TaxTMI 
TaxTMI 
2026 (3) TMI 1435
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....Indian Penal Code regarding default in repayment of loans and credit limits availed from a consortium of banks led by the Union Bank of India (the appellant in one of the two appeals being considered in this order) and violation of the terms on which the same were extended. The consortium granted a total loan of Rs. 122 crore. Out of the same, the share of the Union Bank of India was Rs. 70,43,90,000/-, of which an amount of Rs. 60,88,93,512.17 was outstanding as on 31.03.2017 when the account was declared NPA. The borrower had offered 10 immovable properties as collateral security, apart from inventories worth Rs. 6.03 crore, book debts of 61.99 crore, plant and machinery of Rs. 28.34 crore and a cash margin of 0.67 crore. 3. During the course of investigation by the CBI, the IDBI Bank (the appellant in the second appeal herein) also filed a complaint for a declared fraud of Rs. 10 crore and the said complaint was also merged with the case. 4. Investigation by the CBI revealed that the borrower and other private persons entered into a conspiracy to cheat the lenders by making fraudulent transactions such as huge non-trade transactions and diverted the funds for their own use....
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....o- 27-28 Sector 15 A Mathura Road, Faridabad. Area 827.00 sq. ft. Shop No. 4- A/11 (Shop Space) on Fourth Floor, measuring Super Area 827 Sq. Ft. along with proportionate undivided and impartiable share in land on which building is constructed (i.e. proportion which shop area bears to the total built up area of entire complex,) Plot No- 27- 28 Sector 15 A Mathura Road, Faridabad. Sale Deed 2481000 Valuation report dtd. 25.09.2015 0.64 5. 23777 & 15.02.2007 Chandra Narain Kuchroo, Residential Property at 149, Block- A, Sushant Lok-III, Gurgaon Plot No. 149 Block No. A admeasuring 696.00 Sq. M. in the residential colony known as Sushant Lok Phases-III situated in and around village Tigra Dist. Gurgoan Haryana Sale Deed 3329640 Valuation report dtd. 28.09.2015 6.72 6. 13669 & 02.12.2011 Anmol Ratan Construction & Builders Pvt. Ltd., Non Agriculture land at Property No. 19, Village Nagola, Anoop Sahar Road Aligarh area admeasurig 10093.77 Sq. Yards Area Admeasuring 10093.77 Sq. Yards. Khatra No. 019 Gata No. 593, Village Nagola, Anoop Sahar Road Aligarh Sale Deed 1200000 Valuation report dated 09.05.2014 7.60 Total 50....
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....cement, Ahmedabad FPA-PMLA-6262/AHD/2023 and stated that the appellant in present case are identically placed as the appellants in that case and therefore, similar orders may be passed in their cases. Ld. Counsel for the Respondent referred to the PAO as well as the impugned order and submitted that efforts were made to identify the direct proceeds of crime and a part of the same were traced to plant and machinery which has also been attached. He further submitted that the main accused, Shri C. N. Kuchroo, was trying to shift the controlling interest in the company to his brother Shri Dilip Kachroo by transferring the shares. Therefore, the ED had attached the properties to prevent him from doing so. Responding to the above submission from the Ld. Counsel for the Respondent, Ld. Counsel for the Appellant stated that the said event occurred in 2016 when the bank was already having a lien of the property as the mortgagee and the bank was in the process of auctioning the properties. Considered the submissions from both the sides. Upon perusal of the judgment of this Appellate Tribunal cited by the appellants, it is found that the same are on identic....
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....y, the provisional attachment order was passed. It is affecting recovery by the financial institution. The failure of the ED is to find out direct or indirectly obtained or acquired proceeds of crime but to attach the mortgage property affecting the institution and otherwise a failure to achieve the object of the Act of 2002. In fact, it remains to the benefit of the accused who may be enjoying the proceeds obtained directly or indirectly which is not reached by the respondents and thereby attaching the mortgage property for value thereof causing serious prejudice to the institution. In the light of the facts given above, we are inclined the accept the appeal filed by the financial institution alleging violation of Section 5(1) of the Act of 2002 for causing provisional attachment of the property under mortgage having no likely of its alienation, the impugned order qua the appellant is set aside. The appeal is allowed with the aforesaid." 11. When final arguments on the case were heard from both sides after the respondent directorate had brought on record a copy of the Prosecution Complaint for which they were granted leave, an argument was raised by the Ld. Counsel for....
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....t Ltd was holding 31,62,142 equity shares of M/s Samprash Foods Ltd. having share value of Rs.10 each. Thus, it is clear that there were various entities of M/s Samprash Group which were interconnected to cach other and payment for purchase of M/s Anmol Ratan Construction and Builders Pvt Ltd was made through these interconnected entities. Mr. C. N. Kuchroo purchased this company so that he could mortgage the properties of the company for availing loan in the name of M/s Samprash Foods Ltd. The purchase value of the company was given by Mr. C. N. Kuchroo after obtaining loan from the bank and paying it in cash as well as through the accounts of other entities, which were being utilized for routing the working capital. Mr. Kapil Chugh received the amount in the account of his companies. The fact has also been corroborated from the statement of Mr. Sanjay Agarwal, General Manager(Admn.) of M/s Samprash Foods Ltd u/s. 50 of PMLA(g) Mr. C. N. Kuchroo pledged 4 inmmovable properties held in the name of M/s Anmol Ratan Constructions & Builders Pvt Ltd. as mortgage against the loan. It is observed that Mr. C.N. Kuchroo was the main director of M/s Anmol Ratan Construction and Builders Pvt....
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.... properties in the name of this company was dealt in a way by Mr. C. N. Kuchroo to shift the ownership from himself to Mr. Dilip Kuchroo. Though, these properties are mortgaged with bank, but it is likely that he may further shift the ownership of these properties anytime by changing the directorship to transfer the legal liability on him and M/s Samprash Foods Ltd. 13. Upon a careful perusal, I do not find any material to conclude that the said four properties standing in the name of M/s Anmol Ratan were attached as property acquired directly or even indirectly out of the proceeds of crime generated from the scheduled offence. Rather, all the material on record indicates that the properties have been attached as 'value of such property' ('value thereof'). This is clear from para 9.10 (page 54 of the OC) wherein it is categorically mentioned that the properties available in the name of M/s Anmol Ratan Constructions & Builders Pvt. Ltd. are proceeds of crime in terms of 'value of any such property' under the provisions of Section 2(1)(u). Further, para-9 of the impugned order (Page No. 35-38) dwells at length upon the concept of 'value thereof'. 14. The contention put forward ....
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....nding anything contained in first proviso, any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act: [Emphasis supplied] 17. The plain language of Section 5 which provides for attachment of the property involved in money laundering, makes it evident that in order to invoke the provisions of sub-section (1), it is essential that the authority seeking to invoke the provision has reason to believe, which are to recorded in writing, on the basis of material in his possession, that if such property involved in money-laundering is not attached such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime. To invoke the Second ....