9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 12 - AT - Money LaunderingProvisional Attachment of Land - development of Ports - proceeds of crime - illegal gratification - main submissions of the Respondent was that the name of Matrix Enport Holdings Pvt. Ltd. was changed to Vanpic Projects Pvt. Ltd. without any involvement of Government of Ras al Khaimah ( GoRAK ), which was based on the board resolution dated 30.06.2008 - HELD THAT - From the impugned order as well as provisional attachment order and from the stand of respondent no. 1, it appears that the submissions are not correct as the allotment of the VANPIC Project was not to Mr. Nimmagadda Prasad, but, to Ras Al Khaimah, the sovereign Emirate of United Arab Emirates, which had engaged Mr. NimmagaddaPrasad as its Local Partner under the MOU and Concession Agreement, the rationale for identifying a sum of ₹ 267.45 Cr. (instead of which ₹ 274.45 Cr. approx. has been actually attached) is found at pages 82-87 of the Complaint. As per appellants, two sets of investments made and a donation by the Appellants have been wrongly identified as illegal gratification paid to Y. S. Jagan Mohan Reddy. Section 35 of PMLA provides the Procedure and powers of the Appellant Tribunal which says that Tribunal shall not be bound by the procedure laid down by Code of Civil Procedure but shall be guided by the principles of natural justice and subject to the other provisions of this Act and Appellant Tribunal shall have powers to regulate its own procedure.One of the main objects and reasons of this Act is to confiscate of proceeds of crime apart to the criminal liability if the accused has committed under the provisions of this Act and schedule offense. Till the time final order is passed by the Special Courts, if a valid case is made by ED, the proceeds of crime must be preserved so that after final order it should be confiscated for the benefit of State. Sub-section (1) of the said provision mandates that any stage if the defendant has absconded or left the local limit of the jurisdiction or is about to abscond or leave and has disposed of his property or part thereof in order to obstruct the execution of decree against him, the court under those circumstances may issue warrant to arrest to bring him before court and ask him to furnish security for his appearance. if the defendant fails to furnish security under sub section 4, under sub section 5, the court if satisfies may direct the defendant for furnish security for production of property in order not to allow the defendant to obstruct the decree - The provisions of Section 5 and 8 of PMLA are not exactly similar but principles and intend to incorporate the said provision to some are the guiding factors. In the present situation, the balance can be strike as admittedly the investment in BCCL had got net profit of ₹ 274.95 crores on an investment of ₹ 342 crores which was sold for ₹ 617.45 crores with an IRR of 30% to the French Company, who is admittedly not charge-sheeted and its money was clean money as admitted by the respondent no. 1. However, in view of allegations by CBI, in order to strike balance, certain directions are necessary to be passed, unless the same are disposed or set-aside. The Appeal of Nimmagadda Prasad and group are partly allowed, subject to the condition that the said group of appellants shall furnish the Indemnity Bond for a sum of ₹ 274.95 crores with the respondent within four weeks from today as surety amount with an undertaking that in case the final order is passed by the final Court under PMLA against the said appellants, they shall secure the said amount with the respondent. The said Indemnity Bond shall be furnished without prejudice. The rest of attachment of Nimmagadda Prasad and group are setaside and properties are released - Admittedly, the attachments at the hands of Jagati Publications are wholly unnecessary as per Orders of the Hon ble High Court at Hyderabad dated 23.05.2012 made in Cr.LP No. 4523 of 2012 restrain the alienation of any assets of the company Jagati Publications who is a media house employing numerous persons. The present order has been passed only in relation to attachment of properties of the appellants and confirmation thereof.
Issues Involved:
1. Validity of Provisional Attachment Orders (PAOs) under PMLA. 2. Allegations of quid pro quo investments. 3. Determination of "proceeds of crime." 4. Compliance with procedural fairness and natural justice. 5. Double attachment and valuation discrepancies. Issue-wise Detailed Analysis: 1. Validity of Provisional Attachment Orders (PAOs) under PMLA: The Tribunal examined whether the PAOs complied with Section 5(1) of PMLA, which mandates "reasons to believe" and recording such reasons in writing before passing the attachment order. The Tribunal found that the PAOs lacked independent investigation and valid reasons, as they were primarily based on the CBI chargesheet without independent application of mind by the Enforcement Directorate (ED). The Tribunal highlighted that mere reproduction of statutory language does not fulfill the requirement of "reasons to believe," and emphasized the necessity of cogent and coherent reasons to be recorded in writing. 2. Allegations of quid pro quo investments: The Tribunal scrutinized the allegations that investments made by Mr. Nimmagadda Prasad and his group companies in entities controlled by Mr. Y.S. Jagan Mohan Reddy were quid pro quo for undue favors received from the Andhra Pradesh government. The Tribunal noted that significant investments were made before the VANPIC project was conceived and after the death of Dr. Y.S. Rajashekhara Reddy, undermining the quid pro quo argument. The Tribunal also observed that the investments were commercially viable and yielded substantial returns, indicating genuine business transactions rather than bribes. 3. Determination of "proceeds of crime": The Tribunal addressed the definition of "proceeds of crime" under Section 2(1)(u) of PMLA, requiring a causal link between the property and the criminal activity. The Tribunal found that the ED failed to establish this nexus, particularly concerning the profits earned from the sale of shares to a French company, which was not implicated in any criminal activity. The Tribunal emphasized that profits from legitimate transactions cannot be arbitrarily deemed proceeds of crime without concrete evidence. 4. Compliance with procedural fairness and natural justice: The Tribunal criticized the Adjudicating Authority for procedural lapses, including non-supply of rejoinders to the appellants, which violated principles of natural justice. The Tribunal underscored that parties must be given a fair opportunity to respond to all allegations and evidence against them. The Tribunal also highlighted the need for recording reasons in writing before issuing show-cause notices under Section 8(1) of PMLA. 5. Double attachment and valuation discrepancies: The Tribunal identified instances of double attachment, where the same properties or amounts were attached in multiple hands, leading to unjust enrichment. The Tribunal also noted discrepancies in the valuation of attached properties, emphasizing that the current market value should be considered rather than outdated acquisition values. The Tribunal directed the ED to rectify these issues and ensure fair and accurate attachment proceedings. Conclusion: The Tribunal partly allowed the appeals, setting aside the attachments where procedural and substantive deficiencies were identified, and directed the appellants to furnish indemnity bonds to secure the amounts in question. The Tribunal emphasized the need for adherence to legal standards and principles of natural justice in attachment proceedings under PMLA.
|
