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TMI Blog2019 (6) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... Court while disposing of the petition inter alia directed the CBI vide its order dated 10.08.2011 and categorically observed as under:- "we hasten to add that there may or may not genuine investments from the business point of view and that can be ascertained only by a detailed investigation, and we are sure that the investigating agency will appropriately segregate the genuine investors from others in the sweep of such investigation" 3. The Hon‟ble High Court while directing a detailed investigation by a special agency was of the view that it can only be ascertained after complete investigation as to which investments are non genuine investments from the business point of view. The Central Bureau of Investigation (CBI) has, thereafter filed FIR No. RC 19(A)/2011-HYD dated 17.08.2011 against the 74 accused on the basis of allegations in the writ petitions and thereby initiated investigations. Thereafter, the CBI has filed charge sheet no. 14 dated 10.09.2013 before the Court of Principle Special 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 sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector 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: Letter addressed by the District Collector to CCLA recommending alienation of land in favour of the appellant and suggesting the market price of Rs. 20,000/- per acre. 13.09.2007: DRO addressed a letter to CCLA certifying that "lands are not notified in terms of AP Assigned Lands (POT) Act, 1977. 08.02.2008: DRO in his incharge capacity as Joint Collector addressed his letter to the CCLA clarifying market value and POT Act. 04.06.2008: Proposal for alienation was placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Section 13 of PC Act, 1988 are the Scheduled offences under the Act, a case has been registered under ECIR/09/HYZO/2011 dated 30.08.2011 (Annexure-B3) and investigation has been initiated under the provisions of PMLA, 2002. 9. Documents submitted by M/s Jagati publications Ltd, in response to the summons issued under PMLA, 2002, reveal inter alia that S/Shri V. Vijay Sai Reddy, Harish C. Kamarthy and Jella Jagan Mohan Reddy are the initial subscribers of the company, incorporated as private limited company on 14.11.2006 and later converted to public limited company on 12.01.2009. The registered office of the company is at Hyderabad, State of Telangana. a) Shri V. Vijay Sai Reddy and Shri Y.S. Jagan Mohan Reddy were the Directors for the period from 14.11.2006 to 21.06.2007 and from 21.06.2007 to 01.02.2011 respectively. b) During the year 2006-07, M/s Jagati Publications had raised share capital of Rs. 50.04 crores by way of allotting shares at the rate of Rs. 10/ per share. The company was yet to commence its commercial operations, during 2006-07. c) During the year 2007-08, M/s Jagati Publication Limited has launched Sakshi, a Telugu daily newspaper on 24.03.2008. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevision Limited. (c). M/s Carmel Asia Holdings Pvt. Ltd. had not declared any dividends to its shareholders from 2005 to 2013-14. The company has not received any dividends from any of the subsidiary companies, in which they made investments, as they have not declared any dividends so far. 11. M/s Penna Cement Industries Ltd. vide its letter dated 10.06.2015 inter alia informed the following- a). The Government of Andhra Pradesh vide GO No. 21 dated 15.03.2013 cancelled the Mining Lease granted to M/s. Penna Tandur Cement Company Ltd. and the cancellation is Sub Judice in Writ Petition No. 8703 of 2013 pending on the file of the Hon‟ble High Court of Andhra Pradesh. b). M/s Pioneer Holiday Resorts Limited had constructed the hotel building and the same was completed in the month of March, 2010 and also furnished details completion of Hotel Building floor wise and the same are tabulated hereunder- Sl. No. Floor Area (In sq. mtr) Height (In Mtrs.) Approximate date of completion 1 Basement-1 4460.40 2.95 January, 2008 2 Basement-2 3467.60 37.75 Feb, 2008 3 Basement-3 3467.60 2.95 April, 2008 Total 11395.60 9.65 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Invested in 16.12.2006 Completion of resumption of assigned lands to the extent of 114 acres (approx) facilitated by MRC, Yadiki, Anantapur District. 22.12.2006 Rs. 10 Cr. M/s Carmel Asia Holdings Private Ltd. 27.12.2006 Rs. 13 Cr. M/s Carmel Asia Holdings Private Ltd. 28.12.2007 Written request to the Chief Minister by Sri P. Prathap Reddy for alienation of lands to the extent of 237 acres. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral of State gave a legal opinion dated 08.07.2008 confirming that in case of surrender, whether it is by inducement or voluntary, provisions of POT Act are not attracted. 14.7 Draft memorandum dated 01.10.2008 was prepared and was approved by the then Chief Minister for alienation of land to the extent of Ac. 231.09 cents on payment of market value of Rs. 50,000 per acre. 14.8 The cabinet of Council of Ministers in the meeting held on 29.11.2008 approved the proposal for alienation of land to the extent of Ac. 231.91 cents in Kamalapadu, Gudipadu, Kudanakota and 23/2 Nittoor Villages, Yadiki (M) in favour of M/s Penna Cement Industries, Hyderabad on payment of Market value of Rs. 50,000 per acre. 14.9 The department of Revenue issued GO MS No. 1490 was issued on 12.12.2008 alienating 231.09 acres to the appellant at the rate of 50,000 per acre. 15. The details mentioned in proceeding para are supported with the documents which have not legally considered by the Adjudicating Authority. 16. The respondent has recorded the statement of the witnesses. None of the material witness has admitted that the investment of money towards the shares are the bribe amount or in lieu of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings, the only concern of this Tribunal is to examine the investigation carried out under PMLA t as well as the validity of PAO and confirmation thereof are sustainable or not. 20. There is a force in submission of senior counsel appearing on behalf of appellants that the provisions of PMLA are not attracted as none of the allegations made regarding alienation of land and violation of the POT Act constitute a schedule offence prescribed in the PML Act as the alienation of land was done in favour of the appellant with approval of Council of Ministers. The decision of the Council of Ministers was never challenged and therefore same cannot be questioned the present proceedings. The Respondent no. 1 cannot sit in judgment over the policy decisions taken by the state or its instrumentality. The alienation of land was in accordance with the state policies and no illegality can be imputed by the respondent. The aforesaid principle has been stated in the case of Arun Kumar Agarwal Vs. Union of India and others reported in (2013) 7 SCC 1 and in case of Pathan Mohammed Suleman Rehmathkan Vs. State of Gujarat and Others reported in 2013 Law suit (SC) 1076. 21. It is submitted on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on higher price. It is not denied by the respondent that the investment money was a clean money. It is also alleged that share certificate of total value of Rs. 25 Crore was issued on 01.06.2009 in anticipation of additional investment for Rs. 5 Crores. 27. It is a matter of fact that the land property at Banjara Hills was acquired by the appellant through various registered sale deeds (16 in total) from the year 1988 to 2008. The total extent of the area is 9759.16 sq. yards in which the additional area of 397 sq. yards for road widening purchased by the appellant in 2008 is included. The land use of the aforesaid land was converted from residential to general commercial by the State Government vide GO. Ms. No. 324 of 1998 and requisite fee for the same was paid. Another G.O. Ms. No. 423 of 1998 was issued which rationalized the FAR values and standards of buildings requirements in Municipal Corporation & Urban Developments Authorities areas. 28. Thereafter, the State Government issued G.O. Ms. No. 329 of 2005, wherein it was specifically stated that in Banjara Hills and Jubilee Hills, there will be no height restrictions for constructions of multistoried hotels of 4 star and ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of Rs. 95,54,500/- for revised permit in the year 2009 which includes the Developmental and permit fee, Infrastructure Impact fee etc. Having paid a sum of Rs. 95,54,500/- over and above what was paid by the appellant in the year 2005, it cannot be the case that the appellant was in any way granted financial favours or benefits by the State Government. The revised building plan for construction of hotel was sanctioned on 11.11.2009 vide permit No. 10/17, well after the then Chief Minister alleged to have benefited the appellant had expired on 2-9- 2009. 34. It was submitted that no relaxation was made to the appellant company and the entire process was followed by the government officials as per law and none of the Govt. Officials and public servant were made accused in the aforesaid chargesheet. The construction of the hotel at Banjara Hills is as per the building bye laws and various Government orders issued by the State Government from time to time. No benefit was derived by the appellant in any manner, therefore, the same cannot be considered as "proceeds of crime‟. The appellant has prepared a chart showing the amount spent for grant of permission. At the interim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has not alleged that the permission/the regularisation even by the municipal corporation is illegal and not according to the municipal rules. It is stated that it is not the case of ED that such regularisation was done illegally or such a regularisation was impermissible in law, what has been regularized is legally permissible, such regularisation as per law do not tantamount to any offence under any act much less under IPC or a schedule offence. Common discussions in both appeals 40. It appears from the impugned order that the show cause notice issued u/s 8(1) was mechanically issued without satisfying itself that there is "reason to believe that any person has committed an offence u/s 3 or is in possession of proceed of crime" as mandated u/s 8(1) of the Act and if the mandate of Section 8(2) is not followed by the Adjudicating Authority, the confirmation of the provisional attachment order is liable to set aside. In case the provisional attachment order is read, it is clear that there are valid reasons to believe. It is just mainly repetition of allegations of charge-sheet of CBI and very little the details of PMLA investigation. 41. Thus, it is evident that the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company by the Board of Directors and comparing with other existing media companies decided to invest in the companies in question. The said material is available on record. 46. It is the case of appellants that at the time of investment (share premium at Rs. 350 in M/s Jagati Publication and Rs. 252 in M/s Caramel Asia) the Eenadu Newspaper which was the leading Telugu Newspaper evaluated its share at Rs. 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 Board of Directors meeting and comparisons were made. The Sakshi Newspaper published by M/s Jagati Publication has become the second largest Telugu Newspaper in the past few years all these materials are available on record. According to, Audit Bureau of Circulation, circulation figures released in December, 2017, Sakshi is the second largest circulating newspaper in Telugu states after Eenadu with a circulation figure of more than 1.09 million (internet figures). 47. The alleged benefit of 1.15 Cr. against the investment of 45 Crs. to be considered as bribe is beyond an imagination. One is failed to u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement Ltd. vide GO Ms. No. 25, Industries and Commerce Department dated 29.01.2009 and iv) Permission for Hotel construction at Banjara Hills, Hyderabad and relaxations thereon vide Memo No. 2710/M1/09, MA & UD dated 03.03.2009 to M/s. Pioneer Holiday Resorts Limited. 51. Admittedly, the perspective license was granted for a period of three years, which has already been expired. Therefore, at present, this Tribunal is not inclined to release the attachment of property i.e. M/S. PENNA CMEENT INDUSTRIES LIMITED (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 - Rs. 1,15,54,500/-. 52. In case para-83 of the impugned order is read, one is surprised to note that the adjudicating authority, in this para, has observed that the appellants have committed schedule offence, when the charges are yet to be framed in the matter. It appears to this Tribunal that the adjudicating authority was not aware that unless the charges are framed and trial is conducted, nobody can be declared that he has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erived or obtained directly or indirectly as a result of criminal activities relating to a schedule offense. 57. Section 35 of PMLA provides the Procedure and powers of the Appellant Tribunal which says that Tribunal shall not be bound by the procedure laid down by Code of Civil Procedure but shall be guided by the principles of natural justice and subject to the other provisions of this Act and Appellant Tribunal shall have powers to regulate its own procedure. 58. One of the main objects and reasons of this Act is to confiscate of proceeds of crime apart to the criminal liability if the accused has committed under the provisions of this Act and schedule offense. Till the time final order is passed by the Special Courts, if a valid case is made by ED, the proceeds of crime must be preserved so that after final order it should be confiscated for the benefit of State. 59. Before this Act came into existence, it has been noticed that accused person used to dispose of proceeds of crime till the time final orders are passed under the Schedule Offense. Therefore in order to secure the proceeds of crime, some direction are required to be passed in appropriate appeals to preserve the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kota and Nittor Village of Yadaki Mandal, Anantapur District, Andhra Pradesh], shall continue, however, possession of the said property shall not be taken by the respondent. 67. With regard to second property i.e. PROPERTY 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, the appeal no. 1191/2016 is allowed by modifying the impugned order by coming to conclusion that at the best, the said property could have been attached in lieu of value thereof. The suggestion given by the appellants is allowed. The appellant shall furnish a Fixed Deposit Receipt of an amount of Rs. 6,69,37,415/- in favour of the respondent, subject to the said deposit with the respondent within two months from today, the attachment of entire basement no. 3, total 9th floor,8th floor and part of 7th floor of the Hotel buildings (which are attached) shall be released. It is also subject to the condition that the appellant shall not dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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