TaxTMI 
TaxTMI 
2022 (5) TMI 1044
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....t vs Smt. Sona Bansal and others", filed by respondent No.2 - Directorate of Enforcement. It is also prayed that respondent No.1 - CBI and respondent No.2 - Directorate of Enforcement be further directed to act in co-ordination and harmony with each other during the course of investigation relating to the cases of sale and purchase of land in Manesar. Learned senior counsel for the petitioners has argued that petitioner No.1 is engaged in the business of real estate, commodity trading and stock trading for the last 30 years whereas petitioner No.2 is engaged in food processing and real estate business. It is further submitted that both the petitioners were acquainted with one Lalit Modi for the last about 20 years and he was advising the petitioners to make certain investment in the real estate. On the asking of Lalit Modi, the petitioners have purchased and then sold certain properties in an around NCR Delhi during this period. In the year 2004, the petitioners along with one Raj Kumar Arora and Lalit Modi became promoters of M/s. Sheel Buildcon Private Limited, Progressive Buildtech Private Limited and Ecotech Buildcon Private Limited. All the 03 companies were land owning com....
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....It is also submitted that the decision to purchase some land was taken by Lalit Modi as most of adjoining land was purchased by other persons. The 03 companies purchased the land between November, 2004 to November, 2005. Later on, Lalit Modi proposed to the petitioners that one Atul Bansal through his company is interesting in acquiring 03 land owning companies and the petitioners gave consent and on 30.11.2006, an oral agreement was arrived at between Lalit Modi and Atul Bansal and Rs.5.00 crores as advance was paid by Atul Bansal towards the sale consideration of the 03 land owning companies, however, at that time, no share was transferred. Later on as per the agreement, the shares in the 03 land owning companies was transferred to A.B.W. Group (Aditya Build Well Group) belonging to Atul Bansal. Learned senior counsel for the petitioners has also submitted that in fact, there was no sale or purchase of the actual land and rather, it was an investment in property through the 03 land owning companies and the entire shareholding in the company was transferred in favour of A.B.W. Group. It is also submitted that later on, on 24.08.2007, acquisition proceedings were dropped and FIR....
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....ing any licence for development of any colony nor ever applied to the government for withdrawal of the land from the acquisition proceedings as it was a simple investment made by the petitioners. It is further submitted that in the meantime, the proceedings under the PMLA Act, were initiated by the Enforcement Directorate, Chandigarh, as per ECIR No.04/CDZO/2015 dated 24.09.2016. It is next contended that the petitioners were also summoned by the Enforcement Directorate on various occasions wherein, they appeared and recorded their statements on 23.11.2007 and furnished all the documents as required by the Enforcement Directorate with regard to the transactions of the 03 land owning companies, the shareholding of the petitioners and of Lalit Modi, which were transferred in the name of M/s. A.B.W. Group. Learned senior counsel for the petitioners has relied upon the statements recorded under Section 50 of the PMLA, attached as Annexures P-7 and P-8, respectively, wherein in reply to the questionnaire, the petitioners have given the details of the land purchased and sold to M/s. A.B.W. Group, the time upto which the petitioners were holding the share in the company, the deta....
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.... It is next argued that on 17.07.2018, a prosecution complaint under Section 45 of the PMLA Act was filed by the Enforcement Directorate and in this complaint, the petitioners were not arraigned as an accused. Vide order dated 27.08.2018, the trial Court took cognizance of the said complaint and issued process against the accused persons arraigned in the said prosecution complaint. Later on, during those proceedings, the Enforcement Directorate issued a Provisional Attachment Order against M/s. A.B.W. Group on 24.12.2018. It is also submitted that a Supplementary Prosecution Complaint was filed on 14.02.2019, by the Enforcement Directorate and even in this complaint, the petitioners were not arraigned as an accused. The trial Court took cognizance of this complaint also and issued the process against the additional accused. Learned senior counsel for the petitioners has next contended that after 02 years of the investigation in which the petitioners were associated, time and again, and the investigation was started by CBI and prosecution was launched by the Enforcement Directorate, the petitioners were summoned again by the Enforcement Directorate on 22.07.2019 and again, Saura....
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....d senior counsel for the petitioners has next submitted that in the "scheduled offence" wherein the CBI has registered an FIR and during the investigation, has recorded the statement of the petitioners under Section 161 Cr.P.C., the petitioners are cited as witness No.300 and 301, respectively. It is also submitted that when the 1st R.C. was registered under the PMLA Act, the statement of the petitioners were recorded under Section 50 of the PMLA Act. However, the petitioners are nominated as an accused in the 2nd complaint, filed in exercise of powers under Section 44 of the PMLA Act, though, the prosecution by CBI and by the Enforcement Directorate is to be tried together by the same Judge, therefore, the prosecution of the petitioners by the Enforcement Directorate is mala fide as at no point of time, in the investigation by the CBI, the petitioners were found to be accused persons and rather they are cited as a witness. (e) Learned senior counsel for the petitioners has also submitted that the Enforcement Directorate in the 1st complaint did not arraign the petitioners as accused or even in the supplementary statement again, did not arraign them as an accused and after....
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.... reasonably believed by the Deputy Director (ED) that the unaccounted money is connected with the commission of offence under PMLA. Simultaneously, the letter of the I.T. Department dated 16.5.2019 and the details as mentioned, makes it clear that for the currency seized, the tax is already paid, therefore, it is not the quantum earned and used for money laundering. In our opinion, even in cases of PMLA, the Court cannot proceed on the basis of preponderance of probabilities. On perusal of the statement of Objects and Reasons specified in PMLA, it is the stringent law brought by Parliament to check money laundering. Thus, the allegation must be proved beyond reasonable doubt in the Court. Even otherwise, it is incumbent upon the Court to look into the allegation and the material collected in support thereto and to find out whether the prima facie offence is made out. Unless the allegations are substantiated by the authorities and proved against a person in the court of law, the person is innocent. In the said backdrop, the ratio of the judgment of Radheshyam Kejriwal (supra) in paragraph 38 (vi) and (vii) aptly applicable in the facts of the present case. 19. As discussed ....
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.... seize the property obtained from the laundered money. The PMLA is a specific and special enactment to combat the menace of laundering of money, keeping in view the illegal practices that have been surfacing with respect to transfer and use of tainted money and subsequent acquisition of properties by using the same. The offence of money laundering is three- fold including the stages of placement, whereby the criminals place the proceeds of crime to the general and genuine financial system, layering, whereby such proceeds of crime are spread into various transactions within the financial system and finally, integration, where the criminals avail the benefits of crime as untainted money. The offence of money laundering under the PMLA is therefore, layered and multi-fold and includes the stages preceding and succeeding the offence of laundering money as well. 30. The offence of money laundering, however, is not to be appreciated in isolation but is to be read with the complementary provisions, that is, the offences enlisted in the Schedule of the Act. The bare perusal of the above mentioned provisions of the PMLA establishes the pre-requisite relation between the commission o....
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....of PMLA as under - "(u) "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;" 37. A holistic reading of this definition of 'proceeds of crime' and the penal provision under Section 3 of PMLA, which uses conjunctive 'and', makes it luminous that any persons concerned in any process or activity connected with such "proceeds of crime" relating to a ""scheduled offence"" including its concealment, possession, acquisition or use can be guilty of money laundering, only if both of the two prerequisites are satisfied i.e. - (i) Firstly, if he - (a) directly or indirectly 'attempts' to indulge, (b) 'knowingly' either assists or is a party, or (c) is 'actually involved' in such activity; and (ii) Secondly, if he also projects or claims it as untainted property. 38. The first of the two prerequisites to attract Section 3 of PMLA shall thus satisfy any of the following necessary ingredients - A. Re : Direct or Indirect Attempt: ....
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....ually involved would mean actually involved into any process or activity connected with the proceeds of crime and thus "scheduled offence", including its concealment, possession, acquisition or use. There is absolutely no material or circumstantial evidence whatsoever, oral or documentary, to substantiate any such allegation qua the petitioners. D. Neither any of the petitioners is arraigned as accused in the '"scheduled offence"s' punishable under Indian Penal Code for direct or indirect involvement, abetment, conspiracy or common intention, nor is any such case made out even on prima facie basis against any of them. 39. The second of the two prerequisites to attract Section 3 of PMLA would be satisfied only if the person also projects or claims proceeds of crime as untainted property. For making such claim or to project 'proceeds of crime' as untainted, the knowledge of tainted nature i.e. the property being 'proceeds of crime' derived or obtained, directly or indirectly, as a result of criminal activity relating to a "scheduled offence", would be utmost necessary, which however is lacking in the instant case. 40. Great emphasis ....
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....titioners, there is no legal presumption in Section 24 that - (a) The concerned property is "proceeds of crime", (b) The person accused has knowledge that the property is "proceeds of crime", and (c) The person is involved in or is guilty of "money-laundering" merely for possessing or having any concern with the proceeds of crime. In fact Section 24 clearly indicates that even a person in possession or connected with any proceeds of crime may or may not be charged with the offence of money laundering. Whether a person shall be charged with money laundering or not shall thus depend only upon satisfying the requirements of Section 3 of PMLA as already explained above. 43. In the instant case, neither there is anything to raise a presumption of fact or law that any of the petitioners was aware that the monies received in their bank accounts through banking channels were 'proceeds of crime' derived from any '"scheduled offence"', nor is there anything to further presume that the petitioners were intentionally projecting or claiming any proceeds of crime as untainted one. In absence of the same, merely because the petitioners ....
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.... it is mentionable that entities namely Shashikant Chaurasia and Dilip Lalwani (As Ex-Directors/shareholders of Sheel Buildcon Pvt. Ltd. Progressive Buildcon Pvt. Ltd. and Ecotech Buildcon Pvt. Ltd.).... Indulged themselves in creating/forming/purchasing land owning companies, further purchasing notified land from farmers under pressure during the notification issued under Section 4 & 6 of the Land Acquisition Act, 1894 and further sold the same to Atul Bansal/ABWIL/Group Companies and earned huge undue profits to the extent of Rs.6.04 crores each lying in the Union Bank of India, Patel Nagar Branch, New Delhi Saving Bank Account No.308002050000155 & 308002010043649 respectively which is "Proceeds of Crime" as per Section 2(1)(u) by involving section 3 r/w section 70 of the PMLA." (l) Learned senior counsel for the petitioners has further argued that as per CBI charge-sheet filed on 01.02.2018, the petitioners are cited as witnesses whereas in the first and supplementary prosecution complaint by the Enforcement Directorate, the petitioners were not arraigned as an accused, however, only in the second prosecution complaint, the petitioners were arraigned as accused Nos.5 an....
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.... submitted that the provisions of Section 2(1)(u) of the PMLA Act, shows that "Proceeds of Crime" is the property derived from the criminal activity relatable to the particular schedule/predicate offence. (p) Learned senior counsel for the petitioners has further submitted that in the statement recorded under Section 161 Cr.P.C., before the CBI, a specific question was asked "on whose direction, the application for licence was submitted to the Director, Town & Country Planning in collaboration of M/s. A.B.W. Group, for obtaining the licence". The petitioners replied that "the petitioners' company had not filed any application for grant of licence and even never authorized anyone else to file an application for licence from DTCP". (q) It is also submitted that the companies of the petitioners never passed any resolution nor given any authority or ever entered into agreement or MOU with A.B.W. for filing application for licence. Similar reply was given while replying to such similar questions when Enforcement Directorate recorded their statements under Section 50 of the PMLA Act. It is further argued that on the basis of the same statement, the CBI has termed the pe....
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....oners have been arraigned as an accused, without there being any evidence against them as they have made similar statement before the CBI under Section 161 Cr.P.C. as well as under Section 50 of the PMLA Act that they never applied for any licence for development of any project and have purchased the land on the advice of Lalit Modi and later on, the companies of the petitioners were purchased by M/s. A.B.W. Group through Atul Bansal, who is an accused even in CBI proceedings. Further, it is argued that in view of the judgment of the Hon'ble Supreme Court in J. Sekar @ Sekar Reddy's case (supra), the chances of proving the allegations even for the purpose of prosecution under the PMLA Act are very bleak and therefore, the prosecution is liable to be quashed as no prima facie case on the face of second prosecution complaint is made out against the petitioners. After hearing the counsel for the parties and going through the report of CBI; the statement recorded by CBI under Section 161 Cr.P.C. of both the petitioners as well as recorded under Section 50 of the PMLA by the respondent - Enforcement Directorate and from the perusal of the first prosecution complaint; the second prose....
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....plaint, the statement of the petitioners were recorded under Section 50 of the PMLA, in which specific question was put whether the petitioners through their company have ever applied for obtaining a licence for setting-up a project/township, to which the petitioners replied in negative and on completing the investigation, it was found that the petitioners had only made investment through their 03 land owning companies. Even in this complaint, the petitioners were not arraigned as an accused, however, after 02 years of filing the 1st complaint, the impugned supplementary prosecution complaint was filed on 05.06.2021, in which for the first time, the petitioners were arraigned as accused No.5 and 6. A perusal of this complaint show that all the persons, who are accused in the CBI prosecution were arraigned as an accused along with the petitioners. (d) In paragraph 16.14(vii), as reproduced above, it is stated that the petitioners are Exdirectors/ shareholders of M/s. Sheel Buildcon Private Limited, M/s. Progressive Buildtech Private Limited and M/s. Ecotech Buildcon Private Limited and were indulged in purchasing land through land owning companies and have....
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.... once in the "scheduled offence", the petitioners are cited as witness, their prosecution under the PMLA with the same set of allegations, is nothing but misuse of process of law. (g) A bare perusal of the statement recorded by CBI under Section 161 Cr.P.C. and the statement recorded by the Enforcement Directorate under Section 50 of the PMLA, show that a specific question was put to the petitioners, on whose direction, the application for licence was submitted to the Director, Town & Country Planning, in collaboration of M/s. A.B.W. Group and the consistent stand of the petitioners in both the statements is that the petitioners' company neither applied for grant of licence nor moved any such application. It was also specifically stated that the petitioners never authorized any other person to file any application for licence with the office of Director, Town & Country Planning, therefore, this Court find that the investigation conducted by CBI finding that the petitioners have not committed any "scheduled offence" and therefore, they are cited only as witness Nos.300 ad 301 in the chargesheet, the prosecution of the petitioners under the PMLA, only on the basis of a prepo....