TaxTMI 
TaxTMI 
2026 (3) TMI 1534
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....ith Section 34 of the Indian Penal Code, 1860 and Section 25 and 27 of Arms Act, 1959 for killing Shri R.N. Nayak, Industrialist & Co-operative Leader from Ankola, Uttara Kannada District. The investigation was conducted followed by charge-sheet. The ECIR was recorded by the respondent and followed by its investigation where it was found that Shri R.N. Nayak, a prominent business personality and co-operative leader from Uttara Kannada District was gunned down on 21.12.2013 at Ankola by the associates of Shri Bananje Raja @ Rajkumar @ BR @ Hemant Hegde an underworld don operating from a foreign soil. In the investigation conducted by the police, it was revealed that money spent for the crime was organized from Dubai by Mr. Hajee Ameen Basha on the instructions of Mr. Bananje Raja. The money reached to the associates of Mr. Bananje Raja through hawala channels. The said transaction was linked with the commission of crime where Shri R.N. Nayak was shot down. It was at the instance of Mr. Hajee Ameen Basha operating from Dubai who was an associate of Mr. Bananje Raja. As per the instructions of Mr. Hajee Ameena Basha the money received from Dubai was distributed to Smt. Chandrika Shett....
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....grody Road, Konchady, Mangalore-575008. 6. Mr. Dyani Antony Paul was summoned and his statement was recorded on 23-9-2015 under the provisions of section 50(2) & (3) of the Prevention of Money Laundering Act, 2002 ( in short "the Act of 2002"). Mr. Dyani Antony Paul in his statement inter-alia stated that- (i) he is the owner of J.C. Enterprises, Mangalore which is in the business of Xerox, travels and a Reliance Telecom Franchisée. Further, he also used to assist his elder brother Mr. Lawrence Paul, who is running business in Dubai. (ii) his elder brother Mr. Lawrence Paul, is the Managing Director of M/s. Sea Bird Shipping Agency, Burdubai, UAE; Proprietor of M/s. East and Gulf International, FZCO, Jabel Ali Industrial Area, Dubai and also the Proprietor of M/s. Smart Look Tailoring LLC, Dubai However, no documentary evidence was submitted to the said effect. (iii) his elder brother Mr. Lawrence Paul has transferred about Rs. 10 Crore to his Bank Accounts in Mangalore and from the said money he has purchased/invested in various properties as detailed above in the name of self, his brother Mr. Lawrence Paul and sister-in-law Mrs. Anita Dorine F....
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....) Not maintained any legal Balance Sheets in respect of M/s. Sea Bird LLC, Dubai and M/s. East and Gulf International FZCO, Jebel Ali, UAE. (v) As a patriotism towards the country, he has purchased the properties in Mangalore and Bangalore in the name of self, wife and brother from the profits generated from business and also borrowed around AED 26,00,000/- from few individuals during the years 2008 & 2010, but not submitted any documentary evidence to the profits generated from business and the borrowings. (vi) When the SMS extracts pertaining to mobile number 9663611986 retrieved by the CFSL from the mobile handsets seized by the Police from the Mangalore residence of Smt. Chandrika Shetty W/o. Mr. Hajee Ameen Basha of Dubai was shown to him and asked for his explanation, Mr. Lawrence stated that, he has not sent/received any money from anybody through, non- banking channels either on 4-7-2013 or on 14-7-2013 as mentioned in the SMS extracts. Further, it was also stated that, he does not know any person by name Mr. Hajee Ameen Basha in Dubai and he has no connection with the SMS messages. (vii) not purchased any agricultural property in India till date.....
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.... not been made accused in the criminal case relating to the predicate offence where others may be involved. In view of the above there was no reason to cause provisional attachment of their property. 11. The Learned counsel further submitted that the transmission of the amount of Rs.10 crores from Dubai to India was through proper banking channel. It was out of the income earned by the elder brother Lawrence Paul who is residing in the Dubai for 22 years. He earned the amount and accordingly transferred to Dyani Antony Paul through banking channel. The transfer amount has no connection with the commission of crime of murder where the appellant was not even connected. The purchase of property out of the amount transmitted from Dubai couldn't have been taken as proceed of crime and accordingly, impugned order deserves to be set-aside. 12. The counsel for the appellant further submitted that during the investigation, the respondent and police authority had recorded certain messages after the seizure of the mobile phone and electronic gadgets of Smt. Chandrika Shetty wife of Mr. Hajee Ameen Basha. The SMS couldn't have been taken as basis to connect the appellant with the receipt....
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....red while recording finding to each issue raised by the appellant. It is to avoid repetition of one and the same facts and for the sake of brevity. Finding of the tribunal: 17. We have considered the rival submissions raised by the counsel of the parties and perused the record. Facts on record shows registration of FIR in Ankola police station Karnataka on 21.12.2013. The FIR was registered against Mr. Vivek Kumar and three unknown persons for causing offence under section 302, 353 & 307 read with section 34 of the Indian Penal Code, 1860. It was even for the offence under section 25 and 27 under Arms Act, 1959. The accused said to have been involved in killing of Sh. R.N. Nayak, Industrialist and co-operative leader from Ankola, Uttara Kannada District. The police conducted the investigation and filed the chargesheet. 18. The ECIR was recorded by the respondent and it was followed by the investigation under the Act of 2002. It was revealed that the prominent business personality and Co- operative leader Shri. R.N. Nayak, was gunned down on 21.12.2013 by associates of Shri Bananje Raja @Rajkumar @BR @Hemant Hedge and an underworld don operating from a foreign soil. It was ....
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.... for provisional attachment of property, one need not to be an accused in the commission of crime. It can be any person who remains the recipient of the proceeds of crime. In this case the appellants have been taken to be recipient of the proceeds of crime and accordingly the provisional attachment of the properties has been caused. 21. We may refer to the Judgement of the Apex court in the case of Vijay Madanlal Chaudhary and Others v. Union of India &Ors. reported in (2022) SCC Online 929 where the same argument raised by the appellant has been dealt with. Para 65 & 68 of the said judgment are quoted thus: "65. As aforesaid, in this backdrop the amendment Act 2 of 2013 came into being. Considering the purport of the amended provisions and the experience of implementing/enforcement agencies, further changes became necessary to strengthen the mechanism regarding prevention FPA-PMLA-4599,4600/DLI/2022 Page 10 of 16 of money- laundering. It is not right in assuming that the attachment of property (provisional) under the second proviso, as amended, has no link with the scheduled offence. Inasmuch as section 5(1) envisages that such an action can be initiated only on the ba....
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....to freeze proceeds of crime and as discussed in the preceding paras, the property gifted to the appellant would fall within the realm of proceeds of crime. The use of the terms "any person" in Section 5(1)(a) read with "such proceeds of crime" in sub -clause (b) of Section 5(1) includes any person not necessarily an accused. In case, the argument of the appellant is to be accepted, the same would render to defeat intention of the legislature and frustrate the object of the Act. In light of the above, the argument that the appellant has not been named as an accused in the FIR or ECIR would not be of any consequence as ultimately what is relevant is the property that was seized being 'proceeds of crime'. An example in reference to it has been given in preceding paras. If the argument of the appellant is accepted, then it would become very convenient for the accused to park the 'proceeds of crime' with third person not involved in the crime and in that case, the third person being not accused would always raise a plea that property with him could not have been subjected to attachment. In the instant case, the accused Nirmal Kumar Kejriwal knowing it well that property with him may bec....
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....a. It was at the instance of the person involved in India named Shri Bananje Raja @Rajkumar @BR @Hemant Hedge with an underworld don operating from a foreign soil. 25. In the light of the facts given above it was necessary to prove the source of sum of Rs. 10 crores for his transmission to India which appellant utterly failed and therefore the argument that the transfer of the amount was out of the income cannot be accepted. 26. The learned counsel further submitted that purchase of property on the day of message i.e. 04.07.2013 maybe coincident otherwise the appellant has produced sufficient evidence to prove the source of 16 properties purchased between year 2012 to 2015. The argument aforesaid cannot be accepted in the light of the fact that the SMS on the same day cannot be a coincidence. The appellant was connected mainly based on the SMS and thereupon his failure to show the source for transfer of Rs 10 crores in India. Accordingly, the arguments regarding coincidence of purchasing the property on the day of message cannot be accepted. 27. Another argument was regarding acquisition of the property even prior to commission of crime. The argument has been raised in ign....
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..... 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." 3.3. The aforesaid observations made by the Supreme Court enable this Bench to re-examine the entire issue, as in the considered opinion of this Bench, the judgment passed in Seema Garg's case (supra) is no longer a good law. This Court has taken this view due to the subsequent interpretation by the Supreme Court, which has superseded the legal principles established in Seema Garg's case (supra). 3.4. It is evident that the original (unamended) definition of phrase 'proceeds of crime' was structured into two distinct parts. The first part relates to the property derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence, whereas, the second part relates to the value of any such property where the proceeds of crime are not traceable. This clearly means that if the property derived or obtained, directly or indirectly, from the proceeds of a crime of scheduled offence is not traceable, then any property of eq....
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.... sub-category is a result of amendment brought in 2015 and 2019 in the Act. It provides that if the property derived or obtained from the proceeds of crime has already been taken out of the Country then the property equivalent in value held within the Country or abroad can be made liable to be attached. This position has been explained by the Delhi High Court in an elaborate manner in Axis Bank's case (supra) and Prakash Industries case (supra). 3.6. It is not disputed that the Supreme Court in Vijay Madanlal Chaudhary's case (supra) was examining the scope of the '2002 Act' including definition of phrase 'proceeds of crime'. The submission put forth by the learned counsel that the phrase 'or the value of any such property' is superfluous was rejected by the Court and it was held that the definition of 'proceeds of crime' is wide enough to not only include to the property derived or obtained as a result of criminal activity related to a schedule offence but also any other property of equivalent value. 3.7. While interpreting a statutory provision, it is the bounden buty of the Courts to interpret it in manner so that each wo....
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....chment of properly falling under the category of 'direct' or 'indirect' proceeds of crime. The complaint under Section 44-45 of 2002 Act was quashed by the Supreme Court. The Bench was never called upon to analyse the contentions based upon Section 2(i)(u) of 2002 Act, whereas, in Vijay Madanlal Chaudhary's case (supra) the Court directly answered the aforesaid question. Hence, there is no substance in the first argument of learned counsel for petitioner"......... 29. The facts on record further shows that the payment for purchase of property was even involving the cash for which no source could be given. 30. It is otherwise brought on record that Shri Lawrence Paul remitted approximately Rs.7 crores to India by depositing Dirhams in cash with money exchange companies for transfer to his own account in India. The source of such heavy cash deposit has not been explained by evidence. It is also a fact that huge remittance was made immediately before and after the commission of schedule offence. Most of the properties were acquired in the same period, the details of which are given under:- SCHEDULE (A) - MOVABLE PROPERTY Sl. No. Description of the pr....
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....r RTC 28-1P1) situated at Kankanady 'B' Village of Mangalore city and registered in the Office of the Sub-Registrar, Mangalore City vide Document No. 2294 dated. 7- 7-2015 in the name of Mr. Lawrence Paul 10,75,000/- 7. 10 Cents of non-agricultural immovable property at Survey No. 121/10A(as per Sketch 121/10AP) with residential building bearing Door No. 15-22- 1388(1) and registered in the Office of the Sub- Registrar, Mangalore City vide Document No. 5049 dated. 14-1-2014 in the name of Mrs. Anitha Dorine Fernandes W/o. Mr. Lawrence Paul 34,27,000/-- 8. 20 Cents of non-agricultural immovable property situated at Survey No. 37- 7B1 in lddya Village, Mangalore Taluk along with a residential house bearing Door No. 6-132/1 measuring 1340 Sq. Feet and registered in the Office of the Sub-Registrar, Mangalore Taluk vide Document No. 3335 dated. 4-7- 2013 name of Mrs. Anita Dorine Fernandes W/o. Mr. Lawrence Paul 28,05,000/- 9. 6 Cents Non-agricultural immovable property at Survey No. 40/5(P) & 40/7 situated in lddya Village, Mangalore Taluk together with a Residential House bearing Door No. 6-54/2 and registered in the Office of the Sub-Registrar, Mang....