TMI Blog2018 (3) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... g opinion about the rival submissions of the parties on merit, it would be appropriate to await the decision of the Supreme Court. After the said decision, an appropriate order would be passed - MP-PMLA-2015/HYD/2015 (Stay)FPA-PMLA-1053/HYD/2015, MP-PMLA-2016/HYD/2015 (Stay) 2. FPA-PMLA-1054/HYD/2015, MP-PMLA-2086/HYD/2015 (Stay) 3. FPA-PMLA-1055/HYD/2015, MP-PMLA-1945/HYD/2015 (Stay) 4. FPA-PMLA-1035/HYD/2015 - - - Dated:- 13-3-2018 - Justice Manmohan Singh, Chairman And Shri Anand Kishore Member For the Appellant : Shri Raghenth Basant, Advocate Shri K. Sidharth Rao, Advocate Shri Yogesh Ravi, Advocate For the Respondent : Shri S. A. Saud, Advocate JUDGEMENT FPA-PMLA-1053/HYD/2015, FPA-PMLA-1054/HYD/2015, FPA- PMLA-1055/HYD/2015 FPA-PMLA-1035/HYD/2015 1. The above mentioned appeals have been filed against the order dated 04.08.2015 by Adjudicating Authority made in Original Complaint No. 424 of 2015 confirming the attachments made vide Provisional Attachment Order No. 04/2015 dated 25.02.2015 (PAO) in ECIR/09/HZO/2011. PAO passed corresponding to CC No. 24 of 2013 before the Special Judge for CBI Cases, Hyderabad (CBI Case). 2. Attachments effected i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Shri Y.S. Jagan Mohan Reddy had fixed the premium at ₹ 350/- per share in respect of M/s Jagati Publications Limited and at ₹ 252/- per share in respect of M/s Carmel Asia Holding Pvt. Ltd. To justify these huge premiums, the company s value has been inflated in the valuation reports. In pursuance of conspiracy, the inflated value report got prepared subsequently by M/s Jagadisan Co., for M/s Jagathi Publications Limited and antedated as 12.07.2007, though this was completed in January, 2008 to justify the high premiums already received by M/s Jagati Publications Ltd. Sri V. Vijaya Sai Reddy got valuation report from M/s Deloitte Touche Tohmtsu India Pvt. Ltd., in respect of M/s Jagati Publications Limited inflated and also got inflated credit worthiness of M/s Carmel Asia Private Limited and got this antedated as in November, 2007, though the same was prepared in April, 2008. The benefits received by M/s The India Cements Limited are (i) Renewal of Land Lease in Kadapa District vide GO Ms. No. 865 dated 11.07.2008 of Revenue (ASN.IV) as well as permission to draw 10 Lakh Gallons of water from Krishna River vide GO Ms No. 146 dated 22.07.2008 of Irrigation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of ₹ 324.02 Cr. including premium of ₹ 292.15 Cr. was received by the Company by way of Private Placement of equity shares. While the accumulated loss as on 31.03.2008 was ₹ 7.23 Cr., the earning per share and dividend was declared Nil in the balance sheet. It has been observed by the respondent that investigations revealed that the companies which had been favoured illegally by the Government of Andhra Pradesh at the behest of Shri Y.S. Jagan Mohan Reddy and others had paid the consideration for favours to the companies owned and controlled by Y.S. Jagan Mohan Reddy and that the said payments were made under the cover of Financial Transactions by way of equity participation in Bharathi Cement Corporation Pvt. Ltd, M/s. Jagati Publication Pvt. Ltd. and M/s. Carmel Asia Holding Pvt. Ltd. The said details are as under: i) An amount of ₹ 95,32,63,855/- had been paid by M/s. India Cement Ltd. to M/s. Bharathi Cement Corporation pvt. Ltd. as equity participation as per details below: Date Bank Name Amount (Rs.) Beneficiary 05.02.2007 Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Jagati Publication Pvt. Ltd. [A/c No. 1110109000026 Oriental Bank of Commerce, Jubilee Hills, Hyderabad] 4,00,00,000 09.08.2007 3,00,00,000 10.08.2007 08.01.2008 3,00,00,000 11.01.2008 2,00,00,000 29.01.2008 2,00,00,000 30.01.2008 1,00,00,000 31.01.2008 2,00,00,000 05.02.2008 1,50,00,000 06.02.2008 1,50,00,000 07.02.2008 2,00,00,000 14.02.2008 2,00,00,000 15.02.2008 2,00,00,000 18.02.2008 1,00,00,000 05.03.2008 1,60,00,000 07.03.2008 1,60,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Holdings Pvt Ltd, into M/s Janani Infrastructure Pvt Ltd. and M/s Indira Television Pvt Ltd. are genuine investments made in course of bona fide commercial transactions and as on 30.09.2014, M/s Carmel Asia Holdings Pvt Ltd. invested a total amount of ₹ 11,54,87,968/- in M/s Janani Infrastructure Pvt Ltd. The said investment is already in ED s notice and has been accepted in PAO NO.4 of 2015 dated 15.12.2014. In fact, the Respondent already attached several properties as value of the investments made by M/s P.R. Energy Holdings Ltd. into M/s Carmel Asia Holdings Pvt Ltd.in PAO NO.4 of 2015 dated 15.12.2014. Therefore, attachment at the hands of M/s Janani Infrastructure Pvt Ltd constitutes double attachment. 8. The entirety of share application money (Rs.3,20,00,000/-) initially invested by M/s Carmel Asia Holdings Pvt Ltd into M/s Saraswati Power Pvt Ltd has been returned even before the impugned attachment. Therefore, the same is factually incorrect. 9. It is submitted by all the appellants that the penal provisions alleged in charge sheet were not included in the Schedule to the PMLA during the relevant time. They were included in the Schedule only by way of amendmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e.; (i) up till 31.03.2007 - ₹ 5 Crore; (ii) up till 31.03.2008 ₹ 10 Crore; (iii) up till 31.03.2009 ₹ 82,32,63,855 16. It is the case of Bharathi Cement that out of the total amount of ₹ 95,32,63,855/- lying in fixed deposits in Vijaya Bank, Banjara Hills, Hyderabad, only a sum of ₹ 25 crores has been received from Oriental Bank of Commerce. The source of this 25 crores is operations of the company as the amount maintained in Vijaya Bank is funds maintained from the operations of the company and not from investment. Yet, the Joint Director, Enforcement Directorate, has attached the entire sum lying in Vijaya Bank. This attachment was confirmed by the Adjudicating Authority observing as under: Fixed Deposits held in the name of M/s. Bharathi Cement Corporation Private Limited to the tune of ₹ 95,32,63,855/- in VIJAYA BANK, BANJARA HILLS, HYDERABAD, being the proceeds of crime with M/s Bharathi Cement Corporation Limited . 17. It is alleged by Bharathi Cement that admittedly in Para 9.1 of the PAO that the amount in Vijaya Bank was ₹ 66 crores only. The other amount stated to be proceeds of crime was ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in OC. No.424/2015, the amount of ₹ 95,32,63,855/- invested by India Cements in Bharathi Cements has also been held to be proceeds of crime and has been attached, which constitutes double attachment. (iii) Reason to believe It is contended on behalf of the appellant that the Adjudicating Authority in the impugned order has failed to consider, firstly that the attachment was without legitimate Reasons to Believe and there is no nexus between the proceeds of crime and property sought to be attached. [See Paresha G Shah v. State of Gujarat, 2016 GLH (1) 329 at Para 32-34] The Adjudicating Authority holds at page 114-115 of the impugned order that the OC/PAO disclose facts justifying a prima facie case and sufficiently convey what the Defendants have to meet. However, the Adjudicating Authority has not considered whether the parameters for reasons to believe under Section 5(1) have been adequately met. While in para 62 at page 115, the Adjudicating Authority had held that under Section 5 8 of the PMLA there is no requirement that reasons be conveyed to the Defendants. 20. It is also submitted that the Adjudicating Authority fails to note that Section 5(1)(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the cognizance of the offences under Sections 420 120B IPC Section 12 of PC Act, taken by the Principal Special Judge for C.B.I Cases, Red Hills, Nampally, Hyderabad so far as the petitioner/A3-Sri N. Srinivasan concerned are quashed for no basis to sustain. The bail bonds of the petitioner/A3-Sri N. Srinivasan if any shall stand cancelled. The miscellaneous petitions pending if any stand closed. The India Cements Ltd and their directors were the petitioners in the said matters. The instances of illegal gratification in the guise of investment as quid-pro-quo by India Cements Ltd. (A-7) into the companies of Sri Y.S. Jagan Mohan Reddy are detailed in para 2(ii) of the said Judgement. The allegations inter-alia against India Cements Ltd are referred in para of 2(ii) (j) of the Judgement which are re- produced here below: (j) India Cements Limited (A-7) had invested 12,50,000 of preference shares at a premium of ₹ 110/- for a sum of ₹ 15,00,00,000/-. Thereafter India Cements Limited (A-7) had invested a sum of ₹ 80.31 crores at a premium of ₹ 1440/-. There was no explanation available in the minutes of the meeting or the statements recorded fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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