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TMI Blog2015 (11) TMI 1694X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the accused persons had also deputed agents in Haryana, Punjab & other places for alluring unemployed persons who were offered jobs in M/s. Agrofed India after taking huge sums of money. The appointment letters were signed by Shri Paramjit Singh Sandhu or Sh. Gurmukh Singh; the jobs were allegedly given permanently by taking money from persons either directly or through agents. The FIR No. 168 dated 10 June, 2006 was registered at police station Mahesh Nagar, district Ambala and police had filed challans dated 7th August, 2006 and dated 6th October, 2006 under section 173 of CRPC, 1973 in the court of JNIC, Ambala and Shri Paramjit Singh Sandhu along with others has been charged of having committed the offence under section 467 of IPC which is a scheduled offence under Prevention of Money Laundering Act 2002 (in short PMLA). 2.2 It is alleged that Shri Paramjit Singh Sandhu had collected large amount of money from many persons assuring them that he was chairman of M/s. Agrofed India, an "under taking of Government of India" and he was offering government jobs and thus he cheated people by misrepresentation and collected money directly or indirectly. The money thus collected by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Fabrics on regular basis. Both the appellant as well as the partnership firm M/s. M.K.S. Fabrics are income tax assessees having income tax permanent account numbers and are regularly filing income tax returns which are placed on appeal record. He submitted that the appellant has purchased the attached immovable house property in question from Shri Gurmeet Singh by taking housing loan from PNB Housing Finance Limited to the extent of Rs. 8 lakhs and the balance Rs. 1.90 lakhs was met out of his legitimate earnings from the partnership firm and no proceeds of crime have been utilized for purchase of subject property. It was contended that that appellant is a bona fide purchaser who purchased the property in good faith after paying due consideration and he was not aware of the nefarious activities of Shri Paramjit Singh Sandhu or his wife Smt. Parminder Kaur or about the criminal cases proceedings against them. The appellant purchased the built up property on 1st February, 2008 as per the registered sale deed after taking housing loan from PNB Housing Finance Limited for which necessary due diligence was exercised by verification of title of the property by way of obtaining legal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport specially to the following paragraph which shows that after taking into consideration of documents including Agreement to sell, Power of Attorney and Affidavit executed by Smt. Parminder Kaur confirming that subject property has been sold by her to Shri Gurmeet Singh, PNB Housing Finance Limited granted housing loan to the appellant:- "As requested, I have conducted the legal investigation of the above said property and made search of records in registration office and other offices as required in matter. I have answered all the queries in the Special Report which is enclosed. Chain of title relating to property is complete given below: I hereby certify that Smt. Parminder Kaur with Shri Paramjit Singh has got a clear, unencumbered, valid and marketable title over the above said property in favour of the prospective buyer son of Sh. Mohan Singh after due execution and registration of prospective buyer, a valid mortgage can be created by deposit of the following original documents- i) Original sale deed to be executed and registered in favour of the prospective buyer alongwith original site plan. ii) Original sale deed bearing Vasika No. 791 dated 18/4/2006. iii) O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted an affidavit duly attested by Notary Public, Ludhiana to the effect that Smt. Parminder Kaur is still alive and said general power of attorney has not been revoked by her." 5. The counsel submitted that the Agreement to sell coupled with General Power of Attorney, Will and transfer of possession of property etc. is equal to sale in terms of section 53A of the Transfer of Property Act since the consideration has already been paid by Shri Gurmeet Singh to Smt. Parminder Kaur and Smt. Parminder Kaur has given possession and enjoyment of the subject property to Shri Gurmeet Singh. In this connection he relied upon the judgment of Hon'ble Supreme Court in the case of Suraj Lamp and Industries Pvt. Ltd. v. State of Haryana and another (2012) 1 Supreme Court Cases 656 and judgement of Hon'ble Delhi High Court in the case of Asha M. Jain v. Canara Bank (2001) 94 DLT 841. 6. He contended that the appellant had no relationship or nexus with the accused Shri Paramjit Singh Sandhu or his wife Smt. Parminder Kaur. He had no knowledge about the criminal cases pending against them. It was contended that the appellant is not connected with the accused persons or the proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Finance Limited made correction in the cheque and the cheque was issued in the name of seller Shri Gurmeet Singh. He submitted that the certificate of PNB Housing Finance Limited in this regard is filed and placed in the appeal paper book and drew our attention to the same which reads as follows:- "Dated: 19/01/2010 To Whom It May Concern It is certified that Sh. Sanjeev Sharma & Smt. Rajani Sharma availed Housing Loan of Rs. 11,00,000/-(Rs. 8,00,000/- for purchase of build up house and Rs. 3,00,000/- for repair renovation). Payment of Rs. 8,00,000/- was made to Sh. Gurmeet Singh s/o Sh. Mohan Singh (Power of Attorney holder of Smt. Parminder Kaur) vide Cheque No. 861685 Dated 28/01/2008. It is certified that correction in the Cheque is duly authorized by our office and was done at the request of the purchaser (Borrower) after following the due procedure." 8. The counsel submitted that the subject property is situated far away from the main city area and during the period when property was purchased by the appellant, the market price of property in the area at that time was very volatile due to political changes in Punjab and there was sharp decline in the property pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bring Shri Gurmeet Singh in the picture so as to show disconnect between her and Shri Sanjeev Kumar. He contended that there is no document to show that entire sale consideration was paid by Shri Gurmeet Singh and the actual possession of the property was ever given by Smt. Parminder Kaur to Shri Gurmeet Singh so as to even remotely argue that indeed the property was transferred to Shri Gurmeet Singh. He submitted that it was unimaginable that a property which is purchased by Shri Gurmeet Singh for Rs. 13,50,000/- on 15th October, 2007 was sold by him for at a much lower price at Rs. 9,90,000/- on 1st February, 2008. If the property was sold by Smt. Parminder Kaur to Shri Gurmeet Singh then her name would not have been found as seller in the sale deed dated 1st February, 2008 wherein Smt. Parminder Kaur was described as seller through Shri Gurmeet Singh who had signed the sale deed as her General Power Attorney holder. He contended that the sale deed dated 1st February, 2008 itself discloses number of facts which shows that the property was purchased from Smt. Parminder Kaur and not from Shri Gurmeet Singh. 11. The counsel further contended that the appellant knew Smt. Parminder K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate of Enforcement). (b) Plot No. 99, 100 and 101 in Silver Kunj Colony, Village Bhora, Jalandhar Bye-pass, Ludhiana purchased by Shri Paramjit Singh Sandhu in the year 2006 for ana amount of Rs. 7,20,000/- Plot No. 99 and 100 were purchased in the name of Shri Paramjit Singh Sandhu and plot No. 101 was purchased in the name Smt. Parminder Kaur W/o Shri Paramjit Singh Sandhu. (c) Plot No. 11 & 12 (shops) in D.M. Plaza, Village Bhora, Jalandhar Bye-pass, Ludhiana purchased by Shri Paramjit Singh Sandhu in the year 2006 for an amount of Rs. 1,77,000/-, Plot No. 11 was purchased in the name of Smt. Parminder Kaur W/o Shri Paramjit Singh Sandhu in M/s. D.M. Plaza, Jalandhar-bye-pass, Ludhiana for Rs. 75,000/- and plot No. 12 was purchased in the name of Smt. Palwinder Kaur also wife of Shri Paramjit Singh Sandhu for Rs. 1,02,000/-. 3. AND WHEREAS consequent to results of investigation conducted by officers of Haryana Police, in case FIR No. 168 dated 10.06.2006 registered at Police Station Mahesh Nagar, District Ambala, a Report under section 173, CrPC has since been filed by Police authorities in the Court of Hon'ble JMIC, Ambala, against a number of Accused, including Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amjit Singh Sandhu as admitted by him in his statement dated 02-03-2007. The value as per registration deed was declared as Rs. 4,25,000/-. The said property had been sold to Sh. Sanjeev Kumar s/o R.R. Sharma of Ludhiana on 01-02-2008 for Rs. 9,90,000/- as per copy of the registration deed provided by Sh. Sanjeev Kumar defendant No. 4. ......................" 15. A careful consideration of the allegations made by the respondent in the provisional attachment order and original complaint shows that at the time of passing provisional attachment order attaching the subject property, the respondent No. 1 had recorded statement of accused Shri Paramjit Singh Sandhu u/s. 50 of PMLA who had stated that the property was purchased by him in the name of his wife Smt. Parminder Kaur in the year 2006. Thus, at the time of provisional attachment of subject property there was no material available on record with the respondent No. 1 which will show that the appellant had any collusion or nexus with Smt. Parminder Kaur or Shri Paramjit Singh Sandhu, accused. Even till date no material has been brought on record by the respondent No. 1 to show any nexus or collusion of the appellant with Smt. Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Smt. Parminder Kaur through General Power Attorney holder Shri Gurmeet Singh in favour of Shri Sanjeev Kumar." 18. It was noted that Agreement to sell dated 5th October, 2007 has been executed on stamp papers of Rs. 300/- and it reveals that Smt. Parminder Kaur had agreed to sell the subject property for Rs. 13.5 lakhs to Shri Gurmeet Singh and she had received Rs. 5 lakhs in cash as earnest money and balance amount was to be paid by Shri Gurmeet Singh on registration of sale deed up to 5th November, 2007 and possession of the subject property was also to be handed over at the time of registry alongwith the documents. The agreement to sell dated 5th October, 2007 also reveals that the transaction between Smt. Parminder Kaur and Shri Gurmeet Singh has been made through M/s. Shiv and Adiya Property Advisor, Ludhiana and both the parties have agreed to pay 2% commission each to the property advisor. The two notes extending the date of registry from 5th November, 2007 to 12th November, 2007 and then from 12th November, 2007 to 19th November, 2007 shows that as Shri Gurmeet Singh was not able to complete sale transaction by 5th November, 2007, the time was extended twice. Receipt for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 207764 and the deponent Smt. Parminder Kaur is identified by Shri Jaspreet Singh, Advocate and the Affidavit reveals as follows: "1. That House No. B-32-E,14/6290 Plot No. 53-54 Area 249 square yards (two hundred forty nine square yards, boundaries of the same are East- Gali 20 feet wide- area 56 ft. West Surinder Pal area- 56 It. North Deen Dayal - area 40 feet South Gali 20 feet wide -area 40 feet out of Khasra No. 5//11-12/1-19/2-20/1-20/2-21/1-21/2/1-6/13/2-14/2-15-16/1-16/2-16-3-17/1-17/2-18/1-18/2/2-19/2-21/2-22/2-23/1-23/2-24/1-24/2/1-6//24/2/2-25/1-25/2/1/-7/25/2-10/5/2/-6/1-11/1/1-2/1-3/1-4/1-10/1 Khata No. 376/394 Jamabandi 2004-05 situated in village Bhaura. H. No. 88 Tehsil and District Ludhiana Abadi New Akash Nagar, which has been sold by me through an agreement to S. Gurmeet Singh son of S. Mohan Singh resident of Village Jagirpur Tehsil and District Ludhaina and have received the entire consideration amount and possession has been given. 2. That the Purchaser may get the registries done in any one's name as many he wants at his own costs, wherever I am required to sign or to appear, I can appear at that place. 3. That on the asking of the Purchaser, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not successfully refuted by the respondent, therefore, it cannot be inferred that there was no transaction of sale of subject property between Smt. Parminder Kaur and Shri Gurmeet Singh and Shri Gurmeet Singh was never handed over the possession of the subject property. Thus, considering the above discussed facts and circumstances and the judgment of Hon'ble Supreme Court in the case of Suraj Lamp and Industries Pvt. Ltd. v. State of Haryana (2012) 1 SCC 656, we are of the considered view that the finding returned by Adjudicating Authority that the principles laid down by Hon'ble Delhi High Court in the case of Asha M. Jain v. Canara Bank (2001) 94 DLT 841 are not applicable as there was no evidence of possession of subject property having been given to Shri Gurmeet Singh, is erroneous. 22. As regards contentions of the respondent that the PNB Housing Finance Limited had issued cheque of Rs. 8 lakhs in favour of Smt. Parminder Kaur as she was the owner, is also of no consequence. It is an admitted fact that though Shri Gurmeet Singh had purchased the subject property from Smt. Parminder Kaur but no sale deed was registered, therefore, in revenue records Smt. Parminder K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Shri Vijay Kumar Gupta, Advocate, Non-encumbrance Certificate issued by Sub-Registrar, Ludhiana and Special Report of Title dated 23rd January, 2008 issued by Shri Vijay Kumar Gupta, Advocate. There is no material on record to show that the appellant had repaid the housing loan out of proceeds of crime generated by the accused Shri Paramjit Singh. 24. Judgment dated 4.3.2011 of the Hon'ble High Court of Andhra Pradesh at Hyderabad in the case of B. Rama Raju S/o B. Ramalinga Raju v. Union of India (UOI), Ministry of Finance, Department of Revenue, represented by its Secretary, (Revenue) and Ors. in Writ Petition Nos. 10765, 10769 and 23166 of 2010 is referred to and relied upon. In this case, the petitioner has challenged the virus of certain provisions of PMLA. Challenging section 2(u) of PMLA, it was contended that the expression "Proceeds of Crime" as defined/understood/interpreted by the Enforcement Director is likely to target bona fide purchasers/transferees of the property who have no knowledge/nexus/participation in any criminality associated with a property. It was also contended that while a property in the domain, custody or possession of any person who knowingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Bench of the Supreme Court considering the validity of provisions of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) observed: The relatives and associates are brought in only for the purpose of ensuring that the illegally acquired properties of the convict or detenu, acquired or kept in their names, do not escape the net of the Act. It is a well-known fact that persons indulging in illegal activities screen the properties acquired from such illegal activity in the names of their relatives and associates. Sometimes they transfer such properties to them, may be, with an intent to transfer the ownership and title. In fact, it is immaterial how such relative or associate holds the properties of convict/detenu - whether as a benami or as a mere name-lender or as a bona fide transferee for value or in any other manner. He cannot claim those properties and must surrender them to the State under the Act. Since he is a relative or associate, as defined by the Act, he cannot put forward any defence once it is proved that that property was acquired by the detenu - whether in his own name or in the name of his relatives and associates. The Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure 'illegally acquired property' of a person (defined as a convict or detenue under specified enactments and relative or associate of such convict or detenue (the expression relative or associate also defined)). This is a 1976 enactment that provides for forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators. The Act, on the other hand, specifically targets the wider pathology of money-laundering in relation to a large number of scheduled offences enumerated from a variety of specified legislations. In the context of the objects sought to be achieved by the Act and the specificity of the definitions of the expressions "money-laundering" and "proceeds of crime"; the inherence of the burden of proof on a person accused of an offence under Section 3 (Section 24) and the presumptions in inter-connected transactions (Section 23), it is clear that what is targeted for confiscation is proceeds of crime in the ownership, control or possession of any person and not all property or proceeds of all crime in the ownership, control or possession of any person." 25. In the case of Jitender Kumar Lalwani v Dy Director, PMLA in FPA-PMLA-37/AHD/2009 (ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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