TaxTMI 
TaxTMI 
2025 (6) TMI 1016
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....Crime 1. Land & Building of Plant of M/s NCS Sugars Ltd. situated at Village: Lachhayapat, BobbiliMandal, District- Vizianagaram, Andhra Pradesh i) Land ii) Building 31,92,80,000 22,58,33,194 47,30,00,000/- Total 54,51,31,194 47,30,00,000/- 2. As per the facts of the case, on complaint from an investor, MRA Marg Police Station, Mumbai registered an FIR No. 216/13 dated 30.09.2013 for commission of offences Section 120-B IPC r/w 409, 465, 467, 468, 471, 474, 477-A of IPC and substantive offences thereunder. After transfer of investigation to EOW, Mumbai Police, the said FIR has been renumbered as CR No. 89 of 2013. The complainant stated that he had been induced into making investments by false representations and assurances given by the promoters and senior management of National Stock Exchange Limited (NSEL) with a deliberate intention to dishonestly misappropriate his funds and had been cheated by NSEL with practically little hope for recovery of the amounts on the contracts. He was cheated by NSEL by creating a false impression of being a proper Spot Exchange with correct risk management systems in order to induce him to trade....
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....d to sell it on exchange platform on short duration contracts. The trades on NSEL platform were stopped on 31.07.2013 and the outstanding amount to be settled as on that day the exchange was to the tune of Rs. 5600 Crores. These funds included the NSEL charges of warehousing, financial charges, interests etc. The net funds outstanding on account of bogus trades affected on NSEL platform amounted to approx. Rs. 5600 Crores. Investigation revealed that funds were diverted from the settlement and client accounts by the defaulters to their company/firm accounts from where they were channeled to scores of other accounts including group company accounts, personal accounts, third party accounts, traders accounts, and accounts of fictitious companies/firms/persons. The funds were then laundered either by way of merging it in their regular business activities or placing it in movable and immovable properties/assets. During the investigation in the matter, it was found that NSEL, it promoters, the senior management of NSEL and the 25 defaulters indulged in criminal conspiracy, cheating and collusion wherein NSEL allowed trading on commodities by sellers, without ensuring goods of ap....
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....rs Ltd. had paid Rs. 133.15 Crores to NSEL into their settlement account against the sugar bought through exchange in corresponding T+25 contracts. Thus, as on 31.08.2013, the net liability of M/s NCS Sugars towards NSEL was Rs. 54.91 Crores. As per NSEL, the total outstanding liability of M/s NCS Sugars Ltd. is Rs. 58.85 Crores towards NSEL on account of settlement of their T+25 contracts. c) Shri N. Nageswara Rao, Managing Director of M/s NCS Sugars Ltd. has in his statement dated 14.05.2015 and 19.05.2015 recorded u/s 50(2) & (3) of the PMLA, 2002 stated that M/s NCS Sugars Ltd. had sold sugar through contracts launched on the NSEL platform without having corresponding physical stock of the same; the said sale transactions were only paper transactions; the funds received from NSEL through such bogus sale transactions were diverted towards business needs, including purchase of raw material, payment of bank loans & interest, capital expenditure required for the plant, payment of taxes, etc. d) As per the report provided by Income tax authorities regarding verification of warehouses of M/s NCS Sugars Ltd,- "Discrepancies have been observed in the amount of stock a....
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....s of crime. During investigation ED recorded statements of various suspects/accused persons & others and also collected the documents from the various sources and search conducted at various premises. Investigation revealed the trail of proceeds of crime and it was found that the funds so received from NSEL were utilized mainly toward repayment of bank loans obtained by M/s NCS Sugars Ltd. and its group companies, purchase of raw materials and working capital requirement of the plant of M/s NCS Sugars Ltd. by way of transfers, NEFT/RTGS payments/pay orders. A Prosecution Complaint No. 04/2015 has been filed by the Directorate against NSEL & 67 others before the Competent Special Court, PMLA, Mumbai on 30.03.2016 agaisnt NSEL, their Officials/Directors, 14 defaulter groups companies/entities and their directors/controllers. Further, another Prosecution Complaint bearing no. 04/2016 was also filed on 21.11.2016 against one of the defaulters i.e. M/s ARK Imports Pvt. Ltd. & Ors. Further, two more Prosecution Complaints have been filed in the matter before the Hon'ble Special Court against Financial Technologies India Ltd., parent company of NSEL, and Shree Radhey Trading Co. ....
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.... wrongly attached the aforesaid mortgaged & assigned property by giving it a color of tainted money or proceeds of crime by claiming that the aforesaid property mortgaged by the borrower M/s NCS Sugars Ltd. was obtained from the proceeds of crime. Respondent ED, however, has not provided any details or evidence regarding the aforementioned claim that the said properties have been purchased from the proceeds of crime/siphoned. In-fact, the aforementioned properties have been purchased much prior to the registration of the FIR and commission of schedule. Ld. Counsel for the appellant ARC contended that SARFAESI provisions will get precedence over provisions of PMLA. Prayer is accordingly made to allow the present appeal and release the aforementioned mortgaged property assigned to the appellant AARC as mentioned at para no. 1 above. 4. On the other hand, Ld. Counsel for the Respondent ED strongly opposed the contention of the Ld. Counsel for the appellant ARC and submitted that the properties were mortgaged during the period of commission of offence and the Respondent ED is entitled to attach the same. Ld. Counsel for the respondent ED submitted that the FIR was registered in t....