2024 (11) TMI 1629

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ral) received a tip off that illegal flesh trade was being carried out at Kapal Bar & Dimple Lodge, which is situated at old Mumbai Goa Highway, at Kaluare Village, Panvel. Based on the tip off, the police raided the said premises on 02.05.2013 and rescued 90 girls who were found propositioning sexually at the clients. Apart from the above, the police also recovered Indian currency to the tune of Rs.  1,15,93,500/- and also 871.04 grams of jewellery worth Rs. 23,51,808/-. The Panvel town police, Navi Mumbai registered in FIR No. 173/2013 dated 03.05.2013 against 1) Mr. Navin Divakar Kotian, Manager of Kapal Bar and Dimple Lodge; 2) Mr. Ratnakar Hegde, Waiter of Kapal Bar and Dimple Lodge; 3) Mr. Raju Dejanna Shetty, Proprietor of Kapal Bar and Dimple Lodge; and 4) Mr. Jayram Shetty, Proprietor of Kapal Bar and Dimple Lodge invoking Sections 5 & 6 of Immoral Traffic (Prevention) Act, 1956. After due investigation, the Panvel Police subsequently filed a charge-sheet bearing no.217/13 dated 20.07.2013 invoking Sections 372, 373, 376(1), 109 and 114 of the Indian Penal Code (IPC), 1860 and Section 3, 4, 5, 6 (2A) and 7 of Immoral Traffic (Prevention) Act, 1956 read with Section....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the Bar, dancing and also posturing sexually at the clients. Apart from the above, it has also been revealed that the decoy customers planted by the police, to act as genuine customers, were taken by the girls to rooms build on the second floor of the bar for flesh trade. It clearly proves that the Kapal Bar and Dimple Lodge was being used illegally for purpose of flesh trade/prostitution in the garb of service bar, hence, the currency and jewellery so recovered during the raid was in fact the money generated as a result of flesh trade/prostitution. Based on the statements of the accused, documents examined and on the basis of money trail it revealed that the accused has committed the offence of money laundering as defined in Section 3 of the PMLA, 2002 and punishable under Section 4 of the said Act. It has also been established that the seized cash and jewellery were acquired from flesh trade/prostitution being carried out illegally in the Kapal Bar and Restaurant and Dimple Lodge in the name of Service Bar, and thus, are proceeds of crime defined under Section 2(1)(u) read with Section 2(1)(v) of the PMLA. Thus, the properties having value amounting to Rs.  1,13,45,308/-....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tor, Enforcement Directorate, FEMA/PMLA, would categorically reveal that there was enough cash flow out of business transaction of the three entities of the appellant, thereby justifying the huge cash in hand with the appellant, being a cash and carry business. Ld. Counsel for the appellant contended that some part of the money which was seized was the salary of the staff, who used to stay in the same premises and keep their salary with the appellant for security, as they belong to far-away places like Orissa, Karnataka and they used to take the salary at the time of visiting their native place. Ld. Counsel for appellant also pleaded that the appellant has taken a loan of Rs.  10,65,000/- for renovation of Bar and the said amount is duly reflected in the balance sheet of M/s Hotel Ajit Palace Restaurant and Bar for the year 01.04.2012 to 31.03.2013 and the contention of the department that the appellant had submitted a letter on 19.02.2016 with the complainant that one of his friends has deposited Rs.  15,00,000/- towards purchase of bungalow plot in Panvel is also reflected in the balance sheet and hence, the allegation by the department that the said two amounts o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... to why the appellant would keep such huge amount openly (particularly deposits of employees) at the cash counter in the Bar, instead of keeping the same in the Bank Account of the Bar, or in the personal account of Shri Raju Dejanna Shetty. There is nothing on record that the appellant at the time of police raid took the plea that the said recovered jewellery is handed over by customers in lieu of cash, though, the appellant has stated that the same was of the customers who had taken cash from the Bar for playing rummy and deposited their jewellery as security in lieu of the cash taken by them from the counter. No record was produced before the police at the time of raid to show that the jewellery was deposited by any customer to take cash for playing rummy. We agree with the contention of the respondent ED that the customers visiting the Bar already knew the purpose of their visit very well and they were also supposed to be conscious of the fact that good of cash will be required for different activities, including rummy which is a cash intensive game, so it defies logic as to why would they need cash from counter against jewellery. Even otherwise, till date no customer has tu....