TMI Blog2019 (6) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... person concerned who is stated to be involved in money laundering. Merely on the basis of allegations the respondent with evidence can not attach any property by passing provisional attachment order unless there are reason to believe that the impugned property is definitely involved in money laundering within the meaning of Section 2(1)(u) read with Section 3 of the Act - Reason to believe is not a formality but it should akin to prima facie findings that the person concerned is positively involved in money laundering. The provisional attachment order can only be passed if such exercise is done within the four corners of settled law. The meaning of proceeds of crime is any property derived or obtained directly or indirectly as a result of criminal activities relating to a schedule offense. The provisions of Section 5 and 8 of PMLA are not exactly similar but principles and intend to incorporate the said provision to some are the guiding factors. The manner in which the provisional attachment order was passed and confirmation thereof in the impugned order, the same cannot continue by attaching commercial properties where the future and career of hundred of employees are involv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge for CBI cases Hyderabad, in CC no. 26/2013, which is pending adjudication arraying the appellant as an accused. The said charge sheet is a subject matter of challenge in section 482 Cr.P.C proceedings pending before the Hon‟ble High Court. The Hon‟ble High Court has stayed the framing of charges against the Appellant with respect to the alleged offences under the Prevention of Corruption Act. 4. The scheduled offences alleged are under Section 420 read with 120B IPC. The main allegation against the appellant is that alienation of the land to the extent of 231.09 acres was done in favour of the appellant and the M/s Pioneer Infrastructure Holding Ltd, in lieu of the aforesaid alienation, made quid pro quo investment ₹ 53,00,00,000/- in M/s Caramel Asia Holding Pvt. Ltd. and M/s Jagati Publication Pvt. Ltd., which are the companies of Sh. Y.S. Jagan Mohan Reddy. The details of alleged quid pro quo investments done in lieu of the aforesaid alienation as per Para 11 of the charge sheet, the same are as under:- Date Favour Date of Investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.09.2006: District Collector addressed a letter to MRO, Yadiki and Tadipatri, Ananthapur District for enquiry and submission of proposal for alienation. 9.12.2006: District Revenue Officer (DRO) having full charge of Joint Collector, inspected the land sought to be alienated. 02.03.2007 : Notices were published in respect of the lands in question inviting objections if any and no objections were reported. 24.3.2007: Tahsildar, Yadiki Mandal submitted a report confirming the publication of notice in the villages on 01.03.2007. 23.05.2007: Inspection notes were made by RDO Tahsildar. 26.05.2007 : RDO addressed a letter to the District Collector, confirming the Sub-registrar‟s highest basic value. 17.07.2007: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by CBI under the PMLA, 2002. The respondent issued PAO No. 10/2015 dated 12.08.2015 which was confirmed by the Adjudicating Authority vide the impugned order dated 14.12.2015. 7. It is stated on behalf of appellants that due process of law was duly followed and the land was alienated over a period of three years after the request for alienation of land was made by the Appellant. The requirements of issuance of notices, valuation, survey, inspection etc. were duly carried out by the respective revenue officers i.e. MRO, RDO, Joint Collector, District Collector, CCLA Commissioner (Legal Affairs). It is only after the said revenue authorities gave its go ahead for alienation of land in favour of the Appellant, the mater was placed before the Empowered Committee and Council of Ministers, which recommended that the valuation be done at ₹ 50,000/- per acre. The same was preceded by the legal opinion of the Advocate General of State of Andhra Pradesh stating that there was no bar in alienating the land to the Appellants. The investigation carried out under PMLA, 2002: 8. Under section 120-B read with Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 968.36 lakhs and accumulated loss of ₹ 252.32 crores at the end of the financial year. The net loss after tax as per profit and loss account was ₹ 908.65 lakhs. The basic and diluted loss per share was ₹ 0.99, while the nominal value per share was ₹ 10/-. The capital raised during the year was NIL. The dividend declared was NIL. 10. The documents submitted by M/s Carmel Asia Holdings Private Limited in response to the summons issued under PMLA, 2002, reveal inter alia that Shri Y.S. Jagan Mohan reddy and Shri B. Ramesh Babu are the initial subscribers of the company, incorporated as private limited company on 30.11.2005. The registered office of the company is at Bangalore, Karnataka. (a). M/s. Carmel Asia Holdings Pvt. Ltd. is an investment company, promoted with the purpose of making investments mainly in the group companies of Shri Y.S. Jagan Mohan Reddy. (b). M/s. Jagati Publications Ltd., M/s Janani Infrastructure Pvt. Ltd. and M/s. Indira television Ltd. are the subsidiaries of M/s. Carmel Asia Holdings Pvt. Ltd. Investments of about ₹ 94 Cr. have been received by the company from different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 1st Floor 1989.42 5.85 August, 2008 6 2nd Floor 1699.18 3.80 November, 2008 7 3rd Floor 1844.77 3.20 December, 2008 8 4th Floor 1844.77 3.20 January, 2008 9 5th Floor 1844.77 3.20 March, 2009 10 6th Floor 1844.77 3.20 May, 2009 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Enforcement Directorate vide provisional attachment order has attached 231.09 acres of land valued at ₹ 1,15,54,500/-. Out of 231.09 acres of land, 114 acres of land belonged to assigned lands. 13.1 The allegation of the Enforcement Directorate is that the farmers who were assigned lands (to the extent of 114 acres) were forced to relinquish the assigned land to the Government and thereafter, the land was allotted to the appellant company without following the provisions of A.P. Assigned Lands (Prohibition of Transfers) Act 1977 (As amended in Act 8 of 2007 Act 21 of 2008) (hereinafter called POT Act). 13.2 It was also alleged on behalf of respondent that the aforesaid favour was given by the then Chief Minister Late. Y.S. Rajshekhar Reddy in lieu of the quid pro quo investments made in Jagan Mohan Group of Companies. The details of quid pro quo investments done in view of the aforesaid alienation as per para 11 of the charge sheet are as under: Date Favour Date of Investment Amount of Investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ldar submitted the inspection report to the District Collector on 24.03.2007 and suggested the basic market value of the lands proposed for alienation. The total land value was fixed to be ₹ 31,30,225/-. 14.4 The Revenue Divisional Officer vide its letter dated 26.05.2007 to the District Collector Annathpur confirmed basic market value as proposed by the Tehsildar and reduced an area of Ac. 8.42 cents and thereby recommending the total alienation of Ac. 231.09 cents. 14.5 In a letter dated 17.07.2007 to Chief Commissioner Land Administration Hyderabad, the District Collector approved the alienation of the aforesaid land. However, he increased the basic market value to ₹ 20,000 per Acre from ₹ 14,500 per Acre. The District Collector clarified to the Chief Commissioner Land Administration vide letter dated 08.02.2008 that POT Act is not attracted in the proposed land for alienation. 14.6 The proposal for alienation was placed before Empowerment committee on 04.08.2008 and the committee recommended the alienation at the higher rate of ₹ 50,000 per Acre. The Advocate General of State gave a lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion etc. were duly carried out by the respective revenue officers i.e. MRO, RDO, Joint Collector, District Collector, CCLA Commissioner (Legal affairs). After the said revenue authorities gave its nod to go ahead for alienation of land in favour of the Appellant the matter was placed before the Empowered Committee and Council of Ministers, which recommended that the valuation to be done at ₹ 50,000/- per acre. The same was preceded by the legal opinion of the Advocate General of State of Andhra Pradesh stating that there was no bar in alienating the land to the Appellant. It can not be concluded that no due process has been followed at all as argued by the counsel for the respondent. The fact of the matter is that under the mandatory provisions of Section 8(2) of the Act, the reply and material placed on record has not been legally considered at the time of confirmation order. 19. It might be possible that some technical discrepancies have been crepted by following the procedure, but, ultimately one has to see the overall conduct of the parties. It is also correct that there are allegations against the appellants in CBI Charge-sheet, but this Tribunal does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axations for hotel construction at Banjara Hills, Hyderabad vide Memo No. 2710/M1/09, MA and UD dated 03.03.2009 were granted to the appellant company and in lieu of such benefits quid pro quo investments were made in the Jagan Mohan Reddy Group of Companies. 24. The Enforcement Directorate attached part of the hotel building constructed (i.e. part of Basement 2 (790.8 sq. mtrs), entire basement no. 3, total 9th floor, total 8th floor, part of 7th floor (907.74 sq. mtr) by the appellant company at Banjara Hills Hyderabad. The learned counsel for the respondent has argued that many favours are granted to the appellants after investment and the provisions to built the extra floors could not be granted, therefore, the attachment of the said floor is valid. 25. The total property under attachment has been valued at ₹ 6,69,37,415/-. In lieu of the aforesaid benefit an investment of ₹ 25 Crores which is being alleged as the bribe, was made in M/s Jagathi Publications Ltd (₹ 10 Crores each in Jagathi Publications on 09.03.2009 and on 23.03.2009 by M/s Pioneer Infrastructure Holdings Pvt. Ltd). One is failed to understand, how it is possi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shortcomings faced earlier. As per clause 9.4 of the aforesaid G.O. Ms. No. 86, no further permission from the Airport Authority was required, if the site did not fall under the funnel zone. As the site of the appellant did not fall under the funnel zone, the appellant was not required to obtain further permissions from the Airport authorities. All the contents of these paras supported by documentary evidences. 31. Counsel for the appellant has referred the document in order to show that a similar case M/s Blitz Hotels Resorts Limited, was permitted by the State Government for construction of 5 star hotel at Banjara Hills without any height stipulation and the company was not required to pay any conversion charges with respect to the same. 32. Thereafter, the State Government issued Memo No. 2710 dated 03.03.2008 and permitted the same benefits to the appellant subject to (i) payment of all fees and charges as possible (ii) compliance of all other provisions of GO Ms. No. 86 (iii) obtaining prior clearance from AAI and also permit to extend the setback relaxation as per the existing policy of GHMC, keeping in view the appellant had surrendere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are at ₹ 5,28,630/- . At the time of deciding to invest, the details of the compiled data including the annual report and quotes of Sun TV and Deccan Chronicle were also placed before the meeting and comparisons were made. The Sakshi newspaper published by M/s Jagati Publication has become the second largest Telugu newspaper in past few years. 37. It is submitted on behalf of the appellants that for a total alleged benefit of ₹ 6.69 Crs. an investment of ₹ 25 Crs. as quid-pro-quo investment cannot be considered to be a bribe. The same is unbelievable. It is alleged that the investments are genuine business transactions and the same is also evident from the fact that the newspaper Sakshi became second largest Telugu daily in circulation within few years of its launch. 38. As explained above it was not a public issue, and already ₹ 20 Cr. investment was made. The share certificate of ₹ 25 Cr. were issued on 01.06.2009 on the promise that the amount of ₹ 5 Cr. to be paid on 06.06.2009. Such an act cannot tantamount to any IPC offence much less any schedule offence and the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is not even a single averment to this effect and the reasons required to form part of the attachment order under section 5 are conspicuously missing. 42. The allegations of pressurizing the farmers and the assignees in surrendering the land by the Appellant are patently false and are figment of imagination of the respondent. Had it been the case, the farmers or the assignees of the land would have lodged a complaint before the Authorities against the Appellant. When enquired from the counsel as well as from IO there was confirmation that any complaint is filed or civil proceedings are pending on behalf of seller. 43. Therefore, at the best subject to final decision it may or may not be the substantive offence u/s 420IPC and 120B alleged to have been committed by the appellant but prima facie, it is difficult to arrive that it is a scheduled offences under the PMLA, 2002 at the time when the alleged benefits were granted to the appellant and it is only after the PML Amendment Act was passed on 1.06.2009, the same became part of schedule offences under the PMLA as alleged by the appellant. 44. The aforesaid investee companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITED (Lands) AC 231.09 Cents of land in Kamalapadu, Gudipadu, Kundankota and Nittor Village of Yadaki Mandal, Anantapur District, Andhra Pradesh of M/s. Penna Cement Industries Limited alienated vide GO Ms. No.1490 Revenue (ASNV) Department dated 12.12.2008 - ₹ 1,15,54,500/-. II. PROPERTIES WITH M/S. PIONEER HOLIDAY RESORTS LIMITED (Buildings) Hotel Building constructed [part of Basement No.2 (790.8 Square Meters), entire Basement No. 3, total 9th Floor, total 8th Floor and part of 7th Floor (907.74 Square Meters) of the Hotel Building] at 8-2-268, Banjara Hills, Hyderabad of M/s. Pioneer Holiday Resorts Limited ₹ 6,69,37,415/- GRANT TOTAL - ₹ 7,84,91,915/- 49. As per charge-sheet dated 10th September, 2015, filed by the CBI with regard to the 1st property, one of the allegations against the appellants is that they have received the benefit received by Penna Group of companies are i) Alienation of Government land to an extent of 231.09 Acre in Yadiki Mandal of Anantapur District to M/s. Penna Cement Industries Limited vide GO Ms. No. 1490 Revenue (ASN.V) D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f crime or value thereof. It is evident that the hearing officer was not sure as to whether the attached properties were to be confirmed as proceed of crime or value thereof. The adjudicating authority has taken the middle path in this para by using the word or‟. Similar findings are given in para-76 of the impugned order while coming to the conclusion that the properties were purchased in proceed of crime or value thereof. The said findings in both paras suffer from inherent lapsed, thus, the impugned order was passed without due application of mind. 53. However, in view of the amendment inserted by Act of 13/2018, which is applicable w.e.f. 19.4.2018 where in the 2nd proviso, it is allowed to party to claim the restoration of the said property during the trial by moving the said application, if so required, if the appellant has acted in good faith, would be able to satisfy the Special Court that the appellant is suffering irreparable loss if the claim of the appellant is not allowed. 54. It is also known fact that CBI charge sheet and allegations made therein or any FIR or criminal complaint can not be taken as gospel trut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crime. 60. In case Order XXXVIII of code of Civil Procedural are read meaning manner it appears that the objects and reasons of Pmla to preserve the proceeds of crime to somehow similar. Order XXXVIIII provides the remedy of arrest and attachment before judgment. 61. Sub section (1) of the said provision mandates that any stage if the defendant has absconded or left the local limit of the jurisdiction or is about to abscond or leave and has disposed of his property or part thereof in order to obstruct the execution of decree against him, the court under those circumstances may issue warrant to arrest to bring him before court and ask him to furnish security for his appearance. if the defendant fails to furnish security under sub section 4, under sub section 5, the court if satisfies may direct the defendant for furnish security for production of property in order not to allow the defendant to obstruct the decree. 62. The provisions of Section 5 and 8 of PMLA are not exactly similar but principles and intend to incorporate the said provision to some are the guiding factors. 63. Therefore, the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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