TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 888
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....issued in ECIR No. ECIR/01/LKZO/2018 dated 19.02.2018 was confirmed vide the Impugned Order. Thus, the Provisional Attachment of the following properties of the Appellants before us, were confirmed: Description of the Property Value of the Property Khata No. 31 Plot No. 225/1242 Village Rampur Bangar, Tehsil Jewar, Distt. Gautam Budda Nagar in the name of Smt. Shyama Devi W/o Shri Roop Singh Yadav to whom the property is attributed. Rs.42,00,000/- Attachment is to the extent of Rs. 30,00,000/- Plot No. A-138, Friends Colony, Village Hariharpur, Tehsil Sarojini Nagar, Lucknow in the name of Shri Anil Yadav and attributable to him. Rs. 19,50,000/- Plot No. A-89A, Friends Colony, Village Hariharpur, Tehsil Sarojini Nagar, Lucknow in the name of Shri Anil Yadav and attributable to him. Rs. 19,99,000/- Plot No. 85A, Friends Colony, Village Hariharpur, Tehsil Sarojini Nagar, Lucknow in the name of Shri Anil Yadav and attributable to him. Rs. 19,99,000/- Attachment is to the extent of Rs. 14,40,000/- 2. Ld. Counsels for the Appellants stated that FIR No. 0831 was registered on 19.06.2017 under Sections 409, 420, 467,471, 34 of IPC and Sections 7 & 13 of th....
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.... budget to the tune of Rs. 1513.51 Cr. The Council of Ministers being the highest Authority, their decision became final. The process of Tender started on 6th August 2015 but as the work to be carried out was of special type and the same was not regularly executed in the Irrigation Department the contractors in Irrigation Department lacked experience & resources to carry out such special type of work. Therefore, invitation was sent to other contractors who had the adequate resources and expertise with the consent of the Competent Authority i.e. Chief Engineer Sharda Sahayak Office and an order bearing no. C-691 was issued from the office of Superintending Engineer XII circle irrigation, Lucknow. M/s Crossland Engineering and Infrastructure Pvt. Ltd. was assigned the work on 03.11.2016 as per the law and in adherence to the rules and regulation. 4. Ld. Counsels for the Appellants submitted that the immovable property attached by the Respondent was purchased on 10.09.2013 by the Appellant Smt. Shyama Devi prior to the commission of the Gomti River Channelization Project. He further contended that the Respondent has failed to show any direct evidence for the allegation that the App....
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....n the Irrigation Department and did not have any authoritative role in the Department. The authority of accepting the tender, power to recommend the drawings and design and approving the budget for the construction work was vested with the Superintendent Engineer and Chief Engineer and the Financial committee respectively. Hence by no stretch of imagination it can be construed that the Appellant has benefited or has derived any illegal gratification or bribe as the Appellant was not holding any decision-making position in the Department at the relevant time. The Appellant was neither at the key managerial person nor was entrusted with any supervisory role and due to the same reason CBI or the Police did not register any FIR against the Appellant. Ld. Counsel for the Appellant Shri Anil Yadav submitted that the Respondent merely on the basis of the statement of few contractors namely Sh. Amit Yadav, Director of M/s Crossland Engineering and Infrastructure Pvt. Ltd. and the statement of Sh. Angesh Kumar Singh, Director, M/s Angraj Constructions Civil Project has erroneously proceeded against the Appellant. The statement of the aforesaid persons itself lack sanctity as the said person....
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.... thereof is provided as one of the limb in the definition of 'proceeds of crime' under Section 2(1)(u) of PMLA. The attachment as 'value thereof' can only be made in those cases with the first proviso is invoked. However, the second proviso to Sub-Section 5 (1) of PMLA requires the Respondent Directorate to show that the attached property was involved in money laundering, which the Respondent has failed to demonstrate. Since the reliance on 'value thereof' necessarily brings in the concept of 'proceeds of crime', the said property could not have been attached as 'value thereof'. Ld. Counsel has therefore inferred that there was no reason to believe to make the attachment. He further contended that the AA has grossly erred in observing that the Appellant Shri Roop Singh Yadav had prima facie committed the Scheduled offence. Ld. Counsels for the Appellants prayed for allowing the Appeals. 7. Ld. Counsel for the Respondent submitted that the Report given by Justice (Retd.) Shri Alok Kumar Singh was taken on record wherein it appeared that there were technical, administrative and financial irregularities in the execution of the Gomti River Front Project and Gomti River Channelizatio....
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....iversion of funds for this project falls under the category of financial irregularity. As per Justice Alok Kumar Singh Report, there were irregularities in awarding tender for "diaphragm wall" component to the contractor M/s Gammon India Ltd., Mumbai, wherein 'the tender conditions were tweaked in favour of the contractor. For example, it was mentioned in the original tender, that the volume of material may increase or decrease but for that no compensation shall be paid to the contractor. This was changed through corrigendum and it was written that payments would be made as per quantity of the material used. Further, the work of "diaphragm wall" was also increased resulting in not only increase in height by 2 meters but also area and material were increased and no new tender was invited for the same. The component of "intercepting drain" work was not included in the original project but this was included in the revised project which was sent on 20.04.2016. On 10.06.2016, Financial Expenditure Committee granted its approval and on 18.07.2016, the Council of Ministers granted its approval. Thereafter, on 25.07.2016 the Government sent letter releasing the budget. 8. Ld. Counse....
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....aid amount to purchase properties in name of his wife to make the transactions appear as untainted. Ld. Counsel for the Respondent further submitted that the analysis of the ITRs, shows that the income declared by the Appellant Smt. Shyama Devi in F.Y. 2016-17 was not commensurate with the income being declared for the period of 2012-2016. The Income of the Appellant specifically shows abrupt increase in the A.Y. 2017-18 (corresponding to FY 2016-17). Ld. Counsel mentioned that Sh. Roop Singh Yadav was associated with Gomti River Front Project as Executive Engineer during 2015-17. There is an entry of Rs. 32 lakhs as cash deposit on 21.11.2016 in the United Bank of India of Smt. Shyama Devi. This also relates to the period 2015-16 in which the execution of the Gomti River Front project was in progress. Sh. Roop Singh Yadav in his statement dated 28.08.2018 under PMLA, 2002, was asked for the explanation about the same and in response he stated that he couldn't tell. As per the ITRs of the Appellant Smt. Shyama Devi for the relevant years, she could not have procured the immovable properties on her own. Thus, it is evident that the properties may be in the name of Smt. Shyama De....
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....reasons to believe that the attached properties were involved in money laundering. Ld. Counsel further contended that wordings of Section 3 of PMLA makes it unambiguous that the process or activity connected with the proceeds of crime so as to make it untainted, is the offence of money laundering. He further stated that in fact both the two provisos to Sub-Section 5 (1) are in reference to the proceeds of crime as the initial and main part of the Sub-Section cannot be ignored while invoking any of the two provisos. He stated that the second proviso cannot be read in a manner so as to exclude the reference to proceeds of crime. Ld. Counsel stated that the proceeds of crime include 'value thereof' in accordance with Section 2(1)(u) of PMLA, and hence, property in the name of the spouse was correctly attached. Ld. Counsel also made distinction between the facts of this case and that of Pavana Dibbur. He pointed out that the Appellant in the matter of Pavana Dibbur was not the wife of the main accused and the allegation against her was to facilitate the main accused by lending her account for transfer of proceeds of crime. On the other hand, in the present case Smt. Shyama Devi is the ....
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.... 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 country: Provided further that, notwithstanding anything contained in first proviso, any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money- laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act. Provided also that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this section is stayed by the High Court, shall be excluded and a further period not exceeding thirty days from the date of order of vacation of such stay order shall be counted." On reading of the said provisions, it is obvious that the provisos to t....
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....interpretation which leads to the conclusion that a word used by the legislature is redundant, should be avoided as the presumption is that the legislature has deliberately and consciously used the words for carrying out the purpose of the Act. The legal maxim "A Verbis Legis Non-Est Recedendum" which means, "from the words of law, there must be no departure" has to be kept in mind. 40. The court cannot proceed with an assumption that the legislature enacting the statute has committed a mistake and where the language of the statute is plain and unambiguous, the court cannot go behind the language of the statute so as to add or subtract a word playing the role of a political reformer or of a wise counsel to the legislature. The court has to proceed on the footing that the legislature intended what it has said and even if there is some defect in the phraseology etc., it is for others than the court to remedy that defect. The statute requires to be interpreted without doing any violence to the language used therein. The court cannot re-write, recast or reframe the legislation for the reason that it has no power to legislate. 41. No word in a statute has to be constru....
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.... enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever." It is obvious that no money laundering can occur unless there are proceeds of crime. Since, the definition of proceeds of crime includes the 'value thereof' as part of the definition, the conclusion that the 'value thereof' is also proceeds of crime is inescapable. The definition of proceeds of crime as provided under Section 2(1)(u) of PMLA is reproduced below: "2 (1) (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 relat....
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....her in the month of March, 2016. There is no corroborative evidence for such claim which has been adduced by the Appellants. Neither the complete investigations of the Scheduled offences nor the charge-sheet, if any, is before us. In fact, we find that the Respondent has been reasonable enough to attach only one property in the name of the Appellant Smt. Shyama Devi as 'value thereof' of the alleged proceeds of crime in the hands of her husband Shri Roop Singh Yadav. The Respondent Directorate on the basis of the investigations under PMLA has inferred that bribe of Rs. 30,00,000/- was received by the Appellant Shri Roop Singh Yadav from Shri Amit Yadav Director of M/s Crossland Engineering and Infrastructure Pvt. Ltd. for release of his due payments. The investigation covers statements of Shri Amit Yadav recorded under Section 50 of PMLA, wherein he has given the cheque numbers 018201 and 018202 of dates 05.09.2016 and 06.09.2016 to withdraw cash of Rs. 15,00,000/- on each occasion from the account in the Dena Bank. The investigators have confirmed this from the statements of the said Bank account. During the search of the premises of the said company loose sheets were recovered ev....
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....re the interest of the victim till conclusion of the trial. This would not only frustrate the object of the Act of 2002, but would advance the cause of the accused to promote the crime of money laundering. The Judgment in the case of Vijay Madanlal Chaudhary (supra) is of three judges' bench while the judgment in the case of Pavana Dibbur(supra) is of two judge's bench. 23. At this stage, it is reiterated that any other interpretation other than the one taken by Delhi High Court in the cases of Axis Bank (supra) and Prakash Industries (supra) for the definition of "proceeds of crime" would defeat the object of the Act of 2002. It is more especially when the arguments raised by the appellant that the property acquired prior to the commission of crime would not fall in the definition of "proceeds of crime". In that case, the task of the accused would become very easy to first commit the scheduled offence and after obtaining or deriving the property out of the criminal activities, immediately siphon off or vanish so that it may not remain available for attachment and otherwise the contingency aforesaid would satisfy only the first limb of definition of "proceeds of crime" lea....