TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 1711
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..... (running hotel) 4 Bigha 16 Biswas situated at village Dhakoli, Distt. Mohali, (then Distt. Patiala) registered vide deed no. 2674 dated 24.03.1999 and 14 Biswas land for sum of Rs. 1 lakh situated at the adjacent place registered vide deed no. 106 dated 09.04.1996 Sh. Avtar Singh (D-9) S/o Sh. Sarwan Singh (D-2) Fair market value= 33.47 crore M/s Ashiana Inn Ltd. (D-1) 2. Hotel March Royale-II village Dhakoli, Tehsil- Derabassi 2 Bigha 12 Biswas land for sum of Rs. 4.5 lakh registered vide deed no. 2748 dated 05.09.2000, 2 Bigha land registered vide deed no.2691 dated 31.08.2000 & 2 Bigha 2 Biswas (In fact 2 Bigha 0 Biswas) land for sum of Rs. 4.5 lakh registered vide deed no.2817 dated 08.09.2000 all land situated at village Dhakoli, Distt. Mohali, (then Distt. Patiala). M/s Ashiana Inn (P) Ltd (D-1) now known as M/s Ashiana Inn Ltd. (D-1) Fair Market value=58.36 crore Conservative value=49.60 crore Distressed value=43.75 crore M/s Ashiana Inn Ltd. (D-1) 2. As per the facts of the case the Vigilance Bureau Flying Squad, Mohali, Punjab registered FIR No. 12 dated 26.08.2015 against Sh. Mandeep Singh, IAS, Secretary (Rtd.), Department of Public Gri....
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.... Bank, Sector-17, Chandigarh, against loans given to the said company. Deputy Director reasonably believed that said hotels were constructed by illegitimate funds possessed by Sh. Mandeep Singh, IAS (now Retd.) (D- 5), in excess of known sources of his income, in connivance with Sh. Avtar Singh (D-9) S/o Sh. Sarwan Singh. He further reasonably believed that proceeds of crime generated by Sh. Avtar Singh (D-9) S/o Sh. Sarwan Singh, by defrauding the aforesaid bank by diverting loan funds to the shell companies/entities, have also been invested in construction of Hotel Marc Royale-II. The Deputy Director reasonably believed that these immovable properties i.e. Hotel Marc Royale-l and Hotel Marc Royale-II are proceeds of crime as per PMLA. The Deputy Director has reason to believe that the above-mentioned immovable properties (specified in Para 54 and 55 of PAO), are likely to be transferred or dealt with in any manner which may result in frustrating the proceedings relating to confiscation of such proceeds of crime as further investigation in this case is still in progress. These properties involved in the process of Money Laundering, if not attached immediately under Chapter-III of ....
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..... 43 lakhs were invested by Navjot Singh and Gursharandeep Singh for purchasing the shares of M/s Ashiana Inn Ltd. Therefore, he stressed that the question of attaching the said two properties of Hotel Royale Marc is not justified, when the share certificates in the name of sons of accused Mandeep Singh having value of Rs. 43 lakhs are already attached. He submitted that even otherwise, when most of the properties of accused Mandeep Singh are already attached as mentioned in table 1 of the impugned order, the question of attaching the present mortgaged property with the appellant bank is not justified. He contended that respondent ED wrongly attached the said two properties of hotels under misconception that the same are purchased and constructed from the proceeds of crime/tainted money in the hands of Mandeep Singh. He further contended that under such facts and circumstances appellant bank may kindly be permitted to auction the mortgaged properties to realize its dues along with interest by way of auction sale and appellant bank undertakes to deposit the remainder amount, if any, with ED by way of FDR. He strongly argued that if the bank is not allowed to realize its outstanding ....
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....ccused Mandeep Singh, reflects his share as 50% in M/s Ashiana Inn Ltd., which was stated to be devolved on his son Mandeep Singh clearly points towards the direction that Mandeep Singh invested the huge amount in the Hotel Projects of M/s Ashiana Inn Ltd. It is interesting to note that all the share certificates of M/s Ashiana Inn Ltd. were recovered and seized by Vigilance Bureau from the Office of Hotel Marc Royal at the instance of accused Mandeep Singh. The said share certificates include the certificates in the name of Navjot Singh (800 shares) and Gursharandeep Singh (7100 shares), both sons of Mandeep Singh. The two major shareholders, namely, M/s Marc Royale Hospitality Services Pvt. Ltd. and M/s Frontier Securities Management Ltd. were found to be bogus and shell companies being controlled by Avtar Singh himself. Some other shareholders selected at random from the list of 561 shareholders of M/s Ashiana Inn Ltd. were also found to be bogus. Accordingly, the creation of share capital of M/s Ashiana Inn Ltd. based on fake share certificates is not ruled out and accordingly, infusion of tainted money earned by accused Mandeep Singh by corrupt means is apparent on record. We ....
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....ution having mortgage the properties and thereupon attached under the Act of 2002 are protected under section 8(8) of the Act of 2002. 11. The release of the properties would however be after conclusion of the trial whereas the financial institution would be affected on account of non-realization of the dues during the intervening period. In general, there remains appreciation of immovable properties, thus even if there is a delay, it would not affect the financial institution. 12. It is otherwise a fact that property is attached to protect the interest and to settle it at the end of the trial in favour of those who are entitled for it. The attachment does not affect the title or the ownership of the property rather it can be when it is confiscated. The Special Court and the Central Government are having power to settle the interest of the claimant and accordingly to release the property in favour of those who are entitled for it. Thus, financial institution would not be affected and if the property is released at the initial stage and ultimately someone else also make a claim of the same property, it would remain unaddressed. Therefore, proper safeguards for the ....
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....iments and only on the ground that once there is a mortgage of the property, it should go to the financial institution. 26. In case, it is taken up on the sentiments of the institution, it may result in anarchy and explained further by following illustration:- If property is proceeds of crime or attached for the value thereof but was under mortgage with the financial institution and thereby to be released addressing the interests of the financial institution leaving and even affecting the claim of the victim who lodged the criminal case against the accused. In case of release of the property from attachment at the instance of financial institution, it can be auctioned where it may achieve the amount greater than what is due to the financial institution. In that case, the financial institution can retain the amount to the extent it is due to them and remaining has to be given to the person who mortgaged the property which would be none but can be the accused and thereby the accused would be benefited on release of the property in a given case by getting the amount over and above secured, out of the auction to settle the dues of financial institutions. In that case ....
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....ions and find that the relevant date is a date when the tainted property is projected to be untainted and as a consequence to it, the ECIR is recorded showing offence under Section 3 of the 2002 Act. The relevant date to find out the scheduled offence and the offence of money laundering is when it is projected to be untainted property to make out an offence under section 3 of the Act of 2002. The issue aforesaid has been decided in the case of Dyani Antony Paul vs Union Of India reported in (WP No. 49642 of 2018) dated on 21 February, 2023. The relevant paras of the judgment quoted hereby: - "77. Article 20 of the Constitution prohibits conviction except for violation of a law in force at the time of commission of an offence. In other words, there cannot be prosecution under the PML Act for laundering of money acquired by committing the schedule offences prior to the introduction of the PML Act. Therefore, the time of commission of scheduled offences would not be relevant in the context of the prosecution under the PML Act. What would be relevant in the context of prosecution is the time of commission of the act of money laundering. The question would be, whether a person ....
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....ndulge in or to assist or being party to the process or activity connected with the proceeds of crime; and such process or activity in a given fact situation may be a continuing offence, irrespective of the date and time of commission of the scheduled offence. In other words, the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money-laundering under the 2002 Act -- for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in trenches until fully exhausted. The offence of money-laundering is not dependent on or linked to the date on which the scheduled offence or if we may say so the predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the o....