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2024 (12) TMI 1409
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.... Ltd. and M/s MBS Impex Pvt. Ltd. on the basis of FIR No. 01(A)/2013 dated 03.01.2023 registered by Central Bureau of Investigation, Hyderabad, for defrauding, cheating and causing wrongful loss to M/s MMTC Ltd. Subsequently, Charge Sheet No. 25/2014 dated 27.11.2024 was filed by CBI, Hyderabad for the offences punishable u/s 120-B IPC r.w.s. 409, 420, 465, 471. 477-A of IPC, 1860 and also w/s 13(2) r.w. Section 13(1) of PC Act, 1988 and substantive offences thereunder, for defrauding MMTC Ltd. in purchase of gold bullion under Buyers' Credit Scheme and thereby caused loss to Government Exchequer for sum of Rs. 226.82 Crores (principal amount). M/s MBS Jewellers Pvt. Ltd. and M/s MBS Impex Pvt. Ltd. procured bullions from MMTC, Hyderabad under Buyers' Credit Scheme. Under the scheme, at the request of MBS Group, MMTC obtained Buyers Credit from the banks up to the period of 90 days and the bullions were delivered to MBS Group against the available bank guarantees/FDRs with MMTC Hyderabad. Remittance to the foreign supplier was made by the Indian Bank after MMTC availed Buyers‟ Credit from them. On the date of maturity, i.e. 90th day, the funds were to be deposited by MMTC ....
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..... of shares Face value of share Percentage of shareholding 1. Sukesh Gupta 598490 10 6.20 2. Anurag Gupta 2229 10 0.02 3. Neetu Gupta 1292849 10 13.40 4. Prakash Chandra Gupta 27500 10 0.28 5. Aishwarya Gupta 268200 10 2.78 6. Aashi Realtors (Partner Sukesh Gupta and Neetu Gupta) 7332832 10 75.99 7. B. Phani Madhav 90000 10 0.93 8. Agarwal Rubbers Private Limited 35000 10 0.36 9. Gehna Projects Private Limited 2900 10 0.03 Investigation revealed that apart from Sukesh Gupta, Mr. Anurag Gupta was also actively involved in the business of MBS Group. He was also involved in key financial and non- financial decision-making process of the above company. In the procurement of gold bullions and designing of jewellery of the above-named companies, Mr. Anurag Gupta was actively involved. However, after registration of FIR No. 01(A)/2013 dated 03.01.2013 against Mr. Sukesh Gupta, M/s MBS Jewellers and M/s MBS Impex Pvt. Ltd. by CBI, Hyderabad, Mr. Anurag Gupta resigned from the Directorship of the above companies, to escape from clutch of investigati....
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.... income of the all the above family members are computed from their income tax returns and that works out to Rs. 3 crores (approx.) only, and thus, the unsecured loan of Rs. 26.02 Cores given by them to M/s Musaddilal stands unexplained, and hence, the same is also a benami investment of Anurag Gupta in M/s Musaddilal. It is also revealed that M/s Musaddilal has also received Rs. 1 Crores from MBS Jewellers Pvt. Ltd. in FY 2017-18 and subsequently, after 3 years, the same amount was adjusted against the sale of jewellery. In this regard, searches were conducted on 17.10.2022 to 19.10.2022 on the show rooms of M/s MBS Jewellers Pvt. Ltd. M/s MBS Impex Pvt. Ltd., residential premises of Mr. Sukesh Gupta& Mr. Anurag Gupta and M/s Musaddilal vide a purported search warrant no. 42 of 2022 u/s 17(1) of PMLA, 2002. In the above said searches, properties, [gold, bullions, precious metal jewellery, to the extent of Rs. 53,98,56,477/-, cash of Rs. 1,75,00,000/- and documents (pertaining to vague properties and ITRs etc.)] were confiscated. Aggrieved by the aforesaid action of search and seizure conducted at the premises of appellant company on 17.10.2022, the appellant company filed a wri....
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....0 Crores. The company has also availed term loans, housing loans, car loans, etc. from aforesaid bank and an amount of Rs. 11 lakh was paid each month towards interest on the loan acquired. The annual turnover of the company and income tax paid by the appellant company is mentioned in table herein below: Sr. No. Year Total Turnover excluding GST (In Rs.) Income Tax Pain (In Rs.) 1. 2013-2014 NIL NIL 2. 2014-2015 NIL 35,634/- 3. 2015-2016 NIL 1,25,102/- 4. 2016-2017 17,18,80,530/- 12,95,709/- 5. 2017-2018 13,80,60,747/- 9,76,497/- 6. 2018-2019 19,73,27,605/- 9,12,511/- 7. 2019-2020 16,99,75,023/- 8,68,110/- 8. 2020-2021 18,33,18,959/- 12,04,588/- 9. 2021-2022 31,67,90,737/- 16,90,487/- He further contended that M/s Musaddilal is an independent entity having no relation whatsoever either with MBS Jewellers Pvt. Ltd. and M/s MBS Impex Pvt. Ltd., nor its Directors, including Mr. Anurag Gupta. It is further submitted that the respondent ED was investigating a case against Mr. Sukesh Gupta, brother of Mr. Anurag Gupta, Director of MBS Jewellers Pvt. Ltd. and M/s MBS ....
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....es seized during search and seizure conducted on 17.10.2022 is stock-in-trade of the appellant company. Moreover, the aforesaid search and seizure and retention of the property was done when neither the appellant company nor its directors are arrayed as accused in the ECIR and hence, is illegal and in violation of Article 19(1)(g) of the Constitution of India. It is also submitted that the appellant company is on the verge of bankruptcy as there are bank liabilities to pay and more so, the directors of the appellant company and about 300 workers do not have any other source of livelihood. It is further submitted that the respondent has conducted search in the year 2019 at the premises of the appellant company and even at the residence of the Directors and has not found any relevant documents/record to MBS and also has not seized any cash, gold, jewellery, however, they came back and seized the jewellery and cash in 2022 when nothing has changed. in fact, since Mr. Anurag Gupta was Director of MBS Jewellers from the year 2008 to 2013, he was also called for investigation in the case of OA No. 757 of 2022 and his statement was recorded every time till 2018, but still no seizure wa....
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....ments were duly furnished to the Respondent Authorities and thus, the said transaction under no circumstances can be regarded as POC being a bonafide transaction between a customer and the appellant company. The appellant company submitted that the investment of Shri Anurag Gupta and the family members in the appellant company as on date is as follows: Name of partner Purchase of Stock at market prices Amounts transferred from M/s Musaddilal Sons via bank transfer Gifts and other receipts from income/payments Total balance Unsecured Loans (Units in Crores) Shashank Gupta 3.67 0.95 4.62 Vandana Gupta 4.76 0.09 4.85 Anurag Gupta 4.49 2.95 0.09 7.53 Bhagyashree Gupta 2.72 0.06 0.19 2.92 Rudraksh Gupta 2.72 -0.72 2.00 Yashasvi Gupta 4.05 4.05 Total 18.36 4.05 3.61 26.02 Further, it is contended that Mrs. Yashashavi Gupta received gifts from Sh. Prakash Chandra Gupta (grandfather in law) to the tune of Rs. 1.57 Crores and an amount of Rs. 1.42 Crores is received from Smt. Kalavati Gupta (grandmother in law) and amount of Rs. 50 ....
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.... either directly or indirectly by the petitioner herein either involving in criminal activity or indirectly by the petitioner herein either involving in criminal activity or handling any such property derived as a result of criminal activity. The question of concealing or being in possession or acquiring such property does not arise. The amount accrued ad discussed earlier is on account of dollar - rupee fluctuation and it cannot in any manner be held that the petitioner had derived or obtained any property. Though, it was agreed that differential amount of rupee dollar fluctuation would be paid, at most it can be termed as an outstanding which can be 21 recovered in a civil suit and by no stretch of imagination can be called as 'Proceeds of Crime' or the outstanding amount can be called as 'property' as defined under Section 2(1)(v) of the Act. 29. Viewed from any angle, when there is no criminal activity nor any property which is derived as a consequence of criminal activity. I am of the firm opinion that the proceedings in ECIR/05/HYZO/2014 cannot be permitted to continue. 30. Accordingly, the proceedings in ECIR/05/HYZO/2014 are hereby quashed." However, th....
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....2019, it is found that he was in close connection with Sukesh Gupta and has also arranged loans for Sukesh Gupta on various accounts. In his statement, he has also furnished details of same and his family member having transactions with Sukesh Gupta, MBS Jewellers Pvt. Ltd. and MBS Impex Pvt. Ltd. It is further submitted that the search and seizure conducted on 17.10.2023, 18.10.2023 and 19.10.2023 was based on reasons to believe which have already been forwarded by the Deputy Director, Directorate of Enforcement, Hyderabad to office to the Hon'ble Chairperson Adjudicating Authority under PMLA vide letter No. ECIR/05/HYZO/2022 dated 21.10.2022 is in compliance with the terms of Rule 8 of Prevention of Money Laundering (Forms search and seizure or freezing and the manner of forwarding and the reasons and the material to the Adjudicating Authority, impounding in custody of records and the period of retention) Rules, 2005(hereinafter, „Rules 2005‟). He contended that the procedure for retention of property prescribed u/s 20, PMLA in respect of properties seized/freezing during search has also been complied with and the same was forwarded to the Adjudicating Authority vide ....
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.... has to be found out rather than allowing the problem to boil over." Therefore, the appellant cannot now turn around and say that the proceedings u/s 8 are time barred. He contended that the OA has been filed based on substantial evidence and on the reasonable belief and the fact that the appellant is involved in the offence of money laundering and the seized properties are thus generated from the proceeds of crime, as discussed in detail in the OA. Further, the source of capital in M/s Musaddilal is also unexplained and the appellant is deliberately not showing the capital account of its partners in M/s Musaddilal which will clearly demonstrate as to how much capital was contributed to each partner of the firm and how, the same was built up. Further, the appellant did not disclose how the liabilities in the name of M/s Musaddilal were paid up, if all the stocks were distributed by them among the partners. They have their source of investment of Rs. 28 Crores approx. (Rs. 6 Crores in capital and Rs. 22 Crores as unsecured loan) from M/s Musaddilal, whereas it can be seen from the ITR of M/s Musaddilal that it did not have the capacity to fund the same and the partnership firm al....
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....n accommodation entry transaction to justify the infusion of money in the books of the appellant. He stressed submitted that the Directors of the appellant company and the family members did not have the source for giving unsecured loan to the tune of Rs. 26 Crores and the same is being done only to prejudice the proceeds of crime as untainted by Mr. Anurag Gupta. Hence, despite the fact that the appellant was not named in the ECIR or the CBI case, the search and seizure conducted and the property seized from the appellant is legal. Further, the amount of Rs. 1 Crore from M/s MBS Jewellers Pvt. Ltd., to M/s Musaddilal is not genuine transaction, which is claimed by the appellant as sale transaction for the jewellery is nothing, as no buyer of jewellery will lend amount of Rs. 1 Crores for a period of three years and hence, this too is an attempt to assert the POC of Anurag Gupta as untainted. Ld. Counsel for the respondent ED further argued that during investigation, it is clearly established that the Directors of the company were not having the source for purchase of stock, which was seized from them and hence, it is also proceed of crime laundered by them through the partnersh....
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....puting the period of one hundred and eighty days, the period during which the proceedings under this Section is stayed by the High Court, shall be excluded and a further period not exceeding thirty days from the date of order of vacation of such stay order shall be counted.". Hence, the OA is passed well within time, as is duly explained by the Respondent ED in para 4 and also in the OC and thus, sub-section 3 of section 5 of PMLA will be applicable in the present case and the contention of the appellant holds no ground thereby. The second contention of the appellant is that it cannot be proceeded against under PMLA, 2002, since it is not named as accused in any FIR or chargesheet, also there being no nexus of it with the ECIR case and CBI case. However, the offence of money laundering is an independent offence and once a scheduled offence is committed, then the investigation of PMLA offence can be initiated even against the person not named in the scheduled offence, if he is found to be in possession of proceeds of crime and such proceeds of crime are dealt with in any manner which may result in frustration of proceedings under this Act and the same has been cited further in....
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....rs, as computed from the ITRs filed works out to of Rs. 3 Crores(approx.) only and thus, the unsecured loan of Rs. 26.02 Crore is nothing but benami investment of Anurag Gupta in the appellant company. Also, the appellant company deliberately avoided to show capital accounts of its partners which could show as to how much capital has been contributed to each partner and how the same was built up. Further, it is also not disclosed as to how the liabilities were paid in appellant's name Thus, the entire capital of the appellant company is generated out of tainted money of Mr. Anurag Gupta, which is thus a proceed of crime and hence, the appellant is rightfully proceeded against, thereby seizing its properties, which was allowed to be retained. Even otherwise, in the absence of direct proceeds of crime, the respondent ED can attach/freeze the other properties of the appellants as value thereof, seeing the fact that present appellants were part & parcel of conspiracy to commit the fraud. In this regard, we fortify our view in the light of judgment of Hon'ble Supreme Court of India, in case of Vijay Madanlal Chaudhary v. Union of India MANU/SC/0924/2022, where in it is held that- ....