TMI Blog2019 (8) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... source of funds used for purchase of the shares by the Appellant and in absence of any question on the bona fides of the purchase made by PARFICIM, France to whom the Appellant sold his shares, the money earned by the Appellant cannot be classified as proceeds of crime . No case of continuation of attachment of properties of the appellant is made out - As far as allegations of CBI are concerned, this tribunal does not wish to express any opinion on merit. Appeal allowed - decided in favor of appellant. - MP-PMLA-3190/HYD/2017 (Stay) MP-PMLA-3095/HYD/2017 (Exem) And FPA-PMLA-1619/HYD/2017 - - - Dated:- 26-7-2019 - Justice Manmohan Singh Chairman For the Appellant : Shri Rajiv Nayar, Sr. Advocate, Shri Gyanendra Kumar, Advocate, Ms. Jyoti Dastidar, Advocate And Ms. Shreya Seth, Advocate For the Respondent : Mohd. Faraz, Advocate JUDGEMENT FPA-PMLA-1619/HYD/2017 1. By the impugned order dated November 23, 2016, the PAO dated June 29, 2016 was confirmed by the Adjudicating Authority. The attachment of the following immovable properties owned by the Appellant:- (a) prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsive management and corporate experience. The remuneration paid was in accordance with the provisions of the Companies Act, 1956 and in accordance with valid resolutions passed in meetings of the shareholders and the directors of M/s Bharathi Cement Corporation Private Limited. The Appellant was working on a full time basis with M/s Bharathi Cement Corporation Private Limited. 6. The Adjudicating Authority did not consider the facts that (a) that the cement plant of M/s Bharathi Cement Corporation Private Limited was commissioned on September 28, 2009; and (b) PARFICIM, France acquired majority shareholding of M/s Bharathi Cement Corporation Private Limited in April 2010. The said facts have bearing on the remuneration being paid to the Appellant as it is only upon commissioning that M/s Bharathi Cement Corporation Private Limited would start earning money, whereas till then the company was only in the investment stage where every single penny paid was paid out of the investments made by the shareholders and the loans taken from the banks; PARFICIM, France is a foreign multi-national and, it is common market practice that upon acquisition by a foreign multinational, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent s allegation that the remuneration paid to the Appellant was unnatural and false is misconceived and untenable. [The said materials contain details of remuneration paid to the Appellant as a whole time director and as also the remuneration paid to other whole time directors of M/s. Bharathi Cement Corporation Private Limited]. 11. There is no denial that the Board of M/s Bharathi Cement Corporation Private Limited is controlled by PARFICIM, France, and accordingly, the decision making in M/s Bharathi Cement Corporation Private Limited is clearly controlled by them. 12. It is the admitted position that the Adjudicating Authority accepts that PARFICIM, France, is the majority shareholder of M/s Bharathi Cement Corporation Private Limited is wrongly held that control still remained with the Jagan group, which is a position clearly untenable in law and fact. As per facts and law, Mr. Y.S. Jaganmohan Reddy and Smt Bharathi Reddy would constitute only a minority on the board not having the powers to take or influence decision making, and as such attributing the increase in remuneration to them. 13. The Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no also likelihood of the residential property being concealed, transferred or dealt with in any manner which may result in frustrating the confiscation proceedings. 17. The Appellant has also filed an affidavit dated March 06, 2017 providing details of the market value of the aforesaid residential property in terms of directions of this Tribunal contained in order dated February 21, 2017. By order dated May 31, 2017, this Tribunal was pleased to pass an order directing that no coercive action will be taken by the Respondent against the residential immovable property of the Appellant, subject to deposit of an amount of INR 25,000/- per month by the Appellant within the period of two weeks from May 31, 2017 to be paid from the date of the Impugned Order. 18. In compliance with the said order, the Appellant continues to deposit the monthly use and occupation charges of an amount of INR 25,000/- with the Respondent, and the interim order has been extended from time to time. 19. As regards Vacant Land admeasuring 27 acres in Sy. No. 2588, Setti Gunta Village, Kodur Mandal, Kadapa District, it is submitted that the vac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Cement Corporation Private Limited, which issue is already the subject matter in a separate OC No. 424 of 2015, out of which an appeal FPA-PMLA-1035/HYD/2015 titled M/s Bharathi Cement Corporation Private Limited Vs. Joint Director, Directorate of Enforcement has also been filed. 24. It is stated on behalf of the appellant that the investment made by the various entities/ companies was a bona fide investment in M/s Bharathi Cement Corporation Private Limited. Upon transfer of the shares of the various companies/ entities to PARFICIM, France, they made a substantial gain on investment by way of a bona fide, unchallenged and arms length sale of shares to a third party, viz., PARFICIM, France, against which no allegations of any nature have been made. There was a substantial profit to each of the investors, which profit was based on a third party purchase. 25. It is an admitted case that the sale price for each of these investors to an independent third party, against whom no allegations have been made, was at a price of INR 671.20, which evidently was higher than the average price of investment of any of the investors, resulting in substantial profits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules, 1960. I have perused the entire procedure followed for the issue of G.O.Ms. No. 95 Industries Commerce (M.III) Department, Dt.27-3-2006. I do not find any infraction in following the established norms, procedure or the provisions of law. 29. Admittedly the said inquiry conducted by a retired High Court Judge has given a conclusive and unequivocal finding about allotment of the Mining Lease. 30. The Adjudicating Authority, by dismissing the abovementioned unequivocal finding of a retired High Court Judge, heading a Commission constituted by the Government of Andhra Pradesh under the Commissions of Inquiry Act, 1952, has reached faulty conclusions as regards the allotment of the Mining Lease dated March 29, 2006, which is unsupported by any cogent and reliable material on record. The Respondent s stand that the Hon ble Commission only enquired into the legality of grant of mining lease by the Government is against the foundation on which the Respondent s case rests, i.e. the grant of mining license to the Appellant was illegal and incorrect. The Hon ble Commission had categorically noted, that there had been no infraction in following the estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he prosecution complaint before the Special Court on 16.07.2018; iv. The Respondent prosecution complaint was returned by the Special Court citing irregularities/ objections in the documents on 06.09.2018; and v. The Respondent re-filed the prosecution complaint before the Special Court on 14.12.2018. As per the Respondent s affidavit filed on 26.11.2018, the Respondent s investigation finally culminated in the filing of the prosecution complaint on 16.07.2018 after a period of almost 25 months from the date of the PAO i.e. 20.06.2016 and 22 months from the date of the Adjudicating Authority s order confirming the PAO. Even assuming that the amended PMLA provisions will take effect prospectively from 19.04.2018 (i.e., the date when they came into effect), there has been substantial delay in the Respondent s re-filing of the prosecution complaint. Accordingly, the re-filing of the prosecution complaint on 14.12.2018 after substantial delay, without a condonation of delay application accompanying it, ought to be deemed to be a fresh filing in the eyes of the law. 34. The Appellant submits that it is a settled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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