2023 (12) TMI 1355

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....r 2 Sh. P.V.R. Murthy - Managing Director 3 Sh. Y.P. Trivedi - Director 4 Sh. Rajesh Shah     5 Upkar Singh Kohli     6 Mahendra Singh Arora     7 Ashish Mahendrakar     8 Tushar Dey     9 Anant Pathak &     10 Manish Malani for offence under section 406, 420, 120(B) of IPC. 3. After registration of FIR, an ECIR was recorded on 17-1-2014. The FIR was registered on 30-12-2013. The EOW, Mumbai Unit filed charge sheet on 29.3. 2014 in MPID Court against P.V.R. Murthy followed by supplementary charge sheet on 28-10-2016 against the individuals and Birla Power Solutions Limited. It was also against M/s Zenith Birla (India) Limited, Birla Cotsyn (India) Limited and Sholka Eductech, M/s Birla Edutech Ltd. for the offence under section 420, 406, 477 (A) and 120 (B) of Indian Penal Code (IPC), 1860 and section 3 and 4 of MPID Act, 1999. 4. It was alleged that accused company M/s Birla Power Solution Limited and their group entities issued an advertisement to invite fixed deposits on an attractive interest. The accused in coal....

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.... Power Solution Ltd and its Directors. It was to secure the proceeds of crime so transferred to M/s Birla Surya Ltd. The appellant had transferred money to different group of companies. It was even on short term basis. The transactions were noted in the board of meeting. However, due to critical condition of the company, the amount could not be repaid with interest. It has also come that entire fund received by M/s Surya Birla Ltd was released to the Contractor through the bank for acquisition and development of land etc. It was due to adverse conditions, the funds so transferred to M/s Birla Surya Ltd. was not returned back and accordingly repayment could not be made to the investors. Sh. Madan Diwan was engaged to purchase the land in District Satara, State of Maharashtra. It was to establish the projects which includes a solar project. The money was invested even near Pune for purchase of land. It is however a case where investors were cheated by non-payment of interest and the principle amount and accordingly FIRs were registered against them. 9. The attachment order was confirmed by the Adjudicating Authority finding a case of money laundering. It has been questioned by the....

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....rawing the conclusions on each issue. 14. The appellant have submitted that there was a mis-joinder of parties. The proceedings were taken by the Adjudicating Authority against appellant despite not in possession of proceeds of crime. 15. A reference of section 5(1) of the Act of 2002 has been given and reproduced hereunder:- "(1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed: Provided that no such order of attachment shall be made unless, in relation to the scheduled offen....

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....nd any mandate under section 5(1) that before attachment of the property, the Official Liquidator was required to be heard by the Adjudicating Authority. The provision for hearing is given under section 8(1) of the Act. Section 5(1) provides for attachment against "any person" in possession of proceeds. At the relevant time defendant was in possession of the proceeds. The Competent Authority passed the order of attachment was not having information that an Official Liquidator has been appointed. The information was given only to the Adjudicating Authority. 18. In view of the above, the first argument in reference to section 5(1) of the Act of 2002 alleging mis-joinder of parties is not made out. The facts available on records shows a serious allegation against the accused for inviting investments on higher rate of interest and then investors were denied interest and refund of amount. Thus, the accused had cheated the investors. The FIRs were thus registered. It is not that appellants have denied acceptance of investments by M/s Birla Power Solution Limited and thereafter its transfer to various entities which includes M/s Birla Surya Power Limited. The M/s Birla Surya Power Limi....

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....ssion of the property and thereby section 8(1) was not complied. 21. We have considered the submission and find that as per section 8(1), the Adjudicating Authority remain under obligation to have reasons to believe that any person has committed an offence under section 3 of the Act of 2002 or is in possession of proceeds of crime then to serve a notice of not less than thirty days calling up the person to indicate the source of income, earning or assets out of which he has acquired the property attached under section 5(1) of the Act. We find that notice by the Adjudicating Authority is to be given to the person who committed an offence under the Act of 2002 or a person having possession of the proceeds of crime. The Adjudicating Authority found and recorded reasons to believe that defendant have committed offence under section 3 of the Act of 2002 and accordingly all those persons were given an opportunity of hearing. It is not that Official Liquidator has made an application to provide an opportunity of hearing and has been denied. Rather, we find that M/s Birla Surya Limited remain unrepresented and it is they who were relevant party to inform about the appointment of Officia....

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....section 18 and record a finding to that effect, such attachment or retention of the seized property or record shall- (a) continue during the pendency of the proceedings relating to any scheduled offence before a court; and (b) become final after the guilt of the person is proved in the trial court and order of such trial court becomes final. 25. It is submitted that Adjudicating Authority has recorded finding that defendants before it have committed the scheduled offence, generated proceeds of crime and laundered the money thereupon. 26. The conclusions for commission of offence has been questioned by the appellants and for which we quote para 44 of the impugned order and is reproduced hereunder :- "On a thorough perusal of the PAO, Complaint, relied upon documents, the investigations conducted by the ED and the statements recorded u/s 50 of the PMLA and on careful consideration of the arguments advanced on behalf of the Complainant and Defendants undersigned comes to the prima facie conclusion that the Defendants have committed the Scheduled Offence, generated proceeds of crime and laundered them". 27. The perusal of the conclusions does not sho....