TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 459
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....ed by Ld. Adjudicating Authority under Prevention of Money Laundering Act, 2002 (PMLA- 2002) in Original Complaint (OC) No. 411/2015 seeking following reliefs:- (i) The impugned order of the Adjudicating Authority passed against the Appellant on 1-6-2015 in Original Complaint No. 411/2015 in ECIR No. 02/BSZO/2014 dated 09/01/2015 confirming the said PAO, be quashed and set aside as not maintainable on the facts and circumstances of the case, and (ii) The immovable property of the Appellant as detailed Khata No. 68, Plot No. 4, Tahasil: Jatni, Village: Harapur, District - Khurda, Area: 20 Acres, Odisha be released from the provisional attachment. 3. Brief facts of the case. The Enforcement Directorate provisionally attached 20 acres of land in Khata No. 68, Plot No. 4, Tahasil Jatni, Village: Harapur, District - Khurda and building thereon of Bhubaneshwar Institute of Technology (BIT). It is, inter alia, seen from the record that the Orissa Millennium Education Trust (OMET) i.e. the Appellant is a trust established on 20-3-2006 by way of a registered trust deed founded by Rabi N. Mahapatra (Founder/Author), Mrs. Sumita Panda, Mrs. Sarojini Tripathi, Mr. Hari Arjun Patro, Mr. D....
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....mber and Chairman Ravi N. Mahapatra unaware of the fact that Shri Dash could be engaged in a criminal activity and that the trustees of the Appellant Trust became aware about the allegations of financial irregularities committed by Shri Dash in the month of July, 2012 when the matter was reported in the Media and then the trustees convened an emergency telephonic meeting on 20-7-2012 and passed resolutions to remove Shri Prashant Kumar Dash from the position as a trustee in the Appellant Trust. 7. The Appellant Trust, in its pleading has admitted that between the period 2009-2012 Shri Prasant Kumar Dash had, in a phased manner contributed a sum totaling Rs. 9,01,66,000/- to the corpus of the Appellant Trust and the founder/chairman of the trust asked Shri Dash to vacate the trust vide their letter dated 21-7-2012. However, construction of the college building continued during the period when Shri Dash was a trustee in the Appellant Trust and the construction of the college building was carried out by the contributions as stated above and there is no evidence on record to suggest that the contributions of Shri Dash were used towards the constructions of the building. 8. It is also....
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.... in excess of its power and jurisdiction and its order is also contrary to law; B. Principle of natural justice has not been followed by the Adjudicating Authority, wrongfully rejected the evidence submitted by the Appellant by drawing inferences contrary to the real facts; C. Shri Dash has made the offence and without the knowledge of the Appellant induced the proceeds of crime in the Appellant Trust; D. There was no allegation that any of the funds of the Appellant Trust until the end of the financial year 2008-09 represents proceeds of crime; E. The first charge of the college building vests with Syndicate Bank; F. The trustees were not aware of involvement of Shri Dash at the time of induction into the trust and that after they came to know about the financial irregularities resolution was passed asking Shri Dash to vacate the position as a trustee in the Trust; G. The Adjudicating Authority has failed to take the cognizance of audited balance sheet until the financial year 2012-13; H. The Syndicate Bank was not heard to prove that the property in question was not involved in money laundering; I. The future of the students has not been considered by the Adjudica....
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....e the term loan for the trust to initiate the BIT Engineering College project. It is understood by the Chairman and the MT that the obligations of the trust towards the departing trustees are not completely over, until both the funds and the bank clearances are made available to them. (iii) That the MT will ensure sufficient funds are made available for BIT in the short term, defined as the term from now until September, 2010 and in the near term defined as the term from investments. He will support the academic growth plans as per the vision of BIT to become the best technical institute in the state in the next 5-6 years. (iv) That the MT will possess the power for the entire financial control of the project. He will review and approve the financial expenses planned for the project. (v) That any reinvestment plan for BIT and similar projects will be decided jointly by the MT and the Chairman. (vi) That the details of the timing, amount and the process of transaction for the payout of all dues to the existing trustees, the contribution to the trust by the MT and the overall understanding of the ownership of the trust and/or any restructuring thereof, will be mutually discus....
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....1-2019, 24-7-2019 & 19-9-2023 and Additional Written Submissions dated 12.12 2023 in addition and relying on the grounds of appeal and Rejoinder. The averments of the Appellant made in the written submissions, in brief, are as below: A. There is no link or nexus between the attached property and the proceeds of crime. B. Increase in the total strength of the students. C. Recognition of OMET as a Charitable Institution by the Income-tax Department. D. Loan of Rs. 6.80 Crores from Syndicate Bank by the Appellant on 9-6-2008 for the purpose of establishment of BIT and constructions of buildings etc. E. Donation received from Shri P.K. Dash during the period 2009 to 2012. F. There is no allegation against Shri P.K. Dash at the time of induction and ousting of Shri P.K. Dash after the knowledge of his criminal activity by the Appellant. G. Amount of donation has been received through banking channel. H. The Appellant was not named in the FIR, ECIR, Charge-sheet and prosecution complaint/supplementary prosecution complaint. I. Since no prosecution complaint has been filed against the Appellant till date. So, the attached property of the Appellant is liable to be release....
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....his regard he has relied on the following judgments: (i) OPTO Circuit India Ltd. v. Axis Bank [2021] 127 taxmann.com 290/165 SCL 703 (SC)/(2021) 6 SCC 707, Para 14 (decided by the Constitution Bench); (ii) State of Rajasthan v. Mohinuddin Jamal Alvi [2016] 12 SCC 608, Para 61; and (iii) Dipak Babaria v. State of Gujarat [2014] 3 SCC 502, Para 61; and (iv) Seema Garg (supra) Para 45. Besides above, the Ld. Counsel for the Appellant also argued the appeal orally reiterating that are stated in the Memo of Appeal, Rejoinder and Written Submission. On the basis of above, the Ld. Counsel for the Appellant prayed for quashing and setting aside of the Impugned Order and release/return of the attached properties to the Appellant forthwith. 16. The written submission filed on behalf of the Respondent Enforcement Directorate. The Respondent ED has filed their written submission on two different occasions i.e. on 29-11-2019 and again in the month of December, 2023. In the said written submissions they have referred to their replies dated 5-1-2016, 2-3-2016, 26-11-2018 & 19-9-2023, the prosecution complaint dated 31-3-2016 and supplementary prosecution complaint dated 28-3-2017, i....
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....aras of following judgments: a. Vijay Madanlal Choudhary (supra) Paras 250, 252, 269, 270, 280, 295, 301, 303, 313 & 314. b. P. Rajendran v. Asstt. Director, Directorate of Enforcement [Criminal Original Petition No. 19880 of 2022, dated 14-9-2022] Para 9 & 10 c. Radha Mohan Lakhotia (supra), 2010 Para 13 & 19 d. J. Sekar v. Union of India [2018] 89 taxmann.com 159/145 SCL 637 (Delhi)/2018 SCC OnLine Del 6523 Para 50 e. Shiv Shakti Coop. Housing Society v. Swaraj Developers [2003] 6 SCC 659; Para 19 f. Nav Nirman Builders & Developers (P.) Ltd. v. Union of India [Cr. M.P. No. 3608 of 2022, dated 27-2-2023] Para 32 & 33 g. Yogender Chandolia v. Vishesh Ravi [EL. PET 10/2020, dated 24-12-2021] Para 43 h. Biswanath Bhattacharya v. Union of India [2014] 41 taxmann.com 420/124 SCL 256 (SC) Civil Appeal No. 772-73 of 2014 Para 39, 40, 41 & 42 i. Munish Munir Khan v. Deputy Director PMLA [MP-PMLA-267 (Mum.) of 2012, dated 1-1-2014] Para 89 j. Manohar Lal Sharma (supra) Para 65, 68, 73, 74 & 75. k. Y. Balaji v. Karthik Desari [2023] 150 taxmann.com 329/179 SCL 49 (SC) l. Khandelwal Buildcon (P.) Ltd. v. Deputy Director, Directorate of Enforcement [S.B. Civil Writ Pe....
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....r 2011-2012 a sum of Rs. 3.55 Crores was received as donation from Shri Dash and was utilized by the Appellant Trust for running Bhubaneshwar Institute of Technology and for its day-to-day expenses as well as for completing the remaining construction of Dr. B. R. Ambedkar Study Center from hostel for SC/ST students. The Appellant Trust has cited the audited receipts and payments account for the year ending 31st March, 2012 which is annexed as A-6. It is also an admitted fact that there is no donation during the financial year 2012-2013 made by Shri Dash it is also come to light that the trust came to know about the criminal activity of Shri Dash from media and that a resolution was adopted by the trustees to ask Shri Dash to vacate the institute from the post of trustee on 20-7-2012. The Appellant Trust has raised the following issues in their pleadings through appeal and the written submissions filed on different dates a. The appeal is bad for non-joinder of Government of Odisha as a necessary party as the land belongs to Government of Odisha which is given on lease to the Appellant Trust. b. The essential ingredients of attachment of property u/s 5(1) of PMLA are not at all ....
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....l or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to or interest in, such property or assets, wherever located; [Explanation :- for the removal of doubts, it is hereby clarified that the term "property" includes property of any kind used in the commission of an offence under this Act or any of the Scheduled offences;] On perusal of the aforesaid provision, it appears that it is an inclusive definition. It includes any property or assets of every description i.e. corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to or interest in, such property or assets. It means and includes the leased property also. Now, whether the attachment of the land is bad for non-joinder of Government of Odisha as a party. It is an admitted fact that the land has been transferred to the Appellant Trust by the Government of Odisha under a lease deed with certain rights and liabilities but the title of the land has not been passed over to the Appellant Trust. The lease is for 99 years with effect from 11-1-2007 for a premium of Rs. 20 Lakhs at the rate of Rs. 1 lakh per....
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....e of construction of buildings, payment of salary of staffs of the Appellant Trust etc. It is also revealed from the record that some of the amount has also been utilized for the return of money to then existing trustees as per Letter of Intent. The trustees came to know about the alleged criminal activities of Shri Dash and donation of the aforesaid amount allegedly generated through criminal activities, through media in the year 2012 and that Shri Dash was asked to vacate the trusteeship from the Appellant Trust. But the trust did not return the money to Shri Dash. In other words, when the Provisional Attachment Order (PAO) was passed, the alleged proceeds of crime were still with the Appellant Trust and at that point of time there appears to have no intention on the part of the Appellant Trust to return the donation. It is also seen from the record that the Appellant Trust had mortgaged this land and building of the trust with the Syndicate Bank which was settled subsequently and the loan amount was liquidated. As it appears from the PAO that there is a subjective satisfaction of the Respondent ED that the property in question is liable to be attached, the essential ingredients ....
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.... aside as no prosecution complaint has been filed against the Appellant Trust within 365 days as stipulated u/s 8(3)(a) of PMLA, 2002. In this regard, it is seen from the record that the Appellant Trust has pleaded and argued that the PAO is confirmed on 1-6-2015 and till date no prosecution complaint/supplementary prosecution complaint for commission of offence u/s 3 punishable u/s 4 of the PMLA, 2002 has been filed against the Appellant Trust within 90/365 days in any Court of law. The Appellant Trust has relied upon the judgment passed in (1) Arvind Gupta (supra); (2) Serajuddin & Co. (supra); (3) Ashok Kumar (supra); (4) R.B. Prajapati (supra) and also in the matters of (1) Seema Garg (supra); (2) Vijay Madanlal Chaudhary (supra). The first four judgments are the judgments passed by this Appellate Tribunal, in some of the said judgments one of us i.e. (G.C.Mishra, Member) was part of the said Bench. On the other hand, it is contended by the Ld. counsel for the Respondent that the prosecution complaint under PMLA, 2002 has already been filed on 31-3-2016 wherein the property attached in the present appeal is already part of the said prosecution complaint and that cognizance ha....
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....and circumstances of the case, the judgements and orders passed by this tribunal and relied upon by the Appellant Trust are not applicable to the present fact and circumstances of the appeal. The Appellant Trust has also relied on the judgement passed by the Hon'ble High court of Punjab and Haryana in the matter of Seema Garg (supra), so also the judgment of Hon'ble Supreme Court in the matter of Vijay Madan Lal Choudhary (supra), para 467 (v)(d) have no application to the present fact and circumstances of the case. The present legal issue is considered on the basis of the submissions made by both the parties. In the light of discussions made above, the present legal issue is answered against the Appellant. 23. The next issue raised by the Appellant Trust is that the Trust is neither named in the FIR nor in the ECIR and not an accused in the scheduled offence or in the prosecution complaint. In this regard, it is a fact that the Respondent ED has not produced any record that the Appellant Trust has been named either in the FIR or in the ECIR or has been erred as an accused in scheduled offence or in the prosecution complaint. But it is a fact that the property in questi....