TMI Blog2019 (1) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... - In either case, the Adjudicating Authority is required to pass an order within a period of one hundred and eighty days from the date of the order of provisional attachment under Section 5(1) or from the date of order of seizure/freezing passed under Section 17 of the PMLA. This is explicitly clear by the plain language of Section 5(1) of the PMLA. In terms of Section 20 of the PMLA, any property seized under Section 17 or frozen under Section 17(1A) of PMLA can be retained or if frozen, continue to remain frozen for a period not exceeding one hundred and eighty days. Any property can be provisionally attached under Section 5 or be seized under Section 17 or be frozen under Section 17(1A) of the PMLA. However, any such order can be passed only if the necessary checks and balances are complied with; namely, that the seizure or attachment is preceded by the concerned authority having reason to believe that such properties are proceeds of crime or are otherwise related to crime - It is axiomatic that no order of freezing can be passed except in accordance with the provisions of Section 17(1A) of the PMLA. The reliance placed on provisions of Section 65 of the PMLA is misplace ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctorate, BSE continued to withhold 64,94,891 shares of KRBL Ltd. and ₹30,35,006.90 which were received as consideration for the sale of 5109 shares. It is seen that orders under Section 17 of the PMLA freezing the said shares and the amount released in the bank account of the petitioners has since been passed and, the petitioners have preferred an appeal before the Appellate Tribunal. Keeping this in view, no further orders are being passed and it would be open for the petitioners to seek appropriate remedy including compensation for any loss suffered by them on account of the illegal actions on the part of the respondents. Whether the provisions of the PMLA are applicable in respect of freezing orders passed under Section 17(1A) of the PMLA in respect of the shares of KRBL Ltd.? - Held that:- As is apparent from the above that whilst it is clear that RAKGT is alleged to have received the alleged proceeds of crime, it is unclear on what basis it is alleged that the petitioners are recipients of proceeds of crime. Clearly, a ledger entry is not a property and cannot be the proceeds of crime. It appears from the reading of the counter affidavit that it is the Enforcement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 1201910103642797) maintained by the petitioners with respondent no.3 (hereafter SMC ). The aforementioned Demat Accounts are maintained in the name of petitioner nos. 1 and 2 respectively and they hold 78,38,330 equity shares of M/s. Khushi Ram Behari Lal Ltd. (hereafter KRBL Ltd. ) in those Demat Accounts. Whilst the impugned order dated 22.03.2018 a copy of which was handed over by learned counsel of the Enforcement Directorate during the course of hearing indicates that 35,88,330 equity shares are held by petitioner no.1 and 42,50,000 equity shares are held in the Demat Account in the name of petitioner no.2; the petitioners state that 42,50,000 equity shares are held by petitioner no.1 and 35,88,330 equity shares are held by petitioner no.2. 2. In addition to the 78,38,330 equity shares of KRBL Ltd. held by the petitioners in the aforementioned Demat Accounts (Account Nos. 1201910103642803 and 1201910103642797 maintained with SMC), the petitioners also held certain further shares in KRBL Ltd., which were sold in January and February 2018. These included 65,00,000 equity shares of KRBL Ltd. that were sold by the petitioners (32,50,000 equity shares of KRBL Ltd. eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid shares were purchased in the year 2003, which was prior to the PMLA coming into force and, therefore, the provisions of the PMLA are inapplicable to the said shares. He submitted that, therefore, the action of attaching/seizing the said shares is without jurisdiction. Mr. Bhattacharya also clarified that the petitioners had already filed appeals under Section 26 of the PMLA in respect of orders passed regarding freezing of the said shares. He had, accordingly, limited the challenge to the attachment of the said shares only on the aforesaid grounds relating to the jurisdiction of the Enforcement Directorate to pass the orders and issue instructions impugned in this petition. Factual Context 6. The petitioners are foreign nationals and reside overseas. They claim to be engaged in the business of trading goods including rice. They state that they have been importing rice from India for more than three decades. It is further claimed that during the said period, the imports of rice from India were of a value exceeding US $ 2 Billion. 7. The petitioners claim that due to their business interest in import of rice, they decided to make an investment in equity shares of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anuary 2018 and there is no controversy with regard to the said sale. 14. On 12.02.2018, each of the petitioners sold further 32,50,000 equity shares of KRBL Ltd. The bulk of the shares were sold at a gross rate of ₹594 per share; 84 shares held by petitioner no.1 and 25 shares held by petitioner no.2 were sold at a gross rate of ₹594.10 per share; and 5000 shares held by petitioner no.1 were sold at a gross rate of ₹594.05/-. The contract notes annexed to the present petition indicates that the gross amount of ₹1,93,05,00,258.40/- was payable to petitioner no.1 and ₹1,93,05,00,002.5 was payable to petitioner no.2 as sale consideration for the said shares. After deducting the brokerage, transaction charges, stamp duty and taxes, a net amount of ₹1,92,72,34,289.08 was payable to petitioner no.1 and ₹1,92,72,34,033.37 was payable to petitioner no.2. 15. Admittedly, pursuant to the said transaction, SMC debited the Demat account of the petitioners by issuing the quantity of shares sold by the petitioners. The said shares were delivered to BSE for clearing. Similarly, the purchasers of the said shares (counter parties) also remitted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions in the matter. 21. In response to the aforesaid request, the Enforcement Directorate, by an email dated 15.02.2018, advised the BSE that in respect of three counter parties who had purchased an aggregate 5109 equity shares of KRBL Ltd. and had further sold the same, no action was required to be taken against them. 22. On 15.02.2018, BSE sent an email informing Enforcement Directorate that it had withheld funds to the extent of ₹3,86,10,00,261.00 payable to the petitioners and 64,94,891 equity shares of KRBL Ltd., which were to be delivered to The Pabrai Investment Fund II LP . 23. On 23.02.2018, M/s Pabrai Investment Fund sent a letter confirming that it had purchased shares of KRBL Ltd. on the floor of the exchange through their broker M/s Kotak Securities. The said entity lodged its protest for not receiving the shares purchased by it and also being deprived access to its assets. M/s Pabrai Investment Fund had pointed out that it was registered as Foreign Portfolio Investor and the funds invested by it belonged to over three hundred and fifty individuals/institutions across the globe. 24. Almost a month thereafter, that is, on 23.03.2018, the Assistant Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the investigations that were being conducted in respect of the money laundering relating to the kickbacks alleged to have been received by certain parties in connection with the purchase of VVIP Helicopters by the Indian Air Force (IAF) from M/s AgustaWestland, UK (AugustaWestland). 32. In the Counter Affidavit filed by the Enforcement Directorate, it is stated that CBI has registered a case for commission of offences punishable under Section 120B read with Section 420 of the Indian Penal Code, 1860 (IPC) and certain provisions of the Prevention of Corruption Act, 1988 against Sh. S.P. Tyagi, Former Air Chief Marshall in respect of a transaction relating to procurement of twelve Helicopters for VVIPs. 33. It is stated that Sh. S.P. Tyagi had joined as the Chief of Air Staff on 01.01.2005 and remained in office till his retirement on 31.03.2007. It is stated that during his tenure as Chief of Air Staff, IAF had considered reducing the Service Ceiling for the VVIP Helicopters to 4500. It is further alleged that cousins of Sh. S.P. Tyagi (the Tyagi Brothers) had connived with one Mr Guido Haschke and Mr Carlo Gerosa and they had received huge payments from AgustaWestland, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Directorate alleged to be the proceeds of crime and which are alleged to be under control of the petitioners outside India. 38. In compliance with the aforesaid order, the Enforcement Directorate filed an additional affidavit indicating money trail of the alleged proceeds of crime received overseas. It is affirmed in the said affidavit that AgustaWestland transferred Euro 24.37 million to M/s IDS Tunisia during the years 2008 to 2013. M/s IDS Tunisia in turn transferred Euro 12.4 million to the accounts of Interstellar Technologies Limited, Mauritius between the years 2009 to 2012 and Interstellar Technologies Limited transferred USD 2,749,948 to RAKGT between 11.10.08 to 27.01.2010. 39. It is affirmed that Interstellar Technologies Limited also transferred Euro 1 million and USD 1 million to M/s. Windsor Group Holding Limited during the years 2009 to 2012. Out of the aforesaid amount, USD 830,000 were transferred to RAKGT during the period 03.02.2010 to 13.02.2010. Similarly, Interstellar Technologies Limited transferred USD 10,000 to the accounts of one M/s. Carisma Investment Limited in the year 2010 and that company transferred USD 419,980 to RAKGT between 18.04.2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 102 of the Cr.P.C is applicable to proceedings under the PMLA. If the said issue is answered in the affirmative, the next question to be addressed would be whether officers of the Enforcement Directorate have acted in conformity of the said provisions. 44. According to the Enforcement Directorate, the provisions of Cr.P.C. are incorporated in the PMLA by virtue of Section 65 of the PMLA. Thus, the provisions of Section 102 of Cr.P.C, that empower any police officer to seize a property, which is suspected to have been stolen or which creates suspicion of commission of any offence, is also available to officers of the Enforcement Directorate. 45. The PMLA is a Special Act, which is enacted for prevention of money laundering and other connected activities. The statement of objects and reasons indicates that the Prevention of Money-Laundering Bill, 1998 was introduced in the view of an urgent need for the enactment of a comprehensive legislation inter alia, for preventing money laundering and connected activities, confiscation of proceeds of crime, setting up of agencies and mechanisms for co-ordinating measures for combating money-laundering etc. . 46. Chapter III of the PML ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country: Provided further that, notwithstanding anything contained in first proviso, any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act: [Provided also that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this section is stayed by the High Court, shall be excluded and a further period not exceeding thirty days from the date of order of vacation of such stay order shall be counted] (2) The Director, or any other officer not below the ran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identification on such record or property, if required or make or cause to be made extracts or copies therefrom; (e) make a note or an inventory of such record or property; (f) examine on oath any person, who is found to be in possession or control of any record or property, in respect of all matters relevant for the purposes of any investigation under this Act: Provided that no search shall be conducted unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 157 of the Code of Criminal Procedure, 1973, (2 of 1974) or a complaint has been filed by a person, authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or in cases where such report is not required to be forwarded, a similar report of information received or otherwise has been submitted by an officer authorised to investigate a scheduled offence to an officer not below the rank of Additional Secretary to the Government of India or equivalent being head of the office or Ministry or Department or Unit, as the case may be, or any other officer who may be auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards that are expressly inbuilt in the said provisions. An order of provisional attachment or seizure can be passed only if the concerned officer has, on the basis of information in his possession, reasons to believe that a person is in possession of proceeds of crime and such proceeds of crime are likely to be concealed or tampered with or dealt with in any manner, which may result in frustrating any proceedings relating to confiscation of such proceeds of crime. 51. Similarly, an officer can seize any property or pass an order for freezing such property provided that he has, on the basis of information in his possession, reason to believe that any person has committed an act of money laundering; or is in possession of the proceeds of crime involved in money laundering; or is in possession of any records related to money laundering; or is in possession of property related to crime. It is material to note that the reasons to so believe are to be recorded in writing. 52. It is also relevant to note that in either case the order of provisional attachment of any property under section 5(1) of the PMLA or an order of seizure of any property has a limited life. The order of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are involved in money-laundering: Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering. (3) Where the Adjudicating Authority decides under subsection (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of Section 5 or retention of property or record seized or frozen under Section 17 or Section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property or record shall- (a) continue during investigation for a period not exceeding ninety days or the pendency of the proceedings relating to any offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and (b) become final after an order of confis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er such claim unless it is satisfied that the claimant has acted in good faith and has suffered the loss despite having taken all reasonable precautions and is not involved in the offence of money laundering: Provided further that the Special Court may, if it thinks fit, consider the claim of the claimant for the purposes of restoration of such properties during the trial of the case in such manner as may be prescribed. 54. In terms of Section 8(1) of the PMLA, the Adjudicating Authority is required to examine the complaint filed under Section 5(5) of the PMLA or an application made under Section 17(4) of the PMLA. If on receipt of such complaint or application, the adjudicating authority has reason to believe that a person has committed an offence of money laundering or is in possession of the proceeds of crime, he is required to 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 or the means with which he has acquired the property which is provisionally attached under Section 5(1) of the Act or seized or frozen under Section 17 of the PMLA. 55. In either case, the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of confiscation under sub-section (5) or sub-section (7) of section 8, the Special Court or the Adjudicating Authority, as the case maybe, shall direct the release of all property other than the property involved in money-laundering to the person from whom such property was seized or the persons entitled to receive it. (6) Where an order releasing the property has been made by the Special Court under sub-section (6) of section 8 or by the Adjudicating Authority under section 58B or sub-section (2A) of section 60, the Director or any officer authorised by him in this behalf may withhold the release of any such property for a period of ninety days from the date of receipt of such order, if he is of the opinion that such property is relevant for the appeal proceedings under this Act. 56. It is clear from the aforesaid scheme of the PMLA that any property can be provisionally attached under Section 5 or be seized under Section 17 or be frozen under Section 17(1A) of the PMLA. However, any such order can be passed only if the necessary checks and balances are complied with; namely, that the seizure or attachment is preceded by the concerned authority having reason to belie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty seized is such that it cannot be conveniently transported to the Court, he may give custody thereof to any person on his executing a bond undertaking to produce the property before the Court as and when required and to give effect to the further orders of the Court as to the disposal of the same. 61. It is clear from the plain reading of Section 102 Cr.P.C. that any police officer may seize the property, which may be alleged or suspected to have been stolen or which is found in circumstances which create suspicion of the commission of any offence. However, the said order of seizure is only a temporary order and in terms of subsection (3) of Section 102 of Cr.P.C., the police officer seizing any property on the grounds of suspicion of an offence is required to forthwith report the seizure to the Magistrate having jurisdiction. 62. The said property seized is required to be produced before a Court and/or reported to a Magistrate. In such cases, the court would have the power to pass necessary orders with regard to the said property. In terms of Section 457 of the Cr.P.C., whenever a property is seized by any police officer and is reported to the Magistrate, the Magistra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Section 102(3) of Cr.PC which requires such seizure to be reported to a Magistrate. There is clearly no principle of law that would permit such interpretation, where officers can draw the power under a statute and yet not be accountable for the checks and balances enacted therein. 67. Mr Singh had contended on behalf of the Enforcement Directorate that the PMLA does not contain any provision regarding seizure on mere suspicion, therefore the power to make such seizure can be drawn from Section 102 of Cr.P.C. He contended that the provisions of Section 102(1) of Cr.P.C. are, therefore, not inconsistent with the provisions of the PMLA with regard to seizure of property. The said contention is unmerited. The question whether an enactment is repugnant to another is not determined on whether two provisions can be simultaneously obeyed but is determined in the context of the scheme of the legislative enactment. The question to be asked is whether the schemes of the two enactments can subsist and be implemented simultaneously. It is apparent that the scheme of effecting provisional attachment and seizure of property under the PMLA is wholly inconsistent with the one as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to determine whether there is repugnancy between two enactments is of universal application. If one applies the aforesaid test, it is at once clear that the PMLA has set out a separate scheme with a separate set of safeguards for ensuring that properties of parties are not attached or seized without the authorities effecting such actions having reason to believe that such properties are proceeds of crime or are related to a crime. 70. If the contention as advanced on behalf of the Enforcement Directorate is accepted, it would mean that whereas the property cannot be provisionally attached under Section 5(1) of the PMLA and/or seized or frozen under Section 17 of the PMLA without (a) the Director having a reason to believe, on the basis of material available with him, that the properties are proceeds of crime and (b) recording such reasons in writing; the same officer can on mere suspicion pass orders for freezing the properties without recording reasons. Further, there are strict timelines provided under the PMLA. The orders of provisional attachment and/or seizure and/or freezing cannot extend beyond the period of 180 days. The Director of the Enforcement Directorate (or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cion that property in question represents proceeds of crime; but that does not entitle them to freeze the property, interdict transactions and perhaps bring a person s business to a standstill. The nature of the power of seizure contemplated under the provisions of Cr.P.C. is drastic and exercise of such powers is likely to have severe adverse effects on the person concerned; thus, the parliament in its wisdom did not confer upon the Enforcement Directorate, any powers to attach or freeze assets on a mere suspicion. 73. The learned counsel appearing for the Enforcement Directorate has also referred to the decision of the Supreme Court in V.T. Khanzode and Ors. v. Reserve Bank of India and Anr.: (1982) 2 SCC 7. The said decision has no application in the facts of the present case. In that case, the petitioners had challenged the circular issued by the Reserve Bank of India whereby it had decided to combine the seniority of all officers. The petitioners had contended that such conditions of service could not be framed by administrative circulars but necessitated framing Regulations under Section 58 of the Reserve Bank of India Act, 1934. The Supreme Court repelled the said con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eveals that M/s Rawasi Al Khaleej General Trading, UAE which is controlled by promoters of M/s KRBL Limited, received Agusta kickbacks through M/s Abdulla Ali Obeid Balsharaf Omar Ali Obeid Balasharaf. These payments were routed through shell companies. Investigation reveals that the above mentioned kickbacks (proceeds of crime) were further layered through M/s KRBL DMCC and finally reached M/s KRBL Limited. The investigation also reveals that through this laundering of money M/s Abdulla Ali Obeid Balasharaf M/s Omar Ali Obeid Balsharaf acquired 3.19% shares each of M/s KRBL Limited. Further, it is reported that M/s Abdulla Ali Obeid Balsharaf M/s Omar Ali Obeid Balsharaf had entered into the transaction to sell the shares of M/s. KRBL Ltd, which may frustrate the purpose of investigation and further proceedings under PMLA. Since, the matter is under investigation for the offences of money laundering and its operation is required to be seized necessarily. Thus, the operation of the transaction pertaining to the transfer of shares of M/s. KRBL Ltd owned by M/s Abdulla Ali Obeid Balsharaf M/s Omar Ali Obeid Balsharaf ought to be restrained/stopped under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lient Securities to be withheld Seller Client Funds to be withheld The Pabrai Investment Fund II LP 64,94,891 shares Abdullah Ali Balsharaf Omar Ali Obaid Balsharaf Rs.3,86,10,00,261.00 80. It is apparent from the aforesaid email that securities due to M/s Pabrai Investment Fund and the amount due to the petitioners had been withheld. This also clearly indicates that as far as the said entities are concerned, the said transaction of sale and purchase is complete. 81. Any doubt that remained as to the import of the order dated 13.02.2018 passed by the Enforcement Directorate was put to rest by BSE by the abovementioned email dated 15.02.2018, whereby they confirmed that they were holding the securities to be delivered to M/s Pabrai Investment Fund and withholding of ₹3,86,10,00,261.00 payable to the petitioners. 82. Clearly, the Deputy Director of the Enforcement Directorate had no authority whatsoever to freeze the shares, which were to be delivered in settlement to the purchaser. There was no allegation or any iota of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, instructions. Yours sincerely, S/d NARESH MALIK Assistant Director(PMLA) 86. This Court is at a loss to understand as to under which provision of law, such directions were given. Plainly, provisions of Section 102 Cr.P.C. do not empower any police officer to nullify a transaction. The sale of shares of KRBL Ltd. were complete and SMC had tendered the shares and M/s Pabrai Investment Fund had tendered the consideration and was entitled to the said securities. The petitioners were entitled to the consideration paid by M/s Pabrai Investment Fund. By directing BSE to release funds to M/s Pabrai Investment Fund, the Deputy Director of the Enforcement Directorate had proceeded further; he had interdicted the BSE from effecting the clearing and, by the letter dated 23.03.2018, the Assistant Director of the Enforcement Directorate had nullified the sale transaction that was complete. No authority for such actions can be found in section 102 Cr. PC. A police officer cannot set aside a transaction of sale and purchase of shares under the provisions of Section 102 Cr.PC. This Court pointedly asked Mr Singh, the learned counsel for the respondents a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 which were received as consideration for the sale of 5109 shares. 90. Thereafter, on 23.03.2018, the Assistant Director of the Enforcement Directorate informed BSE to release the securities (64,94,891 shares) to the petitioners. This Court was informed during the course of proceedings that the value of the shares had fallen significantly by the said date. 91. Thereafter, on 12.06.2018, the Assistant Director instructed BSE to release ₹30,35,006.90 to SMC. 92. This Court in no manner can doubt that the communications issued by the officers of the Enforcement Directorate interdicting the sale transaction for sale of equity shares of KRBL Ltd. and then subsequently, reversing the same is wholly illegal and without authority of law. This Court is informed that the value of the shares of KRBL Ltd. has fallen to half the value at which they were transacted. Thus, as of today, about 190 crores of the petitioners value in the said shares stands eroded. Thus, even if it is accepted that the respondents are ultimately entitled to confiscate the value of the amount equal to the value of proceeds of crime which are alleged to have been received by the petitioners overseas, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nephew of the promoters of KRBL Ltd. 97. As regards the issue with respect to the involvement of the petitioners as recipients of the proceeds of crime is concerned, it is affirmed in the Counter Affidavit that the proceeds of crime are suspected to be parked in the account of M/s Rawasi AI Khaleej General Trading, LLC Dubai under the ledger entries of M/s Omar Ali Balsharaf-GK, who is a major shareholder of M/s KRBL Limited . 98. As is apparent from the above that whilst it is clear that RAKGT is alleged to have received the alleged proceeds of crime, it is unclear on what basis it is alleged that the petitioners are recipients of proceeds of crime. Clearly, a ledger entry is not a property and cannot be the proceeds of crime. It appears from the reading of the counter affidavit that it is the Enforcement Directorate s allegation that certain funds were received by RAKGT which were essentially kickbacks paid by AgustaWestland. The receipt of the said amounts are reflected as credit entries against M/s Omar Ali Balsharaf-GK. In other words, books of RAKGT reflect that the said sums have been received from petitioner No.2. 99. In view of the above, this court in order to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aphs 2 and 3 of the said affidavit are relevant and are set out below:- 2. That further, the books of account of M/s RAKGT revealed that the money was received by M/s. RAKGT from the Petitioner Omar Ali Balsharaf and the same has been shown as credited in its ledger account maintained in the name of OAB-GK. Basis the money trail, there are strong reasons to believe that the same are Proceeds of Crime parked in the said ledger account and investigation to ascertain the exact nature of the transaction is still ongoing. . 3. That therefore, approximately ₹ 111 Crores were found credited in the ledger account of Petitioner Omar Ali Balsharaf from the above companies, which are directly or indirectly in receipt of proceeds of crime related to M/s. AgustaWestland . 103. A credit entry in the books of RAKGT indicates receipt of money. According to the Enforcement Directorate, RAKGT had received funds, which are alleged to be proceeds of crime and the same are allegedly shown as credited to the account of the petitioners. However, this would only indicate that the petitioners had parted with the proceeds of crime in favour of RAKGT and consequently, the alleged proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminal activity and is held outside the country. In other words, if any property that is derived or obtained from any criminal activity relating to a scheduled offence is held outside India, then a property of an equivalent value held in India, would also fall within the scope of expression of proceeds of crime . Thus, if it is established that the petitioners hold any property overseas, which is derived or obtained by a scheduled offence, then the Enforcement Directorate would be well within its right to initiate proceedings against any property held by the petitioners in India to the extent of the value of the proceeds of crime held overseas. In such a case, it would be irrelevant whether the assets acquired in India were acquired prior to or after the PMLA came into force. 109. In the aforesaid view, the contention that assets acquired prior to enactment of the PMLA could never fall under the scope of the definition of the expression proceeds of crime and consequently are immune from the provisions of the PMLA, is erroneous and is accordingly rejected. 110. The petition is, accordingly, disposed of in the aforesaid terms. It would be open for the petitioners to see ..... X X X X Extracts X X X X X X X X Extracts X X X X
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