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Judgment
Sr.
No.",Details of Property,Present Owner,Area,"Market Value of the
Property (Amount in
Rs.)
(a),(b),(c),(d),(e)
1.,"Land, building,
plant and
machinery situated at Plot
No. 143-D, Bommasandra
KIADB Industrial Area,
Hosur, Hebbagodi, PO
Anekal Taluka, Bangalore,
Karnataka, 560099","Su-Raj Diamonds (India)
Ltd. [now M/s. Winsome
Diamonds and Jewellery
Ltd.]","8826 Sq. Mtrs. to
constructed area of
Approx. 95003.06 Sq.
ft.","22,91,82,462/-
2.,"Land and Building situated
at Plot No. E-7, Marudhara
Industrial Areas, Basni, II
Phase, Jodhpur, Rajasthan","Su-Raj Diamonds (India)
Ltd. [now M/s. Winsome
Diamonds and Jewellery
Ltd.]","P l o t admeasuring
4529.57 Sq.
Mtrs. with ground plus
2 constructions +
Compound Wall","12,38,61,000/-
3.,"Land, Building,
Plant and
Machinery Survey No. â€
437/3, C.S.
No. 5329/2, Sub Plot Nos.
10/B, 11, 12, 13, 14/A, F.P.
No. 417/A, T.P.S.
No. 3, Ashoka Tower,
Building No. 2, Wing A,
Kesharba Market,
Gotalawadi, Katargam,
Surat (Details of Units in the
Buidling) Floor, Unit No. â€
5 and 6, Ground Floor,
Unit No. â€" 2, 3 and
4,6,7 and 8, First Floor,
Unit No. â€" 2, 3 and
4, Third Floor,
Unit No. â€" 2,3 and 4
Fourth Floor,
Unit No.- 2,3 and 4, Fifth
Floor,
Unit No. â€" 2,3 and
4, Sixth Floor, Unit No. -2, 3
and
4, Seventh Floor,
Unit No. -2, 3 and
4, Eight Floor","Su-Raj Diamonds (India)
Ltd. [now M/s. Winsome
Diamonds and Jewellery
Ltd.]","Land Area as per
undivided share
1696.52 Sq. Mtrs.
Built up Area ( As per
Site)
62,494.00 Sq.
ft. (jointly with
Kohinoor Diamonds
Pvt. Ltd.)","22,96,05,700/-
,,,,
,,,,
4.,"Land, Building,
Plant and
Machinery Survey No. â€
437/3, C.S.
No. 5329/2, Sub Plot Nos.
10/B, 11, 12, 13, 14/A, F.P.
No. 417/A, T.P.S.
No. 3, Ashoka Tower,
Building No. 2, Wing A,
Kesharba Market,
Gotalawadi, Katargam,Surat
(Details of Units in the
Buidling) Floor,Unit No. -1,
Basement,
Unit No.-4, Basement,
Unit No. 1, Ground Floor,
Unit No.-4, Ground Floor,
Unit No.-1, First Floor,
Unit No.-5, First Floor,
Unit No.-1, Third Floor,
Unit No.-1, Fourth Floor,
Unit No.-1, Fifth Floor,
Unit No.-1, Sixth Floor,
Unit No.-1, Seventh Floor,
Unit No.-1, Eight
Floor.)","Kohinoor Diamonds P.
Ltd. (Corporate
Guarantee extended by
the directors of the
company to the banks)",,
5.,"Land and building at Plot
No. 1 and 1- A, Tivim
Industrial Estate, Survey No.
500 (Part) and 502
(Part) Mapusa Municipal
Council, Taluka and Regn.
Sub. Dist.- Bardez, Dist. â€
North Goa,
Goa.","Winsome Diamonds and
Jewellery Ltd.","Land 5400 Sq. Mtrs.
Bldg. 5396.20 Sq.
Mtrs.","8,87,42,000/-
6.,"Unit No. -1 NW, First Floor,
SDF Buidling, Gem and
Jewellery Park,
Manikanchan, Plot No. -1,
Block CN, Sector â€" V,
Bidhan Nagar, Salt Lake,
Kolkata- 700 091","Su-Raj Diamonds and
Jewellery Ltd.
[Winsome]","3498.30 Sq. Ft.
(Leased Property)","1,88,91,000/-
7.,"Unit Nos. 801 to 824, 906,
907, 908
and 910, Eight and Ninth
Floor, Service Indl. Estate
(Plaza Panchsheel), Survey
No. 1551 and 1572,
55, Gamdevi Road,
Mumbai â€" 400 007","Su-Raj Diamonds and
Jewellery
Ltd., Su-Raj Diamonds
Consultancies Ltd., Su-
Raj Diamonds and
Jewellery Ltd.,
(Corporate Guarantee
extended by the directors
of the company to the
banks)","Total 28 units as
detailed in Column (b)","46,57,60,000/-
8,"Land and Building situated
at Plot No. A-42,
Marudhara Industrial Area,
Basni Jodhpur, Rajasthan.","Forever Diamonds Pvt.
Ltd.","P l o t admeasuring
10791.81 Sq.
Mtrs. and constructed
area of Approx. 24500
Sq. ft.
and shed of Approx.
17390
Sq. ft.","34,33,64,000/-
9,"Land and Building situated
at Survey No. 130/1 and
184, Paikee, Village
Aasura, Taluka
DharampurVandsa Road,
District-
Valsad, Gujarat","Bombay Diamond Co.
(Ind.) P. Ltd. (Corporate
Guarantee extended by
the directors of the
company to the
banks","P l o t admeasuring
13809.12 Sq.
Mtrs. and Builtup
Area of 23946 Sq. ft.
(14074 Sq.ft. +
9872 Sq.ft.)","3,60,00,000/-
10,"Only Plant and Machinery
installed in the premises No.
17, SDF Bldg., 4th Floor,
Cochin SEZ, Kakkanad,
Kochin â€" 682 037","Winsome Diamond and
Jewellery Ltd.",N.A.,"2,14,00,000/-
TOTAL,,,,"155,68,06,162/-
Unit No.,Date of Acquisition,,,
801,"27th February, 1990",,,
802,"21st March, 1990",,,
803,"23rd January, 1990",,,
804,"29th March, 1990",,,
805,"28th March, 1990",,,
806,"29th November, 1989",,,
807,"28th March, 1990",,,
808,"22nd January, 1990",,,
809,"24th January, 1990",,,
810,"29th November, 1989",,,
811,"20th March, 1990",,,
812,"19th February, 1990",,,
813,"19th March, 1990",,,
814,"17th March, 1990",,,
815,"27thNovember, 1989",,,
816,"21st March, 1990",,,
817,"27th March, 1990",,,
818,"27th March, 1990",,,
819,"26th March, 1990",,,
820,"26th March, 1990",,,
821,"19th March, 1990",,,
822,"20th January, 1990",,,
823,"17th March, 1990",,,
824,"20th March, 1990",,,
906,"21st February, 1990",,,
907,"20th January, 1990",,,
908,"27thNovember, 1989",,,
910,"29th February, 1990",,,
,,,,
,,Rupees in Crore,,
Applicant Nos.,Banks,Total,,
1,Standard Chartered Bank,189.00,,
2,Export import Bank of India,70.00,,
3,Oriental Bank of Commerce,100.00,,
4,Canara Bank,350.50,,
5,Bank of Maharashtra,182.00,,
6,State Bank of Hyderabad,130.00,,
7,Punjab National Bank,534.00,,
8,Vijaya Bank,116.00,,
9,Central Bank of India,350.00,,
10,Union Bank of India,150.00,,
11,Axis Bank Ltd.,46.50,,
12,State Bank of Mauritius Ltd.,30.00,,
,Barclays Bank PLC,27.00,,
13,IDBI Bank Ltd,50.00,,
,Total,2325.00,,
,Additional,465.00,,
,Total,2790.00,,
,,,,
,Rupees In Crore,"Old Limits
(2009)",New Limits (2010),
Applicant
Nos.",Banks,Total,Total,
1,Standard Chartered Bank,264.00,414.00,
2,"Export import Bank Of
India",85.00,110.00,
3,"Oriental Bank of
Commerce",120.00,162.00,
4,Canara Bank,430.00,575.00,
5,Bank of Maharashtra,221.00,300.00,
6,State Bank of Hyderabad,130.00,138.00,
7,Punjab National Bank,655.00,880.00,
8,Vijaya Bank,123.50,152.00,
9,Central Bank of India,435.00,600.00,
10,Union Bank of India,185.00,206.00,
11,Axis Bank Ltd.,46.50,50.00,
12,"State Bank of Mauritius
Ltd.",35.00,45.00,
13,IDBI Bank Ltd,70.00,125.00,
14,BANK of India,50.00,50.00,
,Total,2850.00,3845.00,
,Additional,570.00,769.00,
,Total,3420.00,4614.00,
,,,,
Applicant No.7,Rupees In Crore,,,
P u n ja b National
Bank",Details of Facilities,,Total,
,Fund Based,"Non Fund
Based",,
Ledger Balance,"900,55,07,342.00",----,"900,55,07,342.00",
Unapplied
Interest","145,15,98,822.98",------,"145,15,98,822.98",
Penal Interest,"17,33,25,232.60",-------,"17,33,25,232.60",
Total,"10,63,04,31,397.58",---------,"10,63,04,31,397.58",
,,,,
Applicant No.9,Rupees In Crore,,,
Central Bank of India,Details Of Facilities,,Total,
,Fund Based,"Non Fund
Based",,
Ledger Balance,"700,59,73,310.04",-----,"700,59,73,310.04",
Unapplied Interest,"136,50,62,424.53",-------,"136,50,62,424.53",
Penal Interest,------------,------,------------,
Total,"837,10,35,734.57",-----,"837,10,35,734.57",
,,,,
Fund Based Non Fund
Based",,,,
,,,,
,Fund Based,"Non Fund
Based",,
Ledger Balance,"82,54,45,774,40",---------,"82,54,45,774,40",
Unapplied Interest,"16,75,46,902.82",------------,"16,75,46,902.82",
Penal Interest,"1,73,62,833.03",--------,"1,73,62,833.03",
Total,"101,03,55,510.25",--------,"101,03,55,510.25",
,,,,
“For instance, if LIC Housing Finance Limited, which has advanced money to the Petitioner in the first Writ Petition and whic
consequently has a right over the property, is able to satisfy the Adjudicating Authority that the money advanced by them for the purchase
of the property cannot be taken to be the proceeds of crime, then, the Adjudicating Authority is obliged to record a finding to that effect
and to allow the provisional order of attachment to lapse. Otherwise, a Financial Institution will be seriously prejudiced. I do not think tha
the Directorate of Enforcement or the Adjudicating Authority would expect every Financial Institution to check up whether the contribution",,,,
made by the Borrowers towards their share of the sale consideration was lawfully earned or represent the proceeds of crime . Today, if the
Adjudicating Authority confirms the provisional order of attachment and the property vests with the Central Government, LIC Housin
Finance Limited will also have to undergo dialysis, due to the illegal kidney trade that the Petitioner in the Writ Petition is alleged to have
indulged in. This cannot be purport of the Act.â€",,,,
“8. Adjudication.- (1) On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section
17 or under subsection (10) of section 18, if the Adjudicating 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 attached under",,,,
sub-section (1) of section 5, or, seized or frozen under section 17 or section 18, the evidence on which he relies and other relevant",,,,
information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in",,,,
money-laundering and confiscated by the Central Government: Provided that where a notice under this sub-section specifies any property,,,,
as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided",,,,
further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property.",,,,
“5. Under the Indian penal law, guilt in respect of almost all the offences is fastened either on the ground of ""intention"" or ""knowledge""",,,,
or ""reason to believe"". We are now concerned with the expressions “knowledge†and ""reason to believe"". “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.â€,,,,
In the present case, one G. Srinivasan is accused of having played fraud and obtained a loan of Rs. 15,00,00,000/- by producing bogus",,,,
and fabricated documents. From and out of the said amount, the property in question was purchased by him in the names of his Benamies.",,,,
One Ayyappan was appointed as their Power Agent. One Gunaseelan purchased the property through the Power Agent Ayyappan. The sai,,,,
Gunaseelan was examined and his statement was recorded Under Section 50 of the Act. He had stated that he purchased the property for,,,,
cultivation. He developed the property, but geologist gave opinion that property will not yield proper income. In the circumstances, he sold",,,,
the property to appellants. The respondent has not produced any document or material to disprove the statement of Gunaseelan. There is,,,,
nothing on record to show that the transaction in favour of the said Gunaseelan, is not genuine. It is not the case of respondent that the",,,,
said Gunaseelan is a Benami or employee of G. Srinivasan and that Gunaseelan did not pay any amount as sale consideration or the sal,,,,
consideration paid by Gunaseelan was not legitimate money. There is no material to show nexus and link of Gunaseelan with G. Srinivasan,,,,
and his Benamies. In the absence of any verification or investigation by respondent with regard to genuineness or otherwise of the,,,,
purchase by Gunaseelan; whether he was connected with G. Srinivasan or the sale consideration is legitimate or not the property in the,,,,
hands of Gunaseelan cannot be termed as proceeds of crime.,,,,
In the present case, the respondent failed to prove that the appellants did not have sufficient financial capacity to buy the property or",,,,
that the money paid by them as sale consideration was not legitimate money derived by agricultural activities. No material was produced to,,,,
show that the appellants are close relatives of person, who involved in criminal activities and the person, who sent monies to purchase the",,,,
property did not possess financial capacity to provide such huge amounts and that they are not genuine purchasers of agricultural products,,,,
of appellants. The respondent has not made any such investigation and has not produced any such material. Further, the Appellate",,,,
Authority in fact considered the additional documents produced before it but rejected the same on the ground that Appellants have not,,,,
given any valid reasons for not filing the same before the Adjudicating Authority. Having considered the Additional documents, the",,,,
appellate authority failed to give any finding on merits after verifying with the concerned Bank.""",,,,
that the Appellant Bank has stakes in the said properties at para no. 13 (listed from 01 to 10). The Appellant Bank has the right to recover the loan,,,,
amount against the mortgaged properties under law. The valuable right will be lost if the Order of attachment would continue. The impugned order,,,,
passed by Adjudicating Authority would cause miscarriage of justice if it is not set-aside.,,,,
If the attachment would continue against the mortgaged property of the banks in this matter, the economy of the country would suffer. The banks",,,,
in the present case have proceeded with the matter in good faith and are not involved in the offence of money laundering.,,,,
The Adjudicating Authority had all the reasons to believe despite of aware that abovementioned were mortgaged to the Appellant Bank and that,,,,
the Appellant/consortium had prior charge over the subject matter/properties; inspite of this the Ld. Adjudicating Authority confirmed the provisional,,,,
attachment order issued by the Respondent No. 1 and it has caused huge loss to the Appellant/ consortium. It is submitted that both Enforcement,,,,
Directorate and Adjudicating Authority have failed to apply the law on the subject.,,,,
The Adjudicating Authority in the impugned order has not examined the law on mortgage and securities. The Appellant Bank is entitled to recover,,,,
huge amounts in the above loan accounts and the appellant bank being the mortgagee/transferee of the interest in the properties is entitled to recover,,,,
its dues with the sale of the properties. The properties stood transferred by way of mortgage to the Appellant Bank much before the alleged criminal,,,,
action. The alleged proceeds of crime has not been used for acquiring the mortgaged properties.,,,,
The Adjudicating Authority has failed to consider that the Enforcement Directorate has attached all the properties without examining the case of,,,,
the banks. The evidence on record is clear that all the properties were acquired by the accused much before the alleged date of crime. It is submitted,,,,
that the Bank has already filed the Suit for recovery and has also had taken the action under SARFAESI Act. The Adjudicating Authority failed to,,,,
appreciate that depriving the Appellant Bank from its funds/property, without any allegations or involvement of the Bank in the alleged fraud would be",,,,
unjustified.,,,,
The properties attached cannot be attached under Section 5 of the PML Act because the properties are not purchased from the alleged proceeds,,,,
of crime. As per the provisions of Section 5(1) (c) the primary requirement for the attachment is that the proceeds of crime are likely to be concealed,",,,,
transferred or dealt with in any manner. The said properties are already in the possession of the appellant bank under the SARFAESI Act. The,,,,
Hon‟ble Supreme Court of India in the case of Attorney-General of India and others reported in AIR 1994 SC 2179 while dealing with the matter,,,,
under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act has defined the illegally acquired properties and has held that the,,,,
illegally acquired properties are earned and acquired in ways illegal and corrupt, at the cost of the people and the state, the state is deprived of",,,,
legitimate revenue to that extent hence these properties must justly go back where they belong, the state. In the present case as the money belongs to",,,,
the Appellant Bank it is liable to be recovered by the Appellants Banks. Moreover, it also does not satisfy the proviso to section 9 of the Act.",,,,
The mortgaged properties of the Appellant Bank cannot be attached or confiscated unless link and nexus directly or indirectly established. From,,,,
the facts of the present appeal filed by the bank, I find that there is no illegality or unlawfulness in the title of the Appellant Bank and there is no",,,,
charge of money laundering against the Appellant. The mortgage of property is the transfer under the Transfer of Property Act as there is no dispute,,,,
as regards the origin of funds or the title of the properties. It is submitted that; the bank needs to recover its outstanding dues by taking over the,,,,
possession of the mortgaged properties in case the borrowers are not able to pay back the amount.,,,,
The Respondent No.1 cannot have any lien over the said properties as the Appellant bank is now the Legal transferee of said properties. The,,,,
Respondent No. 1 cannot retain the property over which they have no legal title and the property is to be be returned to the personslawfullyentitled as,,,,
the bank is the victim and even after trial, bank needs to receive back the said properties being a victim party u/s 8(8) of the Act.",,,,
There is no nexus whatsoever between the alleged crime and the fourteen banks who are mortgagee of all the properties which were purchased,,,,
before sanctioning of the loan. Thus, no case of money-laundering is made out against banks who have sanctioned the amount which is untainted and",,,,
pure money. The bank has priority on assets of the secured creditors to recover the loan amount/debts by sale of assets over which security interest is,,,,
created, which remains unpaid.",,,,
The Adjudicating Authority has not appreciated the facts and law involved in these matters and the primary objective of section 8 & 9 of PMLA is,,,,
that the Adjudicating Authority to take a prima facie view on available material and facts produced.,,,,
The complainant in the criminal case is the Appellant Bank who is a victim. Had the Appellant Bank not filed a criminal complaint there,,,,
proceedings would not have been initiated. The security of the Bank, is treated as proceeds of crime and is confiscated under the Act, in future, no",,,,
Bank in such circumstances would make a complaint to the authorities. The trial in the prosecution of complaint would take number of years. The,,,,
Bank being a Secured Creditor is entitled to recover the dues.,,,,
In the case of Indian Bank Vs. Government of India and M/s. PalpapIchinichi Software International Ltd., decided by Madras High Court on",,,,
11.07.2012, wherein it was held in similar circumsta nces that Sections 5 and 8 of the Act cannot be used by the authorities to inflict injury of the",,,,
victim i.e. the Bank. As far as actual amount due from the borrowers are concerned, the out-standing amount would be decided by the appropriate",,,,
authority.,,,,
The banks being appellant in appeal no. 1604/2017 pressed the relief to set aside the impugned order to the extent it attaches charged/mortgaged,,,,
properties, charged/mortgaged to consortium of banks as borrowers have been availing various financial facilities.",,,,
The intention of the Act could not have been to block the loan amount against the mortgaged properties being innocent person as is sought to be,,,,
done in the instant case. It is submitted if the impugned order is taken as correct, it would be a patently absurd situation once substantial securities of",,,,
the bank are not available for the benefit of Bank. Such a result does not advance the objects of the Act.,,,,
There is no denial that all the properties in the subject matter of the Appeal, are mortgaged with the Appellant Bank were acquired by the alleged",,,,
accused/mortgagor much prior to the date of crime. It is also the stand of the ED that the banks are the victim parties. They are entitled to recover the,,,,
amount, most are public sector banks. It is a public money and accused/borrowers are liable to face trial in criminal complaint. The trial may take",,,,
number of years. The main accused is absconding. He has left India.,,,,
Non performing assets (NPA) are choking the banking system and the system is already struggling for some time and banking conditions are,,,,
deteriorating day by day. It is submitted that such order would create a chaos in banking industries and would be against the interest of nation as a,,,,
whole ad would also be against the public policy.,,,,
As a matter of fact, hundreds of borrowers have taken the loans against the securities and mortgaged properties and are not returning the legal",,,,
debts. They are simply adopting all sort of tactics by raising defense that their properties are attached by ED. Even they have stopped paying the,,,,
installments due by raising the plea that why should pay debts once the attachment orders are passed. By way attachment, their properties are also",,,,
safe so as the due amount. In fact, they are happy if the attachment would continue against the mortgaged properties despite of passing the decrees",,,,
by the DRT in favor of banks and against borrowers. By this mean, the attachment-orders amounting to interference with the judicial system as the",,,,
Adjudicating authority in many cases has ignored judgments of the Supreme Court, Full bench of Madras High Court and many High Courts and even",,,,
of this tribunal.,,,,
It has come on record that the main mastermind is Shri Jatin R. Mehta who is the promoter and guarantor of M/s. Winsome Diamonds &,,,,
Jewellery Ltd.,,,,
At present, total outstanding as per Recovery Certificate is Rs.4687,04,04,315.29 (Rupees Four Thousand Six Hundred Eighty Seven Crore Four",,,,
Lakh Four Thousand Three Hundred Fifteen and Paisa Twenty Nine only). What a big tragedy, despite of having a full knowledge about the amount",,,,
due, Jatin R. Mehta has left the country without any hindrance by making a fool of everyone of this country and we are unable to do anything.",,,,
I have been informed that he has run away from this country leaving the debt of more than Rs. 4687 Crores. It is a matter of surprising and,,,,
shocking as many banks are Public Sector Banks. It is a public money. One hand, middle class (who are law abiding citizen) are suffering from",,,,
starvation and small children are dying due to shortage of meal, on the other hand the person like Jatin R. Mehta has cheated the banks and all citizen",,,,
of this country whose hard earned money is Rs.4687 Crore swindled by this villain of our society. The condition of the Public Sector Banks is become,,,,
very bad. It is a matter of fact and it proves that he has flanted the law and guilty of fleece and fly. Jatin R. Mehta, Mehul Chokshi and Nirav Modi",,,,
have scammed and have shamed to this country.,,,,
This tribunal is hopeful that the ED and other authorities must take necessary steps and stringent action against him who is enjoying the lavish life,,,,
in foreign countries by cheating the huge amount of the poor people of this country. This tribunal expects that the ED must take similar actions as,,,,
taken in the case of other accused persons who have run away from this country by issuance of Red-Corner-Notice and initiate the extradition,,,,
proceedings forthwith (if already not taken).,,,,
For the above said reasons as mentioned above, the impugned order dated 16th November, 2016 be set-aside, consequently the provisional",,,,
attachment does not to survive. The same is also quashed. Three appeals filed by the borrowers are disposed of in view of finding arrived in appeal,,,,
no. 1604/2017. The appeal filed by the bank is allowed. All pending MPs are disposed of.,,,,