TMI Blog2022 (3) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... i) and (ii) of PML Act. Applicant has various immovable properties, establishments and companies in India. If certain conditions are imposed on him, he will not flee from India nor would commit any offence while on bail. Applicant Mr. Sachin Joshi S/o Jagdish Mohanlal Joshi be released on bail, by executing PR bond of ₹ 30,00,000/- and one or two sureties of like amount, and on conditions imposed - application allowed. - ORDER BELOW EXH.82 (BAIL APPLICATION) IN PMLA SPL. CASE NO.377 OF 2021 - - - Dated:- 7-3-2022 - M. G. DESHPANDE, SPECIAL JUDGE UNDER PML ACT, (C.R.No.16) Mr. Abad Ponda, Ld. Sr. Counsel @ Ld. Adv. Dr. Sujay Kantawala @ Ld. Adv. Mr. Subhash Jadhav for the applicant. Mr. Hiten Venegaonkar @ Mrs. Kavita Patil, Ld. Spl. P. Ps. ORDER 1. Applicant Sachin Joshi is accused No.5 in this case. He is Director of his various companies mentioned in the title of the complaint (Exh.1). ECIR/MBZO-II/20/2020 is recorded against him. He is praying to release on bail under Ss. 167 (2) and 439 of the Cr.P.C. r.w. Ss. 45, 46 and 65 of the Prevention of Money Laundering Act, 2002 (for short 'PML Act'). 2. Directorate of Enforcement (for sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and officials of ORDPL. Closure report (summary) dt.10.02.2021 was filed by the Officials concerned of the said police station. Informant of FIR No.109/2020 also filed his consent affidavit dt.12.02.2021 and the same was accepted by the Ld. III J.M.F.C. Court, Aurangabad. On the same day i.e. 12.02.2021 the Court accepted the closure Report (summary). 6. ECIR No.MBZO-II-20/2020 was registered on the basis of FIR No.109/2020 after 6-8 months of the said FIR. Process was issued against accused persons vide order dt.30.03.2021. In the meantime, the applicant filed Bail Application No.183/2021. The Court called medical reports of the applicant from the Jail Authority. On 03.04.2021 the Court (my Ld. Predecessor) granted bail to the applicant on medical grounds. However, the then Ld. Court kept implementation of the bail order in abeyance till 09.04.2021. ED challenged the said order dt.03.04.2021 granting bail to the applicant before the Hon'ble Bombay High Court in Cr. Application No.127/2021. On 05.05.2021 temporary bail for two months was granted to the applicant by the Hon'ble High Court and he was released from Arthur Road Jail on 07.05.2021. Thereafter he took treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... longwith Purshis (Exh.82B) is maintainable, but hearing thereof on merits for the remainder (i.e. argument of Ld. S.P.P. Mr. Hiten Venegaonkar) is deferred to dt. 27.01.2022 till the applicant makes compliance of the order of the Hon'ble Supreme Court, whichever is earlier. 9. Applicant again approached the Hon'ble Supreme Court vide Misc. Application No.69/2022 in SLP (Crl.) No.4482/2022, seeking extension of interim/temporary bail granted by the Hon'ble Supreme Court vide order dt.28.09.2021. The Hon'ble Supreme Court vide order dt.28.01.2022 declined to allow the said application for extension of interim bail. In this way, this part-heard application (Exh.82) was to be continued only after the applicant complies the order of the Hon'ble Supreme Court. In this background the applicant surrendered himself before the Jail Authority. Thereafter, Ld. S.P.P Mr. Venegaonkar began his argument and concluded the same. This is in short the history of this bail application and the facts behind it. 10. GROUNDS FOR THIS APPLICATION a. One of the grounds relates to medical issues of the applicant as he suffers from Anxiety, Asthma, Acid Reflux, Slip Disk a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct is evident from the statements of Babulal Varma, Kamal Kishore Gupta and Mr. Satya Mohapatra recorded on 29.01.2021 and 30.01.2021, and dt.26.02.2021 respectively. i In the FIR No.109/2020 registered with City Chowk Police Station, Aurangabad, there is absolutely no whisper about the applicant nor he is connected with the said FIR in any manner nor he has committed any offenec under Sec.420,406 of I.P.C. as alleged therein. j Applicant's arrest was a complete malafide and arbitrary action of respondent No.1 for the said ECIR, when no predicate/scheduled offence exists wherein the applicant is named as an accused or in any manner involved in the alleged dispute between the said first informant and accused persons named in the said FIR No.109/2020. k Applicant is absolutely not concerned with the transactions between the group companies of Omkar and group companies of applicant have nothing to do with the FIR No.109/2020. l Prosecution must clearly specify as to which scheduled offence was committed and substantiate the same with requisite evidence. Prosecution must prove that, the said scheduled offence as specified and proved resulted in generation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDPL are genuine business transactions as per valid agreements entered into between the parties being the terms sheet dt.15.03.2019. t Applicant and his group companies have paid GST of ₹ 4,85,45,000/- and TDS of ₹ 2,94,50,000/- in respect of the monies received from Omkar Group. u All the representatives from YES Bank are made witnesses and not a single person from YES bank has been made an accused, therefore it cannot be said that the bank is complicit and involved with Omkar Group. v Alleged sum of approximately ₹ 87 Crores that is received by the applicant and his group companies from the group companies of M/s ORDPL, has nothing to do with YES Bank loan of ₹ 410 Crores, which is evident from the fact that, some of the amounts were received by the applicant before the disbursement of YES Bank loan amounts to ORDPL. Those amounts, thus, by no stretch of imagination can be out of the alleged Proceeds Of Crime. The first three disbursements were made on 04.08.2016 viz. A) Yes Bank (Processing Fees -₹ 12,60,60,000/-. B) Larsen Toubro Ltd. (Civil and Infra Works ₹ 14,00,00,000/- and C) UC Metals (Civil and Infra Works ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal No.4482/2021. On 28.01.2022 the Hon'ble Supreme Court disposed of the same observing as follows, This application has been filed seeking an extension of interim/temporary bail for a period of six months in view of the serious ill-health of the applicant. Mr.Mukul Rohatgi, learned senior counsel, referred a medical certificate issued by the Lilavati Hospital and Research Centre on 10.01.2022 and argued that the applicant is suffering from Acute Coronary Syndrome, a precursor towards the risk of a sudden cardiac death apart from various other ailments. He submitted that the applicant is in position to appear before the Court. He requests this Court to extend the interim bail granted for a period of at least four weeks and direct the trial court to consider the application for bail without insisting on surrender by the applicant. In the facts and circumstances of this case, we are not inclined to allow the application for extension of interim / temporary bail granted by the order dt.28.09.2021. In this way, the Hon'ble Supreme Court rejected the medical ground of the applicant. Same medical ground is also made for this application when the matter was pend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Sec.45 (1) of PML Act attract in bail application. It was also used to be argued on accused side that, amendment after Nikesh Tarachand Shah neither revive nor resurrect the twin conditions under Sec.45 (1) of PML Act. Even the same situation was there when this application was filed. Recently in the case of Ajay Kumar Vs. Directorate of Enforcement, (2022) SCC OnLine Bom 196 Hon'ble Division Bench of the Hon'ble Bombay High Court has held that, the twin conditions mentioned in Sec.45 (1) of the PML Act would revive and operate by virtue of Amendment Act which is on date in force. Therefore, the Court has to examine the application as per the twin conditions under Sec.45 (1) of PML Act. Ld. Sr. Counsel Mr. Ponda fairly submitted that, twin conditions have been revived and he will restrict his argument and submissions on the basis thereof and not on various citations he has relied on while filing this application indicating non existence of twin conditions. However, he submitted that even in order to attract rigours, it is for the complainant-ED to show that the present applicant is directly or indirectly involved in any of the stages of the process of money laundering for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to justify their case, prima-facie burden is on ED to show that out of ₹ 410 Crores (POC) Sachin Joshi received a single rupee. He further submitted that, oral statements under Sec.50 of PML Act and the transactions mentioned therein, should be corroborated by the documents and account statements. This exercise can be done by actually comparing entries in various bank statements pertaining to the applicant Sachin Joshi and further comparing them with flow charts given in the complaint. According to ED money came from POC to the account of Sachin Joshi. ORDPL has many bank accounts as they have huge construction business and activities having dealings with various agencies. 18. Ld. Sr. Counsel Mr. Ponda further submitted that, whatever amounts Sachin Joshi had received, are through bank accounts of Omkar Group. Therefore, ED has to point out the trail of money firstly from the loan amount of ₹ 410 Crores to ₹ 80 Crores. Secondly from ₹ 80 Crores to various accounts of ORDPL (for ex. ICICI). Thirdly, from accounts of ERA Realtors, Accord Builders, Shri Nidhi, Rock Spaces and ORDPL to applicant Sachin Joshi. Bank statements have clear entries to show the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIFICALLY ALLEGED IN THE COMPLAINT. 20. Case pleaded by ED in their complaint plays an important role. It is their own case about generation of POC and its distribution based on statements under Sec.50 of PML Act, which they alleged on page No.15 paragraphs No.10.8 and 10.09. Same are reproduced below as ready reckoner. 10.8 The statement of Shri Babulal Varma was recorded on 29.01.2021 and 30.01.2021 (copy enclosed as Exhibit-9) under Section 50(2) and 50 (3) of PMLA, wherein he inter-alia explained the details of utilization of ₹ 410 Crores taken from Yes Bank, submitted by M/s Surana Developers LLP vide letter dated 29.01.2021 (copy enclosed as Exhibit-10). The details of which are as under:- Particulars Amount (Rs.) Expenditure incurred 397,60,13,661 Yes Bank Facility Fees Service Tax on Facility Set Up 12,60,00,000 Yes Bank Loan 410,20,13,661 10.9 Further, Shri Babulal Varma stated that the funds of ₹ 410 Crores have been used for Worli and clubbed schemes in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty money into the financial system amounting to placement thereof, which is one of the important steps in the process of money laundering. It is also necessary for ED to clarify and prima-facie show that, after placing such dirty money (₹ 410 Crores) the said POC were separated from their criminal origin by moving them through a series of financial transactions in order to make it harder to establish a connection between them, amounting to layering, the third important stage in the process of money laundering. Fourth and last stage the ED has to prima-facie show with the help of foundational facts alleged in the complaint coupled with relevant bank documents that, such generated, placed and layered proceeds were legitimately explained for the source of funds allowing them to be retained, invested or used to acquire goods or assets, amounting to Integration. So it is for the ED to prima-facie show that, the present applicant has role and he is part of these stages with knowledge that he is dealing with the POC directly or indirectly. 21. In order to examine this aspect, it is necessary to refer contention of ED in Provisional Attachment Order : PAO / MBZO-II/01/2022 dt. Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he transfer of ₹ 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/c No. of M/s ORDPL Amt (Rs. in Crores) 1 03.08.2016 005863700000044 1000180200001099 110 2 06.09.2016 5863700000802 1000180200001099 15 3 30.09.2016 5863700000802 1000181300002334 100 4 02.01.2017 5863700000802 1000180200001099 100 5 22.03.2017 5863700000802 1000180200001099 85 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is clear that, applicant Sachin Joshi received ₹ 5,59,78,000 + ₹ 19,38,40,000 + ₹ 8,56,00,000 + ₹ 15,26,70,000 + ₹ 6,40,00,000 + ₹ 46,40,000 + ₹ 2,60,00,000 = Total ₹ 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 ₹ 11,60,80,000 from ORDPL, ₹ 1,08,00,000 from ERA Realtors, ₹ 1,18,80,000 from Accord Builders and ₹ 9,70,75,000 from Shri Nidhi Concept Realtors. These are ORDPL Group companis. In this way, applicant Sachin Joshi received ₹ 11,60,80,000 + ₹ 1,08,00,000 + ₹ 1,18,80,000 + ₹ 9,70,75,000 = Toral ₹ 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 ₹ 58,27,28,000 + ₹ 23,58,35,000 = Total ₹ 81,85,63,000. In this way approximate ₹ 80 Crores out of ₹ 410 Crores of Proceeds of Crime came to the applicant Sachin Joshi, as alleged in the complaint and PAO, is the case of ED. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (₹ 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. 30.04.2016 in respect of ₹ 1,67,20,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Entry No. in Chart submitted 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erm Loan. Paragraph No.3.8, 10.9 in the complaint indicates that, even ED has also placed its reliance on their statements as such. 29. Complaint and documents clearly indicate that, the monies received from the group companies of M/s Omkar Realtors and Developers Pvt. Ltd. are as per the Term Sheet dt.15.03.2019 and Facilitator Agreement dt.01.04.2016. The said Term Sheet dt.15.03.2019 is at Exh.23 in Vol.IV of the documents filed with complaint. Facilitator Agreement dt.01.04.2016 is at Exh.24, Vol.IV. Careful reading of the Term Sheet indicates that the execution of definitive agreement had to take place after the total amount of ₹ 100 Crores was received by the applicant. Till date the applicant has received only ₹ 48,87,48,000/- under the said Term Sheet. Under the Facilitator Agreement, the applicant has received around ₹ 31,35,95,000/- because his name is lent to the SRA projects as a brand ambassador and for the uses of his name, goodwill, reputation and brand for the said projects. It is pertinent to note that, the applicant and his group companies have paid GST of ₹ 4,85,45,000/- and TDS of ₹ 2,94,50,000/- in respect of the monies he recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oration of the best evidence of all bank transactions referred above. 32. Basically burden of showing this foundational fact is on complainant-ED and the same is not explained with cogent documentary evidence in order to rebut and falsify whatever contended by Ld. Sr. Counsel Mr. Ponda on the strength of bank statements and dates of disbursements. 33. In the aforesaid background, submission on behalf of applicant appears convincing that, the applicant has a peculiar brand value in respect of real estate business. On one hand he is a known film star and on the other hand he has been involved in the real estate business in Mumbai, Goa, Pune and Jaipur for last more than 15 years and successfully completed large number of real estate projects including a four stars hotel in Mumbai, a five stars hotel in Goa, one commercial hotel building in Mumbai. He has also gotton statutory approvals for 1 Million square feet in Jaipur and 3 Million square feet in Pune, and as such he enjoys goodwill and brand value in the real estate business. Ld. Adv. Sr. Counsel Mr. Ponda further argued that, one of the most important factors in any Slum Rehabilitation Project (SRA) is convincing the slum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A/c No.074005001036 as well as ORDPL Group Companies' various accounts from where money had been transferred in the account of Sachin Joshi. Therefore, prima-facie it appears that, applicant is not involved directly or indirectly in dealing with proceeds of crime as defined under Sec.2 (1)(u) r.w. Sec. 3 of PML Act. Therefore, as argued by ld. Sr. Counsel Mr. Ponda, prima-facie it appears that, there are certain business transactions between the applicant, his group companies with ORDPL and their group companies. These transactions have absolutely no nexus with ₹ 410 Crores (Term Loan-POC). Bank entries relate to such other transaction having no nexus with POC. Hence, no prima-facie case of money laundering is made out against applicant Sachin Joshi. 36. Ld. Sr. Counsel Mr. Ponda placed his reliance on Satyam Computer Services Ltd. Vs. Directorate of Enforcement, (2018 SCC OnLine Hyd. 787), wherein it is held as, Assuming that the amount of ₹ 822/- Crores constituted the proceeds of crime, the same, even according to the impugned order, had gone out of the company in the form of salaries etc., and it has also mingled with other legitimate sources of incomes. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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