Manohar Krishna Madhavi vs Deputy Director Directorate Of Enforcement, Mumbai

,,,,,

FPA-PMLA-1845/MUM/2017,,,,,

By this order, this Tribunal proposes to decide the above- mentioned appeal which is filed against the Order dated 31.05.2017 passed in OC-",,,,,

688/2017.,,,,,

The brief facts are that the CBD Belapur Police Station, Navi Mumbai had registered an FIR No. 73/2009 on 17.05.2009 invoking sections 420,",,,,,

465, 467, 468, 471, 218, 409, 34 and 120B of the Indian Penal Code (IPC), 1860 against various persons.",,,,,

2.1. ln the FIR, it was alleged that the accused had increased the number of workers, their man-hours, number of vehicles used etc. in the challan",,,,,

which was used for the approval for the payment of the demolition of unauthorized structure in the jurisdiction of Navi Mumbai Municipal Corporation,,,,,

(NMMC) thereby had cheated NMMC for obtaining excess amount of Rs. 2,69,12,282/- from them.",,,,,

2.1 It is disclosed that the Encroachment Department of NMMC had invited tender/bids to carryy out demolition work of unauthorized structures,",,,,,

transportation of laborers and machinery required for demolition purpose and the contract for the same was granted to M/s. H. B. Bhise & Company,,,,,

which was owned by Shri H. B. Bhise. Company submitted the bills to NMMC for the work done by them, but during the audit, it was transpired that",,,,,

M/s H.B. Bhise & Company had cheated NMMC by overcharging the bills, manipulating bills, tempering/ overwriting/inflating the bills after",,,,,

submissions.,,,,,

a) During the preliminary examination by the Deputy Commissioner (Encroachment), NMMC, it was mentioned that the challan after obtaining the",,,,,

signature of ward officer has been overwrite and the numbers of vehicles, labour and working hours has been increased.",,,,,

b) During the preliminary investigation, it was revealed that M/s H.B. Bhise and Co. after signing the challan of ward officer has increased the",,,,,

numbers of vehicles, labour, machinery and cheated the Municipal Corporation for his personal gain/ greed. M/s. H. B. Bhise & Company submitted",,,,,

the bills to NMMC for the work done by them but during the audit, it was transpired that M/s. H. B. Bhise & Company had cheated NMMC by",,,,,

overcharging the bill wherein they had increased number of workers, their man-hours, number of vehicles used vehicles etc., thereby presented those",,,,,

inflated bills for the excess amount of Rs. 2,69,12,292/- as true bills for the work done.",,,,,

c) During the investigation by the police authorities, it was revealed that the said contractor has cheated the NMMC to the tune of Rs. 2,69,12,200/-",,,,,

during the period from 27.03.2003 to 31.03.2009.,,,,,

In the FIR dated 17.05.2009, registered under section 420/465/467/468/471 IPC, the Appellant has not been named, even in the Charge-sheet dated",,,,,

25.08.2009. However, the name of the Appellant was added in the supplementary charge-sheet 25.09.2009 filed.",,,,,

Police authorities of CBD Belapur, Navi Mumbai as per Charge Sheet No. 1-79/09 dated 25.08.2009 invoked sections 420, 465, 467, 468, 471, 120B",,,,,

and 34 of Indian Panel Code (IPC) against (i) Manohar Krishna Madhavi (ii) Hanumantrao Baurao Bhise (iii) Dhanaji Kashinath Mhatre (iv) Ajay,,,,,

Mhatre and others. Subsequently, Supplementary Charge Sheet Nos. I 78-A/09 dated 25.09.2009, I 79-B/09 dated 19.04.2011 and 79-C/09 dated",,,,,

20.07.2012 was also filed.,,,,,

As the offence under Section 120B, 420, 467, 471 of IPC, 1860 falls under scheduled offences covered in PART A of Paragraph-1 of the schedule",,,,,

to the PMLA, 2002, the Directorate of Enforcement, Mumbai Zonal Office, recorded an ECIR bearing No. 92/MZO/2009 dated 06.11.2009 against",,,,,

the appellant, Shri Manohar Madhavi and S/Shri Rajesh Patil, Ajay Mhatre, Praveen Bavdane, Prem Mhatre, Shailesh Patil, Hanumantrao Bhise,",,,,,

Dhanaji Mhatre, Ambrish Patnigire, Divakar Samel, Jaivant Dalvi, Namdev Alhat and Prakash Kamble under the provisions of PMLA, 2002). After",,,,,

investigation and recording the statement of the witnesses, the provisional attachment order was passed. Thereafter, by the impugned order, the",,,,,

attachment order was confirmed. The appellant has challenged the said order on filing of present appeal.,,,,,

In the present case, this Tribunal is only concerned as to whether the impugned order is sustainable in law or not and the properties attached are",,,,,

acquired from proceed of crime or not. This Tribunal does not wish to express any opinion on the basis of allegations made in the charge-sheet nor the,,,,,

allegations made in the prosecution complaint under Section 45 of PMLA.,,,,,

About the appellant, he is engaged in the business of construction and supply of machinery and transport like JCB, dumper, labour and has also",,,,,

supplied the same to various parties including M/s H.B. Bhise & Co. It is the case of the appellant that the appellant provided the said services to M/s,,,,,

H.B. Bhise & Co. in 2001-2002 for various projects and in lieu thereof, the appellant received the payments in and around 2002-2003.",,,,,

It is not in dispute that M/s H.B. Bhise & Co. got the contract from NMMC for demolition of unauthorized structure and made a request to the,,,,,

appellant for providing the services of JCB, poplan, labour services etc. and in lieu thereof payments were made by M/s H.B. Bhise & Co. to the",,,,,

Appellant over a period of time. A copy of Agreement between the Appellant and M/s H.B. Bhise & Co. is already filed with the Appeal.,,,,,

It is not denied by the respondent that M/s H.B. Bhise & Co. submitted bills to NMMC for the work carried out, but during the audit, it was",,,,,

transpired that they have cheated NMMC by overcharging, tampering and inflating the bills. The only allegation against the Appellant is that the",,,,,

Appellant was the beneficiary of the amount defrauded in the case and on the basis of which the Adjudicating Authority vide Order dated 31.05.2017,,,,,

passed an order of attaching the properties of the Appellant.,,,,,

The respondent has admitted that the appellant has no contract with NMMC, nor any bill and invoices were raised by him. He has received the",,,,,

payment from the said firm H.B. Bhise & Co.,,,,,

The FIR was actually registered on the basis of complaint mainly against M/s. H.B. Bhiso and Company.,,,,,

The appellants counsel has referred the statement recorded as well as documents already filed,,,,,

a) The statement of Shri Suresh Ramu Patil, who had lodgded the complaint with Belapur Police Station was recorded on 16.02.2016 under the",,,,,

provisions of the Section 50 (2) and 50 (3) of the PMLA, 2002 wherein he inter alia stated, that he was presently posted as Deputy Commissioner,",,,,,

Zone-II, Navi Mumbai Municipal Corporation; that as per the directions of the then Commissioner of Navi Mumbai Municipal Corporation he had",,,,,

lodged Complaint with Belapur Police Station against M/s. H B Bhise & Co. for inflated demolition bill scam on 16.05.2009 and accordingly Belapur,,,,,

Police had registered FIR on 17.05.2009; that the NMMC had called for tender for demolition work contract and after due official procedure, the said",,,,,

contract was granted to M/s. H B Bhise & Co. on 27.02.2003; that on receipt of the bill from the Contractor, the Encroachment Department verified",,,,,

the challans and bills and further submitted to the Office Superintendent who after verification further submitted to the Asstt. Commissioner,,,,,

Name of the Company,Name. of the Proprietor,Account No.,"Name of the Bank and

Branch",,

M/s Aditya Transport,"Dhanaji Kashinath

Mhatre",023/3057,,,

,,,"Gopinath Patil Parsik

Janta Sahakari Bank

Ltd. Airoli Branch",,

M/s Aditya Construction,"Dhanaji Kashinath

Mhatre",023/3562,"Gopinath. Patil Parsik

Janta Sahakari Bank

Ltd. Airoli Branch",,

M/s D A Transport,"Dhanaji Kashinath

Mhatre",1674,"Mahanagar Co

operative Bank Ltd,

Airoli Branch.",,

Sr.

No.","Year of acquisition

of the

property",Description of the Immovable property,Area,,

1.,2009,"Plot No. 110, Sector-25, Talawali

Ghansoli, Navi Mumbai","100 sq.

meters",,

2.,2010,"Flat No. 106, First floor, Plot No. 14, New

Bombay Safalya Co- operative Housing

society Ltd. Near PirSaiyad Sufi Sant

Garden, Sector-7, Airoli, Navi Mumbai,

Pin-400708","1250 sq. ft.

(including

Terrace)",,

3.,2011,"Row House No. 01, Plot No. 30, Friends

Co-operative Housing Society, Near Pratik

Corner Society, Sector-7, Airoli, Navi

Mumbai","1000 sq. ft.(G+2

floor)",,

4.,2011,"Flat No. 04, Ground Floor, Plot No. 18,

Type AL-6, Panchwati Building No. 25,

Near Omkareshwar Temple, Sector-5,

Airoli, Navi Mumbai",67.48 sq. meters,,

Sr.

No.","Documents submission

details",Description documents,Scrutiny analysis,,

1.,"Document submitted

by Shri Manohar

Madhavi under his

statement dated 30.09.2014","Copy of the agreement executed

between M/s. M.K.

Constructions and M/s. H.B.

Bhise","This is the agreement

between the firms of

Shri Manohar Madhavi and

M/s. H.B. Bhise for the",,

2,"Copy of NMMC. letter

dated 16.02.2016","NMMC by letter dated

16.03.2016 submitted the

financial year-wise break-up of

the amount totalling to Rs.

2,69,12,292/- for which NMMC

was cheated","Confirmation by the

NMMC authorities with

regard to the amount i.e.

proceeds of crime for

which NMMC by cheated.",,

3,"Documents

submitted by Shri Dhanaji

Mhatre under his statement

dated 18.01.2017","a. Irrevocable Power

of Attorney executed between

Shri Dhanaji Mhatre Proprietor

of M/s. Aditya Construction and

Shri Ajay Mhatre.

b. Irrevocable Power of

Attorney executed between Shri

Dhanaji Mhatre Proprietor of

M/s. D.A. Transport and Shri

Ajay Mhatre.","Scrutiny of the document

confirmed that Shri Ajay

Mhatre was looked after

the transactions of the

firms bank account of the

firm including the bank

accounts of the firms.",,

4,"Documents submitted by

Shri Manohar Madhavi","Income Tax Return filed

by Shri Manohar Madhavi","Shri Manohar Madhavr is

the proprietor of M/s.

M. K. Construction

operating from ‘Blue

Heaven Society Sector-5

Airoli, Navi Mumbai'",,

5,"Documents submitted by

Shri Ajay Mhatre","Income Tax Return filed

by Shri Ajay Mhatre","Shri Ajay Mhatre had not

mentioned any business

income other than salary

and there was no mention

of M/s. M K Construction

as his Proprietorship firm.",,

6.,"Document forwarded by

the Navi Mumbai Police

authorities","Affidavit filed by Shri Ramesh

Mohite, Police inspector dated

31.07.2009 before Hon’ble

Bombay High Court in Criminal

Application 319 of 2009 filed by

Shri Manohar Madhavi","The affidavit revealed that

the criminal antecedent of

Shri Manohar Madhavi.",,

7.,"Documents submitted by

Shri H.B. Bhise under his

statement dated 14.03.2018","Affidavit filed by Shri H. B.

Bhise before Hon’ble Trial

Court on 30.06.2009.","The affidavit revealed that

Shri Manohar Madhavi had

obtained the contact from

NMMC and the work of

the contact was looked

after by Shri Manohar

Madhavi through Shri Ajay

Mhate.",,

Sl.

No.","Amount transferred from

NMMC

to Bhise's Account",,"Amount transferred from Bhise's account to Shri

Manohar Krishna Madhavi and his associates",,

1.,"Date of

credit",Amount,Account Name,"Date of

credit",Amount in Rupees

2.,06.02.2004,"Rs. 7,87,627/-",M K Construction,10.02.2004,"Rs. 7,82,627/-

3.,15.03.2004,"Rs. 15,80,749/-",M K Construction,17.03.2004,"Rs. 15,55,000/-

4.,18.06.2004,"Rs. 16,12,166/-",M K Construction,19.06.2004,"Rs. 15,96,166/-

5.,03.09.2004,"Rs. 24,55,321/-",M K Construction,04.09.2004,"Rs. 24,30.800/-

6.,14.02.2005,"Rs. 24,51,800/-",M K Construction,15.02.2005,"Rs. 24,27,282/-

7.,29.07.2005,"Rs. 38,47,245/-",M K Construction,30.07.2005,"Rs. 15,23,600/-

8.,14.10.2005,"Rs. 15,14,248/-",M K Construction,17.10.2005,"Rs. 4,49,731/-

,,,M K Transport,17.10.2005,"Rs. 10,49373/-

9.,02.02.2006,"Rs. 32,22,441/-",M K Construction,06.02.2006,"Rs. 10,74,147/-

,,,M K Transport,04.02.2006,"Rs. 10,74,147/-

,,,D A Transport,04.02.2006,"Rs. 10,74,147/-

10.,07.04.2006,"Rs. 44,95,641/-",M K Construction,08.04.2006,"Rs. 6,95,641/-

,,,M K Transport,08.04.2006,"Rs. 22,50,000/-

,,,D A Transport,08.04.2006,"Rs. 15,50,000/-

11.,26.07.2006,"Rs. 45,86,525/-",M K Construction,"2,707.2006","Rs. 15,28,840/-

,,,D A Transport,27.07.2006,"Rs. 15,28,840/-

,,,Aditya Transport,27.07.2006,"-Rs. 15,28,840/-

12.,13.06.2007,"Rs. 14,02,688/-",D A Transport,16.06.2007,"Rs. 13,88,660/-

13.,02.11.2007,"Rs. 35,78,602/-","Aditya

Construction",05.11.2007,"Rs. 35,42,815/-

14.,03.04.2008,"Rs. 30,37,432/-","Aditya

Construction",04.04.2008,"Rs. 30,02,957/-

15.,17.05.2008,"Rs. 47,63,191/-","Aditya

Construction",22.05.2008,"Rs. 47,09,224/-

16.,03.07.2008,"Rs. 21,65,340/-","Aditya

Construction",07.07.2008,"Rs. 21,40,871/-

17.,03.09.2008,"Rs. 36,25,969/-","Aditya

Construction",05.09.2008,"Rs. 35,84,886/-

18.,04.04.2009,"Rs. 30,51,974/-","Aditya

Construction",08.04.2009,"Rs. 30,17,395/-

,Total,"Rs. 4,81,78,959/-",Total,,"Rs. 4,77,91,389/-

1.,"M/s M K

Construction",CA/1196,"Mahanagar Co-operative Bank

Ltd. Airoli Branch.","Rs. 15,28,840/-",

2.,"M/s. MK

Construction",023/2549,Parsik Janta Sahakari Bank,"Rs. 1,25,34,994/-",

3.,"M/s.MK

Transport","CA/01811

0100000985","Punjab and Maharashtra Co

operative Bank Ltd. Airoli

Branch.","Rs. 66,58,920/-",

4.,"M/s Aditya

Construction",CA/3562,"Gopinath Patil Parsik Janta

Sahakari Bank Ltd. Airoli

Sector-5 Branch.","Rs. 1,99,98,148/-",

5.,"M/s Aditya

Transport",CA/3057,"Gopinath Patil Parsik Janta

Sahakari Bank Ltd. Airoli

Sector-5 Branch.","Rs. 15,28,840/-",

6.,"M/s D A

Transport",CA/1674,"Mahanagar Co-operative Bank

Ltd. Airoli Branch.","Rs. 55,41,647/-",

,,,Total,"Rs. 4,77,91,389/-",

Sr

No",Name of the Firm,Account Number,Bank Name and Branch,"Amount

Transferred (in

Rs)",

1.,"M/sMK

Construction",CA/1196,"Mahanagar Co-operative

Bank Ltd. Airoli Branch.","15,28,840/-",

2.,"M/sMK

Construction",023/2549,"Parsik Janta Sahakari

Bank Ltd. Airoli Sector-5

Branch.","1,25,34,994/-",

3.,M/sMK Transport,"CA/01811

01000009

85","Punjab and Maharashtra

Co-operative Bank Ltd.

Airoli Branch.","66,58,920/-",

4.,"M/s Aditya

Construction",CA/3562,"Gopinath Patil Parsik Janta

Sahakari Bank Ltd. Airoli

Sector-5 Branch.","1,99,98,148/-",

5.,"M/s Aditya

Transport",CA/3057,"Gopinath Patil Parsik Janta

Sahakari Bank Ltd. Airoli

Sector-5 Branch.","15,28,840/-",

6.,"M/s.

D.A.Transport",CA/1674,"Mahanagar Co-operative

Bank Ltd. Airoli Branch","55,41,647/-",

,,,Total,"4,77,91,389/-",

Sr.

No.",Name of the Firm M/s.,"Amount received

from M/s H B Bhise &

Company",Amount withdrawn in cash,,

1,M K Construction,"Rs. 15,28,840/-","Rs. 8,00,000/-",,

2,M. K. Construction,"Rs. 1,25,34,994/-","Rs. 65,97,000/-",,

3,M. K. Transport,"Rs. 66,58,920/-","Rs. 27,00,000/-",,

4,Aditya Construction,"Rs. 1,99,98,148/-","Rs. 1,29,97,800/-",,

5,Aditya Transport,"Rs. 15,28,840/-","Rs. 13,00,000/-",,

6,D A Transport,"Rs. 55,41,647/-","Rs. 31,00,000/-",,

,Total,"Rs. 4,77,91,389/-","Rs. 2,74,94,800/-",,

(ii) In Essar oil limited v. Hindustan shipyard limited, [(2015) 10 SCC 642], the Hon’ble Supreme Court held as under:",,,,,

“27.…In our opinion, the High Court had committed an error by not considering the above facts and by observing that the Appellant",,,,,

will have to take legal action against the ONGC for recovery of the amount payable to it. If one looks at the relationship between the,,,,,

Appellant and the Respondent, it is very clear that the Respondent had given a sub-contract to the Appellant and in the said agreement of",,,,,

sub-contract, the ONGC was not a party and there was no liability on the part of the ONGC to make any payment to the Appellant.",,,,,

Moreover, we could not find any correspondence establishing contractual relationship between the ONGC and the Appellant. In the",,,,,

circumstances, the ONGC cannot be made legally liable to make any payment to the Appellant….",,,,,

The learned Counsel appearing for the Appellant failed to show any document in the nature of a contract entered into between the,,,,,

Appellant and the ONGC whereby the ONGC had made itself liable to make payment to the Appellant. Even when the payment had been,,,,,

made by the ONGC, it was very clear that the payments were made on behalf of the Respondent as the ONGC was debiting the account of",,,,,

the Respondent by the amount paid to the Appellant. It is important that the payment was made to the Appellant only upon certification of,,,,,

work done by the Respondent. The ONGC had given a contract to the Respondent. The ONGC had never entered into any contract with the,,,,,

Appellant and therefore, it did not rely upon any certification or any statement made by the Appellant in relation to quantum of work done",,,,,

by the Appellant.â€​,,,,,

It is submitted on behalf of appellant that the statements dated 30.09.2014 and 26.09.2016 of the Appellant were recorded in English language.,,,,,

The appellant being a non-metric is neither conversant or affluent with English nor was he allowed to take the assistance of a translator along with,,,,,

him. As such, the said statements recorded under section 50 of PMLA cannot be relied upon.",,,,,

It is correct that on 27.02.2003, an Agreement between Navi Municipal Corporation and H.B. Bhise & Co. was executed for the demolition work.",,,,,

H.B. Bhise & Co. got the contract from NMMC for demolition of unauthorized structure and accordingly it requested the appellant for providing the,,,,,

services of JCB, Poclain, labour and materials etc. for the said project.",,,,,

On 10.03.2003, almost two week later, an Agreement between H.B. Bhise & Co., a proprietary firm of Mr. H.B. Bhise and M/s. M.K.",,,,,

Construction, a proprietary firm of Mr. M.K. Madhavi was executed to provide the aforesaid services. Para 3(vi) of the said Agreement is",,,,,

reproduced as under:-,,,,,

“3. The proprietors of the First Party and Second Party are known to each other since last many years. The First Party even though is,,,,,

involved in above said business, due to lack of funds, is not in a position to own its own vehicles, required for performing the terms of",,,,,

various contracts pertaining to civil work. In the same way, First Party requires from time to time various civil material. The terms of",,,,,

Government contract are usually that unless the contract is completed, or stipulated work is done, the Bills are not raised. However, for",,,,,

completion of such work and that too within the stipulated period many a times, a huge amount is required to be invested for purchasing of",,,,,

materials and/or for arranging various such vehicles for execution of contract work. Due to lack of funds, many a times it becomes difficult",,,,,

for the First Party to arrange these things in time bound schedule. The First Party, therefore, approached the Second Party and requested",,,,,

the Second Party that as and when required by the First Party, Second Party should arrange for supply of building material and/or should",,,,,

arrange for the requisite vehicles such as JCBs, Dumpers, Twin-van and other Transport Vehicles etc. by giving two months credit for",,,,,

payment. The First Party assured the Second Party that after assured the Second Party that after release of the bills against the said,,,,,

contracts, it shall immediately pay the amount payable to the Second Party against about stated supply and/or arrangements. The Second",,,,,

Party in view of relation agreed to help out the First Party by making all such supply and/or arrangement on credit. However, with a view to",,,,,

record in writing the agreed terms of said supply and or arrangement, parties are executing this Agreement, the terms and conditions",,,,,

whereof are as under:,,,,,

NOW THIS AGREEMENT WITNESSETH AS UNDER:,,,,,

vi) NOTWITHSTANDING anything contained hereinabove, it is specifically agreed by and between the parties herein that by virtue of this",,,,,

agreement, no share or interest in any such contracts which the First Party gets or acquires in its name from Government Agencies, Local",,,,,

Bodies, Corporations, CIDCO, Private Parties etc. is created of the Second Party. This agreement shall also not be construed as a",,,,,

partnership by and between the parties herein pertaining to any such contracts. The Second Party specifically assures the First Party not to,,,,,

claim any such share or interest in any such contracts any time herein after.â€​,,,,,

As para 3(vi) of the Agreement dated 10.03.2003 is non-obstante para stating that no interest or partnership is created between the parties. Since the,,,,,

appellant has no relationship/privity of contract with NMMC and thus not at all responsible to NMMC. On the other hand, it is M/s. H.B. Bhise & Co.",,,,,

which is solely responsible for the same.,,,,,

It is also correct that on 16.05.2009, a complaint was lodged against M/s. H.B. Bhise & Co. by Mr. Suresh Ramu Patil, the then Dy.",,,,,

Commissioner (Zone-II), NMMC on the instruction of the then Commissioner of NMMC. Neither the appellant nor his firms namely M/s. M.K.",,,,,

Construction and M/s. M.K. Transport are named in the said complaint which is also evident from the complainant’s statement dated 16.02.2016,,,,,

recorded under section 50 of PMLA.,,,,,

On 23.06.2014, while disposing of the bail application of the ^ ^that-,,,,,

...neither in the FIR nor in the statements of witnesses u/s Section 161. It is alleged that the forged bills were submitted by the applicant.",,,,,

Moreover, from the Notorized Agreement dated 10/03/2003 it is seen that the accused H.B. Bhise had entered into contract with the",,,,,

applicant M.K. Madhavi who used to supply JCB's, Dumpers etc. to the accused Bhise. That the agreement was executed way back in 2003,",,,,,

which is even prior to the period of the offence i.e. Financial Year 2007- 2008. So prima-facie it appears that the Notorized Agreement that,,,,,

the accused Bhise had entered into contract with applicant Madhavi.,,,,,

The payments for the services provided to M/s Bhise & Co. pertain to the period 06.02.2004 to 08.04.2006. The provisions of Prevention of,,,,,

Money-Laundering Act, 2002 (PMLA) came into force only w.e.f. 01.07.2005. The offences u/s 420 & 120B IPC have been inserted as scheduled",,,,,

offences w.e.f. 01.06.2009 and, therefore, the same cannot be given retrospective effect under PMLA being a Statute of penal nature.",,,,,

Discussion and finding,,,,,

The facts remains that the payments made for the services provided to the M/s KB. Bhise & Co. during 2004 to 2006 were actually received,,,,,

between 06.02.2004 to 08.04.2006 whereas the properties attached by the Respondent were purchased during 2003, 2009, 2010 and 2011. It is stated",,,,,

on behalf of appellant that the properties in question were not purchased during the period of 2004-2006. Hence, the attached property can be",,,,,

construed as 'proceeds of crime' u/s 2(1 )(u) of PMLA. It is stated by the appellant that the source of acquisition of all these properties are duly,,,,,

disclosed to the Income Tax Department and the ITRs for the relevant period were duly furnished to the Respondents during the course of,,,,,

investigation and also placed on record before the Tribunal with prior service to Counsel for ED.,,,,,

On 16.02.2016, Statement of the Complainant, Mr. Suresh u Patil, the then, Dy. Commissioner (Zone-II), NMMC, was recorded under section 50",,,,,

of PMLA wherein he clearly stated about the involvement of M/s H.B. Bhise & Co. and also disclosed the fact that the Appellant has not been,,,,,

named therein. The following extracts of the Complainant's statement dated 16.02.2016 recorded under section 50 of PMLA are reproduced below:,,,,,

Q 2 Whether NMMC had filed complaint with Belapur police against M/s. H.B. Bhise & Co.?,,,,,

A:- As per the direction of the then Commissioner, NMMC I had lodged complaint with Belapur Police Station against M/s. H.B. Bhise & Co.",,,,,

for inflated demolition bill scam on 16.05.2009, accordingly Belapur Police has registered FIR on 17.05.2009.",,,,,

Q3 Whether NMMC has allotted demolition work contract to M/s. H.B. Bhise & Co.?,,,,,

A:- Yes, NMMC has called for tender for demolition work contract, after due official procedure the said contract granted to Ms. H.B. Bhise",,,,,

& Co. on 27.02.2003.,,,,,

Q5 Whether the contract in question exclusively allotted to M/s. H.B. Bhishe & Co.?,,,,,

A:- Yes, the contract in question exclusively allotted to M/s. H.B. Bhise & Co. further on being asked there is no provision of sub-contract in",,,,,

such cases.,,,,,

Q 6 Whether NMMC has allotted any demolition work contract to ManoharK. Madhavi or his firm/company? A:- No, NMMC. has not",,,,,

allotted any contract to Manohar K. Madhavi or his firm and company.,,,,,

Q 7 Whether the demolition contract allotted to M/s. H.B. Bhise & Co. was actually carried out by Manohar K. Madhavi?,,,,,

A:- No, I have no such idea, on being further asked, it is to state that, as per the NMMC's rule/criteria no such contract allotted to any sub-",,,,,

contractor.,,,,,

Q 8 Whether the Prop. Mr. Bhise of M/s. H.B. Bhise & Co has submitted the Bills/Challan to NMMC?,,,,,

A:- As per the official procedure Contractor has to submit the bills to the Enforcement Deptt.,,,,,

Q9 Whether NMMC has filed any complaint/FIR against M.K Madhavi or his firm/company for inflated demolition bill?,,,,,

A:- No, NMMC has not filed any complaint against M.K. Madhavi for inflation of demolition bills, as NMMC has not allotted any contract,",,,,,

to M.K Madhavi or his firm and company?,,,,,

In above statement, the Complainant deposed that NMMC has not allotted any demolition work contract to the Appellant or his firms but only to M/s",,,,,

H.B. Bhise & Co. alone. It is further clarified that NMMC has not even filed any complaint against the Appellant for inflation of demolition bills.,,,,,

Role of the accused person as per respondent in the offence of money laundering:,,,,,

The Complainant submits that Shri Manohar Krishna Madhavi, being elected Corporator, was not entitled to take the contract for carrying out",,,,,

demolition work of unauthorized structures from the NMMC. Therefore in order to avoid disqualification from being a Councilor, Shri Manohar",,,,,

Madhavi used Shri Hanumant Baurao Bhise's Contractor license to obtain the NMMC demolition contract. The NMMC authorities on submission of,,,,,

bills disbursed the amount in the bank accounts of M/s. H. B. Bhise & Co. After receipt of the amount in the bank accounts M/s. H B Bhise 8b Co.,",,,,,

Shri H.B. Bhise, under the instructions of Shri Manohar Madhavi transferred the , amount either in the bank accounts of the firms owned controlled by",,,,,

Shri Manohar Madhavi or in the firms controlled by Shri Manohar Madhavi through Shri Ajay Mhatre. After receipt of the POC in the bank accounts,,,,,

of the firms owned controlled by Shri Manohar Madhavi, the entire POC was withdrawn in cash as 'Self from the bank accounts of the firms owned/",,,,,

controlled by Shri Manohar Madhavi. Therefore Shri Manohar Madhavi is the ultimate beneficiary of the entire POC. Shri Manohar Madhavi had,,,,,

projected the withdrawl of the said amount as untainted by projecting its utilization in the business activity of the firms owned/controlled by Shri,,,,,

Manohar Madhavi, but no documentary evidence such as Vouchers for payment in cash to Labourer, Invoices for the supply of the Material/ Machine",,,,,

etc. was submitted by Shri Manohar Madhavi. In fact Shri Manohar Madhavi intentionally withdrawn the entire POC in cash to disguise the further,,,,,

trail of POC and he is the ultimate beneficiary of the entire POC. Therefore Shri Manohar Madhavi is involved in the activity of the concealment,",,,,,

possession, acquisition related to proceeds of crime and projected the same as untainted property, thereby had committed the offence of money",,,,,

laundering as defined under Section 3 of the PMLA,2002 which is punishable under Section 4 of the PMLA, 2002.",,,,,

The Complainant submits that Shri Manohar Krishna Madhavi was ultimate beneficiary of the entire POC by way of withdrawal of cash owned,,,,,

and controlled by Shri Manohar Madhavi. Further in order to conceal the tainted origin of the POC, Shri Ajay Mhatre had knowingly assisted Shri",,,,,

Manohar Madhavi by projected himself as the Proprietor of M/s. M. K. Construction (which is Proprietorship firm of Shri Manohar Madhavi). Also in,,,,,

order to conceal the tainted origin of the POC, Shri Ajay Mhatre had knowingly assisted Shri Manohar Madhavi by:",,,,,

(i) opening the bank accounts in the name of the firms viz. M/s. Aditya Construction, M/s. Aditya Transport and M/s. D. A. Transport specifying that",,,,,

those firms were proprietorship of his brother Shri Dhanaji Mhatre said firms;,,,,,

(ii) obtaining the Power of Attorney from his brother Shri Dhanaji Mhatre to operate the firms including its bank accounts and withdrew the POC in,,,,,

cash from the bank accounts of the above mentioned firms projected as untainted.,,,,,

Therefore, this act of Shri Ajay Mhatre Madhavi is involved in assisting Shri Manohar Madhavi in respect of the concealment, possession,",,,,,

acquisition related to proceeds of crime and projected the same as untainted property, thereby had committed the offence of money laundering as",,,,,

defined under Section 3 of the PMLA, 2002, which is punishable under Section 4 of the PMLA, 2002.",,,,,

In the statement dated 16.02.2015, Suresh Ramu Patil, Deputy Commissioner, Navi Mumbai Municipal Corporation (NMMC), it was stated that",,,,,

NMMC has not allotted any demolition work contract to the Appellant or his firm and the contract in question was exclusively allotted to M/s H. B.,,,,,

Bhise & Co. It was further clarified that NMMC has not even filed any complaint against the appellant for inflation of bills etc. since no such contract,,,,,

was allotted to the appellant. However, in his statement, he has also mentioned about the role of the appellant.",,,,,

It is also a matter of record that as per complaint, the contractor has cheated the NMMC to the tune of Rs.2,69,12,282/- during the period from",,,,,

27.03.2003 to 31.3.2009. It has also come on record that the appellant who was dealing with the contractor has purchased the property from the year,,,,,

2003 onwards till 2011. There may not be any conclusive evidence produced by the respondent as to whether the said properties were purchased from,,,,,

the tainted amount received by the appellant from the contractor, but the fact of the matter is that in PMLA investigation, the role of the appellant has",,,,,

been discussed. The same are reproduced herebelow:,,,,,

“The Complainant submits that Shri Manohar Krishna Madhavi was ultimate beneficiary of the entire POC by way of withdrawal of cash,,,,,

owned and controlled by Shri Manohar Madhavi. Further in order to conceal the tainted origin of the POC, Shri Ajay Mhatre had",,,,,

knowingly assisted Shri Manohar Madhavi by projected himself as the Proprietor of M/s. M. K. Construction (which is Proprietorship firm,,,,,

of Shri Manohar Madhavi). Also in order to conceal the tainted origin of the POC, Shri Ajay Mhatre had knowingly assisted Shri Manohar",,,,,

Madhavi by:,,,,,

(i) opening the bank accounts in the name of the firms viz. M/s. Aditya Construction, M/s. Aditya Transport and M/s. D. A. Transport",,,,,

specifying that those firms were proprietorship of his brother Shri Dhanaji Mhatre said firms;,,,,,

(ii) obtaining the Power of Attorney from his brother Shri Dhanaji Mhatre to operate the firms including its bank accounts and withdrew the,,,,,

POC in cash from the bank accounts of the above mentioned firms projected as untainted.,,,,,

After having considering the entire gamut of the matter, this Tribunal is of the view that in view of material placed on record, it is not fit case to",,,,,

release the attachment though there has been an inordinate delay of 7 years between the filing of the FIR and passing of the Provisional Attachment,,,,,

Order. Their balance is to be strike in light of facts involved in the matter in view of non-action by the ED against M/s. H.B. Bhise and Company.,,,,,

In the present case is that the specific complaint of NMMC is against M/s. H.B. Bhise and Company, who had submitted the forged bill. The",,,,,

appellant firm has received the amount from H.B. Bhise and Company who has allegedly committed the fraud and other schedule offence, however,",,,,,

no action was taken by the ED against the said company. The ED has not attached the property of M/s. H.B. Bhise and Company, nor any",,,,,

prosecution complaint has been filed. When this situation is confronted to the learned counsel and IO appearing on behalf of respondent, there was",,,,,

very vague answer. Firstly, it was admitted that no action under PMLA was taken against him. Secondly, it was mentioned that he may become",,,,,

approver. One is failed to understand that as per complaint, the FIR was registered and thereafter, on the basis of averment made in the complaint of",,,,,

NMMC, the charge-sheet was filed against him also, how he can become approver as per allegation made against him. Only ED is aware why no",,,,,

action was taken if any case is made out on the basis of complaint and charge-sheet.,,,,,

As far as the role of appellant is concerned, no doubt, the PMLA investigation is also against the appellant. However, the said allegations are to be",,,,,

established in trial of schedule offence and PMLA charge-sheet. All the allegations of both authorities are to be tested as per law. It is a matter of,,,,,

fact that no valid explanation is given by the respondent, why the provisional attachment was passed after the gap of seven years and at the same",,,,,

time, the benefit is given to M/s. H.B. Bhise and Company by not attaching its property and why no prosecution complaint has been filed as per",,,,,

allegations available on record.,,,,,

Considering the overall facts and circumstances of the case, I am of the view that at this stage, no case is made out to release the property",,,,,

although there are certain issues raised by the appellant have some force.,,,,,

Under these circumstances, the appeal is disposed of by modifying the impugned order. It is directed that as far as attachment of properties are",,,,,

concerned, the same shall continue, however, the respondent is restrained to take the physical possession.",,,,,

It is also clarified that no opinion is expressed on the basis of allegations made in the FIR or in the charge-sheet under PMLA. Both the complaints,,,,,

shall be decided as per its own merit and without any influence of this order.,,,,,

The appeal as well as pending applications are disposed of.,,,,,

No costs.,,,,,