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Ffr Software Pvt Ltd. & 1 Versus Union Of India - Thro Secretary & 2.

2013 (11) TMI 1713 - GUJARAT HIGH COURT

Special Civil Application No. 2183 of 2012 - Dated:- 12-11-2013 - Mr. Anant S. Dave, J. Mr Uday Joshi for M/S Trivedi & Gupta, for the Petitioner. Mr I.H. Syed for the Respondent ORAL ORDER 1. The petitioners have filed this petition under Articles 226 & 227 of the India with the following main prayers: [A] Your Lordships may be pleased to issue writ of mandamus or a writ in the nature of mandamus or any other appropriate writ order or direction quashing the impugned action / decision on .....

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petitioner had purchased two wind turbines from one M/s Vishal Plastomer Pvt. Ltd. Which had established the said two turbines in the year 2001 with the help of Industrial Renewable Energy Development Agency, New Delhi which had provided loan to the tune of ₹ 2.30 crores to M/s Vishal Plastomer Pvt. Ltd. who had entered into a Power Purchase Agreement with the Rajasthan Electricity Board for sale of electricity and the said power purchase agreement came to be transferred in the name of th .....

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were scheduled offences under the provisions of PMLA, respondent 2 took cognizance of same and issued provisional attachment order no. 7/2011 along with a complaint under section 5 of the Act on 23.06.2011 for attachment of immovable properties stated therein, alleging that the said properties were acquired or are part of proceeds of crime and that the same are likely to be concealed, transferred or dealt with which may result into frustrating further proceedings under the provisions of the Act. .....

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td. and M/s Vishal Plastomer Pvt. Ltd., it was presumed that the amount which M/s Vishal Exports Overseas Ltd. had borrowed from Andhra Bank (which was subject matter of the complaint registered by Andhra Bank and investigated by the Central Bureau of Investigation (BS & FC), Mumbai) was siphoned off and routed through a foreign company one Banquo Ventures Ltd., Dubai and sent to the petitioner out of which the petitioner had purchased the said two wind turbines. In view of the aforesaid, tw .....

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l after the guilt of the person is proved in the trial court and order of such trail court becomes final and it was also directed that the Director or any other officer authorized in this regard to take possession of the attached property. 2.5 The said order dated 16.11.2011 is challenged by the present petitioner and other affected parties by way of an appeal before the Appellate Tribunal established under the provisions of the Act which at present is pending. 2.6 The petitioner had purchased t .....

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e petitioner acquired the wind turbines and the rights under the power purchase agreements where from the income received is duly credited into the account of the petitioner. The entire allegation is in respect of the loan taken by M/s Vishal Exports Overseas Ltd. from Andhra Bank is that the same was fraudulently obtained and siphoned off abroad and subsequently party brought back as advance remittances in the account of the petitioner. 2.7 The petitioner was carrying out its business by genera .....

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Respondent No. 3. 3. Learned counsel Mr. Uday Joshi appearing for the petitioner submits that there is no alternative remedy against the communication and action under challenge as well as that the action of debit freezing the current account, if amounts to provisional attachment under provisions of PML Act, the procedure prescribed under the PML Act has not been followed by the authorities whereby the action is illegal. 4. During the course of hearing the learned Assistant Solicitor General Mr .....

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Assembly of the United Nations at its seventeenth special session on the twentythird day of February, 1990. Further, the Political Declaration adopted by the Special Session of the United Nations General Assembly held during 8th to 10th June, 1998 called upon the Member States to adopt national moneylaundering legislation and programme. In pursuance thereof, the PMLA was enacted by the Parliament. Thus, the legislative mandate behind such enactment is of material importance; The objects of the A .....

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are not rendered nugatory. In other words, the spirit and not, the letter alone of PMLA needs to be understood objectively. In this context, Respondents referred to the observations of Justice V.R. Krishna Iyer, his Lordship as he then was, while delivering separate judgment in the case of Union of India vs. Sankal Chand Himatlal Sheth - AIR (1977) SC 2328 at this stage: ….Primarily, the key to the opening of every law is the reason and spirit of the law - it is the animus imponentis - i .....

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iteral in meaning is to see the sin and miss the soul of the regulation also assumes significance. 4.3 In the context of the challenge mounted by the petitioners on the extent of investigatory powers of the authorities under the PMLA, in order to comprehend the broad contours of the terms investigation the Respondents referred to the decision of Apex Court in the case of H.N. Rishbud Vs. State of Delhi ( 1995 Cri LJ 526) where it was held that under the Code investigation consists generally of t .....

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the trial. [5] Formation of the opinion as to whether on the material collected there is a case to place the accused before a Magistrate for trial and if so taking the necessary steps for the same by the filing of a chargesheet under Section 173 . 4.4 The statutory scheme under PML Act can be invoked in the course of investigation of a case. In terms of Section 2 (na) of PMLA, investigation includes all the proceedings under this Act conducted by the Director or by an authority authorized by th .....

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ode of Criminal Procedure, 1973 (2 of 1974) shall apply, in so far as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under this Act . Thus by virtue of section 65 of the Act, the IOs under PMLA can take recourse to the provisions of Cr. P.C. in respect of any proceedings including investigation if the same are not inconsistent with the provisions of PMLA. 4.6 In the case of S .....

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, prohibiting the operation of the bank account. It was held that the High Court of Bombay committed error in holding that the police officer could not have seized the bank account or could not have issued any direction to the bank officer, prohibiting the account of the accused from being operated upon. It was also held that the legislature having used the expression any property and any offence in section 102 of Cr. P.C. have made the applicability of the provisions wide enough to cover offenc .....

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4.8 The learned Assistant Solicitor General also apprised this Court that during the pendency of this petition, the provisional attachment order no. 2/2013 dated 19.3.2013, issued under section 5 of the Act, has since been confirmed vide Order dated 10.09.2013 by the Adjudicating Authority under section 8 of the Act. 4.9 Learned Assistant Solicitor General has also placed reliance on directions of the Division Bench of the High Court in the case of B.Rama Raju v. Union of India vide order dated .....

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orders impugned in these petitions, remedy of statutory appeal is available. The petitioners have approached this Court without availing of such appellate remedy……I do not find it appropriate to entertain these petitions without exhausting the appellate remedy . [ii] Dipak Jashvantlal Panchal Vs. The Deputy Director of Enforcement in SCA No. 6341 of 2008, Coram : Honourable Mr. Justice Jayant Patel : …..as the order has been passed by the Authority, against which there is a .....

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statutory mandate under the PML Act makes it imperative for the authorities in the course of investigation i.e. collection of facts to establish specific details of the suspected properties from the concerned authorities prior to issuance of the provisional attachment order under section 5 of the Act. As such, it has to be issued with abundant caution. It is therefore necessary that the requisite information/details are ascertained from the repositories of such information. Such repositories ma .....

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tigation. The challenge mounted by the petitioners on such powers of the authorities is therefore, erroneous. The term investigation as defined in section 2 (na) of PML Act has to be read in consonance with the provisions of section 65 which empowers the authorities under PML Act to issue such directions/prohibitory orders. Therefore, any such direction issued in the course of investigation is within the four walls of law and in consonance with the object and reasons of the Act to ensure that th .....

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tances when directions are issued to the concerned authorities viz. the letter dated 12.07.2011 issued by the respondent No.2 to respondent No.3 in the instant case, the rationale behind such orders being the property would otherwise might change hands frustrating the objectives of the Act. I also find force in the averments of the respondents that the power of the authorities under PMLA to issue such directions is ingrained in the powers of conducting investigation as defined in the PMLA which .....

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spondent No.2 have not yet received any notice in regard to any appeal preferred by the petitioners before the Appellate Tribunal under PMLA against the order of the Adjudicating Authority. In terms of the statutory scheme under PMLA, the petitioners have clear cut remedies available by way of appeal to the tribunal under section 26 of PMLA. Section 42 provides for the appeal against the order of Tribunal under PMLA to the High Court. The petitioners have clear cut remedies available under the S .....

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the statute itself provided the petitioners with an efficacious alternative remedy by way of an appeal to the Prescribed Authority, a second appeal to the tribunal and thereafter to have the cases stated to the High Court, it was not for the High Court to exercise its extra ordinary jurisdiction under Art. 226 of the Constitution ignoring as it were, the complete statutory machinery. 9. In yet another case of Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement & Another - C .....

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ng redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up. 10. In para 8.2 of the judgment dated 31.07.2013 delivered in Special Civil Application No.4171 of 2012 with Special Civil Application No.1059 of 2012, this court has noticed certain brief facts of those case .....

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ctorate in the instant case and the submissions are as under:a) M/s. Vishal Exports Overseas Ltd. (VEOL) and its Director including Shri Pradip Mehta had defrauded a consortium of 23 Banks led by State Bank of India to the tune of more than ₹ 100 Crores by their acts of cheating and forgery. Accordingly bank Security and Fraud Cell of CBI, Mumbai upon their investigation have filed 3 chargesheets against M/s. VEOL & others before the competent court. Besides, in another fraud and cheat .....

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ent Order No.07/2011 dated 23.06.2011. Details of Immovable Properties Sr. No. (a) Particulars of the Property, (b) Date of Acquisition & (c) name of initial holder Name of the Present Owner of the Property Value as per Sale Deed 1 (a) Wind Turbines and rights of PPAs of the said Wind Turbines at location J50 (Capacity 0.35 MW) & location J80 (Capacity 1.25 MW) at Jaisalmer, Rajasthan commissioned by Rajasthan Renewable Energy Corporation Ltd., Jaipur. (b) 27/07/2009. (c) M/s. Vishal Pla .....

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aid order has been confirmed by the Adjudicating Authority vide its Order in Original Complaint No.109/2011 dated 16.11.2011. e) It is submitted that M/s.FFR Software Pvt., Ltd., which had purchased the properties in auction of SBI namely at Sr. No.1 and settled the loan in respect of property No.2 above is controlled by Shri Pradip Mehta himself. It is submitted that in the course of investigation it has also been found that many of the properties including Vishal House which were auctioned by .....

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in 2009. It shows that VEOL was in possession of funds to pay to banks to repay its outstanding dues & thereby reduce/compensate the losses of the Banks. However, VEOL controlled by Pradip Mehta used those funds to purchase properties in the names of abovementioned Companies [M/s.JMD Media Pvt. Ltd., M/s. Alive Hospitalities and Foods Pvt Ltd. And M/s.FFR Software Pvt Ltd]. These properties earlier belonged to VEOL/Sh Pradip Mehta did with Banks, therefore, this money which Pradip Mehta use .....

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irections of Shri Pradip Mehta and the source of fund was also arranged by Shri Pradip Mehta and all the companies have practically no business activities as revealed by their Director, Rakesh Y. Bhatt and Sh. Pravin T. Halvadia all the companies were used to route funds for purchasing properties. Thus it appears that all these companies directly or indirectly belong to/controlled by Shri Pradip Mehta. All these companies are controlled by Pradip Mehta, though to hide this fact, Pradip Mehta pre .....

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operation masterminded by Shri Pradip S. Mehta. i) When Directorate of Enforcement attached the properties acquired in the name of M/s. FFR Software Pvt. Ltd., vide Provisional Attachment Order No.07/2011 dated 23.06.2011, Shri Pradip Mehta started selling the properties including Vishal House , which was then owned by M/s.JMD Media Pvt Ltd., which is controlled by him. The said Provisional Attachment Order No.07/2011 dated 23rd November 2011 has been confirmed vide order dated 16.11.2011 in O.C .....

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sale of this property, which was acquired from Proceeds of Crime, which is itself a fraud committed with the Applicant. Thus, the liability of Pradip Mehta is towards the Applicant. It is therefore prayed that the seller as named in the unregistered Sale Deed, may be directed by this Hon'ble Court to return the money to the applicant. k) Apart from above, the Directorate of Enforcement is investigating the connection of the applicant with Pradip Mehta and in this process statements of Shri .....

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11 received from Sub Registrar, Memnagar regarding the sale of (Vishal House, Opp. Sales India, Ashram Road, Ahmedabad) by M/s.JMD Media, Pathar Kuva, Ahmedabad to Shri Jagdishbhai Patel. 2 21.12.2011 Summons dated 21.12.2011 was issued to Shri Rakesh Y. Bhatt for appearance on 21.12.2011, Summons to Shri Pradip Mehta for appearance on 22.12.2011 and Summons to Shri Praveen Halvadiya for appearance on 22.12.2011. 3 21.12.2011 On 21.12.2011, statement of Shri Rakesh Y. Bhatt recorded. 4 21.12.201 .....

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1. 7 23.12.2011 Letter issued to Shri Pradip Mehta regarding his adjournment letter dated 21.12.2011, enclosing the fresh summons requiring his presence on 27.12.2011. Directive issued to Kalupur Commercial Cooperative Bank, Swastik Char Rasta Branch, Ahmedabad forproviding details of Bank accounts of M/s. Global Nutrition and M/s.Vikalp Rasayan Pvt Ltd. 8 26.12.2011 A letter received from Shri Pradip Mehta including some clarification. In response to said letter, letter was issued to Shri Pradi .....

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2. 12 03/01/12 Statement of Shri Pradip Mehta recorded. Directives issued to Kalupur Commercial Cooperative Bank, Swastik Char Rasta for providing details of bank accounts of M/s. JMD Media 7 M/s. Alive Hospitalities. Letter dated 03.01.2012 received from Shri Pradip Mehta enclosing the annual report of VEOL for year 200506, 200607, 200708, 200809. 13 04/01/12 Summons issued to Smt. Falguni R. Bhatt for appearance on 04.01.2012. Statements of Shri Smt. Falguni R. Bhatt recorded on 04.01.2012. 14 .....

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0809, Shri Pradip Mehta wrote a letter dated 12.01.2012 to give precise details of documents required to be submitted by him with the request for adjournment till 23.01.2012 due to preoccupation in other engagements. In regard to his letter, this office also issued him letter giving details of documents submitted by him with the directions to submit the balance documents. On 12.01.2012 a letter received from S.B.I. containing the details of auction of Properties mortgaged by M/s.VEOL purchased .....

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ich is regarding the allowance of property Vishal House to get registered in the name of Jagdish Patel and family including the details of payments etc. 19 18.01.2012 On 18.01.2012, letter received from VEOL regarding submission of IT Returns for A.Y. 200708 with the promise to submit the other IT Returns. 20 19.01.2012 Letter dated 19.01.2012 received from Shri Jagdish Patel requesting for adjournment on ground of sickness, then Summons dated 19.01.2012 issued to Shri Jagdish Patel for appearan .....

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2 Statement of Shri Jagdish Ishwarbhai Patel recorded on 24.01.2012 Shri Pradip S. Mehta's letter dated 24.01.2012 received in which he made request to amend his statement dated 23.01.2012. 23 25.01.2012 Directive issued to Axis bank, Ankur branch for providing bank account details of M/s.JMD and Alive Hospitality and Foods Pvt Ltd. 24 27.01.2012 A reference was made to Joint SubRegistrar, Memnagar directing him not to allow registration of Vishal House as the matter is still under investiga .....

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2012 6. In view of the facts mentioned above, this is humbly prayed that Shri Pradip Mehta, who is the habitual offender and a number of cases have been booked against by the C.B.I., DRI, R.B.I. And Directorate of Enforcement, may be directed to return the money received against Sale of Property Vishal House, Opposite Sales India, Ashram Road, Ahmedabad to the applicant and the lien of this office may be continued as the said property Vishal House is still under investigation as it is suspected .....

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