TaxTMI 
TaxTMI 
2022 (11) TMI 1231
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....t Vs. Tahir Hussain, whereby the orders were 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,....
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....for several days in which both parties had been indulging in stone 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....
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....02/307/385 of the Indian Penal Code, 1860 are scheduled offences in para 1 of part A of the Scheduled Offences under Section 2(1)(y) of the PML Act, 2002. The ECIR/05-STF/2020 submitted by the Directorate of Enforcement states inter alia to the effect: "4. Brief facts of the offence/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) Do....
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....ies as tabulated below: Sr.No. Amount transferred from Company Name of bogus company to whom amount was shown to be transferred to in RTGS narration Entry Operator in whose account amount was actually credited 1 Rs. 60 lakh from ECPL Meenu Fabrication Shri Sai Traders 2 Rs. 32 lakh from ECPL S P Financial Services Sanjay Traders 3 Rs. 20 lakh from EGSPL Meenu Fabrication 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 ....
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....ely:- (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a banking company or a financial institution or a company, and examining him on oath; (c) compelling the production of records; (d) receiving evidence on affidavits; (e) issuing commissions for examination of witnesses and documents; and (f) any other matter which may be prescribed. (2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any 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 Indi....
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.... 30 Lakhs were signed bv him (Nitesh Kumar Gupta) for transfer of money through RTGS/NEFT to 'Meenu Fabrications' and 'SP Financial Services Pvt. Ltd'. He signed cheques worth Rs. 30 Lakhs and RTGS forms near Kalindi Kunj Metro Station and handed it over to Rahul Kasana, driver of Tahir Hussain, who had come on his motorbike. Rahul Kasana had come there with the cheques and RTGS forms and he simply signed the same and gave it to him. iii. In this way, total transactions worth Rs.1.12 Crore from M/s ECPL and EGSPL were done on the instructions of Tahir Hussain. iv. Tahir Hussain assured him that the money would be returned 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 colle....
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....it Aggarwal the next week. However, Amit Aggarwal later did not respond to his calls and he also could not meet Amit Aggarwal due to lockdown restrictions. x. He further admitted that the said transfer of Rs. 1.12 Crore from the accounts of ECPL and EGSPL in the garb of payment for supply of manpower was done on the instructions of Tahir Hussain. Rosban Pathak, the accountant of Tahir Hussain, assisted Tahir Hussain and facilitated these transactions along with Amit Aggarwal on the instructions of Tahir Hussain. 6.2 Statement of Mohammad Akram was recorded under Section 50 of the PML, 2002 on 29.06.2020 (RUD-10) wherein he, inter alia, stated that: i. He worked as a Project Manager 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 trans....
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....authoriser for such online transactions. viii. He revealed that in this manner, cash of approximately Rs. 1.58 Crore was collected through these transactions. The manner and place for collection of cash was informed by Amit Gupta who also deducted his commission for the same. The cash was handed over to/ collected by the office boy of SEAPL namely Shadab and Dilshad who further handed over the cash to Tahir Hussain or Shama Anjum. The instruction regarding handing of cash was passed on by Tahir Hussain directly to the office boys namely Dilshad, Shadab. ix Amit Gupta provided him the back-dated bills for the RTGS payments made to companies/firms arranged by him. The fake bills were sent to him on the same day the transactions were conducted. x. On being asked further, he stated that he could remember that there 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. A....
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....hatsapp chat printout, he had conveyed Dilshad about the details of bank account of Meenu Fabrications; in the chat on page no. 6 he instructed Dilshad .to pick Rs. 25 lakhs (coded as 25Kg) from 183- Parshant Vihar, D Block, New Delhi i.e. from the house of Amit Gupta. He stated that he passed on the instructions to Dilshad as per the instructions provided to him by Tahir Hussain. xvii. He was confronted with a diary seized from the office of M/s SEAPL at E-7 Main Karawal Nagar Road, Khajuri Khas, New Delhi during the course of search under Section* 17 of PMLA, 2002. In response to the same he stated that the diary belonged to him and all the pages had been written by him; that the handwriting appearing on all the pages were his; that he had seen all the pages of the diary and the page-wise description of his notes were as under: Pg No. Description 1 It was the first page of diary with 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....
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....bad. 10 27/01/2020: Point No.1: GST return of Saifi Wooden Works Point No. 2: Pending cash of Rs. 23.17 lakhs to be collected from Amit. Rest of the entries were regarding the GST and TDS returns of the companies. 11 28/01/2020: Point No. 1 & 3: Update for GST and TDS returns of the companies. Point No.2: Pending cash to be collected from Amit. 31/01/2020: Point No. 1 & 3: Update for GST return of the companies 12 01/02/2020: No work mentioned. 04/02/2020: Point No. 1: Pending cash to be collected from Amit. Rest of the entries were regarding the update of accounts for GST return, Kolkata expenses and banking documentation regarding the banking operations. 13 Empty page 14 17/02/2020: Point No. 1: Documentation required for opening new office at Tronica City instead of the one at Kasna. Point No. 2, 3 & 4: Regarding the company sales matter, PF matter and legal matters. Point No.5: Pending cash to be collected from Amit Tirumala for Rs. 23.5 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 col....
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....o stated that he did not know about Kanhiya Enterprises, Yudhvee Impex, and Vasundhra; and that no production had been carried out for these companies under his supervision in SEAPL. 6.5 Statements of Smt. Shama Anjum were recorded under Section 50 of the PML,. 2002 on 24.06.2020, 22.07.2020, 01.09.2020, 3.09.2020, 05.09.2020, 24.09.2020 and 07.10.2020 (RUD-13) wherein she, inter alia, stated that: i. She was a house wife and did not involve actively in any business activity but since the place of residence and business were the same she had functional knowledge of the furniture business. ii. She tendered the documents related to movable and immovable properties registered in the name of Tahir Hussain, his family members as well as his companies. iii. On being asked, she also tendered purchase bills of the following 10 firms/companies with which SEAPL appeared to have indulged in suspicious transaction during March 2017 to October 2019-M/s Ambika Traders, Rahul Sales Corporation, Pankaj enterprises. Vansh Trading Co., Vanshika Enterprises, Priya Enterprises, Saubhagya Tradecom Pvt. Ltd. R.S. Trading Co., V.K. Enterprises Durga Trading Co. ....
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....nd RTGS forms signed from Sh. Nitesh Kumar Gunta on the instruction of Shri Roshan Pathak. The same were handed over back to Sh. Roshan Pathak once they were signed. vi. On being asked he stated that in the month of January, 2020, on being told by Tahir Hussain he drove him to Shaheen Bagh. On reaching in front of an officer Tahir Hussain asked him to park the vehicle. Tahir Hussain got down from the vehicle and went inside. After sometime. he also saw the entry of Sh. Umar Khalid and Sh. Khalid Saifi in the same office. He further stated that he knew Khalid Saifi for a long time as he used to frequently visit the office of Tahir Hussain and he had seen Umar Khalid in the news and media. vii. He revealed that he saw Tahir Hussain giving money to two persons who were related to the anti-CAA protests/Delhi riots because he drove Tahir Hussain in Chand Bagh area where the protest was going on. That once when he drove Tahir Hussain to Chand Bagh area where anti-CAA protest was going on, Tahir Hussain shouted to somebody to call one Suleiman Siddiqui; that after some time, a person came and Tahir Hussain handed him over a bundle of money. From their conversation it was....
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....:00 AM on 24.02.2020, people started gathering around in the area. So, they asked the ladies in the staff namely Suman, Nidhi and. Kavita to leave early fearing any untoward incident might happen. *Gradually all the office staff left for their home. He and Rahul Kasanawere the last ones to leave the office premises on Rahul Kasana's bike between 1- 1:30 p.m. He had not gone to the office of SEAPL since then. 6.8 Tahir Hussain was arrested by Special Cell, Delhi Police on 6.4.2020 in offences related to FIR 59/2020 dated 06.03.2020 and was lodged in Judicial Custody at Tihar Jail, New Delhi. Accordingly, an application seeking permission to interrogate Tahir Hussain was filed before the Hon'ble Court of Sh. Amitabh Rawat, Special Court (PML), Ld. Additional Sessions Judge-03, Shahdara District, Karkardooma Court, New Delhi (hereinafter referred to as the Hon'ble Trial court) on 09.03.2020. The Hon'ble Trial Court granted permission for interrogation of Tahir Hussain at the jail premises. Accordingly, statements of Tahir Hussain were recorded under Section 50 of the PMLA, 2002 in Judicial Custody with the permission of the Hon'ble Trial Court on 16.08.2020, 17.08.2020 an....
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..... 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 lakh in the bank accounts which were provided by Sh. Amit Gupta. xiii He and his wife were the directors of SEAPL. His wife was a housewife and he looked after all the works of the company; that though both had the powers to' operate the....
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....er-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 partnetship (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 into a Private Limited Company named M/s Essence Cellcom Pvt. Ltd. IECPL) with equal shareholder of the three Directors (erstwhile partners) v ECPL provided manpower for the installation and maintenance of equipment used in mobile towers. Major clients of ECPL included ECI - Essence used in mobile towers. Major clients of ECPL included ECI - Essence vi His role in ECPL was to arrange finances. Operational responsibility was looked. after by the other two directors. vii He had invested about 15-20 lakh rupees in Adobe Cellcom Networks in initial 6 months, that in 2019 he pledged his property i.e. E-7, Main Karawal Nagar Road, Khajuri Khas, New Delhi-94 in lieu of Cash Credit (C....
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....ect 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." 7. It has been submitted further through the said ECIR that thereafter the remand of the petitioner in the custody of the Directorate of Enforcement was taken with the permission of the Court and the statements of the petitioner were recorded thereafter under Section 50 of the PML Act, 2002, on 31.8.2020, 1.9.2020, 2.9.2020, 4.9.2020, 8.9.202010.9.2020 wherein he stated: i. Sh. Amit Gupta did not provide any goods or services against the bills of Meenu Fabrications and S. P. Financial Services provided by him for ECPL. ii. Sh. Amit Gupta agreed to supply manpower for ECPL and EGSPL. However, neither had he asked for. manpower from Sh. Amit Gupta in the past nor had Sh. Amit Gupta supplied manpower to him. He did not know any person who had supplied manpower from Sh. Amit Gupta. iii. He stated that he had taken* cash against GST....
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.... 10170004396706 Bandhan Bank 2700000 8 Saubhagy Tradecom Pvt. Ltd. Kiran Traders 12620200047786 Federal Bank 1751458 9 K 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 12 Bansal Sales Corporation 3250000 vii. In response to the above transactions made with the 12 different entities being not in the purchase files of SEAPL was that these could be the bills against entry for GST was taken; that there could be no purchase against these bills and these bills could have been used to get cash from these entries for cash expenses; that another reason could be that the bills of these entities were lying in the office or factory premises. viii. Purchase bills of 10 firms/companies out of the aforesaid companies were tendered by Smt. Shama Anjum during her statement recorded under Section 50 of PMLA between 01.09.2020 to 05.09.2020. However, bills of Sheel Enterprises and Bansal Sales Corporation (....
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....cash expenses." 8. As per the ECIR the persons/entry operators who facilitated the accommodation entries from the bank accounts of the companies related to the petitioner were recorded under Section 50 of the PML Act, 2002 with the reasons given by the ECIR for naming and including the persons as witness as mentioned in para 14 thereof "14. Brief detail of reason for naming & including a person as a witness: S.No. Name of the witness Reason for including as a witness 1 Nitesh Kumar Gupta Director of ECPL and EGSPL. Funds amounting to Rs.1.12 Crores transferred to firms operated by entry operators from these two companies on the instruction of Tahir Hussain. He was not aware about the fraudulent transactions and the mechanism of cash generation. Also, he did not have any knowledge of the ultimate utilization of the funds transferred out of his companies. 2 Mohammad Akram Director of ECPL and EGSPL. Funds amounting to Rs.1.12 Crores transferred to firms operated by entry operators from these two companies on the instruction of Tahir Hussain. He was not aware about the fraudulent transactions and the mechanism of cash generation. Also. he did not have ....
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.... An entry operator who controlled the bank accOl.mt of Vian Forex Tours and Travels Pvt. Ltd. (Rs. 65 lakhs transferred in it from Shri Sai Traders) and helped Roshan Thakur, 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 utilisation of the cash funds generated through entry operator firms/ companies. 12 Aayush Mittal A commission agent who helped Roshan Thakur, Manoj Thakur & Amit Gupta in arranging cash of Rs. 15 Lakhs from Paras Enterprises (in which Rs. 15 Lakh was transferred from Shri Sai Traders) 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 untilisation of the cash funds generated through entry operators firms/companies. 13 Sunil Tayal A commission agent who helped Roshan Thakur, Manoj Thakur & Amit Gupta in arranging cash of Rs. 15 Lakhs from Paras Enterprises (in which Rs. 15 Lakh was transferred from Shri Sai Traders) for Tahir Hussain in lieu of the RTGS/NEFT fr....
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....ompanies 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 firms/companies. 20 S.K. Aggarwal @ Shanki An entry operator who controlled/used the bank account of Shree Ram Wood Products (in which Rs. 15.28Lakhs transferred from SEAPL) and arranged cash of Rs. 15.28 Lakhs and helped Manoj Thakur and Amit Gupta in arranging cash for Tahir Hussain in lieu of the RTGA/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. 21 Ashish Mittal A commission agent who helped S.K. Agarwal alias Shanki, Manoj Thakur and Amit Gupta in arranging cash of Rs. 15.28 Lakhs from Shree Ram Wood Products (in which Rs. 15.28 Lakh was transferred from SEAPL) 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 firms/companies. 9. Inter alia, it was su....
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.... the riots and he conducted several meetings with them, Some such people were identified as Arshad Pradhan, Irshad Ahmed, Abid Khan etc who were arrested by the Delhi Police/Crime Branch for instigating riots. 7.4 The conspiracy hatched by Tahir Hussain with his associates to fund and organise anti-CAA protests and the North East Delhi riots was the result of his conspiracy to fraudulently withdraw money through . bogus and malafide transactions. Investigation conducted so far has revealed that Tahir Hussain entered into a criminal conspiracy with Sh. Amit Gupta and other persons to fraudulently transfer money from the accounts of companies owned /controlled by him. The money so obtained by Tahir Hussain as a result of criminal activity relating to the offence of criminal conspiracy qualifies as 'proceeds of crime'. The said 'proceeds of crime' generated through the offence of criminal conspiracy under Section 120B of the IPC, which is a scheduled offence under PMLA, was used by Tahir Hussain to commit offences under Sections 302, 307 and 385 which have been invoked in the aforesaid FIRs and which are also scheduled offences under the PML. 2002. The conspiracy to fraudulen....
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....ved by him only. 7.9. Sh. Amit Gupta, whom Tahir Hussain conspired with for arranging and managing the fraudulent funds transfer and fulfilling the task of arranging cash did not provide any goods or services against the bills of Meenu Fabrications and S. P. Financial Services provided by him for ECPL. Tahir Hussain had taken cash against GST bills from Sh. Amit Gupta in January, 2020. In the past also, he had purchased bogus VAT bills from Sh. Amit Gupta. Sh. Amit Gupta managed the fraudulent transactions through bogus firms and fake bills on the instructions of Tahir Hussain. 7.10 Statement of bank account number 50200023780784 held by SEAPL in HDFC bank was called for the period 01.03.2017 to 15.05.2020 and analysed. Purchase bills of SEAPL were also verified. It was noticed that there were several high valued transactions with certain entities and their purchase bills were not filed in the purchase bills file. It was also found during investigation that payments made to these entities, in almost all the cases, reached to some bank account that was not in the name of these entities. Such transactions are as under: Table No.2: Bogus VAT Bills/ Accommoda....
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....ased in 2015-16 and the entries for the same were to be made within 3 years; that the remaining amount could be outstanding payment which could be reflected in the ledger of these parties. However, Tahir Hussain or his wife Shama Anjum could not produce the copies of year-wise ledger accounts of these parties." 10. Furthermore, as per the ECIR the Directorate of Enforcement has put forth the alleged money trail in respect of funds allegedly fraudulently removed from the companies associated with the petitioner in January, 2020 to the effect that: "8. Money Trail in respect of the funds fraudulently removed from the companies associated with Tahir Hussain in January, 2020: 8.1 As already mentioned in the preceding paras, RTGS/NEFT transactions amounting to Rs. 60 lakh were made by M/s ECPL to one 'Meenu Fabrications' as reflected in the banking narration for the RTGS/NEFT transfers. However, investigation revealed that the said amount was in fact credited in the account of one 'Shri Sai Traders'. Fake and bogus invoices were created in the name of Meenu Fabrications to M/s ECPL for 'supply of manpower services'. The amount was further tra....
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.... money for use in anti-CAA protests/gathering people/any kind of nuisance or uproar and asked him to make complete arrangements. He also met a woman named Gul at Jafrabad, where another CAA protest was going on, handed over money to her and told her to do similar things as Suleiman Siddiqui. His active role in North East Delhi riots is highlighted by the fact that there was a sudden surge of persons in his office a few days before the riots and he conducted several meetings with them. Some such people were identified as Arshad Pradhan, Irshad Ahmed, Aabid Khan et who were arrested by the Delhi Police/Crime Branch for instigating riots. The conspiracy hatched by Tahir Hussain with his associates to fund and organise anti-CAA protests and the North East Delhi riots was the result of his conspiracy hatched with Amit Gupta to fraudulently withdraw money through bogus and malafide transactions. Tahir Hussain entered into a criminal conspiracy with Amit Gupta and other persons to fraudulently transfer money from the accounts of companies owned/controlled by him. The money so obtained by Tahir Hussain as a result of criminal activity relating to the offence of criminal conspiracy quali....
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....owing is the list of evidences that have been collected during the course of investigation. * Fake invoices raised in the name of fictitious firms viz. Meenu Fabrications, SP Financial Services. On perusal of these invoices, it is also revealed that fake GSTIN numbers were being used. Also the addresses of the firms mentioned on these bills are also found to be fake (RUD-44). * Diary of Roshan Pathak recovered and seized during search proceedings conducted on 26.06.2020 at E-7. Main Karawal Nagar Road, Khajoori Khas, New Delhi - 110094 (RUD-45). * Bank statements of the beneficiary accounts depicting incorrect narration along with KYC details and bankers book of evidence certificates (RUD- 46). * Bogus contracts were recovered from the laptop of Shri Nitesh Kumar Gupta which were prepared to cover up the fraudulent transactions. * Statements of Tahir Hussain, Amit Gupta, Roshan Pathak (accountant of Tahir Hussam). Nitesh Kumar Gupta, entry operators, and others involved in the complex web of fraudulent transactions and return of cash in lieu of such transactions. * Whatsapp chat extracted from the mobile phones of Roshan Pathak ....
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.... 2(1)(u) of PML, 2002. The said 'proceeds of crime' generated through the offence of criminal conspiracy under Section120B of the IPC, which is a scheduled offence under PML, was used by Tahir Hussain to commit offences under Sections 302,307 and 385 of the IPC (which have been invoked in the aforesaid FIRs and which are also scheduled offences under the PML, 2002). The conspiracy to fraudulently withdraw money through malafide transactions with bogus entry operators on the strength of fake bills was thus part of the larger conspiracy to fund and organize the riots in Delhi which led to the loss of lives of many people." 17. The Directorate of Enforcement has further submitted that in terms of section 2(1)(v) of the PML, Act, 2002, "property" includes "16.4 Further, as defined by Section 2(1)(v) of PML, 2002 "property includes" property of any kind used in the commission of an offence under this Act or any of the scheduled offences.". As discussed in the preceding paras, the aforesaid amount of Rs.1.5943 Crore was used by Tahir Hussain and was instrumental in the commission of offence of funding and organizing anti-CAA protests and North East Delhi riots which l....
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....submitted that investigation is also underway to identify and examine the persons (including but not limited to Suleiman Siddiqui and Gul) who conspired with Tahir Hussain, i.e., the petitioner herein, and were involved with him in the anti-CAA protests and the North Delhi riots. 20. Inter alia, the Directorate of Enforcement has further submitted through its ECIR that the unique modus operandi in this case enables the entry operators to exploit the loopholes in the banking system and in strengthening the cash based informal economy is that narrations for RTGS transfers are deliberately in the name of fictitious firms (like Meenu Fabrications etc) whereas the actual funds transfers are made to other entry operator bank accounts. It was submitted further by the complainant that one of the reasons for this deliberate misrepresentation is to name the fictitious firm in such a way that it appears to be relevant to the business of the firm from which funds are being transferred eg. the names of Meenu Fabrications and S P Financial Services were chosen by Amit Gupta as they appeared to be related to the "supply of manpower" service and that was the pretext on which the funds were tran....
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....the complaint that for fraudulent removal of funds from the accounts of M/s SEAPL, ECPL and EGSPL, he conspired with Amit Gupta and asked him to arrange cash for entries and thus, in January 2020, Rs. 92 lakh from ECPL and Rs. 20 lakh from EGSPL were transferred in the bank accounts of entry operators, the details of which were provided by Sh. Amit Gupta. The narration for funds transferred though RTGS from ECPL and EGSPL reflected the names of 'Meenu Fabrications' and SP Financial Services, however, the bank accounts in which the funds were actually transferred belonged to Shri Sai Traders and Sanjay Traders. Similarly, transfers amounting to Rs. 47.43 lakh were made from the bank accounts of SEAPL in the bank accounts of Kanhaiya Enterprises alias Shree Ram Wood Products, Yudhvee Impex alias Vikram Traders and Vasundhra alias Sainyam Traders and in return for these fraudulent transfers, cash of an equivalent amount ultimately reached Tahir Hussain after changing several hands and after deduction of commission at different levels. The said cash was used by Tahir Hussain for funding anti-CAA protests and for Delhi riots in which he played a key role. It was submitted fur....
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....offence of Money Laundering as defined under Section 3 of the PML Act, 2002 and they are liable to be prosecuted and punished under Section 4 of the PML Act, 2002. 23. Through oral and written submissions made on behalf of the petitioner it was submitted that the provisions of Section 3 of the PML Act, 2002 cannot be invoked in the instant case as there is no material on the record to suggest that any money/proceeds of crime had been accumulated in the form of property or asset by way of committing the predicate offence punishable under Sections 385/302/201/34 and 307/34/120B of the Indian Penal Code, 1860 qua which the FIRs were registered. 24. Inter alia, the petitioner submits that protests and riots are different in their meanings and protests in Shaheen Bagh or in any other area was a right as enshrined by the Constitution whereas riots are different and punishable under other provisions of the Indian Penal Code, 1860. 25. The petitioner places reliance on Section 2(u) of the PML Act, 2002, which defines the "proceeds of Crime" to be: "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal acti....
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....me' under Section 2(1)(u) of the PML Act, 2002. Inter alia the petitioner submits that there was no property acquired in the instant case from the proceeds of crime and there are no civil proceedings or attachment proceedings of any kind in the instant case where any property has been attached. The petitioner has further submitted that the prosecution version is to the effect that the amount earned from the tax violations and withdrawn from the banks in the companies owned by the petitioner in cash was spent in the Shaheen Bagh protest and that cannot be an offence under Section 3 of the PML Act, 2002 in view of the observations of the Hon'ble Supreme Court in Vijay Madan Lal Chaudhary & Ors. (supra) vide paragraphs 29 to 33 of the said verdict as proceeds of crime is the core ingredient for initiation of proceedings under Section 3 of the PML Act, 2002 which is missing and wholly absent in the instant case. 28. Inter alia, the petitioner submits that there are no statements on the record under Section 50 of the PML Act, 2002 which show any withdrawal of money from the banks and the statement of the driver of the petitioner has also not been proved of what amount and for what pu....
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....e not specified under the Scheduled offence? k. Whether a prosecution under Section 3 and 4 of the Prevention of Money Laundering Act, 2002 is valid absent any finding or allegation of creating or generating proceeds of crime? l. Whether such inquiry referred to under Section 50 of the PMLA 2002 before the Assistant Director or any other officer can be termed as deemed to be a ''judicial proceeding" within the meaning of Section193 and Section 228 of the Indian Penal Code (45 of 1860)? m. Whether the absence of power of inquiry under Section 50 of the PMLA the proceedings can be termed as judicial proceedings?" 31. Inter alia the petitioner has submitted that in as much as the contents of the ECIR clearly reflect that the investigation in the matter has not yet been completed no charges could have been directed to be framed in the matter on the basis of a piece meal investigation. 32. Reliance has been placed on behalf of the petitioner in relation thereto on the verdict of the Hon'ble Supreme Court in Luckose Zachariah @ Zak Nedumchira Luke & Ors. V. Joseph Joseph & Ors.;2022 SCC OnLine SC 241. Reliance has also been placed on behalf of the....
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....torate of Enforcement vs. Padmanabhan Kishore, Judgment dated 31.10.2022 would be squarely applicable wherein it is held that even a bribe giver is guilty of the offence of money laundering if he is handing over the amount to the person taking bribe with an intent to bribe him. In this regard the following observations which negate a very similar submission as made by the petitioner would defeat the petitioner's argument herein as well: "16. ... The crucial part therefore is the requisite intent to hand over the amount as bribe and normally such intent must necessarily be antecedent or prior to the moment the amount is handed over. Thus, the requisite intent would always be at the core before the amount is handed over. Such intent having been entertained well before the amount is actually handed over, the person concerned would certainly be involved in the process or activity connected with "proceeds of crime" including inter alia, the aspects of possession or acquisition thereof. By handing over money with the intent of giving bribe, such person will be assisting or will knowingly be a party to an activity connected with the proceeds of crime. Without such active particip....
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....m the bank accounts on the strength of fake bills and fraudulent transactions with an intent to fund the Delhi Riots, for which there is evidence of funding." 35. Inter alia, the Directorate of Enforcement submits that further investigation under Section 44 of the PML Act, 2002 is not a bar for framing of the charges and that during the course of the proceedings on the bail application of the petitioner vide order dated 3.11.2022 it had been observed to the effect that: ""Ld. Special Public Prosecutor as also IO have categorically stated that the investigation in respect of the relevant period is also already complete. This fact is also mentioned in the complaint in para 17.1. Thus, it cannot be said that incomplete complaint was filed on the basis of incomplete investigation so as to defeat the statutory rights of bail of the accused. If further investigation is pending qua some other accused persons, then it cannot be said that the complaint is incomplete qua the accused Tahir Hussain. 6.5 Thus, it cannot be said, in the facts of the case that incomplete chargesheet/complaint was filed against accused Tahir Hussain giving rise to his right to statuto....
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.... of the earlier part of the same section, which envisages that even though both the trials may proceed before the same Special Court, it must be tried separately as per the provisions of the 1973 Code. Insofar as Clause (ii) of the Explanation, at the first glance, it does give an impression that the same is unconnected with the earlier part of the section. However, on closer scrutiny of this provision, it is noted that the same is only an enabling provision permitting to take on record material regarding further investigation against any accused person involved in respect of offence of money-laundering for which complaint has already been filed, whether he has been named in the complaint or not. Such a provision, in fact, is a wholesome provision to ensure that no person involved in the commission of offence of money-laundering must go unpunished. It is always open to the Authority authorised to seek permission of the Court during the trial of the complaint in respect of which cognizance has already been taken by the Court to bring on record further evidence which request can be dealt with by the Special Court in accordance with law keeping in mind the provisions of the 1973 Code ....
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....e so. Thus, involvement in any one of such process or activity connected with the proceeds of crime would constitute offence of money-laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence - except the proceeds of crime derived or obtained as a result of that crime." *** "284. In other words, the Authority under the 2002 Act, is to prosecute a person for offence of money laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of "proceeds of crime". Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a standalone process." 37. It has further been submitted on behalf of the Directorate of Enforcement that at the stage of framing of charges what is required is only a prima facie case and a strong suspicion and the conclusion that the ac....
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....d 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 pursuing with an action regarding proceeds of crime, if the situation so warrants and for being presented before the Adjudicating Authority. It is a different matter that the information and evidence so collated during the inquiry made, may disclose commission of offence of money-laundering and the involvement of the person, who has been summoned for making disclosures pursuant to the summons issued by the Authority. At this stage, there would be no formal document indicative of likelihood of involvement of such person as an accused of offence of money-laundering. If the statement made by him reveals the offence of money-laundering or the existence of proceeds of crime, that becomes actionable under the Act itself. To put it differently, at the stage of recording of statement for the purpose of inquiring into the relevant facts in connection with the property being proceeds of crime is, in that sense, not an investigation for prosecution as such; and in any case, there would be no formal accusation against th....
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.... 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 Vihar and did not meet any of the family members of Tahir Hussain and who also stated as per the prosecution that he knew Roshan Pathak as well as Amit Gupta and on the instructions of the petitioner, Sh. Roshan Pathak had sent him to the shop of Sh. Amit Gupta in Chandani Chowk 2-3 times between Oct-Nov, 2019 to Jan-Feb, 2020 to collect cash from him, though, he did not remember the dates and the cash provided by Amit Gupta was wrapped in a cloth/newspaper or placed in a bag which was handed over to Tahir Hussain or Roshan Pathak and he never opened the same and thus, he did not know the amount of cash carried by him. 42. Inter alia, he stated that he knew Nitesh Kumar Gupta and went to the Kalindi Kunj metro station once in January 2020 on his motor cycle to get the cheques and RTGS forms signed from Sh. Nitesh Kumar Gupta on the instructions of Sh. Roshan Pathak and the same were handed over back to Sh. Roshan Pathak once they were signed. Inter alia, this witness stated during investigation unde....
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....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 Police/Crime branch for instigating riots. 44. As put forth by the Directorate of Enforcement, the petitioner had hatched a criminal conspiracy with his associates to fraudulently withdraw money from the accounts of companies i.e. M/s. Show Effect Advertisement Pvt. Ltd. (SEAPL), M/s. Essence Cellcom Pvt. Ltd. (ECPL) and M/s. Essence Global Services Pvt. Ltd. (EGSPL) owned and controlled by him through bogus and mala fide transactions with bogus entry operators on the strength of fake bills and used this money to fund the Delhi riots. 45. Section 120B of the Indian Penal Code, 1860 provides as follows:- "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 a conspiracy, be punished in the same manner as if he had abetted such offen....
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.... 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 some purpose and also told that his accountant, Roshan Pathak, would take care of the mechanism through which money would be transferred from the accounts of M/s ECPL and would reach him in cash and that the petitioner also told that Roshan Pathak would arrange bills for 'supply of manpower' as they (ECPL/EGSPL) require manpower for their operational work and this would serve to be a good alibi for raising bills without actual transfer of any goods or services and it was also suggested by Tahir Hussain i.e. the petitioner herein that fake contracts would be prepared for supply of manpower services, whereafter transfer of money from M/s ECPL and EGSPL started from 07.01.2020, in as much as, Nitesh Kumar Gupta transferred Rs. 9 Lakhs, Rs.6 Lakhs and Rs. 5 Lakhs i.e. total Rs. 20 Lakhs from M/s EGSPL through NEFT to one 'Meenu Fabrications' whose name and account details were sent to him by Roshan Pathak through Whatsapp m....
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....inst 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 said transfer of money was done by one Amit Aggarwal (it was later on found during the course of PMLA investigation that the actual name of the said person was Amit Gupta and that he was also known as Amit Aggarwal) and he provided him the contact number of Amit Aggarwal, whereafter, Nitesh Kumar Gupta contacted the said Amit Aggarwal for the signing of the contract and they decided to meet at Nangloi Metro Station for the same and then Nitesh Kumar Gupta and Mohd. Akram prepared back dated contract and met Amit Aggarwal at Nangloi Metro Station in the evening and the said Amit Aggarwal informed him that he knew Tahir Hussain i.e. the petitioner herein for the past 15 years and Amit Aggarwal left with the contract and said that Nitesh Kumar Gupta could collect the signed copy from Amit Aggarwal the next week but Amit Aggarwal did not respond to his calls and Nitesh Kumar Gupta also could not meet Amit Aggarwal due to lockdown restri....
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....ay 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 which have been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence and the process or activity can be in any form- be it one of concealment , possession, acquisition, use of proceeds of crime, in as much as projecting it as untainted money or claiming it to be so and thus, involvement in any one of such process or activity connected with the proceeds of crime would constitute the offence of money laundering and this offence otherwise has nothing to do with the criminal activity relating to a scheduled offence- except the proceeds of crime derived or obtained as a result of that crime. 55. Section 3 of the PMLA, 2002 provides as follows:- "3. Offence of money-laundering.-Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and proje....
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....ng 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 process of the criminal conspiracy for use of the said proceeds i.e. the commission of the crime to commit riots in the North Eastern part of Delhi between 23/25.02.2020 and to cause unrest, falls prima facie within the ambit of commission of a scheduled offence, in as much as, the offence for commission of a criminal conspiracy is a standalone offence and a scheduled offence in terms of Section 2(y) of the PMLA, 2002. The three accepted stages of money laundering as set forth in paragraph 271 of the verdict in Vijay Madanlal Choudhary &Ors. (supra) are clearly brought forth in the instant case. 59. That there were no proceeds of crime attached, is not relevant, in as much as, in terms of Section 3 of the PMLA, 2002, the process or activity in connection with the proceeds of crime i.e. hatching a criminal conspiracy for violation of tax/ laws for subsequent use of such....
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....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 projects it as untainted property is guilty of offence of money-laundering. So, it is a very technical offence. The predicate offences are all listed in the Schedule. Unless there is a predicate offence, there cannot be an offence of money-laundering." [emphasis supplied]" 61. Apparently thus, the agreement to enter into an agreement to commit a crime, falls within the ambit of Section 120A of the Indian Penal Code, 1860 falling thus, within the ambit of a scheduled offence. 62. As regards the contention raised on behalf of the petitioner that investigation in the matter was not complete and thus, no charges could be even considered to be framed on the basis of the material on the record in view of the categorical submissions through the ECIR itself that further investigation was being conducted, the explanation (ii) to Section 44(1) of the PM....