9911796707
TMI Blog2011 (9) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... lved in connection with that transaction, which order has been confirmed not only by the Adjudicating Authority but by the Tribunal as well as this Hon'ble Court in the case of Radha Mohan Lakhotia, Radha Mohan Lakhotia, HUF and Asha Lakhotia. Those persons had filed Appeals being First Appeal Nos.527, 528 and 529 of 2010, which came to be dismissed by the Division Bench Judgment and Order dated August 5, 2010. Although the appellants in the present Appeals raised similar contentions already answered by the High Court in the above said Judgment, during the course of hearing, the learned Counsel for the appellants fairly accepted that it may not be possible for him to persuade the Court to distinguish the opinion recorded in the said decision on those issues or, for that matter, to re-consider the same. We place on record that the appellants have reiterated those issues even in the present Appeals, but, for the reasons already recorded in the abovesaid decision, we do not think it necessary to elaborate and repeat those matters. The present Judgment, however, will be confined to the other questions which have been raised in the present Appeals. 3. We may further place on record tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER NO. I/2008 (Under Section 5 of the Prevention of Money Laundering Act, 2002) ........................................ 1. In exercise of the authorization dated 07.02.2007 issued by the Director of Enforcement under sub-section (1) of section 5 of the Prevention of Money Laundering Act, 2002 (15 of 2003) read with Notification No. GSR.441(E) dated 1st July, 2005, I, Atul Verma, Deputy Director, in-charge of Mumbai Zonal Office make the following order: 2. WHREAS on the basis of material placed before me such as copy of complaint No. NDPS Spl. Case No. 192/2006 dtd. 08.12.2006 filed by the Mumbai Zonal Office of the Narcotics Control Bureau, statement of bank accounts, statements of S/Shri Umesh Bangur, Vinay Kumar Nogaja, Om Prakash Nogaja and various documents gathered during the course of investigation in case no. ECIR/04/MZO/07 dated 24th January, 2007 and on its examination, I have reasons to believe that i) During the course of investigation it was revealed that two NRIs namely Smt.Nirmala Biyani and Smt.Madhubala Maheshwari both resident of Singapore had invested Rs. 2,50,00,000/- and Rs. 5,05,26,879/- in M/s. OPM International Pvt. Ltd. for purchase of shares of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67,48,144 2. BANK OF RAJASTHAN 0670301115094 Current 23,44,051 3. HDFC BANK LTD. 0602320009475 Current 1,22,12,453 4. PUNJAB NATIONAL BANK 3731002104760684 Current 41,11,675 5. 3731002104761850 Current 10,62,893 6. 37310031000081939 F.D. 57,060 7. 373100PR00007724 F.D. 3,77,933 8. 373100PR00009184 F.D. 88,31,361 9. 373100PR00009218 F.D. 15,35,281 10. 373100PS00000658 F.D. 14,00,000 11. 373100PS00000667 F.D. 2,00,000 12. 373100PR00000861 F.D. 15,47,781 13. 373100PR00001091 F.D. 8,50,000 14. 373100PR00001204 F.D. 3,50,000 15. 373100PR00001365 F.D. 8,75,000 16. 373100PR00001383 F.D. 8,00,000 17. BANK OF INDIA, HYDERABAD 100562 Current 34,45,005 18. PUNJAB NATIONAL BANK, GANDHIDHAM 019002100034844 Current 57,88,179 19. CITIBANK, FORT, MUMBAI 340237005 Current 3,355 TOTAL 6,25,40,171 SEALED AND SIGNED ON THIS 7th DAY OF July, 2008 Sd/- (Atul Verma) Deputy Director Mumbai Zonal Office, Directorate of Enforcement, 2nd Floor, Mittal Chambers, Nariman Point, Mumbai SEAL To 1. M/s. O.P.M. International Pvt. Ltd. 30-D, 1st floor, 9-B, Wadia Building, Cawasji Patel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orized representative, duly instructed on the 27th day of August Year 2008 at 10.30 a.m., failing which the complaint shall be heard and decided in your absence. Given under my hand and the seal of the Adjudicating Authority, this 15th day of July, 2008. Sd/- Suptd./Admn. Officer/Registrar Adjudicating Authority PMLA SEAL Recd. Sd/- 18/07/08 (Om Prakash Nogaja) M.D. OPM. Intl. Pvt. Ltd." 6. Pursuant to the said show-cause notice, the appellants filed their response and contested the proceedings before the Adjudicating Authority. The Adjudicating Authority, upon considering all aspects of the matter, rejected the objections raised by the appellants. The Adjudicating Authority opined that it is admitted position that the provisional attachment order in respect of moneys transferred to the NRI Account of R.P. Modani to Umesh Bangur which were considered by the Adjudicating Authority in its order dated 1st June, 2007, 6th October, 2007 and 17th March, 2008. Those provisional attachment orders have been confirmed. Further, the present proceedings are also arising out of the same investigation. It then proceeded to hold that during the course of investigation carried o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeds of crime makes the property liable for attachment to avoid further layering of the property. The Authority thus concluded that the appellants have failed to prove the source of income, earning or assets out of which or by means of which they have acquired the property attached. It also noted that the present proceedings against the appellants have emanated out of the same transaction which is subject matter of attachment of properties held by other persons, which provisional attachment has been confirmed. Accordingly, the adjudicating Authority ordered that the provisional attachment of the properties referred to in the order dated 7th July, 2008 shall continue during the pendency of proceedings initiated by NCB, Mumbai before the Special Judge under NDPS cases under Sections 23 and 24 of the NDPS Act and shall become final after the guilt of the person is proved in the Trial Court and the order of such trial becomes final. 7. The appellants assailed the abovesaid decision of the Adjudicating authority before the Appellate Tribunal under PMLA at New Delhi by way of two separate Appeals. Both the Appeals were heard and decided together by the Tribunal by a common Judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject properties after giving opportunity of being heard to the person concerned. Reverting back to the case on hand, the Tribunal found that considering the fact that the company was neither a Public Limited Company which is listed on Stock Exchange coupled with the fact that the shares of the company are closely held by persons who are relatives, the Corporate veil of the company will have to be lifted to ensure that the purpose of the PMLA is not frustrated by collusive act of omission and commission of such persons. Only that approach would obviate any fraud being perpetrated behind the veil of the company. The Tribunal noted that the two NRI ladies, who invested in the majority shares of the Company, were related. The NRI ladies held 74.363% shares in the Company, and 25.599% shares are held by O.P. Nogaja, appellant in one of the appeals. It is the Company which was issued notice under Section 8 of the Act to file evidence to prove legitimate source of the funds received from two NRI ladies and to discharge the burden of proof that the funds held by the Company were not proceeds of crime or tainted property. The Tribunal held that no law prohibits the Company to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as per the provisions of the PMLA. The Tribunal has also noted that the counsel for the appellants was already given opportunity to prove the genuineness / legitimate source of payment received from the NRE accounts of the two ladies, which opportunity was declined by him. The Tribunal, therefore, upheld the opinion of the Adjudicating Authority that the properties in question were required to be provisionally attached, as the same were involved in money-laundering. 8. The Company and O.P. Nogaja have filed separate appeals before this Court against the decision of the Tribunal. As mentioned earlier, similar orders of provisional attachment passed in respect of properties of the other persons involved in connection with the same transaction have been upheld by this Court by dismissing First Appeal Nos. 527 to 529 of 2010 vide judgment and order dated 5th August, 2010. More or less, on same grounds, the appellants have assailed the impugned decision of the Tribunal in the present appeals. The appellants, however, are not in a position to distinguish the opinion recorded by the Division Bench in the earlier matters on the said issues, nor are in a position to point out that the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of commission of offence under Part A of the Schedule, and it is alleged that the money involved is proceeds from illicit trafficking of drugs. Suffice it to observe that cognizance of offence punishable under Section 3, read with Section 4 of the PMLA and Section 120-B of I.P.C., has been taken by the concerned Court against all the accused. As a matter of fact, the said order taking cognizance of the offence against all the accused was challenged before this Court at the instance of the accused, which challenge, however, has failed. In that view of the matter, it is not open to the appellants to now contend to the contrary. That is sufficient for provisional attachment of the properties in question pending the trial. 10. It was then argued that the offence under the Narcotic Drugs and Psychotropic Substances Act, 1985, has been allegedly committed between May-June, 2006, whereas the money from NRE investors was received as a shareholder during the period May-November, 2005, which was much before the transaction in question. As a mater of fact, shares were also allotted to the investors by the Company before the order for teakwood was placed in the month of March, 2006. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken for the first time in the present appeals. We find force in the submission of the respondents that the relevant date is not the date of acquisition of the property by the Company, which is being provisionally attached by the Authority, but the relevant date is the date when the property is projected as untainted property. As aforesaid, the purport of Section 23 raises presumption and the burden of proof is on the accused and the person concerned to prove otherwise to the satisfaction of the Adjudicating Authority. In the present case, the appellants have failed to discharge the said burden. 12. It is then argued on behalf of the appellants that the two Authorities below have proceeded on erroneous basis that the finding and the conclusion reached in the case of other persons involved in the same transaction would be binding on the appellants herein, whereas the case of the appellants ought to have been examined on its own merits, which was factually different. In the former cases, the amount travelled from the account of R.P. Modani, and his beneficiaries remitted / invested the same with the appellants. In the present case, the amount was invested from the NRE Account by wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny towards share capital or that the shares represented the alleged funds could alone be attached and not the amount lying in the Share Capital Account to represent its own common funds. It would have been a different matter if the Appropriate Authority were to pass order of provisional attachment of the shares held by the shareholders of the Company, without giving notice to the shareholders in that behalf. In the present case, the provisional attachment is of the funds of the Company which have become tainted because of the inter-connected transactions. As aforesaid, the presumption under Section 23 of the Act has not been discharged by the appellants. As a result, it is not open to contend that the said funds were not amenable to provisional attachment at all. For the reasons already noted hereinbefore, the argument under consideration deserves to be rejected. 15. It was next contended that, out of Rs. 6,25,40,171/- lying in various bank accounts, a sum of Rs. 4,23,85,083/- was the amount that was already frozen by the Narcotics Control Bureau on 16th June, 2006 under the NDPS Act, as per the direction in terms of order passed by the learned Single Judge of the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f that property for confiscation at the end of the trial against the accused persons relating to Scheduled Offence. 16. In this context, it was submitted that the amount was fully secured because of the condition imposed by the learned Single Judge, and the order of provisional attachment in respect of the said amount, therefore, suffers from non-application of mind. We are not inclined to accept this submission, as the law obliges the Appropriate Authority under the PMLA to proceed against the tainted property or which is proceeds of crime in a particular manner. The Appropriate Authority is obliged to proceed in that manner only. Hence, this argument deserves to be rejected. 17. It was then contended that, because of the action of provisional attachment order in respect of the amount covered by the order of the learned Single Judge dated 10th August, 2000, the appellants would suffer financial loss. In that, the amount was invested in FDRs bearing varying rates of interest, whereas, after the provisional attachment, the amount has been invested in FD Scheme by the respondents on relatively lesser rate of interest. This contention may have significance, if the appellants were ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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