TaxTMI 
TaxTMI 
2026 (9) TMI 198
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....leading to attachment of buildings on Plot No. 235/918 and Plot No. 807/919 in holding No. 227/51 in Mouza Tala Jaring, PS Junagarh, District Kalahandi Odisha valued at Rs. 12,81,31,028/-. These buildings comprise of Hospital, College, Ladies Hostel and Doctors Residential Quarters. 2. Ld. Counsel for the Appellants submitted that in the year 2003, the Government of Orissa invited participants for running Medical Colleges in backward regions of the State on Public Private Partnership (PPP Mode) basis. Accordingly, the Appellant Selvam Educational Trust headed by its Founder Chairman Late Shri S. Arul Raja participated in the bid for establishment of a Medical College in Kalahandi District, which is the most backward, remote and tribal area in the State of Orissa. Accordingly, on 30.01.2004, an agreement was entered into between the Western Odisha Development Council (hereinafter referred to as WODC) and the Appellant trust herein headed by its Founder Chairman Late Shri S. A. Raja by way of a Memorandum of Understanding (MOU). In the said MOU it was agreed that the WODC will provide Rs. 10 Crores as financial assistance to the Appellant Selvam Educational Trust in a phased manne....
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....n by the Hon'ble Supreme Court. But the State Government tried to convert these 15% NRI seats into Government seats. The Officials of the State Government even went to the extent of trying to arrest the Appellant Shri A. Johnsel Raja who is the Chairman of the College. Therefore, the College was compelled to file a Writ Petition (C) No. 883 of 2013 before the Hon'ble Supreme Court seeking declaration about the entitlement of the Colleges to fill up the unfilled 15% NRI quota seats. Ld. Counsel for the Appellants further submitted that the Hon'ble Supreme Court was pleased to issue an order of status quo and permitted the College to fill up the 15% NRI seats for the year 2013-14 and the same procedure was extended for the next academic year also. Ld. Counsel submitted that throughout the litigation and even before it, neither the Government of Orissa nor the WODC extended any support to the Appellants, instead they opposed the case of the College tooth and nail. According to the Ld. Counsel this was in sum and substance total breach of the MoU. Even though it was promised in the MOU dated 30.01.2004 that the Selvam Educational Trust could take any loan facility from any ....
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....hows that the academic and other standards of the College were very high and better than any other College in Orissa. It is pertinent to note that the Government did not send any students under WODC quota for the year 2013-14 and 2014-15. The WODC also did not take any steps to get the 10% quota reserved. This was the attitude of WODC throughout and the WODC never tried to fulfill its obligation as per the MoU signed with the Appellants. 6. Ld. Counsel for the Appellants submitted that the Appellant Trust participated in the Bid and started the College in the most backward area in Orissa in Kalahandi District with an expectation that the State Government as well as the Western Odisha Development Council would give due support as promised and as mentioned in the MoU between the parties in the year 2004. But from the beginning itself the State Government showed its hostile attitude by not allowing the Respondent College even to fill the 15% unfilled NRI quota seats even though the same was provided for by the Hon'ble Supreme Court in its various decisions. The Western Odisha Development Council and the State Government did not take any action regarding the representation submi....
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.... on 18.12.2017 for the aforesaid offences. The allegation of the prosecuting agency was that the Appellant Trust represented by Late Shri S. Arul Raja entered into a Memorandum of Understanding (MOU) on 30.01.2004 with the Western Odisha Development Council (WODC) for the establishment of a Medical College and Hospital at Jharing, Kalahandi District. According to the prosecution, for establishment of the College the WODC provided Rs. 10 Crores and 25 acres of land in favour of the Trust free of cost through the District Collector, Kalahandi. According to the prosecution though the WODC fulfilled all the terms and conditions of the MoU, the Appellant failed to fulfil its obligation. It was further alleged that a show cause notice was issued by the Chief Executive Officer of WODC to the Appellants to comply with terms and conditions of MoU and the MCI guidelines to develop adequate infrastructure facilities, but no reply was given by the Appellants. It was also alleged that the Appellants failed to provide adequate infrastructure, appointment of teaching and non-teaching staffs and other facilities and the Appellant Shri A. Johnsel Raja adopted some fraudulent tactics to get permissi....
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.... Ld. Counsel for the Respondent submitted that the Charge Sheet No. 14 dated 18.12.2017 was filed by CBI in Case No. RC-22(A)/2014-BBS (RC0152014A0022) u/s 420 & 120B of IPC, 1860 and Section 7, 8 & 13(2) r/w 13(1) of Prevention of Corruption Act, 1988 against certain officials of MCI, Sri A. Johnsel Raja, Smt. Bala Johnsel, wife of Sri Johnsel Raja, Sri Sachidananda Khalko, the then principal of SRMCH and certain other private persons. The charge sheet alleges that though the SRMCH was lacking adequate faculty members, the same was fraudulently arranged for the purpose of inspection conducted by Medical Council of India (MCI) team on 11.06.2013 & 12.06.2013. The college also arranged 80 nurses from outside for such inspection. Further, the college arranged 250 healthy villagers with fraudulent intention to show them as patients for the purpose of MCI inspection. 30 beds were also arranged from an engineering college located at Bhawanipatna. All these were done to convince the Board of Governors of MCI about the bona fides of the Appellant. During the investigation, CBI invited the college faculty along with doctors of CGHS, Bhubaneswar to visit the college. It was found that the c....
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....nt documents and infrastructure as well as staff position MCI granted permission to run the college for the year 2013-14 and hundred medical students got admitted in the year. Similarly, during the inspection by the MCI team manipulation was done by Sri. A. Johnsel Raja to obtain permission from MCI to hold the second-year class. Shri A. Johnsel Raja, again followed the same tactics of fabricating /manufacturing the documents for inspection of MCI teams for 3rd year permission for the college. MCI team made filed visit on 11.02.2015 and 12.02.2015. The assessment report was considered by the executive committee of the council at its meeting held on 02.03.2015 and 41 no. of deficiencies were pointed out. It includes 100% deficiency in teaching faculty, shortage of resident doctors 100%, non-availability of Dean, no bed occupancy, non-functioning of Blood Bank, and other important facilities required for running of Medical College and Hospitals. This was communicated to Secretary, Govt of India, Ministry of Health & Family Welfare by Section officer of MCI. Ld. Counsel contended that it clearly suggests that the accused had manufactured/ fabricated the documents relating to various a....
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....eals. 10. We have considered the rival submissions and the material on record. The contention of the Appellants is that the establishment of Sardar Rajas Medical College was undertaken pursuant to a Public Private Partnership Scheme floated by the Government of Odisha for development of a medical institution in the backward district of Kalahandi. According to the Appellants, the difficulties faced by the institution were attributable to repeated breaches of the MoU by the State Government and the Western Odisha Development Council (WODC), including delayed allotment of land, failure to provide No Objection Certificate for availing institutional finance, non-cooperation in admission of students and continuous litigation initiated by various authorities. It is, therefore, contended that the failure of the project was the result of administrative and contractual disputes and not any criminal misconduct on the part of the Appellants. 11. We observe that the scope of proceedings under the PMLA is neither to adjudicate the rights and obligations arising under the MoU nor to determine whether the Government or WODC acted fairly in implementing the project. The predicate offence regi....
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....he amount aggregates to 128175000 gathered by SRMCH while committing the offences under Section 420 r/w 120-B of IPC. Thus, the amount of Rs. 128175000 is derived and obtained by the Defendants by commission of the criminal activities relating to the scheduled offences. The said property of Rs. 128175000 thus constitutes proceeds of crime. xxxxx The said proceeds of crime are not available in the form as they were acquired but are admittedly used for construction of building and developing of infrastructure for establishment of medical college. The said proceeds of crime are therefore utilized and exhausted into construction of the building and the infrastructure therein. The term proceeds of crime is defined to mean any property derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence or the value of any such property where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad. The properties provisionally attached under the order dt. 29.05.2020 are thus value of the proceeds of crime/value of the property derived and obtained ....
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....e offence of money laundering is not dependent upon the commercial success or failure of the underlying enterprise. The question about the occurrence of the offence of money laundering in contingent upon whether any property was directly or indirectly derived or obtained as a result of criminal activity relating to the scheduled offence. The evidence brought forth during the course of investigation has established the nexus between the occurrence of scheduled offences, generation of proceeds of crime and the activities thereafter make the properties so generated appear untainted. 15. The arguments by the Appellants that the grant of Rs. 10 Crores by WODC was utilized in construction of the hospital and the college are mere attempts to obliterate the nexus between the proceeds of crime and the scheduled offences. The investigation by the CBI attributes fraudulent acts of the Appellants to the mis-management of the institution, including fabrication of infrastructure for MCI inspection, use of temporary faculty and patients, manipulation of official records, illegal collection of fees from students and dishonest utilization of Government financial assistance. These allegations con....