TaxTMI 
TaxTMI 
2025 (6) TMI 1511
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....ed 18.01.2015 was registered at P.S. Kavi Nagar, District Ghaziabad. (U.P.) under sections 420, 467, 468, 471 & 469 of the erstwhile Indian Penal Code (IPC) against one Shri Manish Jain and others wherein it was alleged that during a search conducted by the DRI under the Customs Act, 1962, it was found that Shri Manish Jain, R-12/40, Raj Nagar, Ghaziabad, was involved in making illegal foreign remittances to Hong Kong through banking channels by submitting fake import documents to bank authorities. As per the report, Sh. Manish Jain and others operated through various fictitious firms/companies and remitted more than Rs. 380 crores to Hong Kong from India during the period 2007-2011, showing the same as payment for import of computer parts and accessories. On further investigation by the DRI, it was revealed that Manish Jain and others had been remitting foreign exchange to Hong Kong through bogus firms/companies, namely, M/s Suntek Computers and M/s Shyam Trading Company (controlled by Sh. Manish Jain) adopting the same modus operandi and had remitted an amount of over Rs. 100 crores from 2012 till 2014. The DRI searched the residential and business premises of Sh. Manish Jain and....
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...., M/s Pacific Exim, M/s Pioneer Computers, M/s Shyam Trading Company, M/s Suntech Computers, Sh. Rajeev Wadhwa and others had acquired the proceeds of crime in the form of forex against fake import documents and remitted the same outside India, with a view to launder the said money in the garb of remittance against advance import to conceal fraudulent exports/imports. 5. Investigations led to the formation of reasons to believe that the aforesaid accused persons and entities purchased various movable and immovable properties which are actually proceeds of crime and involved in the offence of money laundering as defined under section 2(1)(u) and section 3 of the PMLA, 2002, generated through their aforesaid criminal activities and laundering thereof as defined under section 3 of the Act. Accordingly, properties worth Rs. 2,19,36,954/- were traced and attached vide PAO dated 11.05.2016. Two Prosecution Complaints were filed before the designated Special Court, which has taken cognizance on the same against the accused persons, Sh. Manish Jain, Sh. Rajeev Wadhwa and others. 6. An Original Complaint (O.C.) dated 09.06.2016 having been filed before the Ld. AA as per the requirement of....
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....h, New Delhi (ii) Rs 6,96,000 paid on 21-4-2015 from bank account M/S Kamakhaya Forex Pvt. Ltd maintained with HDFC bank, Karol Bagh, New Delhi. (Cash of Rs 4,00,000 was deposited in the said account from the available cash in hand of the company (iii) Rs 1,46,700 paid on 21-4-2015 in cash from available cash in hand of the company. 11. It is contended that the appellant had submitted a reply dated 23.07.2016 to the Complaint and explained the sources of the purchase of the above vehicles. All the supporting documents relating to source of purchase of vehicles were forwarded. The Bankers have confirmed before the Adjudicating Authority that finance as stated hereinabove was provided by them. 12. It is also contended that the appellant had replied to all the allegations in the said reply. There is nothing in the complaint to show as to how the complainant has come to the said conclusion that the cars represent proceeds of crime. The allegations made by Respondent No. 2 in his provisional attachment order and original complaint against the appellant are false and baseless. Both the above transactions and details have been duly reflected in the relevant Income Tax Returns (ITRs)....
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....s, the appellant has prayed that the impugned order may be quashed and set aside. 16. The Respondents have strongly opposed the arguments put forward on behalf of the appellants. They have, firstly, reiterated at length the facts leading to the initiation of inquiries in this case, the material gathered during the investigations carried out by the DRI and the respondent Directorate (ED), including seizure of incriminating material such as email communication, fake voter ID cards, PAN Cards, postal wrappers of Hong Kong Post, photographs of several persons, seals of various companies/CA/banks, RSA tokens, details of foreign based companies accounts etc., admissions made in statements of accused persons and witnesses, bank account statements etc. The modus operandi adopted by the group for fraudulently remitting large amounts of money abroad is also described at great length in the written pleadings filed by the respondents. That, there are concrete reasons to believe that Manish Jain and other had acquired huge quantity of the proceeds of crime in the form of Foreign Exchange on the strength of fake documents to the tune of about Rs. 600 crore which had been remitted outside India ....
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....case titled as Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. [Special Leave Petition (Criminal) No. 4634 of 2014], has held as below: "68. ....... 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 would further the legislative intent in recovery of the proceeds of crime and vesting it in the Central Government for effective prevention of money-laundering." 23. As such, the settled legal position on the subject is that even assuming that a given property itself was acquired out of explained sources, the same can still be attached as 'value' of proceeds of crime if the direct proceeds or crime have been dissipated or are unavailable for attachment for any reason. In the set of cases to which ....
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....ed transactions. Cash was delivered by Sanjeev Wadhwa and Rajeev Wadhwa or their employees at the doorstep of Manish Jain and Rakesh Jain at Ghaziabad with the instruction slip regarding further remittance out of India large remittances were sent from the accounts operated by Manish Jain for Rajeev Wadhwa, Sanjeev Wadhwa and Pravesh Gujral; remittances abroad were also made by the principal accused Shri Manish Jain on the directions of Sanjeev Wadhwa who was controlling the affairs of Kamakhya Forex wherein his wife Bhawna Wadhwa was a director; huge cash used to be deposited in the accounts of Kamakhya Forex, which was received from importers, and subsequently remitted to Hong Kong using accounts of companies operated by Manish Jain; similar allegations also exist in respect of M/s P.R. Forex Pvt. Ltd; Pravesh Kumar Gujral and Subhash Arora were directors of P.R. Forex and earned a commission on the foreign exchange remitted abroad through fraudulent means; Manish Jain and Rakesh Jain used to get huge amounts deposited in cash and transferred the amounts to other accounts through RTGS etc., and remitted it abroad in foreign exchange, mainly to Hong Kong and were paid a commission ....
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....im stage when prosecution complaints have been filed and are pending before the designated Special Court. 36. We also note that the value of property attached by the respondents in the present case is a mere fraction of the alleged proceeds of crime. 37. No other issues were argued before us from either side other than dealt with by us. ORDER 38. In light of the above discussions, we do not find any grounds to interfere with the order of the Ld. Adjudicating Authority in the instant set of appeals. 39. Accordingly, all these appeals are hereby dismissed and shall stand disposed of along with pending applications, if any. As such, I do not find any reasons to interfere with the impugned order passed by the Ld. AA whereby the attachment of the subject properties has been confirmed. Accordingly, the present appeal is hereby dismissed. No order as to costs." 25. The above observations and findings of the Appellate Tribunal in the appellant's own case arising out of a different O.C. but the same set of underlying facts, are equally valid in the present case also. Accordingly, for the all the reasons discussed above, the present appeal is hereby dismissed. 26. Pending ap....
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....atement against the appellant while in custody. In this regard it is contended that statement made in custody has no sanctity. The Ld. Counsel cited the recent judgment dated 28.08.2024 of the Hon'ble Supreme Court in Prem Prakash v. UoI [SLP (Crl) No. 5416/2024] wherein it was held that statement u/s 50 of PMLA, 2002 recorded in custody is inadmissible. It is also contended that Sh. Manish Jain, in the said statement, named many persons apart from the appellant, including Ajay Goyal, Kamal Goyal etc., but none of them has been named as accused. It is further contended that proceeds of crime have not been quantified. However, properties were attached as 'value' thereof. 32. The respondent has contested the submissions made on behalf of the appellant. It is submitted that just because the appellant is not named in the predicate offence, it cannot be said that he cannot be proceeded against under PMLA, 2002. It is also submitted that Prosecution Complaint under PMLA, 2002 has been filed against the present appellant through a Supplementary Prosecution Complaint. The Ld. Counsel for the respondent further submitted that the judgment in the case of Prem Prakash does not apply in the p....
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....ence of money-laundering, of Section 25 of the Evidence Act is available or not, may have to be considered on case-to- case basis being rule of evidence, and held that in the facts of the case before them, the rule applied. In the facts and circumstances of a different case, the same position need not necessarily apply. More importantly, I find that the case against the appellant in the instant case does not rest on the sole testimony of his statement of Sh. Manish Jain which is claimed to have been recorded while he was in custody. The respondents, in their written reply to the appeal filed by the appellant have inter alia placed the following detailed facts on record: "8. That, Sh. Rakesh Jain in his statement stated that his brother Mr. Manish Jan had also got opened more than 60 bank accounts at OBC Bank, Razapur, Ghaziabad in the name of various/companies/firms for example Shiva Trading Rishabh International Pacific Exim, Alaska Trading, Sai International, Unique Enterprise. Pioneer Companies Jai Bharat Impex, Aadinath Exim, Apple computers, etc., showing proprietor as Sanjay Kumar, his brother himself, Sarad Singh, Ashwin Kumar, Ravi Kumar etc. at the address of own shops a....
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....aid emails IDs has also available on file and he admitted the contents of the same, that in the said transactions, it has been reflected that Manish Jain had further transferred the desired amount in the account of China based companies from the account of Manish Jain at Hong Kong as per the instructions from Rajeev and Sanjeev Wadhwa; that the process used in sending outside remittance was as follows:- 1. Cash was delivered to Manish Jain by Rajeev, Sanjeev, Kamal etc. mentioned above. 2 Cash was deposited by Manish at various banks opened in the name of many firms and companies and further RTGS to some designated accounts for further remittances. 3. Outside India remittances were made in the shape of foreign exchange as per the instructions of above said persons, mainly at Hong Kong. 4. Further electronics transfer by Manish Jain from Hong Kong based company account into the account of China based companies and others as per the instructions of Sanjeev, Rajeev, Kamal Goel etc., that after debiting the account in Hong Kong based companies, transactions details were send either through emails or on phone for confirmation of party concern; that some of the details may be ver....
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....online marketing business but his CA could give complete details and he has not having any document with regard to the said business. He has not revealed any legal source of his income and passed over the whole onus to justify his source of income to his CA, Sh. L. K. Arora. It is strange that he has no knowledge about source of his and his wife income as shown in Income Tax returns filed by them before the concerned department and his CA can state better. It suggests that he and his wife do not have any legal source of income He himself admitted that he is involved or deals the clients who have requirement of foreign exchange and received his commission or profit in the shape of cash He is also involved and prosecuted in the similar types of case vide ECIR no 20/DLZO/2015 in which outward remittances were sent outside India to the tune of Rupees 6000 Crores from bank of India and running in judicial custody in the said case. 12. That, during investigation of another similar case mentioned above, the mobile phones surrendered by Rajeev Wadhwa were forensically examined in cyber forensic lab of Enforcement Directorate in the presence of two independent witnesses and Rajeev Wadhwa ....
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....ersons so that if caught by the enforcement agencies he can wash his hands of these phones saying that these were not in his name However, the data recovered from these phones in the form of his family photographs at Goa and other SWIFT/TT messages and the locations of the phones in Goa during material time, demolished the thin veil that he had created to conceal his identity and remain anonymous. Therefore, his claim that the phones did not belong to him proves to be untrue and has no substance and a weak attempt to get over himself from the incriminating evidences proving his active involvement in the crime of money laundering with the other co-accused. SWIFT messages/TT messages recovered from the phones of Rajeev Wadhwa indicated that while he was evading the investigation being conducted by this Directorate, he still indulged in the fraudulent activities of remitting money to various Chinese companies, using some different persons/companies details of which he refused to divulge. The relevant records/documents pertaining to the said cases, relied upon in the present case has also been placed on file. 14. That, in the light of the above, assertions of Sh. Manish Kumar Jain th....
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....atter he was carrying mobile phones having SIMs in different identities, also strengthen the facts that he wanted to get away himself from any direct involvement or to create any direct evidence against him. He had knowledge about the Manish Jain activities and his company's names, which were involved in sending/receiving remittances by illegal means. He had also visited at Hongkong during the alleged periods Thus, having no source of his income, having non cooperative attitude during investigation, having large transactions in cash in accounts, having dealing with clients from or in the name of PR Forex, having close association with present directors of PR. Forex and having interconnected banking transactions between the PR Forex and with family members of directors of PR Forex, receiving of cash by Manish Jain from Rajeev Wadhwa for further remittances and corroboration of the same by the witnesses, having emails ID's, mobile phones in fake identities, having swift messages with regard to illegal remittances at the time of arrest in similar nature case etc., all these lead and strengthen the facts that he was actively involved in the offences of money laundering with the....
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....nts and further sent to other accounts as per further requirements, that they had done the said work through electronic means, that they had also used to give the proof to the party in respect of TT transfer done; that he did not accept the said offer of Manish Jain and Rakesh Jain that Manish Jain and Rakesh Jain had informed him that the above mentioned current accounts have been opened on the basis of forged names and addresses, that they had got made fake PAN Card and Voter Cards in that regard, that the documents prepared as proof of sending foreign exchange abroad, were also fake that these forged documents were made by Rakesh Jain and both brothers had used those forged documents as per their convenience and requirement, that as per his knowledge Income Tax Deptt. had carried out raid in the year 2010 at the office of Manish Jain and Rakesh Jain and DRI had also searched their office and house premises in the year 2014 and during searches, PAN Cards, Voter Cards and computer pertaining items, related to fictitious companies, were recovered, that Manish Jain and Rakesh Jain frequently used to go to Hongkong where they had opened and maintained fictitious accounts in the name ....
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....mpany, he had not constituted any company but continue the work of foreign exchange through the said company because he was not having any licence to deal in foreign exchange, that he had dealt his clients through or in the names of PR Forex although he is not directly attached with the said company, that he had earned Rupees approx. 10-15 lacs as profit from the said business of foreign exchange and he had business of around rupees one crore in the year, that he had shared his profit with wife Mrs Harpreet Kaur for the point of income tax and shown some of his income in the name of his wife, that his wife has no permanent source of income; that she is a house wife and taught tuition to some children at home some time: that whole record with regard to his income is with his CA Sh. L.K. Arora, that he had good relationship with the director of PR. Forex, that he has no relationship with M/s Kamakhaya Forex, that as per his knowledge his brother Sh. Sanjeev Wadhwa has done the business of Forex through Kamakhaya Forex, that Sanjeev is director in the said company or not he has no knowledge of the same. 17. That, during examination, Shri Ram Sagar stated that he had worked with Mani....
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....by Manish Jain and Rakesh Jain; that Income Tax department and DRI had also searched their premises in the year 2010 And 2014 respectively, that forged PAN Cards. Election Voter Identity Card, stamps of fake companies and foreign based companies, computer etc. were seized by the DRI and he was also called for examination by the said departments and his statement was also recorded; that as per his knowledge Manish Jain and Rakesh Jain had visited several times aboard at Hong-Kong; that he further stated as per instructions, of Manish Jain, sometimes he had visited to Karol Bagh and at the premises of Ajay Goel at Vivek Vihar, for collecting cash and then further carried the cash to deposit the same in different banks accounts that on being asked about who carried/brought cash or deposited in the bank he stated that Chander Veer and Raj Naryan, generally deposited the cash at different bank accounts as per the instruction of Manish Jain and Rakesh Jain and sometimes Manish Jain and Rakesh Jain themselves used to carry cash and deposited in the bank. 18. That, as per statement of Mrs Bhawana Wadhwa recorded on 04.02.2016 wherein she inter-alia stated that she is one of the Promoter ....
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....elongs to Sanjeev Wadhwa, Rajeev Wadhwa and their acquaintances having its office at Saraswati Marg, Karol Bagh, deals in foreign exchange; that Sh. Rajeev Wadhwa is the younger brother of Sh. Sanjeev Wadhwa and for the past sometime both brothers have been working separately; that as per his knowledge Sh. Rajeev Wadhwa has no dealings in Mis Kamakhya Forex and he works in the name of P.R. Forex; that the name of C.A. or accountant of this company is L.K. Arora and his office is in Laxmi Nagar, his mobile phone is 9811251982; that now a days company has not been earning any profit, earlier also company was running on marginal profit; that Sh. Sanjeev Wadhwa and Sh. Rajeev Wadhwa have good command over cash dealings of foreign exchange and they are famous for this work; that he knew Subhash, Gurdeep (Neetu), Pravesh Kumar Gujral and met them in the office of P.R. Forex that he has heard that the above said three persons alongwith Sh. Sanjeev and Sh. Rajeev Wadhwa, jointly had used to run M/s P.R. Forex but later on due to unknown reasons Sanjeev Wadhwa left P.R. Forex. 20. That, there are concrete reasons to believe that Manish Jain and others had acquired huge quantity of the pro....