TaxTMI 
TaxTMI 
2023 (12) TMI 1170
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....yed as A.8 in the said crime. The aforesaid FIR has been registered against one Ghanta Subba Rao, the then Special Secretary to the Government, Skill Development, Entrepreneurship and Innovation Department, M/s. Siemens Industry Software India Private Limited (SISW), M/s. Design Tech System Private Limited (DTSPL) and others for allegedly swindling of money invested by the Government in a dubious manner. According to the said FIR, APSSDC entered into a Memorandum of Association (MoA) with SIEMENS (combination of SISW and DTSPL), to impart Hi-end technology training to the trainers of APSSDC, pursuant to which DTSPL had to provide training software development including various sub modules designed for the high-end software for advanced manufacturing CAD/CAM, and the MoA does not contemplate any sub contract. As part of the SIEMENS project, 6 clusters at a cost of Rs. 546.84 crores (per cluster) were to be formed in which 90% of the total project cost i.e. Rs. 2951.00 crores was supposed to be borne by M/s. SISW and M/s. DTSPL, and the remaining 10% i.e. Rs. 330.00 crores was supposed to be borne by the Government. The total project cost for establishing 6 SIEMENS clusters amount to....
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....cuments like purchase order, invoices, bills, etc. were created to project these bogus transactions as genuine. Profiles of most of these companies are nowhere related to software/ hardware services. Funds transferred from PVSP/SEPL to ACI was with an intention to generate cash without genuine business, and whatever cash that had been generated in this chain was handed over either to Yogesh Gupta or Mukul Agarwal (A.3), who approached Suresh Goyal for generation of cash. SEPL diverted some funds to company of Mukul Agarwal (A.3) viz. Knowledge Podium Systems Private Limited (KPSPL) and from there, the funds were diverted to personal account of Mukul Agarwal (A.3). The companies/entities which provided cash in lieu of receiving accommodated entries were identified. Apart from ACI, other entities viz. Inweb Services Private Limited, Patric Info Services Private Limited, IT Smith Solutions Private Limited, Provestment Services Limited, Bhartiya Global Infomedia Limited, etc. were used as bogus billing entry to divert funds received directly from SEPL, and so far, diversion of funds of Rs.67.00 crores has been identified. Most of the funds were circulated among the entities eithe....
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....Siemens Project and about Rs.67.00 crores was diverted out of the Government funds from the bank accounts of DTSPL to SEPL and from there to ACI and other shell entities on the pretext of supply of material/services for the project, and the diverted amount was routed through a web of shell companies and in lieu of the transferred amounts, cash was arranged through entry operators. Payments were made from SEPL to various entities after confirmation from DTSPL of receipt of goods, but no corresponding goods or services were provided by the shell entities to DTSPL/SEPL against transfer of the funds from SEPL, and the petitioner deliberately lied and tried to hide the routing of funds and generation of cash. 4. Learned senior counsel Sri B. Adinarayana Rao appearing for Sri V. Nitesh, learned counsel for the petitioner, strenuously contended that Section 19 of the PMLA requires that before arrest of a person, the Authorized Officer must have reason to believe, basing upon the material in his possession, which has to be recorded in writing, that the person is guilty of the offence punishable under the said Act. He submitted that the Authorized Officer placed reliance on oral and hear....
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....LA. The learned DSG submitted that investigation conducted so far revealed many discrepancies including diversion of APSSDC funds through various shell companies, and the vendors from whom purchases were shown to have been made were pre-decided in advance, and major portion of funds were transferred to SEPL which was incorporated post 'tri party agreement' signed among M/s. DTSPL, SISW and APSSDC, and that major portion of funds received from the Government were diverted to newly opened entity SEPL which has no past experience to execute the scope of work in the subject project. The learned D.S.G. further submitted that during the course of investigation, certain entrepreneurs were examined under Section 50 of the PMLA and it is found that the funds which were diverted by DTSPL to SEPL and thereafter to shell/defunct entities and cash that was generated was withdrawn from the system. It is further submitted that the entire bogus transactions were done on the basis of concocted and fabricated documents and invoices. He further submitted that the companies/entities which provided cash in lieu of receiving accommodated entries were identified, and some of these persons/entities wer....
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.... SEPL, which was incorporated post 'tri party agreement' signed among M/s. DTSPL, SISW and APSSDC for implementation of SIEMENS project, and major portion of the funds received from the Government in the account of Execution Partner M/s. DTSPL, was diverted to the newly opened entity SEPL, which does not have any past experience to execute the subject work. During investigation, it has been revealed about diversion of major funds to suspicious entities done by SEPL under the pretext of supply of software/ hardware/materials/services. It is alleged that in reality, the supply of such goods and services was not done. On examination of data and analysis of bank account statements shows that about Rs. 56.00 crores, out of the funds received from APSSDC, was transferred by SEPL to the entity ACI, and the said amount was diverted through a web of shell entities by way of layered transactions. 8. Insofar as role of the petitioner is concerned, it is alleged that he is involved in siphoning of government funds and played an active role in floating shell companies in the said process. The petitioner was examined by the investigating agencies number of times. Investigating agencies sea....
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....g that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, or is accused either on his own or along with other co- accused of money-laundering a sum of less than one crore rupees may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by- (i) the Director; or (ii) any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government. (1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed. (2) The limitation on granting of bail specified in 5**....
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....nt showing complicity of the petitioner herein. In respect of the investigation which has been carried on, in crime No. 29 of 2021, till today, it has not come to light that any money has been flown to the account of the petitioner herein to show the complicity of the petitioner. It is also borne out of the record that the petitioner remained present ever since investigation started, irrespective of the agency. He was available to the investigating agency and fully co- operated as and when he was called. He appeared before the C.I.D. multiple times. In pursuance of the conditions imposed while granting anticipatory bail to the petitioner, he was appearing before the investigating agency. Though residential premises of the petitioner were searched, no incriminating material has been seized. The petitioner herein was summoned by the respondent to appear on 01.03.2023, 02.03.2023 and 03.03.2023 and was examined at length. The petitioner was arrested on 04.03.2023. Despite the fact that for the last more than 15 months, different investigating agencies are conducting investigation, there is absolutely no accusation to the extent of any monies flown into the account of the petitioner. E....
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....ift on the person facing charge of offence of money-laundering - to rebut the legal presumption that the proceeds of crime are not involved in money-laundering, by producing evidence which is within his personal knowledge. In other words, the expression "presume" is not conclusive. It also does not follow that the legal presumption that the proceeds of crime are involved in money-laundering is to be invoked by the Authority or the Court, without providing an opportunity to the person to rebut the same by leading evidence within his personal knowledge. 346. Such onus also flows from the purport of Section 106 of the Evidence Act. Whereby, he must rebut the legal presumption in the manner he chooses to do and as is permissible in law, including by replying under Section 313 of the 1973 Code or even by cross-examining prosecution witnesses. The person would get enough opportunity in the proceeding before the Authority or the Court, as the case may be. He may be able to discharge his burden by showing that he is not involved in any process or activity connected with the proceeds of crime. In any case, in terms of Section 114 of the Evidence Act, it is open to the Court to pres....
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....t necessary to be assigned, the order granting bail must demonstrate application of mind at least in serious cases as to why the applicant has been granted or denied the privilege of bail. 46. The duty of the court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. However, while dealing with a special statute like MCOCA having regard to the provisions contained in sub-section (4) of Section 21 of the Act, the court may have to probe into the matter deeper so as to enable it to arrive at a finding that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the court while granting or refusing bail undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby" (emphasis supplied) 401. We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma. The Court while dealing with the application....
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.... Bench of this Court, it could be deduced that the basic jurisprudence relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of "grave offence" and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be....