AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 720
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....Sq. ft.) at D. No. 7-1-140, Ground Floor, Flat No. 1, Sri Venkateshwara Apartment in Rs. No. 465, Jangareddygudem village. 4730/2011 01.07.2011 12,00,000 2. Housing Property to the extent of 46.72 Sq. Yds. (950 Sft) at D.No. 7-1-141, Ground Floor, Flat No. 2 in Rs. No. 465, Jangareddygudem Village. 4731/2011 01.07.2011 12,00,000/- 3. Housing Property to the extent of 220 Sq Yds. (1080 Sq. ft) at D.No. 17-1-24 Rs. No. 103/1 of Jangareddygudem Village, Sriram Nagar, Jangareddygudem. 2898/2013 25.06.2013 15,55,000/- 4. Housing Property to the extent of 170.1 Sq Yds. (867 Sft) at D.No. 19-2-116 Rs. No. 315 of Jangareddygudem Village, Sriram Nagar, Jangareddygudem. 2897/2013 25.06.2013 11,35,000/- 5. 5.3 Acres agriculture land at R S No. 60, Balive Village, Musunuru Mandal, Krishna District. (SRO Nuzuvidu). 1197/2000 07.06.2000 14,57,500/- Property held by Smt. Ganne Mani Kumari 6. Plot to the extent of 7851.4 Sq. Yds at Rs. No. 486 (7260 Sq. Yds) and 485/1C (591.4 Sq. Yds), Gurvaigudem village, Jangareddygudem Mandal, West Godavari District. 2163/2013 30.04.2....
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....were credited to the accounts of M/s Sri Durga Steels in Andhra Bank, Jangareddygudem and in SBH, Jangareddygudem. The vehicle loans were credited to the account of M/s Automotive Manufacturers Limited, Jangareddygudem and M/s Mahavir Motors Private Limited, Jangareddygudem maintained at Andhra Bank, Jangareddygudem. The above firms were found to be fictitious. The accounts in the above fictitious firms were opened by Shri Ganne Srinivasa Rao. All the 26 housing loans and 16 Car loans remained unpaid, unrealized and were declared as NPA by the Bank. There was outstanding balance of Rs. 4,35,07,215/- in respect of 26 housing loans as on 22.11.2014 and Rs. 2,39,76,000/- in respect of 16 car loans as on 30.11.2013. The total outstanding loan balance at the time of NPA was 6,74,83,215/-. There are 15 accused in the chargesheet including Shri Ganne Srinivasa Rao, Smt. Ganne Mani Kumari and Shri Nandigam Naveen Kumar. As per the Charge Sheet No. 43/2014 filed by CBI, ACB, Visakhapatnam, it is seen that Shri Ganne Srinivasa Rao with the connivance of Shri Ch. Veeraiah, the then Branch Manager of Indian Overseas Bank, Krishna Nagar Branch, Vijayawada availed CGTMSE (Credit Guarantee Tru....
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....an amounts to the bank account of M/s Saravana Motors (Proprietor-Shri Ganne Srinivasa Rao) with the Oriental Bank of Commerce, Rajamundry and to the bank account of M/s Saravana Motors (Proprietor-Sri Bonthu Satish) with the Bank of India, Jangareddygudem. M/s Saravana Motors does not exist and no vehicle was purchased by any of the borrowers using loan amounts in 73 loan accounts. All 73 vehicle loan accounts slipped into NPA on 30.11.2013 and as on 30.11.2013, the net outstanding against the said vehicle loan accounts is Rs. 7,32,23,508. There are 42 accused in the charge sheet filed by the CBI including Shri Ganne Srinivasa Rao, his wife Smt. Ganne Mani Kumari and relative Shri Nandigam Naveen Kumar. The accused persons/entities mentioned in the instant OC prima facie committed offences punishable under Section 120-B IPC r/w Section 420, Section 468 of IPC, 1860 and also r/w Section 13(2) r/w 13(1) of PC Act, 1988 in Charge Sheet No. 43/2014 filed by CBI in the case of Indian Overseas Bank, Jangareddygudem, which are scheduled offences under paragraph 1 and paragraph 8 respectively of para A of the scheduled to the Prevention of Money Laundering Act, 2002 (as amended). On th....
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....ng the search, certain documents along with two vehicles (1) One black colour Toyota-Fortuner (AP05UL T/R 5969) in the name of Shri Ganne Srinivasa Rao and (ii) One White colour Hyndai Creta (TS10T T/R 3189) in the name of Smt. Sowmya Ratna Patibandla W/o Shri Ganne Srinivasa Rao were recovered and seized. Apart from the above, one Laptop and three mobiles were also seized during the search. An application requesting for retention of the retention of the seized documents and movable properties mentioned above had also been filed before the Adjudicating Authority vide O.A. No. 314/2019 dated 31.07.2019 in terms of Section 17(4) of PMLA, 2002 which was allowed. From the documents received from State Bank of India, Jangareddygudem; Indian Overseas Bank, Krishna Nagar Branch; Bank of Maharashtra, Eluru Branch; and Oriental Bank of Commerce, Rajahmundry, it has been observed that the 6 persons were closely associated with Shri Ganne Srinivasa Rao to siphon off the loans sanctioned by the above banks. They have also availed loans from the above said banks and are accused in all the three charge sheets filed by CBI. After registration of cases by CBI, Shri Ganne Srinivasa Rao abscon....
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....M/s Discount Drug Mart are on paper only. M/s Discount Drug Mart is also not well operative. However, the loans in their names are being repaid by Shri Ganne Srinivasa Rao by cash, or through the credits received from the bank accounts of him/his benami entities. From the above, it can be seen that Shri Ganne Srinivasa Rao is using the loan proceeds taken from various banks during 2010-13 for the repayment of loans taken in the names of M/s. Discount Drug Mart, CB Beverages, Water Boy India and Sharavana Beverages and for the day- to-day needs of the above said entities or their proprietors. Shri Ganne Srinivasa Rao, thus has been using tainted money to pay the loan installment of M/s Discount Drug Mart, M/s CB Beverages M/s Sharavana Beverages and M/s Water Boy India. As there were indications that the defendants were involved in generating proceeds of crime, investigation simultaneously had been carried out to find out immovable/movable properties in the name of Shri Ganne Srinivasa Rao and his family members. On the basis of above, Directorate of Enforcement worked out the total outstanding dues towards banks at Rs. 19,83,78,905/-, which is in the nature of proceeds of crime ....
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....l the immovable/movable properties acquired by him, his mother and his wife since 2010 comes under the purview of "Proceeds of Crime" as defined under Section 2(1)(u) of PMLA, 2002. Pursuant to the above proceedings in the aforesaid ECIR and in view of the statements and Chargesheet, Directorate of Enforcement passed the Provisional Attachment Order No. 03/2019 dated 17.08.2019. Thereafter, Original Complaint (OC) No. 1189/2019 was filed before the Adjudicating Authority for confirmation of the aforesaid Provisional Attachment Order. Accordingly, after filing of the OC, the Adjudicating Authority issued Show Cause Notice to all the Defendants directing them to appear before the Adjudicating Authority with reply. The Counsels for the Defendants appeared in the matter on the said date and subsequent dates thereafter. After receiving the replies/written submissions from both the sides and hearing the rival submissions, the Adjudicating Authority vide its order dated 07.02.2020 confirmed the PAO for attaching the properties of the Defendants. Aggrieved by the said order, Appellants filed the present Appeals. 3. During the arguments, Ld. Counsel for the Appellants submitted ....
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....o the definition of "proceeds of crime" given under Section 2(1) (u) of the Act of 2002 and is quoted thus- "2. Definitions -(1) In this Act, unless the context otherwise requires, -xx xx xx xx xx xx xx xx (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 relatable to the scheduled offence]. xx xx xx xx xx xx xx xx xx xx" The perusal of the definition reveals three limbs of the definition out of which first part refers to the property acquired or derived directly or indirectly by a person relating to the criminal activity to a scheduled offence. The second part includes "the va....
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.... Further, in view of the para 68 of the judgment of Hon'ble Supreme Court of India in the case of Vijay Madanlal Chaudhary v. Union of India, 2022 SCC OnLine SC 929, wherein, it is held that- "68. It was also urged before 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." In the light of the aforesaid, second limb of the definition of "proceed....
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....Oriental Bank of Commerce, Rajahmundry Branch and Bank of Maharashtra, Eluru Branch to the tune of Rs. 29,66,40,000/-, on the basis of false and forged documents, which was later-on siphoned of by him for the other purposes than shown in the loan applications/agreements. Out of the said defrauded amount, sum of Rs. 19,83,78,905/-, is still outstanding towards the said banks and accordingly, the quantum of proceeds of crime were taken by ED as the said amount. Even if, the ED is unable to connect the properties acquired by the Appellants during the period of alleged offence or thereafter from the proceeds of crime, even then, the said properties along with the ancestral properties can be attached by the ED in absence of direct proceeds of crime and hence, same are rightly confirmed by the Adjudicating Authority. Ld. Counsel for the Respondent ED pointed out that the PAO dated 17.08.2019 was passed by the Deputy Director, Directorate of Enforcement, Hyderabad u/s 5(1) of the PMLA, 2002, in respect of the properties covered under Section 2(1)(u) of the Act, which are POC, as the same were derived out of the proceeds of crime or as value thereof in absence of direct proceeds of crime. ....