Satish Kumar Vs Assistant Director Directorate Of Enforcement

FPA-PMLA-1364-1363/CHD/2016

1. This appeal has been filed under section 26 of the Prevention of Money Laundering Act, 2002 against the order dated 03.06.2016 passed by the Adjudicating Authority confirming the provisional attachment order.

2. Brief facts of the case:

Based on the complaint dated 04.06.2019 of Chief Vigilance Officer, Vijaya Bank, Bangalore, Economic Offences Unit 1, CBI, New Delhi registered an FIR on 08.06.2019 against Shri B. Sadashiv Rai, General Manager (Retd.) of Vijaya bank, Shri Y.D. Mishra, Assistant Manager (Retd.) and Shri Satish Kumar Gupta, proprietor of M/s Gold Auto industries. It was for the offence under section 420, 468 and 471 read with 120 B IPC and section 13 (2) and 13 (1) (d) of Prevention of Corruption Act, 1988. The investigating agency conducted the investigation and filed charge sheet before the Special Judge, CBI and PC Act, Dehradun.

In the investigation, it was revealed that during the year 2007-2008, appellant Satish Kumar Gupta entered into the conspiracy with Y.D. Mishra and Shivaji Sahai and thereby Shri Gupta applied for opening a bank account in Vijaya Bank in the name of M/s Golden Auto Industries. The appellant has submitted fake pan card for opening of the account. They submitted even RC (Residence Certificate) issued by Tehsildar, Ludhiana and based on the documents, Branch Manager of the Vijaya Bank opened the current bank account in the name of the Company. It is alleged to be without verifying the pan card and Residence Certificate. The introduction of Satish Kumar Gupta to open the bank account was by an unknown person.

After opening of the bank account, Satish Kumar Gupta submitted in an application on 10.03.2007 for sanction of credit facility of Rs. 1 crore to M/s Golden Auto Industries for purchase of machines from M/s R.D. Engineering Works. It was alleged that the fake quotation dated 25.11.2006 for purchase of machinery was submitted showing it to be from M/s R.D. Engineering Works, Ludhiana. The fake documents of plots at Ludhiana were also submitted to obtain the loan.

In the investigation, it was revealed that a deed dated 10.06.2004 was executed between one Amit Kumar and Satish Kumar Gupta (the appellant) in the presence of two witnesses. The witnesses however denied knowledge about the deal and even purchaser and seller. It was stated that signature may have been on the instructions of one property dealer, Swaroop Singh. In the similar manner, another deed was executed between Nirmal Singh and Satish Kumar Gupta. However, Nirmal Singh denied sale of the property vide sale deed dated 21.03.2005.

He even denied the signature on the photograph affixed on the deed. Allegation of impersonation was made. Even the witnesses had also denied the knowledge of the deed.

 In view of the above, the sale deed to show purchase of property by appellant Satish Kumar Gupta was required to be verified by the bank officials before sanction of the loan but the co-accused sanctioned the loan without verification of the documents and even the pan card and accordingly, appellant Satish Kumar Gupta remained successful to secure loan of 75 lakhs and L.C. Limit of 20 lakhs for M/s Golden Auto Industries vide sanction letter dated 27.06.2007. The Regional Officer, Vijaya Bank was otherwise to retire on 31.07.2007, thus, the period being less than three months, he was not having power to sanction the loan as per the guidelines of the Bank. The Regional Manager did not even consider Evaluation Report submitted by M/s National Engineering, the approved valuer of Vijaya Bank. It was even of a building in Khata number 237, 260 and other Khatas situated at Abadi Guru Gobind Singh Nagar, and the quotation for supply of machinery by M/s R.D. Engineering Works. The documents were not verified by the Bank Manager.

In the investigation, it came that the appellant Satish Kumar Gupta even opened a current account in the bank showing himself to be the proprietor of M/s R.D. Engineering Works. It was opened with HDFC Bank, Ludhiana using his own photograph and the pan card and deposited 3 DDs of Rs. 41 lakhs , Rs. 22 lakhs and Rs. 19 lakhs, showing it to be cost of the machinery. It was also found that money was transferred by the appellant Satish Kumar Gupta in the current account maintained with HDFC Bank, Ludhiana and thereupon siphoned the money. In the investigation, it was also found that despite the legal advice of panel Advocate Sh. Naam Chand Jain, necessary verification of the properties offered by the appellant for obtaining loan was not carried out and thereby huge money belonging to the bank was siphoned off.

The ECIR was thereupon recorded on 16.12.2009 for the offence under the Act of 2002. The statement of the Assistant Director was recorded on 21.09.2015. It was regarding use of pan card number 6101 F for taking loan from Central Bank of India and Vijaya Bank, Dehradun. The new pan card was taken through Ashish Gupta bearing number SG 7512 F and was found at the residence of appellant Sh. Satish Kumar Gupta. It is apart from another pan card number 1512 L which he got through CA Sandeep Singh. It was also found that appellant is involved in many cases of similar nature and FIRs have been registered against him. He is a habitual offender to secure the loan and for that he opened many factories and closed subsequently.

In order to find out the income of Smt. Sunita, the other appellant, a letter was sent to ITO to get her ITR. It was informed that no ITR under the pan card number 9402 N has been submitted. The Vijaya Bank also conducted a separate investigation and submitted the report.

3 In reference to the aforesaid, the properties in question were attached. The appellant submitted that properties attached by the respondents were not the proceeds of crime. It was also submitted that the appellant was the owner of a plot number 2233, Phase 2, Urban Estate, Dugri, Ludhiana. The deed was executed on 22.12.2005. It was for the sale consideration of 53.36 lacs and Satish Kumar Gupta handed over the physical possession of the plot to the purchasers.

The said consideration was received through cheque number 971355 for a sum of Rs. ten lacs and nine lakh was received through pay order dated 08.04.2015. The another amount of nine lacs was also received through Pay Order on the same date. The remaining amount was received through different pay orders on 08.04.2015. The total consideration was of Rs. 53.36 lacs. However, the appellants submitted that an agreement to sale with Jatinder Pal Singh and Gagandeep Singh of the said plot was executed for Rs. 2 .60 crore vide agreement dated 11.10.2014. The majority of the amount out of the agreement was received in cash leaving a che que of Rs. 43,36,000/-. It was however found that the registered documents of the plot was for consideration of Rs. 56,36,000/-. The story taken up by the appellant that whatever amount was incurred for purchase of plots thereupon was out of the sale proceeds of plot number 2233 and not out of the bank loan. The aforesaid was not found to be correct rather agreement to sale was unregistered while sale deed on consideration of Rs. 53.36 lacs was a registered document. The sanction of loan by the Regional Manager was in connivance and thereby without verification of Pan card and other documents. The loan was sanctioned and siphoned off by the appellant.

4. The appellant however submitted that he has been granted bail by the High Court and thereby no case is made out against him.

5. The learned counsel could not clarify as to whether grant of bail would amount to acquittal in the criminal case rather we find that the respondents have not pursued the matter and thereby the interim order has been extended from time to time and otherwise FIR or ECIR have not been quashed rather the money trail was sufficient to show how money was laundered by the appellant. According to the respondents, following facts were revealed in the investigation under the Act of 2002 and are quoted hereunder:-

4 (i) That Shri Satish Kumar Gupta the proprietor of M/s Golden Auto Industries took credit limit of Rs. 1.10 crore f rom Vijaya Bank, Dehradun and transferred the Term Loan Credit amount to his other firms’ accounts on the basis of fake documents and also utilized the remaining amount for his personal use.

(ii) That Shri Satish Kumar Gupta had no intention of paying the loan amount back to the Vijaya Bank.

(iii) That the unit namely M/s R. D. Engineering Works was created for bogus transfer of amount and diversion of funds either to his other firm M/s Golden Industry or withdrawal of the same for his personal use.

(iv) That the Proceeds of crime (POC) were transferred from one account to another account for the purpose of layering/laundering in an attempt to project it as untainted money.

(v) That the POC was used to pay off the loans/interest amount of various loans and to meet their persona l expenditures, etc., so as to integra te the POC with legal economy and also to project the same as untainted.

(vi) That Shri Satish Kumar Gupta and his family has laundered and utilised the POC in order to project it as untainted and hence, committed an offence of money laundering under section 3 of PMLA, 2002.

(vii) That Shri Sa tish Kumar Gupta is not having any major source of income. Similarly his family members also do not have any independent source of substantial income. Accordingly it stands to reason that the properties owned by Shri Satish Kumar Gupta in the name of his wife and himself are nothing but proceeds of crime.

5. Further, during the course of investigation conducted under PMLA, 2002, it revealed tha t Shri Satish Kumar Gupta is a habitual offender and has done similar frauds in past with various other banks. FIRs are filed against him for bank frauds committed in Sta te Bank of India, Bilaspur, H.P; State Bank of Patiala, Olinda Branch, Bilaspur, H.P.; Central bank of India, Roorkee, Uttarakhand with similar modus operandi (i.e. misusing the loan amount for purchasing of movable and immovable properties in Ludhiana).

6. During the course of investigation, it has been established that the following movable/immovable properties, as detailed below, represent the POC which was generated by Shri Satish Kumar Gupta and his family.

6. During the course of the argument, counsel for the appellant prayed for quashing of the order passed by the Adjudicating Authority and the provisional attachment order mainly in reference to the bail granted to appellant Satish Kumar Gupta. No other argument was raised, though subsequently, written arguments were submitted going beyond the oral arguments made before the Tribunal. In the written arguments also, reference to the interim order has been given and thereupon the main emphasis has been made regarding sale proceeds of plot number 2233 showing it to have been sold for a sum of Rs. 2.60 crore . The said plot was earlier purchased from Sh. Gurcharan Singh after obtaining loan from HDFC Bank and the amount was said to have been repaid. It was thereafter sold by the appellant in the year 2015 for consideration of Rs. 53.36 lacs under registered deed though the appellant tried to emphasize sale price to be Rs. 2.60 crores pursuant to agreement to sale of year 2014 going contrary to the registered document of year 2015. The plea taken by the appellant was not accepted going against the registered deed having reference to the sale price of Rs. 53.36 lacs. The appellant shown to have routed Rs. 2.60 crore for purchase of plots but failed to clear the contradiction in the amount entered in the deeds out of which registered deed was referring to the amount of Rs. 53.36 lacs only and executed in the year 2015. The another deed was only an agreement to sale and was an unregistered deed of year 2014 and therein also an amount of more than 2.15 crore said to have been received in cash. The said plea was not accepted and could not have been going against the registered sale deed. The appellant rather laundered the Bank loan for purchase of the plot and did not repaid the loan. The documents, which includes the pan card for purchase of machinery for M/s Golden Auto Industries were not verified and otherwise, it has come on record that appellant himself was the proprietor of M/s R.D. Engineering Works said to have given quotation for sale of machinery.

7 Thus, a case of money laundering and as a result proceeds of crime was found by the Adjudicating Authority and we don’t find any error in the order so as to cause interference therein. The appeal filed by the appellant accordingly fails and is dismissed.