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TMI Blog2017 (8) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... ty is a vacant property w.e.f. 31.03.2017 as informed by learned counsel for the appellant. The value of the property as as stated in the statement of Shri N.R Padamnabhan, Director in the appellant company appellant is approximately between ₹ 170-200 crores. Admittedly, Dr. Vijay Mallya has not cleared the loan amounts worth thousand of crores. He is declared as absconder. It is also not his case that he is not capable to pay the amounts due to the banks. The amount due in-fact is public money. There is no assurance on his behalf that in a particular period of time, he would clear the loan amount. He has not shown his willingness to join the proceedings pending against him in Indian courts. It also appears from the material placed on record that he was actively involved in the day to day activities of all the businesses carried out by him directly or indirectly when the loan was sanctioned. Merely by alleging that a particular company is an independent entity would not help the case of the appellant because he was the ring master of entire game. Thus the facts in the present case are peculiar than other cases referred on behalf of the appellant. It is also well settled po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther documents were executed by KAL in favour of the consortium banks. The applicant purportedly executed a corporate guarantee dated 21.12.2010 in favour of the consortium banks guaranteeing due repayment of the outstanding amounts in respect of the restructured facilities in the event of default in repayment by KAL. (iv) The complaint also stated that KAL did not keep its accounts with Consortium Banks regular, as a result of which the accounts of KAL became NPA in the accounts of various banks. Hence, the consortium banks were, therefore, constrained to recall the credit facilities granted to KAL and also invoke the corporate guarantee of UBHL and personal guarantee of Shri Vijay Mallya. (v) It was alleged that the guarantors viz. UBHL and Shri Vijay Mallya, deliberately and dishonestly did not repay the outstanding amount due and payable by KAL to the consortium banks. The complaint further alleged that there was a conspiracy among KAL, Shri Vijay Mallya and others that they had dishonest intention to cheat the banks, since inception and that KAL, Dr. Vijay Mallya and the Applicant misrepresented to the banks, to cheat the banks and to cause wrongful gain for themse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hearing, Shri Dayan Krishnan, the learned senior Advocate appearing on behalf of the appellant in support of their argument that the applicant/appellant is a separate and distinct legal entity and its property could not be attached on account of alleged defaults by the KAL and Dr. Vijay Mallaya, referred the following decision in the case of Anita Kaur Vs. Universal Weather and Aviation India Pvt. Ltd., 2014 SCC OnLine Del 3137 wherein in Para 8 of the judgment it is observed as under:- 8. We remain unimpressed. The First of the aforesaid argument is against the very grain of Company Law. A Company is a distinct legal entity from its shareholder, even if all the shares are held by one person only. Thus, merely because the defendant no. 2 holds 100% of the shareholding of the defendant no. 1 Company, would not make ' the defendant no. 2 liable for the dues and acts of the defendant no. 1. Admittedly both defendant no. 1 and defendant no. 2 are separate legal entities. No case for piercing of the corporate veil is made out. The Supreme Court in Vodafone International Holding B.V v. Union of India (2012) 6 SCC 613 (para 101) has held that a Company is a separate legal perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared as absconder. Non-bailable warrants have been issued against him. His passport has been cancelled. He further referred to various statements recorded during the investigation to show that Dr. Vijay Mallaya was actually controlling the appellant/applicant company. 10. We have considered the rival contentions for purposes of disposal of the stay application. The primary ground of the appellant/applicant seeking the interim relief is on account of the appellant‟s legal entity being distinct from that of Dr. Vijay Mallaya and of KAL to whom the loan was sanctioned. As far as the proposition of law is concerned, there is no dispute that in case the present case on facts falls within the four corners of the cases referred on behalf of the appellant, then those are binding in law and the judgment have to be followed by this Tribunal. However, in the present case we have found that material and underlying facts are different. 11. The statement of Shri NR Padmanabhan which was recorded on 26th July, 2016 and who is Director of the company of the appellant at Mandwa Farms Pvt. Ltd in which he has deposed in reply to Q.5 to Q.10 and Q.13 regarding the incorporation of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 03 days. Q 7 Who are the prompters/Shareholders/owners of M/s Talesi Ventures pvt. Ltd. M/s. Ganpathy mallya and M/s UB Distilleries ltd. etc? A. I state that I am not aware of the promoters of M/s Talesi Ventures pvt ltd. Ganpathy Mallya investments and M/s UB Distilleries ltd. On being asked, I am / also not aware of the trustees of M/s Mallay Family trust, Siddharth mallya trust, Lean a Mallya trust and Tanya Mallaya trust. Q. 8 Who are the promoters of M/s Blitz Publications Pvt Ltd ? What are the activites of the said company and the assets owned by them/ A. I state that M/s Biltz Multimedia pvt. ltd is the promoters/ Shareholders of M/s Biltz publications pvt holding 100% shares. I state that earlier they were publishing blitz paper. However, after acquisition in the year 2007, there were no publications and presently there are no activities. Q, 9 As you have stated that there was no activities in M/s Mandwa farms pvt ltd. Please explain as to how you have managed to purchase the property in M/s Mandwa farms pvt. ltd? A I state that initially M/s Herberstone ltd. purchased land adm. 12 acres from one person by name Mr. vital Ramachandra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Private Limited Shareholding pattern as at 31.01.2017: Paid up capital 1,680 Equity Shares of ₹ 100 each Name of Share holder No. of Shares % to paid- up capital Blitz Multimedia Private Limited 1,640 97,00% VJM Investments Private Limited 50 3.00% VJM INVESTMENT Private Limited Shareholding pattern as at 31.01.2017: Paid up capital 50,00,000 Equity Shares of ₹ 10 each Name of Share holder No. of Shares % to paid- up capital Blitz Multimedia Private Limited 27,50,000 55% Dr. Vijay Mallya 22,50,000 45% BLITZ Multimedia Private Limited Shareholding pattern as at 31.01.2017: Paid up capital 1,37,650 Equity Shares of ₹ 100 each Name of Share holder No. of Shares % ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to paid- up capital Dr. Vijay Mallya 42,298 99.99% Dr. Vijay Mallya Mr.P G Govindan(jointly held) 1 0.002% Dr. Vijay Mallya Mr. K V Sreenath(jointly held) 1 0.002% 14. On account of the position discussed in the forgoing paras, prima facie, we are inclined to agree with the respondent that the appellant company was controlled by Dr. Vijay Mallaya. Admittedly, Dr. Vijay Mallaya and his group companies owe amount in excess of several thousand crores of rupees to different bank/financial institutions against loans which have not been repaid in time, diverted for use other than that for which loan was sanctioned and so on. He is enjoying the leave outside of India and has been declared an absconder. 15. Due to the said conduct of Dr. Vijay Mallya and his other companies; the appellant/applicant cannot take the shelter of the law whereby the Supreme Court and High Court have held that each company is a legal entity distinct from its share holders as the situation in the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f crime and including therein the value of any such property i.e. the value of any proceeds of crime, does not get attracted, is also unsustainable. It is contended that the 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. It is further submitted that in the present case as the attachment is not in respect of proceeds of crime, but in respect of the property involved in money laundering there is no question of applying the term value of any such property , as appearing in section 2(l)(u). The argument is incorrect. The concept of money laundering revolves around, term proceeds of crime . Thus an act of any person involving in any process or activity connected with the proceeds of crime would be covered as an act of money laundering. Thus in any of the case referred in section 3 of PMLA, in relation to the proceeds of crime would be covered as money laundering , irrespective of the fact where any such proceeds of crime are already projected as untainted or are in the process of being projected as untainted. The enactment is for traci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uing offence and is held to be so by the Hon'ble Bombay High Court as under:- In Nitesh J. Thakur v/s state of Maharashtra and another in ABA no. 823/2012 d/o 01.04.2013, the Hon'ble Bombay high court while considering the submission of ASG that offence of money Laundering is a continuing offence since it also punishes possession of property acquired from crime and therefore, there is no question of retrospective criminalization, referred to the judgment in the case of State of Bihar V. Deokaran Nenshi and another, reported in (1972) 2 SCC 890 quoted as under:- A continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. On every occasion that such disobedience or noncompliance, occurs and reoccurs, there is the offence committed. The distinction between the two kinds of offences is between an act or omission which constitutes an offence once and for all and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shows indifference nee of D-2, to sincerely attend the investigation and follow the due process of law. 18 Even otherwise in case the provisions of section 8(4) and 8(5) of the PMLA are read together, it is evident that after the confirmation of the attachment by the Adjudicating Authority, the Enforcement Directorate is required to take the possession of the attached property. While the Tribunal, in exercise of its inherent powers of an appellate court during hearing appeals under the related acts, in suitable cases has granted interim relief including by way of stay of action for taking possession of attached properties confirmed in adjudication subject to such conditions as considered suitable in a particular case, for the reasons as mentioned above we do not consider the present case to be one where such discretion can be exercised. 19. The attached property is a vacant property w.e.f. 31.03.2017 as informed by learned counsel for the appellant. The value of the property as as stated in the statement of Shri N.R Padamnabhan, Director in the appellant company appellant is approximately between ₹ 170-200 crores. Admittedly, Dr. Vijay Mallya has not cleared the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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