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TMI Blog2022 (3) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of contest made by ED will be discussed afterwards. 3. It is contention of the applicant that, he was remanded to judicial custody on 22.02.2021. This Court took cognizance of the complaint on 30.03.2021. Eversince till date he has been in judicial custody, but was released on temporary bail for some period. In this way, he contended to allow the application as he is nowhere involved in the offence alleged against him nor anyway connected with Proceeds of Crime. He has been falsely implicated in the case. He has a very good background. He is an actor and has unblemished record. Also he is businessman having his own companies. He was never convicted in any offence etc. 4. Heard at length arguments of Ld. Sr. Counsel Mr. Abad Ponda for the applicant and Ld. S.P.P. Mr. Hiten Venegaonkar in number of sessions. Both of them relied on voluminous documents. Following points arise for my determination. I am recording following findings thereon for the reasons discussed below :- POINTS FINDINGS 1. On opposing the application by the Ld. S.P.P. whether the applicant has satisfied that, there are reasonable grounds for believing that he is not guilty of such offence and that, he is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 before the Hon'ble High Court and challenged the order dt.23.06.2021 passed by the then Court. Thereafter, he preferred a Special (Crl) No.4482/2021 before the Hon'ble Supreme Court challenging the order dt.05.05.2021 passed by the Hon'ble High Court in Cr. Application No.127/2021. Vide order dt.02.07.2021 the Hon'ble Supreme Court extended the temporary bail granted to the applicant by the Hon'ble High Court until further orders. Applicant then filed application (Exh.72) and sought withdrawal of the bail application (Exh.12), and the same was allowed. 7. The Hon'ble Supreme Court pleased to continue the temporary bail for a period of four months. In the meantime the applicant withdrew interim application No.2311/2021 from the Hon'ble High Court for challenging the order passed by this Court on 23.06.2021. By order dt.21.12.2021 the Hon'ble High Court allowed the applicant to withdraw the Interim Application No.2311/2021 in Cr. Application No.127/2021. Thereafter, applicant challenged the order dt.23.06.2021 passed by this Court regarding maintainability, before the Hon'ble High Court vide Writ Petition No.6732/2021. The Hon'ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y score of 12/25 (Corads-6), small fat containing paraumbilical hernia, patchy fibrotic inflitates with illdefined ground glass opacities noted in bilateral long fields (Corads-6) and for the treatment of the same the applicant was on injectable antibiotics, anti-viral indications and low dose steroids. He has been admitted to Lilavati Hospital, Mumbai for the said treatment, wherein he was in the Critical Care Unit and underwent 72 hours Holter Monitoring which interalia showed three episodes of Tachycardia with Ectopic Ventricular Beats. Ultimately the doctors suggested that, the applicant should undergo a detailed Coronary Angiography. c Statement of Mr. Babulal Varma recorded on 29.01.2021 and 30.01.2021 makes it clear that, the loan amount of Rs. 410 Crores received from YES Bank was completely used for different purposes as stated by Mr. Babulal Varma in his statement dt.29.01.2021 and 30.01.2021 (Vol.-II, Exh.9, RUD pages 97- 113). These statements of Babulal Varma are further confirmed by Mr. Kamal Kishore Gupta in his statement dt.29.01.2021 and 30.01.2021 (Vol.II, Exh.11, RUD pages 188-189). d Utilization of Rs. 410 Crores is explained by Surana Developers (Wadala LLP) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of proceeds of crime from any such offence. n The provision of reverse burden of proof under Sec.24 of PML Act can only be invoked once the initial burden is discharged by the prosecution. o Prosecution has to first prove the 'scheduled offence' and generation of 'proceeds of crime', therefrom which the prosecution has completely failed to prove in the present case. p The only allegation in the FIR with respect to the loan of Rs. 410 Crore taken from YES Bank by Surana Developers (Wadala LLP) is that, the same was not utilized for the purposes for which it was granted. The very reading of the FIR apparently indicates that, no specific allegation was made in the FIR. If the terms of contract between YES Bank, Surana Developers (Wadala LLP) were not followed, it can be at the most a case of breach of contract; which is of civil nature and cannot be a subject matter of criminal case. Even the allegations in the FIR are considered as it is, there is nothing to show that, any of the expenses made by Surana Developers (Wadala LLP) out of the said amount Rs. 410 Crores were made for any unauthorized purpose. q Case of ED itself indicates that, Rs. 410 Crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o whom the said payments were made are clearly identifiable in the said list, which clearly demonstrates that those funds were never mixed up with other funds of Omkar Group. Therefore, question of these amounts ever coming in the hands of the applicant does not arise. y Large funds have gone out of those amounts to entities such as L & T, Blue Star, Government and Public Sector Undertakings and such other reputed entities. A look at the nature of expenditure and entities who received those funds would show clearly that, all these payments were for business purpose and there is no possibility of any diversion, nor is there any allegation nor there can be any possibility of fund diversion for unauthorized purposes, much less to the applicant. z In any case, it is apparent that the funds received by the applicant are entirely from sources having no connection with the said sum of Rs. 410 Crores received from Yes Bank. Hence, there is no case made out of receipt of any alleged proceeds of crime by the applicant. Therefore, question of his involvement in money laundering offence does not arise. These are the main grounds claimed by the applicant for grant of bail. CONTENTION O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition No.6332/2021). The said direction in paragraph No.5 is as follows, "5. Needless to state that if the petitioner files a fresh bail application before the learned Special Judge (P.M.L.A.) alongwith a fresh purshis, the learned Special Judge to decide the same, on its own merits, uninfluenced by its earlier order dated 23rd June, 2021. All contentions of the parties are kept open. Parties are at liberty to file compilation of judgments before the learned Judge, on which they propose to rely." Admittedly, complainant ED has not challenged this order of the Hon'ble High Court before the Hon'ble Supreme Court. It is, therefore, necessary that past orders if any cannot influence this application and in order to examine the merits, test of applicability of twin conditions under Sec.45 (1) (i) and (ii) of PML Act is required to be examined. Certainly applicability of twin conditions and attracting rigours thereof is based on prima-facie establishing the foundational facts by complainant-ED. This is compass of inquiry of this application. Therefore, after establishing foundational facts and on giving an opportunity to the learned S.P.P. there should be satisfaction that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not utilized for the purpose for which it was granted, but the same was siphoned off and projected as untainted. Therefore, this amount Rs. 410 Crores is Proceeds of Crime (POC). Present applicant has received an amount of Rs. 80 Crores from ORDPL, which is part of Proceeds of Crime and used it for the personal business expenses. This Rs. 80 Crores was transferred from the accounts of ORDPL, out of which part amount was transferred into the account of Sachin Joshi and part amount was transferred into the account of Viking Group of companies, in which the applicant was Director. An amount of Rs. 48 Crores approximately was transferred for the purpose of investment and an amount of Rs. 31 Crores (approx.) was transferred for the purpose of facilitation of fee for evacuation of tenements, settlement of non-eligible tenants, resettlement in permanent accommodation, brokerage etc. In this way, ED contended that the role attributed to the applicant is in respect of placement and layering of proceeds of crime (POC). FOUNDATIONAL FACTS TO BE SHOWN BY ED PRIMA FACIE. 16. Applicant has specifically contended that, he has not received a single penny out of POC i.e Rs. 80 Crores (approx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . and then (c) From the said Group companies of ORDPL in the account of applicant Sachin Joshi and his group companies. 19. Basically initial burden is on ED to justify their contention alleged in the complaint and Provisional Attachment Order (PAO). Therefore, it is obligatory on the part of ED to prima-facie show bank entries relating to flow of money, its source and roots. Mere vague statements that Rs. 410 Crores loan amount given by YES Bank is POC and Rs. 80 Crores thereof gone to the account of applicant Sachin Joshi are not sufficient as bank entries are the best evidence. The complaint contains only flow charts without details of bank entries corresponding the amounts mentioned therefor. Whatever contended in the complaint has to be prima-facie justified with the help of bank entries disclosing the incoming and outgoing flow of tainted money i.e. POC Rs. 410/Rs. 80 Crores. In view of twin conditions under Sec.45 (1)(ii) of PML Act, whenever bail application is to be decided, there should be a subjective satisfaction of the Court for arriving at a concrete conclusion as to whether there are reasonable grounds for believing that applicant is not guilty of such offence and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OU dated 7th Nov, 2015; Rs. 18,44,21,151,/- towards procurement of materials such as steel, marbles and other building material used in construction of 1973 Worli sale building and Worli Mahalaxmi CHS SRA Rehab building along with these major expenditure, he also explained the details of various other expenditure. He further stated that all the expenditure out of the term loan of Rs. 410 Crores were incurred towards the construction of 1974 Worli sale building and Worli Mahalaxmi CHS SRA Rehab building. It is therefore, clear that whole term loan of Rs. 410 Crore (POC) disbursed by YES Bank was utilized for two projects - 1973 Worli Sale Building and Worli Mahalaxmi CHS SRA Rehab building. Admittedly, case of complainant-ED in respect of applicant Sachin Joshi is that, he has not played any role in generation of POC. Admittedly, name of Sachin Joshi is not even mentioned in the FIR of schedule offence lodged at Aurangabad. The role attributed to Sachin Joshi is that, he is a recipient of POC and not a generator thereof. It is also necessary for ED to show that, whatever amounts received by applicant Sachin Joshi were received with knowledge that the said amounts pertain to POC Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk Ltd. In 5 tranches, the details of the same are shown in Table No.1 below :- Table No.1 Sr. No Bank Account Number Name of the Account Holder Date of Transaction Amount (in Rs.) 1 005863700000044 Surana Developers, Wadala 03.08.2016 1100000000 2 5863700000802 Surana Developers, Wadala 31.08.2016 150000000 3 5863700000802 Surana Developers, Wadala 30.09.2016 1000000000 4 5863700000802 Surana Developers, Wadala 30.12.2016 1000000000 5 5863700000802 Surana Developers, Wadala 21.03.2017 850000000 5.2 Immediately after the disbursal of the funds of Rs. 410 Crores, an amount of Rs. 310 Crores was transferred into the Bank Account No.1000180200001099 of M/s ORDPL held with Yes Bank Ltd., and an amount of Rs. 100 Crores was transferred into the Bank Account No.1000181300002334 of M/s ORDPL held with Yes Bank Ltd. The details of the transfer of Rs. 410 Crores from the accounts of M/s Surana Developers Wadala, LLP into the account of M/s ORDPL are shown in Table No.2 below :- Table No.2 Sr. No Date of transaction Funds transferred from Bank A/c No. of M/s Surana Developers Wadala, LLP Funds transferred to Bank A/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Rock Spaces and remaining from ORDPL. * Rs. 46,40,000 (Viking Ventures) received from ORDPL. * Rs. 2,60,00,000/- (Viking Building) received from ORDPL. Thus, it is clear that, applicant Sachin Joshi received Rs. 5,59,78,000 + Rs. 19,38,40,000 + Rs. 8,56,00,000 + Rs. 15,26,70,000 + Rs. 6,40,00,000 + Rs. 46,40,000 + Rs. 2,60,00,000 = Total Rs. 58,27,28,000. 23. Flow Chart (Annexure-A3) at page No.81 of the complaint indicates following details :- "Applicant Sachin Joshi in his Axis Bank Account received Rs. 11,60,80,000 from ORDPL, Rs. 1,08,00,000 from ERA Realtors, Rs. 1,18,80,000 from Accord Builders and Rs. 9,70,75,000 from Shri Nidhi Concept Realtors." These are ORDPL Group companis. In this way, applicant Sachin Joshi received Rs. 11,60,80,000 + Rs. 1,08,00,000 + Rs. 1,18,80,000 + Rs. 9,70,75,000 = Toral Rs. 23,58,35,000 from ORDPL, ERA Realtors, Accord Builders and Shri Nidhi Concept Realtors. The Total of amounts shown in the Flow Chart (Annexure A2 and Annexure A3) of the complaint, thus comes Rs. 58,27,28,000 + Rs. 23,58,35,000 = Total Rs. 81,85,63,000. In this way approximate Rs. 80 Crores out of Rs. 410 Crores of Proceeds of Crime came to the applicant Sachin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries that, all that what applicant had received from ORDPL is from ICICI and other banks, but not a penny from the YES Bank. Therefore, prima-facie it is glaringly evident that alleged monies (POC) transferred to the applicant Sachin from their criminal origin i.e Yes Bank by moving them through a series of financial transactions in order to make harder to establish a connection between them, which is called as layering, is absent in the case of prosecution as alleged in the complaint and PAO. 25. It is necessary to note that, initial burden in respect of foundational facts is on the complainant-ED that, whatever received by the applicant Sachin Joshi is a part of proceeds of crime. There is no dispute that, YES Bank disbursed the first trench of Term Loan (Rs. 410 Crores) to Surana Developers Wadala LLP on 03.08.2016. Prior to 03.08.2016, neither there was any loan from YES Bank nor any proceeds of crime was generated. Even complainant ED admits this fact and situation. Alleged Generation of Proceeds of Crime by way of Term Loan for the first time took place on 03.08.2016. There are two entries showing transfer of money from Omkar Realtors to applicant Sachin. First entry dt. 30. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted by ED Date Amount(Rs.) 1 3 First 26.04.2016 82,02,081 2 6 First 02.08.2016 5,0 ,0 ,0 0 5,82,02,081 3 27 1 26.05.2016 52,25,0 0 4 27 2 26.05.2016 1,56,75,0 0 5 27 3 03.06.2016 1,04,50,0 0 6 27 4 20.06.2016 38,50,0 0 7 27 5 28.06.2016 5 ,0 ,0 0 8 27 6 30.06.2016 1 ,0 ,0 0 9 27 7 25.07.2016 3,27,75,0 0 10 27 8 26.07.2016 1,12,25,0 0 11 27 9 27.07.2016 58,75,0 0 9,16,75,0 0 12 5 Last 30.04.2016 1,67,0 ,0 0 Total 16,65,7 ,081 At the cost of repetition the date of first trench of disbursement of Term Loan Rs. 410 Crores (POC) is 03.08.2016. All the above amounts of Rs. 16,65,77,081/- are claimed in the complaint and PAO as proceeds of crime, when POC was not even conceived. All this ultimately indicates the failure of ED to show that, such amounts and all other amounts which the applicant received from ORDPL are part of layering, integration, (the fourth stage) in the process of money laundering. In this background it will be far fetched to hold that applicant Sachin Joshi was knowing and quite aware that Babulal Varma, Kamal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paper to facilitate layering and integration of the POC Rs. 410/Rs. 80 Crores as alleged in the complaint. 30. Ld. S.P.P Mr. Venegaonkar pointed out statement of Mr. Sanjay Sethi of M/s. Viking Group of companies recorded under Sec.50 (1) and (2) of PML Act on 29.01.2021 and 30.01.2021, wherein he was asked regarding the purpose of transfer of Rs. 87 Crores funds form M/s ORDPL into the accounts of Sachin Joshi and his Viking Group of Companies. He stated that, part of the funds have come as investment and with respect of remaining part, wherein bills / invoices mention about rendering of SRA related services, he stated that their companies are not into any SRA related activities and no such services are given by Mr. Sachin Joshi. 31. Mr. Venegaonkar further placed reliance on the statement of Mr. Mayank Shrivastava, General Manager - ORDPL recorded on 19.02.2021 who looks after all SRA related works of ORDPL. He stated that, no such name or brand of Mr. Sachin Joshi is or was ever used in Omakr SRA works and he has never heard any of such name or brand nor there is any such trend in SRA projects of using brand name of any celebrity for clearing or rehabilitating the slums. I c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder to earn the said Trust, associate any known entity with the project in order to convince the slum dwellers of the trustworthiness. Therefore, face of the applicant being a film actor having successful track record in real estate business, trusted by the common men, has been used. I carefully examined this argument. Considering the huge record of transactions filed with the application, prima-facie indicates that there is substance in the argument of Ld. Sr. Counsel Mr. Ponda. It is also prima-facie justifying that even though ED alleged companies of applicant as 'paper companies', yet the same does not appear prima-facie probable. 34. I have already made exhaustive discussion how money trail from ORDPL YES Bank A/c No. 1000180200001099 to ORDPL ICICI Bank is not prima-facie evident from the complaint. Even there is nothing to show that, monies were transferred from ORDPL YES Bank A/c No. 1000181300002334 into the ICICI Bank accounts M/s ERA Realtors, Accord Builders, M/s. Shri Nidhi, M/s Rock Spaces and M/s. Roshni Developers. Therefore, material two steps of layering and integration are prima-facie missing from the allegations in the complaint and materials supportin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rushed aside easily." Somewhat similar situation is here in this case, wherein ED alleged that, Rs. 80 Crores out of POC Rs. 410 Crores went to the applicant. But there is absolutely no documentary evidence to indicate this travel from ORDPL YES Bank A/c No. 1000180200001099 to ORDPL ICICI bank and further to other group companies of ORDPL having their ICICI bank accounts and at last reaching the same to Sachin Joshi and his group companies. Unless this basic foundational trail is established the applicant cannot be held responsible for any placement, layering or integration in the process of money laundering. 37. Principal object of the PML Act is 'Confiscation' of proceeds of crime. In the present case, ED has already attached properties of the applicant worth Rs. 80 Crores. Hence, part of the object has been already fulfilled. Further everything has been documented in eight huge volumes with the complaint. Co-accused are behind bars since more than a year. There is no certainty that the trial will begin and conclude in near future. In this background and in view of above detailed discussion, I hold that there are reasonable grounds for believing that applicant is not gu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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