TaxTMI 
TaxTMI 
2022 (11) TMI 1231
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....ere passed for framing of charges against the petitioner under Section 3 of the PMLA, 2002 punishable under Section 4 of the said enactment. 2. The respondent, the Directorate of Enforcement, was present on advance notice of the petition and exhaustive oral submissions were made on behalf of either side. Pursuant to the directions dated 15.11.2022 the written submissions have also been submitted on behalf of either side.A catena of verdicts has been relied upon on behalf of either side in support of their rival contentions. 3. The brief facts of the case sought to be asserted by the Directorate of Enforcement against the petitioner are to the effect that: FIR No. 88/2020 Police Station Dayalpur, under Sections 307/120B/34 of the Indian Penal Code, 1860, qua an occurrence on the date 25.2.2020 at around 3:50 P.M. was registered wherein the complainant Ajay Goswami stated that on 25.2.2020 he had come to the house of his uncle Rakesh Sharma and it was around 3:50 P.M. when he was going to his house at Khajuri and when he reached the corner of the gali he saw a crowd of persons throwing stones and firing bullets on the main road, Karawal Nagar and these persons were committing rio....
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.... throwing and putting fire and firing with weapons. It was further stated through this FIR that the office of the then Municipal Councillor Tahir Hussain (the petitioner herein) was near the Chand Bagh Pulia and in this office he, i.e., Tahir Hussain (the petitioner herein), had gathered gunda elements and who were firing from the top of the office throwing petrol bombs and stones due to which there has been much tension and a fearful environment in the public at large. It was further stated in the said FIR that on the date 25.2.2020 Ankit Gupta, the son of the complainant, who had gone out in the evening at 5 P.M. to get some household articles did not return for much time and after making enquiries and waiting for the entire night, the missing report was lodged whereafter it was learnt that a boy had been killed and thrown in the Chand Bagh drain from the top whereafter with the assistance of the police the dead body of the complainant's son was found wearing only underwear with sharp edged weapon injuries on his head, face, chest back side, midriff with the face and other body parts having been burnt with some acid like substance in order to conceal the identification. Through....
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....allegation/ charge/ amount involved under PMLA: 4.1. After recording the aforementioned ECIR, investigation in the matter was taken up. The following documents and evidences were collected/obtained: (1) Bank statements of bank accounts maintained in the name of M/s Show Effect Advertisement Pvt. Ltd. (hereinafter referred to as SEAPL ), Show Effect Worldwide Pvt. Ltd. (hereinafter referred to as SEWPL), Essence Cellcom Pvt. Ltd.( hereinafter referred to as ECPL) Essence Global Services Pvt. Ltd. (hereinafter referred to as EGSPL), Saifi Wooden Works, Sh.Tahir Hussain and Smt. Shama Anjum (wife of Tahir Hussain) were called for from HDFC Bank and Bank of Baroda. (ii) Copies of FIR. No. 59/2020 dated 06.03.2020 registered by Crime Branch, Delhi Police and FIR No. 65/2020 dated 26.02.2020 and 88/2020 dated 01.03.2020 recorded by P.S. Dayalpur, New Delhi (iii) Documents/digital devices recovered and seized from various premises during searches conducted on 23.06.2020, 25.06.2020 and 26.06.2020. (iv) Statements of the suspects & witnesses, recorded under Section 50(2) & (3) of the PMLA, 2002. 4.2. Examination of the bank accounts of M/s SEAPL. ECPL and EGSPL for the period O....
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....ication Shri Sai Traders 4 Rs. 25.65 lakh from SEAPL Yudhvee Impex Vikram Traders 5 Rs. 15.28 lakh from SEAPL Kanhaiya Enterprises Shri Ram Wood Products 6 Rs. 6.5 lakh from SEAPL Vasundhara Sanyam Traders 5. Searches conducted during the course of investigation: 5.1 Based on the above facts and findings and in order to collect further evidences, search and seizure action under section 17 of PMLA was carried out on 23.06.2020, 25.06.2020 and 26.06.2020 at the following premises: i. A-1/112, Gali No.3, Nehru Vihar, Delhi94: Premises of Kallan Saifi, father of Tahir Hussain, where Shama Anjum, wife of Tahir Hussain was residing. ii. D-211, Site V, Surajpur.Industrial Area, Kasna, Greater Noida, Gautam Budh Nagar, Uttar Pradesh (UP): Production facility of M/s SEAPL. iii. 2C-302, AWHO Society, Greater Noida, UP: Residential premises of Sh. Nitesh Kumar Gupta, Director M/s EGSPL and M/s ECPL. iv 3L-304, AWHO Society, Greater Noida, UP: Residential premises of Md. Akram, Director M/s EGSPL and M/s ECPL. v. G-75-A & G-72/3, First Floor, Shaheen Bagh, Jamia Nagar, New Delhi: Office premises of M/s EGSPL and M/s ECPL. vi. E-7, Main Karawal Nagar Road, Khaj....
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....y person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act. (3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required. (4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 (45 of 1860). (5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act: Provided that an Assistant Director or a Deputy Director shall not- (a) impound any records without recording his reasons for so doing; or (b) retain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the Director. (emphasis suppl....
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....ned to the bank accounts of M/s ECPL and EGSPL to do further business and to meet expenses. However, since he stated running short of money to meet daily expenses, he requested his father in law Sh.Madan Lal Gupta for some help and he transferred Rs.4 Lakhs. Thereafter, Mohammad Akram ((Director in both ECPL and EGSPL) and he (Nitesh Gupta) paid several visits to the residence cum office of Tahir Hussain at E-7, Main Karawal Nagar Road, Khajoori Khas, New Delhi regarding return of the. money. However, till 20.02.2020, they could collect only about Rs. 10 Lakhs from Tahir Hussain. v. in the meantime, he (Nitesh Gupta) contacted Rosban Pathak for bills of 'supply of manpower' which was earlier decided as the alibi for transfer of money. In this regard, he provided the Service Accounting Code (SAC) of manpower services to Roshan Pathak for generating the invoices for supply of manpower services from Meenu Fabrications and SP financial Services Pvt. Ltd. The said invoices worth Rs. 1.12 Crore were sent by Roshan Pathak to his office through Rahul Kasana and the same invoices had been recovered from his office at G-75A & 72/3, $haheen Bagh, Abul Fazal Enclave-II, New Delhi dur....
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....ager in both the companies viz. ECPL and EGSPL. He did not know anything about Meenu Fabrications and S. P. Financial Services Pvt Ltd. ii. He knew that in the month of January 2020, Tahir Hussain called him and told that he needed funds from ECPL and EGSPL accounts. He told Tahir Hussain that he could have the funds but it should not affect the field operation of the company and that Tahir Hussain promised the same. iii. He did not know any details about the transfers made to Meenu Fabrications and S. P. Financial Services Pvt. Ltd. as finance of the company was handled by Nitesh Kumar Gupta. iv. He revealed that no goods or services have been provided by Meenu Fabrications and S. P. Financial Services Pvt. Ltd. to ECPL and EGSPL. 6.3 Statements of Roshan Pathak were recorded under Section 50 of the PML, 2002 on 26.06.2020, 27.06.2020, 01.07.2020 and 09.09.2020 (RUD-11) wherein he, inter alia, stated that: i. On being asked about certain high valued transactions in the bank accounts of SEAPL, ECPL and EGSPL to Meenu Fabrication, S. P. Financial Services Pvt. Ltd., Kanhiya Enterprises and Yudhvee Impex stated that in the end of month of December 2019, Mr. Tahir Hussain....
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....ere were a few other such kind of transactions that were in the books of account of the previous years. He came to know that these were similar transactions from the fact that these parties were related to Amit Gupta; the names of some of such parties were (a) Shree Laxmi Overseas, (b) Rahul Sales Corporation and (c) Singhal Corporation. xi. Apart from the above, due to handling of finances for a long time, he came to know over a period of time that there were some firms/companies which he suspected of indulging in the business of providing accommodation entries and appeared in the books of account of M's SEAPL; the names of such entities were - (a) Gajgamini Sales Pvt. Ltd., (b) Durga Commodeal Pvt. Ltd. or Durga Trading Co. and (c) Eversafe Enterprises. xii. During the course of recording of his statement, Sh. Roshan Pathak tendered his mobile phone as an evidence to his statement and printouts of his whatsapp chats with Amit Gupta, 'Shadab Office' and Dilshad were taken. xiii On being confronted with the printout of his 'whatsapp chat' with 'Tirumeks' alias Sh. Amit Gupta of Tirumala Timbers, he confirmed that all the pages were the ....
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....ith his personal details 2 There was rough scribbling on this page 3 On 7/01/2020: Point no 1 was about the loan against purchase orders of client like One RX India P. Ltd., Chell and ITC etc. Point No. 2 was about the work done by him on that day. On 08/01/2020: Point No. 1: Personal discussion and personal verification at Kasna with Shruna Anjum for the purpose of loan at Rattan Bank. Point No.2: Contact with credit manager, Mr.Abhishek of HDFC for ECPL Over Draft. Point No.3: for finding out the status of Purchase order outstanding and call to Gunjan Dhall for funding of Rs.40 Lakhs. Point no.4: RTGA done to Amit. Cash Rs.35 Lakhs to be received out of which Rs.20 Lakhs received and Rs.15 Lakhs pending. 4 On 9/01/2020: Point no 1: Contact with credit manager, Mr.Abhishek of HDFC for ECPL Over Draft. Point No. 2 & 3: RTGS done to Amit i.e. Amit Gupta of Tirumala Timbers for Rs. 55.28 Lakhs done out of which cash of Rs. 6 Lakhs was received. Transactions of Rs. 32 Lakhs and 6.5 Lakhs from ECPL and SEAPL respectively. Entries on the rest of the page were regarding the stock statement and GST calculation. 5 On 10/01/2020: Point no 1: Purchase of Bike for one of the em....
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.....5 lakhs. 15 18/02/2020: Point No. 1 to 3 and 5: Regarding. The company sales matter. PF matter and legal matters. New mask manufacturing by Kamlesh. Point No.4: pending cash to be collected from Amit Tirumala for Rs.23.5 Lakhs. 19/02/2020: All the points were regarding the updating of books for filing GST returns, sales matters, Tronica land and e-net problem. 16 20/02/2020: All the points were regarding the updating of books for filing GST returns and e-net problem. 17 Details regarding job opening for his wife were mentioned. 23/02/2020: Phone No. Tarun G.-7011279250 of HDFC mentioned 18 Details regarding job opening for his wife were mentioned. 19 Address and password mentioned for MSTC site Note: If there was a check mark on any point or word it meant that the job had been completed and if no marking then it meant that the job was still pending. xviii. He stated that he would like to point out that the payment of Rs. 23.5 lakhs was pending from Amit Tirwnala as on 18.02.2020. The payment, if made, would be in the knowledge of Amit Gupta and Tahir Hussain or Shama Anjum. xix. On being. confronted with a white coloured file containing pages 1 to 30 seized fro....
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....terprises, Saubhagya Tradecom Pvt. Ltd. R.S. Trading Co., V.K. Enterprises Durga Trading Co. iv. She also tendered the purchase bills of another firm- M/s Bansal Sales Corporation during the recording of her statement on 7.10.2020 and clarified that the same were for purchase of materials such as adhesives, corion sheets and dispensers made from Bansal Sales Corporation. v. she, however, stated that she could not submit the purchase bills of M/s Sheel Enterprises despite her best efforts. 6.6 Statement of Sh. Rahul Kasana was recorded under Section 50 of the PML. 2002 on 01.09.2020 and 02.09.2020 (RUD-14) wherein be, inter alia, stated that: i. He was the driver of Tahir Hussain, Councillor; that the last day of his duty was 24.02.2020. On that day he reached office at 10:00 AM. and .at 11:00AM., Smt. Shama Anjum, wife of Tahir Hussain sent him to bring back her children from the school to her residence cum office at E-7, Main Karawal Nagar. Road, Khajuri Khas, New Delhi-94. On his way, his friends and family members called him and asked him to come back home stating that it was in the media that there was a possibility of riots and tension in Karawal Nagar area where his....
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....ey. From their conversation it was revealed that he was Suleiman Siddiqui. Suleiman siddiqui had covered his face with a cloth. viii. Tahir *Hussain asked Suleiman Siddiqui to keep the money with him as it could be used in anti-CAA protests/ gathering people any kind of nuisance or uproar. Tahir Hussain asked him to make complete arrangements. ix. After this, he drove Tahi Hussain towards Jafrabad where another protest was going on. There, Tahir Hussain, asked to pull over the vehicle. and asked a person to send one Gul. After sometime, a woman came and Tahir Hussain gave her a bundle of money and told her similar things told by him to Suleiman Siddiqui. After this they left from there. x. It was further revealed by him that there was a sudden surge in the known and unknown persons in the office of Tahir Hussain a few days before the *riots. He saw him conducting meetings with these people many a times. Sometimes some boys came on motorcycles to take Tahir Hussain with them. After riots when he saw videos related to riots on social media, he saw some people. involved in rioting who were known persons of Tahir Hussain and who used to visit Tahir Hussain before the riot. The n....
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....RUD-16) wherein he, inter alia stated that: i. He came to Delhi along with his father in 1992 and started the work of Carpentry along with his father. In 2003 he started a proprietorship firm in the name of Saifi Wooden Works. In year 2007 he started a Private Limited Company in the name of Show Effect Advertisement Pvt. Ltd. (SEAPL) in which he and his wife were the Directors. The basic work of both these companies was to manufacture and maintain Advertisement Display Furniture, Sign, Boards and Show Rooms. Their major clients included Cheel India Pvt. Ltd. One Rx India Pvt. Ltd., ITC and other small companies. ii. In 2009, he started a partnership firm named Adobe Cellcom Networks with Md.Akram (his brother-in-law), Sh. Nitesh Gupta(a friend of Md.Akaram) and Sh. Sachin Jain (his acquaintance) each having 25% partnership, that later on Sh. Sachin Jain parted ways, thus leaving only three partners with equal partnership (33.33% each) iii. In around 2012, another partnership firms was started in the name of M/s Essence Cellcom Networks in which he, Md.Akram and sh. Nitesh Gupta were partners with equal share. iv In year 2017 M/s Essence Cellcom Networks was converted int....
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.... it was only then that his wife would operate the bank accounts of SEAPL as per his instructions. xiv He was confronted with the documents/records received from the bank wherein in the bank statements of SEAPL there was a debit entry of Rs. 20 lakh to M/s Yudhvee Impex and there was no other entry of Rs. 20 lakh on 08.01.2020 and the bank statement of M/s Vikram -Traders reflected creditentry of Rs. 20 lakhs on 08.01.2020 from SEAPL. In response to the same he stated that he did not know any of the above two firms and the bills for the same were provided by Sh. Amit Gupta. xv He further stated that Sh.Amit Gupta used to collect 11% out of the total 18% GST of the bills provided by Sh. Amit Gupta. Thus he gained 7% of the GST amount. xvi On being asked about the nature of work/job conducted with seven firms/companies to whose accounts substantial amount of funds were transferred in short span of time, he stated that he did not remember it." 6. Inter alia, through the said ECIR, it has been submitted that the petitioner was arrested by the Special Cell, Delhi Police on 6.4.2020 in relation to offences qua FIR No. 59/2020 Police Station Crime Branch and was lodged in judicial c....
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....te the bank accounts of ECPL. ix On being asked he also revealed that he had told Sh. Nitesh Gupta to transfer money in two bank accounts which had been provided by Sh. Amit Gupta (proprietor of Tirumala Timbers). He also revealed that he had business relations with Sh. Amit Gupta for the last 10-12 years; that Sh. Amit Gupta had provided him the name and account number of two firms in which had to transfer the amount; that in lieu of this amount, he (Sh. Tahir Hussain) was going to get cash after reducing the GST(Goods and Services Tax) amount from the bills; that the bills for the above transfer were arranged by Sh. Amit Gupta. x He did not know anything about the above mentioned two companies in which he had transferred the amount because all the work was handled by Sh. Amit Gupta and he trusted him. xi He further stated that according to the discussion with Sh. Amit Gupta in Dec-2019 or Jan-2020, in January 2020, Rs. 92 lakh from ECPL and Rs. 20 lakh from EGSPL respectively were transferred in the bank accounts which were provided by Sh. Amit Gupta. xii The directors of EGSPL were Sh. Nitesh Gupta and Mohammad Akram; that on his instruction they had transferred Rs. 20....
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....x. 1050 sq. yards. b) Kolkata Revenue Survey No. 138, Vill-Ganga *Pur, PS Bhangarh, Distt.-South 24, Paragana, Kolkata admeasuring 33 Kattha. c) D-211, Kasna Greater Noida. Factory premises with area 1167 sq. mtrs. d) Plot No. 296, Sector 56A, Huda, Faridabad measuring 332 sq. mtrs. e) A/1-112 Gali No. 3, Nehru Vihar, Delhi-94, in the name of his father measuring 50 sq. yards. v. Apart from the bogus GST bills; he had purchased bogus VAT bills also from "Amit Gupta. vi. Bank statement of account number 50200023780784 held in the name of vi M/s SEAPL with HDFC bank was called *for the period 01.03.2017 to 15.05.2020 and analysed. Further, purchase bills of SEAPL were tendered by Shama Anjum during her statement recorded under Section 50 of PMLA on 22.07.2020, 01.09.2020, 03.09.2020, 05.09,2020 and 07.10.2020 and were analysed. It was noticed that there were several high valued transactions with certain entities as reflected in the aforesaid bank account statement and their corresponding purchase bills were missing/not existing in the purchase bills file submitted during investigation. It was also found during investigation that payments made to these entities, in almost ....
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....him and entries in the bank accounts for that amount were to be made within three years. ix. It was *also noticed that the submitted bills of Ambika Traders amounted to Rs. 81.6 lakhs whereas the transactions in the bank account reflected Rs. 71.3 lakhs only. On being asked to clarify, he stated that the bills for Ambika Traders were purchased in 2015-16 and the entries for the same were to be made within 3 years; that the remaining amount could be the outstanding payment. x. During the recording of her statement on 24.09.2020, Smt. Shama Anjum was asked to provide the copies of ledgers of all the aforesaid 12 firms/companies. However, the required documents could not be submitted by her and during the recording of her statement on 07.10.2020 she stated that she would not be able to submit the same. xi. On being asked about the bills received in respect of the transactions conducted in January 2020, Tahir Hussain stated that the bills were not received by him as he had instructed Sh. Roshan Pathak to keep information of the payments and bills from Amit Gupta and also look into the compliance related to the bills. According to him, the bills were handed over by Amit Gupta to....
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....n work carried out at the Kasna, Greater Noida Office. He did not know about the entry operator firms/companies and did not handle the cash generated through entry operator firms/companies. 5 Shama Anjum Director of SEAPL. She was a house wife and did not involve actively in' any business* activity. She tendered purchase bills of SEAPL and the documents related to movable and immovable properties registered in the name of Tahir Hussain, his family members as well as his companies. 6 Rahul Kasana Driver of Tahir Hussain and eye witness to the transfer of funds by Tahir Hussain to anti-CAA protestors, meetings of Tahir Hussain with rioters and coconspirators. Also an eye witness to the incidents that untold on 23.02.2020 and 24.02.2020. 7 Girish Pal An employee in the office of Tahir Hussain and eye witness to the incidents that unfolded on 23.02.2020 and 24.02.2020. 8 Manoj Thakur A GST Consultant who helped Amit Gupta in arranging cash for Tahir Hussain in lieu of the RTGS/NEFT from the companies owned/controlled by Tahir Hussain. He did not know Tahir Hussain nor had any knowledge of the ultimate utilisation of the cash funds generated through entry operator....
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....ned/controlled by Tahir Hussain. He did not know Tahir Hussain nor had any knowledge of the ultimate utilisation of the cash funds generated through entry operator firms/ companies. 15 Rajnish Kumar Jain Proprietor and accountholder of Paras Enterprises. The account was actually used and controlled by Shri Lokesh Singhal. Did not have any knowledge about the transactions carried out from this account. 16 Yogesh Bansal An entry operator who controlled the bank account of Sanjay traders and Sainyam Traders (R.s. 32 & 6.5 Lakhs respectively transferred in them from ECPL & SEAPL) and helped Manoj Thakur& Amit Gupta in arranging cash for Tahir Hussain in lieu of the RTGS/NEFT from the companies owned/controlled by Tahir Hussain. He did not know Tahir Hussain nor had any knowledge of the ultimate utilization of the cash funds generated through entry operator firms/companies. 17 Pankaj Goswami Proprietor and account holder of Sanjay Traders. The account was actually used and controlled by Shri Yogesh Bansal. Did not have any knowledge about the transactions carried out from this account. 18 Pankaj Bansal Ap. entry operator who arranged cash of Rs. 15.28 Lakhs the bank ....
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....Khalid Saifi. In this meeting, the three of them purportedly hatched a plan to incite people against CAA, to organize protests and to create unrest. Khalid Saifi was known to Tahir Hussain and used to frequently visit the office of Tahir Hussain. 7.2 On 24.02.2020 there was a large gathering of crowd and police in the area of Tahir Hussain's office and it was feared that riots may take place in the area at any time and any untoward incident may take place. As a result of violence in the area on 23.02.2020,there were burnt cars and bikes lying on the road. There were stones/bricks also lying on the roads from the stone-pelting in the area on the evening of 23rd February, 2020. There was mob gathered around Sherpur Chowk and the mosque at Chand Bagh Pulia. Police deployment was also there. At around 11:00 A.M on 24.02.2020, people started gathering around in the area. So, the ladies in the staff of SEAPL were asked to leave early fearing any untoward incident. Tilll :30 PM, all the office staff left for their home. 7.3 The involvement of Tahir Hussain in anti CAA protests and North East Delhi riots is further established by the fact that Tahir Hussain actively funded anti-CAA....
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....ge amount of money was withdrawn from. the accounts of companies by way of transfer of funds to entry operators and bogus companies. The names of these companies from which funds were withdrawn on his directions and instructions and the amounts siphoned off from their accounts are as under: (a) M/s Essence Cellcom Pvt.Ltd. (ECPL)- Rs. 92 lakh (b) M/s Essence Global Services Pvt. Ltd. (EGSPL)- Rs. 20 lakh (c) M/s Show Effect Advertisement Pvt. Ltd. (SEAPL) - Rs. 4 7 lakh (approx.) 7.6 Tahir Hussain, Nitesh Kumar Gupta and Mohammad Akram were the Directors of ECPL. Tahir Hussain and his wife Shama Anjum were the directors in SEAPL. Tahir Hussain did not have any stake in EGSPL, however, he exercised control over the directors of EGSPL - Nitesh Kumar Gupta and Mohammad Akramdue to various reasons such as- he had help them set up ECPL, Md. Akram was his wife's brother, he was a politically influential person due to his positions as councillor. 7.7 PMLA investigation has revealed that under the instructions of Tahir Hussain funds were transferred through RTGS/NEFT from the aforesaid three companies to the accounts of fictitious/bogus entities created by entry operators. Th....
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....00000 6 Vanshika Enterprises Shiv Shakti Enterprises 12620200048792 Bandhan Bank 2700000 7 Priya Enterprises Bharat Trading Co. 10170004396706 Bandhan Bank 2261970 8 Saubhagy Tradecom Pvt. Ltd. Kiran Traders 12620200047786 Federal Bank 1751458 9 R S. Trading Co. Navyuga Traders 38294884300 SBI 1600000 10 V. K. Enterprises Shiv Shakti Enterprises 10180001435707 Bandhan Bank 1328000 11 Durga Trading Co Deep Enterprises 10180001671841 Bandhan Bank 505900 7.11 Perusal of the bank statements and bills of the above firms/companies (except Sheel Enterprises), as well as on the basis of the statements of the persons engaged in providing/arranging the bogus bills/ accommodation entries for the aforesaid transactions, revealed that Tahir Hussain had used these funds for cash expenses of the company as well as his personal use and this cash was not recorded in the books of account. 7.12 Investigation further revealed that the bills raised for covering up the aforesaid transactions were dated back to the period April 2014 to July 2016 whereas the corresponding transactions were made from 2017 to 2019. Tahir Hussain,....
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....s 5 Rs. 15.28 lakh from SEAPL Kanhaiya Enterprises Shri Ram Wood Products 6 Rs. 6.5 lakh from SEAPL Vasundhara Sainyam Traders Total- Rs. 1.5943 Crore 11. A flow chart of money trail was also put forth through the ECIR to the effect:- 12. The specific role attributed against the petitioner in the abetment and the commission of offences in the money laundering in terms of Section 3 of the PML Act, 2002 was put forth to the effect: "10. Specific role of the accused/co- accused/persons abetting in the commission of the offence of money laundering in terms of Section 3 of PMLA: Sl.No. Name of the Accused Role in the case 1 Tahir Hussain The main conspirator involved in the acts of criminal conspiracy, cheating and falsification/forgery of documents which resulted in fraudulent removal of money from the accounts of certain companies. Under his instructions, funds were transferred from companies owned/controlled by him to the accounts of fictitious/bogus entities created by entry operators. The entry operators operating such entities made payments of equivalent amount in cash to him. He was the ultimate beneficiary of the money. received in cash which was u....
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.... cash in lieu of the RTGS/NEFT from the companies owned/ controlled by Tahir Hussain. He was the main person who organized cash for Tahir Hussain through entry operators by way of fraudulent transactions, fictitious firms and bogus bills. The role of organising cash, which was to be used for unlawful activities, was entrusted by Tahir Hussain to Amit Gupta as he had done similar jobs for Tahir Hussain in the past also. 13. The petitioner herein is stated to have been arrested on 6.4.2020 in FIR No. 59/2020 Police Station Crime Branch and was arrested on 20.8.2020 in relation to the ECIR in question. 14. The co-accused Amit Gupta in the instant case has however not been arrested as per the ECIR and the investigation into his role and acquiring funds for the petitioner through fraudulent means in the past was still being conducted. The impugned order however indicates that he has been awarded pardon vide order dated 19.2.2022 on his application under Section 306 of the Cr.P.C., 1973. 15. The evidence stated to have been collected by the Directorate of Enforcement (HQ) with contentions that the applicant was involved in money laundering is put forth as being: "13. Brief summary ....
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.... January 2020. For the remaining amount of Rs. 5,72,006, investigation revealed that such fraudulent removal of funds from the bank accounts of M/s SEAPL had taken place prior to January 2020 also. One such company which appeared in the books of account of Tahir Hussain and indicated identical modus operandi was Yudhvee Impex alias Vikram. Traders. Investigation revealed that in addition to fraudulent removal of Rs. 20 lakhs in January 2020, funds amounting to Rs. 3,56,265/- and Rs.2,15,7411- were fraudulently removed from HDFC Bank account no. 50200023780784 of M/s SEAPL through Yudhvee Impex alias Vikram Traders on 16.10.2019. Thus, the said amount of Rs. 5,72,006 falls under the ambit of interconnected transactions as covered under the provisions of Section 23 of PML, 2002. 16.3 The aforesaid fraudulent transactions amounting to Rs. 1.5943 Crore and the resultant cash generation was the result of the acts of criminal conspiracy, cheating and falsification/forgery of documents. Tahir Hussain entered into a criminal conspiracy with Amit Gupta and other persons to fraudulently transfer money through bogus and malafide transactions from the accounts of companies owned/controlled b....
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..../s SEAPL were subjected to verification which revealed that several transactions during March 2017 to October 2019 followed the same modus operandi for the fraudulent removal of funds from this account. Tahir Hussain, in his statement recorded under Section 50 of the PMLA, 2002 admitted that the cash generated through these entries had been utilized by him for cash expenses for personal and company's use with it having been submitted further through the complaint that the examination of other bank accounts of the company belonging to the petitioner and his associates was under progress and a supplementary complaint would be filed on the basis of the outcome of the ongoing investigation. 19. It was further submitted that the further investigation in respect of the fraudulent withdrawal of money prior to the period October 2019 in HDFC Bank account no. 50200023780784 of SEAPL is under progress. It was further submitted that the supplementary prosecution complaint in this regard shall be filed after the completion of investigation and examination of other bank accounts (other than HDFC Bank account no. 50200023780784 of SEAPL) of the companies belonging to Tahir Hussain and his a....
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....icalisation, fomenting trouble, disruption of law & order terror funding, etc. 21. Inter alia, the respondent has submitted that it had been established during the investigation that the petitioner by way of using a myriad web of transactions and arranging cash thereof had funded anti-CAA protests and played a key role in instigating violence and fomenting trouble which led to Delhi riots in the month of February 2020. The Directorate of Enforcement has further submitted that the petitioner established M/s SEAPL in which he and his wife were Directors and also helped his brother-in-law Md. Akram and Md. Akram's friend Sh. Nitesh Gupta insetting up their business which eventually led to the formation of M/s ECPL in which Tahir Hussain, Md. Akram and Nitesh Kumar Gupta were equal shareholders, it was further submitted that due to the fact that he had helped them set up ECPL, and as Md. Akram was his wife's brother, and he himself was a politically influential person, he exercised control over M/s EGSPL even though he did not have any stake in EGSPL nor was he the Director in EGSPL. As per the complaint, during December 2019-January 2020, Tahir Hussain contacted Nitesh Gupta....
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....usly planned and executed all the steps which led to the acquiring of cash through fraudulent means, masking the trail of funds and using the funds so acquired for orchestrating and supporting anti-CAA protests in certain areas and for mobilising people, instigating them and fomenting trouble which led to the North East Delhi riots which led to the loss of lives and property and disruption of public order. It was further alleged that the petitioner deliberately planned the whole scheme of acquiring the funds meant for the unlawful activities in such a manner that his identity remained undisclosed. 22. The Directorate of Enforcement has thus submitted that the petitioner along with his co-conspirator Amit Gupta was involved in the acts of criminal conspiracy, cheating and falsification/forgery of documents which resulted in fraudulent removal of funds amounting to Rs. 1.5943 Crore during October 2019 to January 2020 from the accounts of companies owned/controlled by him. The withdrawal of funds in the manner as aforesaid was submitted to be in furtherance of the larger conspiracy to utilize the proceeds of crime in funding antiCAA protests and Delhi riots which led to the loss of l....
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....d used in the commission of an offence under this act or any of the scheduled offences.) and section 120B of the Indian Penal Code, 1860 which reads to the effect: "120B. Punishment of criminal conspiracy.- (1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, 2[imprisonment for life] or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such abetted such offence. (2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.] 27. The petitioner places reliance on observations in paragraphs 29 to 33 and 52 to 54 of the verdict of the Hon'ble Supreme Court in SLP(Crl.) No. 4634/2014 titled as Vijay Madan Lal Chaudhary & Ors. V. UOI, 2022 SCC OnLine SC 929 to contend to the effect that it has been categorically laid down therein that the offence under Section 3 of the PML Act, 2002 is dependent on the wrongful/illegal gain of the property as a result of a criminal activity r....
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....the transactions of an accused person which has no relation to the scheduled offence can be treated as an inter-connected offence under Section 23? e. Whether the Ld. Special Judge erred in observing that the fundamental right of the Petitioner under Article 20(3) was not violated during the course of investigation? f. Whether the PML Act has retrospective effect by virtue "Clarificatory Amendments" despite being substantive in nature which further impose new conditions which will nullify fundamental rights of an accused person contrary to the Judgment of the Hon'ble Supreme Court in M.M. Aqua Technologies Ltd v Commissioner of Income Tax Delhi-III 2021 SCC OnLine SC 575 g. Whether statements recorded under Section 50 given by a person can be used to incriminate in him an offence despite the constitutional bar under Article 20(3) and the statutory bar contained in the Evidence Act? h. Whether proceeds of crime which do not arise from the scheduled offence can be projected and layered? i. Whether an offence under PML Act can be established by virtue of mere involvement without proving mens rea? j. Whether the Enforcement Directorate has the jurisdiction to investigat....
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.... in connection with the proceeds of crime as well as its subsequent use to fund the North East Delhi riots. 8. The Hon'ble Supreme Court in the case of Vijay Madanlal Choudhary & Ors. vs. Union of India & Ors. 2022 SCC OnLine SC 929, has held that section 3 of PMLA has a wide reach and any person who is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or actually involved in one or more process or activity connected with proceeds of crime, namely its concealment or possession or acquisition or use, or projecting it as untainted property or claiming it as untainted property, would be guilty of the offence of money laundering. The petitioner herein withdrew 1.53 Cr., as cash against fraudulent transactions on the strength of fake bills with an intention to distribute cash amongst several co-conspirators, who would be instrumental in fomenting violence in North East Delhi riots. Therefore, it cannot be said that the petitioner is not involved in the process or activity connected with proceeds of crime. Moreover, the recent judgment of the Hon'ble Supreme Court in Criminal Appeal No. 1864/2022 titled Directorate of Enforcement vs....
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....that Section 120-B of the IPC relating to criminal conspiracy is an independent offence and a substantive offence and the provision renders the mere agreement to commit an offence punishable Sudhir Shantilal Mehta vs C.B.I (2009) 8 SCC 1 (Para 113), State of Kerala vs. P. Sugathan and Anr.(2000) 8 SCC 203 (Para 11), Yogesh alias Sachin Jagdish Joshi vs. State of Maharashtra (2008) 10SCC 394 (Para 25) and Ahsan Ahmad Mirza And Others vs Enforcement Directorate W(C)No.2780/2019 CM No. 5528/2019 (Para 29). 12. That investigation includes all the proceedings under the provisions of PMLA for collection of evidence. Further, section 120B of the IPC, 1860 is specifically mentioned in the FIR and Chargesheet in the instant case and the same also falls under the ambit of Part-A, Paragraph 1 of the Schedule under the PMLA, 2002. It is submitted that a criminal conspiracy is hatched to commit an illegal act, which is an offence punishable under law. The accused herein is guilty of the offence of money laundering as he is connected with the process or activity relating to proceeds of crime by way of fraudulent withdrawal of cash from the bank accounts on the strength of fake bills and fraudu....
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....fence or offence of money-laundering shall hold trial in accordance with the provisions of the 1973 Code as it applies to a trial before a Court of Sessions. Going by the plain language of this provision, no fault can be found for conducting trial in the respective cases in the same manner as provided in the 1973 Code. However, the grievance is about the insertion of Explanation vide Finance (No. 2) Act, 2019. As a matter of fact, this insertion is only a clarificatory provision, as is evident from the opening statement of the provision which says that "for the removal of doubts, it is clarified that". None of the clauses inserted by this amendment travel beyond the principal provision contained in Clause (d). Clause (i) of the Explanation enunciates that the jurisdiction of the Special Court while dealing with the offence being tried under this Act, shall not be dependent upon any orders passed in respect of the scheduled offence, and the trial of both sets of offences by the same Court shall not be construed as joint trials. This, in fact, is reiteration of the earlier part of the same section, which envisages that even though both the trials may proceed before the same Special C....
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....vidence, the same would be maintainable. (See Yogesh Mittal vs. Enforcement Directorate, 2018 SCC Online Del 6565 at Para 25)" 36. Inter alia, the Directorate of Enforcement submits that the allegations against the petitioner relate to the involvement in money laundering which is an independent offence dealing with the proceeds of crime derived and obtained out of the scheduled offence placing reliance on the observations on the verdict of the Hon'ble Supreme Court in Vijay Madan Lal Chaudhary & Ors. (supra) in para 269 and 284 "269. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The process or activity can be in any form - be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Thus, involvement in any one of such process or activity connected with the proceeds of crime would constitute offence of money-laundering. ....
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....f Enforcement" (2018) 11 SCC 46 as already observed hereinabove, Section 50(4) of the said enactment makes all proceedings in terms of Section 50(2) and (3) thereof to be judicial proceedings within the meaning of Section 193 & 228 of the Indian Penal Code, 1860. 40. Undoubtedly, though the verdict of the Hon'ble Supreme Court in "Vijay Madanlal Choudhary &Ors. vs. Union of India &Ors." 2022 SCC OnLine SC 929 vide paragraph 431 thereof observes to the effect:- "431. In the context of the 2002 Act, it must be remembered that the summon is issued by the Authority under Section 50 in connection with the inquiry regarding proceeds of crime which may have been attached and pending adjudication before the Adjudicating Authority. In respect of such action, the designated officials have been empowered to summon any person for collection of information and evidence to be presented before the Adjudicating Authority. It is not necessarily for initiating a prosecution against the noticee as such. The power entrusted to the designated officials under this Act, though couched as investigation in real sense, is to undertake inquiry to ascertain relevant facts to facilitate initiation of or pur....
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....ments made after arrest would be in the nature of a confession, the same would relate only to the accused and not to a witness as was the witness Rahul Kasana, who is not an accused in the ECIR. 41. In the said context, the statement of Rahul Kasana, the driver of the petitioner recorded on 01.09.2020 and 02.09.2020, wherein, he stated that on 24.02.2020, the last day of his duty when he left the vehicle and children of the petitioner whom he had brought back from the school at 11.00 AM at the instance of Smt. Shama Anjum, the wife of the petitioner and as he had had been informed by his friends and family members to come back home at it was in the media that there was a possibility of riots and tension in Karawal Nagar area where his office was located and around 1.00 PM, he saw a large gathering of a crowd and police in the area of his office situated at E-7, Main Karawal Nagar Road, Khajuri Khas, New Delhi-94 and feared that riots may take place in the area at any time and any untoward incident may take place with him and that he immediately took Giril Pal, an employee in the billing department in the company of Tahir Hussain, on his motor cycle and went to his house in Roshan ....
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....ce or uproar and that Tahir Hussain i.e. the petitioner herein asked him to make complete arrangements and after this, he drove Tahir Hussain towards Jafrabad where another protest was going on and there, the petitioner asked to pull over the vehicle and asked a person to send one Gul and after sometime, a woman came and Tahir Hussain i.e. the petitioner herein gave her a bundle of money and told her similar things told by him to Suleiman Siddiqui and after that they left from there. This witness is further stated to have stated that there was a sudden surge in the known and unknown persons in the office of Tahir Hussain i.e. the petitioner herein a few days before the riots and that he saw him conducting meetings with these people many a times and sometimes some boys came on motorcycles to take Tahir Hussain with them and after riots when he saw videos related to riots on social media, he saw some people involved in rioting who were known persons of the petitioner herein and who used to visit the petitioner before the riots and the names of these persons told by this witness as being Arshad Pradhan, Irshad Ahmed, Aabid Khan etc. which persons were later on arrested by the Delhi Po....
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....companies to the accounts of fictitious/bogus entities created by entry operators into names of bogus companies such as 'Meenu Fabrications', S P Financial Services, Yudhvee Impex, Kanhaiya Enterprises, Vasundhara whereas, the entry operator in whose account the amount was actually credited was 'Shri Sai Traders',Sanjay Traders, Vikram Traders, Shri Ram Wood Products respectively; and the forensic examination of mobile phones, digital devices recovered from the office premises of these companies including their production facilities as also from the residence of the father of the petitioner where the petitioner and his wife were residing i.e. at A-1/112, Gali No.3, Nehru Vihar, Delhi-94, examination of whatsapp chats indicating fraudulent transfer of money from the accounts of these companies to other accounts and the reciprocal transfer of cash to the petitioner herein through his associates and employees, coupled with the statement of Nitesh Kumar Gupta under Section 50 of the PMLA, 2002 who stated that the petitioner herein was one of the directors of ECPL and its 33% stake holder, contacted him in the first week of January 2020 and that he needed cash money for ....
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....ent by Roshan Pathak to his office through Rahul Kasana and the same invoices had been recovered from his office at G-75A & 72/3, Shaheen Bagh, Abul Fazal Enclave-II, New Delhi during the search operations conducted by the Enforcement Directorate and were seized by the Enforcement Directorate. 49. This witness further stated that in February, in order to file monthly GST return, purchase bills and invoices including these invoices worth Rs. 1.12 Crore were sent to their Chartered Accountant, Mukesh Rao and Kamlesh, an employee of Mukesh Rao, later informed him over phone that the said invoices worth Rs.1.12 Crore were all fake and bogus invoices as the GSTIN numbers mentioned on them were bogus and thereafter, the petitioner was arrested and sent to custody in the riots case. This witness is stated to have further stated that since the said invoices worth Rs. 1.12 Crore were fake and bogus and there was also no manpower supply against the transfer of money, he got scared and contacted Roshan Pathak and demanded that the contract which was earlier agreed upon to be signed as a cover up for transfer of money in the garb of supply of manpower and Roshan Pathak informed him that the s....
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....s of crime, which proceeds of crime fall withing the ambit of culpability in terms of Section 3 of the PMLA, 2002 making a person who has so allegedly committed such an offence, guilty of the offence of money laundering, which is punishable in terms of Section 4 of the PMLA, 2002. 53. Thus, the contention of the petitioner that what the petitioner was allegedly involved in, can at the most be considered to be a GST violation and that a GST violation may be punishable under the enactment dealing with GST violation and under the Income Tax Act, 1961 but that the same would not amount to the commission of any scheduled offence in terms of the Scheduled Part A & B in terms of Section 2(x) of the PMLA, 2002 and thus, no offence described under Section 3 of the PMLA, 2002 punishable under Section 4 thereof, can be held to have been prima facie committed,- cannot be accepted. 54. The verdict of the Hon'ble Supreme Court in Vijay Madanlal Choudhary &Ors. (supra) vide paragraph 269 thereof, categorically lays down that the offence of money laundering in terms of Section 3 of the PMLA, 2002 is an independent offence regarding the process or activity connected with the proceeds of crime whi....
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....been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provision (Section 3, as amended until 2013 and were in force till 31.7.2019); and the same has been merely explained and clarified by way of Explanation vide Finance (No. 2) Act, 2019. Thus understood, inclusion of Clause (ii) in Explanation inserted in 2019 is of no consequence as it does not alter or enlarge the scope of Section 3 at all." 57. The observations in paragraph 271 of the said verdict read to the effect:- "271. As mentioned earlier, the rudimentary understanding of 'money-laundering' is that there are three generally accepted stages to money-laundering, they are: (a) Placement : which is to move the funds from direct association of the crime. (b) Layering : which is disguising the trail to foil pursuit. (c) Integration : which is making the money available to the criminal from what seem to be legitimate sources." (emphasis supplied) 58. Thus, the alleged commission of a conspiracy even for the purpose of GST violation in order to avail cash i.e. money through the proces....
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....L Act are thus wide enough to cover the role played by such person." and that thus, the submission of the petitioner that there were no crime proceeds attached, is insignificant. 60. It is essential to observe the speech delivered by the then Hon'ble Finance Minister Mr. P. Chidambaram while introducing the Prevention of Money Laundering (Amendment Bill), 2002 in the Rajyasabha on 17.12.2012 states to the effect:- "...firstly, we must remember that money-laundering is a very technically-defined offence. It is not the way we understand' money-laundering' in a colloquial sense. It is a technically-defined offence. It postulates that there must be a predicate offence and it is dealing with the proceeds of a crime. That is the offence of money laundering. It is more than simply converting black-money into white or white money into black. That is an offence under the Income Tax Act. There must be a crime as defined in the Schedule. As a result of that crime, there must be certain proceeds - It could be cash; it could be property. And anyone who directly or indirectly indulges or assists or is involved in any process or activity connected with the proceeds of crime and projec....