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TMI Blog2017 (12) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, 467, 468 and 471 read with 120 (B) of IPC on the written complaint of Shri U Balkrishna Bhat, C.G.M. & Zonal Head, Corporation Bank, Greater Mumbai. The allegation in the complaint discloses that S/Shri Bharat kumar M Kapadia, Chairman, Rajesh M Kapadia, Managing Director and others of Biotor Industries Limited, Vadodara entered into a criminal conspiracy to commit the offence of cheating, forgery of valuable securities, forgery for the purpose of cheating and using forged documents as genuine etc. against Corporation Bank and to cause pecuniary advantage to M/s Biotor Industries Limited in the matter of availing post-harvest short term loans on the basis of forged and fabricated documents without any genuine trade transactions/genuine business. The accused persons cheated the Corporation Bank thereby causing wrongful loss to the bank to the tune of Rs. 50 crores. (ii) RCBSM2011E0006 dated 17.06.2011 was registered by CBI, BS&FC, Mumbai under Sections 420, 467, 468, 471, 477-A read with 120 (B) of IPC on the written complaint of Shri Rajnikant Diwan, D.G.M., Oriental Bank of Commerce, Ahmedabad. The allegations in the complaint discloses that S/Shri Bharat Kumar M Kapadia, Chai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BI Bank and to cause pecuniary advantage to M/s Biotor Industries Limited, Vadodara in the matter of availing short term loans on the basis of forged and fabricated documents without any genuine trade transactions/genuine business. Due to the aforesaid acts of accused persons, IDBI Bank suffered a loss of Rs. 121.80 crores. 3. In the subject FIR, Charge Sheet No.13/2010 dated 01.07.2010, 23/2010 dated 22.12.2010 and Charge Sheet No.11/2011 dated 01.04.2011 was filed by DCB police Station, Vadodara City before the designated Court under Sections 409, 420, 465, 467, 468, 471, 474, 477-A and 120(B) of IPC. On the basis of FIR and charge-sheet ECIR was registered. 4. The main reasons given to the alleged allegations against the appellants, as mentioned while passing the impugned order are:- (i) The accused charged in the subject charge sheets hatched a conspiracy to mis-appropriate the amount from M/s Biotor Industries Limited (hereinafter referred to as „BIL) and different banks during the year 2007 to 2009, by preparing false bills, false invoices and through bogus vehicles Nos. made sale - purchase of the goods viz. Castor Seeds and Castor Oil and prepared false documents a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant no. 1 company. 6. The provisional Attachment Order, which has been confirmed by the Impugned Order was passed on a presumption that the appellant company has availed various loans from various banks in form of Agri Loan and further the company has rerouted the same through different modes in large number of inter connected transaction to purchase various properties and hence Section 23 of the PMLA is prima facie applicable. 7. Counsel for the appellant has argued that it is the admitted fact that the properties which have been attached were acquired prior to the year 2009. The details of each Agri Loan and the details of the property acquired:- Bank Sanction Date Date of Disbursement Alleged period of Conspiracy Corporation Bank 16.05.2009 28.05.2009 2009 Oriental Bank of Commerce 22.03.2009 27.03.2009 28.07.2009 2009 Bank of Maharasthra 04.08.2009 19.08.2009 2009 IDBI Bank 07.02.2009 13.02.2009 2009 The properties attached as per order would show that the properties were acquired prior in time before sanction of the Agri Loans and the same was not purchased from proceeds of Agri Loans disbursed by the respective bank to the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k who are having the possession of the same as per agreement and proceedings of recovery are pending. 12. Despite having full knowledge, the Adjudicating Authority chose to ignore the law and various judgments passed by the Supreme Court and High Court and passed the confirmation order. 13. Details of mortgage created by Banks Description of Property Property Acquired During Mortgaged Created on Notice u/s 13(2) Notice u/s 13(4) Plot No. 14 and 14-A, Petrochemical Complex (A & B), Village Ranoli, District Vadodara 2006 08/09/2009 30/09/2009 25/10/2010 05/11/2011 15/11/2011 Industrial Land and Construction Property at Block No. 558 Part, 560 Part, 561 Part, 562/A, 562/B, 563, 564, 566, 567 Part, 578, 580, 581 Admeasuring in all 1,42,523 Sq. Mtrs. And Construction thereon admeasuring 15,512 Sq. Mtrs. Situated at Itola- Padra Road, District- Vadodara 2005 08/09/2009 30/09/2009 25/10/2010 05/11/2011 15/11/2011 Ekalbara Block No. 495-P and R.S. No. 369/1, Village Ekalbara, Taluka-Padra, 2006 23/11/2006 24/07/2007 25/10/2010 05/11/2011 15/11/2011 District Vadodara 07/07/2009 &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty involved in money- laundering - (1) Where the Director, or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding 180 [one hundred and eighty days] from the date of the order, in such manner as may be prescribed: [Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved that the mortgaged properties are security to the loans and cannot be subject matter of attachment particularly when the same were purchased and mortgaged prior to the events of funds diversion and frauds committed by the borrowers. A completely same scenario exists in the present case also where the Appellant is a bona fide lender and the properties in question have been originally purchased, much before the offending transactions took place. The contents of said paragraphs 46 and 47 are reproduced:- "46. In the present case, it is undisputed facts that the attached property were purchased much prior to the period when the facility of loan sanctioned to the borrowers. The banks while rendering the facilities were bonafide parties. It is not the case of the respondent that the attached properties were purchased after the loan was obtained. The mortgaged of the properties were done as bonafide purposes. None of the bank is involved in the schedule offence. No PMLA proceedings are pending except the complainant bank was arrayed as Column;-11 at the time of framing charges. Union Bank of India has not granted sanction against its employee to proceed against him in criminal c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudicating Authority shall, after- (a) considering the reply, if any, to the notice issued under sub- section (1); (b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf, and (c) taking into account all relevant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are involved in money-laundering: Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering. The proviso of Section 8 (1) is clear that where any property held by a person on behalf of any other person, a copy of such notice shall also be served. 20. Counsel for the respondent submits that no such notice was not required. We reject his argument, firstly on the reasons that ED and Adjudicating Authority were fully aware before passing of their respective orders that the attached properties were mortgaged with the banks, despite of that no notice under the mandatory provision was is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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