AI Structured Summary
Not yet generated for this judgment
Judgment
S.No,"Name of Owner of
Property      Property",,Facility Secured,"Mortgage Deed
Executed","Fair
Market
Value
(INR)
(Approx.)","Year of
Purchase
1,"Unit    No.1,
Lease  Land &  Â
Building at Plot No -
61,  SEEPZ,
Parajapur, Kondivita, Marol,
Andheri (EAST),
Mumbai",GGL,"GECLÂ Â Â Â Â Â Â Â Â Â
WC
Facility extended    vide
Third Supplemental Working
Capital Consortium Agreement
dated June 29,
2011","Deed        Â
of Mortgage cum Â
Charge cum Guarantee
dated 29.06.2011",29.75 Cr.,"04th
February,
2010
2,"Flat No 33,
5th    Floor,
Sukhshanti building  No
2,          Â
19
Peddar road, Cumbalia Hill,
Mumbai-26","Guniyal
Choksi","GECL WC
Facility extended    vide
Third Supplemental Working
Capital Consortium Agreement
dated June 29,
2011","Deed        Â
of Mortgage cum Â
Charge cum Guarantee
dated 29.06.2011",4.03 Cr.,"01st
January,
1970
4,"Unit  No  II, on Â
Plot  16
(part),    17,
28,         29
MIDC,
Andheri East, Mumbai",GGL,"GGLÂ Â Â Â Â Â Â Â Â Â Â Â
WC
Facility extended    vide
Supplemental Working Capital
Consortium Agreement dated Â
July  6,
2012Â Â Â Â Â Â Â Â Â Â and
Supplemental Working Capital
Consortium Agreement dated
December 26, 2017","Indenture  of Mortgage
dated 17.04.2015
and Deed of Mortgage
dated 26.12.2017",68.28 Cr.,"23rd
September
, 2013
INE34
6H010
14","Gitanjali
Gems Ltd.
EQ",22575053,"1.Â
GGLÂ Â Â Â Â Â Â Â Â
WC Facility extendedÂ
vide Master   Joint
Lenders Forum Agreement
dated 06.08.2014
2. ECB   Facility
extended vide Facility
Agreement dated
10.09.2011 and
Amendatory Facility
Agreement dated
17.10.2011","1. Pledge
Agreement dated
10.10.2014
and Pledge
Agreement dated
16.02.2015
2. Pledge
Agreement for
ECBÂ Â Â Facility
dated 14.11.2011",9.36 Cr.,
INE34
6H010
14","Gitanjali
Gems EQ",1343000,"1.Â
GGLÂ Â Â Â Â Â Â Â Â
WC Facility extendedÂ
vide Master   Joint
Lenders Forum Agreement
dated 06.08.2014
2. ECB   Facility
extended vide Facility
Agreement dated
10.09.2011 and
Amendatory Facility
Agreement dated
17.10.2011","1. Pledge
Agreement dated
10.10.2014
and     Â
Pledge Agreement
dated 16.02.2015
2. Pledge
Agreement for
ECBÂ Â Â Facility
dated 14.11.2011",.55 Cr.,
INE34
6H010
14","Gitanjali
Gems Ltd.
EQ",1276100,"1.Â
GGLÂ Â Â Â Â Â Â Â Â
WC Facility extendedÂ
vide Master   Joint
Lenders Forum Agreement
dated 06.08.2014
2. ECB   Facility
extended vide Facility
Agreement dated
10.09.2011","1. Pledge
Agreement dated
10.10.2014,
Pledge Agreement
dated 16.02.2015
2. Pledge
Agreement for
ECBÂ Â Â Facility
dated 14.11.2011",.52 Cr.,
3,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Supplemental
Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
yECB Facility date
17.10.2011.","1,09,103/-
d",,
5,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extendedvide Facility
Agreement dated
10.09.2011.","y1 . Supplemental
Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
yECB Facility date
17.10.2011.","13,91,757/-
d",,
7,"GBL (now known as
Nakshatr a World
Limited /NWL)","N WL WC Facility
extended Vide
Supplemental
Amendatory Working
Capital Consortium
Agreement dated
29.09.2014 and Third
Supplemental
Working Capital
Consortium
Agreement dated
18.04.2012","D e e d of
Hypothecation dated
29.09.2014 and Joint
Deed of
Hypothecation dated
18.04.2012","8,54,703/-",,
8,GECL,"GECL WC Facility
extended vide
Supplemental and
Amendatory Working
Capital Consortium
Agreement dated
30.10.2014 and Third
Supplemental
Working Capital
Consortium
Agreement dated
29.06.2011","D e e d of
Hypothecation dated
30.10.2014 and Deed
of mortgage cum
charge cum
guarantee dated
29.06.2011.","35,825/-",,
9,GECL,"GECL WC Facility
extended vide
Supplemental and
Amendatory Working
Capital Consortium
Agreement dated
30.10.2014 and Third
Supplemental
Working Capital
Consortium
Agreement dated
29.06.2011","D e e d of
Hypothecation dated
30.10.2014 and Deed
of mortgage cum
charge cum
guarantee dated
29.06.2011",107/-,,
10,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","1,19,943/-
d",,
15,GECL,"GECL WC Facility
extended vide
Supplemental and
Amendatory Working
Capital Consortium
Agreement dated
30.10.2014 and Third
Supplemental
Working Capital
Consortium
Agreement dated
29.06.2011","D e e d of
Hypothecation dated
30.10.2014 and Deed
of Mortgage cum
charge cum
guarantee dated
29.06.2011.","2,80,638/-",,
16,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extendedvide Facility
Agreement dated
10.09.2011.","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","51,705/-
d",,
18,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012.
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","43,726/-
d",,
21,GECL,"GECL WC Facility
extended vide
Supplemental and
Amendatory Working
Capital Consortium
Agreement dated
October 30, 2014 and
Third Supplementa
Wor king Capital
Consortium
Agreement dated
June 29, 2011","D e e d of
Hypothecation dated
30.10.2014 and Deed
of Mortgage cum
charge cum
guarantee dated 29-
06-2011.
l","44,310/-",,
25,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012.
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","4,63,242/-
d",,
27,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","12,58,957/-
d",,
28,NWL,"N W LW C Facility
extended Vide
Supplemental
Amendatory Working
Capital Consortium
Agreement dated
29.09.2014 and Third
Supplemental
Working Capital
Consortium
Agreement dated
18.04.2012","D e e d of
Hypothecation dated
29.09.2014 and Joint
Deed of
Hypothecation dated
18.04.2012","6,916/-",,
29,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011.","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","66/-
d",,
30,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","2,33,594/-
d",,
31,GECL,"GECL WC Facility
extended vide
Supplemental and
Amendatory Working
Capital Consortium
Agreement dated
30.10.2014 and Third
Supplemental
Working Capital
Consortium
Agreement dated
29.06.2011","D e e d of
Hypothecation dated
30.10.2014 and Deed
of Mortgage cum
charge cum
guarantee dated
29.06.2011.","8,46,222/-",,
32,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012.
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","6,528/-
d",,
34,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","1,36,045/-
d",,
35,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012.
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","24,834/-
d",,
36,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011.","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","29,63,893/-
d",,
37,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","1,64,817/-
d",,
38,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","1,80,836/-
d",,
39,NWL,"N W LW C Facility
extended Vide
Supplemental
Amendatory Working
Capital Consortium
Agreement dated
29.09.2014 and Third
Supplemental
Working Capital
Consortium
Agreement dated
18.04.2012","D e e d of
Hypothecation dated
29.09.2014 and Joint
Deed of
Hypothecation dated
18.04.2012","74,769/-",,
40,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","3,51,412/-
d",,
41,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","1,800/-
d",,
42,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","10/-
d",,
43,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","63,50,956/-
d",,
44,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","9,242/-
d",,
45,GECL,"G E C L WCFacility
extended vide
Supplemental and
Amendatory Working
Capital Consortium
Agreement dated
30.10.2014 and Third
Supplemental
Working Capital
Consortium
Agreement dated
29.09.2011","D e e d of
Hypothecation dated
30.10.2014 and Deed
of Mortgage cum
charge cum
guarantee dated
29.09.2011.","40,658/-",,
47,NWL,"N W LW C Facility
extended Vide
Supplemental
Amendatory Working
Capital Consortium
Agreement dated
29.09.2014 and Third
Supplemental
Working Capital
Consortium
Agreement dated
18.04.2012","D e e d of
Hypothecation dated
29.09.2014 and Joint
Deed of
Hypothecation dated
18.04.2012.","2,75,088/-",,
54,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012.
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","3,28,87,831/-
d",,
60,GGL,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011","y1 . Deed of
Hypothecation dated
19.08.2016 and Deed
of Mortgage cum
charge cum
guarantee dated
06.07.2012.
2 . Deed of
Hypothecation for
ECB Facility date
y17.10.2011.","15,089/-
d",,
13,
17,
20,
23,
24,
53,
57,
58,
59",MehulCh oksi,"1. GGL WC Facilit
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016 and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012
2 . ECB Facilit
extended vide Facility
Agreement dated
10.09.2011 3.
N W LW C Facility
extended Vide
Supplemental
Amendatory Working
Capital Consortium
Agreement dated
29.09.2014 and Third
Supplemental
Working Capital
Consortium
Agreement dated
18.04.2012","yPersonal
guarantee(s)
1 . Deed of
Guarantee dated
29.09.2014.
2 . Deed of
Guarantee dated
27.09.2011.
y3 . Agreement of
Guarantee dated
30.12.2014","6,63,226/-
9,143/-
65,526/-
97,57,393/-
6,201/-
81,554/-
13,199/-
1,615/-
 5,676/-",,
14,
51","GitanjaliI nfratech
Limited",ECB Facility,"Deed of Corporate
Guarantee dated
27.09.2011.","1,91,910/-
17,68,109/-",,
6,
26,
55,
56",Gilli India Limited,"G G L WC Facility
extended by ICIC
Bank vide facility
agreement dated
18.04.2012.","D e e d of
IHypothecation dated
24.10.2016.","13,63,608/-
4,609/-
72,656/-
95,020/-",,
Sr.
No.","Address of
Searched
Premises","Owner
of
Stock",Facility Secured,"Security Deed
Executed","Value as per
Govt.
Approved
Valuer",
1,"Gili
Showroom,
Viviana Mall,
Thane West,
Maharashtra","Gili
India
Limited","GGLÂ Â Â Â Â Â WCÂ Â Â Â Â Â Facility
extended                Â
Vide Supplementary   Facility
Agreement            dated
19.08.2016.","Deed  of Â
Hypothecation
executed  by Â
Gili  India
Limited   in  Â
favour   of
ICICIÂ Â Â Â
Bank    Limited
dated 24.10.2016.","1,11,57,884/-
(1.11 cr.)",
2,"Gili
Showroom,
R- City Mall,
Ghatkopar
West,
Mumbai,
Maharashtra","Gili
India
Limited","GGLÂ Â Â Â Â Â WCÂ Â Â Â Â Â Facility
extended                Â
Vide Supplementary   Facility
Agreement            dated
19.08.2016.","Deed  of Â
Hypothecation
executed  by Â
Gili  India
Limited   in  Â
favour   of
ICICIÂ Â Â Â
Bank    Limited
dated 24.10.2016.","81,97,155/-
(.82 cr.)",
3,"Gitanjali
Gems
Limited,
Ranga Reddy
District,
Telangana,
Andhra
Pradesh","Gitan-
jali
Gems
Limited","1. GGL WC Facility
extended Vide
Working Capital
Facility Agreement
dated
19.08.2016and
Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012.
ECB Facility
extended vide
Facility Agreement
dated 10.09.2011","1. Deed of
Hypothecation dated
19.08.2016 and
Deed of Mortgage
cum charge cum
guarantee dated
06.07.2012.
Deed of
Hypothecation for
ECB Facility dated
17.10.2011.","103,06,81,223
(103 cr.)",
4,"Gitanjali
Gems Ltd,
Siapura
Industrial
Estate, Jaipur","Gitan-
jali
Gems
Limited","1. GGL WC Facility
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016
and Supplemental
Working Capital
Consortium
Agreement dated
06.07.2012.
ECB Facility
extended vide
Facility Agreement
dated 10.10.2011.","1. Deed of
Hypothecation dated
19.08.2016 and
Deed of Mortgage
cum charge cum
guarantee dated
06.07.2012.
Deed of
Hypothecation for
ECB Facility dated
17.10.2011.","2,64,28,596/-
(2.64 cr.)",
6,"Shoppers
Stop, New
Delhi","Gitanjali
Gems
Limited","1. GGL WC Facility
extended Vide
Working Capital
Facility Agreement
dated 19.08.2016
and Supplemental
Working Capital
Consortium
Agreement dated 06.07.2012.
ECB Facility
extended vide
Facility Agreement
dated 10.09.2011.","1. Deed of
Hypothecation dated
19.08.2016 and
Deed of Mortgage
cum charge cum
guarantee dated
06.07.2012.
Deed of
Hypothecation for
ECB Facility dated
17.10.2011.","61,97,985/-
(.62 cr.)",
7,"M/s B
SarkarJohury,
Kollkata","Gili
India
Limited","GGL WC Facility extended Vide Supplementary
Facility Agreement dated 19.08.2016","Deed of Hypothecation
executed by Gili India
Limited in favour of
ICICI Bank Limited
dated 24.10.2016.","2,86,00,000/-
(2.86 cr.)",
9,"Office of the
Custodian of
Bharat
Diamond
Bource,
BandraKurla
Complex,
Bandra East,
Mumbai","Gitanjali
Gems
Limited","1. GGL WC Facility extended Vide Working Capital
Facility Agreement dated 19.08.2016and
Supplemental Working Capital Consortium
Agreement dated 06.07.2012
ECB Facility extended vide Facility Agreement
dated 10.09.2011","1. Deed of Hypothecation
dated 19.08.2016 and
Deed of Mortgage cum
charge cum guarantee
dated 06.07.2012.
Deed of Hypothecation
for ECB Facility dated
17.10.2011.","85,00,00,000/-
(85 cr.)",
10,"Office of the
Custodian of
Bharat
Diamond
Bource,
BandraKurla
Complex,
Bandra East,
Mumbai","Gitanjali
Gems
Limited","1. GGL WC Facility extended Vide Working Capital
Facility Agreement dated 19.08.2016 and
Supplemental Working Capital Consortium
Agreement dated 06.07.2012
ECB Facility extended vide Facility Agreement
dated 10.09.2011","1. Deed of Hypothecation
dated 19.08.2016 and
Deed of Mortgage cum
charge cum guarantee
dated 06.07.2012.
Deed of Hypothecation
for ECB Facility dated
17.10.2011.","5,10,00,000/-
(5.10 cr.)",
Vehicles,,,,,,
S.
No.","Make       Â
& Model",Owner,"Facility
Secured","Personal Guarantee
Executed","Fair   Â
Market
Value (In
INR)",
1.,BMW BMWX118l,MehulChoksi,"Supplemental
Working  Â
Capital
Consortium
Agreement Â
dated
29.09.2014","Deed        Â
of Guarantee dated
29.09.2014","14,00,000/-",
2.,Toyota Innova,,,,"15,00,000/-",
The Appellant gave a description of the Assets, which included the Properties (subsequently attached by the Respondent), which had been secured in",,,,,,
favour of the Appellant, in the annexures to these Notices.",,,,,,
The Appellant and the other Consortium Lenders have filed Original Applications before the Debt Recovery Tribunal (""DRT""), Mumbai being OA No.",,,,,,
408/2018, OA No. 520/2018 & OA No. 540/2018 on 05.07.2018, 18.08.2018 & 27.08.2018 U/s 19 of the Recovery of Debts Due to Banks and Financial",,,,,,
Institutions Act, 1993 (""RDDBFI"") seeking recovery of debts advanced under the GGL WC and ECB and NWL WC Facilities respectively.",,,,,,
The Appellant has also filed a Corporate Insolvency Resolution Process (""CIRP"") Application against GGL & NWL U/s 7 of the Insolvency &",,,,,,
Bankruptcy Code, 2016 (“I&B Codeâ€) before the National Company Law Tribunal, Mumbai (""NCLT"") on 10.09.2018 & 03.10.2018 byCompany",,,,,,
Petition Nos. 3585/2018 & 3872/2018 respectively. NCLT pronounced the Admission Orders on the said Applications vide Judgment dated 08.10.2018 &,,,,,,
29.01.2019 respectively and declared Moratorium against GGL & NWL to come into operation with immediate effect.,,,,,,
An amount of Rs.5843,97,35,652.30 (Rupees Five Thousand Eight Hundred and Forty Three Crores Ninety Seven Lakhs Thirty Five Thousand Six",,,,,,
Hundred Fifty Two and Thirty Paisa Only) as is outstanding on April 30, 2018 together with further interest and other charges is owed collectively to the",,,,,,
Appellant & the Consortium Lenders under inter-alia, the GECL and GGL WC Facilities.",,,,,,
An amount of USD 12,053,106.29 (United States Dollars Twelve Million Fifty Three Thousand One Hundred and Six and Twenty Nine Cents Only) as is",,,,,,
outstanding on June 30, 2018 together with further interest and other charges is payable to the Appellant and the other Consortium Lenders under the GGL",,,,,,
ECB Facility.,,,,,,
All the properties qua which the Appellant is seeking relief stand mortgaged/hypothecated/pledged/guaranteed as security with the Appellant and the,,,,,,
Consortium Lenders. The appellant is not claiming any right in present proceedings, other properties owned by borrowers who have alleged that the",,,,,,
proceedings are already pending for those properties.,,,,,,
The Appellant is seeking setting aside of the Impugned Judgment on the following grounds:,,,,,,
Ingredients of S. 5(1) of the Act are not satisfied:,,,,,,
An order of attachment U/s 5(1) of the Act can only be passed upon satisfaction of the compulsory twin conditions found in sub clauses (a) and (b), i.e.",,,,,,
Firstly, the Director must have reason to believe, on the basis of the material in possession, that any person is in possession of any proceeds of crime; and",,,,,,
Secondly, thatsuch proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings",,,,,,
relations to confiscation of such proceeds of crime.,,,,,,
13.1 The admitted case of the Respondent, is that the alleged proceeds of crime generated are a sum of Rs. 6097.63 crores which the entities of the Gitanjali",,,,,,
Group including GGL and GECL, have siphoned from Punjab National Bank, Brady House Branch, Mumbai and allegedly layered overseas for making",,,,,,
payments to overseas suppliers and for settling existing Buyerâ€s Credit liabilities with the overseas branches of Indian banks. Upon the conclusion of,,,,,,
investigation, the Respondent arrived at the finding that “as the proceeds of crime have been siphoned off out of the country, the same is not available for",,,,,,
attachment in the Country….Thereafter, the said funds were routed and diverted to various overseas companies out of country with the intention to launder",,,,,,
the proceeds of crime….The said three accused entities have acquired the proceeds of crime and layered the same out of country to hide its criminal origin.,,,,,,
The said proceeds of crime is not available in the country for attachment.†Therefore, as per the case of the Respondent, all the alleged Proceeds of Crime",,,,,,
as were generated were siphoned out of the country. Consequently, it is not the case of the Respondent that the Properties attached were purchased from",,,,,,
the ill-gotten gains generated by Mr.MehulChoksi& the borrowers. Further, admittedly neither the Appellant nor any of its officer(s)/employee(s) have been",,,,,,
charged by the Respondent for the commission of the offence of money laundering.,,,,,,
13.2 The Respondent, whose finding found favour with the Adjudicating Authority, submitted that the proceeds of crime generated were layered out of the",,,,,,
country and were accordingly not available in the country for attachment. Erroneously, the Ld. Adjudicating Authority then went ahead to take a diametrically",,,,,,
opposite view, which is noted in the Impugned Judgment at Page No. 292 to 294, “The Adjudicating Authority is required to record findings that all or any",,,,,,
of the properties referred in the Notice to Show Cause are/is involved in Money Laundering or not. Money Laundering as can be seen from the definition of,,,,,,
the Offence of Money Laundering given in section 3 of PMLA is any process or activity connected with the proceeds of crime and its projection as,,,,,,
untainted. …There is considerable evidence regarding generation of proceeds of crime by commission of the scheduled offences. There is sufficient,,,,,,
evidence of such proceeds of crime having been utilized by the Defendants.…,,,,,,
…It is concluded that the properties …… are all involved in money laundering…â€,,,,,,
13.3 Admittedly since the Accused Persons siphoned the proceeds of crime out of the country, the Properties in question cannot be said to have been",,,,,,
involved in the offence of Money laundering and hence be generated as a result of criminal activities. Furthermore, the immoveable properties were",,,,,,
purchased prior to the commission of the predicate offence and the first charge over such properties in favour of the Appellant and the other Consortium,,,,,,
Lenders was created much prior to the period of the commission of the predicate offence being 2015-2017 as per the Respondent. Therefore, the properties",,,,,,
do not qualify as proceeds of crimes. Consequently, the first ingredient as prescribed under S. 5(1)(a) is not satisfied in the present case.",,,,,,
The Appellant and the Consortium Lenders are bonafide third party claimants of the properties. It is an admitted position that the Properties are already,,,,,,
mortgaged/ hypothecated/pledged/guaranteed with the Appellant and the Consortium Lenders, pursuant to legitimate banking transactions. The Appellant and",,,,,,
the other Consortium Lenders possess legitimate third party claim to the Properties on account of the security deeds executed in their favour in order to,,,,,,
secure Working Capital facilities as were extended to GGL & NWL. Such facilities were extended after conducting due diligence and the necessary checks,,,,,,
and balances. Furthermore, the first Working Capital Agreement executed between the banks and GGL was in the year 2004 i.e prior to the commission of",,,,,,
the alleged criminal activity by Mr.MehulChoksi and the Gitanjali group of Companies in the year 2015-17.,,,,,,
The FIR No. RC 02(E)/2018/CBI/BS&FC/Mumbai registered for the commission of the Scheduled Offence notes that GGL, Gili India Ltd. and",,,,,,
Nakshatra Brands Ltd. during 2017-18 defrauded Punjab National Bank. Furthermore, the ECIR as was subsequently registered on the basis of the FIR,",,,,,,
notes that “the said three entities of Gitanjali Group, since 2015, used to obtain the LOUs through fraudulent modes from PNB and siphoning off the funds",,,,,,
of the said LOUs out the country through their alleged overseas suppliers….The said cycle of issuance of LOUs and its utilization has been continued till,,,,,,
2017…â€(Reference from the Impugned Judgment at Page No. 97 and the Complaint at Para No. 22.5.)Therefore, admittedly the period of commission of",,,,,,
the scheduled offence as per the case of the Respondent is 2015-2017. Consequently, the Appellant and the other Consortium Lenderâ€s acquisition of",,,,,,
interest in the Properties was not with an intention to frustrate or defeat the purpose of the Act. The Appellant has filed a table of the Properties attached,",,,,,,
detailing the year of purchase, Credit Facility sanctioned and Deed executed in favour of the Appellant and other Consortium Lenders. The said details have",,,,,,
been reproduced in earlier part of my order.,,,,,,
The Honâ€ble High Court of Delhi in the recent decision of “The Deputy Director, Directorate of Enforcement, Delhi Vs. Axis Bank &Ors.,â€",,,,,,
reported in 2019 SCC Online Del 7854 (hereinafter referred to as the “Axis Bank Decisionâ€) has rightly held that the interest of a third party in the,,,,,,
property of an accused, acquired prior to the commission of the proscribed offence cannot be defeated or frustrated by attachment of such property U/s 8 of",,,,,,
the Act.,,,,,,
The Honâ€ble High Court further recognized the right of such third party to proceed with enforcement of its interest in accordance with law such that,,,,,,
while the order of attachment under the Act would not be rendered irrelevant, yet it would take a backseat such that the State action would be restricted to",,,,,,
such part of the value of the property as exceeds the claim of the third party, if any. (Reference Paragraph No. 162-164 of the Axis Bank Decision) speak",,,,,,
for itself.,,,,,,
The Appellant has already initiated recovery proceedings under the SARFAESI and RDDBFI Act and insolvency proceedings under the I&B Code for,,,,,,
enforcement of its interest. S. 13 SARFAESI allows secured creditors to enforce security interest created in their favour without the intervention of the,,,,,,
Court or Tribunal.,,,,,,
The Appellant has also issued Statutory Notices U/s 13(2) SARFAESI dated 07.05.2018 and 17.05.2018 to the borrowers (GGL & NWL) and their,,,,,,
guarantors, prior to the issuance of the PAO on 25.06.2018. Consequently, in terms with the Axis Bank Decision, the claim of the Respondent to the",,,,,,
Properties would be restricted to such part of the aggregate value of the properties attached as exceeds the claim of the Appellant. Claim of the Bonafide,,,,,,
Third Party Claimant to be determined by the Appellate Tribunal.,,,,,,
In terms with the statutory safeguards incorporated in the Act, any party aggrieved by the confirmation of the Provisional Attachment Order by the",,,,,,
Adjudicating Authority may challenge such confirmation in an appeal to this Tribunal U/s 26 of the Act and then before the Honâ€ble High Court U/s 42 of,,,,,,
the Act against the order of this Tribunal. Accordingly, under the legislative and statutory scheme of the Act, unless a party has exhausted its remedies in",,,,,,
appeal right up to the Honâ€ble High Court, an order confirming the attachment cannot be said to have attained finality.",,,,,,
Therefore, this Tribunal is fully equipped and possesses the requisite jurisdiction in terms with the Act as the court of first appeal, to adjudicate upon the pleas",,,,,,
of the Appellant and determine the bonafides and legitimacy of its claims as well as the legality of the Provisional Attachment Order.,,,,,,
There is no force in the argument of learned counsel appearing on behalf of Enforcement Directorate that claims of third parties are to be solely,,,,,,
adjudicated by the Special Court before whom trial is pending, the Honâ€ble High Court of Delhi in the Axis Bank Decision has held that the claim of a party",,,,,,
asserting a bonafide and legitimate claim would be inquired into by the Special Court only if the order confirming the attachment “has attained finalityâ€.,,,,,,
An order cannot be said to have attained finality until and unless all the remedies under the Act have been exhausted. I agree that the Tribunal has only to,,,,,,
examine the impugned order and is empowered under section-26 of the Act as to whether the attachment order has been passed as per law or not. This,,,,,,
Tribunal has the exclusive jurisdiction on this issue. The Bank is otherwise if so may approach the Special Court for release of properties even during the,,,,,,
pendency of appeal or after allowing the appeal. The validity of the confirmation of attachment order is only to be considered by this court.,,,,,,
The factum of mortgage and the effect thereof on the claim of the Appellant, the Impugned Judgment erroneously notes at Page No. 230 & 233 as under:",,,,,,
“….Thus if a property is a proceeds of crime or is a property involved in money laundering, the same is necessarily to be provisionally attached,",,,,,,
confirmation whereof may be adjudicated and finally liability of confiscation may be determined by the Special Court….To advance the argument that,,,,,,
Provisional Attachment Orders should not be issued in relation to the proceeds of crime involved in money laundering, as such properties are required to be",,,,,,
liquidated in favour of the bank, who are custodian of public fund may amount to putting a premium on such unchecked activities carried on by the officers",,,,,,
due to irresponsible approach or connivance of the bank management….The pleas of the mortgagees, therefore cannot be granted at this stage of",,,,,,
confirmation of the provisional attachment order, as such grant of the relief would interject with the scheme of the Act, deliberately provided. As aforesaid",,,,,,
section 8(8) of the PMLA provides for rights of claimant with a legitimate interest with the property provisionally attached/confiscated, who may have",,,,,,
suffered a quantifiable loss as a result of the offence of money laundering….In view of the legal provisions above referred and the object sought to be,,,,,,
achieved by the PMLA, I humbly and with great respect cannot concur with the view expressed by the Appellate Tribunal, PMLA in the Judgments of the",,,,,,
Appellate Tribunal cited by D-21 and D-22.,,,,,,
The Adjudicating Authority erred in upholding the view canvassed by the Respondent that the pleas of the Appellant of possessing a legitimate and,,,,,,
bonafide claim as a third party to the Properties cannot be tackled at the stage of confirmation of the PAO and that the rights of the Appellate will be dealt,,,,,,
with by the Special Court at the stage of Section 8(8) of the Act. The said argument of the respondent is contrary to the statutory and legislative scheme of,,,,,,
the Act It would amount to an exercise in futility and wasteful litigation if the Appellant were required to be a mute spectator to the confirmation of,,,,,,
attachment of mortgaged properties at this stage and await the conclusion of trial U/s 3, 4 of the Act to agitate and pursue its rightful legal claim over such",,,,,,
mortgaged properties.,,,,,,
It would be futile to deny the Appellant his claim over the mortgaged properties at the stage of confirmation of the PAO itself. Further, the legislative",,,,,,
intent for relief at this stage can be borne out from the fact that under the proviso to sub clause 1 and 2 of section 8 of the Act, prior to the confirmation of",,,,,,
the PAO, the Adjudicating Authority is required to adjudicate over the claim of an innocent party who seeks claim over the attached property, apart from the",,,,,,
person to whom notice had been issued.,,,,,,
Therefore, the Adjudicating Authority by the Impugned Judgment has erred in failing to recognise the legitimate claim of the Appellant at the stage of",,,,,,
confirmation of the PAO itself as the Appellant Bank is a victim of the fraud perpetuated by Mr MehulChoksi and the Gitanjali Group companies including,,,,,,
GGL & NWL, which is further aggravated by the effect of the Impugned Judgment, depriving it of pursuing its legal claims against properties mortgaged to it.",,,,,,
The value of the properties on account of the present case as well as the FIR has depreciated significantly and is deteriorating on a daily basis, such that any",,,,,,
delay in enforcement of recovery by the Appellant would be rendered meaningless. In the present case, the Appellant is the victim of the fraud played upon it",,,,,,
by Mr.MehulChoksi and the Gitanjali group of Companies.,,,,,,
Ingredients of S. 8(1) of the Act are not satisfied.,,,,,,
Under Section 8(1), upon receipt of a Complaint U/s 5(5) of the Act, if this Authority has reason to believe that any person has committed an offence",,,,,,
under section 3 or is in possession of proceeds of crime, he may serve a notice of not less than thirty days on such person calling upon him to indicate the",,,,,,
sources of his income, earning or assets, out of which or by means of which he has acquired the property attachedU/s 5(1) of the Act.",,,,,,
The fact that the Appellant along with the other Consortium Lenders have a mortgage on the attached properties and have provided facilities against the,,,,,,
security of such attached Properties cannot and does not fall within the purview of Section 8(1) of the Act. Consequently, the notice U/s 8(1) of the Act as",,,,,,
was issued to the Appellant as Lead Bank of Consortium Lenders was bad in law and hence also liable to be set aside.,,,,,,
The words “reason to believe†used in S. 8(1) of the Act cast an onerous duty on the Adjudicating Authority, while deciding to act under the said",,,,,,
Section and before issuance of notice under Section 8(1) of the Act. The Honâ€ble Supreme Court and various Honâ€ble High Courts have held that,,,,,,
“reason to believe†is not the same thing as suspicion or doubt and merely seeing cannot be equated to believing. “Reason to believe†is a higher,,,,,,
level of state of mind. A person must have reason to believe if the circumstances are such that a reasonable man would, by probable reasoning, conclude or",,,,,,
infer regarding the nature of the thing concerned. Further, at the initial stage for believing the existence of a thing, condition or a statement of fact, one would",,,,,,
collect information and then examine the information and come to a final conclusion on the basis of that information, that such a thing, condition or statement",,,,,,
of a fact exists. All these ingredients are pre-requisite for forming an opinion based on “reason to believeâ€.,,,,,,
Reasons to believe,,,,,,
Counsel appearing on behalf of ED submits that it is not necessary to record the reasons to believe prior to passing the provisional attachment order.,,,,,,
Secondly, it can only be recorded in respect of provisional attachment order itself.",,,,,,
Copy of the same is not to be served to aggrieved party even at the stage of arguments in the main appeal or any subsequent proceedings.,,,,,,
These cannot be shown to the appellant.,,,,,,
The guidelines of recording the reason to believe have been laid down in various judgements of Apex Court and High Courts. It is held time and again by,,,,,,
the said Honâ€ble Courts directing that the approach should be not the subjective satisfaction of the officer concerned. Such power given to the officer,,,,,,
concerned is not an arbitrary power and has to be exercised in accordance with the restraints imposed by law. The belief must be that of an honest and,,,,,,
reasonable person based upon reasonable grounds, the officer concerned may act on direct or circumstantial evidence but not on mere suspicion or the",,,,,,
allegations mentioned in the FIR or charge-sheet so that the same can be scrutinized in order to verify whether they are relevant and germane or not.,,,,,,
He cannot proceed further on the basis of opinion already formed by someone else. The officer who is supposed to write down his reasons to believe,,,,,,
independently applying his mind in every case. It should not be merely a mechanical reproduction of the words mentioned in the statute in order to complete,,,,,,
the formality as PMLA cases (being independent proceeding) as submitted on behalf of the respondent. If the person concerned are more than one, the",,,,,,
officer authorized is to record the independent/separate, reasonsto believe for each “person concernedâ€.",,,,,,
If no valid reasons to believe are recorded, the issuance of notice to the “person concerned†or without going into the material and non-application of",,,,,,
mind, the same would be considered as invalid notice. It is settled law that if the Show-Cause notice fails to fulfil the basic ingredients as laid down by a",,,,,,
Constitutional Bench of the Honâ€ble Supreme Court inK hem Chand v. Union of India [AIR 1958 SC 300,] the Show-Cause Notice itself is bad in law.",,,,,,
Thus, it is vitiating the proceedings. Also see another judgement in the case of Aslam Mohammad Merchant v. Competent Authority [2008 (14) SCC 186 ]in",,,,,,
this regard.,,,,,,
In the present case, copy of reason to believe has not been filed. Counsel for the respondent submits that reason to believe is not required prior to the",,,,,,
order of passing the provisional attachment order. The attachment order shows that after recording the facts, the IO has just used the expression by repetition",,,,,,
of language of section 5(1) in the provisional attachment order. The respondent must understand that unlike other statute. Under this Act, the burden of proof",,,,,,
lies with person concerned under. It is virtually not possible for any party to discharge the burden of proof unless he knows the allegations and copy of reason,,,,,,
to belief. From the submission addressed on behalf of respondent, it is clear that the respondent does not wish to show or communicate the extract of reasons",,,,,,
to believe recorded at the stage of Section 5(1) of the Act to the aggrieved party/person concerned. The said stand of the respondent cannot be accepted as,,,,,,
the same is against the law and against the principle of natural justice. The reason to believe must be recorded in terms of para 22 of my order.,,,,,,
In the case of C.B.Gautam vs. Union of India (1993(1) SCC 78,) a Constitution Bench of the Honâ€ble Supreme Court of India held that the reasons to",,,,,,
be recorded in writing shall not only be incorporated in the order but also shall be communicated to the affected parties. The relevant extract from the,,,,,,
judgement is as under:,,,,,,
“Sec. 269UD(1), in express terminology, provides that the appropriate authority may make an order for the purchase of the property for reasons to be",,,,,,
recorded in writingâ€. Sec. 269UD(2) casts an obligation on the authority that it ""shall cause a copy of its order under sub-s. (1) in respect of any immovable",,,,,,
property to be served on the transferor"". It is, therefore, inconceivable that the order which is required to be served by the appropriate authority under sub-s.",,,,,,
(2) would be the one which does not contain the reasons for the passing of the order or is not accompanied by the reasons recorded in writing. It may be,,,,,,
permissible to record reasons separately but the order would be an incomplete order unless either the reasons are incorporated therein or are served,,,,,,
separately along with the order on the affected party. Reasons for the order must be communicated to the affected party.â€[,,,,,,
The above referred to decision has been followed in various judgments by many High Courts, as well the Honâ€ble Supreme Court of India in subsequent",,,,,,
decisions.,,,,,,
a)In Kranti Associates v. Masood Ahmed Khan (2010) 9 SCC 496, the legal position was summarized as under:-",,,,,,
a. In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.",,,,,,
b. A quasi-judicial authority must record reasons in support of its conclusions.,,,,,,
c. Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.,,,,,,
d. Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.,,,,,,
e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations.,,,,,,
f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-",,,,,,
judicial and even by administrative bodies.,,,,,,
g. Reasons facilitate the process of judicial review by superior Courts.,,,,,,
h. The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts.,,,,,,
This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice. i. Judicial or even quasi-judicial opinions these,,,,,,
days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason,,,,,,
that the relevant factors have been objectively considered. This is important for sustaining the litigants†faith in the justice delivery system.,,,,,,
j. Insistence on reason is a requirement for both judicial accountability and transparency.,,,,,,
k. If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding,,,,,,
is faithful to the doctrine of precedent or to principles of incrementalism.,,,,,,
l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or “rubber-stamp reasons†is not to be equated with a valid",,,,,,
decision making process.,,,,,,
m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the,,,,,,
judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987),,,,,,
100 Harvard Law Review 731-737).,,,,,,
n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a",,,,,,
component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya vs. University of",,,,,,
Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, ""adequate and intelligent",,,,,,
reasons must be given for judicial decisions"".",,,,,,
o. In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving",,,,,,
reasons for the decision is of the essence and is virtually a part of ""Due Process"".",,,,,,
b) In Income Tax Officer v. LakhmaniMewaldas 1976 (3) SCR 956, the Supreme Court held that there should be a live link or close nexusǁ between the",,,,,,
material before the ITO and the formation of his belief that income had escaped assessment. More recently, in Aslam Mohd Merchant v. Competent",,,,,,
Authority (2008) 14 SCC 186, the entire legal position has been explained elaborately by the Supreme Court as under:",,,,,,
It is, however, beyond any doubt or dispute that a proper application of mind on the part of the competent authority is imperative before a show cause",,,,,,
notice is issued. Section 68-H of the Act provides for two statutory requirements on the part of the authority viz: (i) he has to form an opinion in regard to his,,,,,,
“reason to believeâ€; and (ii) he must record reasons therefor. Both the statutory elements, namely, “reason to believe†and “recording of",,,,,,
reasons†must be premised on the materials produced before him. Such materials must have been gathered during the investigation carried out in terms of,,,,,,
Section 68-E or otherwise. Indisputably therefore, he must have some materials before him. If no such material had been placed before him, he cannot initiate",,,,,,
a proceeding. He cannot issue a show cause notice on his own ipse dixit. A roving enquiry is not contemplated under the said Act as properties sought to be,,,,,,
forfeited must have a direct nexus with the properties illegally acquired.,,,,,,
It is now a trite law that whenever a statute provides for “reason to believeâ€, either the reasons should appear on the face of the notice or they must",,,,,,
be available on the materials which had been placed before him. We have noticed hereinbefore that when the authority was called upon to disclose the,,,,,,
reasons, it was stated that all the reasons were contained in the show cause notices themselves. They, however, in our opinion, do not contain any reason so",,,,,,
as to satisfy the requirements of sub-section (1) of Section 68H of the Act.,,,,,,
c) In JotiParshad Vs. State of Haryana [1993 Supp (2) SCC 497, ]the Honâ€ble Supreme Court observed that “suspicion†and “reason to believeâ€",,,,,,
are not the same thing. “Reason to believe†is a higher level of state of mind and there must exist reason to believe. The following observations are,,,,,,
relevant in this regard-,,,,,,
“5. …We are now concerned with the expressions “knowledge†and “reason to believeâ€. “Knowledge†is an awareness on the part of the,,,,,,
person concerned indicating his state of mind. “Reason to believe†is another facet of the state of mind. “Reason to believe†is not the same thing as,,,,,,
“suspicion†or “doubt†and mere seeing also cannot be equated to believing. “Reason to believe†is a higher level of state of mind. Likewise,",,,,,,
“knowledge†will be slightly on a higher plane than “reason to believeâ€. A person can be supposed to know where there is a direct appeal to his,,,,,,
senses and a person is presumed to have a reason to believe if he has sufficient cause to believe the same. Section 26 IPC explains the meaning of the words,,,,,,
“reason to believe†thus:,,,,,,
Reason to believe â€" A person is said to have “reason to believe†a thing, if he has sufficient cause to believe that thing and not otherwise.â€",,,,,,
In paras 74 to 77, the Double Bench of Honâ€ble High Court of Delhi in its judgementJ . Sekar v. Union of India and Ors. 2018 SCC Online Del 652,3",,,,,,
has held that:,,,,,,
The Court, therefore, holds as under as regards the submissions of the learned counsel for the Petitioners with regard to the constitutionality of the second",,,,,,
proviso to Section 5(1) PMLA:,,,,,,
(i) Although the second proviso to Section 5(1) states that the property has to be “involved in money-laundering†and section 5(1) states that mere,,,,,,
possession of proceeds of crime is sufficient, the Court does not see any conflict in these expressions. When the definition in Section 3 PMLA is read with",,,,,,
Section 2(1)(v) and the Explanation thereto, it becomes clear that the property which constitutes “proceeds of crime†is the property involved in money-",,,,,,
laundering.,,,,,,
(ii) The reasons to believe at every stage must be noted down by the officer in the file.,,,,,,
(iii) While the reasons to believe recorded at the stage of passing the order of provisional attachment under Section 5(1) PMLA may not be forthwith at that,,,,,,
stage communicated to the person adversely affected thereby, the reasons as recorded in the file have to accompany the complaint filed by such officer",,,,,,
within 30 days before the AA under Section 5(5) PMLA.,,,,,,
(iv) A copy of such complaint accompanied by the reasons, as found in the file, must be served by the AA upon the person affected by such attachment after",,,,,,
the AA adds its own reasons why he prima facie thinks that the provisional attachment should continue.,,,,,,
There are two reasons to believe. One recorded by the officer passing the order under Section 5(1) PMLA and the other recorded by the AA under,,,,,,
Section 8(1) PMLA. Both these reasons to believe should be made available to the person to whom notice is issued by the AA under Section 8(1) PMLA.,,,,,,
The failure to disclose, right at the beginning, the aforementioned reasons to believe to the noticee under section 8(1) PMLA would not be a mere irregularity",,,,,,
but an illegality. A violation thereof would vitiate the entire proceedings and cause the order of provisional attachment to be rendered illegal.,,,,,,
The Court disagrees with the learned counsel for the Union of India that there is no mandatory requirement, under section 8(1) PMLA, to communicate",,,,,,
to the noticee the reason to believe. On a collective reading of Section 5(1) PMLA and Section 8(1) PMLA, such an interpretation is contraindicated and",,,,,,
cannot satisfy the requirement of what the AA is supposed to do under Section 8(2) PMLA, viz. to consider the reply of the noticee, give them and the",,,,,,
Director a hearing and “take into account†all relevant materials placed on record.,,,,,,
Although at the stage of issuance of notice under Section 8(1) PMLA all the relevant material on record which constituted the basis for reasons to believe,,,,,,
may not be made available, if the noticee demands to see those materials on record, the AA is bound to make available all those materials on record to them.",,,,,,
It is most likely that without such access to such material on record, the noticee will be unable to file an effective reply. Therefore, there cannot be any denial",,,,,,
of access to the noticee of the materials on record. If there is any sensitive material, it can probably be redacted before issuing copies thereof, after nothing",,,,,,
the reasons for such redaction in writing in the file. But even such redacted material will have to be nevertheless shown to the noticee.,,,,,,
Though the operation of the aforesaid judgment has been stayed by the Honâ€ble Supreme Court, the above dicta cannot cease to be law of precedential",,,,,,
value and binding in other matters i.e. third parties, in view of settled law. One of such decision reported as vide Shree Chamundi Mopeds Ltd. v. Church of",,,,,,
South India Trust Assn., (1992) 3 SCC 1 (para 10).",,,,,,
A division bench of the Honâ€ble Calcutta High Court in NiranjanChatterjee v. State of West Bengal &Ors., 2007 SCC OnLine Cal 28 3after relying on",,,,,,
the aforesaid decision has held that:,,,,,,
“17. After hearing the learned Counsel for the parties and after going through the aforesaid position of fact, we find that the Supreme Court by those",,,,,,
interim order has, no doubt, stayed the operation of the order of the Division Bench of this Court by directing the parties to maintain status quo but at the",,,,,,
same time, has even restrained the State from inducting the third parties on the lands which were the subject matters before the Apex Court. Such interim",,,,,,
order is binding upon the parties to the proceedings but the law is equally settled that by mere passing of an interim order staying the operation of a judgment,,,,,,
with certain further conditions, the existence of the said judgment is not wiped out and at the same time, for such interim order inter parties, the authority of a",,,,,,
decision as a precedent is never undermined. Unless a decision is set aside by the Superior Court, the said decision remains effective as a precedent though",,,,,,
may not be binding upon the parties to the proceeding where the superior Court has granted interim order.,,,,,,
Therefore, the effect of the order of stay in a pending appeal before the Apex Court does not amount to “any declaration of law†but is only binding",,,,,,
upon the parties to the said proceedings and at the same time, such interim order does not destroy the binding effect of the judgment of the High Court as a",,,,,,
precedent because while granting the interim order, the Apex Court had no occasion to lay down any proposition of law inconsistent with the one declared by",,,,,,
the High Court which is impugned.â€,,,,,,
[Emphasis Supplied],,,,,,
In the light of above, it is held that the provisional attachment order is bad as no valid reason to believe has been passed within the meaning of the",,,,,,
provision of Section-5(1) of the Act is read meaningful manner, the same is the intent of the statue, it is held that the officer concerned must be recorded",,,,,,
after having gone through the materials available and in legal manner.,,,,,,
In the present case, prima facie, there is no valid findings with the properties mortgaged with the appellant as to who is the financial institution and",,,,,,
possession of the proceeds of crime or the same is likely to be concealed, transferred or dealt with in any manner as the said properties are already",,,,,,
mortgaged with the appellant.,,,,,,
It is also a matter of fact that the mortgaged properties are attached under the 2nd proviso of Section 5(1) of the Act, which reads as under:",,,,,,
“PROVIDED FURTHER that, notwithstanding anything contained in first proviso, any property of any person may be attached under this section if the",,,,,,
Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for,,,,,,
such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately",,,,,,
under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act"".",,,,,,
In consonance with the statutory requirement, the Respondent can in the absence of a complaint or a chargesheetimmediately attach a property if",,,,,,
“non-attachment of the property is likely to frustrate any proceedings under this Actâ€, which condition is sine-qua-non to the provisional attachment of",,,,,,
properties by the Respondent. The basis of the Department for immediate attachment of the Properties which was subsequently upheld by the Adjudicating,,,,,,
Authority is recorded on Page Number 62 of the Impugned Judgment, which reads as under:",,,,,,
“..ShriMehulChoksi is not co-operating with the investigation at all as he has not attended this office despite of three summons issued to him under the,,,,,,
provisions of the PMLA, 2002. Similarly,Mr. Sunil Verma is also not co-operating with the investigation as he has not attended this office despite of three",,,,,,
Summons issued to him under the provisions of the PMLA Therefore, the likelihood of selling and/or disposing of the said property are extremely high.",,,,,,
Therefore I have reason to believe that the properties mentioned hereinabove i.e the proceeds of crime are likely to be concealed, transferred or dealt with in",,,,,,
such a manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under Chapter III of the Prevention of,,,,,,
Money Laundering Act.â€,,,,,,
The above reasons reveal how the Respondent is taking the onerous duty cast upon it under Section 5 of the Act, lightly and in flagrant disregard of the",,,,,,
statutory safeguards incorporated therein. The non-cooperation of Mr.MehulChoksi with the investigation as was conducted by the Respondent cannot give,,,,,,
rise to an apprehension that in case the Properties are not attached immediately, proceedings under the Act would be frustrated.",,,,,,
The immediacy, as is a statutory safeguard incorporated in the Act, could have been inferred from an actual attempt to sell or alienate the Properties by",,,,,,
Mr.MehulChoksi or one of the group companies. However, no such attempt to act/alienate the properties was mentioned by the Respondent in their PAO,",,,,,,
Complaint or the Impugned Judgment. The Respondent, in its Reply to the present Appeal, has for the first time in Reply to Ground E at internal Page No. 4",,,,,,
of the Reply stated, “ It is further submitted that during the course of investigation it was revealed that ShriMehulChoksi was desperately trying to dispose",,,,,,
of his entire properties.†This fact is neither mentioned in the PAO, Complaint or the Impugned Judgment, making it a malafide afterthought and desperate",,,,,,
attempt on behalf of the Respondent to improve its case at the Appellate stage. Even otherwise, barring this bald statement, the Respondent has not placed",,,,,,
on record any material to corroborate and substantiate the said allegation.,,,,,,
Furthermore, there could not have be any likelihood of concealment, transfer or dealing of the Properties by Mr.MehulChoksi or the group companies",,,,,,
related to the Appellant since the same were and continue to remain hypothecated/mortgaged/pledged to the Appellant, for which the Deeds executed are",,,,,,
binding and continue to remain in force. This eliminates any possibility of the Properties being sold or alienated or dealt with in any manner whatsoever which,,,,,,
would frustrate any proceedings under this Chapter.,,,,,,
The Constitutional bench of the Honâ€ble Supreme Court in the case ofâ €œBarium Chemicals Ltd. &Ors V/s The Company Law Board &Ors.†(AIR,,,,,,
1967 SC 295) held that when a statute postulates the exercise of discretion by an authority contingent to the existence of certain circumstances envisaged,,,,,,
therein, the formation of such opinion by the authority has to be compulsorily based on the actual existence of the stipulated circumstances as envisaged in the",,,,,,
statute. Therefore upon the inability of the Respondent to demonstrate the existence of circumstances, which satisfy the necessary ingredients of S. 5(1)(b)",,,,,,
of the Act and its second proviso, the POA and consequently the Impugned Order are liable to set aside being bad in law.",,,,,,
A bare perusal of the Complaint as was filed by the Respondent reveals a glaring absence of any mention of investigation into the charge of the Appellant,,,,,,
over the Properties and the existence of the factum of the banks†dues, recoverable from the Borrowers. This reflects the inadequate investigation",,,,,,
undertaken by the Respondent, which on the basis of incomplete facts has taken the drastic measure of provisionally attaching properties already charged",,,,,,
with the Appellant and in the absence of a Complaint or Chargesheet being filed,,,,,,
It is evident from the second provision of Section 5(1) that only those properties shal be attached if such property involved in the money laundering unlike,,,,,,
the first proviso, which is general rule that the properties shall not be attached unless the report of under Section 173 Cr.P.C. has been filed. The condonation",,,,,,
stipulated in second proviso is not formed part of first proviso.,,,,,,
In the present case, admittedly, the properties were attached by invoking second proviso. The authorised officer has failed to trace out the other",,,,,,
properties which are involved in the money laundering. Without any proper investigation in this regard, the officer concerned straightaway target the",,,,,,
mortgaged properties which are not acquired from the proceed of crime and the same were purchased and mortgaged prior to the date of offence committed.,,,,,,
It is the duty of the authorised officer to investigate all the properties. The second appeal filed by Vijay Garg are having the same facts.,,,,,,
The Adjudicating Authority further failed to take note of the fact that NCLT, Mumbai pronounced the Admission Orders vide Judgement dated",,,,,,
08.10.2018 and 29.01.2019, respectively and has declared Moratorium under section 14 of the I&B Code against GGL & NWL to come into operation with",,,,,,
immediate effect. The said Judgements have declared moratorium, which prohibits the continuation of pending suits or other civil proceedings, including the",,,,,,
present attachment proceedings against the corporate debtors i.e. GGL & NWL. The Judgement dated 08.10.2018 was in the knowledge of the Adjudicating,,,,,,
Authority since the Insolvency Resolution Professional as appointed by NCLT, was party to the proceedings before the Adjudicating Authority. The",,,,,,
impugned judgement is thus liable to be set aside since the Adjudicating Authority could not have continued with the attachment proceedings under the,,,,,,
PMLA upon the declaration of Moratorium under the I&B Code which is prior in time to the impugned judgement.,,,,,,
It is a matter of fact that ED has registered the ECIR and passed the provisional attachment order after the moratorium order is passed by the NCLT.,,,,,,
Thus, on the face of record, it is evident that the ED and the Adjudicating Authority have not understood the legal issues involved rather they have ignored",,,,,,
the settled law and passed the impugned order. The serious situation is that ED has registered ECIR on the basis of FIR which was registered at the request,,,,,,
of banks†complaint as borrowers who failed to pay the loan amount. The banks have now become victim. Therefore, both the impugned order and",,,,,,
provision attachment order are set-aside qua the appellant bank.,,,,,,
The impugned order confirming the provisional attachment order is passed without application of mind and without understanding the law, it is liable to be",,,,,,
quashed with regards to mortgage properties.,,,,,,
I do not agree with the submission of counsel appearing on behalf of ED that the banks may not be allowed to dispose of the mortgage properties owned,,,,,,
by MuhulChoksi and NiravModi and we should wait for trial to be faced by these offenders and it would also have some bearing in their extradition,,,,,,
proceedings.The main reasons for disagreeing his arguments are that the mortgage properties were acquired much prior period from the date of offense. The,,,,,,
banks are innocent and victims. The banks are not charge-sheeted. They are the secured creditors. Banks moneys have been looted by these cheaters.,,,,,,
Public Sectors banks†money is the public money. The banks are in critical conditions as these alleged accused have cheated every citizen of this country.,,,,,,
The courts in overseas countries are aware about the mortgage law. Rather, if their mortgage properties are disposed off, loan amount would be decreased.",,,,,,
No doubt, they should also be dealt with criminal liabilities, but recovery process cannot be stalled in this way. These joneys are always happy if their",,,,,,
mortgage properties shall remain attached and should not be disposed of. It is also held that if the mortgage properties are not the proceeds of crime, the said",,,,,,
properties cannot be attached in lieu of value thereof as banks are the secure creditors, but ED, no doubt, after investigation, is welcome to attach the",,,,,,
properties in lieu of value thereof only in the cases where it was virtually not possible to trace out the properties which were purchased from proceeds of,,,,,,
crime, but other than the mortgage properties which were not acquired from proceeds of crime. Borrowers mortgage properties can not secure in safe",,,,,,
heaven if they failed to return back the loan amount otherwise public will suffer.,,,,,,
No doubt, this tribunal is clear in its mind that if the property was acquired from proceeds of crime and at the time of mortgage, the bank is aware and still",,,,,,
the loan is sanctioned, then said property can be attached even in lieu of value thereof if the borrowers has concealed or is concealing the proceeds of crime,",,,,,,
but under those circumstances, there must be material or prima facie evidence on record before passing the provisional attachment orders.",,,,,,
This order is being passed in relation to mortgage properties in favour of banks which are not purchased from proceeds of crime. The same were,,,,,,
purchased and mortgage with the banks prior to the of crime period.ED is not precluded to attach other private properties and all other assets of the alleged,,,,,,
accused.,,,,,,
It is clarified that this order shall have no bearing in any proceedings initiated against the alleged accused including extradition proceedings pending or,,,,,,
proposed to be initiated in any part of the world. Those are to be considered as per law and without any influence of this order which is being passed in the,,,,,,
interest of public as bank money is a public money. Most of the banks are public sector banks. Their valid and legal recovery cannot be blocked for years,,,,,,
without valid reasons.Therefore the issue in hand is being decided only for limited purposes,,,,,,
The period of continuation of proceedings before the Adjudicating Authority, PMLA, and before this Tribunal till the passing of the present judgment and",,,,,,
order, from the date of commencement of the moratorium order, be treated as excluded while calculating limitation of the period of completion of the",,,,,,
Corporate Insolvency Resolution Process.,,,,,,
Thus, both appeals are allowed by setting aside the order dated 11.12.2018 passed in OC No. 1000/2018 titled “Deputy Director, Directorate of",,,,,,
Enforcement Vs. ShriMehulChoksi&Ors.†by the Adjudicating Authority confirming the Provisional Attachment Order No. 09/2018 dated 25.06.2018, qua",,,,,,
the properties secured to the Appellant.,,,,,,
As far as merit of the allegations against the alleged accused is concerned, no opinion is expressed. The borrowers must be dealt with strictly in",,,,,,
accordance with law.,,,,,,
No costs.,,,,,,