TaxTMI 
TaxTMI 
2026 (1) TMI 1400
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....umar Jain, Sanjeev Jain, Chandrashekhar Sarda, Jagdish Purohit, M/s. Kumao Engineering Pvt. Ltd., Dhanpat Parashuram Seth, Rajesh Mohanlal Mistry, Shailesh Swarupchand Mehta, Prime Builders & Developers, Kapil Rajprakash Puri, Vipul Kanhaiyalal Kakaria, Royal Enterprises, Neelkamal Central Apartment LLP (formerly known as Neekamal Central Apartment Private Limited), Asif Yusuf Balwa, Sanjay Dattatray Kakade, Kakade Infrastructure Pvt. Ltd., Sky Lux Cityscapes Pvt. Ltd., Chhagan C. Bhujbal, Sameer M. Bhujbal, Pankaj C. Bhujbal, Satyen Appa Kesarkar, Dilip Jagannath Khaire, Sanjay Diwakar Joshi, Tanvir Ismail Shaikh, Deepak Vitthal Shinde, Nilesh Shantiprakash Shahu, Rajesh M. Dharap, Nimish M. Bendre, M/s. Parvesh Construction Pvt. Ltd., M/s. Devisha Infrastructure Pvt. Ltd., M/s. Amstrong Energy Pvt. Ltd., M/s. Origin Infrastructure Pvt. Ltd., M/s. Niche Infrastructure Pvt. Ltd., M/s. Matrubhoomi Infrastructure Pvt. Ltd., M/s. Yashdhan Infrastructure Pvt. Ltd., M/s. Deepam Infrastructure Pvt. Ltd., M/s. Bhavesh Builders Pvt. Ltd., M/s. Anandvan Infrastructure Pvt. Ltd., M/s. Amstrong Information Pvt. Ltd., M/s. Intellectual Management Consultants Pvt. Ltd., M/s. Amstrong Pure Water....
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....on of Corruption Act, 1988, and Sections 109, 406, 409, 420, 465, 468, 471, 474, read with Sections 120(B) and 34 of Indian Penal Code. Similarly, FIR No. 69 of 2015 dated 13.06.2015 invoking Sections 120(B), 406, 420, of Indian Penal Code along with Sections 3, 4, 5 and 8 of Maharashtra Ownership of Flats Act was registered by E.O.W. Branch of Navi Mumbai Police against M/s. Devisha Infrastructure Pvt. Ltd. and its directors namely Shri Pankaj Bhujbal, Sameer Bhujbal, Rajesh Dharap, Satyen Kesarkar and Amit Blraj. 3. Scrutiny of the FIR No. 35/2015 dated 08.06.2015 revealed that - (i) The accused persons, especially the public servants misused their designation and entered into a criminal conspiracy to cheat and cause financial loss to the Government and undue gain to the developer, M/s. K. S. Chamankar Enterprises; (a) they have put up bogus/fabricated financial statements before Infrastructure Facilities Committee of the Maharashtra Government for obtaining sanction in respect of the development of R.T.O. Office situated on Plot No. 825/2, Andheri, Mumbai; (b) they were aware that these financial statements were not genuine; that Shri Chhagan Bhu....
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....; and cheated the said persons without giving possession of the flats. (ii) Statement of Shri Mohamad Yunus Abdul Rehman Shaikh, resident of Flat No. 9, Bhaskar Apartment, Payali Pada, Sion-Trombay Road, Trombay, Mumbai - 400 088 recorded on 13.06.2015 has been considered as First Information/complaint in this FIR. (iii) On going through the contents of the complaint, it is gathered that the complainant came to know about a housing project being initiated at Rohinjan Village, Survey No. 91/1, near Sector 35, Kharghar, Navi Mumbai, Dist-Raigad by M/s. Devisha Infrastructure Pvt. Ltd. in 2009; that the project comprised around 14 storied towers comprising 30 to 32 floors per floor; that the said company purchased around 35 acres of land; that cost of 1 BHK was apprx. Rs.18 lakhs and cost of 2 BHK was Rs. 30 Lakhs; that registration and stamp duty was to be paid separately; that possession was to be given within 3 years; that believing the said project was very affordable and economical, the complainant had booked two flats in the name of his wife by paying Rs. 36,000/- each in December, 2009 by two undated cheques. The complainant further stated that his cheques wer....
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.... (xiv) Praveena Prasanna Chamankar, partner of M/s. K. S. Chamankar Enterprises. (xv) Pranita Prashant Chamankar, partner of M/s. K. S. Chamankar Enterprises. (xvi) Prasanna Shantaram Chamankar. (xvii) Tanvir Ismail Shaikh, employee of Bhujbal family related companies. (xviii) Iram Tanvir Shaikh, employee of Bhujbal family related companies. (xix) Sanjay Diwakar Joshi, employee of Bhujbal family related companies. (xx) Geeta Sanjay Joshi, employee of Bhujbal family related companies. (xxi) others. 6. Similarly, investigation under PMLA was initiated by registering a case vide ECIR/MBZO/08/2015 dated 17.06.2015 against the following persons/entities in respect of FIR No. 69/2015 registered by Taloja Police, Navi Mumbai: (i) Devisha Infrastructure Pvt. Ltd. (ii) Pankaj Bhujbal, Director of Devisha Infrastructure Pvt. Ltd. (iii) Sameer Bhujbal, Directorof Devisha Infrastructure Pvt. Ltd. (iv) Rajesh Dharap, Director of Devisha Infrastructure Pvt. Ltd. (v) Satyen Appa Kesarkar, Director of Devisha Infrastructure Pvt. Ltd. (vi) Amit Blraj, Director of Devisha In....
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....intentionally prepared bogus documents which they were aware that the same were false in order to show undue favour and cause undue gain to the developer i.e. M/s. K. S. Chamankar Enterprises. 9. A chargesheet bearing S.C. No. 584 of 2018 (Old No. 176/2016) was filed by Economic Offence Wing, Navi Mumbai Police in the FIR No. 69 of 2015 invoking Sections 120(B), 406 and 420 of Indian Penal Code along with Sections 3, 4, 5, 8 and 13 of Maharashtra Ownership of Flats Act before the Hon'ble First Class Magistrate, Panvel Court, District - Raigad, Maharashtra. The said chargesheet is filed against - (i) Shri Pankaj Chhagan Bhujbal (ii) Shri Sameer Magan Bhujbal (iii) Shri Rajesh Madhav Dharap (iv) Shri Satyan Appa Kesarkar (v) Shri Amit Blraj 10. It is alleged by the EOW, Navi Mumbai Police in the said charge sheet that the aforesaid persons hatched a criminal conspiracy to cheat the members of public to the tune of Rs. 44.04 crores towards booking of flats in their proposed rental housing project. The accused persons knew that land required for the project was not owned/possessed by them nor they had received the requisite permiss....
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....l Estate Ltd for construction of Central Library at Kalina, Santacruz and alleged payment of Rs.2.5 crores to Chhagan Bhujbal Welfare Foundation by the contractor/their associate entity is pending wherein Chhagan Bhujbal is one of the main accused. It is to further submit that allegation levelled in the FIR No. 32/2015 are entirely different to FIR No. 35/2015 & 69/2015 for which Prosecution Complaint has already been filed under PMLA. Chhagan Bhujbal is common accused. Therefore, leave of the Court is craved to file prosecution complaint against Chhagan Bhujbal who is also named accused in Prosecution Complaint no.02/2016 and 03/2018 upon completion of investigation in respect of allegation pertaining to construction of Central Library, Kalina (FIR No 32/2015). In view of above, the complainant reserves its right to file supplementary complaint if required at later stage with respect to the matter delineated supra." As such, the predicate offences for the present PMLA complaint are C.R. No. 35 of 2015 and C.R. No. 69 of 2015 i.e. Spl. Case No. 10 of 2016 and S.C. No. 584 of 2018, and not Spl. Case No. 18 of 2016 (based on C.R. No. 32 of 2015). 14. Before averting to the subm....
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....er PMLA, cannot be tried either against them as well as against the remaining accused, including accused nos. 39 and 52. The ld. Advocate has also referred to the order passed by the Hon'ble High Court in Writ Petition No. 3400 of 2025 dated 16.09.2025, quashing the PMLA case qua Chamankar brothers. 20. Ld. Advocate Mr. Aseem Naphade has also argued on merits and submitted that even on merits there is no sufficient material and hence, no charge can be framed against accused nos. 39 and 52. Giving details, it is argued that there was an agreement of sale with Parvesh Construction, the company concerning Bhujbals, investment was made by Parvesh Construction for three flats of around Rs. 13 crores and payments were made between 04.08.2006 to 06.07.2007 and between 11.05.2006 to 31.06.2007 to accused no. 51 and 52. The project did not complete and in the consequence, the agreements were cancelled executing two separate deeds on 02.04.2009 and the amount was paid through bank. Thus, according to him, it was not a transaction of money laundering or layering of the funds nor it was connected with the alleged crime. It is therefore, he has sought discharge of accused nos. 29 and 52. He ....
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.... Hon'ble Bombay High Court in the case of Chamakar brothers (supra) and argued that the judgment of the Hon'ble Bombay High Court is on the same point, which squarely covers the present subject. In nutshell, according to the ld. Sr. Counsel, no charge can be framed against the accused when there is no predicate offence pending against them. 25. It is submitted that two revision petitions are filed against the discharge order passed in the case of predicate offence before the Hon'ble High Court, but the revision petitioners are not the State or informant/complainant in the original case. Also it is pointed out that there is no stay order issued by the Hon'ble High Court in those revision petitions and further that during pendency of those petitions, the discharge order of Chamankar brothers has been passed by the Hon'ble Bombay High Court on 16.09.2025. As such, according to the ld. Sr. Counsel, the accused/applicants deserve to be discharged from the case. 26. The ld. Sr. Counsel has also argued on merits of the case and submitted that even otherwise, having regard to the observations of Special Court in discharge orders, no charge can be framed by this Court in PMLA case. ....
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....e main accused are discharged from the predicate offence, there is no case of generation of crime proceeds and therefore, there can be no charge against any of the accused for offence of money laundering under PMLA. 31. Apart from the above legal hurdle, it is submitted that there is no evidence to show that the accused/applicants hatched conspiracy with the main accused i.e. Bhujbals and for that reason also, no charge can be framed against them. 32. Ld. Advocate Mr. Sajal Yadav has further argued that except one accused, all other accused are discharged from the case of predicate offence. The accused whose discharge application in the case of predicate offence was rejected i.e. Deepak Deshpande, is not an accused in the PMLA case. It is submitted that the order of discharge of main accused has not been challenged by the prosecution and therefore, no charge can be framed against the accused in PMLA case. The ld. Advocate has argued that if the order of discharge in predicate offence is reversed, the prosecution may come back with a prayer of prosecuting the accused for PMLA and framing of charge. However, when there is no predicate offence available as a foundation, no case ....
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....ord to frame charges against the accused. (ii) The accused are discharged from the predicate offence and the discharge orders have attained finality. State has not challenged the discharge orders and therefore, there is no existence of scheduled offence. (iii) In the absence of any scheduled offence, there can be no existence of proceeds of crime. (iv) Existence of scheduled offence and proceeds of crime cannot be assumed and it is for the prosecution to establish the same. (v) In the absence of the scheduled offence, the prosecution agency cannot assume jurisdiction to initiate action under PMLA, 2002 nor it can investigate the predicate offence. (vi) When there is no existence of predicate offence and proceeds of crime, no charge can be framed against the accused under the provisions of PMLA, 2002. Submissions of ld. SPP: 36. Ld. SPP Mr. Gonsalves has argued that there is sufficient material to show that predicate offence was committed by the accused and although many of them are discharged, it cannot be said that there was no substance in the prosecution. He has submitted that there is specific role of each of the accused in com....
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....specifically observed as follows: "91. In para-20 of the order dated 9.7.2021 of accused No. 5 Mr. Deepak Deshpande, the reasons have been assigned for rejecting the application. In absence of any proper, satisfactory and acceptable justification, it was held that there was a strong suspicion of committing the offence. But when each and every allegation/charge has been considered in detail and from it no case has been made out to hold a trial against the present accused, the citing of the order dated 9.07.2021 does not much help either to prosecution or to the intervenor. 92. After taking in the account the materials made available on record and after hearing the submissions of both, it requires to hold that the prosecution has not made out a prima facie case against the accused nos. 1, 4, 12 to 17 from the materials available on record, though a suspicion against accused nos. 1, 4, 12 to 17 has been shown by the prosecution, the same has been properly and satisfactorily explained by the accused nos. 1, 4, 12 to 17. None of the ingredients constituting the alleged offences punishable u/secs. 13(2) r/w 13(1)(c) and 13 (1) (d) of the Prevention of Corruption Act, 19....
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....ant was prima facie appearing to be an attempt to resolve the civil dispute by giving it colour of criminal offence. No fraudulent or dishonest intention at the time of accepting the booking amount from the customer is seen. 34. After taking in the account the materials made available on record and after hearing the submissions of both, it requires to hold that the prosecution has not made out a prima facie case against the accused nos. 1 to 4. None of the ingredients constituting the alleged offences punishable u/sec.120B, 406, 420 of Indian Penal Code and u/sec.13 r/w 3, 4, 5, 8 of Maharashtra Ownership Flats (Regulations of the Promotion of Construction, Sale Management and Transfer) Act, 1963, are found, so that a trial can be held against the accused Nos. 1 to 4." 44. The case of prosecution in Sessions Case No. 584 of 2018 was that accused nos. 1 to 5 being the Directors of M/s. Devisha Infrastructure Private Limited, had undertaken a development project at Panvel, Navi Mumbai, they misrepresented the buyers by concealing material facts, deceived them by collecting an amount of approximately Rs. 44 crores, who booked 2344 flats in the project. It is alleged that t....
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....isition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever." 47. The statute provides for punishment to the persons directly or indirectly involved in the process or activity connected with the proceeds of crime. The term "proceeds of crime" is defined by PMLA under Section 2(u) as follows: "Sec. 2 (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;" 48. From bare reading of the definition and the explanation appended thereto as above, what can be gathered is that the proceeds of crime means the money generated by comm....
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....f the 2002 Act. Dealing with proceeds of crime by way of any process or activity constitutes offence of money-laundering under Section 3 of the Act. 32. Be it noted that the definition clause includes any property derived or obtained "indirectly" as well. This would include property derived or obtained from the sale proceeds or in a given case in lieu of or in exchange of the "property" which had been directly derived or obtained as a result of criminal activity relating to a scheduled offence. In the context of Explanation added in 2019 to the definition of expression "proceeds of crime", it would inevitably include other property which may not have been derived or obtained as a result of any criminal activity relatable to the scheduled offence. As noticed from the definition, it essentially refers to "any property" including abroad derived or obtained directly or indirectly. The Explanation added in 2019 in no way travels beyond that intent of tracking and reaching upto the property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence. Therefore, the Explanation is in the nature of clarification and not to increase t....
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....e case of "Vijay Madanlal Choudhary" (cited supra) has also dealt with the term "scheduled offence" vis-a-vis "proceeds of crime". The relevant observations of the Hon'ble Bench are useful for deciding the present discharge applications. Those are quoted thus: "175. The expression "scheduled offence" has been defined in Section 2(1)(y). This provision assumes significance as it has direct link with the definition of "proceeds of crime". In that, the property derived or obtained as a result of criminal activity relating to notified offences, termed as scheduled offence, is regarded as tainted property and dealing with such property in any manner is an offence of money-laundering. The Schedule is in three parts, namely Part A, B and C. Part A of the Schedule consists of 29 paragraphs. These paragraphs deal with respective enactments and the offences specified thereunder which are regarded as scheduled offences. Similarly, Part B deals with offence under the Customs Act specifically and Part C is in relation to offence of cross border implications." 51. From the above observations of the Hon'ble Supreme Court, what can be gathered is that a money laundering activity can be....
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....) of the 2002 Act and further it is involved in any process or activity. Not even in a case of existence of undisclosed income and irrespective of its volume, the definition of "proceeds of crime" under Section 2(1)(u) will get attracted, unless the property has been derived or obtained as a result of criminal activity relating to a scheduled offence. It is possible that in a given case after the discovery of huge volume of undisclosed property, the authorised officer may be advised to send information to the jurisdictional police (under Section 66(2) of the 2002 Act) for registration of a scheduled offence contemporaneously, including for further investigation in a pending case, if any. On receipt of such information, the jurisdictional police would be obliged to register the case by way of FIR if it is a cognizable offence or as a non-cognizable offence (NC case), as the case may be. If the offence so reported is a scheduled offence, only in that eventuality, the property recovered by the authorised officer would partake the colour of proceeds of crime under Section 2(1)(u) of the 2002 Act, enabling him to take further action under the Act in that regard. 54. Even though....
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....e filed by the ACB, Mumbai. 5.1) At the further outset, it may be noted that, the decision in the case of Niket Kansal (supra), has been rendered by the learned single Judge of the Jammu and Kashmir High Court and under the law, it has no binding effect on this Court. Even otherwise a bare perusal of the said decision would clearly indicate that, in the conclusions drawn by the Hon'ble Judge of the said High Court, in para Nos. 39, 40 and 42 it has been held that, the ruling issued by the Hon'ble Supreme Court in Vijay Madanlal Choudhary (supra) is binding for all subordinate Courts. That, the judgment must be applied with careful consideration of the specific factual context and legal matters unique to each case, necessitating a case-by-case analysis. 5.2) In the case of Pavana Dibbur (supra), the Hon'ble Supreme Court has considered the issue that, an accused in PMLA case, who comes into the picture after the scheduled offence is committed by assisting in the concealment or use of proceeds of crime, need not be an accused in the scheduled offence or not. While enumerating its conclusions, in para No. 31.2, the Hon'ble Supreme Court has held as un....
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.... accused are discharged from the case of predicate offence, they cannot be prosecuted for the offence punishable under PMLA. Having regard to the mandate of law, no trial can proceed against the accused persons who are discharged from the case of predicate offence. Also when there are specific findings that there was no generation of proceeds of crime, no question arises of layering or siphoning of the proceeds of crime further. Therefore, the role attributed to the rest of the accused in PMLA case comes to an end. They cannot be prosecuted for the offence of money laundering, when there is no more a case of generation of crime proceeds in existence. 55. There is one more aspect which require consideration at this stage. The properties of the accused were attached under PMLA by E.D. with the claim that those were purchased or acquired out of the proceeds of crime in the predicate offence. All these properties are released by the Appellate Tribunal for SAFEMA at New Delhi, vide orders dated 09.09.2024 on applications moved by different accused in the present case. Ld. SPP Mr. Gonsalves has conceded the fact that the Appellate Tribunal for SAFEMA has released all the properties at....
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....4 observing that the accused have not been finally discharged from the predicate offence because two revision applications are pending before the Hon'ble High Court. 59. What is necessary to note here is that the discharge orders passed in the cases of predicate offences have not been challenged by the State. The revision petitions are filed by private persons before the Hon'ble High Court, in which there is no interim relief granted by the Court. A revision petition cannot be said to be continuation of trial of the case. Also pendency of revision petition cannot be said pendency of the case before the Court. The said order of my ld. Predecessor was considered by the Hon'ble High Court in Writ Petition No. 3400 of 2025 and the PMLA Case has been quahsed qua the Chamankar brothers. The observations and findings recorded by Hon'ble High Court in Writ Petition No. 3400 of 2025 are binding upon this Court. Having regard to the findings, the case of PMLA cannot be continued against the other accused also. 60. The above observations lead me to conclude that in the discharge orders passed in ACB Spl. Case No. 10 of 2016 and Sessions Case No. 584 of 2018, the Court has held that no o....
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....ution under PMLA without existence of the proceeds of crime related to the predicate offence is akin to a tree without roots, devoid of legal sustenance and incapable of surviving judicial scrutiny. 63. The prosecution i.e. ED had traced proceeds of crime and its siphoning, and attached the properties which were allegedly acquired or purchased out of the proceeds of crime of the predicate offence. As observed in para Supra, the Appellant Tribunal of SAFEMA has set aside all the provisional and confirmed attachment orders with the observation that those properties cannot be said to have been acquired using the proceeds of crime. As such, at present no property is under attachment in the present case. It is necessary to note here that the said orders of the Appellate Tribunal have also not been challenged by the prosecution. 64. The orders of discharge of accused in the predicate offence have reached finality. The orders of release of the attached properties have also reached finality. Under these circumstances, continuation of the PMLA proceedings for the offence under section 3 r/w 4 becomes a dead-wood. 65. At this juncture, it is necessary to note that discharge applicat....