TaxTMI 
TaxTMI 
2025 (7) TMI 81
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..... Rakhi Bhansali (w.e.f. 28, Feb. 2018) USD 7.1 Million (Rs. 73.58 per USD as on 05.10.2018) 2. As per the facts of the case, after receiving the complaint dated 29.01.2018 from Punjab National Bank (PNB), Zonal Office, Mumbai, the CBI, BS & FC, Mumbai, registered an FIR No. RCBSM2018E0001 Dated 31.01.2018. The allegations in the compliant are reproduced as under: (i) On 16th January 2018, M/s Diamond R US, M/s Solar Exports and M/s Stellar Diamonds (Partners: - Shri Nirav Modi, Shri Neeshal Modi, Smt. Ami Nirav Modi and Shri Mehul Chinubhai Choksi) approached the branch office of the Punjab National Bank at Mid Corporate Branch, Brady House, Mumbai and presented a set of import documents to the branch with request to allow buyers credit for making payment to the overseas suppliers. Since there was no sanctioned limit in the name of the above firms, the branch officials requested the firms to furnish at least 100% cash margin for issuing Letter of Undertakings (LOU) for raising buyer's credit. At this, the firms contested that they have been availing this facility in the past also, but the branch records did not reveal details of any such facility having....
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....M/s Solar Exports and M/s Stellar Diamond in conspiracy with Sri Gokulnath Shetty, Deputy Manager (retd.), Punjab National Bank, Manoj Hanumant Kharat, Single Window Operator, Punjab National Bank and other unknown persons committed the offence of cheating against Punjab National Bank and caused a wrongful loss. The public servants committed abuse of official position to cause pecuniary advantage to M/s Diamond R US, M/s Solar Exports and M/s Stellar Diamond and wrongful loss of Rs. 280.70 crore to Punjab National Bank. (v) In view of the above, the FIR has been registered under sections 120-B r/w 420 of IPC, 1860 read with Section 13(2) read with 13(1)(d) of PC Act, 1988 against following persons/individuals/entities:- (a) Shri Nirav Modi, Partner of M/s Diamond R US, M/s Solar Exports & M/s Stellar Diamonds. (b) Shri Neeshal Modi, Partner of M/s Diamond R US, M/s Solar Exports & M/s Stellar Diamonds. (c) Smt. Ami Nirav Modi, Partner of & M/s Diamond R US, M/s Solar Exports & M/s Stellar Diamonds. (d) Shri Mehul Chinubhai Choksi, Partner of M/s Diamond R US, M/s Solar Exports & M/s Stellar Diamonds. (e) Shri Gokulnath Shetty, D....
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....gh the above-mentioned fraudulent modes. The said LOUs amounts were utilized for making payment to their alleged overseas suppliers/companies. In the following years also i.e. 2012, 2013, 2014, 2015, 2016, the said modus operandi was adopted by the said three entities and therefore, funds of LOUs obtained fraudulently were siphoned off through their alleged overseas pilers/companies. The details of LOUs obtained by the said three entities since 2011 along with their utilization is as under: - Year Details of LOUs along with utilization No of LOUs Opened Amount USD Million Amount in Rs. Crore Utilization (Rs. In Crore) Companies Banks 2011 43 116.00 742.40 742.40 0.00 2012 115 352.43 2255.55 2255.55 0.00 2013 237 640.24 4097.54 4097.54 0.00 2014 123 301.19 1927.62 1927.62 0.00 2015 185 438.53 2806.59 2697.66 108.93 2016 353 875.9 5605.73 4505.80 1099.93 2017 150 1015.34 6498.18 1448.16 5064.60 Total 1206 3739.63 23933.61 17674,73 6273.46 The fund obtained by three entities were utilized for the payment of various o....
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....raudulent LOUs. With his active involvement several dummy companies were formed all over the world including Dubai and Hong Kong to camouflage the real transactions. Mr. Mihir Bhansali also formed the necessary facade of overseas companies for layering the proceeds of crime generated from the fraudulent LOUs issued. He also appointed the employees/ex-employees as dummy directors in these companies. He ensured that the directors should be trust worthy and in the words of Shri Himanshu Trivedi, Ex- Director of Firestar Group "who do not apply much brain". A secure internal email communication system was also developed at his instance and its server was deliberately kept in Dubai for any eventuality. Apart from fund transfer and setting of shadow entities, he was actively involved in rotation of goods, melting of precious metal extracted from dismantling of jewellery and low-quality jewellery production/export-import with artificially high value declaration. In their statements, Mr. Kurian Mathews (General Manager, accounts of Firestar Diamond FZE), Mr. Saju Paulose (General Manager, accounts, Firestar Diamond Pvt Limited), Mr. Satyendra Shukla General Manager of Firestar Diamond FZE)....
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.... substantial amount of proceeds of crime has been transferred to Mihir Bhansali and his company in form of Gold, cash and transfer of funds which are not available for attachment directly. Mrs. Rakhi Mihir Bhansali is the wife of Mr. Mihir Bhansali and she is a home maker and her wealth is derived from her husband Mr. Mihir Bhansali. After registration of the case, Mihir Bhansali transferred ownership to his wife Mrs. Rakhi Bhansali for nominal value USD 10 only (w.e.f. 28, Feb, 2018). Therefore, ED concluded that the above-mentioned property presently owned by Mrs. Rakhi Bhansali (Wife of Mr Mihir Bhansali) represents the value of proceeds of crime in terms of definition of Section 2(1)(u) of PMLA, 2002 as the value of any such property is liable for attachment under PMLA, 2002. On the basis of above material placed before the complainant procured during the course of investigations against the above said entities/firms and persons and on its examination and analysis as discussed in PAO, the complainant had reason to believe that M/s Diamond R US, M/s Solar Export and M/s Stellar Diamond have obtained LOUs amounting to Rs. 6498.20 crore from PNB, Brady House Branch, Mumbai frau....
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....onal attachment under section 5(1) of the PMLA, 2002. By their acts of using the utilizing the fraudulently obtained funds i.e. proceeds of crime from PNB, it appears that Nirav Modi along with Mr. Mihir Bhansali have indulged in money laundering activities in terms of Section 3 of PMLA, 2002. Investigation has revealed that the monies have been transferred out of India were utilized overseas for settlement of LOUs earlier obtained by the said entities and also for making payment to alleged overseas suppliers. Shri Nirav Modi, and Mihir Bhansali have not co-operated with the investigation at all as they have not attended the ED office despite summons being issued to them under the provisions of the PMLA, 2002 seeing the likelihood of selling and/or disposing of the said property as extremely high, therefore, the complainant had reason to believe that the property mentioned at para 1 supra i.e. proceeds of crime is likely to be concealed, transferred or dealt with in such a manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under Chapter III of the Prevention of Money Laundering Act, 2002 (15 of 2003) and hence issued Provisi....
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.....33 are as under: a. USD 710,000 Paid by HSBC Cheque no.334 on 31.10.2016. (Page 334 of paper book) b. USD 4,631,018.33 Paid by HSBC cheque no.102554980 on 13.03.2017 (page 340 of Paper book) Remaining amount was paid by taking loan from HSBC Bank. Loan Amount USD 1,830,000 on 13.03.2017. (Page no.341-381 of paper book). From this amount, an amount of USD 1,758,981.76 was paid by HSBC Cheque no. 102529768 to builder. Accordingly, he stressed that from the above it is quite clear that the attached property was acquired prior to any allegation relating to generation of Proceeds of Crime. There are ample proofs that Mrs. Rakhi Bhansali was the sole owner of the attached property, for which evidence has been completely ignored by the Adjudicating Authority. He contended that the allegation that Mr. Mihir Bhansali had joint account with Mrs. Rakhi Bhansali and that Mihir Bhansali received money from Twinfield Investment overlooks the fact that the monies from Twinfield were transferred on 20.10.2017 and 07.11.2017, whereas the attached property was acquired much prior in time i.e. on 13.03.2017, and hence, could not possibly said to be related to the Pro....
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.... set aside the impugned order. 4. On the other hand, Ld. Counsel for the respondent ED controverted the submissions made by the Ld. counsel for the appellant and pointed out the incriminating material/evidence against the appellant, which will be discussed in our discussions in the final para, in order to avoid the necessary repetition. 5. After hearing the rival submission, we have given our thoughtful consideration to the same. With regard to role of Mihir Bhansali, investigation revealed that he was instrumental in setting up the scheme of transferring and layering of funds generated from the fraudulent LOUs. With his active involvement several dummy companies were formed all over the world including Dubai and Hong Kong to camouflage the real transactions. Mr. Mihir Bhansali also formed the necessary facade of overseas companies for layering the proceeds of crime generated from the fraudulent LOUs issued. He also appointed the employees/ex-employees as dummy directors in these companies. He ensured that the directors should be trust worthy and in the words of Shri Himanshu Trivedi, Ex-Director of Firestar Group "who do not apply much brain". A secure internal email communi....
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....Mihir Bhansali, who in turn acquired the same as mentioned in above chart. Ld. Counsel for the appellant failed to explained how appellant Rakhi Bhansali possessed the own funds as pointed out by him in para no. 3 above, seeing the fact that the appellant is a house maker and was not carrying out any business activity. Further Ld. counsel for the appellant also failed to point out that how her sister accumulated and transferred USD 38,22,280 to the account of appellant on 21.12.2016 and routing of the part of proceeds of crime through sister of appellant is not ruled out. Ld. Counsel for respondent ED specifically stressed that that this amount was in fact transferred firstly transferred by the accused persons to the father of the appellant, and thereafter, by the father of the appellant to the account of appellant's sister, and thereby, circuitous route is adopted by the accused persons to explain the payment for purchasing the property. Moreover, Ld. counsel for the respondent ED also made a valid submission that the said amount was never stated to be gift, nor the same was refunded, and hence, the same is apparently the part of POC. It is to emphasize that attachment of asset at....