TaxTMI 
TaxTMI 
2025 (6) TMI 1177
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..../2016 dated 22.11.2016 was registered at Police Station Kashmere Gate, District North, against Devendra Kumar Jha, Mohit Garg, and Raj Kumar Sharma for commission of offence under Section 420 IPC read with Section 120B of IPC. As per FIR, on 22.11.2016 police intercepted Honda City Car Registration No. DL-2FV-0036 in which the said three accused persons were travelling. On checking the said car, it found to contain huge old denomination notes containing demonetized currency of 1000/- totaling to Rs. 3.70 crores in four bags. On interrogation they failed to produce the proof of any ownership or any other proof regarding the custody of the currency. On interrogation they disclosed that they are indulging in the illegal activity of exchange of old demonetized currency into new currency with a conspiracy and collusion with the bank officials. The said demonetized currency of Rs. 3.70 crore was seized along with six cheque books of Axis Bank. Thereafter, Section 7 and 13 (1) (d) of Prevention of Corruption Act, 1985 was also added for conducting investigation against the bank officials. On the basis of said FIR the Directorate of Enforcement recorded ECIR No.11/DLZO/2016 dated 30.11.20....
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....o that the illegal money can be layered, within very little time through RTGS/transfer in different accounts on a commission of 1% of total money deposited in front companies; (which was later increased to 2%). After making arrangement for transfer/RTGS of demonetized money through banking channels, Mohit Garg and Rajeev Singh Kushwaha agreed to the proposal of Nitin Gupta on a commission @15% of total cash deposits. After the bankers agreed to the offer, Nitin Gupta started collecting demonetized money from the buyers, delivered it to Mohit Garg, who after deducting his commission of 15%, with the help of Vineet Gupta, Branch Manager and Shobhit Sinha, Manager Operations of AXIS Bank Kashmere Gate, Delhi deposited huge amount of money into the accounts of three front companies controlled by Rajeev Singh Kushwaha namely M/s Sunrise Trading, M/s Himalaya International and M/s R.D Traders. After the cash was deposited, RTGS were sent into the accounts of M/s Beagle Marketing, another front company of Rajeev Singh and transferred the money to the accounts of importers/suppliers of Gold namely M/s Tushar Jewelers, M/s Aadi Traders, M/s Sidhhi Vinayak, M/s Ganesh Traders and M/s Maa & S....
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....ove with Rajeev Singh Kushwaha as 2% commission to Bank Official was given on the total amount of cash deposited; further stated that he had given one gold bar of one Kg each to Vineet Gupta and Shobhit Sinha (bank officials). Statement of Nitin Gupta S/o Sh. Pawan Gupta was recorded by ED on 01.12.2016, wherein he stated Mohit Garg was his friend and neighbor and was into billing business i.e. issuing bills without supplying the goods and they have been arranging bills from him. Subsequent to demonetization, the prices of gold/ bullion had increased many folds. He in connivance with others planned to buy gold and sell it at profit on premium rate out of the demonetized currency notes. For this purpose he contacted his friend Mohit Garg, who agreed to arrange RTGS entries of demonetized currency for a commission of 15% of the total cash. On 09.11.2016, he delivered the first tranche of Rs. 4.5 crore of currency notes of 500 and 1000 denomination which was delivered by Shashank Jain at the door step of Mohit Garg at his instance. He collected cash from various prospective gold buyers and RTGS was arranged by Mohit Garg to the M/s Aadi Traders, M/s Sidhhi Vinayak, M/s S.K. Impex and....
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....ay Katta. After deduction of 15% commission amount. (Cash amount received from Ajay Katta Rs. 4.45 crore and Anķşuh Jain Rs. 9.40 are under investigation). Further statement of Mohit Garg was recorded on 05.01.2017, wherein he stated that he used to charge 15% commission of total demonetized currency for converting old demonetized currency into liquid assets/monetized currency (RTGS). He alongwith Rajeev Singh Kushwaha and his associates booked a farm house measuring 5040 sq. yard in Green Beauty Farm, Noida and initially a booking amount of Rs. 2,21,000/- was paid by Sh. Rajeev Singh Kushwaha to Mr. Mahfooz Khan, representative of farm house. After 3-4 days Rajeev Singh Kushwaha paid another instalment of Rs. 20,00,000/- to Mr. Mahfooz Khan for the said property thereafter, he (Mohit Garg) paid Rs. 50,00,000/- to Mr. Mahfooz Khan and Rs. 20,00,000/- to Mr. Deepak Mehra, contractor for construction work in the said farm house. Statement of Sh. Devendra Kumar Jha S/o Sh. Mohan Jha was recorded u/s 50 of PMLA, 2002 on 06.12.2016. wherein he stated that he was working as a CA and used to file returns of various firms, persons and companies including M/s J.P. Jewelers, M/s ....
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....d deposited the same in accounts of front companies of Rajeev Singh Kushwaha. After depositing cash on 11.11.2016 around 8:00 pm on the instruction of Rajeev Singh Kushwaha, he had kept a black bag (yellow mark) in the branch manager's (Vineet Gupta's) cabin. Mohit Garg gave him gold bars on three different occasions. In the first instance he gave him two gold bars which he handed over to Sh. Rajeev Singh Kushwaha. The second time; Mohit Garg gave him one gold bar which he again handed over to Rajeev Singh Kushwaha and the third time Mohit Garg gave him one gold bar which he handed over to Sh. Devendra Jha. Sh. Rajeev Singh Kushwaha gave him Rs. 2.42 Crore cash which he handed over to Sh. Mohit Garg. Gold bars were given to Rajeev Singh Kushwaha between 12th to 16th November 2016 and cash given to Mohit on 17.11.2016. Statement of Sh. Rajeev Singh Kushwaha S/o Sh. Avnindra Pratap Kushwaha was recorded u/s 50 of PMLA, 2002 on 05.12.2016, wherein he stated that he had opened bogus firms namely M/s Himalaya International, M/s RD Trader and M/s Beagle Marketing on the instructions of Shri Lalit Garg father of Mohit Garg, out of these three firms, mostly M/s Himalaya was used f....
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...., Gurunanak Pura, Delhi-92 3. Divya International Ram Charan 42/A57, Gurunanak Pura, Delhi-92 4. Disha Traders Rajeev Singh Kushwaha 42/A57, Gurunanak Pura, Delhi-92 5. Sunrise Trading Co. Anil Kumar A-27 Street-3, Gurunanak Pura, D 6. Beagle Marketing Pvt. Ltd. Imran Khan and Ram Charan 14/A, Street No.1 Guru Angad Nagar Delhi-92 7. Magnum Traders Pvt. Ltd. Imran Khan and Ram Charan A-27, Street-3 Gurunanak Pura, Delhi- 92. 8. Bharat Trading Co. Rajeev Singh Kushwaha 57, Vijay Block, Laxmi Nagar, Delhi-92. House no. 42/A57, Gurunanak Pura, Delhi-92 is his residential address, and A-27, Street-3, Gurunanak Pura, Delhi -92 his old office address, which he had left in December, 2015 and 57, Vijay Block, Laxmi Nagar, Delhi -92 was his friend Mr. Devender Kumar Jha's address, which he left in 2015. Imran Khan was his driver since 2012 and he used to pay him salary and sometimes he used to send Imran Khan to bank also. Anil Kumar was his peon and he used to pay him salary and he used to work as per his instructions. Ram Charan, who is a painter, once came to his house to do white wash and he had used his identity to open two companies as above. When demoneti....
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....ven the name of company, in which he was director. Rajeev Singh Kushwaha used to send him to deposit the cheques in the name of company and he used to sign on cheques on the instruction of Sh. Rajeev Singh Kushwaha. Statement of Shobhit Sinha, S/o Shri A.B. Sinha, was recorded on 03.12.2016 under Sec 50 of PMLA, wherein he stated that he was working as operation Manager in Axis Bank from Dec 2011. Rajeev Kushwaha and Mohit Garg contacted him and Vineet Gupta, Branch in-charge, for the purpose of depositing the demonetized currency into three front companies of Rajeev Kushwaha, having bank account with AXIS Bank, Kashmere Gate. He agreed to the proposal, but asked for a commission @ 1% of the total deposits in the front companies, which Rajeev Singh and Mohit Garg agreed to pay in the form of gold bricks. He was aware that Rajeev Singh Kushwaha use to come with Devendra Jha and Mohit Garg and Raj Kumar Sharma to deposit Cash after business hours, he used to deposit the money and also gave the request for fund transfer the very same day in the account of M/S Beagle Marketing Pvt. Ltd. after that he used to give them fund transfer request to other accounts mainly of M/s Aadi Traders,....
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....tized currency into new currency notes. He also stated during his statement dated 08.12.2016 that he has exchange Rs. 1 lakh old 'demonetized currency of Rajeev Singh Kushwaha for that Rajeev Singh Kushwaha submitted only one Identity Card. Statement of Sh. Vineet Gupta was recorded u/s 50 of PMLA, 2002 on 04.12.2016, wherein he stated that he was working as a branch head in Kashmere gate branch since May 2014. The Kashmere Gate Branch of Axis Bank was a mid-size branch of the bank. He knew Rajeev Singh Kushwaha since 2014, since he was having accounts of various front firms/companies namely M/s Himalaya International, M/s RD Traders, M/s Sunrise Trading, M/s Beagle Marketing etc. in his branch. He also knew that Rajeev Singh Kushwaha was not the director or authorized signatory in any of the aforesaid companies account. He knew that proprietor of M/s Himalaya International and M/s R.D Traders, was Mr. Imran Khan and he was also an authorized signatory/director in M/s Beagle Marketing Pvt. Ltd. It was Mr. Imran Khan who used to come to the bank to operate the said accounts. However, for the past 6-7 months Imran Khan was not visiting the branch and in his place a person called....
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....h. He has accepted the packet from Vineet Gupta on 11.11.2016 around 11:15 pm that packet contains currency notes. Statement of Navpreet Singh Duggal S/o Sh. Harvinder Singh Duggal u/s 50 of PMLA, 2002 stated that on 24.01.2017 that he was working as cashier in Axis Bank, Kashmere Gate from Oct, 2016 and was dealing with cash deposit and withdrawal. He was reporting to Operation Head, Shobhit Sinha. He further stated that huge cash was deposited in the accounts of the firms namely M/s Himalaya International, M/s R. D. Traders and M/s Sunrise Trading Co. by Mohit Garg, Rajeev Singh Kushwaha and others. For depositing this cash Branch Head Vineet Gupta, Operational Head Shobhit Sinha used to generate e-receipt thereafter they used to order him to deposit cash given by Rajeev Singh Kushwaha and his associates as he was reporting to Shobhit Sinha and Vineet Gupta (Branch Head) he used to make entry in Finacale Software as per their direction. Cash were received by either Vineet Gupta or Shobhit Sinha as they used to come in cash counter to receive the cash. After making entry transactions were verified by senior officials either by Vineet Gupta or Shobhit Sinha. In all these cases for....
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....ut not as direct/indirect proceeds of crime. He argued that the property of the appellant as value thereof cannot be attached, as there is nothing on record to show that appellant siphoned of the alleged proceeds of crime out of India. In support of his contention, he relied upon the judgment of the Apex Court in the case of Smt. Pavana Dibbur v. The Directorate of Enforcement reported in 2023 SCC OnLine SC 1586. He pointed out that no charge sheet with respect to predicate offence is filed by the police till date. He further contended that in absence of any police report under Section 173 Cr.P.C, the question of attaching the property of the appellant as per the first proviso of Section 5(1)(b) of PMLA does not arise. He further pointed out the second proviso of Section 5(1)(b) of PMLA which states that "such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be pr....
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....consideration to the same. Admittedly, at present, appellant is not facing any trial along with the co-accused persons in predicate offence, and even, no charge sheet is filed against him. However, question of releasing the property on this ground does not arise, seeing the fact that no closure report is filed by the police against the accused persons till date. Therefore, till the filing of the charge sheet or the closure report we are not inclined to allow the appeal at this pre mature stage. We are of the view that the police has to conduct the investigation for the commission of the predicate/schedule offence and ED is not empowered to re-investigate the same. ED has to see only the following points during its investigation for money laundering:- i) Whether there is any prima facie incriminating evidence against the culprits for commission of schedule offence; ii) Whether any proceeds of crime were generated by commission of crime/predicate offence; iii) Whether the said proceeds of crime are laundered, or likely to be laundered; iv) If proceeds of crime are laundered, then the mode of layering of the same, or the trail of POC; v) If proceeds of crime are already dis....
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....stries Ltd. v. Directorate of Enforcement reported in 2022 SCC OnLine Del 2087. The relevant para no. 105 of this judgment is reproduced as under:- "105. It would be pertinent to recall that properties which were acquired prior to the enforcement of the Act may not be completely immune from action under the Act in light of what this Court had held in Axis Bank. As was explained by the Court in Axis Bank, the expression proceeds of crime envisages both ―tainted property as well as ―untainted property‖ with it being permissible to proceed against the latter provided it is being attached as equal to the "value of any such property" or "property equivalent in value held within``` the country or abroad". However, both the italicised categories would be liable to be invoked in cases where the actual tainted property cannot be traced or found out. It is only where the respondents are unable to discover the tainted property that they can take the statutory recourse to move against properties which may fall within the ambit of ―value of any such property or ―property equivalent in value held within the country or abroad. To the aforesaid limited extent, prope....