AI Drafter 
TaxTMI 
TaxTMI 
2023 (2) TMI 948
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.... 109/2020 dated 7th March, 2020 registered with City Chowk Police Station Aurangabad invoking Sections 420, 406 and 34 of the Indian Penal Code, 1860. The details of the properties attached in the impugned PAO are set out below:- 6.2 Ms. Loveleen Behera, Vice President, Yes Bank Ltd. during her statement recorded on 01.09.2021 under the provisions of Section 50 of PMLA, has interalia stated that during the year 2015, the then saleable area of Omkar 1973 Project was mortgaged with Yes Bank Ltd. and M/s Piramal Realty Pvt. Ltd; that in the year 2016, M/s Surana Developers (Wadala) LLP, a company of M/s ORDPL, approached the Yes Bank Ltd. for an additional loan of Rs. 410 crores for Anand Nagar SRA CHS Scheme; that Yes Bank Ltd. disbursed an amount of Rs. 410 crores and against the said loan, a saleable area of 3.5 lakhs sq ft. to be loaded in Omkar 1973 project, Worli, was mortgaged with the Yes Bank Ltd and therefore, the specific saleable area of 3.5 lakhs sq ft. of M/s Surana Developers (Wadala) LLP for Anand Nagar SRA CHS Scheme was mortgaged only with the Yes Bank Ltd. and the other saleable area of identified units of area 5 lakhs sq ft. in Omkar 1973 Worli was mortgag....
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....could have been utilized, hence the property as mentioned below have been identified as the Proceed of Crime as per the concept of value of such property as defined under Section 2(1)(u) of the PMLA, 2002 to the extent of Rs. 330 crores (approx.): Sr.No. Name of holder Detail of Properties Value of Properties (in Rs.) Source of Fund 1. M/S ORDPL (Mortgaged with Yes Bank and M/s. Piramal Realty Pvt. Ltd. Flat No. C-1601, C-1602, C-1701, C-1702, C-1801, C-1802, C-1901, C-1902, C-2101, C-2201, C-2202, in Tower C in Omkar Worli 1973 Project situated in CTS No. 286(pt), Lower Parel Division, Ward G/s, Pandurang Marg, Worli, Mumbai. 330,57,79,200 Yes Bank Loan of Rs. 410 crores vide letter dated 31.12.2015 to M/s. Surana Developers, Wadala LLP 3. The petition was first listed before this Court on 27th July, 2022, when status quo was directed. The relevant extract of the said order reads as under: "3. Till the next date of listing, the respondent shall stand restrained from taking further steps as contemplated under Section 8 of Prevention of Money Laundering Act, 2002. The petitioner shall also stand restrained from disposing of or creating any t....
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..... Vs. Union of India and Ors. [SLP (Criminal) No.4634 of 2014, decided on 27.07.2022], with liberty to avail appropriate remedies as per law. 3. In all these applications it is specifically contended that, the term 'Proceeds Of Crime' defined under the Prevention Of Money Laundering Act (hereinafter referred to as 'the PML Act') is based upon the criminal activity relating to Scheduled Offence. When Predicate Offence then there can be no offence under the PML Act as held by the Hon'ble Supreme Court. It is further contended that, when the Scheduled Offence itself is not in existence, there cannot be any tainted money and without which there is nothing to be laundered. With this, all the applicants in the respective applications Exh.166 to 173 prayed their discharge. xxx xxx xxx 11. The Prosecution Complaint indicates that, companies Accused No.1, 2, 12 to 17 are arrayed by ED for Mr. Babulal Varma (A3) and Mr.Kamalkishor Gupta (A4). These companies allegedly got status of legal entities because of Mr.Babulal Varma (A3) and Mr.Kamalkishor Gupta (A4). Both of them (A3 & A4) were discharged after as 'C Summary' acceptance order dt.12.02.2021 passed by the Ld....
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....ey-laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money-laundering against him or any one claiming such property being the property linked to stated scheduled offence through him." Therefore, in the event that the accused person is discharged in the PMLA case itself, the impugned PAO and the attachment of such property linked to the accused person, from the said PAO, deserves to be quashed. 10. This legal position has been subsequently affirmed by the Supreme Court in the following cases. i. Parvathi Kollur v. Enforcement Directorate [Criminal Appeal No. 1254/2022, decided on 16th August, 2022], ii. Adjudicating Authority v. Shri Ajay Kumar Gupta & Ors. [Criminal Appeal Nos. 391-392/2018, decided on 2nd December, 2022]....
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....sed No. 1 expired on 08.05.2018. 5. Thereafter, the Trial Court, by its judgment and order dated 04.01.2019, allowed the application and discharged the Appellants from the offences pertaining to the Act of 2002 while observing that occurrence of a scheduled offences was the basic condition for giving rise to "proceeds of crime"; and commission of scheduled offence was a pre-condition for proceeding under the Act of 2002. 6. Aggrieved by the said discharge order, the Directorate preferred a revision petition before the High Court. The High Court proceeded to set aside the discharge order while observing that the allegations made in the complaint and the material produced, prima facie, made out sufficient ground for proceeding against the Appellants for offences under the Act of 2002. 7. Learned Counsel for the Appellants has contended that the issue as involved in this matter is no more res integra, particularly for the view taken by a 3-Judge Bench of this Court in the case of Vijay Madanlal Choudhary and Ors. v. Union of India and Ors. decided on 27.07.2022 where, the consequence of failure of prosecution for the scheduled offence has been clearly provid....
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.... be registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum; thirdly, in the event there is already a registered scheduled offence but the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or quashing of the criminal case of the scheduled offence, there can be no action for money laundering against not only such a person but also any person claiming through him in relation to the property linked to the stated scheduled offence. In other words no action under PMLA can be resorted to unless there is a substratum of a scheduled offence for the same, which substratum should legally exist in the form of a subsisting (not quashed) criminal complaint/inquiry or if it did exist the accused has since been discharged or acquitted by a Court of competent jurisdiction." 13. The Supreme Court in W.P.(C) 368/2021 titled 'Indrani Patnaik & Anr. v. Enforcement Directorate and Ors.' has recently held that there cannot be any prosecution in relation to an offence for which the accused person has already been discharged. The rele....