TaxTMI 
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2025 (7) TMI 1413
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....-Registrar, Hyderabad (South) having a value of Rs. 1,66,10,048/- (Rupees One crore Sixty Six Lakhs Ten Thousand Forty Eight Only)" Brief facts of the case: 2. The brief facts of the case are that after the confession made by Sh. B. Ramalinga Raju, ex-Chairman of M/s SCSL, share price of M/s SCSL dipped to the lowest and many investors suffered losses. Leena Mangat (one of the investors) made a complaint to the police and Andhra Pradesh State Crime Investigation Department registered FIR No.2/2009 on 9.1.2009 under section 120-B read with sec.406,420,467,471,477A of IPC. Thereafter, the Government transferred the investigation to the CBI and the CBI Anti-corruption Branch, Hyderabad registered FIR in RC 4(S)/2009, Shri B. Ramalinga Raju, B. Rama Raju, V. Srinivas (Respondent No.2 herein) and other accused persons were arrested and later enlarged on bail. The CBI, after completion of investigation filed the charge sheet before the competent court under section 120-B, 420, 419, 467, 468, 471, 477A and 201 of IPC. The designated court, after considering the charge sheet had taken cognizance of the case and the trial of the case was completed. The designated court convicted Sh. V. Sr....
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....f 2,30,500, M/s IL & FS sold away 1,67,358 shares during the year 2007-2008, by invoking the pledge. After adjusting the loan amount, interest & other charges M/s IL & FS returned amounts of Rs. 1,29,74,704 in June 2007 and Rs. 1,36,81,279 in September 2008 to V. Srinivas. The remaining 63,142 shares of M/s SCSL were released to Sh. V. Srinivas which were later sold to him through M/s DSP Merrill Lynch. The sale proceeds of these shares were included in the total amount of Rs. 13,18,38,209. Hence, an amount of Rs. 15,84,94,191/- (Rs. 13,18,38,209 + Rs. 2,66,55,982) has been derived Sh. V. Srinivas out of inflated shares of M/s SCSL. 8. Further, V. Srinivas received 13,600 bonus shares in the year 2006 from M/s SCSL and also sold 10,780 American Depository receipts (ADRs) of M/s SCSL for a consideration of Rs. 1,92,33,860/- during the year 2006. Such value derived by them is attributed to the criminal conduct relating to scheduled offence within the meaning of Section 2(1)(u) of the PMLA and therefore, such proceeds correspond to proceeds of crime. 9. The proceeds of crime generated by pledge / sale of the shares of SCSL have been invested in purchase of large number of immovable ....
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....tted position from the documents and statements that Rs. 1,56,06,000/- was an amount from the loan obtained from the Appellant. Therefore, the bifurcation of the sources of the property is glaringly explicit. Appellant has relied on State Bank of India vs. The Deputy Director, Directorate of Enforcement, Lucknow & Ors., reported in MANU/ML/0013/2017. 16. It was also submitted that the money was advanced in the course of a regular banking transaction and thus the property purchased from such money cannot be said to be purchased from proceeds of crime. 17. It was also submitted that by confirming the PAO, the Appellant would suffer a loss on account of the alleged illegal acts of V. Srinivas and V. Lalita Parameswary and no fault of its own. As, of today, V. Srinivas and V. Lalita Parameswary owe the Appellant Rs. 4,06,14,498.46/-. 18. It was further submitted that the impugned order is liable to be set aside because the pre-requisite for passing an order u/s 8(1) of PMLA is that there must be "reason to believe" that any person has committed n offence u/s 3 of the Act or is in possession of proceeds of crime. The Appellant was not the perpetrator of the crime but its victim and b....
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....lassic example of collusion between bank and Sh. V. Srinivas as the Respondent registered case under PMLA in 2009 and issued PAO on 31.03.2010, filed complaint under 5(5) before AA on 16.04.2010 and the AA confirmed the same on 12.08.2010. The bank after coming to know of attachment and confirmation in conspiracy with Sh. V. Srinivas issued notice under SARFAESI 31.08.2010 though stated came to know from Sh. V. Srinivas in response to bank notice. 25. Notwithstanding the same, the property in dispute has admittedly been purchased for Rs. 1,66,10,048/- by obtaining a bank loan of Rs. 1,56,06,000/-. Thus, the difference amount of Rs. 10,04,048/- has flowed from proceeds of crime. 26. It was also submitted that the said property of Plot no.20 is owned by Sh. V. Srinivas and he has to repay the loan. The definition of proceeds of crime covers within its ambit" the value of any such property". Therefore, it clearly fits into the scope of proceeds of crime even if it is to be argued that there are no direct proceeds of crime in acquiring the property. 27. It was further submitted that the averment of ICICI bank that the said property was purchased from the loan taken from the bank and....
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....operties are intermediate and inextricable to each other. 34. It was also submitted that Sh.V.Srinivas and V.Lalita Parameswary are the lawful owners of both the first property and the adjacent properties and therefore, they have constructed a superstructure of a house spreading across the three plots. Accordingly, the superstructure is stretching to all the three plots. 35. It was further submitted that the Appellant has concealed that the superstructure of the house is built on the property. Therefore, the plea of the Appellant in the said Appeal is beyond possibility until and unless the property is released by the Respondent No.1. 36. It was further submitted that the Respondent department has only attached the land and not the superstructure built on the land. Hence, the Appellant cannot plead for release of first property without considering the superstructure built on the property. 37. It was also submitted that releasing the adjacent properties along with the first property would be beneficial for all the parties involved as this will enable Sh. V. Srinivas and Smt. V. Lalita Parameswary to sell all the properties jointly along with the superstructure thereon. Such an a....
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..... 7,62,07,600/- have been identified in the name of 1 company and 3 individuals which are found to be purchased out of the proceeds of crime. 46. Records reveal that V. Srinivas also received 13,600 bonus shares of M/s SCSL. Sh.V. Srinivas also acquired a company -M/s Akash Ganga Greenfields Pvt. Ltd., which was used to purchase 9 immovable properties. These properties were purchased in the name of the company while 5 other immovable properties were purchased in the name of three individuals out of such proceeds of crime. So, total 14 such properties were acquired by Sh. V. Srinivas. Sh. V. Srinivas and V. Lalita Parameswary were also the directors of M/s Akash Ganga Greenfields Pvt. Ltd. at the relevant time. The source of all these properties was the proceeds of crime which has been derived from the M/s SCSL by way of hyping the share value and then offloading the same at an opportune time. M/s Akash Ganga Greenfields had no independent source of funds except the proceeds of crime. Hence, the proceeds of crime was used to purchase such properties in the name of Sh. V. Srinivas, Smt. V. Lalita Parameswary, Sh. V. Vijay (son of V. Srinivas and V. Lalita Parameswary) and in the nam....
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....elied on PNB housing Finance vs. Deputy Director, FPA-PMLA-1388/JL/2016 and SBI vs Deputy Director, Directorate of Enforcement, Mumbai, FPA-PMLA- 2538/MUM/2018- to put forward the argument that "legitimate loan advanced by the Appellant was the source of monies used to purchase the first property and it was public money which should come to the bank" 51. Based on the investigation, part of the purchase consideration amounting to Rs. 41,52,512/- for the above said property was paid from the account No.422070000202 of Sh. V. Srinivas maintained with HDFC Bank,Begumpet, Hyderabad. The source for the above money was traced to the proceeds derived out of sale of inflated shares of M/s SCSL by Sh. V. Srinivas to M/s DSP Merrill Lynch. Further, it is not clear whether the loan taken by Sh. V. Srinivas was entirely used by the Applicant for acquiring the said immovable property. Sh. V. Srinivas has admitted, in his statement that the loan taken from the ICICI bank is only a part of the said purchase consideration. Thus, the averment that only the payment made beyond the loan amount would be proceeds of crime, would not be correct. In furtherance of this view, it would be pertinent to quot....
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....69. We find force in the stand taken by the Union of India that the objective of enacting the 2002 Act was the attachment and confiscation of proceeds of crime, which is the quintessence, to combat the evil of money laundering. The second proviso, therefore, addresses the broad objective of the 2002 Act to reach the proceeds of crime, in whosoever's name they are kept or by whosoever they are held. To buttress this argument, reliance has been placed on the dictum in Attorney General for India v. Amratlal Prajivandas and Raman Tech. and Process Engg. Co. v. Solanki Traders. " 52. In view of the legal position emerging from above case laws, the contention of the Appellant is unsustainable. Considering the wide interpretation given to the term "value of any such property" mentioned in Sec. 2(1)(u). Proceeds of crime would also include property equivalent in value to the property derived from the criminal activity relating to the scheduled offence, even though acquired through legitimate and known sources of income. Similar view has been taken by this Tribunal in the case of Ayush Kejriwal vs. Dy. Director, ED in FPA-PMLA-4358/KOL/2021, order dated 1-5-2024. 53. The Appellant has rel....