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Judgment
Sr. NO.,"Particulars of the Property and date of
Acquisition","Name of the
Current Holder
of the Property","Value (Accepted
Bid Amount)
1.,"“Vishal House†Opposite Sales India,
Ashram Road , Ahmedabad - Land
bearing P lot NO. 169/ 14 of Mouja Shaik
hpur -Khanpur of City Taluka :
Ahmedabad","M/ s J.M.D.
Media Pvt. Ltd.
Ahmedabad","Rs.
1,89,00,0 00/ -
2.,"Jay Bungalow, Ishavashyam Society,
[Near Rupmadhuri Society, Nr. Lav Kush
Society] Vastrapur, Ahmedabad situated
at Survey NO. 398 (Paiki) of T.P. Sheme
No. 5, Final Plot No. 213 (Paiki), Sub -Plot
NO. 4/ A (Paik i), 4/ B (Paiki) and 4/ C of
Mouje Vejalpur of City Taluka.","M/ s Alive
Hospitality and
Foods Pvt. Ltd.
Ahmedabad","Rs. 2,15,00,000/ -
2.10 On 24.10.2011, an agreement to sell was entered into between the appellant and respondents 4, 5 and 6 in respect of 16 units of the appellant and",,,
3 units of others in Vishal House and the same was registered at S.No. 12069/2011 with the Sub-Registrar, Ahmedabad. Possession of all the 19 units",,,
was then handed over to respondents 4, 5 and 6 and a letter to this effect was executed and notarized.",,,
2.11 On 10.12.2011, Sale deed was drawn on requisite stamp papers and signed by the appellant, other co owners and respondents 4, 5 and 6. Anand",,,
Owners Association also signed the sale deed as confirming party. Then registration charges were deposited and the sale deed was presented to the,,,
Sub-Registrar on 12.12.2011 for registration. The instrument so presented was accepted by the Sub Registrar and acknowledgment confirming,,,
refused to register the sale deed contending that he had been restrained from registering any sale deed in respect of the stated property by letter dated,,,
21.07.2011 by the office of the Directorate of Enforcement. No other objection was raised by the Sub Registrar except the letter dated 21.07.2011 of,,,
the ED. In the letter dated 21.07.2011, the Enforcement Directorate had on the basis a circular of 30.06.2010 of Inspector General of Registration,",,,
asked the Sub-Registrar not to register any sale deed. Enforcement Directorate who had also intimated the Sub- Registrar that in case the sale deed is,,,
registered, he would also be liable for penal action under the Prevention of Money Laundering Act.",,,
Prior to the said transaction, it is matter of fact that on 30. 11.2009, after completion of investigation, a charge Sheet dated 25.11.2009 was filed",,,
before the special CBI Judge under section 120B, 420,468,471 and 477A of the Indian Penal code and sections 13(2) read with 13(1)(d) of the",,,
prevention of Corruption Act. In the report under sections Penal Code and sections 13 (2) read with 13(l)(d) of the Prevention of 173 of the Cr.P.C it,,,
has been stated that the Directors of VEOL and the bank officers entered into a criminal conspiracy to cheat PNB in the matter of obtaining short-,,,
term loan of Rs. 50 crores and foreign usance bill discounting of Rs.150 crores on the basis of misrepresentation during the period 2005 to 2006 by,,,
abuse of their official position.,,,
On 15.03.2012, Directorate of Enforcement on the basis of the report under section 173 Cr.P.C filed by the CBI allegedly initiated its own enquiry.",,,
It recorded statement of various persons under section 50 of the PML Act and collected various documents during the course of investigation. On the,,,
basis of the investigation carried out, the ED concluded that Vishal House and Jay Bungalow have been acquired out of the proceeds of crime and",,,
have been projected as untainted money. The ED also concluded that these proceeds of crime were likely to be concealed, transferred or dealt with in",,,
such a manner which may result in frustrating further proceedings i.e., confiscation etc. and therefore passed the provisional attachment order.",,,
The Deputy Director then filed a complaint under section 5(5) of the Prevention of Money Laundering Act, 2003 seeking confirmation of the",,,
provisional attachment order. The complaint was registered as OC No. 133 of 2012. Notice of the complaint was issued and JMD Media Ltd.,,,
amongst others appeared before the Adjudicating Authority. After hearing, vide order dated 10th July, 2012; the Adjudicating Authority held that the",,,
properties provisionally attached were involved in money laundering and confirmed the provisional attachment order dated 15.03.2012.,,,
It is against the said order of the Adjudicating Authority dated 10th July, 2012 that the present appeal has been filed inter alia mainly with the",,,
following grounds:,,,
(i). The Adjudicating Authority had committed a patent error by holding that there was a reason to believe on the part of the respondent no. 1 that the,,,
Vishal House property were proceeds of crime and by holding that sufficient material existed in the form of the charge sheet and accompanying,,,
documents and materials gathered by the Joint Director through his investigation including statements of Directors on the basis of which reason to,,,
believe as envisaged under section 5(1) of the Act could be formed and has completely ignored the following which would establish that the,,,
respondent no. 1 could not, on the basis of the material available before him, have had any reason to believe that the Vishal House property was",,,
purchased from out of proceeds of crime as there was absolutely no evidence or material to show that the Vishal House property was purchased out,,,
of proceeds of crime. The charge sheet and documents accompanying it did not allege or even provide a shred of evidence indicating that the Vishal,,,
House property was purchased out of proceeds of crime. There is not even a remote link which could show that the Vishal House property was,,,
purchased from out of proceeds of crime.,,,
(ii) . The Adjudicating Authority has failed to appreciate that none of the essential conditions of section 5(1) of the Act were fulfilled in the present,,,
case in view of the following (a) the Vishal House Property cannot be said to be proceeds of crime since there is no allegation of commission of any,,,
scheduled offence which has resulted in the Vishal House property being derived or obtained, (b) since there is no allegation against the appellant in",,,
respect of having committed any scheduled offence, the appellant in respect of having committed any scheduled offence, the appellant cannot be said",,,
to be in possession of any proceeds of crime, (c) the appellant is admittedly not charged of having committed a scheduled offence, (d) since the Vishal",,,
House property is not proceeds of crime.,,,
(iii) . The Adjudicating Authority has committed an error of law in rejecting the appellant’s contention that, when it was not charged for any",,,
scheduled offence and did not even have any knowledge of the activities of the persons who were charged under the charge sheet, there could be no",,,
action against any property of the appellant under the provisions of Section 5 the act and has failed to appreciate that the fining of the Adjudicating,,,
Authority in this regard is clearly contrary to the clear provisions of Section 5 of the Act.,,,
(iv) . The Adjudicating Authority has erred in holding that the statements of the Directors of the appellant and that of the respondent no. 7 showed that,,,
all of them were consciously into activities of layering and integration of proceeds of crime and were involved in money laundering and were under the,,,
wings of the respondent no. 7.,,,
(v). The Adjudicating Authority has failed to appreciate that there is absolutely no connection or nexus, between the allegations made in the charge",,,
sheet dated- 26.11.2009 and the purchase of the Vishal House property by several persons in the year 1991 or the subsequent purchase of the subject,,,
property by the appellant in the year 2009 in the auction sale conducted by SBI and hence the subject property could not, by any stretch of-imagination",,,
be said to be proceeds of crime. As far as appellant was concerned, it had not directly taken any monies from the respondent no.s 2 or 7 for making",,,
payments in respect of the sale consideration towards the Vishal House Property. It is clear that there is no nexus between the loans valid of by the,,,
respondent no. 2 from PNB or any other bank and the source of the funds paid by the appellant to SBI towards the sale consideration for the Vishal,,,
House property.,,,
(vi). The respondent no. 1 has no jurisdiction to attach any property unless the charge sheet specifically alleged commission of a scheduled offence,,,
which has resulted in deriving or obtaining that property. The Provisional Attachment Order and the complaint are based on conjectures and surmises,,,
with regard to the source of funds from which the respondent no. 1 purchased the subject property and proceed on the assumption that certain funds,,,
which could have been utilised by the respondent no. 2 to repay the banks were given to other companies. When there was no nexus whatsoever,,,
between funds sanctioned by PNB to the respondent no. 2 and the funds utilised by the appellant for making payment to SBI towards purchase,,,
consideration for the Vishal House property and the sources of funds utilised for purchased the said property were independent of the loans given by,,,
PNB to the respondent no. 2 and there was no allegation made at any time that the appellant has used any monies of PNB to acquire the subject,,,
property, the subject property cannot be termed as proceeds of crime in relation to the offences alleged to have been committed in the charge sheet",,,
dated 26.11.2009.,,,
S.NO,DATE,PARTICUALRS,
1.,11.03.1991,"Anand Owners association purchased a plot admeasuring
339 sq. mts under an auction sale from income tax
Department by way of conveyance deed of even date and
consequently constructed the building.",
2.,05.10.1991,"Share certificates were issued to several people pertaining to
16 units of the said property.",
3.,December 1999,"Share certificates pertaining to 3 units of the said properties
were allotted to Shri Darshit Mehta, Shri Vishal Mehta and
Shri Jay Mehta.",
4 .,17.03.2003,"One M/ s Vishal Exports Overseas Ltd. obtained financial
assistance from consortium of State Bank of India for which
16 units of the said property were mortgaged to State Bank
of India by way of depositing it ledeeds of even date.",
5.,,"Due to default in repayment of finance obtained, the
borrower was classified as non - performing assets in terms
of guidance and directives issued by RBI.",
6.,19.09.2008,"Under SARFESI Act, bank had taken over the possession of
the aforesaid property.",
7.,27.08.2009,"The said property was put to auction/ sale under SARFAESI
Act, which was purchased by one Ms. JMD Media Pvt.
Ltd.",
8.,04. 09.2009,"After receipt the entire auction amount, SBI confirmed the
sale in favour of the purchaser and issued sale certificate of
even date",
9.,05. 09.2009,"Sale certificate and original it ledeeds as well as peaceful
possession were handed over to JMD Media Pvt. Ltd.",
10 .,,"Appellants came to know of inclination of M/ s. JMD Media
Pvt. Ltd. and owners of other three units of the said
properties to sell the same.",
11.,30.06.2010,"Chief Inspector of Registration, Gujarat State, Gandhinagar
issued a Circular conveying that where properties have been
attached under sectio n 5(1) of the Prevention of money
Laundering Act, 2002, the properties mentioned in the
Attachment order should not be registered without prior
approval of the concerned Department.",
12.,13.12.2010,"A Sum of Rs. 6,00,000/ - was initially paid to M/ s. JMD
Media Pvt. Ltd.",
13.,08. 04.2011,"Appellants’ through their advocates gave a notice in the
newspapers as regards any person having objection to the
sale of the said property.",
14.,21. 07.2011,"Assistant Director, Enforcement issued a letter to the Joint
Sub - Registrar, Ahmedabad, conveying that the authority
should not allow transfer/ sale of the property to any person/
party without
prior approval of the Enforcement Directorate and that in
case any sale / transfer is allowed it would compel the
authority to conclud e that by allowing registration of
property by way of sale
/ transfer / alienation/ modification the Registering Authority
would be liable for penal action under the Prevention of
Money Laundering Act, 2002 for assistance in the activities
connected with the offence.",
15.,22.09.2011,"Having received no objection from any one, the advocate
thereafter, certified vide certificate dated 22.09.2011 that he
had not received any claim or objection regarding the said
public notice till the issuance of certificate.",
16.,24.10.2011,"Subsequent to the said certificate dated 22.09.2011,
appellants proceeded to make payment and entered into
agreement to
sale which was registered by the Sub - Registrar.
No objection whatsoever were raised by the said authority at
the time of registering the aforesaid agreement.
Possession note pertaining to entire property was given
along with physical possession of the property.",
17.,10.12.2011,"Sale deed pertaining to the said property was executed
between appellant and Ms. JMD Media Pvt. Ltd., Shri
Darshit Mehta, Shri Vishal Mehta & Shri Jay Mehta.",
18.,12.12.2011,"The appellants approached sub - Registrar for registration of
aforesaid sale deed but the Sub - Registrar informed that the
sale deed cannot be registered as vide notice dated
21.7.2011 Assistant Director an Authority for Prevention of
Money Laundering act had restrained him from doing so as
certain investigation were carried out against M/ s. Vishal
Exports,
etc. with which the appellants are in no way concerned.",
19.,16.12.2011,"Sub - Registrar, Ahmedabad - III addressed a letter to the
Enforcement Directorate asking for clarification/ necessary
permission regarding registration of sale -deed.",
20 .,21.12.2011,"Enforcement Directorate addressed a letter to the Sub -
Registrar conveying that the re gistration of the sale deed
may not be allowed and reiterated contents of letter dated
21.7.2011.",
21 .,04.01.2012,"Appellants addressed a letter to the Joint Registrar,
Ahmedabad - III explaining the position and requesting for
registration of
the Sale Deed.",
22 .,10. 01.2012,"Sub - Registrar, Ahmedabad - III addressed a letter to
 Enforcement Directorate seeking clarification.",
23 .,30. 01.2012,"As The Sale Deed Was Not Being Registered By The Sub -
Registrar, Appelalnts Filed A Writ Petition Bearing SCA
No. 1059 Of 2012 In The Hon’ble Gujarat High Court
praying for various reliefs on which the Hon’ble Court
was pleased to issue notice.",
24 .,15.03.2012,"Joint Director, Enforcement was pleased to issue provisional
attachment order no. 2 of 2012 attaching the property.",
25 .,11. 04.2012,"Joint Director, Enforcement filed a complaint bearing
Original Complaint No. 133/ 2012 in provisional attachment
order No.02/ 2012 under section 5(5) of prevention of
Money Laundering Act, 2002.",
26 .,10. 07.2012,"Adjudicating authority was pleased to pass an order
confirming the provisional attachment of property.",
27 .,,"Appellants filed appeals challenging the said order in the
Tribunal.",
28 .,09.10.2012,"Appellants received a notice from the Directorate of
 Enforcement to vacate and hand over the possession of
the said premises to the Deputy Director within ten days
from the date of the receipt of this notice.",
29 .,31. 07.2013,"Hon’ble Gujarat High Court disposedoff the Writ
Petition being Special Civil Application NO. 1059 of 2012
filed by the appell ants relegating the appellants to alternate
remedy. However, status quo as regards possession of
property was directed to be maintained till final disposal of
appeals by the Tribunal.",
30 .,,"Being aggrieved and dissatisfied, applicant filed Letters
Patent Appeal being LPA no. 1038 of 2013 to only an extent
to
which the judgment dated 31.7.2013 was against the
appellant.",
31 .,21. 02.2014,"Appeal challenging the said Judgment dated 31.7.2013 being
Letters Patent Appeal NO. 1038 of 2013 (to an extent to
which the judgment was against the appellants) was
dismissed on the ground of alternate remedy.",
32.,02. 09.2014,"Petition being SLA (C) No. 10714/ 2014 filed by the
appellants in the Hon’ble Supreme Court of India
Challenging the
Judgment of Hon’ble Gujarat High Court in Letters
Patent Appeal NO. 1038 of 2013 came to be dismissed on
the ground that the appellants had already adopted
alternative remedy. It was however, clarified that all the
issues raised in the Special Leave Petition were kept open
and the Hon’ble Tr ibunal may decide the same
independently and in accordance with law.",
the monies obtained from the Banks. What has been recorded in the PAO is only the subjective satisfaction. Besides, there is no nexus between the",,,
funds sanctioned by PNB to VEOL and the funds utilized by the appellant in making the payment to SBI towards the purchase consideration.,,,
Similarly, there was no material before the Adjudicating Authority for formulating the reason and then issuance of the notice. In fact, the attaching",,,
authority by itself did not have any material on the basis of which it could formulate the reason to believe and hence no material could have been,,,
placed before the Adjudicating Authority. The issuance of notice under Section 8 of the Prevention of Money Laundering Act, by itself was bad in",,,
law.,,,
It is submitted by the appellant that offences under Sections 120B, 420, 471 and 477A of the Indian Penal Code and Sections 13 (2) of the",,,
Prevention of Corruption Act were not scheduled offences on the day they are alleged to have been committed. FIR was lodged 31.01.2008 and the,,,
offence if any ought to have been committed prior thereto. In fact, the allegation is that the loans were taken by adopting dubious means in 2005-06.",,,
The alleged offences came to be incorporated in the schedule by the amendment effective from 01.06.2009. Offence, if any, had been committed in",,,
2005-06 and at that time these were no scheduled offences. The amendment of 2009 is not retrospective.,,,
Even before the passing of the provisional attachment order on 15.03.2012, the property had been passed on to 3 HUFs as detailed in the memo",,,
appeal. The appellant being desirous to sell 16 units in Vishal House, negotiated with the 3 HUFs through their Kartas and the deal was struck at Rs.",,,
2,09,00,000/-. A Public notice was got issued in newspaper inviting objections to the sale of said 16+3 units in Vishal House. Thereafter an agreement",,,
for sale was executed between the appellant, other vendors and the intending purchasers on 24.10.2011 which was registered with the Sub- Registrar.",,,
NO objection in response to the public notice was received from any quarter. On 24.10.2011 possession was handed over to the HUFs and a,,,
possession note was executed. Thereafter, requisite stamp papers were purchased and the sale deed was drawn on the requisite stamp papers. The",,,
sale deed was then signed by both the purchaser and the seller and was presented for registration to the office of the Sub- Registrar on 12.12.2011,,,
after paying the requisite charges. It was at that stage that the Sub- Registrar refused to register the sale deed on the basis of a letter dated,,,
21.07.2011 addressed by the Director of Enforcement to the Joint Sub-Registrar Stating that investigations were being carried out and that was,,,
suspected that properties listed therein were subject matter of further investigation and directed the joint Sub-Registrar not to allow transfer/sale of,,,
any of the property listed in the letter. In the letter dated 21.07.2011, the Enforcement Directorate had misquoted a circular of 30.06.2010 of inspector",,,
General of Registration, restrained the Sub-Registrar from registering any sale deed. Enforcement Directorate also intimated the Sub-Registrar that in",,,
case the sale deed was registered, he would also be liable for penal action under the prevention of Money Laundering Act. Reference to the said the",,,
letter of Inspector General of Registration clearly show that it was in respect of the properties that had been provisionally attached under Section 5 of,,,
the Prevention of Money Laundering act. Under Prevention of Money Laundering Act, there is no provision empowering the Enforcement Directorate",,,
to issue restraint order before passing of the provisional attachment order. It shall not be out of place to state here that the Sub-Registrar not only,,,
refused to register the sale deed but illegally retained that instrument it is respectfully submitted that provisional attachment order was passed much,,,
thereafter. The direction to the Sub-Registrar was absolutely illegal and void ab initio and could not be acted upon. It is settled law that in order passed,,,
by any authority or Court without jurisdiction is coram non-judice. It is non nest-void ab inito. It’s invalidity can be set up whenever it is sought to,,,
be enforced or acted upon. The defect of jurisdiction sticks at the very authority.,,,
The submission of the appellant is that whatever was necessary for execution of the sale deed had already been done by it and nothing further,,,
remained to be done by the appellant. Only a ministerial work had to be carried out by the Sub-Registrar for registering the property.,,,
In addition to what has been submitted, the appellant also adopts the submissions made on behalf of the purchasers â€" Respondents 4, 5 and 6.",,,
During the course of hearing, the appellant placing reliance on the said sequence of events /facts â€" vehemently pleaded that no allegation had",,,
been made against the appellant/defendant no. 4 i.e. JMD Media Pvt. Ltd on 10.12.2011. Mentioning further that the sub-registrar informed the,,,
appellant that the sale deed cannot be registered in view of notice dated 21.07.2011 raised by the Enforcement Directorate, attention was drawn to the",,,
fact that he was not way connected with M/s Vishal Exports Ltd and further argued that even if the sale deed had not been registered, the mere",,,
execution of the sale deed was sufficient to establish the ownership of the property, in view of the decision of the Apex Court in the case of the Suraj",,,
Lamp Case.,,,
All above contentions of the appellant were strongly refuted by the respondent. As regards the appellants’ contention that for issuing the show,,,
cause notice, there must be “reasons to believe†which were absent in the instant case, the respondent stated that the show cause notice itself",,,
contains the reasons of forming such a believe as sufficient material do exist in form of the CBI charge sheets along with accompanying documents as,,,
well as the materials gathered by the Joint Director through his own investigation including the statement of Directors of various companies involved in,,,
alleged transfer of money which formed the basis of “reason to believe†as in section 5(1) of the Act. It was reiterated by the counsel for the,,,
respondent that the fact that the designated court had taken cognizance of the charge sheets filed lends further credence to the said believe.,,,
The nexus between Vishal Exports Overseas Ltd. and M/s JMD Media Pvt. Ltd. and the details of funds flow for purchase of Vishal House -,,,
which is under attachment, have been explained by the Respondent as under:-",,,
M/s. JMD Media Pvt. Ltd., is having its registered office Near Jagdish Ashram, at P.O. Lukhtar, Dist.: Surendranagar which is the residence address",,,
of its Director Shri PravinHalvadiya, who is a childhood friend of Shri Pradeep Mehta and Shri Deepak Mehta, the masterminds of the subject scam",,,
and the de-facto owners of the firm. The other director of the firm is Smt. Falguni Bhatt who is the cousin sister of the same Shri Pradeep Mehta and,,,
Shri Deepak Mehta. Both these persons were made directors of the company by the said de-facto owners, and they have categorically stated that",,,
they were not aware of the day to day activities of the company and that all such things are handled by the said Shri Pradeep Mehta and Shri Deepak,,,
Mehta.,,,
The said M/s. JMD Media never carried out any objects for which it was set up as per Memorandum and Articles of Association. POCs were,,,
diverted and rotated among a number of group firms floated in this manner by Shri Deepak Mehta and Shri Pradeep Mehta.,,,
Shri PravinHalwadiya was also director of various other group companies of Vishal Exports, i.e. Navkar Green Power, Alive Hospitalities, FFR",,,
Software, etc.",,,
Smt. Falguni Bhatt was also director of other Vishal Group firms, i.e. Alive Hospitalities, VikalpRasayan, Mandakini Hydro Power, DF Hydro Power,",,,
etc. Her husband Rakesh Bhatt was also director of M/s. FFR Software, etc. along with Shri PravinHalwadiya.",,,
It revealed that the property i.e. Vishal House, Ahmedabad was owned by M/s VEOL & its Directors and relatives thereof. The subject property was",,,
auctioned by the State Bank of India and the same was purchased by M/s JMD Media Private Limited whose one of the director was Shri Pravin T.,,,
Halvadiya (childhood friend of Shri PradeepS.Mehta). During investigation it revealed that JMD Media Private Limited had received the funds from,,,
M/s VikalpRasayan Private Limited (Group company of VEOL). M/s VikalpRasayan Private Limited had received funds from M/s VEOL, Vishal",,,
Builders and VIOL. It is evident that to save from the clutches of PMLA, the property was purchased by so called JMD. It appears prima-facie that",,,
the same was purchased from the funds of M/s VEOL after doing interlink transactions. The fund flow chart in regard of the same is as below,,,
The fund flow from the de-facto owners and their other group firms to M/s. JMD Media is well explained in the complaint.:,,,
The above flow of funds has been explained by Shri Rakesh Bhatt (husband of Smt. Falguni Bhatt and cousin sister of Shri Pradeep Mehta and Shri,,,
Deepak Mehta) in his statement recorded on 19.03.2012.,,,
The above chart reveals that Shri Pradeep Mehta and Shri Deepak Mehta have transferred total amount of Rs. 2.69 Crores to M/s. VikalpRasayan,,,
(their own group firm in which their cousin sister Smt. Falguni Bhatt and her husband are the directors). Such transfers have done either from their,,,
own account or from the accounts of their group firms such as Vishal Builders, Vishal Imports Overseas Ltd. besides sourced out of the sale of a",,,
property at BKC, Mumbai. Out of the total Rs. 2.69 Crores, M/s. VikalpRasayan transferred Rs. 1.89 Crores to M/s. JMD Media Ltd.",,,
The said amount of Rs. 1.89 Crores was paid by M/s. JMD Media to SBI for purchase of Vishal House in auction proceedings.,,,
Para 5(a) to (f) of the prosecution complaint clearly illustrates the flow of funds among the group firms of Vishal Group.,,,
Statements of Shri Falguni Bhatt, Shri Rakesh Bhatt, Shri PravinHalwadiya referred under Para 7 of the prosecution complaint clearly reveal that",,,
none of these persons, who were on the board of directors of various group firms, were actually handling the daily affairs of their business; and all",,,
such works were exclusively carried out by the de-facto owners Shri Pradeep Mehta and Shri Deepak Mehta.,,,
In his statement dated 22.12.2011, Shri PravinHalwadiya, Director of M/s. JMD Media has categorically admitted that he was not even aware as to",,,
who had attended the auction proceedings in which his company had purchased Vishal House from SBI.,,,
In her statement dated 09.03.2012, Shri Falguni Bhatt, other director of M/s. JMD Media stated that she was not aware of the unsecured loans taken",,,
by the said company from different sources, and that Shri Deepak Mehta and Shri Pradeep Mehta could only answer the same.",,,
In his statement dated 27.12.2011, Shri Pradeep Mehta admitted to have provided funds to M/s. JMD Media and other group firms for purchase of",,,
subject properties.,,,
In view of the above, it was contended that the nexus between the appellants and VEOL is proved beyond reasonable doubt and therefore, the",,,
present appeal should be dismissed.,,,
We have considered the written submissions and the oral arguments made by the appellant as well as the respondent. As regards the,,,
appellant’s contentions that “reasons to believe†were absent in the instant case, a perusal of the show cause notice confirmed the arguments",,,
of the respondent that the reasons to forming to such believe was on the basis of sufficient material existing in the form of CBI Chargsheet alongwith,,,
accompanying documents as well as material gathered by the Joint Director through his own information including the statement of Directors of,,,
various companies do find place in the said showcause notice. The other contention of the respondent that the fact that the designated court had taken,,,
cognizance of the charge sheets filed lends further credence to the said “reasons to believe†as also a matter of word.,,,
As regards the other contentions of the appellant that there was no evidence or material to show that the said property i.e. Vishal House had been,,,
purchased out of proceeds of crime, as it is a matter of record that the investigation revealed that Vishal Exports Overseas Limited (VEOL) had",,,
misused the credit facility given to it by Punjab National Bank and it was only on failure on the part of VEOL to the payment of the loan amount that,,,
certain immovable properties including Vishal House had been put up for auction by the consortium of banks led by State Bank of India and the,,,
property in question i.e. Vishal House had been purchased by JMD Media Pvt. Ltd. ( the appellant for an amount of Rs. 1.89 crores).,,,
A perusal of the statements of Shri Pradeep Mehta, Managing Director of VEOL, Praveen T. Halvadia, Director, JMD and others indicate",,,
creation of various groups under the supervision of Shri Pradeep Mehta, and on analysis of details available on record indicate that Shri Pradeep",,,
Mehta and Deepak Mehta had transferred the amount of Rs. 2.69 crores to M/s VikalpRasayam (their own group firm in which their cousin sister,,,
Smt. Falguni Bhatt and her husband are the Directors), and such transfers have been done either from their own account or from the accounts of their",,,
group firms such as Vishal Builders, Vishal Imports Overseas Ltd. besides sources out of the sale of a property at BKC, Mumbai and it was out of",,,
the said amount of Rs. 2.69 crores that M/s VikalpRasayan had transferred Rs. 1.89 crores to JMD Media Pvt. Ltd. which was utilised for paying to,,,
State Bank of India for purchase of Vishal House in auction proceedings.,,,
As stated earlier, out of 19 units in Vishal House, the share certificate of 3 units of the said property were purchased by Shri Jagdish Ishwarbhai",,,
Patel, HUF (through ifs Karta, Jagdish Ishwar Bhai Patel), Shri Krushbhai Jagdishbhai Patel HUF (through its Karta, Krushbhai Jagdishbahi Patel)",,,
and Shri Ankit Jaddishbhai Patel HUF (Through its Karta, Krushbhai Jagdishbhai Patel) also referred to as respondents 4, 5 and 6 and the sale deed",,,
â€" though executed on 10.12.2011 - had not been registered by the Sub-Registrar in view of the communication received from the Enforcement,,,
Directorate conveying that the registration of sale deed need not be allowed as the property in question had been attached u/s 5(1) of the Prevention,,,
of Money Laundering Act, 2002.",,,
As regards the appellant’s other contention that the execution of the sale deed dated 24.10.2011 had resulted in the sale/transfer of the said,,,
property, it was argued by the respondent that the said agreement dated 24.10.2011 was a sham document prepared subsequent to a letter dated",,,
21.07.2011 of the Enforcement Directorate issued to the Joint Sub-Registrar not to allow transfer/sale of any property to any person/party without,,,
prior approval of the Enforcement Directorate. In support of his contention that the said agreement dated 24.10.2011 was a sham document, the",,,
learned counsel for the respondent place reliance on the following facts:-,,,
(1) After having paid a sum of Rs. 6 lakhs to M/s JMD Media Pvt. Ltd. on 13.12.2010, it was only in April, 2011 that the Respondent 4,5 & 6 through",,,
their Advocates had given a notice in the newspaper as regards any person having objection to the sale of the said property and implying hereby that,,,
the fact that there was some issue relating to the property in question was in the knowledge of the seller as well as the buyers and;-,,,
(2) Though the appellant received a communication from his Advocate that he had not received any claim or objection to the sale of the said property,,,
only on 22nd September, 2011, an amount of Rs. 5 lakhs had been further received by the appellant on 9th June, 2011 itself;",,,
(3) As per the statement of Shri Ankit Patel on 07.02.2012, 13.02.2012 & 15.02.2012 wherein Shri Ankit Patel had stated that he had received a call",,,
from Shri Pradeep Mehta in August, 2011, wherein Mr. Mehta had insisted for an early finalization of the deal whereby Shri Ankit Patel got to know",,,
that the said property indirectly belonged to Shri Pradeep Mehta and M/s VEOL and had liability of the CBI. In his statement, Shri Ankit J. Patel",,,
stated that he had met with Mr. Pradeep Mehta again and requested him to settle the matter and refund the payment of Rs. 2 crores on which he was,,,
advised by Shri Pradeep Mehta to file a petition before Hon’ble Gujarat High Court and that arrangement of Advocate and payment of fees for,,,
handling the matter in the High Court was also to be arranged by Shri Pradeep Mehta.,,,
As would be observed from the above, it is evident that the tainted nature of the property was well known to JMD Media Pvt. Ltd. as well as the",,,
buyers. As stated earlier, the Chief Inspector of Registration, Gujarat State, Gandhinagar had issued a circular conveying that where properties have",,,
been attached under Section 5(1) of the Prevention of Money Laundering Act, 2002, the properties mentioned in the attachment order should not be",,,
registered without prior approval of the concerned Department. Having received the initial payment of Rs. 6 Lakhs on 13.12.2010 M/s JMD Media,,,
Pvt. Ltd. thought it prudent to give a notice in the newspaper through their Advocates only on 08.04.2011 as regards any person having objection to,,,
the sale of the said property, Still further, an amount of Rs. 5 lakhs was paid by the appellant to M/s JMD Media Pvt. Ltd. on 9th June, 2011 itself,",,,
whereas a communication from the Advocate stating that no objection had been received from anyone to the proposed sale of the said property has,,,
been received vide certificate dated 22.09.2011 only.,,,
As far as registration of sale deed is concerned, the same has not been registered. We agree with regard to the argument that the FIR in the",,,
matter was registered on 31.01.2008 and the schedule offence were added on 01.06.2009, the same have no force as the units in questions were sold",,,
only in the year-2011. As regards the other arguments of the appellant, the same have no force as each and every plea raised by the appellant before",,,
us has been dealt in the impugned order. There is no infirmity in the impugned order.,,,
In view of the facts and circumstance of the case, we find no force in the arguments of the appellants that the impugned order dated 10th July,",,,
2012 is arbitrary, unreasonable, high handed, only without jurisdiction and illegal and void. There is no infirmity in the order, we have passed a detailed",,,
order in the connected appeal. The operative part of order pertaining to the same property “Vishal House†is read as under;,,,
“43. In view of the facts and circumstance of the case and the discussion hereinabove, we find no force in the arguments of the",,,
appellants that the impugned order dated 10th July, 2012 is arbitrary, unreasonable, high handed without jurisdiction and illegal and void.",,,
We therefore uphold the impugned order.,,,
43.1 At the same time, it is observed that the appellants have already paid an amount of Rs. 1.89 crores to the seller, i.e. JMD Media Pvt.",,,
Ltd. â€" for purchase of the attached property and the property is in the possession with the appellant. During the hearing, the learned",,,
counsel of the appellant had made a prayer as an alternative submission that possession may be allowed to be continued with them. In the,,,
facts and circumstances of the case, we are of the opinion that it would be in all fairness if such permission is allowed subject to the",,,
condition that the appellant deposits the sum of Rs. 25 thousand per month for the attached properties to the respondent from the date of,,,
this order till the final disposal of the proceedings under the PML Act-2002, before the Learned Special Court. The said deposit shall be",,,
treated as without prejudice and in case it was found after trial and final order that the appellants were innocent party in purchasing the,,,
property, the said amount would be refunded to the appellant by the Respondent without any delay. In case the result is otherwise, the",,,
amount shall be to the account of the respondent. It is further directed that subject to the appellant complying with the above condition,",,,
possession shall not be taken over by the respondent in pursuance of the impugned order. The appeal is allowed in above terms.â€,,,
As far as the appeal of the appellant is concerned, there is no merit. The same is dismissed.",,,