TaxTMI 
TaxTMI 
2025 (10) TMI 971
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....dmeasuring 1769 Sq. Ft. area along with stilt parking of market value of Rs. 3.86 crore approx. (having agreement value of Rs. 24.25 Lakhs + 12.25 Lakhs = Total Rs. 36.50 Lakhs) registered in the name of Shri Pankaj Kumar Srivastava and his wife Mrs. Veena Kumar Srivastava. 2. As per the facts of the case, MIDC Police Station, Mumbai registered a FIR No. 760/2015 dated 18.12.2015 u/s 409, 420, 477(A), 120-B r.w.s. 34 of Indian Penal Code (IPC), 1860 against Shri Prashant Mulekar, Kiran Kulkarni, Pankaj Kumar Srivastava & Dinesh Jajodia. Subsequently, this case was taken over by the Economic Offence Wing (EOW), Mumbai, Unit No. V, and re-numbered the case vide C.R. No. 88/2015. Three directors of M/s Geodesic Ltd., viz. Prashant Mulekar, Kiran Kulkarni and Pankaj Kumar Srivastava hatched a criminal conspiracy with Dinesh Jajodia, Tax Consultant of M/s Geodesic Ltd. to cause wrongful gain for themselves and wrongful loss to the shareholders and foreign currency convertible bondholders (FCCB holders) and siphoned off shareholders money to the tune of Rs. 250 Crores by showing bogus purchases of software modules and also failed to redeem Foreign Currency Convertible Bonds worth U....
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....provided) GL - Dinesh Jajodia - Tax Consultant in India (Tax records seized from his office as per High Court order, affidavit submitted by company with IT office.) During the course of investigation, statements of Shri Prashant Mulekar, Kiran Kulkarni, Pankaj Srivastava all Directors of M/s. GL and Shri Dinesh Jajodia, Tax Consultant of M/s. GL were recorded in jail on 02.04.2016. Statement of Shri Pankaj Srivastava was recorded in jail on 02.04.2016 under Section 50 of the Prevention of Money Laundering Act, 2002. His further statement was recorded on 20.06.2016 after his release on bail. He stated that M/s. Geodesic Information Systems Pvt Ltd (Now M/s. Geodesic Limited) was established in the year 1999. The company was engaged in software development business and in January 2008 M/S GL raised USD 125 million in which Citibank NA was the Merchant Banker. The purpose for raising the FCCB was to acquire technology companies abroad and invest in marketing abroad. The tenure of FCCB was for a period of 5 years and they had defaulted in repayment of FCCB in January, 2013. The amount of approx. 25-26 million USD out of the FCCB funds raised by M/s. GL was utilized for acquisi....
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.... twenty lacs) from M/s Standard Chartered Bank (Am attaching a copy of loan closure letter dated 07.05.2005 from Standard Chartered Bank.) b. Around Rs. 12 lacs (rupees twelve lacs only), were contributed by my wife Mrs. Veena Kumar, from her savings. She had worked with M/s Punjab and Sind bank, from 1977 to 2001. She had taken voluntary Retirement in the year 2001. c. The Balance Rs. 10 lacs came from my savings and proceeds from sale of my shares. d. Myself and my wife each held 50% share of the flat." The statement of Shri Mangiram Sharma was recorded on 05.04.2016 under PMLA, 2002 wherein he confirmed that he had acquired the six Indian companies with assistance of Shri Dinesh Jajodia on the instruction of Shri Prashant Mulekar, Director of M/s. Geodesic Limited. Geodesic Group companies used to transfer funds to the accounts of 6 companies against the bogus purchase of goods/software for which no goods/software were delivered to M/s. Geodesic Group companies, as the purchase of software by M/s. Geodesic Limited was merely book entry. Shri Prashant Mulekar Director of M/s. Geodesic Limited used to give direction to him (Shri Magniram Sharma) to fu....
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.... Market Funds (EEMF). (vi) The chart showing the funds flow of the FCCB amount of USD 125 Million is at page no. 29 of the impugned order. vii) Further, it was revealed from the charge sheet that the FCCB Funds raised by M/s GL was utilized for acquiring shell companies in Tax haven countries which are controlled by the Directors of M/s GL. Thereafter, such shell companies had made investment into other Funds viz. ADG & EEMF based in Tax Haven Countries which were further diverted in form of credit facilities or customer driven investments in their own shell companies (Yvette, Audrain Commercial Corp etc.) which is confirmed from the documents during the course of investigation conducted under PMLA. (viii) Thus, the said FCCB amount was either not utilized for the intended purpose of acquisition and investment in overseas subsidiary/joint venture by M/s. GL or was utilized in investment in/acquisition of shell/ bogus companies in tax havens, which were not in software business. Further huge funds were diverted to M/s. GTSL (Hong Kong), GHL (Mauritius), M/s. Spokn Communications Pte Ltd (Singapore), Yvette Investments, Lasdun Ventures S.A., Eland Crown Int....
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....ounting to Rs. 250 Crore (Approx.) have been diverted/siphoned off from M/s. GL to shell companies in India through bogus purchases. The investigation under PMLA, 2002 revealed that proceeds to the tune of appx. Rs. 250 Crore have been generated out of criminal activities (bogus purchase) related to scheduled offence, hence the same is also Proceeds of Crime as defined under section - 2(1)(u) of PMLA, 2002. (x) Therefore, the total Proceeds of Crime (POC) as defined under section 2(1)(u) of PMLA so far works out to be Rs. 743 Crore [Rs. 493 Crore +Rs. 250 Crore] in this case. The said proceeds have been utilized by GL and their directors, projecting as untainted money. Thus, they have committed offence of Money Laundering. (xi) As the POC amount has been parked abroad by Shri Pankaj Srivastava and other directors of M/s. Geodesic Limited in foreign country or utilized in other activities routing through complex web of shell companies, the properties derived directly or indirectly out of POC are not available for attachment in India. However, the investigation has revealed that the executive directors viz. S/Shri Prashant Mulekar, Kiran Kulkarni and Pankaj Srivasta....
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....jab & Sindh Bank where she was employed and Rs. 5.5 Lakhs from the savings of her husband Pankaj Kr. Srivastava. The balance amount of Rs. 20 Lakhs was tendered to the vendor Captain K.F. Juvale by taking housing loan from Standard Chartered Bank, which was sanctioned on 29.12.2002. The said housing loan was fully repaid by Veena and Pankaj by 07.05.2005. These material facts were ignored by the Adjudicating Authority that the investment made by Veena Srivastava is from the legal sources of income. He further argued that in the year 2002, there arose a discord in the family as Pankaj Srivastava was in need of finance and mooted an idea to sell the Flat and go for smaller one. Veena and her daughter Vidhi resisted the said idea and instead of selling the flat to an outside party, appellant Veena purchased the share of her husband Pankaj Srivastava for sale consideration of Rs. 52.02 Lakh and the sale deed was executed by Pankaj Srivastava qua his share in favour of Veena vide sale deed dated 22.09.2011. He pointed out that in order to tender the said sale consideration to her husband, Appellant Veena Srivastava made payment to her husband from her savings bank account with ICICI Ban....
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.... wife. He pointed out that the Sections 120B & 420 of IPC were not in the schedule to PMLA, when the alleged offences took place in the year 2008. Prayer is accordingly made to allow the present appeals. 4. The Ld. Counsel for the respondent argued and strongly controverted the submissions made by the appellants, which will be considered in our findings and analysis. 5. Upon perusal of the arguments of both parties, the following issues emerge for discussion: i) Whether the proceedings under PMLA are not applicable given the fact that the Sections 120 B & 420 of IPC were not in the schedule of PMLA when those alleged offences took place in the year 2008? ii) Whether the property should not be attached in view of the fact that the appellants of appeal no 1 Veena Srivastava & No. 3 Vidhi Kumar are not an accused in the scheduled offence? iii) Whether the appellant in appeal no. 1 had sufficient legal source to purchase the impugned property? 6. Coming to issue no. i), the first issue raised by the appellants is regarding the non-application of PMLA due to amendment of 2009 w.e.f. 01.06.2009. With regard to the same, we observe that the relevant dat....
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.... "38. In respect of the second argument, it should be borne in mind that the offence of money laundering is a continuous offence. The date of commission of the scheduled offence may not be relevant to prosecute a person for the offence of money laundering at a later point of time. Even after the date of commission of the scheduled offence, the accused might be in possession of the proceeds of crime. He/she may continue to use or conceal such proceeds of crime or project/claim them as untainted property. Therefore, if a person continues to deal with proceeds of crime, even after the commission of the scheduled offence, he/she may be prosecuted under the PMLA." We further fortify our view in this regard, in lieu of the judgment of Hon'ble Supreme Court of India in the case of Vijay Madanlal Chaudhary Vs. Union of India, MANU/SC/0924/2022, wherein it is held that- "42. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation ....
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....en post amendment, thus, the contention of the appellants in issue no.1 falls flat. Hence, the first issue is decided against the appellants and in favour of respondent ED. 7. Coming to issue no. ii), it is argued that the Appellants of appeal no. 1 & 3 were not named in the CBI charge-sheet or in the prosecution complaint filed under the PMLA, 2002. The law on this issue now stands settled by the landmark judgment of the Hon'ble Supreme Court in the case of Vijay Madanlal Choudhary and Ors. vs. Union of India (UOI) and Ors. (supra). The relevant text from the judgment is quoted hereunder: "65......... The sweep of Section 5(1) is not 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. 69. We find force in the stand taken by the Union of Indi....
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....2003. She failed to explain the heavy deposit entries in her ICICI Bank account i.e. Rs. 4,30,000/- on 14.03.2001 Rs. 3,00,000/- on 16.03.2001 Rs. 7,00,000/- on 16.04.2001 Rs. 60,000/- on 04.05.2001 along with cash deposit entries. Her statement of bank account does not reflect any payment of Rs. 16.5 Lakh to the vendor Shri K.F. Javale from her savings. As per the contention of the Appellant, she purchased Flat No. 8, Sunrise, 142, Sher-e-Punjab, Andheri, Mumbai in the year 1985, which was later on sold vide agreement to sell dated 20.12.2004 to Ms. Gwen D'Souza for sum of Rs. 13,00,000/-. The Agreement reflects that she received sum of Rs. 3,00,000/- vide cheque dated 18.12.2004 and the remaining 10,00,000/- was agreed to be paid on or before 15th Day of January, 2005. Appellant Veena Srivastava has not annexed her bank statement for the relevant period to show the encashment of the aforesaid cheque and the receipt of the balance sale consideration. This amount was stated to be thereafter invested in M/s Yash Infraventure, but no statement of account is filed to show the said investment along with the documents of investment. Appellant Smt. Veena Srivastava also filed her a....
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....48, for the reasons best known to her. It is pertinent to mention the letter dated 10.07.2016 submitted by Mr. Pankaj Srivastava. The relevant part thereof is as under: "2. This flat was purchased by my wife Mr. Veena Kumar and myself, in February 2003 for a total consideration of Rs. 42 lakhs (forty two lacs) approximately that included the consideration of Rs. 36.50 lacs paid to the owner (Rs. Thirty six lacs and fifty thousand only) plus registration and stamp duty etc. e. For the above we had taken a loan of Rs. 20 lacs (rupees twenty lacs) from M/s Standard Chartered Bank (Am attaching a copy of loan closure letter dated 07.05.2005 from Standard Chartered Bank.) f. Around Rs. 12 lacs (rupees twelve lacs only), were contributed by my wife Mrs. Veena Kumar, from her savings. She had worked with M/s Punjab and Sind bank, from 1977 to 2001. She had taken Voluntary Retirement Scheme in the year 2001. g. The Balance Rs. 10 lacs came from my savings and proceeds from sale of my shares. h. Myself and my wife each held 50% share of the flat." The fact that the entire housing loan of Rs. 20 Lakhs was discharged by appellants within a short....