TaxTMI 
TaxTMI 
2026 (10) TMI 125
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.... Priyanka Modi/Lodha 3. Property situated at 24, Sadar Bazar, Ward No. 3, Mount Abu, Sirohi Priyanka Modi/Lodha 4. FDR of Rs. 3.5 Crore M/s Riddhi Siddhi Associates 5. Property at 14, Vidya Vihar Colony, Usmanpura, Ashram Road, Ahmedabad Meenaxi Modi 6. Rs. 15,00,000/- towards share money Meenaxi Modi 7. FDR of Rs. 5 Crores Meenaxi Modi 2. As per the facts of the case, an FIR No. 24/2018 dated 28.12.2018 was registered by Special Operation Group, Rajasthan Police, Jaipur, for commission of offences under Section 120-B of the IPC read with Section 420, 406, 409, 467, 468, 471 & 477-A of IPC and substantive offences thereunder, against Sh. Mukesh Modi, Founder of Adarsh Credit Cooperative Society, and Sh. Rahul Modi, the Managing Director of said Society. Based on the above FIR, case was taken up for investigation under the provisions of PMLA, 2002, by the Directorate of Enforcement after recording ECIR no. JP/01/2019 dated 22.03.2019. Consequent upon the investigation conducted by the SOG, of Rajasthan police in the said FIR first chargesheet was filed against 14 accused persons dated 20.07.2019, which revealed diversion of about R....
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....deed of the mortgage, property along with entire chain of title were also deposited and is presently in custody of Appellant Bank. He contended that even the Enforcement Directorate has not raised any apprehension with regard to bonafide of the Appellant bank. Neither Appellant Bank has been arrayed as a group entity of Adarsh Credit Cooperative Society, nor there is any allegation of malpractice on part of Appellant Bank and that the Appellant was in no manner connected with commission of crime by the accused. There is no allegation by the Complainant with regard to any nexus between the accused or crime and the Appellant Bank. The Appellant Bank is a bona fide creditor and had no means to find out if the properties sought to be mortgaged were acquired by the borrower from any proceeds of crime or not. He submitted that the Appellant Bank registered under MSCS 2002 and its members are from public at large within area of operation as per Banking Regulation Act, 1949. The Appellant Bank had taken all precautions before disbursing the loan and the same was done in utmost bonafide. The Appellant Bank could have easily recovered its due amount and can do the same even today from ....
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....eps were taken to attach assets/ bank accounts of M/s. Amilnstones Pvt. Ltd. or Lala Ram. In the event, if a thorough investigation of M/s. Amilnstones Pvt. Ltd. was done by Enforcement Directorate, then the proceeds of crime could have been easily recovered/attached. He argued that due to incomplete investigation done by the ED, the money of Appellant bank is being wrongly attached and thereby wrongly affected the interest of the Appellant Bank and gave undue advantage to the accused persons. He stressed that the fact regarding mortgage and pledge of the properties (mentioned in Para No. 1) were duly intimated by the Appellant Bank to the Enforcement Directorate vide its reply dated 31.1.2020 before the Adjudicating Authority, but the Enforcement Directorate in its Rejoinder stated that further investigation is underway. However, till date no further action in this regard to trace out the actual trail of proceeds of crime. He argued that the Enforcement Directorate should be directed to do further investigation for tracing out the proceeds of crime and thereby attach the siphoned loan amount taken by M/s. Amilnstones Pvt. Ltd. He pointed out that as per "The Enforcement of Secu....
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....l Government, State Government or Local Authority. This section introduced in the Central Act is with "notwithstanding" clause and has come into force from 01.09.2016. Further it was also held that the la having now come into force, naturally it would govern he rights of the parties in respect of even a lis pending." He argued that the Hon'ble Madras High Court judgment in the case of Dr. V. M Ganesan v. The Joint Director, Directorate of Enforcement. MANU/TN/2475/2014" has explained the grievances faced by the financial institutions while holding that: "For instance, if LIC Housing Finance Limited, which has advanced money to the Petitioner in the first Writ Petition and which consequently has a right over the property, is able to satisfy the Adjudicating Authority that the money advanced by them for the purchase of the property cannot be taken to be the proceeds of crime, then, the Adjudicating Authority is obliged to record a finding to that effect and to allow the provisional order of attachment to lapse. Otherwise, a Financial Institution will be seriously prejudiced. I do not think that the Directorate of Enforcement or the Adjudicating Authority would expect ever....
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.... RIICO against Respondent No. 37,95,76,329.00 (Rs. 37.96 Crores). The demand of Enforcement Directorate against said respondent is Rs. 7.37 Crores. 26. It is also a matter of fact that another property situated at Parth City, Phase I, Kalwar Road, Jaipur being Group Housing Plot measuring 11502 sq yards has been mortgaged with the Appellant to the extent of Rs 10.25 Crores by the ED whereas the Circle Rate / DLC rate of the said property is Rs. 15.72 Crores. 27. It is stated on behalf of appellant that the attachment may therefore be vacated over the property situated at A-5, Airport Enclave, Airport Plaza Extension, Tonk Road, Jaipur admeasuring 7276.40 sq mtrs and RIICO may be permitted to auction/ sell this property to realise its due amount in aforesaid terms as the alleged proceed of crime amount is secured by attaching the second property. 28. The Appellant is a Government Company and attachment of these properties would deprive the Appellant from recovering the due amount, which in turn would be a loss of public money. In the appeal filed by Gangwal Real Estate LLP, he said party through its counsel has made the statement to deposit the entire alle....
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....st prior to the order of attachment under PMLA, the directions of such attachment under PMLA shall be valid and operative subject to satisfaction of the charge or encumbrance of such third party and restricted to such part of the value of the property as is in excess of the claim of the said third party. (xvi) In the situations covered by the preceding two subparagraphs, the bonafide third party claimant shall be accountable to the enforcement authorities for the excess" value of the property subjected to PMLA attachment." Therefore, in view of the default on the part of Respondent No. 84, 96, 97 & 99 to repay the loan amount, the Appellant has every right to enforce security for recovery of the Loan Facility granted by the Appellant bank to the Respondent No. 84, 96, 97 & 99. Prayer is accordingly made to allow the present Appeal and thereby permit the Appellant Bank to auction the said property and Appellant Bank undertakes to deposit the excess amount, if any, with ED by way of FDR for disposal as per law. 4. On the other hand, Ld. Counsel for Respondent ED pointed out that the mortgagors Virendra Modi & Daksha Kumari Jain along with the main accused, after obt....
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....ourt under PMLA once the Prosecution Complaint is filed under PMLA. He stressed that the RBI guidelines, as quoted in this para relates to loan taken against own FDR, NSC, KVP and LIC polices, whereas in this case third party FDRs were pledged for loan. Further, it has already been explained that in case of loan taken by Lala Ram, no repayment was ever made and the FDR was found created out of funds of ACCSL. Similarly, in case of Riddhi Siddhi Associates, the loan was against third party FDRs. As explained in above paras, it was found that initially M/s Amilnstone Pvt. Ltd., Jaipur applied for loan/ OD limit against third party deposit on 12.01.2017 from the bank for Rs. 4.75 Crores for which FDRs of Ms. Garima Modi (Daughter of master mind of this scam Mr. Mukesh Modi) amounting to Rs. 5 crore (Page 515-526 of the documents) was pledged and subsequently it was increased to Rs. 8.07 crores against FDRs of Rs. 8.50 crores by adding Rs.3.50 Crores FDRs of M/s Riddhi Siddhi Associates. It has been found during investigation that both Garima Modi and M/s Riddhi Siddhi Associates were associated with Mukesh Modi and as such the link of them with this borrower M/s Amilnstone Pvt. Ltd....
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....r thoughtful consideration to the same. The RBI guidelines, as contested by the appellant bank relates to loan taken against own FDR, NSC, KVP and LIC polices, whereas in this case third party FDRs were pledged for loan. Further, it has already been explained that in case of loan taken by Lala Ram, no repayment was ever made and the FDR was found created out of funds of ACCSL. Similarly, in case of Riddhi Siddhi Associates, the loan was against third party FDRs. Thus, the RBI guidelines won't be applicable in this case. Further, we are of the considered view that in absence of direct proceeds of crime, any property in possession of the accused persons, their relatives, associates & employees can be attached as value thereof, seeing their role for helping in layering/siphoning of the proceeds of crime. However, in cases of mortgaged properties, a cautious view is advisable to be taken for the bank whose mortgaged property is attached, provided that the bank has no role to play in the crime and that the bank has taken all the necessary steps and due diligence before granting the loan and also, for recovery of the loan amount once its declared NPA or the EMIs are broken. In the presen....