TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 807
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....sp; Details of the Property Property Value (in Rs.) Valuation date 1 Sh. H.B. Chaturvedi, Sh. Sanjay Chaturvedi, Sh. Amit Chaturvedi, 98, Eastern Avenue Sainik Farms, New Delhi, 110062 a. Jewellery as per the Annexure J Valued at Rs. 1,49,50,200/-of Panchnama 1,49,50,200.00 23.06.2014 b. Cash as per Annexure C of Rs. 10,50,000/- 10,50,000.00 do c Honda City No. DL 3CBE 5465 4,05,300.00 05.07.2016 d Skoda Superb Elegance No. DL 8 CZ 0811 14,71,900.00 do e Renault Duster RXL No. DL 8CZ 9910 10,65,400.00 do f Mercedes Benz 1,19,200.00 do 2 Sh. H.B. Chaturvedi, Sh. Sanjay Chaturvedi, Sh. Amit Chaturvedi, 98, Eastern Avenue Sainik Farms, New Delhi, 110062 a One box marked A 1 containing 25 items of jewellery worth Rs. 36,41,088/- as per Annexure J 36,41,088.00 23.06.2014 b One gold watch of Rolex make 22,05,000.00 31.07.2014 c Innova Reg. No. DL 3CBX 0843 5, 54,500.00 05.07.2016 d Scorpio Reg no. DL 3 CA S 4213 7,07,400.00 do e Elantra Reg. No. DL 3 CB P 8137 8,42,550.00 Do 3 Ms. Maharani Chaturvedi w/o Sh. H.B. Chaturvedi, Mrs. Neelima Chaturvedi w/o Sh. Amit Chaturvedi 98, Eastern Avenue Sainik Farms, New Delhi, 110062 43,....
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....16 b A/c No. 18250310017579 of UCO Bank, Ferozeshah Road, New Delhi 78,905.00 06.05.2016 c A/c No. 18250310018606 of UCO Bank, Ferozeshah Road, New Delhi 1,51,900.00 06.05.2016 d A/c No. 18250310018637 of UCO Bank, Ferozeshah Road, New Delhi 1,55,702.00 06.05.2016 e A/c No. 18250310018651 of UCO Bank, Ferozeshah Road, New Delhi 1,38,206.00 06.05.2016 f A/c No. 18250310026496 of UCO Bank, Ferozeshah Road, New Delhi 74,092.00 06.05.2016 g A/c No. 18250310026502 of UCO Bank, Ferozeshah Road, New Delhi 74,095.00 06.05.2016 h A/c No. 18250310026519 of UCO Bank, Ferozeshah Road, New Delhi 74,094.00 06.05.2016 i A/c No. 18250310026526 of UCO Bank, Ferozeshah Road, New Delhi 74,093.00 06.05.2016 j A/c No. 18250310026533 of UCO Bank, Ferozeshah Road, New Delhi 74,095.00 06.05.2016 k A/c No. 18250310026540 of UCO Bank, Ferozeshah Road, New Delhi 74,092.00 06.05.2016 l A/c No. 18250310026557 of UCO Bank, Ferozeshah Road, New Delhi 74,095.00 06.05.2016 m A/c No. 18250310026564 of UCO Bank, Ferozeshah Road, New Delhi 74,099.00 06.05.2016 n A/c No. 18250310026571 of UCO Bank, Ferozeshah Road, New Delhi 74,091.00 06.05.2016 o A/c No. 182503100....
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.... and siphoned off the disbursed funds for the purposes other than for those sanctioned. Accordingly, the Directorate of Enforcement, Zonal Office, Delhi, recorded 8 separate ECIRs for initiating investigation for the offence of money laundering and to trace out the trail of proceeds of crime. During the investigation, ED recorded the statements of the accused/suspected persons and others u/s 50 of PMLA and also received the documents from the CBI, Lender Banks, Registrar of Companies and Income Tax Departments etc. Investigations established linkage between receipts and utilization of loan funds by Shamken group of companies. It was discovered that funds were received in accounts (mostly no-lien) opened with Citi Bank, Connaught Place, New Delhi, or in accounts of companies other than those sanctioned for. These funds were later-on diverted or rotated to the accounts of group companies or were utilized for payment of outstanding dues of previous loans. Sixteen such accounts were closed by the end of June, 2003. Many of these accounts were opened upon sanction of loans from the lender banks and used to avail loan funds. Thereupon, the loan amounts in these accounts were transferr....
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....auds, but with suppression of factual financial data for delaying and obstructing IDBI's Special Investigative Audit. The investigations confirmed the non-linear nature of this case in as much as it is admitted by Sh. Sanjay Chaturvedi, Director and Sh. Parvin Juneja, Director (Corporate Finance) that funds availed through loans for specific purposes were not utilized in accordance, but rotated around to the accounts of other group companies such that they are outstanding to this date. Both the directors had placed the blame upon each other for wrong doings and have also shunned responsibility in not just repaying the loans, but resorting to suppression of factual financial data for delaying and obstructing IDBI's Special Investigative Audit and slowing down investigations of ED by deliberate tactics. It is clear from the statements of both the directors recorded u/s 50 of PMLA that they have not given any clear answers vis-a-vis the fate of loan funds availed. Further, they had withheld the following, important information from ED: i) The existence of some other group companies. ii) The bank accounts of these companies and perhaps many other bank accounts. iii) Rema....
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....f crime and the such proceeds of crime are likely to be concealed/transferred or dealt with in any manner which may result in frustrating the proceedings relating to confiscation of such proceeds of crime. He contended that there is no nexus between the attached properties and the proceeds of crime in any manner, in absence of any proof that Appellants had acquired the said properties directly or indirectly from the proceeds of crime. In support of his contention, he relied upon the judgment of Hon'ble Kerala High Court at Ernakulam, Bench in the case of Satish Motilal Bidri v. Union of India, SCC OnLine Kerala 3410 and the judgment of Hon'ble Supreme Court of India in the case of Pavana Dibbur v. The Directorate of Enforcement reported in 2023 SCC OnLine SC 1586. Accordingly, he stressed that the FDRs, bank accounts and cash were attached by ED without appreciating the fact that the said properties are not acquired from any proceeds of crime as alleged. He further argued that Sh. H B Chaturvedi was the managing director in M/s Shamken Multifab Ltd. and M/s Shamken Cotysn Ltd. The said companies are under liquidation as per order of NCLT Prayagraj Bench on application preferred by ....
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....on 3 of the 2002 Act regarding the offence of money-laundering, it can proceed only if it is established that the person has directly or indirectly derived or obtained proceeds of crime as a result of criminal activity relating to or relatable to a scheduled offence or was involved in any process or activity connected with proceeds of crime." Ld. counsel for the appellants pointed out that Sohit Chaturvedi and Ehsan Chaturvedi are not the owners of property- 97-D Eastern Avenue Sainik Farms, New Delhi 110062. He pointed out that in fact Ms. Aditi Chaturvedi is the owner of this property vide agreement to sell dated 31.12.2003 against consideration of Rs. 20 lakhs via three cheques, which was notarized on 01.01.2004. He pointed out that along with said agreement to sell, the vendors H.B. Chaturvedi, Sh. Sanjay Chaturvedi and Amit Chaturvedi also executed registered GPA, Will, possession letter and receipt in favor of Aditi Chaturvedi. He pointed out that the ownership of Aditi Chaturvedi was also revealed during the adjudication proceedings by Ehsan Chaturvedi, as reflected at page 43 of the impugned order wherein it is mentioned that- "the property as mentioned above was purchased....
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....nt of the same? (vi) Whether the contention of the appellant regarding the jewellery attached as proceeds of crime being her streedhan holds any merit and has she produced any evidences to prove the same? Now, I will decide the above issues one by one in the following paras. Issue No. 1 6. Now coming to the issue no.1, admittedly, at present, appellants are facing trial along with co-accused persons in predicate offence and in prosecution complaint case. Seeing the fact that appellants are facing the trials, this Appellate Tribunal cannot appreciate the quality of evidence collected by the investigation agencies, as it may seriously prejudice the interest of the either party during the said trials. Further, I am of the view that the police/CBI has to conduct the investigation for the commission of the predicate/schedule offence and ED is not empowered to re-investigate the same. It has to see only the following points during its investigation for money laundering: - 1. Prima facie incriminating evidence against the culprits for commission of the schedule/predicate offence; 2. Quantum of generation of proceeds of crime by commission of crime/predicate offence; 3. To check....
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.... aforesaid has been decided in the case of Dyani Antony Paul v. Union of India reported in (WP No. 38642/2016) dated on 21 February, 2023. The relevant paras of the judgment quoted hereby: - "77. Article 20 of the Constitution prohibits conviction except for violation of a law in force at the time of commission of an offence. In other words, there cannot be prosecution under the PML Act for laundering of money acquired by committing the schedule offences prior to the introduction of the PML Act. Therefore, the time of commission of scheduled offences would not be relevant in the context of the prosecution under the PML Act. What would be relevant in the context of prosecution is the time of commission of the act of money laundering. The question would be, whether a person involved in money laundering as provided under Section 3 of the PML Act has indulged in the said act or not has to be decided by the competent authority. What is the date of laundering of money will have to be decided on facts of each case and there cannot be any prescribed straight jacket formula. This is an important fact which the authority will have to examine and it is a mixed question of law and fact. 78....
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.... be so. Thus, involvement in anyone of such process or activity connected with the proceeds of crime would constitute offence of money-laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence -- except the proceeds of crime derived or obtained as a result of that crime. 43. Needless to mention that such process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled offence). It would be an offence of money- laundering to indulge in or to assist or being party to the process or activity connected with the proceeds of crime; and such process or activity in a given fact situation may be a continuing offence, irrespective of the date and time of commission of the scheduled offence. In other words, the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be p....
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....e rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; and (b) 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 prescribed: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other ....
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.... also be attached as value thereof, in absence of any direct/indirect proceeds of crime. To analyze this issue, it would be gainful to refer to the definition of "proceeds of crime" given under Section 2(1) (u) of the Act of 2002 and is quoted thus- 2. Definitions -(1) In this Act, unless the context otherwise requires, -xx xx xx xx xx xx xx xx xx xx xx (u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property' [or where such property is taken or held outside the country, then the property equivalent in value held within the country] [or abroad]; [Explanation.- For the removal of doubts, it is hereby clarified that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence]. xx xx xx xx xx xx xx xx xx xx xx The perusal of the definition reveals three limbs of the definition out of which first part refers to the property acquired or derived directly or ....
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....l the judgments on the issue have been considered and thereby this issue was decided in favour of ED. Further, in view of the para 68 of the judgment of Hon'ble Supreme Court of India in the case of Vijay Madanlal Chaudhary Vs. Union of India, 2022 SCC OnLine SC 929, wherein, it is held that- "68. It was also urged before us that the attachment of property must be equivalent in value of the proceeds of crime only if the proceeds of crime are situated outside India. This argument, in our opinion, is tenuous. For, 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....