TaxTMI 
TaxTMI 
2026 (5) TMI 1599
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. It is a case where an FIR was registered by the investors alleging that the main accused, Mr. Amber Dalal cheated the investors. It is in view of the fact that the accused lured the investors to invest in their company. It was to invest in the funds for nine commodities (Gold, Silver, Crude Oil, Natural Gas, Zinc, Lead, Nickel, Copper and Aluminum) for trade. It is with the assurance that the capital amount would be kept safe with monthly return @ 1.5% to 1.8% to the investors. The investors were asked to invest through banking channels in the account of M/s Ritz Consultancy Services of which proprietor was Mr. Amber Dalal. The investors were accordingly assured for return and to depose confidence in them, cheques of equivalent amount of the investment promising their capital to be safe were issued. It was with the liberty to withdraw the cheques any time. The investors later on found that the promises made by Shri Amber Dalal through the company was false and a sum of Rs. 54.45 Crore was cheated. 3. After the investigation, EOW, Mumbai filed a charge-sheet against the accused for offence under Section 406, 409, 420 of the Indian Penal Code, 1860 and Sections 3 and 4 of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the provisional attachment order has been caused even of the properties purchased prior to commission of crime. Those properties were not connected with the crime and therefore the respondent could not have provisionally attached those properties. Aforesaid has been ignored while causing PAO. Thus, on the aforesaid ground also, the impugned orders deserve to be set-aside. 8. Ld. Counsel for the appellants, further, submitted that the investments made by the appellant were out of her own sources which was disclosed to the respondent during the course of investigation and while filing reply to the notice before the Adjudicating Authority. It has been ignored. In fact, the respondent failed to take note of the fact that all the transactions were made through the banking channels and there was no reason to doubt on the investment made by the appellant either by herself or through her entities, M/s Arya and M/s Garima Fashion. Arguments of Ld. Counsel for the respondent: 9. Ld. Counsel for the respondent vehemently contested the appeals on all the grounds raised by the appellant. The argument would be referred while recording finding on each issue raised by the appellant to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d during the course of investigation under the Act of 2002, he claimed that the appellant had extended friendly loan of approximately Rs. 14 Crore which remains unpaid. While the appellant had asserted her investment in M/S Ritz Consultancy Services, however, she failed to prove it by documentary evidence such as Memorandum of Understanding, Agreement or any other evidence to substantiate her claim for investment. It is more so MoUs were signed with all other investors and exception could not have been the case of the appellant. In fact, no MoUs or documents were executed in favour of the appellant. 13. It was, further, found that the account of the appellant, Mrs. Rashmi Prasad was categorized in the account of M/s Ritz Consultancy Services towards "income" or "expenses" rather than investments. This was fortified by Mrs. Gargi Ganesh Ipte and Ms. Aishwarya Parab former employees of M/s Ritz Consultancy Services. It was also revealed that the appellant, Mrs. Rashmi Prasad received a total sum of Rs. 18.81 Crore from Mr. Amber Dalal and M/s Ritz Consultancy Services. However, she returned Rs. 3.77 Crore leaving outstanding amount of balance Rs. 15.04 Crore and accordingly proper....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hary's case (supra) has interpreted the provision in para 298, which is extracted as under: "It was also urged before us that the attachment of property must be equivalent in value of the proceeds of crime only if the proceeds of crime are situated outside India. This argument, in our opinion, is tenuous. For, the definition of "proceeds of crime" is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property. If the property is taken or held outside the country, even in such a case, the property equivalent in value held within the country or abroad can be proceeded with. The definition of "property" as in Section 2(1)(v) is equally wide enough to encompass the value of the property of proceeds of crime. 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 pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9;proceeds of crime' taken out of the country or any other property of equivalent value thereof. However, this Court is of the considered view that the definition can be divided into two broader categories namely tainted properties and untainted properties. The first part provides about the tainted properties derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence. Thereafter, the untainted properties are further divided into two parts; the first part deals with a situation where the property derived or obtained from 'proceeds of crime' is not traceable. In the aforesaid situation the competent authority is authorized to attach or confiscate any other property of accused, which is of the same value as that of the 'proceeds of crime'. The second 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 Cour....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(supra). Similar is the position in M/s. Himachal Amta Power Limited's case (supra). In this case, the attention of the Bench was not drawn to the second broader category of the definition. In Hemanshu Rajnikant Shah's case (supra) the Court relied upon Seema Garg's case (supra) and held that the properties acquired before the alleged crime and before the enforcement of the '2002 Act' cannot be attached. 3.9. On the other hand the judgments passed in Vijay Madanlal Chaudhary's case (supra), Axis Bank's case (supra) and Prakash Industries case (supra) completely answer the question in favour of ED. 3.10. The petitioner's counsel has also heavily relied upon Pavana Dibbur's case (supra). This Bench has carefully read the aforesaid judgment. The aforementioned case involved attachment of property 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....