TaxTMI 
TaxTMI 
2025 (5) TMI 2100
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....b & Maharashtra Cooperative Bank (hereinafter PMC Bank). The complaint was filed against Shri Joy Thomas, Managing Director of the Bank, Shri Waryam Singh, Chairman and other persons of the board of Directors along with Mr. Sarang Wadhawan, Shri Rakesh Kumar, Shri Kuldip Singh Wadhawan and other unknown persons belonging to M/s Housing Development Infrastructure Ltd. (in short HDIL) and promoters and executives of M/s Somerset Constructions Pvt. Ltd., Serveall Construction Pvt. Ltd., Sapphire Land Development Pvt. Ltd., Emarald Realtors Pvt. Ltd., Prithvi Realtors and Hotel Pvt. Ltd., Sayam Realtors Pvt. Ltd. and the executives of PMC Bank alleged to have caused a wrongful loss to the tune of Rs. 4355 crores to PMC Bank. 3. The FIR was registered for the offences u/s 409, 420,465,466,477 read with Section 120(B) of IPC, 1860. In pursuance to the FIR registered by Mumbai Police, Economic Offences Wing, ECIR was recorded by the Directorate of Enforcement on 01.09.2019. The investigation pursuant to the ECIR was conducted and found that HDIL group engaged in real estate sector and is also involved in construction of residential and commercial complexes, implementation of slum rehabil....
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....e appellants have been named as the accused in Supplementary Charge sheet filed before the Special Court, PMLA which is nothing but verbatim copy of the Provisional Attachment order. The Adjudicating Authority relied upon the allegations made against Mr. Rakesh Wadhawan and Mr. Kuldeep Singh Wadhawan. The Adjudicating Authority ignored two relevant facts of the case. The properties attached by the respondent have no nexus to the commission of crime and otherwise it came in the share of the appellant Ms. Romy Mehra by way of a family settlement and by way of sale deed executed much prior to the commission of crime and registration of FIR. The Adjudicating Authority ignored that joint property acquired by the appellant was based on disclosed sources. 7. The learned counsel submitted that in the year 2007, Ms. Damyanti R. Wadhawan, mother of the appellant Ms. Romy Mehra decided to distribute her shares in the HDIL to her daughters and accordingly 9 lakh shares of HDIL came in the share of each daughter namely Ms. Romy Mehra and Ms. Anjana Sakhuja. In addition to these shares, they further received additional 2,57,000 shares of HDIL in the year 2008 by way of bonus, making a total of ....
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....e of the shares in the year 2009. (iv) The Enforcement Directorate has not denied execution of the deeds. In the Impugned PAO and OC, fact aforesaid has been admitted that the shares of the Rakesh Wadhawan in the attached Properties claimed by PMC Bank is incorrect, far-fetched and imaginary. (v) M/s Libra Hotels Pvt. Ltd. was incorporated in 1999 by Rakesh Wadhawan and the Romy Mehra with 50% shareholding each. Pursuant to the Family settlement, the Rakesh Wadhawan transferred his 50% shareholding in M/s. Libra Hotels Private Limited to the brother-in-law in October, 2016, much prior to the registration of the FIR and by no stretch of imagination it can be called to be an afterthought. (vi) M/s. Libra Hotels Private Limited is solely and exclusively owned by Romy Mehra and her husband since long and Rakesh Wadhawan has nothing to do with it. 9. The learned counsel further submitted that the Adjudicating Authority erroneously observed that that properties were of Mr. Rakesh Wadhawan and was not of Ms. Romy Mehra because an affidavit was filed in PIL no. 13/2019 before the Bombay High Court, that the Hotel Conclave Boutique at A-20, Kailash Colony is recorded under the owners....
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....) Ltd is Rs 126.37 Crs (i.e., Principal Rs.35.52 Crs Interest Rs 90.85 Crs). Further, M/s Deewan Realtors Pvt Ltd having loan account no: 002140700003936 fraudulently availed loan from the PMC Bank which remained unpaid & total outstanding amount of said loan account of M/s Deewan Realtors Pvt Ltd is Rs 121.08 Crs (i.e., Principal Rs.39.60 Crs Interest Rs 81.49 Crs). (ii) Rakesh Kumar Wadhawan availed mortgage overdraft facility on behalf of Libra Realtors Pvt. Ltd. and Dewan Realtors Pvt. Ltd. from PMC Bank on a number of occasions from 2008. (iii) Rakesh Kumar Wadhawan and Romy Mehra were the Directors of M/s Libra Realtors (P) Ltd and M/s Deewan Realtors (P) Ltd. Romy Mehra tendered her resignation from both the companies in July 2019. (iv) The land at A-20, Kailash Colony, New Delhi (Conclave Boutique) was jointly owned by Libra Realtors (P) Ltd and Deewan Realtors Pvt Ltd (both having equal share). It was purchased in the year 1995 and thereupon present structure was built for commercial usage. (v) The land at D-150, East of Kailash, New Delhi (Conclave Comfort) was purchased jointly by Shri Rakesh Kumar Wadhawan and Romy Mehra in 1999. (vi) The land at C-22, Kalkaji....
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....holding on behalf of Rakesh Wadhawan. Thus, the payment of Rs 18,87,81,397/- was nothing but transfer of the payment of the shares of HDIL held in her name and not the payment for the release of properties in her favour. The said transaction is an attempt to veil the properties and hide the actual owner. (xiii) The property at A-20, Kailash Colony, New Delhi (Conclave Boutique) was owned by M/s Libra Realtors (P) Ltd and M/s Deewan Realtors Pvt Ltd. and as per the sale deed dated 28.10.2015 Shri Rakeshkumar Wadhawan transferred the property on behalf of M/s Libra Realtors Pvt Ltd and M/s Dewan Realtors Pvt Ltd to Smt. Romy Mehra. However, M/s Libra Realtors (P) Ltd and M/s Deewan Realtors Pvt Ltd. availed unreported loans from PMC bank in connivance with the PMC staff and they owe Rs.246.45 Crs in total to PMC bank. (xiv) Further 50% share of Property at D-150, East of Kailash, New Delhi and 1/3rd share of Property at C-22, Kalkaji, New Delhi owned by Rakesh Kumar Wadhawan was gifted to Romy Mehra to save the property from being claimed by the PMC Bank towards its loan recovery as no consideration was paid for the above said properties. (xv) The attached properties were acqui....
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.... as accused in the FIR or ECIR, properties can be attached if it is proceeds of crime. 19. As per section 8(1) of the Act of 2002, it is necessary for the noticee to disclose the sources of the property. If sources to acquire the property are disclosed and it is not the proceeds of crime, the challenge may sustain and not otherwise. To analyze the issue in the background aforesaid. We would take each property for which detailed facts have been given by both the parties. 20. Before we take up each property to analyze the issue, it would be necessary to indicate that the appellant Romy Mehra received 09 lakhs shares of HDIL in the year 2007 from her mother Damayanti Wadhawan. She received 2,57,000/- bonus shares in the year 2009. The respondents have alleged that those shares were of the accused Rakesh Kumar Wadhwan and therefore if subsequently those shares were sold by the appellant Romy Mehra and acquired Rs. 18.80 crores and used as consideration to purchase the properties for full share, it was to save the properties from attachment. The issue aforesaid needs to be analyzed at the first stance. 21. The facts on record shows that mother Damayanti transferred 11,57,000/- shares....
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....in the same year and is also not in dispute. In the light of the aforesaid, we are not in agreement with the respondents that alleged 11 lakhs shares were actually belonging to the accused Rakesh Wadhawan whereas it was transferred to the appellant in the year 2007 by her mother. 24. In the background aforesaid, now we may take up each property to find out whether appellant has disclosed the source to acquire the property and it is not the proceeds of crime. Here in, we may clarify that proceeds of crime defined under section 2(1)(u) of the Act of 2002 is not limited to the proceeds acquired or derived directly or indirectly out of criminal activity relating to scheduled offence but if such proceeds is not available, then the property of equivalent value can be taken to be the proceeds of crime and in that event even if the property exists with a person who is not named as an accused, it can yet be attached. First property (A-20, Kailash Colony, New Delhi) 25. The property aforesaid was purchased by M/s Libra Realtors and M/s Dewan Realtors in the year 1995 with equal shares. The commercial structure was built thereupon. According to the appellant Romy Mehra, said property was p....
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....s to whether the said property was under mortgage for taking the loan from the PMC Bank by those two companies. The property was not under mortgage thus purchased subsequently by the appellant Romy Mehra for which a registered deed was executed by the companies in the year 2015. Consideration of Rs. 2,13,13,468/- was paid by the appellant through banking channels and it was out of 18.87 crore received by her out of the sale of 11 lakhs shares of HDIL. The appellant has disclosed the source to acquire the property. Once the property was sold by the Companies, it no more remained in their hands so as to be attached towards the default of the company in repayment of loan amount because the company remains as a separate entity than that of the individual. The property in the hands of the individual secured by the disclosed source cannot be taken for any purpose of the company even if the individual remained a part of the company as director. It is unlike the liability of partners in the partnership firm. 30. The respondent made a reference of loan taken from PMC bank by two companies and remained unpaid. It is a fact that property in question was not mortgaged and otherwise sold for c....
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....le of 11 lakhs shares, the appellant Romy Mehra received Rs. 18,87,81,397/- in the year 2009 and as a consequence of the payment of consideration, Rakesh Kumar Wadhawan released share in the property. The half share in the property aforesaid was existing with the appellant from the year 1999 itself and could not have been taken to be the proceeds of crime because it was purchased from the disclosed sources. No allegation exist against her in the FIR rather she has not been named in FIR though her name appears in the supplementary charge sheet filed before the Special Court, PMLA based on the same contents as has been given in the provisional attachment order. The sale of the shares of M/s HDIL was made in the year 2009, that is much prior to the registration of the FIR in the year 2019 and otherwise actual transfer of the share in the property by Rakesh Wadhawan was made under a deed in the year 2015 itself, that is four years prior to the registration of the case. It is necessary to clarify that the allegation of non-production of the gift deed for transfer of share of HDIL has been made in ignorance of the fact that family settlement can be oral between mother and daughter and ot....
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....supposing transfer of 11 lakh shares to appellant Romy Mehra by her mother Damayanti in the year 2007 to be nothing but holding of those shares of Rakesh Wadhawan by appellant Romy Mehra. During the course of argument, respondent could not clarify the basis of the aforesaid conclusion when admittedly mother Damayanti was holding the shares of HDIL in the year 2007. The respondents even failed to clarify that if at all Romi Mehra was holding 11 lakh of Rakesh Wadhawan and therefore justification of attachment then why the shares transferred to her sister Anjana by the mother in the year 2007 have not been attached despite the fact that she is holding it till date. The respondents have failed to clarify aforesaid foundational facts going in the roots because the consideration for acquisition of full share of the three properties was paid by Romy Mehra out of sale of 11 lakh share of HDIL for a consideration of 18.87 crores. The source has been disclosed to acquire the property. However, it can still be attached if it falls in the definition of the proceeds of crime. Here again the respondent could not clarify so as to why they did not attach the property of M/s Devan Realtors and M/s....