TMI Blog2019 (8) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... Role of the accused person as per respondent in the offence of money laundering - HELD THAT:- This Tribunal is of the view that in view of material placed on record, it is not fit case to release the attachment though there has been an inordinate delay of 7 years between the filing of the FIR and passing of the Provisional Attachment Order. Their balance is to be strike in light of facts involved in the matter in view of non-action by the ED against M/s. H.B. Bhise and Company. In the present case is that the specific complaint of NMMC is against M/s. H.B. Bhise and Company, who had submitted the forged bill. The appellant firm has received the amount from H.B. Bhise and Company who has allegedly committed the fraud and other schedule offence, however, no action was taken by the ED against the said company. The ED has not attached the property of M/s. H.B. Bhise and Company, nor any prosecution complaint has been filed. When this situation is confronted to the learned counsel and IO appearing on behalf of respondent, there was very vague answer. Firstly, it was admitted that no action under PMLA was taken against him. Secondly, it was mentioned that he may become approver. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the approval for the payment of the demolition of unauthorized structure in the jurisdiction of Navi Mumbai Municipal Corporation (NMMC) thereby had cheated NMMC for obtaining excess amount of ₹ 2,69,12,282/- from them. 2.2 It is disclosed that the Encroachment Department of NMMC had invited tender/bids to carryy out demolition work of unauthorized structures, transportation of laborers and machinery required for demolition purpose and the contract for the same was granted to M/s. H. B. Bhise Company which was owned by Shri H. B. Bhise. Company submitted the bills to NMMC for the work done by them, but during the audit, it was transpired that M/s H.B. Bhise Company had cheated NMMC by overcharging the bills, manipulating bills, tempering/ overwriting/inflating the bills after submissions. a) During the preliminary examination by the Deputy Commissioner (Encroachment), NMMC, it was mentioned that the challan after obtaining the signature of ward officer has been overwrite and the numbers of vehicles, labour and working hours has been increased. b) During the preliminary investigation, it was revealed that M/s H.B. Bhis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of present appeal. 6. In the present case, this Tribunal is only concerned as to whether the impugned order is sustainable in law or not and the properties attached are acquired from proceed of crime or not. This Tribunal does not wish to express any opinion on the basis of allegations made in the charge-sheet nor the allegations made in the prosecution complaint under Section 45 of PMLA. 7. About the appellant, he is engaged in the business of construction and supply of machinery and transport like JCB, dumper, labour and has also supplied the same to various parties including M/s H.B. Bhise Co. It is the case of the appellant that the appellant provided the said services to M/s H.B. Bhise Co. in 2001-2002 for various projects and in lieu thereof, the appellant received the payments in and around 2002-2003. It is not in dispute that M/s H.B. Bhise Co. got the contract from NMMC for demolition of unauthorized structure and made a request to the appellant for providing the services of JCB, poplan, labour services etc. and in lieu thereof payments were made by M/s H.B. Bhise Co. to the Appellant over a period of time. A copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment had quantified; j56 the exact amount of inflated demolition bill for the period from 27.02.2003 to 2008-09 as ₹ 2,69,12,292/-; that the Deputy Commissioner (Encroachment), NMMC in the meeting held on 12.05.2009 with the ward officer had terminated the work allotted to M/s. H B Bhise Co. and ordered to conduct preliminary audit for the period April' 2007 to Sept' 2007 and based on the same he was directed to file complaint in the subject case. b) The statement of Shri Hanumantrao Bhise, Proprietor of Contractor firm M/s H B Bhise Company was recorded on 17.09.2014 and 14.03.2018 under the provisions of the Section 50 (2) and 50 (3) of the PMLA, 2002, wherein he inter-alia stated that he was Civil Contractor having PWD's registration which was valid till 2007; that civil work job was carried out under the name of his firm M/s. H. B. Bhise Company; that Shri Manohar Krishna Madhavi was the Corporator of NMMC; that during 2002, he (Shri Manohar Krishna Madhavi) had called him in his office and informed him that, he (Shri Manohar Krishna Madhavi) was not entitled to take the contract of NMMC; that he (Shri Manohar Krishna Madhavi) would ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount and subsequently he was directed by Shri Madhavi (either telephonically or personally) to issue cheques of almost similar amount in firms name viz. M/s. M. K. Constructions, M/s. M. K. Transport, M/s. D.A. Transport, M/s. Aditya Transport M/s. Aditya Constructions which was owned by Shri Manohar Madhavi the works copy and the said cheques were collected personally from him either by Shri Ajay Mhatre or by Shri Manohar Madhavi. c) The statement of Shri Manohar Krishna Madhavi was recorded under Section 50 of PMLA, 2002 on 30.09.2014 and 26.09.2016 wherein he inter-alia stated that, since 1982, he was engaged in the business of construction, supply of construction related material, infrastructure etc. and was having firm's viz. M/s. M. K. Construction, M/s. M. K. Transport, M/s. Mukkabika Enterprises; that since last 15 years, he is a Corporator of Navi Mumbai Municipal Corporation; that Shri H. B. Bhise was a Government approved contractor and as such involved in business of Civil Work.; that he (Shri H.B. Bhise) was doing such work under the name and style as M/s. H. B. Bhise and Company; that he procures Municipal Corporation's various work through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... okhalan, Doser, Electrical hamber, JCB, trucks, Dumper, Gas cutter were not readily available with him; that while recording transaction of Cash payments in Cash Book, they had not mentioned receiver's name/details. d) The statement of Shri Dhanaji Mhatre was recorded on 18.01.2017 under Section 50 (2) and 50 (3) of PMLA, 2002 wherein he inter-alia stated that he was having the following Bank accounts in the name of his firms wherein he was the Proprietor: Name of the Company Name. of the Proprietor Account No. Name of the Bank and Branch M/s Aditya Transport Dhanaji Kashinath Mhatre 023/3057 Gopinath Patil Parsik Janta Sahakari Bank Ltd. Airoli Branch M/s Aditya Construction Dhanaji Kashinath Mhatre 023/3562 Gopinath. Patil Parsik Janta Sahakari Bank Ltd. Airoli Branch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all construction work viz. construction of gutter, excavation etc.; that though M/s. M. K. Construction wherein he was the proprietor had shown the income but no documents were prepared in respect of the said transactions; that the said income was not reflected in the Return filed by him (being Proprietor of the firm) with the Income Tax Authorities; that there was no business transaction with his firm viz. M/s. M. K. Construction with Shri Manohar Madhavi and his firms/companies; that being cousin brother, Shri Manohar Madhavi used to help him whenever he was in need of money by giving cash; that for this receipt of cash from Shri Manohar Madhavi, no documents like loan agreement etc. were prepared. Shri Ajay Mhatre had claimed that he was the proprietor of M/s. M. K. Construction having current account bearing number CA 1196 of M/s M K Construction with the Mahanagar Co-operative Bank Limited. Therefore on being asked to explain the details of the credit transaction of ₹ 15,28,840/- dated 27.07.2006 reflected in the said account statement and utilization thereof, he stated that he was not recalling the name of the remitter from whom he rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proprietor. However, he confirmed that no documents with regards to the transactions including the amount withdrawn in cash as self from the bank accounts of the firms wherein Shri Dhanaji Mhatre was the proprietor. 12. The appellant is the owner of the following immovable properties and had acquired the following immovable properties from 2003 onwards and the same were attached by the PAO which was confirmed in the impugned order:- Sr. No. Year of acquisition of the property Description of the Immovable property Area 1. 2009 Plot No. 110, Sector-25, Talawali Ghansoli, Navi Mumbai 100 sq. meters 2. 2010 Flat No. 106, First floor, Plot No. 14, New Bombay Safalya Co- operative Housing society Ltd. Near PirSaiyad Sufi Sant Garden, Sector-7, Airoli, Navi Mumbai, Pin-400708 1250 sq. ft. (includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oprietor of M/s. D.A. Transport and Shri Ajay Mhatre. Scrutiny of the document confirmed that Shri Ajay Mhatre was looked after the transactions of the firms bank account of the firm including the bank accounts of the firms. 4 Documents submitted by Shri Manohar Madhavi Income Tax Return filed by Shri Manohar Madhavi Shri Manohar Madhavr is the proprietor of M/s. M. K. Construction operating from Blue Heaven Society Sector-5 Airoli, Navi Mumbai' 5 Documents submitted by Shri Ajay Mhatre Income Tax Return filed by Shri Ajay Mhatre Shri Ajay Mhatre had not mentioned any business income other than salary and there was no mention of M/s. M K Construction as his Proprietorship firm. 6 Document forwarded by the Navi Mumbai Police authorities Affidavit filed by Shri Ramesh Mohite, Police inspector dated 31.07.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case. The NMMC authorities by letter dated 16.02.2016 forwarded the financial year- wise break-up of the amount of ₹ 2,69,12,292/- for which NMMC was cheated by M/s. H B Bhise Company which is enclosed as Annexure-G. Therefore, the amount of ₹ 2,69,12,200/- has been generated out of criminal activities related to scheduled offence and therefore was the ^roceeds of crime' (POC) in terms of the definition of Section 2 (1) (u) of the PMLA, 2002. (iv) During the course of investigation, the bank statement of the current account bearing number 100006100720 of M/s. H B Bhise Company with DMK Jaoli Sahakari Bank Ltd., Vashi Branch, Navi Mumbai along-with the details of the beneficiary from the said account was obtained. The scrutiny of the bank statement 100006100720 of M/s. H B Bhise Company with DMK Jaoli Sahakari Bank Ltd. Vashi Branch, Mumbai had revealed that out of ₹ 4,81,78,959/- (inclusive of ₹ 2,69,12,200/-) received by M/s. H B Bhise Company from NMMC, an amount of ₹ 4,77,91,389/- was transferred into the Bank Accounts of M/s. M. K. Constructions, M/s. M, K. Transport, M/s. Aditya Construction, M/s. Aditya Transpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17.10.2005 ₹ 4,49,731/- M K Transport 17.10.2005 ₹ 10,49373/- 09. 02.02.2006 ₹ 32,22,441/- M K Construction 06.02.2006 ₹ 10,74,147/- M K Transport 04.02.2006 ₹ 10,74,147/- D A Transport 04.02.2006 ₹ 10,74,147/- 10. 07.04.2006 ₹ 44,95,641/- M K Construction 08.04.2006 ₹ 6,95,641/- M K Transport 08.04.2006 ₹ 22,50,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 30,51,974/- Aditya Construction 08.04.2009 ₹ 30,17,395/- Total ₹ 4,81,78,959/- Total ₹ 4,77,91,389/- From the above, it was seen that on receipt of payment from NMMC, every time almost full amount was transferred to bank account of business entities of Shri Manohar Krishna Madhavi on the same day or within 2-3 days leaving negligible amount in the account of M/s. H.B. Bhise Company. (v) The bank statement of M/s. M. K. Constructions, M/s. M. K. Transport, M/s. Aditya Construction, M/s. Aditya Transport and M/s. D. A. Transport were also obtained from the respective bank authorities and it was revealed that an amount of ₹ 4,77,91,389/- was transferred into the following Bank Accounts: Sr. No Name of the Firm Account Number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CA/1196 Mahanagar Co-operative Bank Ltd. Airoli Branch. Enclosed as Exhibit-XX 2. M/s. M K Construction 023/2549 Parsik Janta Sahakari Bank Ltd. Airoli Sector-5 Branch. Enclosed as Exhibit-XXI 3. M/s. M K Transport CA/0181 loidooo 0985 Punjab and Maharashtra Co-operative Bank Ltd. Airoli Branch. Enclosed as Exhibit-XXII 4; M/s. Aditya Construction CA/3562 Gopinath Patil Parsik Janta Sahakari Bank Ltd. Airoli Sector-5 Branch. Enclosed as Exhibit-XXIII 5. M/s. Aditya Transport CA/3057 Gopinath Patil Parsik Janta Sahakari Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no mentioned of M/s. M K Construction of whatsoever. (b) Shri Manohar Madhavi in his statement recorded under Section 50 of the PMLA, 2002 had admitted that he is the Proprietor of M/s. M. K. Construction and the claim of Shri Manohar Madhavi was found to be correct as in the Income tax return filed, Shri Manohar Madhavi had declared the income in respect of M/s. M. K. Construction. Also in the bank account CA 1196 the address of M/s. M. K. Construction is declared as Blue Heaven Society Sector-5 Airoli, Navi Mumbaf which is the same address declared by Shri Manohar Madhavi in respect of M/s. M. K. Construction owned by him. (c) Shri Ajay Mhatre had not produced any documentary evidence in support of his claim that he was operating any Construction or any other firm whatsoever. Therefore, in view of the above it can concluded that the amount withdrawn in cash as 'self from the account CA 1196 was withdrawn by Shri Manohar Madhavi only being Proprietor of M/s. M. K. Construction and he is the ultimate beneficiary of the amount withdrawn in cash. Also the same modus operandi was adopted by Shri Manohar Madhavi in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bail Application 3159 of 2009 and the Criminal Application 359 of 2009 in the Anticipatory Bail Application 3159 of 2009 that the Hon'ble Bombay High Court had taken on record the Affidavit filed by Shri Ramesh Mohite, Police inspector dated 31.07.2009 before Hon'ble Bombay High Court in Criminal Application 319 of 2009 filed by Shri Manohar Madhavi and Affidavit filed by Shri H. B. Bhise before Hon'ble Trial Court on 30.06.2009. 15. As per respondent, the proceeds of crime is - 15.1 The NMMC authorities by letter dated 16.02.2016 forwarded the financial year-wise break-up of the amount of ₹ 2,69,12,292/- for which NMMC was cheated by M/s. H B Bhise Company. Therefore, the amount of ₹ 2,69,12,292/- was generated out of criminal activities related to scheduled offence and therefore was the proceeds of crime' (POC) in terms of the definition of Section 2 (1) (u) of the PMLA, 2002 15.2 As discussed in the foregoing para out of ₹ 4,81,78,959/- (inclusive of ₹ 2,69,12,292/-) received by M/s. H B Bhise and Company from NMMC, an amount of ₹ 4,77,91,389/- was transferred int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of the bank statement of M/s. M. K. Construction bearing number 023/2549 with Parsik Janta Sahakari Bank Ltd. Airoli Sector-5 Branch, had revealed that out of ₹ 1,25,34,994/- received from M/s. H B Bhise Company, an amount of ₹ 65,97,000/- was withdrawn in cash under the head 'SELF' by the account holder i.e. Shri Manohar Krishna Madhavi. 15.5 The analysis of the account statement o fM/s. M. K. Transport bearing number CA/018110100000985 with Punjab and Maharashtra Co-operative Bank Ltd. Airoli Branch, had revealed that out of ₹ 66,58,920/- received from M/s. H B Bhise Company, an amount of ₹ 27,00,000/- was withdrawn in cash under the head 'SELF' by the account holder i.e. Shri Manohar Krishna Madhavi. 15.6 The analysis of the account statement of M/s. Aditya Construction bearing number CA/3562 with Gopinath Patil Parsik Janta Sahakari Bank Ltd. Airoli Sector-5 Branch, had revealed that out of an amount of ₹ 1,99,98,148/- received from M/s H B Bhise and Company, an amount of ₹ 1,29,97,800/- was withdrawn in cash under the head 'SELF' by M/s. Aditya Construction. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total ₹ 4,77,91,389/- ₹ 2,74,94,800/- 16. As discussed in the foregoing paras, Shri Manohar Madhavi is the ultimate beneficiary of the entire POC. Further the entire POC amount was utilized by Shri Manohar Madhavi and hence the same was not available for attachment. Therefore, being ultimate beneficiary of the POC the following properties acquired/held by Shri Manohar Madhavi were attached under the Provisional Attachment Order 01/2017 dated 27.01.2017 as value of any such property in terms of Section 2(l)(u) of the Act. The Adjudicating Authority (PMLA) by order dated 31.05.2017 confirmed the provisional attachment order 01/2017 dated 27.01.2017 being the properties involved in the money laundering. 17. Counsel for the appellant submits that the doctrine of privity of contract clearly provides that a contract cannot confer rights or impose obligations arising under it on any person or agent, except the parties to the contract. The Appellant never had any jural relationship with the NMMC and cannot be held answerable for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payments were made on behalf of the Respondent as the ONGC was debiting the account of the Respondent by the amount paid to the Appellant. It is important that the payment was made to the Appellant only upon certification of work done by the Respondent. The ONGC had given a contract to the Respondent. The ONGC had never entered into any contract with the Appellant and therefore, it did not rely upon any certification or any statement made by the Appellant in relation to quantum of work done by the Appellant. 18. It is submitted on behalf of appellant that the statements dated 30.09.2014 and 26.09.2016 of the Appellant were recorded in English language. The appellant being a non-metric is neither conversant or affluent with English nor was he allowed to take the assistance of a translator along with him. As such, the said statements recorded under section 50 of PMLA cannot be relied upon. 19. It is correct that on 27.02.2003, an Agreement between Navi Municipal Corporation and H.B. Bhise Co. was executed for the demolition work. H.B. Bhise Co. got the contract from NMMC for demolition of unauthorized structure and accordingly it requested th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the parties herein that by virtue of this agreement, no share or interest in any such contracts which the First Party gets or acquires in its name from Government Agencies, Local Bodies, Corporations, CIDCO, Private Parties etc. is created of the Second Party. This agreement shall also not be construed as a partnership by and between the parties herein pertaining to any such contracts. The Second Party specifically assures the First Party not to claim any such share or interest in any such contracts any time herein after. As para 3(vi) of the Agreement dated 10.03.2003 is non-obstante para stating that no interest or partnership is created between the parties. Since the appellant has no relationship/privity of contract with NMMC and thus not at all responsible to NMMC. On the other hand, it is M/s. H.B. Bhise Co. which is solely responsible for the same. 21. It is also correct that on 16.05.2009, a complaint was lodged against M/s. H.B. Bhise Co. by Mr. Suresh Ramu Patil, the then Dy. Commissioner (Zone-II), NMMC on the instruction of the then Commissioner of NMMC. Neither the appellant nor his firms namely M/s. M.K. Construction and M/s. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner (Zone-II), NMMC, was recorded under section 50 of PMLA wherein he clearly stated about the involvement of M/s H.B. Bhise Co. and also disclosed the fact that the Appellant has not been named therein. The following extracts of the Complainant's statement dated 16.02.2016 recorded under section 50 of PMLA are reproduced below: Q 2 Whether NMMC had filed complaint with Belapur police against M/s. H.B. Bhise Co.? A:- As per the direction of the then Commissioner, NMMC I had lodged complaint with Belapur Police Station against M/s. H.B. Bhise Co. for inflated demolition bill scam on 16.05.2009, accordingly Belapur Police has registered FIR on 17.05.2009. Q3 Whether NMMC has allotted demolition work contract to M/s. H.B. Bhise Co.? A:- Yes, NMMC has called for tender for demolition work contract, after due official procedure the said contract granted to Ms. H.B. Bhise Co. on 27.02.2003. Q5 Whether the contract in question exclusively allotted to M/s. H.B. Bhishe Co.? A:- Yes, the contract in question exclusively allotted to M/s. H.B. Bhise Co. furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... havi through Shri Ajay Mhatre. After receipt of the POC in the bank accounts of the firms owned controlled by Shri Manohar Madhavi, the entire POC was withdrawn in cash as 'Self from the bank accounts of the firms owned/ controlled by Shri Manohar Madhavi. Therefore Shri Manohar Madhavi is the ultimate beneficiary of the entire POC. Shri Manohar Madhavi had projected the withdrawl of the said amount as untainted by projecting its utilization in the business activity of the firms owned/controlled by Shri Manohar Madhavi, but no documentary evidence such as Vouchers for payment in cash to Labourer, Invoices for the supply of the Material/ Machine etc. was submitted by Shri Manohar Madhavi. In fact Shri Manohar Madhavi intentionally withdrawn the entire POC in cash to disguise the further trail of POC and he is the ultimate beneficiary of the entire POC. Therefore Shri Manohar Madhavi is involved in the activity of the concealment, possession, acquisition related to proceeds of crime and projected the same as untainted property, thereby had committed the offence of money laundering as defined under Section 3 of the PMLA,2002 which is punishable under Section 4 of the PMLA, 2002. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e produced by the respondent as to whether the said properties were purchased from the tainted amount received by the appellant from the contractor, but the fact of the matter is that in PMLA investigation, the role of the appellant has been discussed. The same are reproduced herebelow: The Complainant submits that Shri Manohar Krishna Madhavi was ultimate beneficiary of the entire POC by way of withdrawal of cash owned and controlled by Shri Manohar Madhavi. Further in order to conceal the tainted origin of the POC, Shri Ajay Mhatre had knowingly assisted Shri Manohar Madhavi by projected himself as the Proprietor of M/s. M. K. Construction (which is Proprietorship firm of Shri Manohar Madhavi). Also in order to conceal the tainted origin of the POC, Shri Ajay Mhatre had knowingly assisted Shri Manohar Madhavi by: (i) opening the bank accounts in the name of the firms viz. M/s. Aditya Construction, M/s. Aditya Transport and M/s. D. A. Transport specifying that those firms were proprietorship of his brother Shri Dhanaji Mhatre said firms; (ii) obtaining the Power of Attorney from his brother Shri Dhanaji Mhatre to operate the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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