TaxTMI 
TaxTMI 
2025 (1) TMI 991
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 612/2016 (OC) vide which the properties of the appellants attached vide Provisional Attachment Order No. 11/2016 (PAO) dated 11.06.2016 were confirmed. The details of the said properties are as under:- Details of properties Sl.No. Description of the property Area adm. In the name of Value of the property (Rs.In crore) As per Govt. ready Reckoner,2009 Present Value as per Govt. ready reckoner,2016 01. 87/11, Rustomji Flat,Richmond Road, Richmond Town,Bangalore 291 Sq.Ft. United Breweries (Holdings)Ltd. 1.0(approx.) 3.32(approx.) 02. 604, HB, Wallace Apartments, Nashir Bharucha Marg, Grant Road, Mumbai 1561 Sq.Ft. United Breweries (Holdings)Ltd. 1.43(approx.) 3.10 03. Factory Building & land at Sl. No. 254/1, Thuthipattu, Village, Ambui Vaniyambadi Taluka, Vellore, District Tamil Nadu 4.50 Acres UB Global-a division of United Breweries (Holdings) Ltd. 0.8(approx.) 1.14 04. Land parcels situated in Biligen Vilage Kiragandoor Village, Madekuri, Kumboor Village. 28.71 Acres M/s Endeavour Estates Pvt. Ltd. 0.85 (approx.) 1.55 05. UB City, Bangalore (UB Tower, Commercial)1st Floor car parking IInd Floor-Reception 12th Floor-UBH office 14th Floor ..d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itted by Sh. A. Raghunathan and was marked to the attention of Sh. B.K. Batra MD. While proposal was pending, vide letter dated 07.10.2009, Sh. A Ragunatham, giving reference to the meeting dated 06.10.2009 between Dr. Vijay Mallya and Sh. Yogesh Aggarwal, CMD, IDBI requested the bank to release a short terms loan of Rs. 150 crores for period of six months to meet certain critical obligation to overseas vendors. On the same day a memorandum was put up to the committee and the facilities were sanctioned though the company was having negative financial & negative net-worth, and the borrower, being a new client did not satisfy the conditions/norms stipulated in the corporate loan Policy of the bank Similarly in November 2009, vide order dated 04.11.2009, Sh. A. Raghunathan CFO, Kingfisher Airlines Ltd. gave reference of the meeting held between Dr. Vijay Mallya with the bank's CMD and sought an adhoc release of Rs. 200 crore pending sanction of the proposal for corporate loan of Rs. 950 crores to meet critical obligations to overseas vendors. The said proposal was put up to the group head (Corporate Banking) Sh. S.K. Batra also recommended that the CMD may approve the proposal and a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Bulls Financial Services Ltd. Similarly, an amount of Rs. 1.13 crore was transferred to the account of M/s UB Engineering Ltd. to service a term loan taken by the said company. A major chunk of funds transferred to the Axis Bank Ltd. were used for foreign remittances towards lease rentals, purchase of aircraft parts etc. Since these remittances have gone outside the country, further inquiry can only be made by sending letters Rogatory for foreign investigation by taking up a regular case. Similarly, funds aggregating to Rs. 3.45 crore were paid into the bank account of the company in London. Since the funds were gone out of India further inquiry can be made only through sending a letter Rogatory for foreign investigation. On the basis of the preliminary enquiry report FIR No. RC BSM 2015E 0006 dated 26.07.21015 was registered by CBI-BS&FC, on the following allegations: a. Sh. Vijay Mallaya laid M/s Kingfisher Airlines Ltd. (KAL) and unknown officers of IDBI and others for showing undue favor to KAL in the matter of sanction and disbursement of short-term loan (STR) to the tune of Rs. 150 crores Rs. 200 crore and Rs. 750 crores; despite weak financial, negative net-worth lo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....own officers of IDBI banks and others, as a prima facie case for commission of an offence of money laundering (sections 3 of the Prevention of Money Laundering Act, 2002) punishable under section 4 of the said Act was made out which requires investigation by ED. During the course of investigation under PMLA by ED, besides gathering record and other investigations, statements of several persons were recorded by the officers of Enforcement Directorate under the provisions of section 50(2) & 50(3) of PMLA. As the said statements reveal about the money laundering activities, substances thereof are reproduced as under: I. Statement dated 11.03.2016 of Ms. Mythili Balasubramaniam, Executive Director of IDBI In her statement recorded on 11.03.2016. she inter-alia stated that, she is presently designated as Executive Director of IDBI Bank Ltd.; that there are three applications excluding restructuring package viz. an application letter dated 01.10.2009 seeking a loan of Rs. 950 crore, an application letter dated 07.10.2009 seeking short term loan of Rs. 150 crore for 06 months period, an application letter dated 04.11.2009 seeking adhoc release of Rs. 200 crore pending processing san....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r through out and the CEO was Shri Sanjay Aggarwal, who came in October, 2010 and left somewhere in early 2014; that initially the erstwhile M/s Kingfisher Airlines Ltd. was 100% subsidiary of M/s UBHL; that post Air Deccan acquisition, the UB Group held about 60% (approx.) of M/s Kingfisher Airlines Ltd. and subsequently, came down to 15% to 20%; that M/s Kingfisher Airlines owned the property at Vile Parle EUR, a few aircrafts were acquired on finance lease viz. Six ATR-72, Two Airbus 320s, Two Helicopters, One Corporate Jet etc, that as far as heremembers, M/s Kingfisher Airliens Ltd. have taken loans from Axis Bank, ICICI Bank, Bank of India, Bank of Baroda, Central Bank, Federal Bank, Punjab National Bank, Punjab Sind Bank, IDBI Bank, State Bank of India, State Bank of Mysore, IndusInd Bank, Yes Bank, United Bank, United Commercial Bank, Vijaya Bank, Corporation Bank, J&K Bank, Indian Overseas Bank, Indian Oriental Bank, Union Bank, Laxmi Vilas Bank; that the outstanding loan amount is to the tune of Rs. 5600-5800 crore; that the last loan amount of Rs. 20 crore was received from Indian Overseas Bank somewhere in 2012 and thereafter, no loan amount was received from the banks;....
X X X X Extracts X X X X
X X X X Extracts X X X X
....quently revised to the tune of Rs. 3400 crore that regarding negative lien on fleet of hire purchase/finance lease aircraft, the title of the finance lease aircraft will come to M/s KAL only upon the payment of the last installment of the financial lease payment; that since, the title is not currently with the company, the company undertook that upon the company getting the title after the expiry of the lease term, it will offer the same as a security to the bank; that regarding the Corporate Guarantee of UBHL, it is standard format of undertaking the loan repayment in the event of the borrower's failure to repay the loan and in the similar manner a personal guarantee was also issued by Shri Vijay Mallya; that the loan amount was utilized for the operational expenses/payments of the company; that they are filing the I. Tax Returns of M/s KAL regularly till March, 2014 till March, 2014 from their Registered office located at UB City, UB Tower, 24 Vittal Mallya Road, Bangalore; that the Income Tax Department is investigating a case for not depositing of TDS amount deducted from the employees salaries and other expenses and the Services Tax Department is investigating a case for non-d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te Finance Department, Bangalore; that regarding small ICDs from time to time, the Treasury In charge from M/s KAL used to negotiate with the brokers and keep him informed of their efforts; that presently, he was not able to recollect the exact amount given to Formula 1 as there were two agreements with Force IndiaFormula 1 Team and all the payments were made according to the said agreement; that since M/s KAL was contemplating to start their international flights in mid-2008, Shri Mallya felt that the international motor grande is a good medium for advertising the brand in various countries especially in Europe & Middle East and therefore, decided that M/s KAL should sponsor Formula 1 team as in any event M/s KAL had already sponsored the Toyata Team with the same objective; that it was around USD 5 million; that the total number of aircrafts that M/s KAL had at its peak was Eighty Eight (88) under its Scheduled Air Operators permit as they are covered under NSOP (Non Scheduled Operators Permit); that there were 68 aircrafts lease agreements (approx.) entered by M/s KAL. However, he does not have the copies of the agreements as the same were submitted to SFIO and their copies were....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing. An end use certificate has also been obtained as per the requirement of bank and has been handed over to the IDBI Bank, who have acknowledged the same. Accordingly, CBI registered the FIR No. RC BSM 2015 E-0006 dated 29.07.2015 on the basis of the aforesaid facts revealed in the preliminary enquiry. As the suspects committed the Scheduled Offence, Enforcement Directorate register ECIR No. 03/2016 dated 29.01.2016, as the above facts revealed prima facie Commission of Offence of Money Laundering under Section 3 of Prevention of Money Laundering Act, 2002, punishable under Section 4 by the said suspect, ED conducted investigation and recorded the statement of the suspect and other persons under Section 50 of PMLA, 2002 and thereafter attached the properties vide PAO No. 11/2016 dated 11.06.2016 as mentioned in para no. 1 above. Thereafter Original Complaint No. 612/2016 was filed before the Adjudicating Authority for confirmation of the said attached property. Being satisfied with the allegation mentioned in the Original Complaint the Adjudicating Authority after forming reasonable belief issued the Show Cause Notice to the defendants. After receiving the replies on behalf....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1st para) it is mentioned that: "As far as claim of M/s. United Spirits Limited (USL) is concerned, it is pertinent to note that the claimed area is part of attachment and said attachment order has been challenged before the Hon'ble Appellate Tribunal under the Prevention of Money Laundering Act, 2002 in Appeal No. 2524 of 2018. The present claim of USL, is also pending for consideration before the Hon'ble Appellate Tribunal at New Delhi. Therefore, this Court can not independently consider said claim. Resultantly, the claim of USL and other intervenors stands rejected." Accordingly, he submitted that the right of the present appellant was not decided by the Trial Court as the appeal was pending before this Appellate Tribunal. 4. Ld. Counsel for the appellant M/s United Breweries Ltd. in appeal no. FPA-PMLA-2716/MUM/2018 submitted that the appellant company challenged the impugned order qua the attachment of common spaces & parking, lifts, lobby and staircase. He pointed out that sale deed date 28.06.2008 executed by United Breweries (Holdings) Ltd. in favour of United Breweries Ltd. for selling properties of Schedule C measuring 23808.25 sq. ft. situated on Floors III, IV & V,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s still pending before Hon'ble High Court Prayer is accordingly made to allow the present appeal, as the appellant is ready to pay the balance sale consideration amount. 6. Ld. counsel for the appellant Mr. Ravishankar Keerthapati Ramaraju in Appeal No. FPA-PMLA-3151/MUM/2019 submitted that the appellant purchased apartment bearing no. 19C at 19th Floor in Kingfisher Tower measuring 8321 sq. ft. built up area inclusive for proportionate share in all the common areas and with 5 car parking spaces in the building, as mentioned in Schedule E of the Agreement to Sell dated 12.04.2012. Ld. Counsel for appellant pointed out that as per agreement he was liable to pay sale consideration of Rs. 5,23,54,875/- for common space and Rs. 16,76,45,125/- for cost of flat, out of which he tendered sum of Rs. 1,37,50,000/- and 4,12,50,000/- respectively as part payment on the date of agreement. He further pointed out that till date he has tendered some of rupees 19.5 crores, but no sale deed is executed in his favor as the company went into liquidation before execution of sale deed and handing over of the possession. The remaining payment was agreed to be paid as per payment schedule, which are at ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed 15.06.2017 against Vijay Mallya and eight others before Ld. Special Judge, PMLA court, Mumbai. He pointed out that SBI led consortium also filed company application no. 58/2019 under section 8(8) of PMLA, 2002, for restoration of properties attached by ED. He pointed out that Ld. Special Judge PMLA court vide order dated 01.06.2021 restored the properties to SBI led bank consortium, as ED gave NOC in respect of the properties attached by ED claimed by the appellants in the bunch of present appeals. He argued that present appeals need to be dismissed being infructuous, as the said properties are under the process of disposal by Recovery Officer, DRT, in pursuance to the order dated 01.06.2021. Prayer is accordingly made to dismiss all the appeals. Sh. Ashok Bannidenni, Advocate for the consortium of Banks supported the submissions made by the Ld. counsel for the respondent ED, as mentioned in above sub para. 8. After hearing the rival submissions, we have given our thoughtful consideration for the same. Perusal of records reveals that: - Appellant M/s United Spirits Ltd. filed 3 sale deeds annexure A2 to A4 dated 06.10.2010, 01.03.2011 & 30.06.2011 which are at page number 241....