tax, Karnataka Vs. Sterling Foods, Mangalore, (SC), DOD 15.04.1999; 10. Shanti Devi Vs. Union of India and Ors., 73 (1998) DLT 477; and....
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.... Ltd., 2013 (201) DLT 461; 20. Raminder Kaur Narula & Anr. Vs. M/s Prem Chemicals P. Ltd., Criminal Misc. Case 2690/2004 (DHC); 21. N. K. Wahi Vs. Shekhar Singh & Ors., 2007 [1] JCC [NI] 112; 22. Katta Sujatha (Smt.) Vs. Fertilizers & Chemicals Travancore Ltd. and Another, 2003 SCC (Cri) 151; 23. Bharat Barrel and Drum Manufacturing Company Vs. Amin Chand Payrelal, AIR 1999 SC 1008; 24. Kundan Lal Vs. Custodian, Evacuee Property, AIR 1961 SC 1316; 25. N. Chirag Travels (P) Ltd. Vs. Ashwani Kumar and Anr., 152 (2008) DLT 637; 26. Pepsico India Holdings Private Limited Vs. Food Inspector and Another, (2011) 1 SCC 176; 27. Browne Vs. Dunn, (1894) 6 R.] 67; 28. State of U. P. Vs. Nahar Singh (Dead) and Others, (1998) 3 SCC 561; 29. Ramanlal Bhogilal Shah and Another Vs. D. K. Guha and Others, 1973 SCC (1) 696; 30. Tofan Singh Vs. State of Tamil Nadu, (2013) 16 SCC 31; 31. Nooraga Vs. State of Punjab and Another, 2008 [3] JCC [Narcotics] 135; 32. State of Gujarat Vs. Shyamlal Mohanlal Choksi, AIR 1963 Gujarat 178; 33. Amin Shariff Vs. Emperor, AIR 1934 Cal 580; 34. Nanoo Sheikh Ahmed Vs. Emperor, AIR 1927 Bom 4; 35. Vanamala Jagadeswaraiah and Another Vs.....
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.... Nambiar Vs. State of Kerala, AIR 1963 SC 1116; 2. C. K. Damodaran Nair Vs. Govt. of India, (1997) 9 SCC 477; 3. Ram Krishan and another Vs. State of Delhi, AIR 1956 SC 476; 4. C. I. Emden Vs. State of UP, AIR 1960 SC 548; 5. Mohmoodkhan Mahboobkhan Pathan Vs. State of Maharashtra, (1997) 10 SCC 600; 6. Shiv Nandan Dixit Vs. State of UP, (2003) 12 SCC 636; 7. R. Venkatkrishnan Vs. CBI, (2009) 11 SCC 737; 8. M. Narsinga Rao Vs. State of AP, (2001) 1 SCC 691; 9. Girja Prasad (dead) by LRs Vs. State of MP, (2007) 7 SCC 625; 10. K. S. Panduranga Vs. State of Karnataka, (2013) 3 SCC 721; 11. C. Chandrasekaraiah Vs. State of Karnataka, (2015) 13 SCC 802; 12. Sailendra Nath Bose Vs. State of Bihar, AIR 1968 SC 1292; 13. In Re: P. Chelladurai, (1969) 1 MLJ 508; 14. Runu Ghosh Vs. CBI, 2011 SCC OnLine Del 5501; 15. B. Rama Raju Vs. Union of India and others, 2011 SCC OnLine AP 152; 16. M. Shobana Vs. The Assistant Director, Directorate of Enforcement, Government of India, 2013 (4) MLJ (Cri) 286; 17. Radha Mohan Lakhotia Vs. The Deputy Director, PMLA, 2010 SCC OnLine Bom 1116; 18. G. Srinivasan Vs. The Chairperson, Adjudicating Authority, PMLA, (2012) 1 MLJ ....
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....visions of law 151. Let me take note of relevant provisions of the Act as applicable to the facts of the case. 152. Section 2(1)(u) defines "proceeds of crime" as under: "Proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property". 153. Section 2(1)(v) defines "property" as under: "'property' means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located" 154. Section 2(1)(x) defines "schedule" as under: "'Schedule' means the Schedule to this Act" 155. Section 2(1)(y) defines "scheduled offence" as under: "'scheduled offence' means­ (i) the offences specified under Part A of the Schedule; or (ii) the offences specified under Part B of the Schedule if the total value involved in such offences is thirty lakh rupees or more; or (iii) the offences specified under Part C of the Schedule" 156. Section 3 defines the offence of "m....
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....ney­laundering. It is only when "proceeds of crime" is projected or attempted to be projected as untainted property, the offence of money­ laundering arises. 161. In brief, the ingredients of money­laundering are as under: (a) Commission of a scheduled offence; (b) "Proceeds of crime", that is, property, is derived or obtained by the accused as a result of criminal activity relating to such scheduled offence; (c) Such "proceeds of crime" is projected as untainted property. 162. In nutshell, the existence of a scheduled offence and emergence of "proceeds of crime" therefrom, is sine qua non for the existence of the offence of money­laundering. In an authority reported as M. Shobana Vs. The Assistant Director, Directorate of Enforcement, Government of India, MANU/TN/1994/2013, Hon'ble High Court of Madras observed in paragraphs 28 to 32 as under: "28. From the aforesaid definition of 'Offence of Money­Laundering' mentioned in Section 3, the terms 'Money Laundering' can be said to be any process or activity connected with the proceeds of crime and projecting or claiming proceeds of crime as an untainted property. In plain language, it ....
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....and vice versa, as genuine business transactions and these acts constituted an offence of money­laundering by all the accused involved in the case. 164. I may note that I have deliberately quoted in extenso the contents of the complaint to emphasize that the instant case is almost entirely based on the CBI charge sheet, particularly in respect of generation of "proceeds of crime". For ready reference, paragraphs 51 and 68, referred to above, are extracted as under: "51. Investigation under the Act, inter alia, revealed that proceeds of crime to the tune of Rs. 200 crore was paid by Dynamix Realty to KTV through Kusegaon Fruits and Vegetables (P) Limited and Cineyug Films (P) Limited . This payment was illegal gratification for and on behalf of A. Raja in lieu of illegal favours given to STPL by A. Raja. These actions of A. Raja constitute criminal acts under the provisions of IPC and PC Act as stated in the charge sheets filed by the CBI. The individuals and the firms/ companies involved in the transfer of Rs. 200 crore are inter connected. 68. It is revealed in the investigation that, simultaneously, a sum of Rs. 200 crore was arranged by the owners and controllers of STP....
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....ney­laundering has been committed, it shall order that such property involved in the money­laundering or which has been used for commission of the offence of money­laundering shall stand confiscated to the Central Government. (6) Where on conclusion of a trial under this Act, the Special Court finds that the offence of money laundering has not taken place or the property is not involved in money­laundering, it shall order release of such property to the person entitled to receive it." (All under linings by me for supplying emphasis) Thus, in terms of sub­clause (6) of Section 8, as noted above, in case Special Court finds that no offence of moneylaundering has taken place, it shall order release of attached properties to person(s) entitled to receive it. I may add that the prosecution argued that even in case of acquittal, under Clause 6 referred to above, Special Court is empowered to confiscate the property, as the word used in the clause is "finds" and not "acquittal". It is the case of the prosecution that use of word "finds" in contrast to "acquittal" in the clause gives power to the Court to order confiscation of the attached property, even in case o....