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2018 (3) TMI 1065 - AT - Money LaunderingOffence under PMLA - Provisional Attachment Order - Held that - During the course of the hearing, the learned counsel appearing on behalf of the respondent has stated that as far as the calculation of the Judgement of property is concerned this Appellate Tribunal has to give the final findings and in case the allegations against the appellants are proved in the complaint under the scheduled offence in Prevention of Money Laundering Act then the movable and immovable property would be vested with the state. In case we go through the Judgement of Hyderabad High Court 2016 (3) TMI 1289 - ANDHRA PRADESH HIGH COURT which is sub-judice before the Hon ble Supreme Court, it would not be appropriate for us to give the final findings about the merits of the case as well as the clarification of the movable and immovable properties. Under these circumstances, we are of the view that without going into the merit of the appeals and without expressing opinion about the rival submissions of the parties on merit, it would be appropriate to await the decision of the Supreme Court. After the said decision, an appropriate order would be passed
Issues Involved:
1. Confirmation of Provisional Attachment Order (PAO) 2. Allegations of quid pro quo and illegal gratification 3. Validity and genuineness of investments 4. Double attachment of properties 5. Applicability of penal provisions under PMLA 6. Pending Supreme Court decision Issue-wise Detailed Analysis: 1. Confirmation of Provisional Attachment Order (PAO): The appeals were filed against the order dated 04.08.2015 by the Adjudicating Authority confirming the attachments made vide Provisional Attachment Order No. 04/2015 dated 25.02.2015. The attachments were related to various properties and shares worth ?232,27,55,806/- in connection with ECIR/09/HZO/2011 and CC No. 24 of 2013 before the Special Judge for CBI Cases, Hyderabad. 2. Allegations of Quid Pro Quo and Illegal Gratification: Shri N. Srinivasan, Managing Director of M/s. The India Cements Limited, was alleged to have invested ?140,32,63,855/- in the group companies of Shri Y.S. Jagan Mohan Reddy in exchange for undue favors from the Government of Andhra Pradesh. These favors included allocation of additional water, extension of land lease, and priority in cement supply under the 'Indiramma Scheme'. The investments were purportedly made to solicit bribes in the form of equity participation. 3. Validity and Genuineness of Investments: The appellants argued that the investments made into M/s Bharati Cements Corporation Pvt. Ltd., M/s Jagati Publications Ltd, and M/s Carmel Asia Holdings Pvt Ltd were genuine and made in the course of bona fide commercial transactions. They contended that the allegations of undervaluation, overvaluation, and ante-dating of valuation reports were baseless. The premium for the shares was justified based on sound commercial analysis and market conditions. 4. Double Attachment of Properties: The appellants contended that the attachment of properties constituted double attachment. For instance, the amount of ?95,32,63,855/- invested by India Cements in Bharathi Cements was also held to be 'proceeds of crime' and attached, despite the sale proceeds of ?121,08,26,678/- arising out of shares of Bharathi Cement by India Cements Limited to PARFICIM being held as proceeds of crime and attached separately. 5. Applicability of Penal Provisions under PMLA: The appellants submitted that the penal provisions alleged in the charge sheet were not included in the Schedule to the PMLA during the relevant time. These provisions were included only by way of amendment to PMLA vide Act No. 21 of 2009 w.e.f. 01.06.2009. Thus, no "scheduled offence" was committed, and no 'proceeds of crime' were generated for the purposes of PMLA. 6. Pending Supreme Court Decision: The Hon'ble High Court of Hyderabad had quashed the proceedings against the petitioner/A3-Sri N. Srinivasan in CC No. 24 of 2013. The CBI challenged this judgment by filing a Special Leave to Appeal (Crl.) No. 7621/2016 in the Supreme Court of India, which was still pending. The Appellate Tribunal decided to await the Supreme Court's decision before passing an appropriate order on the appeals. Conclusion: The Appellate Tribunal decided to adjourn the matters to 09.07.2018, awaiting the decision of the Apex Court. The Tribunal refrained from expressing any opinion on the merits of the case or the rival submissions of the parties, pending the Supreme Court's judgment.
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