AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 800
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....passed by the Adjudicating Authority confirming the Provisional Attachment Order dated 02.08.2022. 2. It is a case where CBI, Economic Offence-I, New Delhi registered an FIR on 07.03.2020. The allegation was that during the month of April to June, 2018, M/s Yes Bank Ltd. had invested Rs. 3700 Crores in short term debentures of M/s DHFL. Mr. Kapil Wadhawan of M/s DHFL paid a kickback of Rs. 600 Crores to Mr. Rana Kapoor's family members. It was shown to be loan of Rs. 600 Crores by M/s DHFL to M/s DOIT Urban Ventures (India) Pvt. Ltd. (Rana Kapoor's Group Company). Shri Rana Kapoor was otherwise controlling the affairs of M/s Yes Bank. 3. The further allegation was in reference to the deeds of Rana Kapoor and his family members who were holding 100% shares of M/s DOIT Urban Ventures (India) Pvt. Ltd. through M/s Morgan Credits Pvt. Ltd. The loan of Rs. 600 Crores was sanctioned by M/s DHFL on the basis of mortgage of sub-standard properties having minimal value and by considering its future conversion from agricultural land to the residential. 4. The further allegation was in regard to the sanction of loan of Rs. 750 Crores to one R.K.W Developers, the Group companies benef....
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....0 Crores in the debentures of M/s DHFL and thereupon money was transferred by M/s DHFL to Mr. Sanjay Chhabria in the name of development of "Avenue-54" Project. 7. The respondents analyzed the issue to determine the proceeds of crime and accordingly out of Rs. 431.33 Crores, they found payment of a sum of Rs. 363.48 Crores to be the actual cost to M/s Nibodh Realty LLP on so called loan of Rs. 237.50 Crores. Remaining amount of Rs. 67.85 Crores was taken to be the proceeds of crime parked with Avinash Bhosale and accordingly the Provisional Attachment Order was caused to secure the amount aforesaid. 8. The respondents further took note of the alleged diversion of funds by Kapil Wadhawan in favour of Avinash Bhosale in the name of the agreement with beneficially owned entities by Shri Bhosale. The amount is of Rs. 71.82 Crores. The amount aforesaid was given to Avniash Bhosale and his entities in several trenches in the name of consultancy charges and fee, etc. It was for providing service to them related to various projects of M/s DHFL while, according to the respondents, no such service was ever provided by Avinash Bhosale and these entities. It was thus taken to be nothing ....
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....ale entered into an agreement with an entity of Sanjay Chhabria in the year 2014 to obtain loan of Rs. 237.50 Crores with the arrangement of the payment with interest @18%. It was between the entities involved in real estate and, therefore, commercial rate of interest was agreed. The agreement was not only for receipt of the interest but further benefits such as the receipt of warrants and accordingly the appellants company was to receive a sum of Rs. 766.65 Crores out of the agreement executed between the two independent parties in the year 2014-15. In terms of the agreement, an amount of Rs. 267 Crores was paid to the appellant and his entities prior to April, 2018 and remaining amount of Rs. 122.61 plus Rs. 3.37 Crores was paid subsequently. It thus received total sum of Rs. 431.33 Crores out of which Rs. 363.48 Crores was taken to be actual cost and thereby Rs. 67.85 Crores to be the proceeds of crime. 12. The determination of the proceeds in the hands of the appellants was based on imagination of the IO travelling beyond the allegations in the ECIR. To determine genuineness of the payment, the element of payment of interest by M/s Nibodh Realty LLP and processing fee for ob....
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....erroneous. 14. The learned counsel for the appellants thereupon referred to second trench of the determination of the proceeds of crime in the hands of the appellants. It is in reference to an agreement entered between the entity of Avniash Bhosale i.e. M/s Abil Dairy LLP and the entity of Sanjay Chhabria whereby M/s Abil Dairy LLP was agreed to be purchased by the entity of Sanjay Chhabria for a sum of Rs. 75 Crores. The agreement aforesaid was entered in the year 2016 after a public notice and advertisement caused by M/s Abil Dairy LLP for the sale of Dairy. It was published on 26.05.2015. In pursuance to the agreement, Sanjay Chhabria's entity paid a sum of Rs. 25 Crores on 15.01.2016 and was reflected as an advance received in the audited balance sheet of M/s Abil Dairy LLP and was continued to be shown in subsequent balance sheet also. The further payment could not be made immediately and accordingly M/s Abil Dairy LLP did not transfer the Dairy to Sanjay Chhabria, however, on 28.02.2019, second trench of payment of Rs. 25 Crores was made and has been taken to be the proceeds of crime in ignorance of the fact that it was in terms of the agreement but taken to be the proceed....
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....Rs. 71.82 Crores Rs. 47.50 Crores was received by the appellant's company prior to the disbursement of loan by Yes Bank i.e. 12.04.2018 and it was a mere co-incidence that remaining amount of Rs. 24.3 Crores was paid a month after 12.04.2018 though the work was executed coupled with the issuance of the invoices prior to disbursement of the loan. The actual payment was delayed by few days and co-incidentally it was made after 12.04.2018 but could not have been taken to be the proceeds of crime. In this regard, the statement of Avinash Bhosale recorded under Section 50(2) of the Act of 2002 was ignored coupled with the statement of Santosh Maheshwari disclosing all details regarding the work and the material to prove their case. Thus, the Adjudicating Authority has recorded a perverse finding while confirming the provisional attachment of the properties belonging to the appellants. The prayer was accordingly made to cause interference in the impugned orders. 17. The counsel for the appellants did not raise any other argument than referred to above despite an opportunity, rather shown its satisfaction and accordingly even written argument was given to that effect only. Arguments....
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....accordingly caused provisional attachment in reference to it. The detailed arguments were made by both the counsels to support their case and for the purpose of clarity, it would be relevant to give brief facts pertaining to the first trench of the transaction involving Rs. 431 Crores. 23. The material on record shows that an agreement was entered between the entity belonging to Sanjay Chhabria with M/s Nibodh Realty LLP, an entity of Avinash Bhosale in the year 2014-15 where appellant Avinash Bhosale agreed to extend loan of Rs. 237.50 Crores. It was disbursed in terms of the agreement. As per the agreement, M/s Nibodh Realty LLP was to earn interest @18%, apart from the warrants with total return in a period of the agreement to a sum of Rs. 766.75 Crores. In terms of the agreement and with the advancement of the loan of Rs. 237.50 Crores, the appellant Avinash Bhosale's entities received Rs. 431 Crores. It has not been taken to be the proceeds of crime as a whole but to the extent of Rs. 67.85 Crores. The respondents have given detailed reasons for it and justification to determine Rs. 67.85 Crores to be the proceeds of crime which was seriously contested by the counsel for th....
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....5 Crores by the entity of the appellants. The agreement was executed almost four years prior to commission of crime by making investment of Rs. 3700 Crores by M/s Yes Bank in the debentures of M/s DHFL in the year 2018 with kickback of Rs. 600 Crores to Shri Rana Kapoor and diversion of funds by onward transfer to the entity of Sanjay Chhabria. 27. The learned counsel for the respondents was asked to show any material which may perceive for the agreement to be entered in the year 2014, that after more than four years, there would be transaction between M/s Yes Bank and M/s DHFL and thereupon between M/s DHFL and the entity of Sanjay Chhabria so as to enter into agreement with the company in advance to layer the proceeds. It is coupled with the fact as to whether any allegation exists in the FIR or in the ECIR about the transaction entered between the two parties in the year 2014. The contracting party has not made a complaint against the appellants for agreement to receive excessive return which may be upto 300%. The counsel for the respondents was further asked about the jurisdiction of the IO to question a transaction between the two parties which was not subject matter of the....
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....e receipt of the warrants by the appellants out of the agreement. How the profit and other benefits can be ignored by the respondents could not be clarified along with its jurisdiction. 30. In any case, we have taken note of the arguments raised by the counsel for the appellants to record our finding, otherwise we hold exercise of the respondents to cause provisional attachment in reference to an agreement entered in the year 2014 to take benefit of the proceeds of crime out of crime to happen after four years is wholly irrational and without jurisdiction and accordingly we are unable to accept the arguments of the respondents for the aforesaid, rather we asked the counsel to show the jurisdiction of the IO to question a commercial transaction for which no allegation for commission of offence has been made and is not subject matter of FIR i.e. predicate offence or the ECIR. We find the exercise of respondents for causing provisional attachment in reference to first trench of transaction to be wholly irrational and without jurisdiction and if the timeline for it was to be taken, why the entire amount paid by the entity of Sanjay Chhabria after commission of crime and disbursement....
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....can be said to be layering of the proceeds of crime when it was not even reached to the accused to layer it. A transaction prior to the commission of crime has been taken into consideration for layering without any material and jurisdiction. 33. Much emphasis has been made in regard to the statement of Srinivasan Govindan to show execution of the agreement for bogus payment. The argument was seriously contested by the counsel for the appellants and for that he made the reference of the statement of Avinash Bhosale and apart from the material to show that entity of Avinash Bhosale was involved in consultancy service not only for entity of Sanjay Chhabria but many other entities because appellants were having a professional team for it. It is apart from the ignorance of the fact that the entire amount was not towards the consultancy service but an amount towards brokerage for the financial intermediary for the loan transaction by M/s DHFL to one Skylark Buildcon Pvt. Ltd. The transaction was entered prior to the commission of crime and accordingly brokerage was paid pursuance to the invoice dated 06.04.2018 which was also prior to the alleged commission of crime by M/s Yes Bank an....
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....es thereupon. The respondents have treated consultancy and other service agreement to be bogus in reference to the statement of Srinivasan Govindan. However, it could not be clarified as to how the agreements entered prior to the commission of crime could have been taken to be bogus. It can be only when it was designed with the knowledge that after few months or a year, there would be investment by M/s Yes Bank in the debentures of M/s DHFL and M/s DHFL would thereupon transfer huge amount to the entity of Sanjay Chhabria towards the development of "Avenue-54" and such development work would not be undertaken by Sanjay Chhabria and the amount would be further transferred to the appellant. The argument of the respondents could have been accepted if the material would have been shown to question the service and consultancy coupled with brokerage agreement with the knowledge of commission of crime in future. However, no such material has been placed on record. Therefore, even if the part payment was made even subsequent to the commission of crime, the respondents were required to show the material that the consultancy service and agreement were bogus to co-relate with the event of cri....
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....ceived by the accused. Accordingly, even the reason for provisional attachment of second trench of the amount cannot be accepted. Third Item: Sale of M/s Abil Dairy LLP involving Rs. 75 Crores: 35. In the third trench, the appellant through his company M/s Abil Dairy LLP received an amount of Rs. 25 Crores on 28.02.2019. The background of the transaction for the aforesaid was given by the counsel for the parties. The facts and material on record shows that a MOU was entered by M/s Abil Dairy LLP with Sanjay Chhabria for sale of the dairy and in pursuance to the MOU entered in 2016, an amount of Rs. 25 Crores was paid in the same year. The sale of the dairy was otherwise for a consideration of Rs. 75 Crores. After an initial payment of Rs. 25 Cores, the remaining payment of Rs. 50 Crores was not paid for a considerable period, rather another amount of Rs. 25 Crores was paid after a lapse of three years which is taken to be part of the proceeds of crime after transfer of Rs. 25 Crores initially. The transaction could not be completed with transfer of dairy, rather it is admitted that dairy remained with the entity of Avinash Bhosale. The respondents accordingly treated the amou....