TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1297
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....r Promoter Director & CEO of Yes Bank, misused his official position and obtained undue pecuniary advantage in conspiracy with Kapil Wadhawan and Dheeraj Wadhawan of M/s DHFL by investing Rs. 3,700 Crores in short-term debentures of M/s DHFL and Rs. 283 Crore in Masala Bonds. Mr. Rana Kapoor received a kickback of Rs. 600 Crores from M/s DHFL in the garb of loan to the company M/s DOIT Urban Ventures (India) Pvt. Ltd. jointly owned by his daughters. M/s DHFL failed to redeem the debentures, rather laundered and siphoned off the money and accordingly the ECIR was recorded by the respondent ED. 3. The allegation is that Mr. Rana Kapoor of Yes Bank diverted public fund into M/s DHFL to the tune of Rs. 3983 Crores. Kapil Wadhawan of M/s DHFL thereupon diverted Rs. 2317 Crores (Rs.1100 Crore+Rs.439 Crore+Rs.678 Crore+Rs.100 Crore) to the entities of which beneficial ownership was with Mr. Sanjay Chhabria. It was in the name of development of project "Avenue-54" at Santacruz. 4. The allegation was further diversion of Rs. 678 Crores to M/s Flag Industries India Pvt. Ltd. (appellant herein). It was given for construction of the Club House in 'Avenue-54' Project. The project for ....
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....s on the face of it. When the appellant company received Rs. 678 Crores on 28.09.2018 and onwards, it could not have disbursed Rs. 115 Crores on 24.09.2018. On the aforesaid ground itself, a case is made out to quash the attachment of the shares for equivalent value of Rs. 115 Crores. It was also that disbursement of the loan amount is not a crime so as to attach the property even for equivalent value and in the instant case, the disbursement of loan of Rs. 678 Crores was subsequent to the disbursement of the amount of Rs. 115 Crores to M/s Mentor Capital Ltd. 7. Referring to the facts of the case, it was submitted that a loan agreement was executed between the appellant company and M/s DHFL on 14.07.2019 and on the same date, Indemnity-cum-Undertaking was entered between M/s DHFL and Radius Estates Project Pvt. Ltd. A Demand Promissory Note in favour of M/s DHFL for a sum of Rs. 678 Crores together with interest was also executed on 14.07.2019. Out of the sum of Rs. 678 Crores, a sum of Rs. 393.5 Crores was utilized for payment to the Yes Bank towards the loan and interest of Radius Group of Companies. The aforesaid payment has been duly received and acknowledged by Yes Bank and ....
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....is of the application made by the borrower. It was in usual course of business and, therefore, the appellant was bona fide borrower with no knowledge that the loan sanctioned by M/s DHFL is out of the amount received from Yes Bank. It is with further clarification that the amount from Yes Bank was received by M/s DHFL on 28.09.2018 and, therefore, any amount disbursed by the appellant company to M/s Mentor Capital Ltd. prior to the aforesaid date could not have been taken to be out of the proceeds of crime by M/s DHFL and its Directors apart from others. The prayer was accordingly made to set aside the impugned order and allow the appeal. 11. The counsel for the appellant did not raise any other argument despite an opportunity. The argument was completed and the matter was reserved for judgment. However, on the request of the learned counsel for the appellant, it was listed again for hearing in the light of the order passed by the Special Court, PMLA, Bombay on 13.03.2025 refusing cognizance of offence against the appellant while issuing process against the other accused. The argument in reference to the order passed by the Special Court on 13.03.2025 was made and has been incorpo....
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....s paid on 28.9.2018 was utilized by Defendant No.5 for payment to Yes Bank towards loan and interest of Radius Group Companies. The said payment has been duly received and acknowledged by Yes Bank and is not subject matter of investigation or subject matter of Provisional Order of Attachment No.14/2022". 15. In the pleading to the appeal, appellant has admitted sanction of loan of Rs. 678 Crores by M/s DHFL to the appellant company on 24.09.2018 when Sanjay Chhabria said to be not a shareholder of the company. The fact remains that out of the loan amount of Rs. 678 Crores disbursed by M/s DHFL Rs. 115 Crores was received by the appellant company on 24.09.2018 as admitted in Para 2 (d) of the appeal quoted above. The remaining amount was disbursed to the appellant company from time to time as indicated. The pleading of the appeal has been quoted to demonstrate that argument of the appellant in reference to the order of the Special Court, PMLA, Bombay is contrary to pleading and otherwise the facts available on record. Accordingly, at the first instance, we would be referring to the factual issues and for that it is to indicate that FIR was registered finding commission of the offen....
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.... DHFL to stop its value to go further down. In view of the above, the diversion of the fund by the appellant company was found established and remained unpaid. It is also a fact that to cover up the amount of Rs. 115 Crores, a sham agreement was executed. The appellant company acquired 25% equity shares of M/s United Builders and Developers Ltd. i.e. 2500 shares of Rs. 10 each. The facts however remain that the loan taken by the appellant company remained unpaid and it was otherwise out of the proceeds of crime in the light of the investment in short term debentures by Yes Bank and where debentures remained unredeemed by M/s DHFL. 18. The counsel for the appellant submitted that the amount of Rs. 678 Crores was disbursed by M/s DHFL to the appellant Company on 28.09.2018 and, therefore, the allegation for disbursement of Rs. 115 Crores out of it to M/s Mentor Capital Ltd. on 24.09.2018 becomes false on the face of it. If the amount of Rs. 115 Crores was given to M/s Mentor Capital Ltd. on 24.09.2018, it could not have been out of Rs. 678 Crores to the appellant company on 28.09.2018. It is on the strength of the aforesaid fact that the Special Court, PMLA, Bombay has refused to is....
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....fused to take cognizance of the offence against the appellant company, the impugned order should not sustain. A serious contest to the aforesaid has been made by the counsel for the respondent alleging factual mistake by the Special Court in passing the order and, therefore, the order dated 13.03.2025 has been challenged by maintaining a Revision Petition thus it has not attained finality. This Tribunal should not otherwise guide itself from an order passed on incorrect facts. To analyze the issue, we have gone through the record and find that the argument of the appellant for disbursement of Rs. 678 Crores on 28.09.2018 goes contrary to the pleading of the appeal and their reply before the Adjudicating Authority in pursuance to the show cause notice under Section 8(1) of the Act of 2002 thus cannot be accepted. The order of the Special Court, PMLA, Bombay is under challenge thus it has not attained finality and otherwise it is based on incorrect facts, thus under challenge. This Tribunal cannot pass an order going contrary to the pleading of the appeal and records available before us. It may be that the Special Court, PMLA, Bombay was misled in reference to the subsequent loan of ....
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.... Mano) Kumar Agarwal, it chose not to deal with the conclusions which had come to be recorded therein. It may only be observed that the previous Judgment in Varrsana Ispat was perfunctorily dealt with and no cogent reasons assigned to doubt its correctness. The legal position upto the stage of the NCLT and NCLAT in any case ultimately came to be laid at rest by the larger Bench of the Appellate Tribunal in Kiran Shah. Kiran Shah after noticing the relevant statutory provisions which would apply as well as the earlier judgments rendered by the Tribunals in this respect while reiterating Varrsana Ispat held as under: "98. Although, Section 14 of I&B Code deals with 'moratorium', it is not a hindrance for the 'Authority' and the Officers under the 'Prevention of Money Laundering Act, 2002' to deny a person of the tainted 'Proceeds of Crime'. Suffice it for this 'Tribunal' to point out that a person who is involved in 'Money Laundering' is not to be allowed to enjoy the fruits of 'Proceeds of Crime' with a view to ward off is Civil indebtedness, in respect of his Creditors. 99. As seen from the 'Prevention of Money Launder....
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....inding upon this 'Tribunal'." The decision of Manoj Kumar Agarwal was disapproved with the NCLAT observing that it had come to be rendered contrary to the principles of stare decisis. 90. Having noticed the decisions which had been rendered by the Tribunals on the subject it may be noted that the Madras High Court in Joint Director, Directorate of Enforcement Vs. Asset Reconstruction Company India Ltd. and others²¹ made the following pertinent observations: - "8. Section 14 of the IBC speaks of moratorium. A declaration has to be made through an order by the Adjudicatory Authority in this regard. If one carefully goes through the said section, there is no way professional attachment order passed under the provisions of the PMLA would automatically invite a moratorium. This provision only speaks about the consequence for institution of the suit, for continuance and other proceedings against the Corporate Debtor. Therefore, Section 14 of the IBC is consequent upon an order passed by the Adjudicative Authority declaring moratorium. This would not apply to a special enactment which travels on its own path. After all, one cannot presume a conflict between two ena....