TaxTMI 
TaxTMI 
2026 (9) TMI 475
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....ndering Act, 2002 (in short "the Act of 2002"), a challenge has been made to the order dated 08.04.2021 passed by the Adjudicating Authority confirming the Provisional Attachment Order ('PAO') dated 09.07.2020. Vide PAO, the following properties were provisionally attached: Sr. No. Description of Property Approx. Value of Property (Rs. In Crore) Owner 1. -- -- -- 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. The properties referred to above were owned by the comp....
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....poor 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 subsidiary of M/s RAB Enterprises India Pvt. Ltd. which had received gift of Rs. 87 Crore from 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 have been confirmed by the Adjudicating Authority. 5. The appellants are the financial institutions which advanced the loan to the companies whose properties were provisionally attached, though, were mortgaged much prior to provisional attachment. It was with Indiabulls Housing & Finance Ltd. & Ors. and Indiabulls Commercial Credit Ltd. & Anr.. It subsequently assigned the loans to the Assets Reconstruction Company, J.C. Flowers, which has initiated the proceedings before the National Tribunal Company Law ('NCLT') by invoking Section 7 of the....
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.... properties for securing the loans availed by the respondent nos. 13 to 16 and their sister concerns. The mortgaged deeds to secure the amount was executed in favour of the Beacon Trusteeship Ltd., creating a first-ranking equitable mortgage over the attached properties and therefore first charge remains with the appellant company. The fact, further, reveals that charge in the name of IDBI Trusteeship Services over the attached properties was registered with the CERSAI constituted under the SARFAESI Act, 2002. Despite mortgage of the property with the appellants much prior to the provisional attachment, the appellants were not provided opportunity of hearing by the Adjudicating Authority. The appellants had to file an application for impleadment when in one of the case, a notice was caused for taking possession of the property, though, much prior to the aforesaid, appellant invoked the provision of the Arbitration Clause of Loan Agreement and even award was passed in their favour. 6.5 The respondent failed to record the reasons to believe that if the property is not provisionally attached, it is likely to be dealt with or would be transferred to frustrate the proceedings of conf....
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....tained illegally gratification for extending concessions, relaxations and waivers in the existing credit facilities to Avantha Group of companies and for advancing new/additional loans to them. The criminal conspiracy was entered into by Shri Rana Kapoor along with his wife, Smt. Bindu Kapoor, Director of M/s Bliss Abode Private Ltd. ('BAPL') and Shri Gautam Thapar, promoter of AG Companies for illegal gratification. 7.2 The investigation revealed that M/s Avantha Holding Ltd. had obtained credit facilities from ICICI Bank Ltd. and Development Credit Bank (DCB) against collateral security of the immovable property at 40, Amrita Shergil Marg, New Delhi. In the loan books of ICICI bank, the property was valued at Rs. 550 Crore and the value of the property has been taken to be insured which would be elaborated subsequently. It was found that ARL is engaged in the business of renting out owned commercial and residential real estate space to its other entities and to purchase the property it had obtained loan and credit facilities. The principal outstanding loan was of Rs. 350 Crore to ICICI and Rs. 30 Crore to DCB in March, 2016 against charge of above property at 40, Amrita Shergi....
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.... utilized to repay the outstanding loans of ICICI bank and DCB taken by AHL. After above repayment, charge of above property at 40, Amrita Shergill Marg, New Delhi was created in favour of YBL against the said loan of Rs. 400 Crore to ARL. The valuation of the Property at the time of sanction i.e. March, 2016 was at Rs. 550 Crores (as per Valuation Report with ICICI Bank). Further, as per YBL sanction Credit Appraisal Memorandum (CAM), the estimated value of the property was shown to be of Rs. 500 Crore. Shri Rana Kapoor, as MD and CEO of YBL was head of the Management Credit Committee (MCC) of the bank, which approved the loan of Rs. 400 Crore to ARL as well as release of property against repayment of loan. 7.7 For unexplained reasons, the amount of principal loan repayment for the first one year was kept at only Rs. 5 lakh per month as per there payment schedule included in the CAM. This was almost 100 times lower than the lease rental of Rs. 5 Crore (approx.) per month to be received by ARL from BGPPL as per the lease rental agreement. A lower sum of Rs. 5 lakh per month appears to have been deliberately fixed for repayment for a period of one year to facilitate account remai....
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....remaining amount envisaged from the sale proceeds of the said property. 7.11 In continuance to the said conspiracy, on August 29, 2017, the purchase offer of Inter Globe was withdrawn for unexplained reasons and immediately thereafter on August 31, 2017, ARL received an offer of buying above property from M/s Bliss Abode Pvt. Ltd., at a price of Rs. 378 Crore. Smt. Bindu Kapoor, wife of Shri Rana Kapoor, is one of the directors of above company. MCC headed by Shri Rana Kapoor, MD and CEO of YBL readily agreed to the said offer of M/s Bliss Abode Pvt. Ltd. and issued. NOC to ARL for its sale on September 2017. The property was purchased by BAPL in September 2017 after paying an amount of Rs. 378 Crore to ARL. 7.12 The criminal conspiracy amongst above players becomes further evident from the fact that though the offer letter for purchase of above property by M/s Bliss Abode Pvt. Ltd. was made on August 31, 2017 and the property was purchased by it in September 2017, M/s Bliss Abode Pvt. Ltd had already obtained a loan of Rs. 90 Crore from M/s IndiaBulls Housing Finance Ltd. (IBHFL) vide loan agreement dated July 13, 2017 against charge of property at 40, Amrita Shergill Marg, ....
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....s collateral. These loan agreements are dated September 5, 2018. Hence a total loan of Rs. 685 Crore had been obtained by companies in which Shri Rana Kapoor was a director from IBHFL by placing above property as collateral. 7.16 YBL headed by Shri Rana Kapoor did not press for sale of any other property of Avantha group companies in its charge as collateral for the purpose of recovering outstanding loans even when other loans of AG companies became stressed and NPA. YBL at the instance of Shri Rana Kapoor rather extended further credits of Rs. 515 Crore to M/s Oyster Build well Pvt. Ltd. and of Rs. 650 Crore to M/s Solaris Chemtech Industries Ltd. after above property at 40, Amrita Shergill Marg had been purchased by M/s Bliss Abode Pvt. Ltd. in 2017. These loans are yet to be repaid to YBL and there is stated to be a total outstanding of Rs. 1900 Crore against various credit facilities extended by YBL to AG companies by January 2020. 8. The provisional attachment of the property was caused in reference to the facts given above and has been confirmed by the Adjudicating Authority. Arguments of the Ld. Counsel for the appellant: 9. Ld. Counsel for the appellants submitt....
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....rs has no connection with the commission of crime. The appeals preferred by the companies whose properties are under provisional attachment would be decided separately. However, prayer is made that if any relief is granted in the appeals preferred by the companies, it should be governed by the outcome of the proceedings before the NCLT. Arguments of the Ld. Counsel for the respondents companies: 12. Ld. Counsel for the private respondents opposed the prayer for release of properties in favour of the Assets Reconstruction Company, however, if the properties are released pursuant to the appeals preferred by them, then it can be subjected to the final outcome of the proceedings before the NCLT because an application under Section 7 of IBC has already been admitted. The Ld. Counsel for the private respondent did not raise any other argument. 13. The appeals were contested by the respondent No.1 on the facts as well as on the legal issue raised by the appellants. It was submitted that the factual issues pertaining to provisional attachment has to be dealt with in the appeals preferred by the companies whose properties have been provisionally attached and accordingly the appeals....
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....for the reason that the common legal ground was raised by the appellant for challenge to the impugned order. 17. At the outset, Ld. Counsel for the appellant made the reference of Section 5(1)(b) of the Act of 2002 which is quoted hereunder: 5. Attachment of property involved in money-laundering.- (1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- xx xx xx xx xx xx xx xx xx xx (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, xx xx xx xx xx xx xx xx xx xx 18. It was on the ground that provisional attachment of the properties can be caused by the respondent only when the property is involved in money laundering and the proceeds of crime out of it are likely to be concealed, transferred or dealt with in any manner which may result in frustrating the proceed....