TaxTMI 
TaxTMI 
2025 (5) TMI 2104
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....other accused for commission of offence under Section 27(1)(e) IV of the Kerala Forest Act, 1961 and under Section 2(16), 2(35), 2(36), 9, 39, 41, 50, 51 and 52 of the Wildlife (Protection) Act, 1972 ( in short "the Act of 1972") for their involvement in multiple offences relating to the Act of 1972. The accused trespassed reserve forest area for hunting of wild elephants and removing of tusk apart from illegally trading of ivory and ivory articles made out of it. In all, seven FIRs were registered for commission of offence under the Act of 1972 where the accused, Shri Umesh Aggarwal, Shri D. Rajan and Shri Aji Bright were found engaged in buying and selling the ivory @ Rs. 28000/- per kg. The accused were found involved carving ivory to make idols of Ganapathi, Balajee, Thirupathi. Their statements under Section 50(2) & (3) of the Prevention of Money-Laundering Act, 2002 ( in short "the Act of 2002") were recorded which revealed deep involvement of the accused for commission of offence and out of which proceeds in the hands of the appellant, Shri Umesh Aggarwal and Shri D. Rajan was determined. The properties were accordingly attached in reference to it. 3. It has come on recor....
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....the fact that it was not acquired or obtained directly or indirectly out of the commission of scheduled offence. Thus, on the aforesaid ground itself, the impugned order deserves to be set-aside. 7. The argument of the similar nature was made by the Counsel appearing for Shri Umesh Aggarwal and Smt. Vidhi Aggarwal. Their two properties registered in the name of Shri Umesh Aggarwal and Smt. Vidhi Aggarwal valued at Rs. 31,40,000/- and Rs. 15,00,000/-have been attached without showing as to whether it was acquired or obtained directly or indirectly out of the proceeds of crime. The proceeds of crime in their hands was assessed to Rs. 120.44 lakhs out of the illegal trade in ivory and while in the hands of the appellant, Shri D. Rajan, it was quantified to Rs. 124.43 lakhs. The properties of their wives were also attached said to have nexus and therefor challenge to the impugned order has been made. 8. The Ld. Counsel for the appellants were invited to raise any other argument to press their appeals. However, Counsel for the appellants restricted their arguments referred to above. It is despite an opportunity to raise any legal and factual issue other than referred to above. The....
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....g to the persons who were selling the ivory to him and for that he paid Rs. 75 lakhs to Shri Aji Bright since 2012 and at the same time put the money in the bank accounts of Shri Preeston Silva and Smt. Shoja Preeston on different dates of a sum of Rs. 19 lakhs. It is with the further admission that he met local salesman in 1990 and thereupon started selling ivory sculptures from Kerala on commission basis. 12. In the investigation, it was further found that Shri D. Rajan and his wife, Smt. Mini K were also involved in commission of crime. Consequent to the arrest of Smt. Mini K and thereupon her statement, it was admitted that the amount has been deposited in her bank account from Calcutta and Delhi. The money was put by Shri Amarshad and even by Shri Aji Bright. The money was transferred even by Shri Umesh Aggarwal from time to time. We are not required to refer further evidence because final conclusion regarding involvement of the appellants for commission of offence would be determined in the trial and thus referred material to show a prima facie case of involvement of the accused in the commission of offence and proceeds of crime in their hands. The amount in the bank accou....
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.... indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence;" 13. The perusal of the definition aforesaid shows three limbs. In between every limb word "or" has been used to divide the definition into three parts. The first part refers to the property acquired or derived directly or indirectly out of the criminal activities relating to the scheduled offence. In the first part, all those properties which are acquired directly or indirectly out of criminal activities would be termed to be the proceeds of crime. The properties can be acquired directly or indirectly with the use of proceeds of crime. The use of proceeds directly or indirectly would be relevant part to fall in first part of the definition of `proceeds of crime'. To clarify the definition, it may be illustrated. Assuming in a case of dacoit, the accused secured the money and it has been used for the purchase of property, then such a property would fall in the definition of `proceeds of crime' having been obtained out of proceeds of crime. In other case where the property was not acquired or derived by the accused himself but he passed on money out of the cr....
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....d be literally re-writing the provision or making it redundant to a great extent and for this, jurisdiction does not lie with any court of law which includes even the Constitutional Court. They can declare any provision to be unconstitutional but till then there remains presumption of constitutional validity. 16. At this stage, we may refer to Para 68 of the judgment in the case of Vijay Madanlal Choudhary hereunder. "68. It was also urged before us that the attachment of property must be equivalent in value of the proceeds of crime only if the proceeds of crime are situated outside India. This argument, in our opinion, is tenuous. For, the definition of "proceeds of crime" is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property. If the property is taken or held outside the country, even in such a case, the property equivalent in value held within the country or abroad can be proceeded with. The definition of "property" as in Section 2(1)(v) is equally wide enough to encompass the value of the property of proceeds of crime. Such interpretation ....
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.... if tentative one) as to the value of wrongful gain made by the specified criminal activity unless it be not possible to do so by such stage, given the peculiar features or complexities of the case. The confiscation to be eventually ordered, however, must be restricted to the value of illicit gains from the crime. For the sake of convenience, the properties covered by the second and third categories may be referred to as "the alternative attachable property" or "deemed tainted property". 17. The judgment of the Delhi High Court makes it clear that the definition of "proceeds of crime" has three limbs and in the second limb the properties of equivalent value to the proceeds obtained out of crime can be attached which may have been acquired prior to the commission of crime but it would be when proceeds of crime has been vanished and is not available. It is sought to achieve the object of the Act of 2002. 18. In the light of judgment of the Apex Court in Vijay Madanlal Choudhary (supra), we are unable to apply the judgment of Kerala High Court in the case of Satish Motilal Bidri (supra). The Ld. counsel did not refer the relevant para of the judgment in the case (sup....
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....n proceeded to hold that even if the intent of the legislature was to include any property in the hands of a person within the ambit of the expression proceeds of crime‖, there would be no need to create three limbs of definition of proceeds of crime. xxxx 79. Regard must also be had to the fact that the legislation itself is dealing with contingencies where proceeds of crime are layered and their origins camouflaged and masked enabling the accused to project or claim it to be untainted property. The Act clearly as does Axis Bank take into consideration a situation where a person who has obtained proceeds of crime by commission of a scheduled offence has managed to ensure that a property directly or indirectly connected to criminal activity is rendered untraceable. It is to confer authority upon the Directorate to proceed further in such a situation that Section 2(1)(u) uses the expression or the value of any such property. The safeguard which stands constructed in Section 2(1)(u) in such a contingency is that in case the Directorate does proceed against any other property, it must be equivalent in value to the illegal pecuniary benefit or gain that may have been ....
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.... Seema Garg as well as the subsequent decisions rendered by the Andhra Pradesh High Court in Kumar Pappu Singh Vs. Union of India and the Patna High Court in HDFC Bank Limited Vs Government of India, Ministry of Finance. 81. The Court also takes note of the position that although SLP (Crl) No. 28906/2019 is pending before the Supreme Court against the decision rendered in Axis Bank, the judgement of this Court has not been stayed or placed in abeyance. The interim order of 30 August 2019 passed in the aforesaid Special Leave Petition only requires parties to maintain status quo. Insofar as the judgement of the Punjab and Haryana High Court in Seema Garg is concerned, although SLP (C) No.1471314715/2020 preferred against the same came to be dismissed, while doing so the Supreme Court recorded that the petition was being rejected in the peculiar facts and circumstances of the case. The dismissal of the aforesaid Special Leave Petition cannot in any case be interpreted or understood as being an affirmation of the view as expressed by the Punjab and Haryana High Court. xxxx 105. It would be pertinent to recall that properties which were acquired prior to the enforc....
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....g the rival submissions and judgement on the issue given by the High Court and Hon'ble Supreme Court of India. It is after taking note of the object of the Act of 2002. The property acquired prior to commission of crime can also be attached but it would only when proceeds out of crime is not available in the hands of the accused or person associated or connected with. It is also when the proceed has been vanished, traceable or is not available. In such a case the property of equivalent value can be attached and in the instant case when respondent found that proceeds in the hands of the appellant of more than Rs. 120 lakhs in each case and was not found available or it was available only to some extent in the form of investment of Rs.15 lakhs in the name of his wife, thus has been subjected to the attachment. 16. The position of fact is similar in the case of Shri Umesh Aggarwal who is otherwise said to be the main accused in the case and running the show. The recovery of ivory articles from the appellant's residence during the course of search and otherwise his own statement under Section 50 of the Act of 2002 coupled with the statements of the other connected persons are suffic....