AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1409
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.... Thapar, K N Neelkanth, Madhav Acharya, B. Hariharan, Omkar Goswami, Venkatesh VR and others for the offence under Section 120-B, 406, 420, 467, 468, 471, 477A of Indian Penal Code, 1860 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. It was alleging criminal conspiracy, forgery, cheating and criminal misconduct of the accused during the period from 2015 to 2019 resulting in loss of Rs. 2435.00 Crores to the consortium of banks led by the State Bank of India (SBI). 3. The allegation was for involvement of CGPISL and other accused in commission of crime and for that reference of 18 transactions involving proceeds of crime of Rs. 3400 Crores (approx.) and Euro 56 Million was given. A reference of different transactions involving the aforesaid sum in reference to different companies which includes Blue Garden Estates Private Limited (BGEPL) and Action Global Private Limited (AGPL) and others was given to whom the loan was lent by Aditya Birla Finance Limited (ABFL) and other financial institutions. It was found that the Maharashtra Industries Development Corporation ('MIDC') had leased a property in Nasik to CGPISL for a term of 95 years. As ....
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....of Rs. 200 Crores and the said loan of Rs. 200 crores was then diverted. A sum of Rs. 14 crores given to AHL and thereby it was put to use for the purpose other than for which loan was taken. The appellant, Mr. Madhav Acharya received Rs. 5.85 Crores from BGEPL and AGPL which was projected to be the salary and bonuses. The receipt of salary has been shown while the appellant was not the employee and the officer of those companies. The appellant, however, shown those payments towards the salary and bonuses in his income- tax returns and even made a statement to that effect in his statement under Section 50 of the Act of 2002. The proceeds of crime of Rs. 5.85 Crores was used for purchase of mutual funds and accordingly the respondent caused PAO and sent it to the Adjudicating Authority for its confirmation. 7. The Adjudicating Authority confirmed the PAO and aggrieved by the aforesaid, the appellant has challenged the order by way of this appeal. 8. The respondent, otherwise, took note of the claim of the appellant who said to have received Rs. 3 Crores as an incentive for working on the project Spear-Disinvestment of overseas subsidiaries of CGPISL. The payment received by th....
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....themselves. It was with the further statement that recently another Prosecution Complaint has been filed and may be relevant for the present case because there also no case was found against the appellant. Thus, on the strength of the facts given above, the impugned order deserves to be set-aside. 13. Ld. Counsel for the appellant referring to the reply filed before the Adjudicating Authority submitted that the Nasik property was leased without violation of any terms and conditions of the agreement and the appellant was in no way related to the Shell Companies i.e. BGEPL and AGPL, rather, those companies were formed by CGPISL itself. These companies were incorporated at the behest of ABFL with the active involvement of the senior officials of CGPISL. The reference of the order passed by SEBI was given where no case was found against the appellant. 14. Ld. Counsel for the appellant, further, submitted that the amount of Rs. 5.85 Crores received by him towards salary and incentives was reflected in the tax returns. Out of total sum of Rs. 5.85 Crores Rs. 4.3 Crores was paid by BGEPL does not figure in the FIR. The SEBI vide its order dated 04.10.2022 absolved the appellant from....
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....s been given in the opening paras. Gist of the allegation made by the lead consortium bank SBI has also been given where total sum of Rs. 3400 Crores was involved. A case was registered for the offence under Sections, 120-B, 406, 420, 467, 68, 471 and 477A of the IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 It was mainly in reference to the affairs of the CGPISL apart from others which include the appellant, thus, FIR was registered naming the appellant for his involvement in commission of crime. It is with the necessary narration of facts in reference to the appellant who misused his position and got involved himself in commission of crime. The allegation was made even for creating two Shell Companies in the name of BGEPL and AGPL holding company of AHL in the month of March, 2016. The fact regarding leasing of the Nasik property in contravention of the terms and conditions of MIDC and other related facts have been given. The FIR was otherwise lodged by the lead bank SBI in reference to the loan advanced by them and commission of crime thereupon. During the investigation in reference to the allegation, it was found that the appellant a....
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..... Counsel for the appellant submitted that the salary and incentive received by the appellant could not have been considered to be the proceeds of crime and in view of the above there was no reason for the Adjudicating Authority to confirm the Provisional Attachment Order. A reference of the definition of 'proceeds of crime' was given followed by a reference of the judgment of the Apex Court in the case of Vijay Madanlal Choudhary (supra) where it was held that what can be provisionally attached is only proceeds of crime and not any other property of the person. To analyse the issue, we have gone through the records and find that entire gist of the allegation was revealed in the investigation. In the FIR, the allegation was made for commission of offence but the depth of commission of crime was revealed in the investigation where appellant found to be the recipient of sum of Rs. 5.85 Crores showing it to be salary, bonus/incentives from the Shell Companies while the appellant was employee of CGPISL. It was found that to obtain the loan in the name of the shell entities created by the appellant and others, the Nasik property was used contrary to terms and condition of lease. It was ....
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.... limited to the accused named in the criminal activity relating to a scheduled offence. It would apply to any person (not necessarily being accused in the scheduled offence), if he is involved in any process or activity connected with the proceeds of crime. Such a person besides facing the consequence of provisional attachment order, may end up in being named as accused in the complaint to be filed by the authorised officer concerning offence under Section 3 of the 2002 Act. 170. Be it noted that the attachment must be only in respect of property which appears to be proceeds of crime and not all the properties belonging to concerned person who would eventually face the action of confiscation of proceeds of crime, including prosecution for offence of money-laundering. As mentioned earlier, the relevant date for initiating action under the 2002 Act - be it of attachment and confiscation or prosecution, is linked to the inclusion of the offence as scheduled offence and of carrying on the process or activity in connection with the proceeds of crime after such date. The pivot moves around the date of carrying on the process and activity connected with the proceeds of crime; and....
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.... 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 money-laundering. 27. It would be relevant to even quote the definition of 'proceeds of crime' given under Section 2(u) of the Act of 2002 for more clarity and is quoted thus:- 2. Definitions.-(1) In this Act, unless the context otherwise requires,- (u) "proceeds of crime" means any property derived or ....
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....ld not know whether the accused is recipient of the proceeds of crime or whether property is involved therein or not. We do not find any substance in the argument because none of the provision of the Act of 2002 mandates completion of the investigation before causing PAO and therefore Ld. Counsel for the appellant could not refer the provision to mandate completion of the investigation before issuance of the PAO. The PAO can no doubt be caused on filing of the charge-sheet under Section 173 of Cr.PC in reference to the FIR but second proviso was added under Section 5(1) of the Act of 2002 allow PAO without a charge-sheet i.e. before completion of the investigation. It is in a given circumstances where the effort of the person may be to deal with the property to frustrate the proceedings of confiscation. Thus, it is not only the proviso to Section 5 of the Act of 2002 permits provisional attachment of the property before the completion of the investigation, but if the material is found available for receipt of proceeds enough to cause an order for provisional attachment of the property to avoid frustration of the proceedings of confiscation if the property is likely to be dealt with....