TaxTMI 
TaxTMI 
2025 (8) TMI 1473
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....ne for a consideration of Rs. 6,67,50,000/- in the name of M/s Ryewood Retreat Motels Pvt. Ltd, (ii) Flat no. 701, 7th Floor, Déjà vu Co-operative Housing Society Ltd, 77, Hill Road, Bandra (West), Mumbai- 400 050 purchased vide agreement dated 22.03.2006 (page 339-395 of Vol. II) for Rs. 28,75,000/- in the names of Mrs. Chand Masood Sayed and Ms. Jabeen Masood Sayed, and (iii) Flat no. 702, 7th Floor, Déjà vu Co-operative Housing Society Ltd, 77, Hill Road, Bandra (West), Mumbai- 400 050 purchased vide agreement dated 22.03.2006 (page 397-454 of Vol. II) for Rs. 28,75,000/- in the names of Mrs. Chand Masood Sayed, Mrs. Seema U. Razzaki and Mrs. Geeta U. Razzaki. Present appeals are filed by appellants with respect to property at S.No.1 only. 2. Alongwith the appeal appellants filed applications for condonation of delay in filing the appeal beyond the period of limitation of 45 days. It is pertinent to mention here that appellant Scrum Utkarsh CGHS Ltd. previously filed joint appeal with appellant Hindavi Swarajya Trading Pvt. Ltd., and later-on separate appeal was filed on direction of this Appellate Tribunal. On 1.08.2023, after....
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....a) Ltd. Omni 1,41,910/- 7,000/- 4,90,000/- M/s. City Limouzines (India) Ltd. Indica 1,92,710/- 9,000/- 6,50,000/- M/s. City Limouzines (India) Ltd. Indigo 2,22,110/- 10,000/- 7,30,000/- M/s. City Limouzines (India) Ltd Combo 2,72,841/- 17,541x12 17,662x12 17,715x12 17,954x12 18,381x12 10,71,036/- The City Group companies initially made prompt payments of the assured returns to the investors and from August 2009, the cheques issued by these companies were bounced on presentation. On formal inquiry by I.O., M/s Kotak Mahindra Bank and M/s ABN AMRO Bank vide letters dated 20.02.2010 and 10.03.2010 have informed regarding dishonour of 18812 and 23329 cheques respectively. Investigation also revealed that 30% of the deposit received in cash were utilized by S.M. Masood for his personal use. The investments received in one company were transferred to other companies for purchase of movable and immovable properties. Scrutiny of Bank accounts of the companies also revealed that amount of Rs. 400 Cr. was received as inward remittance from abroad suspected to be deposits from investors abroad. ECIR No. 65/MZO/2009 was registered and....
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.... against appellant Hindavi Swarajya Trading Pvt. Ltd. is that it knowingly purchased Development Rights of the immovable property (admeasuring hectares 00.83 Acres of land comprising in Survey No. 220, Hissa No. 1, 5/5, Village Hinjewadi, Taluka Mulshi, District Pune in the name of M/s Ryewood Retreat Motels Pvt. Ltd., which was already subject to attachment by the Enforcement Directorate as mentioned above. It is submitted that M/s Hindavi Swarajya Trading Pvt. Ltd. has its roots in Utkarsh Ventures Group, which was a group of about 70 Software Engineers/IT professional who were working in and around Hinjewadi IT Park, who came together from 2012 with a common dream of building own homes at affordable cost. Six members including Mr. Pravin Gurav were chosen unanimously to run the day-to-day activities and share responsibilities for the completion of the task at hand. The members of Utkarsh Ventures Group started looking for a suitable land parcel preferably in proximity to Hinjewadi to take their dream forward. They also consulted Banks for funding by constituting a Co-operative Society. However, the banks expressed their inability to fund a Co-operative Society citing RBI guideli....
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....mail dated 31.12.2013 to group members. It's worth mentioning here that the subject land sale deed was finally executed on 17.01.2014. Coming to the grounds to challenge the impugned order, Ld. Counsels for appellants submitted that neither M/s Hindavi Swarajya Trading Pvt. Ltd., nor the original group members of Utkarsh Ventures, nor any other individual flat buyers had any knowledge of the Enforcement Directorate proceedings/attachment at the time of purchase of the subject land property at Hinjewadi, development & construction of flats and thereafter at the time of sale/purchase of flats. The subject land was agreed to be purchased in the name of M/s Hindavi Swarajya Trading Pvt. Ltd. for a total amount of Rs.11,03,57,600/- from the partners of M/s Sahil Realtors namely Guddu Sheikh, Mr. Abdul Mujawar and Mr. Gulhameed Shaikh. However, it was agreed that the sale consideration will be paid subject to verification of the title documents and issuance of the public notice. A notice in news daily PRABHAT was also published on 28.12.2013, regarding the proposed sale transaction and no adverse response was received from any quarter whatsoever. Copy of the Paper notice in news daily....
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.... at Serial No. 459/2014 before the Ld. Sub-registrar of Assurances Mulshi- 2 on 17.01.2014 (Copy of the registered Sale Deed dated 17.01.2014 is Annexure A4 with M.A. 12865/2023). After completion of the sale deed the name of HSTPL was duly mutated in the land revenue records on 01.02.2014. After mutation of land revenue record in favor of HSTPL, a second Search and Title was carried out by the law firm Triyama Legal and a clear title certificate was issued to HSTPL dated on 17.02.2014. Copy of the Triyama Legal Title & Search Report (as Annexure A5 with M.A. 12865/2023). The report from the Triyama Legal has given the following certificate: "On the basis of inspection of Index Registers, loose sheets, computer search and the documents placed- before me, I can say that there is no mortgage, charge, lien or any encumbrance on the properties described in para 01. Above except those mentioned in Para 03. I further say that during the course of inspection of Index Registers, as aforesaid, I did not come across with any entry creating any right title or interest adverse to that of the present owners. Hence, considering the above stated facts, the title of the present owner is c....
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....nce Guddu Sheikh had given money to Syed Masood, hence details were required. He was neither told about the attachment of land parcel by ED in 2013, nor his signatures were taken by ED on any document, for the reasons best known to the investigating/enquiry officer of ED. After giving all necessary details to the ED officer, HSTPL was never summoned until the year 2018 (copy of the second summon is Annexure- A9A of M.A. 12865/2023). They argued that the ED ought to have proceeded in accordance with the provisions of the Act. The Act provides for the service of the copy of the order upon the concerned person. In the instant case, HSTPL was never served a copy of the impugned order issued by the ED and the Adjudicating Authority, in violations of the procedure laid down under the Act, 2002. They argued that even otherwise, the principle of natural justice calls for the same. The ED has directly addressed communication to IGR Stamps. ED having conducted a detailed enquiry in this matter with regard to HSTPL way back in the month of July, 2014, had neither passed any order, nor any direction has been given to HSTPL pertaining to the attachment of the development rights of the subject l....
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....t of amount under sale deed between them to Sajid Ibrahim Varekar. HSTPL appeared in the said civil suit and filed its written statement/reply on 30.9.2014. Subsequently on 07.09.2017, the suit was dismissed by Hon'ble Court citing the plaint was not signed by other 15 members and the plaintiff was not holding POA of anyone to file the said suit. Copy of Civil Suit and order passed in the same are Annexure A11 & A12 respectively of M.A. 12865/2023. In September 2015, when appellant approached Sub-Registrar Mulshi and Paud for further registration of flats, the registration was denied citing the receipt of registration stop order from the ED. They pointed out that even at this juncture the ED did not provide any copy of the Provisional Attachment order or the confirmation order of the Adjudicating Authority with respect the land in question, nor the ED summoned or recorded any statement of any Director of appellant HSTPL. On 02.12.2015, HSTPL filed a Writ Petition bearing no. 4614 of 2015 before the Hon'ble High Court of Bombay against ED and others to quash and set aside ED's registration stop order in respect of the subject land, being Bonafide purchasers and for favouring the ven....
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....ondonation of Delay. Authenticated copy of the order of the Hon'ble Bombay High Court is Annexure A13 of M.A. 12865/2023. On 23.01.2017 HSTPL, Director Mr. Pravin Gurav filed a criminal complaint of cheating, forgery and criminal conspiracy against Guddu Sheikh, Gulhameed Sheikh and Abdul Wahab Hanif Mujawar at Hinjawadi Police Station (copy of the acknowledgement obtained from police station is attached as Annexure A-20 of the M.A. 12865/2023). On 06.09.2017, this Tribunal passed an order directing both parties to maintain status quo in respect to the attached property under the impugned order. Further, this Tribunal also directed that the appellant shall not sell, dispose of or create third party interest in the property in question. This is the first time that HSTPL received such instruction. On 15.11.2017, the ED sent a letter to the District Collector, Pune, informing about the attachment of the subject land under the provisions of PMLA. The relevant paragraph of the said letter is reproduced as hereunder "It is therefore once again requested to incorporate the name of the Directorate of Enforcement in 7/12 extract of the attached land parcel to ensure, no other innocent inves....
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....um Utkarsh Co-operative Housing Society have been suffering undue harassment and grave prejudice for no fault of their own. Furthermore, this has also risked public money in the form of home loans from Government & Private Banks to the tune of approximately Rs.30 Crores. There was no instruction from any of the competent local authorities, nor ED to stop the construction work which was being carried out by HSTPL. Vide order dated 23.04.2018, this Tribunal was pleased to appoint an independent Local Commissioner to evaluate the status of occupancy of flats. The report of the Local Commissioner confirmed that a total 126 flats have been purchased by innocent buyers out of which 110 flats are occupied. Copy of the Summary of Inspection Report is part of record. Neither M/s HSTPL, nor any of the home buyers have any connection whatsoever with the scheduled offence or the proceeds of crime generated/usurped by Syed Masood and his cohorts. Neither M/s HSTPL, nor any of the home buyers had any knowledge about the money laundering investigation and/or attachment with regard to the said land parcel. None of the flat buyers found any adverse findings or indication pointing towards ED's claim....
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....03/2019 dated 18.01.2019 was issued attaching properties of Guddu Mehboob Shaikh worth Rs.5.66 Crore and confirmed vide order dated 10.07.2019 in OC No. 1091. Copy of the PAO is Annexure A18 & Copy of Confirmation Order is Annexure A19. On account of the subsequent sale and transfer of attached development rights in the present case, vide order dated 14.02.2022, the Special Court has allowed the application of Enforcement Directorate for confirmation under Section 8(7) of PMLA for POC in Singapore accounts of Syed Masood to the tune of Rs. 280 Crores. The total attachment of proceeds of crime in 25 attachment orders which were also confirmed by the Adjudicating Authority were to the tune of Rs. 390.78 Crores, in addition to the assets in the foreign countries as per the chart furnished by Ld. Counsel for Respondent ED. Accordingly, they stressed that even if the present appeals are allowed on merit being bonafide purchasers, by setting aside the impugned order, even then, there are sufficient assets of the accused persons to satisfy the claim of the claimants who were defrauded by City Group Companies and its directors/associates. 5. On the other hand, Ld. Counsel for Respondent....
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....ts to the flat buyers, without disclosing about the knowledge of attachment order, and accordingly, he stressed that appellant company cannot take the plea that they were ignorant about attachment order and its confirmation till 15.09.2015, when Directorate issued an order to Inspector General of Registration (IGR) to restrain from registering the Flats. Ld. Counsel for the Respondent ED further submitted that appellant company has not denied the fact that its director Pravin Gurav appeared before the ED in response to summons in July, 2014. Appellants have no locus standi to challenge the impugned order being the subsequent purchasers. He further argued that the defence taken by the appellants needs to be tested during the trial in the prosecution complaint, only after the examination and cross-examination of Shri Pravin Gurav & Sajjanrao Patil and other defence witnesses, if any. Prayer is accordingly made to dismiss the appeals being devoid of any merits as well as being time barred. 6. After hearing the rival submissions, following issues emerge for decision: (i) Whether the appellants and the allottees of the flats are bonafide purchasers without any knowledge of P....
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....ject property and non-registration of any encumbrance on the same, purchased the land from M/s Sahil Realtors through its partners Shri Guddu Shaikh, Mr. Abdul Wahab Hanif and Mr. Gulhameed Mehboob Shaikh vide registered Sale Deed dated 17.01.2014. After completion of the sale deed the name of HSTPL was duly mutated in the land revenue records dated 01.02.2014. After mutation of land in revenue record in favour of HSTPL, a second Search and Title was also carried out by the law firm Triyama Legal and a clear title certificate was issued to HSTPL dated on 17.02.2014, as mentioned in para no. 4 above. HSTPL also obtained sanction order bearing No. PMA/NA/SR/395/2014, dated 30.05.2014 for building plan of residential units from the Town Planning & Valuation Department of Pune Municipal Corporation, and N.A orders from the Collector's office. HSTPL was also granted Commencement Certificate bearing no. PMU/Village Hinjewadi/ G. No 220/1 + 220/5/5 Case No. 16/926, Dated 19.06.2015. HSTPL was granted permission to construct total three wings consisting of 140 residential units and was issued Commencement Certificate for the land. Even in the said Commencement Certificate, there is no refe....
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.... ED. It was only in the month of September 2015, when appellants approached Sub-Registrar Mulshi and Paud for further registration of flats, the registration was denied citing the receipt of registration stop order from the ED, before the said incident, appellants were not aware about any restraint order. On 02.12.2015, HSTPL filed a Writ Petition bearing no. 4614 of 2015 before the Hon'ble High Court of Bombay against ED and others to quash and set aside ED's registration stop order in respect of the land in question, being bonafide purchasers and developers of the land, coupled with the fact that I.O./E.O. of Respondent ED has de-frozen the frozen bank account of vendor Guddu Sheikh of M/s Sahil Realtors and for not attaching the accounts of other beneficiaries in whose accounts sale consideration was transferred. As per the contention of the appellants on 11.03.2016, reply was filed by the ED before the Hon'ble High Court in the Writ Petition and only then for the first time they came across the copies of PAO and its confirmation order passed by the Adjudicating Authority with regard to the land purchased & developed by them. We cannot ignore the fact that the appellants exercis....
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....eady purchased by the present appellant and thereafter developed and sold to the flat owners, then first time a board was placed and Panchnama was drawn in the Scrum Utkarsh Housing Society premises regarding the 'confiscation of the Land' by Directorate of Enforcement, Mumbai for the first time only in November, 2017. On account of negligence on the part of the IO/EO of Respondent ED, it has risked public money in the form of home loans from Government & Private Banks to the tune of approximately Rs.30 Crores. There was no instruction from any of the competent local authorities, nor ED to stop the development and construction work, which was being carried out by HSTPL, the Bonafide purchaser or the land. As per the report of the Local Commissioner 126 flats are already purchased by innocent buyers, out of which 110 flats are physically occupied. At this belated stage, when the land is already sold, developed and constructed into flats, and thereafter, the said flats were sold to the large number of owners, on account of not ensuring the proper entry regarding the attachment in the office of Sub-registrar by the IO, the situation cannot be reversed at this stage, otherwise, it will....