TaxTMI 
TaxTMI 
2023 (6) TMI 650
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....d. (hereinafter "Prakausali") and M/s Mayfair Investments Pvt. Ltd. (hereinafter "Mayfair"). 4. The applicant is in custody since 04.10.2021. FACTUAL MATRIX 5. Between 2006 to 2022, 74 FIRs were registered by Delhi Police (EOW, Saket, Mandir Marg, Crime Branch Police Stations) and CBI, against Promoters of Unitech Group i.e. Ramesh Chandra, Ajay Chandra, and Sanjay Chandra and their associates under section 34, 201, 406, 409, 120B, 420, etc. of Indian Penal Code, 1860 (hereinafter "IPC") and under section 7, 7(A), 8,9,10,12 & 13 of Prevention of Corruption Act, 1988 (hereinafter "PC Act"). Most of the said FIRs were recorded based on complaints made by homebuyers who were cheated by the accused persons. The Chandra's promised the homebuyers that they will get their dream home and investors would get handsome return on their investment. Induced by this promise the homebuyers and investors invested huge amounts in the Unitech group. These amounts were misutilised and laundered. On the basis of numerous FIRs, an investigation was taken up to trace proceeds of crime and to investigate possible money laundering under Prevention of Money Laundering Act, 2002 (hereinafter "PMLA")....
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....ts and did not use those funds for the said projects but misappropriated the same. He further states that prior to the arrest, the applicant has joined investigation on 4 occasions and her statements have been recorded. Post arrest, the applicant has been investigated on 9 occasions. 11. Mr. Aggarwal states that two imperative assumptions prevail in the present case: i. The first assumption is that in law one assumes that a person having/dealing with financial transactions cannot know at the outset that the funds involved in the financial transaction are proceeds of crime. ii. The second assumption which he says is relevant is that the applicant's knowledge that the person is an accused of a predicate offence and that the applicant is the wife of that accused does not lead to an automatic inference that the money given by that accused are proceeds of crime. 12. Mr. Aggarwal, learned senior counsel has made the following arguments: A. He states that the twin conditions of section 45 PMLA are not applicable to the Applicant as she is a woman and falls within the proviso to section 45(1) PMLA which appears to further the constitutional mandate of Artic....
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....4 Crores H. Regarding the allegation of 107.4 crores between 01.02.2011 to 11.02.2011 alleged to be received in the Applicant's company Prakausali through its holding company Mayfair, he states that Prakausali was never the Applicant's company. Prakausali had multiple directors and shareholders, apart from the Applicant, including Pushpa Chandra (mother-in-law of the Applicant, who signed various documents of the Company). There were other directors in Prakausali such as Sanjay Chandra, Rekha Bawa, Sunil Keswani, Seema Manga and Pushpa Chandra, thus, it is wrong to allege that Prakausali is Applicant's company. I. The Applicant was never a bank signatory in Prakausali. In fact, for the relevant years when the Applicant was a director, the balance sheets, annual returns, board returns were signed by Pushpa Chandra, the Applicant's mother in law. J. He states the Applicant like other female members of the family was only made a nominee director in Prakausali from 16.06.2010 to 23.04.2013 in view of the MCA regulations. No funds came to the personal account of the Applicant from Prakausali. K. On 25.01.2011, Mayfair passed a resolution, allowing the....
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....'s statement would show the petitioner represented the 25 companies were not associated with M/s. PACL. What weight the statements under Section 50 of PMLA would carry at the end of trial cannot be tested at the stage of bail, more importantly when the intermediary companies were never made an accused in the present ECIR. The ultimate effect of their non-inclusion would be seen at the conclusion of trial. Further considering the order dated 03.09.2020 wherein all remaining co-accused in this ECIR were admitted to bail, this Court has every reason to say the petitioner has passed the test of broad probabilities. Admittedly twin conditions of Section 45 (supra) does not put an absolute restraint on grant of bail or require a positive finding qua guilt." (emphasis supplied) Rs. 43.70 Crores O. Regarding the allegation of Rs. 43.70 crores where the POC from transferred from Unitech Realty, Unitech Infracon, Shatiniketan to Unibild and then further transferred to Prakausali where the Applicant was a director, the learned counsel for the Applicant states that the Applicant had no association whatsoever with Unibild, Unitech Realty, Unitech Infracon or Shantiniketan.....
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....ved by the Applicant. Y. He states that the property was purchased by Mr Ajay Chandra with a loan financed by ICICI Bank, 50% share each for his wife Mrs Upma Chandra, and the Applicant (sister-in-law). Mr. Ajay Chandra was looking after the affairs of the Company and a PoA in this regard was also executed in favour of Mr. Ajay Chandra to take all decisions. Rs. 84,00,000 Z. Regarding the allegation of Rs. 84,00,000/- being used to purchase Lamborghini car for the Applicant pursuant to outward remittance of USD 2,00,000/- on 10.05.2007, learned counsel states the said car was purchased from funds of Mr. Sanjay Chandra and was used by him. Even the sale proceeds of the said car have not been received by the Applicant. Moreover, there cannot be any POC from such time as no allegations of predicate offence were made homebuyers from that time period. TRIKAR GROUP AA. The allegation against the Applicant is that she incorporated and was managing and controlling a benami group with the name Trikar Group with her husband, Mr Sanjay Chandra. POC stashed in foreign accounts of Trikar Group (through Cayman Islands, Singapore and Mauritius) were la....
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....t risk. She has flown overseas from India and back more than 30 times since obtaining the Dominican Republic passport in April 2016. When the Applicant was intercepted on 10.03.2021 at the Delhi Airport, she was travelling with a return ticket and had undertaken travel in January and February of 2021 with no attempt to flee. Reliance is placed on the judgment of Anil Mahajan vs Commissioner Of Customs & Anr2000 SCC OnLine Del 119 wherein it was observed: "14. The legal position emerging from the above discussion can be summarised as follows: ...... (o) Law does not authorise or permit any discrimination between a foreign National and an Indian National in the matter of granting bail. What is permissible is that, considering the facts and circumstances of each case, the Court can impose different conditions which are necessary to ensure that the accused will be available for facing trial. It cannot be said that an accused will not be granted bail because he is a foreign national." HH. He states the Applicant will not tamper with the evidence in the present case as all documents relating to the Applicant are already in the custody of ED. The Applic....
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....hich is punishable up to a maximum of seven years. OO. He states the Applicant satisfies the requirements of triple test as upheld by the Hon'ble Supreme Court in the case of P. Chidambaram vs Directorate of Enforcement reported at (2020) 13 SCC 791 in the following manner: a) Flight Risk: The Applicant voluntarily returned to India while being fully aware of the ongoing investigation and being regularly summoned by the ED for the purpose of recording her statements. The Applicant is in the process of acquiring citizenship and passport of India and adhere to the applicable laws and regulations, and therefore also submitting herself to the jurisdiction of the Hon'ble Courts, and investigating agencies in India. Most importantly, the Ld. Special Judge while dismissing the bail application has otherwise held that the Applicant cannot be considered as a flight risk. b) Tampering with Evidence: The Respondent has already filed a complaint and a supplementary complaint in the present case. Documentary evidence as well, has been either seized or already brought on record along with complaints. There is no possibility of tampering with the evidence, and the Appli....
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....that roughly Rs. 7000 crores were siphoned off out of which Rs. 1742 crores have been diverted out of India. Acquisition and handling of POC G. Mr. Hossain states that the Applicant was actively involved in the acquisition and handling of POC. Rs. 380.08 Crores was generated as POC from funds of home-buyers by Unitech and said POC was transferred to Carnoustie. The Applicant was the director in Prakausali where between 01.02.2011 to 11.02.2011, out of the Rs. 380.08 Crores, Carnoustie (from SBI account no. 30279430078) extended Rs. 107.40 Crores to Prakausali (through its holding company, Mayfair) as Inter Corporate Deposit (ICD). H. He states that on 25.01.2011, Mayfair passed a resolution allowing the transaction of transfer of Rs. 107.4 crores from Mayfair to Prakausali and the board resolution shows the Applicant's participation in the said board resolution for transfer of POC from Mayfair to Prakausali. I. He submits that the Applicant was involved in laundering Rs. 43.70 crores also. The POC from 3 subsidiaries was transferred from Unitech Realty, Unitech Infracon, Shatiniketan to Unibild Engineering. In February 2011, from Unibild, these P....
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.... purchase of Lamborghini car in 2007, there is high likelihood that its source is proceeds of crime. He states it is clear from a narration of the above that the Applicant knowingly and willingly acquired and possessed the Proceeds of Crime of Rs. 151.12 Crores and utilized the same for her personal purposes. TRIKAR P. He states that investigation has revealed that the Applicant along with her husband Sanjay Chandra incorporated, controlled and managed a benami group under the name and style of Trikar Group which managed companies in Cayman Islands, Singapore, Mauritius and India. Q. He states that Indrajit Zaveri (a family friend of the Applicant and a benami /dummy director of Trikar Group in Dubai) in his statement u/s 50 of PMLA, 2002 on 23.03.2021 has deposed that the Applicant and her husband Sanjay Chandra frequently visited Dubai and discussed things related to their benami entity Trikar Group. Indrajit Zaveri in his statement has said that the Applicant called him and made him sign documents (2-3 times) relating to companies in which he was being made a dummy director. The statement of Mr. Zaveri is reproduced below: "Initially, I met he....
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....had served in six entities when the investigation revealed that she was director/beneficial owner etc of more than 14 entities. U. Applicant admitted that the bank accounts of the offshore entities were managed by her husband Sanjay Chandra. However, she did not provide the documentary evidences for the same. The Applicant stated that her two children have acquired citizenship of USA and maintain two bank accounts there but she refused to give bank account statements regarding the same. She also did not provide documents related to offshore entities. He states there are many instances where the applicant has not cooperated in the investigation and wasted time of investigating agency. V. During the Applicant's interrogation in judicial custody, it was further revealed that the she had 3 more properties in Dubai that she previously had failed to disclose. It is also pertinent to mention herein that she has also failed to disclose the source of the money used to purchase the said properties. The said properties have already been attached vide provisional attachment order dated 25.08.2022. Triple Test W. Furthermore, the Applicant does not fulfil the....
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....imination on grounds of religion, race, caste, sex or place of birth ... (3) Nothing in this article shall prevent the State from making any special provision for women and children." 19. Based upon Article 15(3), the State has carved out an exception for 'woman' from the rigours of twin condition of Section 45 of the PMLA. 20. PMLA does not define a 'woman'. It is neither the intention of the Constitution of India nor the intention of PMLA to classify women on the basis of their education and occupation, social standing, exposure to society, etc. 21. It is also settled principle of interpretation that while interpreting a statute and/or a Section, the Courts are not to substitute or add or subtract words from the Section. The same would be amounting to supplanting the intention of the Legislature. 22. The Apex Court in P. Ramachandra Rao v. State of Karnataka (2002) 4 SCC 578 observed as under: "25. The primary function of the judiciary is to interpret the law. It may lay down principles, guidelines and exhibit creativity in the field left open and unoccupied by legislation. Patrick Devlin in The Judge (1979) refers to the role of the Judge a....
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....hould not be considered narrowly, and must be given a liberal interpretation. 24. Thus, to argue what kind of woman is entitled to fall within the proviso to section 45(1) PMLA by creating an ad-hoc illusionary sub-classification of educated women, business women, women belonging to high social strata, within the broader classification of "woman", as sought to be done by the respondent, is misconceived. 25. There is no intelligible differentia in classifying women based on their education, occupation or social stature. Classifying women bereft of any intelligible differentia would be an anathema to the fundamental right to equality under Article 14 of the Constitution. Thus, the respondents' reliance on the judgment of Shivani Rajiv Saxena (supra) is misplaced. 26. The said judgment is also distinguishable as the Coordinate Bench in Shivani Rajiv Saxena (supra) had based its judgment on the triple test and consequently denied bail to the applicant therein. What had weighed with the coordinate bench in Shivani Rajiv Saxena (supra), was that the accused person/ applicant therein was a resident of Dubai for the last 25 years. Her husband was still residing in Dubai and had no....
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....MLA elucidates the legislature's intent to incorporate relaxations for persons below sixteen years of age; a woman; or one who is sick or infirm." ... 35. Thus, the proviso to Section 45(1) of PMLA carves out an exception from the rigours of Section 45 for persons who are sick or infirm. Once a person falls within the proviso of Section 45(1), he need not satisfy the twin conditions under section 45(1) as elucidated in the dicta of Gautam Kundu (supra)." 31. This court has observed in Kewal Krishan Kumar (supra) that the legislature has carved out the proviso to section 45(1) as a lenient provision for persons below sixteen years of age, women or persons who are sick or infirm. The relevant paras read as under: "18. The relevant clauses of the Finance Bill introduced on 1st February, 2018 for amending Section 45 of the PMLA reads as under:- "Clauses 204 and 205 of the Bill seeks to amend certain provisions of the Prevention of Money laundering Act, 2002, which include the following, namely:- -x-x-x-x- (v) to amend section 45 of the Act relating to offences to be cognizable and non-bailable and to amend sub-section (1) ....
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....- (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.]" 37. Vijay Madanlal Chaudhary (supra)clarifies the issue as under: "388. There is no challenge to the provision on the ground of legislative competence. The question, therefore, is : whether such classification of offenders involved in the offence of money-laundering is reasonable? Considering the concern expressed by the international community regarding the money-laundering activities world over and the transnational impact thereof, coupled with the fact that the presumption that the Parliament understands and reacts to the needs of its own people as per the exigency and experience gained in the implementatio....
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....n accused does not lead to an automatic inference that the money in her hands are proceeds of crime. 42. In order to prove mens rea, the respondent/prosecuting agency is required to show something more than merely an allegation. In the present case, though the prosecuting agency has tried to substantiate the allegations by showing transfer of POC as well as section 50 PMLA statements, but what persuades me is that the Applicant has provided a prima facie reasonable, satisfactory explanation for each of the allegations. Whether the prima facie satisfactory explanation crystallises into substantial defence leading to an acquittal or is merely an eye-wash or a sham can only be determined after evidence. 43. The explanations furnished by the Applicant seem reasonable to me to believe that prima facie the Applicant is not guilty of the offence of money laundering are as under: 44. Regarding the allegation of laundering Rs. 107.4 crores, the applicant was a nominee director in Prakausali from 16.06.2010 to 23.04.2013, like other female members of the Chandra family. Further, the said company was incorporated in 1981, way before the Applicant got married in the Chandra family. ....
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....o Prakausali, nothing has been brought on record to show the Applicant's association with Unibild in any capacity or with the three subsidiary companies i.e., Unitech Realty, Unitech Infracon or Shantiniketan. 51. Unibild belongs to an individual named Mr. Praveen Gurnani and the respondent has failed to establish any connection or link between the applicant and Mr. Gurnani. Prima facie, no case is made out against the applicant regarding the allegation of laundering Rs. 43.7 crores. 52. As regards Prakausali is concerned, I have already observed that there is nothing to show that Applicant was holding key managerial position and was involved in day-to-day affairs of the said company. 53. Regarding the allegation of laundering Rs. 7 crores, the applicant was not a director in Unitech Ltd. or Millenium therefore, the allegation of laundering Rs. 7 crores is prima facie not made out. 54. In addition, the allegation of laundering of Rs.7 crores in Prakausali is of the year 2008 when the Applicant was not a director of Prakausali. 55. The amount of Rs. 34.7 lakhs, alleged POC has been returned by the Applicant's company Motif to Prakausli in 2008-09 via cheque numbers 42....
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..... The Applicant only came into the picture in 2017 when the shareholding was transferred to the Applicant that too, on the instructions of Sanjay Chandra. The relevant extract of Mr Anuj Malik's statement via email dated 21.01.2022 is reproduced below: "3. HAVE OU SERVED AS DIRECTOR/SHAREHOLDER/PROPRIETOR/BENEFICIAL OWNER/TRUSTEE ETC IF YES, GIVE DETAILS OF ENTITIES? Yes. The details are as under: a. U i. Redwood International Limited (Holding co. in Jebel Ali Free Zone) Established around end of 2014/ early 201 on the instructions of Mr. Sanjay Chandra who had initially made me a 100% shareholder. My shareholding was reduced to 50% in mid-2016 and was entirely transferred to Indrajit Zaveri under the instructions of Mr. Sanjay Chandra in April 2017. ii. Ul Consultants DMCC (Dubai) Established around early 2014 on the instructions of Mr. Sanjay Chandra who had initially made me a 100% shareholder. My shareholding was entirely transferred to Milko Sinko - a UAE based entity under the instructions of Mr. Sanjay Chandra in April 2017. iii. MNM International FZE (RAK)(new name :PC Global FZE) ....
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....g and overall strategy Govind Sharda- Director and CFO Pranav Kumar (Myself)-fund raising and overall operations Vineet Mathur - Commercial and leasing head SuniiKher-Civil Head R Ravi - Commercial Accounts Smita - Architect Priya Kapoor (Sister of preeti Chandra) - Marketing Shilpi varshney-Company secretary ; Dhananiav Sharma- Accounts" 65. The extract of Mr Indrajit Zaveri's dated 23.03.2021 statement is reproduced below: "Q. 3 Is your statement 22-3-21, in answer No.12 you have stated that you have first met Mr. Sanjay Chandra and his wife Preeti Chandra at a social gathering in 2012 in Dubai at a social gathering. What happened thereafter, please describe in detail. Ans. 3 In 2012, I met Sanjay and Preeti Chandra at a social gathering. We became good friends thereafter. We spent some time together with our children too. Our friendship grew and in 2016, he asked me to become a Director in his company called Trikar Assett Management Ltd. in Cayman Islands. He had offered to pay me a Director's salary of DHS 25,000 P/month. This carried on for a few months and then the payment of....
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....in the affairs of Trikar as a dummy director. Whether he was a dummy director or active director and signed board resolutions at his own instance or at the instance of applicant are questions of trial. 69. What is unexplainable is that even though there are board resolutions of Trikar signed by Mr Indrajit Zaveri, he has not been made an accused. 70. A coordinate bench of this court in Chandra Prakash Khandelwal (supra) has held that weightage given to section 50 statement is to be analysed at the final stage and not at the stage of grant of bail. Hence, prima facie not much reliance can be placed on section 50 statements in view of inconsistency in the statements of Indrajit Zaveri, Anuj Malik and Pranav Kumar. Triple Test - Flight Risk 71. A lot of stress has been laid by the learned counsel of the respondent stating that the Applicant is a flight risk. He has brought to my notice the order of the Hon'ble Supreme Court dated 25.03.2022, wherein the Applicant sought interim bail on account of attending the last rites and cremation ceremony of her deceased maternal grandmother. However, the same was denied by the Hon'ble Supreme Court as the applicant was considered a f....
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....e decided or considered." (emphasis supplied) 74. Once the Hon'ble Supreme Court has granted liberty to the applicant to move appropriate bail application before the appropriate Court, the appropriate Court has to adjudicate the application on its own merits and the reliance of the respondent on an earlier order prior to the order of 10.08.2022 passed by the Hon'ble Supreme Court may not be of much relevance. In addition, the respondents have interrogated the Applicant on numerous occasions and lastly on 15.09.2022. Thereafter the respondents have not felt the need to interrogate the Applicant for a period of more than 7-8 months. 75. The order of 10.08.2022 passed by the Hon'ble Supreme Court assuages the concern of the Applicant being a flight risk. Additionally, the Sessions court on 07.11.2022 has stated that the Applicant is not a flight risk. Regarding the applicant being a citizen of another country i.e., Dominican Republic, which does not have an extradition treaty with India, the learned senior counsel for the Applicant states that the Applicant is willing to renounce the citizenship of Dominican Republic as a bail condition and is already in the process of taking....