TMI Blog2017 (12) TMI 1824X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of an official act and Section 13 relates to criminal misconduct by a public servant. Both of these offences are thus scheduled offences as per Section 2(1)(y) of the Act - proceeds of crime is a property derived by any person as a result of criminal activity relating to a scheduled offence. Anyone who directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with proceeds of crime, including its concealment, possession, acquisition or use and projecting or claiming it as untainted property commits the offence of money laundering. Thus, for commission of an offence of money laundering, there should be a scheduled offence and out of that offence, the accused must have derived or obtained proceeds of crime and having obtained such proceeds, must have projected or claimed it as untainted. Thus, Proceeds of crime is the essence and an indispensable element of the offence of money laundering. It is the core constituent of the offence. Without the existence of proceeds of crime, there cannot be any commission of an offence of money laundering. It is only when proceeds of crime i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajan Advocate for accused M. K. Dayalu, P. Amirtham and Kalaignar TV (P) Limited. Ms. Rebecca John Sr. Advocate with Sh. Sushil Bajaj, Ms. Tarannum Cheema, Ms. Hiral Gupta and Sh. Manvendra Singh Advocates for accused Kanimozhi Karunanithi. Sh. Majid Memon and Sh. Rajneesh Chuni Advocates for accused Vinod Goenka. Sh. Manu Sharma and Sh. Babanjeet Singh Mew Advocates for accused A. Raja. Sh. Vijay Aggarwal, Sh. Mudit Jain, Sh. Ehtesham Hashmi and Sh. Ashul Agarwal Advocates for accused Shahid Balwa, Asif Balwa, Rajiv B. Agarwal, Kusegaon Fruits and Vegetables (P) Limited, Dynamix Realty, DB Realty Limited, Eversmile Constructions Company (P) Limited, Conwood Construction Developers (P) Limited and Mystical Construction (P) Limited (earlier known as Nihar Constructions (P) Limited). Sh. Balaji Subramaniam and Sh. Abhir Datt Advocates for accused Sharad Kumar. Sh. Vijay Sondhi, Ms. Deeksha Khurana and Sh. Varun Sharma Advocates for accused Swan Telecom (P) Limited (now Etisalat DB Telecom (P) Limited). JUDGMENT The instant complaint case has been filed by Joint Director, Directorate of Enforcement, New Delhi, (hereinafter to be referred as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the Union of India in 2008 and were, thereafter, allocated spectrum during the year 2008 09. Spectrum was allocated to STPL for Delhi service area also. 5. However, there were allegations of irregularities and bribery in this process of issue of LOIs, grant of UAS licences and allocation of spectrum. Accordingly, case RC No. 45(A)/2009 was registered by the CBI on 21.10.2009 against unknown officials of DoT, Government of India, unknown private persons/ companies on the allegations of criminal conspiracy and criminal misconduct. 6. On completion of investigation, CBI filed charge sheet in this Court against twelve accused, including the then Minister, MOC IT, A. Raja, on the allegations of criminal conspiracy and criminal misconduct in respect of issuance of LOIs, grant of UAS licences and allocation of spectrum by DoT to two companies, namely, Swan Telecom (P) Limited and Unitech group companies. One of the allegations in the charge sheet is that STPL, at the time of filing applications dated 02.03.2007, was an Associate of Reliance ADA group/ Reliance Communications Limited/ Reliance Telecom Limited, having existing UAS licences in all thirteen telecom service areas. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.25 crore 4. 16.01.2009 2 crore 5. 27.01.2009 0.25 crore 6. 28.01.2009 8 crore 7. 29.01.2009 1.5 crore 8. 12.02.2009 2 crore 9. 20.03.2009 5 crore 10. 06.04.2009 1.5 crore 11. 08.04.2009 25 crore 12 22.06.2009 01 crore 13 15.07.2009 0.25 crore 14. 16.07.2009 80 crore 15. 16.07.2009 20 crore 16. 11.08.2009 50 crore Total 209.25 crore 10. Thereafter, Kusegaon Fruits and Vegetables (P) Limited transferred an amount of ₹ 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2010, bearing number ECIR/31/DZ/2010, against some unknown officials of DoT and other unknown companies/ private persons. The case was registered under the Act, as per FIR bearing Number RC DAI2009 A 0045, dated 21.10.2009, registered by the CBI, ACB, New Delhi. The case registered under the Act, in brief, is that during 2007 08, certain officials of the Department of Telecommunications entered into a criminal conspiracy with certain private persons/ companies and misused their official position in the grant of UASL, causing wrongful loss to the Government and corresponding wrongful gain to individuals/ companies. 14. ED initiated investigation in the instant case with the examination of various persons under the Act and collection of documents from various Government organizations/ companies/ firms and individuals. During the course of investigation, it was revealed that a sum of ₹ 223.55 crore, which is the proceeds of crime in terms of section 2(1)(u) of the Act, was in possession of the Group companies of the promoters of M/s Swan Telecom (P) Limited (hereinafter to be referred as STPL ) and therefore, this amount has been attached under Section 8 (3) of the Act f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yug Media Entertainment Pvt. Ltd., hereinafter referred to as CFPL) and M/s Kalaignar TV Pvt. Ltd. (hereinafter referred to as KTV) for acquisition of 32 35% stake in KTV which, inter alia, provided, that funds transferred to the latter be treated as a loan if no Agreement is reached between the parties regarding the price of KTV s shares by 31.03.2009. Investigations reveal that though no such Agreement was arrived at between the parties by 31.3.2009, CFPL paid a further sum of ₹ 175 crores to KTV after March, 2009. 9 23.12.2008 To 11.08.2009 For transferring illegal gratification of ₹ 200 cores to KTV, M/s Dynamix Realty (hereinafter referred to as Dynamix Realty) in association with other DB Group companies transferred ₹ 209.25 crores to M/s Kusegaon Fruits and Vegetabes Pvt. Ltd. (now known as M/s Kusegaon Realty Pvt. Ltd. hereinafter referred to as KFVPL). There was no Agreement between the two companies for the said transaction. During the course of investigations, it was claimed that this amount was an unsecured loan @ 7.5% interest per annum. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 24.12.2010 On 23.12.2010, Shri A. Raja was directed to appear before the CBI for the purposes of investigation. Shri A. Raja was examined by CBI on 24.12.2010. 18 02.02.2011 Shri A. Raja was arrested by CBI. 19 20.12.2010 to 03.02.2011 Immediately after Shri A. Raja was summoned by CBI for the purposes of investigation, KTV started refunding the amount of ₹ 200 crores to Dynamix Realty through CFPL KFVPL. ₹ 231.36 crores were transferred back by KTV to CFPL. 20 20.12.2010 To 03.02.2011 ₹ 225.08 crores were transferred back by CFPL to KFVPL. 21 23.12.2010 to 28.02.2011 ₹ 223.55 crores were transferred back by KFVPL to Dynamix Realty. 17. It is further claimed that investigation in the case began with the recording of statements of various persons, including A. Raja, the then MOC IT; Shahid Usman Balwa, Director/ shareholder of DB group companies; Vinod K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis shown below clearly reveals the purpose of Kusegaon Fruits and Vegetables (P) Limited so as to become vehicle of transfer of funds from Dynamix Realty to Cineyug Films (P) Limited. The ratios given in the table below show that the transmission of funds was the primary activity of Kusegaon Fruits and Vegetables (P) Limited during the relevant period. (Rs. in crore) Particulars 2012 2011 2010 2009 2008 2007 Investments 6.25 6.25 28.50 Current Assets 3.07 3.15 221.41 3.00 0.01 0.01 Total Assets (A) 9.32 9.40 221.41 31.50 0.01 0.01 Investments 6.25 6.25 28.50 Loans Advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .00 15.07.2009 100.00 28.01.2009 8.00 20.03.2009 5.00 07.08.2009 50.00 29.01.2009 1.50 06.04.2009 25.00 12.02.2009 2.00 08.04.2009 1.50 20.03.2009 5.00 22.06.2009 1.00 06.04.2009 1.50 15.07.2009 0.25 08.04.2009 25.00 15.07.2009 100.00 22.06.2009 1.00 07.08.2009 50.00 15.07.2009 0.25 16.07.2009 100.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65 crore to KTV from 27.11.2011 to 04.03.2011. It had availed ₹ 50 crore Unsecured Adhoc Cash credit (short term corporate working capital) Loan from State Bank of Mysore, and also from their day to day collection. (iii) From Sapphire Media Infrastructure Limited SMIL gave loans and advances of ₹ 83 crore to AFPL from 22.12.2010 to 18.01.2011. SMIL arranged funds from a number of companies for payment to AFPL. (iv) From Anjugam Films Private Limited (AFPL) AFPL paid an amount of ₹ 83 crore to KTV from 24.12.2010 to 18.01.2011. Financial Investigation 19. It is alleged that STPL after having illegally obtained the UAS licences attracted Foreign Direct Investment (FDI) from Etisalat Mauritius. It is further alleged that the FDI of ₹ 3228.44 crore was received without the approval of Foreign Investment Promotion Board (FIPB). The stipulated conditions of security clearance had not been fulfilled. In order to camouflage the total FDI as that permissible under the automatic route of the FDI policy norms, ₹ 380 crore were routed through domestic company Genex Exim India Pvt. Limited and further three shares were issued at ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DB Group that these transactions were loan transactions does not appear to be true because no prudent person will give money @ 7.5% to 10% interest rate out of money borrowed at 13 to 14% interest. 21. It is revealed during the course of investigation under the Act that Kusegaon Fruits and Vegetables (P) Limited passed on ₹ 206,24,75,000/ to Cineyug Films (P) Limited and the source of this amount was from Dynamix Realty. Kusegaon Fruits and Vegetables (P) Limited paid ₹ 200 crore to Cineyug Films (P) Limited during the period 23.12.2008 to 10.08.2009 and it is claimed that transfer was against OCRD @ of 8%. It is further revealed from the scrutiny of documents that through 16 tranches, amount of ₹ 206,24,75,000/ was given to Kusegaon Fruits and Vegetables (P) Limited by Dynamix Realty starting from 23.12.2008 to 10.08.2009. These transactions were effected through Oriental Bank of Commerce, Ragnigandha Shopping Center, Gokuldham, Goregaon (E), Mumbai, through Account Number 05211131001346. 22. It is revealed during the course of investigation under the Act that Cineyug Films (P) Limited, incorporated on 10.09.1997, was registered with the Registrar of Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.08.2010, which relates to the OCRD against ₹ 200 crore and collectively named as transaction documents . This undertaking was given by Aly Morani, Karim Morani and Mohammed Morani on behalf of Cineyug Films (P) Limited that till final repayment of the OCRD, they will not sell/ transfer their shares in Cineyug Films (P) Limited . They also agreed that they will not transfer 951531 equity shares of DB Realty Limited, of which they are legal and beneficial owners. On 01.12.2010 Share Pledge cum Power of Attorney was issued to Kusegaon Fruits and Vegetables (P) Limited by Aly Morani, Karim Morani, Mohammed Morani and Ms. Nasreen Morani (obligors) in respect of SSA executed between Cineyug Films (P) Limited and Kusegaon Fruits and Vegetables (P) Limited. The obligors are the legal and beneficial owners of equity and preference shares of DB Hospitality Limited. As per the said Power of Attorney, obligors pledged the shares of DB Hospitality Limited in favour of Kusegaon Fruits and Vegetables (P) Limited, as security towards repayment of OCRD by the Cineyug Films (P) Limited. 25. Cineyug Films (P) Limited transferred the proceeds of crime amounting to ₹ 200 crore to K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 29. It is revealed during the course of investigation under the Act that KTV was incorporated in Chennai on 06.06.2007. The Directors of the company are: Sl. No. Name of the Directors Period 1 Ms. M.K. Dayalu 06.06.2007 to 20.06.2007 and 27.07.2007 to 09.12.2010 2 Ms. K. Kanimozhi 06.06.2007 to 20.06.2007 3 Shri Sharad Kumar 06.06.2007 till date 4 Shri P. Amirtham 12.06.2007 to 27.07.2007 and 28.05.2010 till date 30. The persons named above at serial numbers 1 to 3 are promoter shareholders of the company. Bank account is with the Indian Bank at Chennai. The First Annual Report (20072008) of KTV reveals, inter alia, that paid up capital of the company was ₹ 7.01 crore out of authorized share capital of ₹ 10 crore. There was a loan of ₹ 50 crore approx. from the director of the company and secured loan of ₹ 53.55 crore. The 2nd Annual Report (2008 2009), inter alia, reveale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Details of repayment made to CFPL Amount (Rs.) 1 Principal 2,000,000,000 2 Interest 313,630,137 Total Payment 2,313,630,137 Sources of funds Sl. No. Description Amount (Rs.) 1 AFPL 69,61,90,000 2 Advertisement Advances received from; The India Cement Ltd. 60,00,00,000 United Spirits Ltd. 24,50,00,000 3 Regular collection over payments 30,40,69,668 4 Open cash credit with Indian bank 46,83,70,469 Total 2,31,36,30,137 34. It is further revealed that in the meeting of the Board of Directors of the KTV held on 09.12.2010 and attended by the Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund of proceeds of crime by KTV to Cineyug Films (P) Limited and further refund by Cineyug Films (P) Limited to Kusegaon Fruits and Vegetables (P) Limited and finally by Kusegaon Fruits and Vegetables (P) Limited to Dynamix Realty was/ were carried out through layering mechanism of passing on varying amounts in a reverse chain sequence. Refund of money by KTV was sourced from various related parties and clients in a short span of time. The refund by the company, that is, KTV, was made not only to project the refund of funds as business transactions but also to project the earlier receipt of funds as arising from bonafide business deal so as to conceal the true nature of bribe money. The reverse flow of the funds is summarized as under: KTV to CFPL CFPL To KFVPL KFVPL To Dynamix Realty Date Amount in Rs (crores) Date Amount in Rs (crores) Date Amount in Rs (crores) 20.12.2010 15.25 20.12.2010 12.19 23.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the aforesaid transactions of more than ₹ 200 crore between Dynamix Realty, Kusegaon Fruits and Vegetables (P) Limited, Cineyug Films (P) Limited and Kalaignar TV (P) Limited, there was no valid Agreement signed between any of the parties as the photocopy of the Share Subscription and Shareholders Agreement to this effect made on 19 th December, 2008 submitted by KTV, is not on stamp paper and is not enforceable in law. Further, it is evident that no collateral securities were ensured to secure the alleged loan amounts. 39. Cineyug Films (P) Limited wrote to KTV vide letter dated 25.10.2010 that they are not interested in making the investment in the company or converting the loan amount into shares. Therefore, it was requested to arrange to repay the entire loan amount together with all accrued interest till date immediately. 40. Cineyug Films (P) Limited received ₹ 31.36 crore (₹ 15.24 crore in 2009 10 and ₹ 16.12 crore in 2010 11) from KTV, in the colour of interest on the amount of ₹ 200 crore paid to KTV by DB Group through Kusegaon Fruits and Vegetables (P) Limited and Cineyug Films (P) Limited. 41. Kusegaon Fruits and Vegetables (P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a colour of regular business transactions with the intent to conceal its true nature and to project the said tainted amount as untainted. The process of structuring of these dubious transactions for layering of the illegal gratification is a process to project the illicit money as untainted and is squarely covered under the provisions of Section 3 of the Act. The knee jerk reaction shown by the entities involved in the return of this amount was triggered on the date when A. Raja was contacted by the CBI for investigation. That all of a sudden, the trust between the entities vanished and the ultimate beneficiary KTV and its Promoters/ Directors, in consultation with other accused persons, tried to collect money by adopting business deals such as bulk advertisement contracts and even collected money that originated from dubious Kolkata based companies in the garb of loan, which again travelled from companies before landing into the bank account of KTV. Modus operandi adopted by the accused entities was again the mode of inter corporate deposits. Sequence flow of fund from one to other entity at the time of reverse flow of funds from KTV to Dynamix Realty corroborate that the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fruits and Vegetables (P) Limited are owned by same group, and if the purpose was to advance loan to Cineyug Films (P) Limited, then there was no requirement to put an intermediary between Dynamix Realty and Cineyug Films (P) Limited other than to project such transactions as genuine to conceal identity of the persons on whose behalf these funds were transferred. 49. Cineyug Films (P) Limited claimed that it gave ₹ 200 crore to KTV for acquiring shares. There was a purported Share Purchase Agreement between Cineyug Films (P) Limited and KTV. In terms of this agreement, shares had to be transferred by 31.03.2009. However, if shares were not transferred till then, the money given by Cineyug Films (P) Limited to KTV was to be converted into loan. Only ₹ 25 crore was given by Cineyug Films (P) Limited to KTV by 31.03.2009, without any transfer of shares. Hence, in terms of the agreement, there shall be no further flow of funds for share subscription. However, even after 31.03.2009, Cineyug Films (P) Limited continued to give money to KTV for unknown purpose as the share purchase agreement had expired on 31.03.2009. Thus, fund amounting to ₹ 175 crore continued to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty through the same two entities of the earlier chain viz. Cineyug Films (P) Limited and Kusegaon Fruits and Vegetables (P) Limited. The investigation has brought out that the reverse flow of the funds occurred from the time A. Raja was asked to join investigation and the completion of the flow coincided with the day of his arrest. Investigations under the Act has revealed how the illegal gratification of ₹ 200 crore was mobilized by KTV in a short span of time since the amount received earlier had already been utilized. The mobilized amount was returned with additional funds so as to appear as if loan was being returned alongwith interest. Therefore, ₹ 231.36 crore was transferred by KTV to Cineyug Films (P) Limited which, in turn, transferred ₹ 225.08 crore to Kusegaon Fruits and Vegetables (P) Limited. The final amount transferred by Kusegaon Fruits and Vegetables (P) Limited to Dynamix Realty was ₹ 223.55 crore. The funds in the hands of KTV were nothing but the value equivalent of the proceeds of crime already utilized by them. The amount of ₹ 223.55 crore which thus reached Dynamix Realty carried the taint and constitutes proceeds of crime as de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d its wholly owned subsidiary called Anjugam Films (P) Limited with an intent to project the proceeds of crime as untainted. 58. Shahid Usman Balwa and Vinod K. Goenka knowingly and willfully used their group companies/ firm Dynamix Realty with the active association of Rajeev B. Agarwal and Asif Balwa in the scheme of projecting bribe money as untainted through series of inter linked financial transactions projecting these as legitimate business/ loan transactions. 59. Karim Morani, an old friend of Vinod K. Goenka,knowingly allowed the accused persons to use his family owned company, Cineyug Films (P) Limited, as conduit in the scheme of projection of tainted money as untainted. Karim Morani is also holding equity in DBRL and was also Director of M/s Allianz Infratech (P) Limited, the company to whom two UASL were granted by A. Raja, which later on merged with Etisalat DB Telecom Pvt. Ltd. (erstwhile STPL). 60. The promoter shareholders of KTV allowed Sharad Kumar and P. Amirtham to utilize and deploy the proceeds of crime of ₹ 200 crore received in KTV. Sharad Kumar had met key management personnel of DB Group like Rajeev B. Agarwal as well as Karim Morani for fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es committed by the accused persons have been revealed in the charge sheets filed by the CBI. Among the reasons for such revelations is the non consideration of auction and non revision of entry fee to be charged from STPL. It is, inter alia, made out that allotment of UAS licences in deliberate and dishonest manner at the rate of fee determined in 2001 without any increase in 2008 whereas Department of Telecommunications (DoT) and Ministry of Finance had worked out the increase by 3.5 times from the year 2002 to 2007 in Adjusted Gross Revenue (AGR) per MHz. 66. The charge sheets filed by the CBI has, inter alia, revealed that STPL got the licence even though it did not meet the eligibility criteria. Thus, STPL illegally acquired LOIs on 10.01.2008 and subsequently UAS licences for ₹ 1538 crore and subsequent to the allotment of UAS licences STPL sold stakes (50%) for ₹ 3228 crore to Etisalat Mauritius Ltd. and ₹ 381 crore to Genex Exim Ventures (P) Limited on 17.12.2008. 67. It is revealed in the investigation that, simultaneously, a sum of ₹ 200 crore was arranged by the owners and controllers of STPL and transferred the same to KTV, using various co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... say. 71. When A. Raja was summoned by the CBI and its news came in media, KTV decided to return ₹ 200 crore to Dynamix Realty through the same route, concealing the motive behind refund, by clothing the return of funds with additional amount claimed as the interest component paid to each carrier companies, that is, Cineyug Films (P) Limited and Kusegaon Fruits and Vegetables (P) Limited, which, in fact, was the layering process to conceal the true purpose for the reverse flow by KTV. 72. The KTV rolled back the illegal gratification of ₹ 200 crore using the guise of legitimate transactions and paid back a sum of ₹ 223.55 crore approx. to Dynamix Realty, which included the amount of illegal gratification of ₹ 200 crore. The balance amount of ₹ 23.55 crore was claimed as interest paid. The refund in excess of the illegal gratification, in fact, is a result of layering process indulged in to transfer funds in the guise of genuine and bonafide transactions. 73. ₹ 223.55 crore which reached back Dynamix Realty by the reverse flow of funds from KTV is the proceeds of crime, as defined in Section 2(1)(u) of the Act. In terms of this Section th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sh. A. K. Srivastava and his written note. Arrangements for distribution of Letter of Intent (LoI) on 10.01.2008 were made with a view to alter priority in favour of STPL. This is corroborated by the statement dated 08.02.2011 of Sh. A. K. Srivastava. Promoters of DB Group were known to A. Raja, since he assumed the office of the Minister of Environment and Forests. This is corroborated by letter dated 08.10.2012 of Vinod K. Goenka and statements dated 28.01.2011 and 21.02.2011 of Sh. A. M. Sadhick Batcha (now deceased). A. Raja was in regular touch with Ms. K. Kanimozhi since 2007 which stands confirmed by his statement dated 10.07.2012, statement dated 16.06.2012 of Ms. Kanimozhi and statement dated 27.05.2013 of Sh. Aseervatham Achary. Illegal gratification of ₹ 200 crore started moving from Dynamix Realty to KTV on 23.12.2008 when the FDI and equity contribution to the tune of ₹ 3609 crore was received by STPL on 17.12.2008. A. Raja was called by CBI on 24.12.2010 and immediately thereafter ₹ 200 crore started moving back from KTV to Cineyug Films (P) Limited and transaction was completed on 03.02.2011 just a day after his arrest. The linkage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K. Goenka roped in Rajeev Agarwal, Asif Balwa and Karim Morani in their scheme of projecting the illegal gratification as untainted. Their group companies as well as company of their associate Karim Morani were used to transfer funds to pre determined entity (KTV) in nexus with A. Raja, Ms. M. K. Dayalu, Ms. Kanimozhi and Sharad Kumar. Dynamix Realty, a partnership firm was opened with the object of development and construction of the buildings on the Slum Rehabilitation Area (SRA) Plots as per the relevant Scheme of the Slum Rehabilitation Authority. This firm acted contrary to its main object and collected funds from a number of associates/ group companies and diverted the same to a Group company Kusegaon Fruits and Vegetables (P) Limited for its ultimate transfer to KTV through Cineyug Films (P) Limited. The act of Dynamix Realty was as per dictates of Shahid Usman Balwa and Vinod K. Goenka with the assistance of Rajeev B. Agarwal and Asif Balwa. Shahid Usman Balwa and Vinod K. Goenka are promoters/ directors of STPL (DB Group company). Dynamix Realty is a partnership firm of three DB Group companies viz. DB Realty Ltd., Eversmile Construction Company (P) Limited and Conwood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that Cineyug Films (P) Limited will, in turn, pass on the money to KTV. Both of them were actually involved in the scheme of projecting illegal gratification as untainted. Asif Balwa and Rajiv B. Agarwal in association with Shahid Usman Balwa and Vinod K. Goenka were, inter alia, shareholders/ directors/ authorized signatories of DB Group companies. Asif Balwa and Rajiv B. Agarwal were shareholders/ directors of Kusegaon Fruits and Vegetables (P) Limited. Asif Balwa and Rajiv B. Agarwal represented Kusegaon Fruits and Vegetables (P) Limited for 49% stake in Cineyug Films (P) Limited. Asif Balwa and Rajiv B. Agarwal were actually involved in the layering of illegal gratification amounting to ₹ 200 crore paid to KTV after the illegal allotment of UAS Licence to STPL. Both of them were also actually involved in layering of the amount of ₹ 223.55 crore on the return journey from KTV. They were thus actually involved in projecting the proceeds of crime as untainted and thus committed the offence of moneylaundering as defined under Section 3 of the Act. IV. Karim Morani Karim Morani is a childhood friend of Vinod K. Goenka who joined as director of Allianz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial transactions of KTV and AFPL, with the motive to project the proceeds of crime as untainted. Sharad Kumar by being actually involved in receiving the payment of illegal gratification amounting to ₹ 200 crore and again by being actually involved in the refund of proceeds of crime of ₹ 223.55 crore by projecting the said refund as untainted money has thus committed the offence of moneylaundering as defined under Section 3 of the Act. VI. M. K. Dayalu The inflow of illegal gratification of ₹ 200 crore in KTV and its utilization by KTV was made when Ms. M. K. Dayalu was holding the post of director and was one of the promoters and the majority shareholder (60%) in the KTV. She was the original subscriber to Memorandum of the company. She attended meetings of the shareholders (that is, EOGM/AGM) and meetings of Board of Directors (as a director) during the period when the illegal gratification of ₹ 200 crore was received in KTV. Statements of P. Amirtham (the then CFO of the company) and of Sharad Kumar (the shareholder of 20% stake and director) further corroborate that Ms. M. K. Dayalu was instrumental in deciding about the strategic decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said resolution to be implemented. Sh. Aseervatham Achary in his statement on 27.05.2013 stated that A. Raja used his influence in getting clearance from the Ministry of Information and Broadcasting for bouquet of channels for KTV and Ms. K. Kanimouzhi was a regular visitor to the residence of A. Raja at 2A, Motilal Nehru Marg, New Delhi. The refund of proceeds of crime of ₹ 223.55 crore got triggered off by the CBI investigation against A. Raja with whom Ms. K. Kanimozhi has close nexus. KTV in which Ms. K. Kanimozhi remained a promoter shareholder set in motion arrangements for mobilization of funds which was used to make payment of ₹ 223.55 crore to Dynamix Realty in lieu of the illegal gratification earlier received and utilised by KTV. Ms. K. Kanimozhi knowingly facilitated and was actually involved in the process of generation and layering of the proceeds of crime and in projection of it as untainted property. She has, therefore, committed the offence of money laundering as defined under Section 3 of the Act. VIII. P. Amirtham P. Amirtham is confidant of Ms. M. K. Dayalu and Ms. K. Kanimozhi and is in their close relation. This fact was confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a were in touch with A. Raja since he was Minister of Environment and Forests. DB group acquired majority stake in STPL on 18.10.2007. Thereafter, Shahid Usman Balwa and Vinod K. Goenka were in charge of and responsible for the business of STPL. ₹ 3609 crore was received by STPL on 17.12.2008 as equity. During the period 23.12.2008 to 11.08.2009, Dynamix Realty (partnership firm of DB Realty Limited, Eversmile Construction Company (P) Limited and Conwood Constructions Developers (P) Limited) transferred ₹ 209.25 crore to Kusegaon Fruits and Vegetables (P) Limited of which Asif Balwa and Rajiv B. Agarwal were promoters and Directors. Shahid Usman Balwa and Vinod K. Goenka are promoters and directors of STPL. Dynamix Realty is a partnership firm of three DB group companies in which Asif Balwa and Rajiv B. Agarwal alongwith Shahid Usman Balwa and Vinod K. Goenka were shareholders/ directors/ authorized signatories. Asif Balwa and Rajiv B. Agarwal were shareholders/ directors of Kusegaon Fruits and Vegetables (P) Limited. Asif Balwa and Rajiv B. Agarwal represented Kusegaon Fruits and Vegetables (P) Limited for 49% stake in Cineyug Films (P) Limited. Thus, promot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l gratification of ₹ 200 crores to KTV. Cineyug Films (P) Limited was used again in the refund of proceeds of crime to Dynamix Realty. Asif Balwa and Rajiv B. Agarwal represented Kusegaon Fruits and Vegetables (P) Limited for 49% stake in Cineyug Films (P) Limited. Cineyug Films (P) Limited transferred ₹ 200 crore to KTV. Cineyug Films (P) Limited received ₹ 231.36 crore from KTV on the return journey of the proceeds of crime from KTV to Dynamix Realty. Cineyug Films (P) Limited transferred ₹ 225.08 crore to Kusegaon Fruits and Vegetables (P) Limited. Cineyug Films (P) Limited has knowingly assisted STPL in the transfer of proceeds of crime amounting to ₹ 200 crore from Dynamix Realty to KTV after the illegal allotment of UAS Licence to STPL in the manner and period as aforesaid and has also again knowingly assisted in transferring back the proceeds of crime of ₹ 223.55 crore from KTV to Dynamix Realty as untainted money through the layering process of transferring varying amounts at the two stages of transfer. Thus, CFPL has committed the offence of money laundering as defined under Section 3 of the Act. XII. Kalaignar TV (P) L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... layering process to project the proceeds of crime as untainted has thus committed the offence of money laundering as defined under Section 3 of the Act. XIV. Eversmile Construction Company Pvt. Ltd. (ECCPL) ECCPL is a DB Group company under the control of Shahid Usman Balwa and Vinod K. Goenka. Rajiv B. Agarwal is one of the directors of ECCPL. ECCPL is partner in the firm Dynamix Realty. Proceeds of crime of ₹ 13.76 crore approx. have been attached from ECCPL, and is knowingly a party to the offence of money laundering. ECCPL has committed the offence of money laundering in terms of Section 3 of the Act. XV. Conwood Constructions Developers Pvt. Ltd.(CCDPL) CCDPL is a DB Group company under the control of Shahid Usman Balwa and Vinod K. Goenka. Rajiv B. Agarwal is one of the directors of CCDPL. CCDPL is partner in the firm Dynamix Realty. Proceeds of crime of ₹ 22.56 crore approx. have been attached from CCDPL and is knowingly a party to the offence of money laundering. CCDPL has committed the offence of money laundering in terms of Section 3 of the Act. XVI. DB Realty Ltd.(DBRL) DBRL is a DB Group company under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering as defined under Section 3 of the Act and Section 3 read with Section 70 of the Act being the persons responsible for the offence of moneylaundering by STPL, DBRL, Dynamix Realty, Conwood Construction Developers (P) Limited, Eversmile Construction Company (P) Limited and Nihar Constructions (P) Limited, in the manner and period as aforesaid in the complaint which is punishable under Section 4 of the Act. 79. Asif Balwa and Rajiv B. Agarwal were actually involved along with Shahid U. Balwa and Vinod K. Goenka in the payment of illegal gratification of ₹ 200 crore in KTV acting on behalf of A. Raja. They were also actually involved along with Shahid U. Balwa and Vinod K. Goenka in the process of layering and receipt of proceeds of crime of ₹ 223.55 crore by KTV to Dynamix Realty. Thus, Asif Balwa and Rajiv B. Agarwal have committed the offence of money laundering as defined under Section 3 of the Act and Section 3 read with Section 70 of the Act being the persons responsible to the company for the offence of money laundering committed by STPL, Kusegaon Fruits and Vegetables (P) Limited, DBRL, Dynamix Realty, Conwood Construction Developers (P) Limited, Eversm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he offence of money laundering by KTV which is punishable under Section 4 of the Act. 84. P. Amirtham, authorized person Director of KTV in association with Ms. M.K. Dayalu, Sharad Kumar and Ms. K. Kanimozhi utilized the illegal gratification of ₹ 200 crore parked in KTV for A. Raja and was actually involved in the refund of the same by KTV through the process of layering as ₹ 223.55 crore to Dynamix Realty in the manner and period as aforesaid. P. Amirtham thus has committed the offence of money laundering as defined under Section 3 of the Act and Section 3 read with Section 70 of the Act being the person responsible for the offence of money laundering by KTV which is punishable under Section 4 of the Act. 85. STPL was illegally allotted UASL by A. Raja for which a sum of ₹ 200 crore of illegal gratification was paid in KTV through a process of layering from Dynamix Realty, which has been received back by Dynamix Realty from KTV through process of layering as ₹ 223.55 crore. Dynamix Realty and STPL being DB Group companies were actually involved in layering of proceeds of crime generated out of illegal gratification and its refund. STPL has thus com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ka, is owner partner of Dynamix Realty. Eversmile Construction Company (P) Limited is knowingly a party in parking the proceeds of crime ₹ 13.76 crore approx. Eversmile Construction Company (P) Limited, therefore, has committed the offence of moneylaundering as defined under Section 3 of the Act and Section 3 read with Section 70 of the Act being the person responsible for the offence of money laundering by Dynamix Realty in the manner and period as aforesaid in the complaint which is punishable under Section 4 of the Act. 91. Conwood Construction Developers (P) Limited, one of the companies of DB Group, owned and controlled by Shahid U. Balwa, Rajiv B. Agarwal and Vinod K. Goenka, is owner partner of Dynamix Realty. Conwood Construction Developers (P) Limited is knowingly a party in parking the proceeds of crime ₹ 22.56 crore approx. Conwood Construction Developers (P) Limited, therefore, has committed the offence of money laundering as defined under Section 3 of the Act and Section 3 read with Section 70 of the Act being the person responsible for the offence of moneylaundering by Dynamix Realty in the manner and period as aforesaid in the complaint which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed a complaint, Ex PW 2/B, before the Adjudicating Authority, which confirmed the attachment order vide its order Ex PW 2/C. He also proved other documents Ex PW 2/D to H. 100. PW 3 Sh. S. Ananda Prasad, Sr. General Manager, United Spirits Limited, Bangalore, deposed that it (United Spirits Limited) entered into a long term advertisement contract dated 25.01.2011 for eight years with Kalaignar TV (P) Limited for a sum of ₹ 65 crore, which was paid in three or four tranches. He also gave statements Ex PW 3/B, C and F to the ED. He also proved documents Ex PW 3/A, D, E, F and F 1. 101. PW 4 is Sh. R. Muralidhar, Vice President, India Cements Limited. He deposed that an amount of ₹ 60 crore was paid to Kalaignar TV (P) Limited by India Cements Limited in 2011 for advertising its products. He also gave statements Ex PW 4/A and B to ED. He also proved documents in this regard Ex PW 4/C to E. 102. PW 5 is Sh. Amit Jain, a practicing Chartered Accountant, New Delhi. He deposed that in 2010, Sh. Sunil Parakh, a Kolkata based businessman, approached him for arranging some accommodation entries for Sapphire Media Infrastructure Limited (SMIL). Accordingly, he approac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in this way, he provided accommodation entries of an amount of ₹ 43.75 crore approximately to SMIL. He further deposed that subsequently entries worth about ₹ 30 crore were reversed. In this regard, he tendered his statement Ex PW 8/E to the ED. He also proved various documents relating to the companies controlled by him and accommodation entries provided by him, which are Ex PW 8/A to G 1. 106. PW 9 is Sh. Aseervatham Achary, former Personal Assistant to A. Raja. He has deposed that Shahid Balwa and Vinod Goenka used to visit office as well as residence of A. Raja. He also deposed that in 2007, Kalaignar TV (P) Limited was launched by the family members of Sh. M. Karunanithi, the chief of DMK party. He also deposed that Kanimozhi Karunanithi is the active brain behind Kalaignar TV (P) Limited and she also used to visit residence of A. Raja and she once visited his office at Electronics Niketan, New Delhi. He proved his statement Ex PW 9/A tendered to the ED. 107. PW 10 is Sh. A. K. Upadhyay, a Kolkata based Advocate. He had submitted documents on behalf of PW 8 Sh. Anil Khemka to ED. He has reiterated the statement of Sh. Anil Khemka in regard to the documents, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s proved statements and documents Ex PW 15/A to V 5. 113. PW 16 is Sh. Chandru Taurani, Branch Manager, Standard Chartered Bank, Ville Parle, Mumbai. He has proved documents relating to account No. 23905026378 owned by Cineyug Films (P) Limited. These documents are Ex PW 16/A 1 to A 18. He has also deposed that as per the account opening form, Karim Morani was one of the directors of the company. 114. PW 17 is Sh. Gopala Krishnan, General Manager (Finance), Gemini Group of Companies, Chennai. He deposed that Sapphire Media and Infrastructure Limited (SMIL) is one of the companies of Gemini group of companies, Chennai, being managed by Sh. A. Manohar Prasad. He deposed that he appeared before the ED on behalf of the company and submitted documents and also tendered his statement. He has proved his statement as well as documents Ex PW 17/A 1 to D26. He also stated that between December 2010 to January 2011, this company received ₹ 83 crore from various companies. He also deposed that SMIL was to be taken over by Sharad Kumar of Anjugam Films (P) Limited. 115. PW 18 is Raj Kumar Tharad, an associate of PW 8 Sh. Anil Khemka. He deposed that he works with Sh. Anil Khemka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s documents on its behalf. He deposed about the transaction of ₹ 200 crore between Kalaignar TV (P) Limited and Cineyug Films (P) Limited as a loan. He also deposed about transfer of money from SMIL to Anjugam Films (P) Limited. He also deposed as to how Kalaignar TV (P) Limited raised money from bulk advertisement agreements. He also deposed about the role of P. Amirtham in Kalaignar TV (P) Limited. He proved his statements and documents Ex PW 21/A to Q. 119. PW 22 is Sh. Surendra Mohan Prasad, Assistant General Manager, Oriental Bank of Commerce, Mumbai. He deposed about account No. 05211011000957 of M/s Dynamix Realty, account No. 05211131002039 of Cineyug Films (P) Limited, and account No. 05211131001346 of Kusegaon Fruits and Vegetables (P) Limited, maintained in his branch. He also proved the documents of Dynamix Realty, Ex PW 22/A 1 to A 7; of Cineyug Films (P) Limited, Ex PW 22/A 8 to A 17; and of Kusegaon Fruits and Vegetables (P) Limited, Ex PW 22/A 18 to A 24. He also proved a certificate, Ex PW 22/A 25, relating to these documents. He also proved documents, Ex PW 22/B to P, about various transactions, which took place between the three entities. He also deposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mirtham. He deposed that he joined Kalaignar TV (P) Limited in July 2007 as Vice President (Operations), on the asking of Sharad Kumar and used to report to Sharad Kumar, P. Amirtham, Chief Financial Officer, and Sh. Ramanaryanan. He also deposed that P. Amirtham does not know English. He also deposed that Kalaignar TV (P) Limited is a popular channel in Tamil. 127. DW 2 is Sh. K. Umashankar, Manager (Finance), Kalaignar TV (P) Limited. He has been examined for Kalaignar TV (P) Limited. He deposed about transaction of ₹ 200 crore between Kalaignar TV (P) Limited and Cineyug Films (P) Limited as a loan. He also deposed that it was an inter corporate deposit. He also deposed that this amount was used by Kalaignar TV (P) Limited in repaying loan and for purchase of movies. He also deposed that initially Cineyug Films (P) Limited wanted to purchase equity in Kalaignar TV (P) Limited. However, due to disagreement on valuation of Kalaignar TV (P) Limited, it did not happen and the amount was returned. 128. DW 3 is Sh. Chintan Ghelani, a practicing Chartered Accountant from Mumbai. He has been examined for Dynamix Realty. His firm is tax auditor for Dynamix Realty since 2006 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 209.25 crore was transferred by Dynamix Realty to Kusegaon Fruits and Vegetables (P) Limited, a company controlled by Sh. Asif Balwa and Sh. Rajiv Agarwal, who were also directors in the companies belonging to DB group and this transfer of money took place between 23.12.2008 to 11.08.2009. It is further submitted that no formal agreement was executed between Dynamix Realty and Kusegaon Fruits and Vegetables (P) Limited for the transaction. It is further submitted that out of this amount of ₹ 209.25 crore, a sum of ₹ 206.25 crore was transferred by Kusegaon Fruits and Vegetables (P) Limited to Cineyug Films (P) Limited. It is further submitted that out of this, a sum of ₹ 6.25 crore was transferred for the purpose of acquiring 49% equity in Cineyug Films (P) Limited. It is further submitted that there was no underlying agreement between the two companies. It is further submitted that despite holding 49% equity of Cineyug Films (P) Limited, Kusegaon Fruits and Vegetables (P) Limited did not appoint any representative on its board. It is further submitted that Cineyug Films (P) Limited transferred a sum of ₹ 200 crore to Kalaignar TV (P) Limited, purportedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence led on record has been extensively read at the bar to emphasize the fact that the transfer of ₹ 200 crore of illegal gratification and return thereof constituted an act of money laundering and each accused and entity is responsible for that and thus, guilty of the offence of money laundering. It is further submitted that the documents were created ex post by these entities to project the transactions as regular commercial transactions. It is repeatedly submitted that the proceeds of crime, that is, money obtained as illegal gratification for the favours shown by Sh. A. Raja to STPL, were projected as untainted one. My attention has been invited to various provisions of the Act, deposition of witnesses, documents and case law in detail for emphasizing that each accused is guilty of the commission of the offence of money laundering. 137. On the other hand, the defence argued that the transactions between the four entities were regular business transactions. It is submitted that the documents executed between entities are genuine one and were executed in the ordinary course of business. It is further submitted that there is no material on record indicating that the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCC 519; 14) R. Janakiraman Vs. State represented by Inspector of Police, CBI, SPE, Madras, (2006) 1 SCC 697; 15) Union of India Vs. Hassan Ali Khan and Another, (2011) 10 SCC 235; 16) Hiten P. Dalal Vs. Bratindranath Banerjee, (2001) 6 SCC 16; 17) M. S. Narayana Menon alias Mani Vs. State of Kerala and Another, (2006) 6 SCC 39; and 18) Gurdip Singh Vs. State of Punjab, (2013) 10 SCC 395. 141. Sh. Pinaki Misra, learned Sr. Advocate for Karim Morani, invited my attention to the following case law: 1. Jafar Mohammed Hasanfatta and Ors. Vs. Deputy Director and Ors., MANU/GJ/0219/2017; 2. T. Shankar Prasad Vs. State of A. P., (2004) 3 SCC 753 ; and 3. Obulapuram Mining Company Pvt. Ltd. and Ors. Vs. Joint Director, Directorate of Enforcement, Government of India and Ors., MANU/KA/0545/2017. 142. Sh. K. Shanmugasundaram, learned Sr. Advocate for M. K. Dayalu, P. Amirtham and Kalaignar TV (P) Limited, invited my attention to the following case law: 1. Jafar Mohammed Hasanfatta and Ors. Vs. Deputy Director and Ors., R/CR. RA/926/2016 (Gujarat High Court); 2. Ajanta Merchants Pvt. Ltd. Vs. Directorate of Enforcement, 2015 SCC OnLine Del 8659; 3. Obul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Vs. T. Abdul Razak etc., 1996 SCC (4) 708; 8. Chirag Harendrakumar Parikh Vs. State of Gujarat, R./CR. MA/17326/2015 (Gujarat High Court); 9. Commissioner of Income Tax, Karnataka Vs. Sterling Foods, Mangalore, (SC), DOD 15.04.1999; 10. Shanti Devi Vs. Union of India and Ors., 73 (1998) DLT 477; and 11. Attorney General for India Vs. Amratlal Prajivandas, 1994 SCC (5) 54. 145. Sh. Manu Sharma, learned Advocate for A. Raja, invited my attention to the following case law: 1. Shaikh Zahid Mukhtar Vs. State of Maharashtra and Ors., 2016 SCC OnLine Bom 2600; 2. Kali Ram Vs. State of Himachal Pradesh, (1973) 2 SCC 808; 3. Babu Vs. State of Kerala, (2010) 9 SCC 189; 4. Haricharan Kurmi and Anr. Vs. State of Bihar, AIR 1964 SC 1184; 5. Suresh Budharmal Kalani Vs. State of Maharashtra, (1998) 7 SCC 337; and 6. State of Delhi Vs. Shri Ram Lohia, 1960 CriLJ 679. 146. Sh. Vijay Aggarwal, learned Advocate for Shahid Usman Balwa, Asif Balwa, Rajiv Agarwal, Kusegaon Realty (P) Limited, Dynamix Realty, DB Realty Limited and Mystical Construction (P) Limited (earlier known as Nihar Constructions (P) Limited), invited my attention to the following case law: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. State of Tamil Nadu, (2013) 16 SCC 31; 31. Nooraga Vs. State of Punjab and Another, 2008 [3] JCC [Narcotics] 135; 32. State of Gujarat Vs. Shyamlal Mohanlal Choksi, AIR 1963 Gujarat 178; 33. Amin Shariff Vs. Emperor, AIR 1934 Cal 580; 34. Nanoo Sheikh Ahmed Vs. Emperor, AIR 1927 Bom 4; 35. Vanamala Jagadeswaraiah and Another Vs. Dy. Commissioner, Customs Central Excise, Hyderabad, 2001 CriLJ 1590; 36. Harichand Kurmi and Another Vs. State of Bihar, AIR 1964 SC 1184; 37. Gurucharan Singh Vs. Union of India and Others, WP (Crl) 307/2016 (DHC); 38. Rakesh Manekchand Kothari Vs. Union of India, Special Criminal Application (Habeas Corpus) No. 4247 of 2015; 39. Vijay Madan Lal Choudhary and Others Vs. Union of India and Others, 2016 [3] MPLJ 664; 40. Kanshi Ram Vs. State, 86 (2000) DLT 609; 41. Surinder Kumar and Others Vs. State, 64 (1996) DLT 620; 42. Ajit Singh Vs. State, 39 (1989) DLT 468; 43. State of West Bengal and Others Vs. Swapan Kumar Guha and Others, (1982) 1 SCC 561; 44. Sakiri Vasu Vs. State of U. P. and Others, (2008) 2 SCC 409; 45. H. N. Rishbud and Inder Singh Vs. State of Delhi, AIR 1955 SC 196; 46. Ritesh Sinha Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CBI, 2011 SCC OnLine Del 5501; 15. B. Rama Raju Vs. Union of India and others, 2011 SCC OnLine AP 152; 16. M. Shobana Vs. The Assistant Director, Directorate of Enforcement, Government of India, 2013 (4) MLJ (Cri) 286; 17. Radha Mohan Lakhotia Vs. The Deputy Director, PMLA, 2010 SCC OnLine Bom 1116; 18. G. Srinivasan Vs. The Chairperson, Adjudicating Authority, PMLA, (2012) 1 MLJ 419; 19. Gautam Kundu Vs. Directorate of Enforcement, (2015) 16 SCC 1; 20. Anand Chauhan Vs. Directorate of Enforcement, 2017 SCC OnLine Del 7790; 21. Karam Singh others Vs. Union of India others, 2015 SCC OnLine P H 19739; 22. Hari Narayan Rai Vs. Union of India and others, 2010 SCC OnLine Jhar 1066; 23. A. K. Samsuddin Vs. Union of India and others, 2016 SCC OnLine Ker 24144; 24. Om Prakash Daulat Ram Nogaja Vs. Deputy Director, ED, First Appeal No. 967 of 2010, Bombay HC, dated 29 th September 2011; 25. Ram Krishna Bedu Rane Vs. State of Maharashtra, (1973) 1 SCC 366; 26. R. Janakiraman Vs. State, represented by Inspector of Police, CBI, (2006) 1 SCC 697; 27. Obulapuram Mining Company Pvt. Ltd and others Vs. Joint Director, Directorate of Enforcement, Writ Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Schedule to this Act 155. Section 2(1)(y) defines scheduled offence as under: 'scheduled offence' means (i) the offences specified under Part A of the Schedule; or (ii) the offences specified under Part B of the Schedule if the total value involved in such offences is thirty lakh rupees or more; or (iii) the offences specified under Part C of the Schedule 156. Section 3 defines the offence of money laundering as under: Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money laundering. 157. Section 4 provides punishment for moneylaundering and reads as under: Whoever commits the offence of money laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine. ................................................................................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia, MANU/TN/1994/2013, Hon'ble High Court of Madras observed in paragraphs 28 to 32 as under: 28. From the aforesaid definition of 'Offence of Money Laundering' mentioned in Section 3, the terms 'Money Laundering' can be said to be any process or activity connected with the proceeds of crime and projecting or claiming proceeds of crime as an untainted property. In plain language, it can safely be stated that 'Money Laundering' is projection of the proceeds of crime as an untainted property. 29. Also that, the words 'Proceeds of Crime' are defined under Section 2(u) of the Act. 'Proceeds of Crime' means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property. 30. The 'Offence of Money Laundering' relates to proceeds of crime derived from a scheduled offence. Scheduled Offences are mentioned under Part A of the schedule of the Prevention of Money Laundering Act, 2002 and (2) for offences specified under Part C of the Schedule viz., having cross border implications etc. 31. Indeed, the 'Offence of Money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STPL by A. Raja. These actions of A. Raja constitute criminal acts under the provisions of IPC and PC Act as stated in the charge sheets filed by the CBI. The individuals and the firms/ companies involved in the transfer of ₹ 200 crore are inter connected. 68. It is revealed in the investigation that, simultaneously, a sum of ₹ 200 crore was arranged by the owners and controllers of STPL and transferred the same to KTV, using various companies as carriers. The amount of ₹ 200 crore is the illegal gratification in lieu of allotment of UAS licence to STPL by A. Raja and others, as revealed in the charge sheet filed by the CBI. 165. Perusal of these two paragraphs reveal that alleged proceeds of crime were generated for the favours allegedly shown by Sh. A. Raja to STPL in the matter of grant of thirteen UAS licences. Thus, the entire case hinges upon proceeds of crime of ₹ 200 crore, which were generated when DB Group paid an illegal gratification of ₹ 200 crore to Sh. A. Raja, which was parked in Kalaignar TV (P) Limited. 166. However, vide my separate judgment dated today, in the case of scheduled offence titled CBI Vs. A. Raja and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it. I may add that the prosecution argued that even in case of acquittal, under Clause 6 referred to above, Special Court is empowered to confiscate the property, as the word used in the clause is finds and not acquittal . It is the case of the prosecution that use of word finds in contrast to acquittal in the clause gives power to the Court to order confiscation of the attached property, even in case of acquittal of accused. However, I do not find any merit in the submission as word find refers to a conclusive decision of not guilty, amounting to acquittal of the accused. For ready reference, I may note that Section 248 of CrPC, heading of which is Acquittal or Conviction also uses the words finds the accused not guilty, he shall record an order of acquittal . Thus, the word finds refers to conclusive decision of acquittal or conviction and not something in between which empowers Court to order confiscation of property even in case of acquittal. The submission of the prosecution is contrary to law. 172. In terms of the above legal position, properties attached in the instant case by the Enforcement Directorate, are ordered to be released to the persons fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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