Kalyani Education Pvt. Ltd. vs Deputy Director, Directorate Of Enforcement Mumbai

,,,

Manmohan Singh, J",,,

FPA-PMLA-1220/MUM/2016, FPA-PMLA-1213/MUM/2016 &FPA-PMLA-1221/MUM/2016",,,

The above-mentioned appellants have challenged the Impugned Order dated 30.12.2015 in OC no. 512/2015passed by the Adjudicating Authority,,,

confirming the Provisional Attachment Order no. 18/2015 dated 21.07.2015 in ECIR No. 6/MZO/2012 dated 18.06.2012.,,,

The detailed separate judgement has been delivered in the ten appeals being no. 1104/2015 and others. Most of the facts and legal issues are,,,

common. Thus the said judgement may also be read with the present judgement being passed in the above appeals.,,,

The adjudicating order is common and hence by this order, I propose to decide all the three appeals by single order.",,,

It is admitted position that the appellants are neither arraigned in any schedule offence nor in any charge-sheet.,,,

The Appellants rely on the grounds of appeal filed by M/s. Kalyani Charitable Trust showing so called money trail at page 57 of the said appeal. Sh.,,,

Nilesh Thakur as proprietor of M/s. PRS Enterprises; M/s. P.R. Developers and Director of M/s. Accord Infrastructure Pvt. Ltd. Sh.Nitish,,,

Thakur/Sh.Nilesh Thakur is a prank contrived to justify invoking Section 13(1)(e) of P.C Act against the public servant Sh. Nitesh J. Thakur. This,,,

aspect has been addressed by Appellants in the said appeal. The grounds are inter-alia reproduced below:-,,,

B. For that the respondent could not proceeded for attachment against the appeal when admittedly the appellant was not held to be,,,

possessing any property on behalf of the public servant and was not arraigned as an accused in the charge-sheet filed by ACB against the,,,

public servant which in turn means that the monies received by the appellant were not part of the disproportionate assets of the public,,,

servant and the donations received by the Appellant Company could not be branded as a property derived or obtained as a result of,,,

criminal activity relating to the scheduled offence, hence was not a “proceed of crime†and therefore, the respondents could not have",,,

assumed jurisdiction to attach the impugned properties of the appellant under PMLA. The impugned order of confirmation and attachment,,,

is, hence, beyond the PMLA and thus is beyond jurisdiction.",,,

C. For that the attachment order and confirmation order by the Ld. Adjudicating Authority is proceeding on erroneous understanding of the,,,

provisions of section 13(1) (e ) of PC Act and section 109 of IPC. The impugned order being contrary to the criminal jurisprudence is void,,,

ab initio.,,,

D. For that the whole proceedings against the appellant and others are bad from root to fruit, inasmuch as, the Ld. Attaching Officer in the",,,

complaint and the Ld. Adjudicating Authority has failed to focus their attention to the first requirement of determination as to whether there,,,

is any “proceed of crime†as envisaged under section 2(u) of PMLA. The appellant submits that there is no material adduced by the,,,

respondent to show that the money sourced to or received from M/s. S.D. Corporation to M/s. PRS Enterprises and others, is result of any",,,

criminal activity relating to any scheduled offence. The appellant humbly submits that in the absence of the basic ingredient as to the,,,

“proceeds of crimeâ€​ being available, the attachment and confirmation of complaint is void abinitio.",,,

E. For that the authorities below have miscarried themselves to conclude that “all†or “any transaction†conducted with the person,,,

arraigned in a “scheduled offence†is a “proceed of crimeâ€. The focus ought to be on property derived or obtained as a result of,,,

criminal activity relatingto the scheduled offence as against the “person†who may be arraigned in a scheduled offence. The order is,,,

liable to the quashed on this count.,,,

F. For that the respondent and the Ld. Adjudicating Authority has proceeded to pass the impugned orders erroneously on the reasoning,,,

that “any person†and “any money†can be proceeded against under PMLA ignoring, that such person proceeded against has to",,,

be in “possession†of “proceed of crime†and it can’t be “any money†but only such money which is derived or obtained as,,,

a “result of criminal activity relating to the scheduled offence†which is a “proceed of crimeâ€. In the absence of any such material,,,

the order is liable to be set aside on this short ground.,,,

G. For that the source of the funds is admittedly emanating from M/s. S.D. Corporation, M/s. Shapoorji Pallonji, who are not proceeded",,,

against in the attachment order or in the OC, hence it could not be averred that monies given by such entities to any person including M/s.",,,

PRS Enterprises or M/s. PRS Developers etc. are emanating from any activity relating to any “scheduled offenceâ€, hence such monies",,,

could not be “proceed of crime†and therefore the instant proceedings under PMLA are void abinitio. The impugned orders are liable,,,

to be set-aside on this short ground.,,,

H. For that admittedly M/s. S.D. Corporation, M/s. Shapoorji Pallonji and or M/s. Strategic Infrasol LLC were neither involved in any",,,

scheduled offence nor party to the instant proceedings under PMLA, hence money flown from such legal entities were not result of any",,,

activity relating to any scheduled offence, hence could not be “proceed of crime†simply because it has come in the account of M/s.",,,

PRS Enterprises or M/s. PRS Developers, Proprietary concerns of Sh. Nilesh Thakur, arraigned as accused in terms of Section 109 IPC",,,

read with Section 13 (1) (e ) of PC Act. Merely because Sh. Nilesh Thakur is arraigned with his brother does not render all transactions,,,

conducted by him and/or by his business concern as “proceed of crime†much less the donation received by the Appellant Company.,,,

Thus, in the absence of “proceed of crimeâ€​, the instant proceedings under PMLA are beyond jurisdiction.",,,

I. For that the mere existence of the “scheduled offence†in the charge-sheet is not a pretence or occasion for exercise of powers of,,,

attachment of property of any person under PMLAS who is not even arraigned as an accused in the charge-sheet of scheduled offence and,,,

that too on the basis of the statement/transcript of the bank account showing movement of funds from one account to another in legal,,,

manner by way of cheques on account of normal legal transactions duly recognized by law. The whole approach of the authorities below is,,,

erroneous and contrary to law rendering the impugned orders null and void.â€​,,,

It is not disputed by any party including ED that the money received by the Appellants is traceable to source of Shapoorji Pallonji, which is",,,

admittedly “clean moneyâ€. This clean money of Shapoorji Pallonji given to M/s. S.D Corporation and further to M/s. PRS Enterprises and,,,

thereafter to Appellants for business purposes does not become “proceeds of crimeâ€, merely because the ACB has registered offence u/s 13(1)",,,

(e) of P.C Act against Shri. Nitesh, brother of Shri. Nilesh.",,,

The use of money does not make such money “proceeds of crimeâ€. As per definition of Section 2(u) of PMLA, the proceeds of crime is the",,,

S.No.,Amount in Rs.,Remarks,

1.,"2,45,00,000","Investment in M/s GCL By M/s HEPL and lying in Corporation Ban

Bhowanipur Branch, Kolkata A/c No.510101003473693 of M/s GCL.",

2.,"11,86,710",Lying as fixed deposits No.015340100288/8 dated 04.07.2017,

3.,"1,26,540",Lying in A/c No.0153201100424,

4.,"7,160",Lying in A/c No.0153201002578,

Total,"2,58,20,410",,

S. no.,"D a t e of execution of

document",Consideration mentioned in the deed,Location

1.,04.11.2011,"65,00,000","Office premises at FO-22

[area 374.40 sq. ft.]

alongwith open parking

FD-10 at Shubhada CHS

Pochkanwala Road Worli,

Mumbai in the name of

Ravindra Sapka

purchased from the

account of Kalyani

Charitable Trust‟s Axis

Bank account

2.,,"65,00,000","Fixed Deposit Syndicate

Bank Byuculla

3.,,"40,50,00,000","B u i l d i n g alongwith

ancillary structures and the

land upon which said

immoveable property

stands today in the

Campus of Kalyan

Charitable Trust at plot

Gut No.335, 340, 341, 342,

345, 367 of Village

Anjaneri, Tal.

Trimbakeshwar, Distt.

Nashik.

4.,,"5,32,469","Bank Balance account in

RavindraSapkal‟s bank

account in Axis Bank,

PrabhadeviWorli Branch

,,"14,16,73,249","B u ild in g s alongwith

ancillary structure and the

land upon immovable

property stand today

situated in the Campus of

Kalyani Education Pvt

Ltd. at Plot Bearing Gut

No.370, 336, 453 of village

Anjaneri& Gut No.45/3

47/2 & 589 of village

Vadholi, Tal.

Trimbakeshwar, Distt.

Nashik

Total,,"56,02,05,718",

14.7 In view of the said Misc. Application, the Adjudicating Authority directed that SPCL be made a party Defendant to the Original Complaint and",,,

accordingly SPCL was arrayed as Defendant No. 12 in the proceedings of the O.C. 512/15.,,,

14.8 At the hearing before the Adjudicating Authority on 18.11.2015, Respondent No. 1 submitted a statement giving his comments to the Misc.",,,

Application praying therein that the Misc. Application filed by SPCL [Reply to SCN] be dismissed as it was devoid of merits and the attachment be,,,

confirmed.,,,

14.9 SPCL filed a Response Statement to the statement filed by Respondent No.1 in November, 2015. By its Response Statement SPCL brought on",,,

record the correct facts of the matter and also thereby dealt with Respondent No. 1â€s comments and contentions set out in Respondent No. 1â€s,,,

Statement.,,,

14.10 The Adjudicating Authority vide its Order dated 30.12.2015 confirmed the said PAO No. 18/15.,,,

Being aggrieved by the Order dated 30.12.2015, SPCL filed the above Appeal before this Tribunal on 15.02.2016.",,,

Nilesh J. Thakur has confirmed the payments given to the appellants for investment purpose. The difference only is that Kalyani Group says that it,,,

was donation and Nilesh J. Thakur has stated that it was investment,,,

These are two versions between the parties otherwise all group parties to the appeals admit that the money was owned by SPCL and was clean,,,

and untainted. It appears that there is an inter-se disputes between appellants and Nilesh J. Thakur. The stand of SPCL is that it was merely an,,,

investment and SPCL has to recover the said amount from Nilesh J. Thakur. Nilesh J. Thakur stand is that it was an investment and he is entitled to,,,

recover the entire amount with interest in order to reduce his liabilities towards decretal amount. Thus, all these are relevant to determine the civil",,,

disputes between the parties.,,,

The appellants are running educational institutions and the Respondent has issued the impugned attachment order and complaint on the erroneous,,,

premise of “any property†of“any person†without focusing its attention as to first pre-requisites in law of existence of any “proceeds of,,,

crimeâ€​ and availability of “materialâ€​ to lead to “reasons to believeâ€​ as required under Section 5 of PMLA.,,,

In the present case, one fact is very clear that Adjudicating Authority has not at all considered the written submission submitted by the Appellants",,,

before him, which are appended at page 95 onwards in the Paper Book of Kalyani Charitable Trust. The respondents and the Adjudicating Authority",,,

have miscarried itself in law by ordering attachment and confirmation of the attachment in the absence of any “proceeds of crimeâ€. In the,,,

absence of proceeds of crime the very exercise of powers by the respondents under PMLA is beyond jurisdiction. The contentions of Appellants have,,,

not been met including denial of cross-examination.,,,

The properties of the appellants were attached towards value thereof. The said properties were not purchased from the proceed of crime. It is,,,

inter-se disputes between the appellants and Nilesh J. Thakur about the money parked at the hand of Kalyani Group. However, it is not disputed by",,,

any party that the said amount was originally owned by the SPCL which is not tainted even as admitted by the counsel for the ED. Thus, the question",,,

of proceed of crime or money laundering by any appellant in all appeals does not arise.,,,

The appellantsâ€​ properties, therefore, wrongly attached by the ED.",,,

All appeals are allowed. The impugned order dated 30.12.2015 and provisional attachment orders are set-aside against the appellants. The,,,

properties are released forthwith.,,,

All MPs are disposed of.,,,

No costs.,,,