TaxTMI 
TaxTMI 
2026 (9) TMI 419
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....been confirmed by the Adjudicating Authority: Sr. No. Description of Property Approx. Value of Property (Rs. In Crore) Owner 1. 34, Apsara Co-operative Housing Society Ltd., NCPA, Nariman Point, Mumbai-400021 29.50 Bliss Apartment (Mumbai) Pvt. Ltd. 2. Khurshedabad, S.K. Barodawala Marg, Cumbala Hill, Mumbai-400026 128.40 Imagine Estate Private Limited (a subsidiary of M/s RAB Enterprises (I) Pvt. Ltd.) 3. Unit No. 6, SESEN, 29, Napean Sea Road, Mumbai-400066 (under construction) 100 Imagine Estate Private Limited (a subsidiary of M/s RAB Enterprises (I) Pvt. Ltd.) 4. Unit No. 5, SESEN, 29, Napean Sea Road, Mumbai-400066 (under construction) 100 Imagine Estate Private Limited (a subsidiary of M/s RAB Enterprises (I) Pvt. Ltd.) 5. Unit No. 4, SESEN, 29, Napean Sea Road, Mumbai-400066 (under construction) 100 Imagine Estate Private Limited (a subsidiary of M/s RAB Enterprises (I) Pvt. Ltd.) Total Rs.457.90 Crore 2. A separate appeal has been preferred by M/s Bliss Apartment (Mumbai) Pvt. Ltd. for the property at item no. 1. Thus, this order would deal with othe....
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....apoor and M/s Morgan Credit Pvt. Ltd. of Mr. Rana Kapoor's daughters were having around 100% subsidiary companies under it and alleged to have been used to launder and siphon of the proceeds of crime. The properties of the appellants' companies were provisionally attached for "value thereof"/ "equivalent value" finding that those companies were subsidiaries of M/s RAB Enterprises India Pvt. Ltd. which was given as gift of Rs. 87 crores by the accused, Mr. Rana Kapoor. It was a company wholly controlled by Mr. Rana Kapoor, though using the name of his wife, Mrs. Bindu Kapoor. Accordingly, properties of the appellant companies were provisionally attached and has been confirmed by the Adjudicating Authority. Argument of the Ld. Counsel for the appellants: 6. The challenge to the impugned order has been made by the appellants raising several grounds which are as under: 6.1 Ld. Counsel submitted that the appellant companies have not been named in the FIR or ECIR and even in subsequent Prosecution Complaint filed by the ED after initial investigation pursuant to the ECIR recorded by them, yet the properties of the appellant companies have been provisionally attached. It is more ....
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....". The property for "equivalent value" or "value thereof" can be provisionally attached when the accused or the person received the proceeds of crime has diverted or siphoned the money and therefore not found available for the provisional attachment. 6.4 In the instant case, the allegation for receipt of kickback of Rs. 600 Crore was made against subsidiary company of M/s Morgan Credit Private Ltd. Mr. Rana Kapoor's daughters having 100% shareholding in the company though kickback was given as a loan to M/s DOIT Urban Ventures (India) Limited against sub-standard security. The appellant company had no connection either with M/s Morgan Credit Private Ltd or M/s DOIT Urban Ventures (India) Limited so as to even alleged laundering of proceeds of crime to the appellant companies. The respondent have provisionally attached the property of the appellant company on the ground that another company, M/s RAB Enterprises (I) Pvt. Ltd., controlled by Mr. Rana Kapoor's wife, Mrs. Bindu Kapoor had invested money out of the gift of Rs. 87 Crore given by Mr. Rana Kapoor. The respondent ignored the fact that even if the appellants are subsidiary company of M/s RAB Enterprises (India) Pvt. Ltd., ....
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....plaint and even order passed by the Adjudicating Authority does not disclose that the properties under provisional attachment were likely to be dealt with or to be transferred to frustrate the proceedings of confiscation. In fact, the provisional attachment could have been caused only after finding that the properties are involved in money laundering as per Section 5(1)(a) of the Act of 2002. In the instant case, the respondent have failed to show that the properties under provisional attachment are involved in money laundering so as to apply Section 5(1)(a) of the Act of 2002 for the provisional attachment. On the aforesaid ground also, the impugned order deserves to be set-aside. 6.9 The prayer was made to cause interference in the impugned order and allow the appeals. 7. Ld. Counsel for the appellants did not raise any other arguments than referred to above despite an opportunity of hearing, rather, called upon by the Tribunal to cause any other factual or legal issues. Ld. Counsel for the appellants submitted that let order be passed in reference to the arguments referred to above. However, it should be along with the order to be passed on the appeals preferred by the M/s....
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....rprisers (I) Pvt. Limited is concerned, there were 16 subsidiaries companies which include the appellant companies. It has not been disputed by the appellant, though, raised argument that the corporate entities have to be recognized with separate status and cannot be mixed merely for the reason it is subsidiary of one of the company said to have received the proceeds of crime. 12. Ld. Counsel for the respondent submitted that in fact there were 3 holding companies of the subsidiary companies, namely, M/s Morgan Credit India Pvt. Ltd., M/s Yes Capital Pvt. Ltd. and M/s RAB Enterprises (I) Pvt. Ltd.. These companies were fully owned by the three daughters of Mr. Rana Kapoor and by Mrs. Bindu Kapoor, wife of Mr. Rana Kapoor. The appellant companies were subsidiary of M/s RAB Enterprises India Pvt. Ltd. of which shareholding was with Mrs. Bindu Kapoor but in her statement under Section 50(2) of the Act of 2002, she had shown her ignorance about the company and its working. She was a housewife and thereby the companies were run and controlled by Mr. Rana Kapoor who misused his official position and extended illegal gains to himself through the family members including his wife, Mrs. ....
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.... of the Act of 2002 penetrates the corporate personality of a company and for the actual individual who is in the control of the organization.A person actually responsible for the activities of a company should not be permitted to take shield behind the corporate personalities. The case involves money laundering of 100 Crore of rupees, thus, the respondent have rightly invoked Section 70 of the Act of 2002 to lift the corporate veil. 15. Ld. Counsel for the respondent, further, submitted that the impugned order of provisional attachment was caused during the course of investigation finding that the properties under provisional attachment are 'proceeds of crime" as defined under section 2(1)(u) of the Act of 2002 which includes the property for "equivalent value" or "value thereof" and finding that though the properties were mortgaged with M/s Indiabulls but are likely to be dealt with or to be transferred to frustrate the proceedings of confiscation. Thus, after recording reasons to believe, the PAO was caused. 16. Ld. Counsel for the respondent further argued the other issues, which would be referred while dealing with the finding on each issue raised by Ld. Counsel for the ....
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.... an effort to provisionally attach the properties of the company received the kick-back, the properties of the appellant companies were erroneously attached. It is also when those properties were under mortgage much prior to the provisional attachment of the properties. 21. The provisions of the Section 5(1)(b) of the Act of 2002 could not have been invoked by the respondent because there was no apprehension of dealing with or transferring the property to frustrate the proceedings for confiscation. 22. Ld. Counsel for the appellants made a reference to the related appeals filed by M/s Indiabulls now pressed by J.C. Flowers for challenge to the same order and the properties under mortgage. The appellant companies accounts were declared Non-Performing Assets (NPAs) by M/s Indiabulls resulting in proceedings under the Insolvency and Bankruptcy Code (IBC), 2016 at the instance of Assets Reconstruction Company, J.C. Flowers assigned the loan. The National Company Law Tribunal (' NCLT') has already admitted the case, thus effective order for the properties would be passed now by the NCLT after matter is processed with the Committee of Creditors. The appellants, however, prayed for ....
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.... Credit Private Limited of three daughters of Mr. Rana Kapoor with 100% shareholding. In fact, the appellant companies have been taken to be the subsidiary of M/s RAB Enterprises (I) Pvt. Ltd. which was not having direct connection with M/s Morgan Credit Private Limited but a separate entity and the appellant companies have been alleged to be subsidiary of M/s RAB Enterprises (I) Pvt. Ltd. of Mrs. Bindu Kapoor as a Director and otherwise the affairs were indirectly controlled by Mr. Rana Kapoor. M/s RAB Enterprises (I) Pvt. Ltd., holding company, had not received any part of the kickback of Rs. 600 Crore from M/s DOIT Urban Ventures (India) Pvt. Ltd. and receipt of Rs. 87 Crore as a gift from Mr. Rana Kapoor was not from M/s DOIT Urban Ventures (India) Pvt. Ltd.. The respondent was, thus, expected to connect the properties with crime of laundering of proceeds for provisional attachment so as to fall within the definition of "proceeds of crime". For the aforesaid, the properties of "equivalent value" or "value thereof" could have been attached provided the proceeds out of the crime has been passed on or layered and when it is not found available even with the person / company to who....