TaxTMI 
TaxTMI 
2026 (3) TMI 1318
X X X X Extracts X X X X
X X X X Extracts X X X X
....nvestors Association against M/s. MPS Greenery Developers Ltd., for not paying MIS, Maturity, Debt claim etc. FIRs were registered against Shri Pramatha Nath Manna, Managing Director of MPS Greenery Developers Ltd., for his involvement in serious criminal activities. These FIRs were Lake P.S. No. 466/14 dated 07.06.2014 u/s 420 of IPC, Bankura Sadar P.S. No. 132/2014 dated 01.04.2014 under u/s 406, 417, 420 & 120 B of IPC and Bankura Sadar P.S. No. 157/14 dated 17.04.2014 u/s 420, 406 read with 34 IPC. The allegations were that M/s MPS Greenery & others were illegally and fraudulently collecting deposits from public with intention of cheating them, by falsely promising high returns on their investment. The Provisional Attachment Order dated 28.03.2018 was passed by the Respondent Directorate against the property of the Appellants viz Plot No. 498, RS Khatian No. 309, LR Khatian No. 289/1, 182/1N, 267/1, 238/1 being JL No. 126, at Mouza Ratulia, P.S. Panskura, Distt. Purba Medinipur in the name of the Appellant Sh. Bhola Nath and property with address Sali Land, area 60 Dec. at Mouza Ratulia, J.L. No. 126, L.R. Khatian No. 289/1, 182/1m,267/1,181/1, and Plot No. 411, L.R. Khatian No....
X X X X Extracts X X X X
X X X X Extracts X X X X
....um of Rs. 1,93,36,754/- has already been returned. 6. Ld. Counsel for the Appellant submitted that the attached property was purchased by the Sh. Bhola Nath on 14.08.2003 from his own sources. The property was used for business purpose of retail outlet of petroleum product in the name and style of Ratulia Filing Station. The Appellant is the absolute owner and is in possession of the said property. The property attached under the Provisional Attachment Order dated 28.03.2018 is untainted property. The Appellant had purchased the property in 2004 from money acquired through legal means and after having taken a loan from the bank much before the alleged Scheduled Offence in 2010. As such it cannot be termed to be proceeds of crime, as the fundamental pre-requisite for generation of proceeds of crime is the commission of the scheduled offence, which the Appellant Shri Bhola Nath Das did not indulge-in. 7. Ld. Counsel for the Appellant submitted that the Ld. Adjudicating Authority has completely ignored that the IBP Co. Ltd., had issued a letter of intent dated 15.01.2004 for retail outlet dealership at Ratulia, Distt. Purba Madinipur, West Bengal. Further, to letter of intent da....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on proceedings, if any, under the PML Act. Further no reason to believe regarding the same has been recorded in the PAO or the OC. Thus, the fundamental premise required for passing any order for provisional attachment was not in existence in the present case. Ld. Counsel therefore pleaded to allow the Appeal. 9. Ld. Counsel for the Respondent submitted that MPS Greenery Developers Ltd. (hereinafter referred to as MPSGDL) was incorporated on 18.05.1995 and was registered with the Registrar of Companies (ROC), West Bengal. There were ten Directors of the Company including Shri Pramatha Nath Manna, Chairman cum Managing Director and one of founder members of the Company. He continues as the Chairman cum Managing Director of the Company. The Directors in conspiracy among themselves, through the Company MPSGDL started raising funds from the year 1999 by launching various schemes which can broadly be categorized under three main heads viz. short term, mid-term and long term under Fixed Deposit Scheme, Recurring Deposit Scheme and Monthly Income Scheme by issuing Agro, Orchard and Teak Bonds respectively to the investors without the permission of RBI, SEBI, etc. The approximate funds ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....matha Nath Manna and the company MPSGDL raised huge public money with a view to making wrongful gain by deceitful means and misappropriation of public money. Ld. Counsel therefore pleaded to dismiss the Appeal. 11. We have carefully considered the submissions advanced by both the parties and have also perused the material placed on record. The principal contention raised by the Appellant Sh. Bhola Nath Das is that he has neither been named as an accused in the FIRs relating to the Scheduled Offences nor in the ECIR registered by the Enforcement Directorate. Therefore, the attachment of his property is unwarranted. It is further contended that the said property was purchased on 14.08.2003 from lawful sources, much prior to the alleged commission of the scheduled offences, and was used for operating a petroleum retail outlet pursuant to dealership arrangements with IBP Co. Ltd. and subsequently with the Indian Oil Corporation Ltd. The Appellant has also submitted that the financial transactions between Sh. Bhola Nath and Sh. Pramatha Nath Manna were in the nature of a loan or financial assistance extended to regularize the bank loan after the account with the State Bank of India h....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... In his pleading the Appellant has stated that the said transfer was in the form of loan to him from Shri Pramatha Nath Manna which is contrary to the findings made during the course of investigation. The claim of the Appellant is not supported by any evidence, documentary or otherwise. It is therefore clear that part of the funds generated by Shri Pramatha Nath Manna by cheating the members of the public were laundered through the Appellant as well. In fact, a glaring example of such laundering is inferred from the statement dated 12.03.2018 under Section 50 of PMLA of the Appellant which brings out that he had purchased land vide Deed No. 04400/2010 dated 11.10.2010 adjacent to the filing station on consideration of Rs. 24 Lakhs which on the very next day was transferred by way of Sale Deed in the name of M/s Temp Store owned by Shri Pramatha Nath Manna and his family members on consideration of Rs. 28,70,320/- plus stamp duty of Rs. 23,230/-. Further the Appellant paid Rs. 21,33,854/- to various persons/entities for development of the said land as per instructions of Shri Pramatha Nath Manna. 14. The contention of the Appellant that such transfers were merely loans or financi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ved 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." 16. With regard to the requirement under Section 5(1) of the PMLA, we find that the Respondent had sufficient material in its possession to form a "reason to believe" that the property was involved in money laundering and that the same was liable to be attached to prevent its possible transfer or alienation. In this regard, we concur with the following findings made in the Impugned Order: "As detailed out in the Provisional Attachment Order and Para 6 herein above (at page 32 and 33), the reasonable belief is entertained in no uncertain term and the same is well amplified. Before forming the reasonable belief, the Joint Director has extensively referred to the material in his possession and well formulated the reasons for the belief. The material also in the form of statements recorded under section 50 of PMLA is reproduced herein above. The belief entertained by the Joint Director i....