TaxTMI 
TaxTMI 
2017 (12) TMI 1824
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.... Amirtham and Kalaignar TV (P) Limited. 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 Mon....
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.... allocated spectrum during the year 2008­09. Spectrum was 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 can....
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.... 11. 08.04.2009 25 crore 12 22.06.2009 01 crore 13 15.07.2009 0.25 crore 14. 16.07.2009 80 crore 15. 16.07.2009 20 crore 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 ....
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....on for UASL. 2 May, 2007 Shri A Raja took over as Minister for Communication & Information Technology (hereinafter referred to as MOCIT). 3 01.10.2007 S/Shri Shahid Usman Balwa and Vinod K. Goenka became Directors in STPL. 4 18.10.2007 DB Group company acquired majority stake in STPL. 5 18.10.2007 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 (....
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....Government of India and unknown private persons/companies for offences punishable under section 120B IPC r/w sections 13(2) and 13(1)(d) of the Prevention of Corruption Act, 1988 with reference to a criminal conspiracy hatched during the period 2007­2008 in connection with the grant of UASL thereby causing wrongful loss to the Government of India and corresponding wrongful gain to the private 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 invest....
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....velopers Private Ltd. 3. D B Realty Limited The firm has an object of development and construction of the buildings on the Slum Rehabilitation Authority (SRA) as per its relevant Scheme. The audited balance sheet for the year 2010 shows that Dynamix Realty was engaged in the business of financing through loan and advances to the tune of Rs. 632.04 crore. These financial transactions of loans and advances are unrelated to the object of the firm. II. Kusegaon Fruits and Vegetables (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 Vegetab....
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.... 08.04.2009 25.00 15.07.2009 100.00 22.06.2009 1.00 07.08.2009 50.00 15.07.2009 0.25 16.07.2009 100.00 11.08.2009 50.00 Total 209.25 Total 206.25 Total 200.00 IV. Kalaignar TV (P) Limited: The Annual Report for the financial year 2007­08 to financial year 2009­10, inter alia, reveals that Kalaignar TV (P) Limited was incorporated on 06.06.2007. Revenue recognition is from broadcasting revenue, sale and commission on Advertisement. Total loan taken by Kalaignar TV (P) Limited in the financial year 2007­08 was Rs. 103.56 crore approx. P. Amirtham was CFO. Gross income was Rs. 15.03 crore in financial year 2007­08. In the financial 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. 1.3....
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.... India Pvt. Limited and further three shares were issued at very high value of Rs. 316.22 crore. STPL and the foreign investor Etisalat Mauritius have separately been charged under Foreign Exchange Management Act, 1999 (FEMA). In order to pass on the illegal gratification of Rs. 200 crore, Dynamix Realty (a partnership firm belonging to DB Group) transferred a sum of Rs. 209.25 crore to Kusegaon Fruits and Vegetables (P) Limited in tranches, between 2008 to 2009. Kusegaon Fruits and Vegetables (P) Limited transferred Rs. 206.24 crore to Cineyug Films (P) Limited and Cineyug Films (P) Limited transferred Rs. 200 crore finally to Kalaignar TV (P) Limited. The dates on which the amounts were transferred from the starting point, that is, Dynamix Realty to the destination, that is, Kalaignar TV (P) Limited, are not only very proximate to each other but also demonstrate that the financial transactions of varying amounts were carried out with the intention of transferring 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 ....
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....istered with the Registrar of Companies (ROC), Mumbai. The name of Cineyug Films (P) Limited was changed to Cineyug Media and Entertainemnt (P) Limited on 13.07.2010. Shareholders of CFPL are as under: Sl. No. Name of the Shareholder No. of shares 1 Shri Karim G. Morani 31875 shares 2 Shri Aly G. Morani 31875 shares 3 Shri M.G. Morani 31875 shares 4 Mrs. Neelam S. Soorma 31875 shares 5 Mrs. Harsha B. Savla 2400 shares 6 KFVPL 122500 shares 23. That the nature of business of the company is film production and event management service. Cineyug Films (P) Limited entered into MOU with Kusegaon Fruits and Vegetables (P) Limited for business cooperation on 16.12.2009. The purpose of MOU was to cooperate with each other to advance their interest in the business and also in the new ventures. Cineyug Films (P) Limited had requested Kusegaon Fruits and Vegetables (P) Limited to partner with it in the business and also in the new ventures. Kusegaon 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 a....
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....old shares of KTV. Both KTV and its promoters, inter alia, had agreed that after execution of this agreement and until the closing date, they shall not take any material decision etc., in connection with the any of the matters mentioned in clause 4.1 of the agreement without prior written consent of the Cineyug Films (P) Limited. As per this agreement, Cineyug Films (P) Limited had agreed to subscribe to the equity of Kalaignar TV (P) Limited and the investor was entitled to terminate this agreement by giving a notice in writing to the company or to the promoters committing a material breach of any of the provisions of the agreement. The promoters of KTV named in the agreement are Ms. M.K. Dayalu, Ms. K. Kanimozhi and Sharad Kumar. 26. The ICD Agreement dated 06.04.2009 betweenKalaignar TV (P) Limited and Cineyug Films (P) Limited was entered into as borrower and lender respectively for Rs. 25 crore @ of 10% per annum payable at the end of every six month's period. Likewise following ICD agreements were further entered 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 crore....
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....e outstanding of unsecured loan from the Directors has been shown as zero (NIL) in this financial year. A comparison of audited balance sheet of KTV for the Annual Report 2008­2009 and Annual Report 2009­2010 reveals that there was no unsecured loan from others in the Annual Report of 2008­2009 as on 31.03.2009, whereas, the Annual Report for 2009­2010 exhibits unsecured loan from others to the tune of Rs. 25 crore as on 31.03.2009. 31. The interest claimed to have been paid on the illegal gratification of Rs. 200 crore, is not as per Section 194A of the Income tax Act 1961 (Tax deducted at source on interest other than "interest on securities"). As per this section, on any interest paid by any person other than individual and HUF, tax has to be deducted at source @ 10% on the interest amount earned. This TDS is to be done every six months and interest is calculated on accrual basis. Payment of illegal gratification started from December, 2008 and ended in August, 2009. Between 23.12.2008 to 07.08.2009, Cineyug Films (P) Limited paid Rs. 200 crore to KTV. Had this amount been loan, as claimed by Cineyug Films (P) Limited and KTV, payment of interest should have s....
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....,86,54,109 Interest upto 31.03.2010 24.12.2010 10 crores ICD principal part payment 27.12.2010 20 crores ICD principal part payment 29.12.2010 9,61,90,000 Interest from 01.04.2010 to 30.09.2010 03.01.2011 10 crores ICD principal part payment 05.01.2011 10 crores ICD principal part payment 11.01.2011 10 crores ICD principal part payment 24.01.2011 65 crores ICD principal part payment 29.01.2011 25 crores ICD principal part payment 03.02.2011 50 crores and 5,82,95,576 ICD principal part payment / final interest Total 230,31,39,685 * Interest amount excludes TDS Reverse trail of money 35. Investigation under the Act has revealed that refund of proceeds of crime by KTV to Cineyug Films (P) Limited and further refund by Cineyug Films (P) Limited to Kusegaon Fruits and Vegetables (P) Limited and finally by Kusegaon Fruits and Vegetables (P) Limited to Dynamix Realty was/ were carried out through layering mechanism of passing on varying amounts in a reverse chain sequence. Refund of money by KTV was sourced from various related parties and clients in a short span of time. The ....
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....t no collateral securities were ensured to secure the alleged loan amounts. 39. Cineyug Films (P) Limited wrote to KTV vide letter dated 25.10.2010 that they are not interested in making the investment in the company or converting the loan amount into shares. Therefore, it was requested to arrange to repay the entire loan amount together with all accrued interest till date immediately. 40. Cineyug Films (P) Limited received Rs. 31.36 crore (Rs. 15.24 crore in 2009­10 and Rs. 16.12 crore in 2010­11) from KTV, in the colour of interest on the amount of Rs. 200 crore paid to KTV by DB Group through Kusegaon Fruits and Vegetables (P) Limited and Cineyug Films (P) Limited. 41. Kusegaon Fruits and Vegetables (P) Limited received Rs. 25.08 crore (Rs. 12.19 crore in 2009­10 and Rs. 12.89 crore in 2010­11) from Cineyug Films (P) Limited in the guise of interest. 42. Kusegaon Fruits and Vegetables (P) Limited was incorporated in December 2006 with the paid up capital of only Rs. 0.01 crore. The company had not started business activities till 2010; still they raised unsecured loans of Rs. 209.25 crore during 2008­10. Dynamix Realty provided loan to the company....
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....contacted by the CBI for investigation. That all of a sudden, the trust between the entities vanished and the ultimate beneficiary KTV and its Promoters/ Directors, in consultation with other accused persons, tried to collect money by adopting business deals such as bulk advertisement contracts and even collected money that originated from dubious Kolkata based companies in the garb of loan, which again travelled from companies before landing into the bank account of KTV. Modus­operandi adopted by the accused entities was again the mode of inter­corporate deposits. Sequence flow of fund from one to other entity at the time of reverse flow of funds from KTV to Dynamix Realty corroborate that the entire exercise done by the accused persons/ entities is nothing but projection of proceeds of crime as untainted. Estimate of the proceeds of crime 45. Investigation under the Act and from the documents including the two charge sheets filed by the CBI, have revealed that Rs. 200 crore was paid by Dynamix Realty to KTV through Kusegaon Fruits and Vegetables (P) Limited and Cineyug Films (P) Limited , in consideration of the illegal favours extended by A. Raja, in connivance wit....
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....greement between Cineyug Films (P) Limited and KTV. In terms of this agreement, shares had to be transferred by 31.03.2009. However, if shares were not transferred till then, the money given by Cineyug Films (P) Limited to KTV was to be converted into loan. Only Rs. 25 crore was given by Cineyug Films (P) Limited to KTV by 31.03.2009, without any transfer of shares. Hence, in terms of the agreement, there shall be no further flow of funds for share subscription. However, even after 31.03.2009, Cineyug Films (P) Limited continued to give money to KTV for unknown purpose as the share purchase agreement had expired on 31.03.2009. Thus, fund amounting to Rs. 175 crore continued to be transferred by Cineyug Films (P) Limited to KTV after 31.03.2009 when the agreement had already expired. Such continued process of flow brings out the obligation on the part of Cineyug Films (P) Limited to transfer the full amount of Rs. 200 crore received by them from Dynamix Realty through Kusegaon Fruits and Vegetables (P) Limited even when the claimed purpose for the transfer no longer existed. 50. Investigation under the Act, inter alia, revealed that proceeds of crime to the tune of Rs. 200 crore ....
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....t was returned with additional funds so as to appear as if loan was being returned alongwith interest. Therefore, Rs. 231.36 crore was transferred by KTV to Cineyug Films (P) Limited which, in turn, transferred Rs. 225.08 crore to Kusegaon Fruits and Vegetables (P) Limited. The final amount transferred by Kusegaon Fruits and Vegetables (P) Limited to Dynamix Realty was Rs. 223.55 crore. The funds in the hands of KTV were nothing but the value equivalent of the proceeds of crime already utilized by them. The amount of Rs. 223.55 crore which thus reached Dynamix Realty carried the taint and constitutes proceeds of crime as defined in Section 2(1)(u) of the Act. Rs. 223.55 crore after such circuitous transfers of the initial proceeds of crime have become the 'value of any such property' in terms of Section 2(1) (u) of the Act. The layering activities of moving varying amounts of funds through a chain of inter connected companies/ firm were nothing but projections made to disguise the proceeds of crime as refund of loan with interest. Role of accused persons 53. Investigation under the Act has, inter alia, revealed that STPL and other DB Group companies, which are involve....
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....his family owned company, Cineyug Films (P) Limited, as conduit in the scheme of projection of tainted money as untainted. Karim Morani is also holding equity in DBRL and was also Director of M/s Allianz Infratech (P) Limited, the company to whom two UASL were granted by A. Raja, which later on merged with Etisalat DB Telecom Pvt. Ltd. (erstwhile STPL). 60. The promoter shareholders of KTV allowed Sharad Kumar and P. Amirtham to utilize and deploy the proceeds of crime of Rs. 200 crore received in KTV. Sharad Kumar had met key management personnel of DB Group like Rajeev B. Agarwal as well as Karim Morani for facilitating the process of inflow of the proceeds of crime to KTV. In this regard to project the proceeds of crime as untainted documents were created with the knowledge and consent of Ms. M. K. Dayalu and Sharad Kumar without any objection from the promoter shareholder Ms. K. Kanimozhi. 61. A set of circumstances triggered off by the investigations of the CBI initiated against A. Raja set in motion the hasty process of return journey of the proceeds of crime from KTV. In an attempt to retrace their earlier steps the key personnel viz. Sharad Kumar and P. Amirtham were ....
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....eets filed by the CBI has, inter alia, revealed that STPL got the licence even though it did not meet the eligibility criteria. Thus, STPL illegally acquired LOIs on 10.01.2008 and subsequently UAS licences for Rs. 1538 crore and subsequent to the allotment of UAS licences STPL sold stakes (50%) for Rs. 3228 crore to Etisalat Mauritius Ltd. and Rs. 381 crore to Genex Exim Ventures (P) Limited on 17.12.2008. 67. It is revealed in the investigation that, simultaneously, a sum of Rs. 200 crore was arranged by the owners and controllers of STPL and transferred the same to KTV, using various companies as carriers. The amount of Rs. 200 crore is the illegal gratification in lieu of allotment of UAS licence to STPL by A. Raja and others, as revealed in the charge sheet filed by the CBI. 68. It is revealed during the course of investigation under the Act that to show the transfer as legitimate, this amount of Rs. 200 crore, in fact, was layered with additional funds to disguise its true intent and object of gratification. The funds of Rs. 200 crore were transferred in tranches to KTV in the guise of transactions between companies acting as carriers one after another. The investigatio....
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....f Rs. 223.55 crore approx. to Dynamix Realty, which included the amount of illegal gratification of Rs. 200 crore. The balance amount of Rs. 23.55 crore was claimed as interest paid. The refund in excess of the illegal gratification, in fact, is a result of layering process indulged in to transfer funds in the guise of genuine and bonafide transactions. 73. Rs. 223.55 crore which reached back Dynamix Realty by the reverse flow of funds from KTV is the proceeds of crime, as defined in Section 2(1)(u) of the Act. In terms of this Section the said amount is value of the illegal gratification earlier paid to KTV on its return to the originator viz Dynamix Realty. Rs. 23.55 crore is thus the amount generated in the processes and activities connected with the refund of Rs. 200 crore under a design to conceal and project the whole amount as untainted. This amount of Rs. 223.55 crore hence ultimately becomes the proceeds of crime, that resulted from moneylaundering and was projected as untainted. 74. The amount of Rs. 223.55 crore being proceeds of crime is involved in the offence of money­laundering in this case. This amount which reached Dynamix Realty had moved from KTV in lie....
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....ent dated 10.07.2012, statement dated 16.06.2012 of Ms. Kanimozhi and statement dated 27.05.2013 of Sh. Aseervatham Achary. Illegal gratification of Rs. 200 crore started moving from Dynamix Realty to KTV on 23.12.2008 when the FDI and equity contribution to the tune of Rs. 3609 crore was received by STPL on 17.12.2008. A. Raja was called by CBI on 24.12.2010 and immediately thereafter Rs. 200 crore started moving back from KTV to Cineyug Films (P) Limited and transaction was completed on 03.02.2011 just a day after his arrest. The linkage between movement back of proceeds of crime of Rs. 223.55 crores to Dynamix Realty and the investigation and arrest of A. Raja by the CBI clearly reveals his role and active participation in the offence of money­laundering. Thus, A. Raja is actually involved in the illegal allotment of UAS Licence to STPL in commission of the offences under IPC and PC Act as revealed in the CBI charge sheets. He was instrumental in getting generated a sum of Rs. 200 crore as illegal gratification by committing criminal activities. The said amount was paid by Dynamix Reality (DB Group firm) to KTV. The Dynamix Realty, STPL an....
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....llected funds from a number of associates/ group companies and diverted the same to a Group company Kusegaon Fruits and Vegetables (P) Limited for its ultimate transfer to KTV through Cineyug Films (P) Limited. The act of Dynamix Realty was as per dictates of Shahid Usman Balwa and Vinod K. Goenka with the assistance of Rajeev B. Agarwal and Asif Balwa. Shahid Usman Balwa and Vinod K. Goenka are promoters/ directors of STPL (DB Group company). Dynamix Realty is a partnership firm of three DB Group companies viz. DB Realty Ltd., Eversmile Construction Company (P) Limited and Conwood Constructions & Developers (P) Limited, in which Shahid Usman Balwa and Vinod K. Goenka alongwith Asif Balwa and Rajeev B. Agarwal were, inter alia, shareholders/ directors/ authorized signatories. Asif Balwa and Rajeev B. Agarwal were also shareholders/ directors of Kusegaon Fruits and Vegetables (P) Limited. Shahid Usman Balwa and Vinod K. Goenka were involved in the procurement of UAS Licence illegally in the name of STPL, by committing the scheduled offences, as revealed in the CBI charge sheets. They were also actually involved in the offence of payment of illegal gratific....
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....Cineyug Films (P) Limited. Asif Balwa and Rajiv B. Agarwal were actually involved in the layering of illegal gratification amounting to Rs. 200 crore paid to KTV after the illegal allotment of UAS Licence to STPL. Both of them were also actually involved in layering of the amount of Rs. 223.55 crore on the return journey from KTV. They were thus actually involved in projecting the proceeds of crime as untainted and thus committed the offence of moneylaundering as defined under Section 3 of the Act. IV. Karim Morani Karim Morani is a childhood friend of Vinod K. Goenka who joined as director of Allianz Infratech (P) Limited (holder of telecom Licences for two circles) on the persuasion of Vinod K. Goenka. Allianz Infratech was later on merged with STPL. He and his brothers, namely, Ali Morani and Mohammad Morani, are holding 951531 equity shares of DB Realty Ltd. He knowingly associated himself with Vinod K. Goenka and Shahid Usman Balwa and allowed them to use Cineyug Films (P) Limited, a company owned by himself and family members as a conduit for transfer of illegal gratification amounting to Rs. 200 crore from Dynamix Realty to KTV and r....
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.... 200 crore in KTV and its utilization by KTV was made when Ms. M. K. Dayalu was holding the post of director and was one of the promoters and the majority shareholder (60%) in the KTV. She was the original subscriber to Memorandum of the company. She attended meetings of the shareholders (that is, EOGM/AGM) and meetings of Board of Directors (as a director) during the period when the illegal gratification of Rs. 200 crore was received in KTV. Statements of P. Amirtham (the then CFO of the company) and of Sharad Kumar (the shareholder of 20% stake and director) further corroborate that Ms. M. K. Dayalu was instrumental in deciding about the strategic decisions in the company as she had the majority shareholding. The flow of funds at the time of refund of illegal gratification shows that the amount of Rs. 83 crore was transferred from AFPL to KTV. This amount was mobilised by AFPL from SMIL which, in turn, received funds through Kolkata based companies/ firms, which provide "accommodation entries". The decision regarding incorporation of AFPL as wholly owned subsidiary of KTV was taken by the Board of Directors on 28.05.2010 when Ms. M.K. Dayalu was also authorised ....
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.... KTV in which Ms. K. Kanimozhi remained a promoter shareholder set in motion arrangements for mobilization of funds which was used to make payment of Rs. 223.55 crore to Dynamix Realty in lieu of the illegal gratification earlier received and utilised by KTV. Ms. K. Kanimozhi knowingly facilitated and was actually involved in the process of generation and layering of the proceeds of crime and in projection of it as untainted property. She has, therefore, committed the offence of money­laundering as defined under Section 3 of the Act. VIII. P. Amirtham P. Amirtham is confidant of Ms. M. K. Dayalu and Ms. K. Kanimozhi and is in their close relation. This fact was confirmed from profile of P. Amirtham in valuation report of AFPL prepared by Collins Stewart Image (P) Limited, which shows that he is a person of confidence for family of Ms. K. Kanimozhi and Ms. M. K. Dayalu. He was associated with KTV from the beginning of its operations as CFO and director. He was appointed as authorized signatory by the Board of Directors of the company in its first board meeting on 06.06.2007 and was also appointed as General Manager (Administration). P. Amirtha....
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....ructions & Developers (P) Limited) transferred Rs. 209.25 crore to Kusegaon Fruits and Vegetables (P) Limited of which Asif Balwa and Rajiv B. Agarwal were promoters and Directors. Shahid Usman Balwa and Vinod K. Goenka are promoters and directors of STPL. Dynamix Realty is a partnership firm of three DB group companies in which Asif Balwa and Rajiv B. Agarwal alongwith Shahid Usman Balwa and Vinod K. Goenka were shareholders/ directors/ authorized signatories. Asif Balwa and Rajiv B. Agarwal were shareholders/ directors of Kusegaon Fruits and Vegetables (P) Limited. Asif Balwa and Rajiv B. Agarwal represented Kusegaon Fruits and Vegetables (P) Limited for 49% stake in Cineyug Films (P) Limited. Thus, promoters of STPL arranged transmission of the proceeds of crime to KTV through Dynamix Realty as well as arranged its reverse flow of Rs. 223.55 crore to Dynamix Realty through layering processes, by the DB Group network of which STPL is a part. Therefore, STPL was actually involved and has committed the offence of money­laundering as defined under Section 3 of the Act. X. Kusegaon Fruits and Vegetables (P) Limited KFVPL was taken over by Rajiv B. Agarw....
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....he return journey of the proceeds of crime from KTV to Dynamix Realty. Cineyug Films (P) Limited transferred Rs. 225.08 crore to Kusegaon Fruits and Vegetables (P) Limited. Cineyug Films (P) Limited has knowingly assisted STPL in the transfer of proceeds of crime amounting to Rs. 200 crore from Dynamix Realty to KTV after the illegal allotment of UAS Licence to STPL in the manner and period as aforesaid and has also again knowingly assisted in transferring back the proceeds of crime of Rs. 223.55 crore from KTV to Dynamix Realty as untainted money through the layering process of transferring varying amounts at the two stages of transfer. Thus, CFPL has committed the offence of money­laundering as defined under Section 3 of the Act. XII. Kalaignar TV (P) Limited KTV was the pre­determined company in which illegal gratification of Rs. 200 crore was paid under the garb of genuine business transactions amongst the companies. The company is owned and controlled by the accused persons namely Ms. M. K. Dayalu, Ms. K. Kanimozhi, Sharad Kumar and P. Amirtham. From 23.12.2008 to 07.08.2009, Rs. 200 crore was received by KTV from Cineyug Fi....
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.... ECCPL is partner in the firm Dynamix Realty. Proceeds of crime of Rs. 13.76 crore approx. have been attached from ECCPL, and is knowingly a party to the offence of money­laundering. ECCPL has committed the offence of money­laundering in terms of Section 3 of the Act. XV. Conwood Constructions & Developers Pvt. Ltd.(CCDPL) CCDPL is a DB Group company under the control of Shahid Usman Balwa and Vinod K. Goenka. Rajiv B. Agarwal is one of the directors of CCDPL. CCDPL is partner in the firm Dynamix Realty. Proceeds of crime of Rs. 22.56 crore approx. have been attached from CCDPL and is knowingly a party to the offence of money­laundering. CCDPL has committed the offence of money­laundering in terms of Section 3 of the Act. XVI. DB Realty Ltd.(DBRL) DBRL is a DB Group company under the control of Shahid Usman Balwa and Vinod K. Goenka. Asif Yusf Balwa is Executive Director of DBRL. Rajiv B. Agarwal is Chief Operating Officer of DBRL. The proceeds of crime of Rs. 161.30 crore have flown from Dynamix Realty to DBRL, out of the proceeds of crime of Rs. 223.55....
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....imited and Nihar Constructions (P) Limited, in the manner and period as aforesaid in the complaint which is punishable under Section 4 of the Act. 79. Asif Balwa and Rajiv B. Agarwal were actually involved along with Shahid U. Balwa and Vinod K. Goenka in the payment of illegal gratification of Rs. 200 crore in KTV acting on behalf of A. Raja. They were also actually involved along with Shahid U. Balwa and Vinod K. Goenka in the process of layering and receipt of proceeds of crime of Rs. 223.55 crore by KTV to Dynamix Realty. Thus, Asif Balwa and Rajiv B. Agarwal 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 to the company for the offence of money­laundering committed by STPL, Kusegaon Fruits and Vegetables (P) Limited, DBRL, Dynamix Realty, Conwood Construction & Developers (P) Limited, Eversmile Construction Company (P) Limited and Nihar Constructions (P) Limited in the manner and period as aforesaid in the complaint which is punishable under Section 4 of the Act. 80. Karim Morani, a promoter shareholder of Cineyug Films (P) Limited had knowingly assist....
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....n KTV for A. Raja and was actually involved in the refund of the same by KTV through the process of layering as Rs. 223.55 crore to Dynamix Realty in the manner and period as aforesaid. P. Amirtham thus has 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 person responsible for the offence of money­laundering by KTV which is punishable under Section 4 of the Act. 85. STPL was illegally allotted UASL by A. Raja for which a sum of Rs. 200 crore of illegal gratification was paid in KTV through a process of layering from Dynamix Realty, which has been received back by Dynamix Realty from KTV through process of layering as Rs. 223.55 crore. Dynamix Realty and STPL being DB Group companies were actually involved in layering of proceeds of crime generated out of illegal gratification and its refund. STPL has thus committed the offence of money­laundering as defined under Section 3 of the Act in the period and manner as aforesaid which is punishable under Section 4 of the Act. 86. Kusegaon Fruits & Vegetables (P) Limited had passed on the illegal gratification of Rs. 200 crore to Cineyu....
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....e Act and Section 3 read with Section 70 of the Act being the person responsible for the offence of money­laundering by Dynamix Realty in the manner and period as aforesaid in the complaint which is punishable under Section 4 of the Act. 91. Conwood Construction & Developers (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. Conwood Construction & Developers (P) Limited is knowingly a party in parking the proceeds of crime Rs. 22.56 crore approx. Conwood Construction & Developers (P) Limited, therefore, has 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 person responsible for the offence of moneylaundering by Dynamix Realty in the manner and period as aforesaid in the complaint which is punishable under Section 4 of the Act. 92. DBRL, one of the companies of DB Group, owned and controlled by Shahid U. Balwa, Asif Balwa and Vinod K. Goenka, is owner partner of Dynamix Realty. DBRL is knowingly a party in parking the proceeds of crime of Rs. 161.30 crore. DBRL therefore has....
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....mited) entered into a long­term advertisement contract dated 25.01.2011 for eight years with Kalaignar TV (P) Limited for a sum of Rs. 65 crore, which was paid in three or four tranches. He also gave statements Ex PW 3/B, C and F to the ED. He also proved documents Ex PW 3/A, D, E, F and F­1. 101. PW 4 is Sh. R. Muralidhar, Vice President, India Cements Limited. He deposed that an amount of Rs. 60 crore was paid to Kalaignar TV (P) Limited by India Cements Limited in 2011 for advertising its products. He also gave statements Ex PW 4/A and B to ED. He also proved documents in this regard Ex PW 4/C to E. 102. PW 5 is Sh. Amit Jain, a practicing Chartered Accountant, New Delhi. He deposed that in 2010, Sh. Sunil Parakh, a Kolkata based businessman, approached him for arranging some accommodation entries for Sapphire Media Infrastructure Limited (SMIL). Accordingly, he approached Sh. Anil Khemka, a Kolkata based entry provider, who arranged accommodation entries for an amount of Rs. 43 crore. However, later on, entries worth about Rs. 30 crore were reversed. In this regard, he gave statements Ex PW 5/A and B to ED. He also proved a letter, Ex PW 5/C, written to ED. 103....
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.... by him and accommodation entries provided by him, which are Ex PW 8/A to G­1. 106. PW 9 is Sh. Aseervatham Achary, former Personal Assistant to A. Raja. He has deposed that Shahid Balwa and Vinod Goenka used to visit office as well as residence of A. Raja. He also deposed that in 2007, Kalaignar TV (P) Limited was launched by the family members of Sh. M. Karunanithi, the chief of DMK party. He also deposed that Kanimozhi Karunanithi is the active brain behind Kalaignar TV (P) Limited and she also used to visit residence of A. Raja and she once visited his office at Electronics Niketan, New Delhi. He proved his statement Ex PW 9/A tendered to the ED. 107. PW 10 is Sh. A. K. Upadhyay, a Kolkata based Advocate. He had submitted documents on behalf of PW 8 Sh. Anil Khemka to ED. He has reiterated the statement of Sh. Anil Khemka in regard to the documents, Ex PW 8/A and B­1 to B48. 108. PW 11 is Sh. R. Anand Babu, Chief Manager, Indian Bank, Kodambakkam Branch, Chennai. He deposed that Kalaignar TV (P) Limited is having an open cash credit account No. 733560561 with his branch. He further deposed that account opening form has been signed by Sharad Kumar, M. K. Dayalu ....
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....y;18. He has also deposed that as per the account opening form, Karim Morani was one of the directors of the company. 114. PW 17 is Sh. Gopala Krishnan, General Manager (Finance), Gemini Group of Companies, Chennai. He deposed that Sapphire Media and Infrastructure Limited (SMIL) is one of the companies of Gemini group of companies, Chennai, being managed by Sh. A. Manohar Prasad. He deposed that he appeared before the ED on behalf of the company and submitted documents and also tendered his statement. He has proved his statement as well as documents Ex PW 17/A­1 to D26. He also stated that between December 2010 to January 2011, this company received Rs. 83 crore from various companies. He also deposed that SMIL was to be taken over by Sharad Kumar of Anjugam Films (P) Limited. 115. PW 18 is Raj Kumar Tharad, an associate of PW 8 Sh. Anil Khemka. He deposed that he works with Sh. Anil Khemka and had signed documents submitted by him (Anil Khemka) to ED on his asking pertaining to three companies of Sh. Anil Khemka, namely, Sunview Retail (P) Limited, Peach Agencies (P) Limited and Chirag Tradecom (P) Limited. He also deposed that a total amount of Rs. 8.25 crore was sent ....
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.... Limited raised money from bulk advertisement agreements. He also deposed about the role of P. Amirtham in Kalaignar TV (P) Limited. He proved his statements and documents Ex PW 21/A to Q. 119. PW 22 is Sh. Surendra Mohan Prasad, Assistant General Manager, Oriental Bank of Commerce, Mumbai. He deposed about account No. 05211011000957 of M/s Dynamix Realty, account No. 05211131002039 of Cineyug Films (P) Limited, and account No. 05211131001346 of Kusegaon Fruits and Vegetables (P) Limited, maintained in his branch. He also proved the documents of Dynamix Realty, Ex PW 22/A­1 to A­7; of Cineyug Films (P) Limited, Ex PW 22/A­8 to A­17; and of Kusegaon Fruits and Vegetables (P) Limited, Ex PW 22/A­18 to A­24. He also proved a certificate, Ex PW 22/A­25, relating to these documents. He also proved documents, Ex PW 22/B to P, about various transactions, which took place between the three entities. He also deposed that all the three accounts are still operative and are being operated by the respective parties. 120. PW 23 is Sh. Navil Kapur, Under Secretary, Ministry of Information and Broadcasting. He deposed that this Ministry grants licences for uplinki....
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....posed that P. Amirtham does not know English. He also deposed that Kalaignar TV (P) Limited is a popular channel in Tamil. 127. DW 2 is Sh. K. Umashankar, Manager (Finance), Kalaignar TV (P) Limited. He has been examined for Kalaignar TV (P) Limited. He deposed about transaction of Rs. 200 crore between Kalaignar TV (P) Limited and Cineyug Films (P) Limited as a loan. He also deposed that it was an inter­corporate deposit. He also deposed that this amount was used by Kalaignar TV (P) Limited in repaying loan and for purchase of movies. He also deposed that initially Cineyug Films (P) Limited wanted to purchase equity in Kalaignar TV (P) Limited. However, due to disagreement on valuation of Kalaignar TV (P) Limited, it did not happen and the amount was returned. 128. DW 3 is Sh. Chintan Ghelani, a practicing Chartered Accountant from Mumbai. He has been examined for Dynamix Realty. His firm is tax auditor for Dynamix Realty since 2006­07. He deposed that he did not find any anomaly in the financial records of Dynamix Realty. He also deposed that Dynamix Realty has been taking and giving loans, as and when required. 129. DW 4 is Dr. P. Gopal from Chennai. He has been ex....
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....ey took place between 23.12.2008 to 11.08.2009. It is further submitted that no formal agreement was executed between Dynamix Realty and Kusegaon Fruits and Vegetables (P) Limited for the transaction. It is further submitted that out of this amount of Rs. 209.25 crore, a sum of Rs. 206.25 crore was transferred by Kusegaon Fruits and Vegetables (P) Limited to Cineyug Films (P) Limited. It is further submitted that out of this, a sum of Rs. 6.25 crore was transferred for the purpose of acquiring 49% equity in Cineyug Films (P) Limited. It is further submitted that there was no underlying agreement between the two companies. It is further submitted that despite holding 49% equity of Cineyug Films (P) Limited, Kusegaon Fruits and Vegetables (P) Limited did not appoint any representative on its board. It is further submitted that Cineyug Films (P) Limited transferred a sum of Rs. 200 crore to Kalaignar TV (P) Limited, purportedly for buying equity in it. 135. It is further submitted that pursuant to registration of FIR by the CBI, an arrangement was made between Cineyug Films (P) Limited and Kusegaon Fruits and Vegetables (P) Limited, whereby the transfer of Rs. 200 crore was shown a....
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....ilty of the offence of money­laundering. It is further submitted that the documents were created ex­post by these entities to project the transactions as regular commercial transactions. It is repeatedly submitted that the proceeds of crime, that is, money obtained as illegal gratification for the favours shown by Sh. A. Raja to STPL, were projected as untainted one. My attention has been invited to various provisions of the Act, deposition of witnesses, documents and case law in detail for emphasizing that each accused is guilty of the commission of the offence of money­laundering. 137. On the other hand, the defence argued that the transactions between the four entities were regular business transactions. It is submitted that the documents executed between entities are genuine one and were executed in the ordinary course of business. It is further submitted that there is no material on record indicating that the aforesaid amount of Rs. 200 crore was illegal gratification and had any link with Sh. A. Raja. It is further submitted that when the amount itself was not illegal gratification, there is no question of there being any proceeds of crime. It is further submit....
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...., (2011) 10 SCC 235; 16) Hiten P. Dalal Vs. Bratindranath Banerjee, (2001) 6 SCC 16; 17) M. S. Narayana Menon alias Mani Vs. State of Kerala and Another, (2006) 6 SCC 39; and 18) Gurdip Singh Vs. State of Punjab, (2013) 10 SCC 395. 141. Sh. Pinaki Misra, learned Sr. Advocate for Karim Morani, invited my attention to the following case law: 1. Jafar Mohammed Hasanfatta and Ors. Vs. Deputy Director and Ors., MANU/GJ/0219/2017; 2. T. Shankar Prasad Vs. State of A. P., (2004) 3 SCC 753 ; and 3. Obulapuram Mining Company Pvt. Ltd. and Ors. Vs. Joint Director, Directorate of Enforcement, Government of India and Ors., MANU/KA/0545/2017. 142. Sh. K. Shanmugasundaram, learned Sr. Advocate for M. K. Dayalu, P. Amirtham and Kalaignar TV (P) Limited, invited my attention to the following case law: 1. Jafar Mohammed Hasanfatta and Ors. Vs. Deputy Director and Ors., R/CR. RA/926/2016 (Gujarat High Court); 2. Ajanta Merchants Pvt. Ltd. Vs. Directorate of Enforcement, 2015 SCC OnLine Del 8659; 3. Obulapuram Mining Company Pvt. Ltd. Vs. Joint Director, Directorate of Enforcement and Ors., Writ Petition No. 5962 o....
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.... 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 11. Attorney General for India Vs. Amratlal Prajivandas, 1994 SCC (5) 54. 145. Sh. Manu Sharma, learned Advocate for A. Raja, invited my attention to the following case law: 1. Shaikh Zahid Mukhtar Vs. State of Maharashtra and Ors., 2016 SCC OnLine Bom 2600; 2. Kali Ram Vs. State of Himachal Pradesh, (1973) 2 SCC 808; 3. Babu Vs. State of Kerala, (2010) 9 SCC 189; 4. Haricharan Kurmi and Anr. Vs. State of Bihar, AIR 1964 SC 1184; 5. Suresh Budharmal Kalani Vs. State of Maharashtra, (1998) 7 SCC 337; and 6. State of Delhi Vs. Shri Ram Lohia, 1960 CriLJ 679. 146. Sh. Vijay Aggarwal, learned Advocate for Shahid Usman Balwa, Asif Balwa, Rajiv Agarwal, Kusegaon Realty (P) Limited, Dynamix Realty, DB Realty Limited and Mystical Construction (P) Limited (earli....
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....nspector 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. Dy. Commissioner, Customs & Central Excise, Hyderabad, 2001 CriLJ 1590; 36. Harichand Kurmi and Another Vs. State of Bihar, AIR 1964 SC 1184; 37. Gurucharan Singh Vs. Union of India and Others, WP (Crl) 307/2016 (DHC); 38. Rakesh Manekchand Kothari Vs. Union of India, Special Criminal Application (Habeas Corpus) No. 4247 of 2015; 39. Vijay Madan Lal Choudhary and Others Vs. Union of India and Others, 2016 [3] MPLJ 664; 40. Kanshi Ram Vs. State, 86 (2000) DLT 609; 41. Surinder....
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.... 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 419; 19. Gautam Kundu Vs. Directorate of Enforcement, (2015) 16 SCC 1; 20. Anand Chauhan Vs. Directorate of Enforcement, 2017 SCC OnLine Del 7790; 21. Karam Singh & others Vs. Union of India & others, 2015 SCC OnLin....
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....nt 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 o....
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....ere cannot be any commission of an offence of money­laundering. 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 projectin....
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....hese "proceeds of crime" were projected, both during transfer from Dynamix Realty to Kalaignar TV (P) Limited 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 i....
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....hese clauses read as under: "(5) Where on conclusion of a trial of an offence under this Act, the Special Court finds that the offence of money­laundering 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 th....