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TMI Blog2015 (12) TMI 1744X X X X Extracts X X X X X X X X Extracts X X X X ..... MLA-587/BNG/2014 : The present appeal is filed challenging the order dated 22nd April, 2014 passed by the Adjudicating Authority in Original Complaint No. 236/2013, dated 23rd December, 2013 seeking confirmation of properties provisionally attached vide Provisional Attachment Order No. 4/2013, dated 11th December, 2013 in ECIR No. 85/BZ/2010-11, dated 29th October, 2010. With the consent of counsel for the parties, the appeal was taken up for final arguments and disposal. Brief facts 2. Deputy Superintendent of Police, Cyber Crime Police Station, CID, Bangalore registered an FIR No. 28/2010, dated 9th September, 2010 on the basis of complaint dated 8th September, 2010 received from Smt. Maria Reuben, Authorized Signatory, ICICI Merchant Services Pvt. Ltd., Bangalore alleging that M/s. Salve Regina Charitable Trust (in short Trust), Bangalore, Mrs. Regina Seelan and its other Trustees indulged in 995 fraudulent transactions using compromised credit card data with the help of other unknown fraudsters and received amounts totalling to ₹ 15,68,53,627/- during 1-7-2010 to 13-8-2010 through the e-commerce gateway provided by them to the official website of the Trust www.s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47/2012, dated 10th July, 2012 and also filed additional charge sheet dated 16th April, 2013 against M/s. Salve Regina Charitable Trust, Mrs. Regina Seelan and other trustees for offences punishable under Indian Penal Code and Information and Technology Act, 2000 including Section 420 of IPC for causing wrongful net loss to M/s. ICICI Merchant Services Pvt. Ltd. to the tune of ₹ 4,51,51,325.87/-. As the alleged offence under Section 420 of IPC is scheduled offence under Part B paragraph 1 of schedule to PMLA, respondent registered an ECIR No. 85/BZ/2010-11, dated 29th October, 2010 and initiated investigations under the provisions of PMLA. 7. During the course of investigation conducted under PMLA, Smt. Regina Seelan, President Trustee of M/s. Salve Regina Charitable Trust in her statement dated 15-3-2011 under Section 50 of PMLA inter alia stated that she is the President and Chief functionary of Salve Regina Charitable Trust; that she registered the Trust on 30-5-2005; that herself and Shri Z.G. Victor D Souza had the power to operate the bank accounts of the Trust; that the Trust is running Divya Shakthi Old Age Home from the rented premises at No. 9, Hanumanth Nagar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 50 of PMLA stated that the amount of advance paid to Sri Ramchandra was never returned to her which fact she reconfirmed in her statement dated 16-9-2013. It was revealed that though Smt. Regina Seelan in her statement stated that advance of ₹ 41 lakhs was paid to appellant for purchase of property but agreement to sell disclosed that advance of ₹ 75 lakhs was paid in cash. 10. During investigation by respondent, statement of appellant was recorded u/s 50 of PMLA dated 1-8-2013. During recording of statement, when appellant was shown copy of agreement dated 16-7-2010 for sale of 2 pieces of land in Bidarhalli Village to Salve Regina Charitable Trust for a total sum of ₹ 150 lakhs and payment of advance of ₹ 75 lakhs in cash, the appellant stated that he has not entered into the said agreement nor the signature are his and he has not received any cash as advance either from Salve Regina Charitable Trust or from Smt. Regina Seelan. He further stated that he is not owner of the above two pieces of land and they are owned by someone else. However, the appellant stated that he has entered into an agreement to sell dated 16-7-2010 with Shri J. Jayaseelan hu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned counsel for appellant submitted that the appellant is not an accused in the scheduled offence nor there is an allegation that he has prior knowledge of the offences committed by the accused. He submitted that the appellant inherited land bearing survey No. 82/2 situated at Byrathi Village, Bidarahalli Hobli, Bangalore South Taluk and two vacant sites i.e. house list No. 27 and house list No. 28 situated at Byrathi Village, Bidarahalli Hobli, Bangalore South Taluk in January, 2002 after the death of his maternal grandfather on 2nd January, 2002. He submitted that the appellant formed 20 residential sites in the said land and sold them to various purchasers and by using these sale proceeds he has constructed house measuring 600 sq. ft. in the year 2003 in the site bearing house Nos. 27 and 28 bequeathed by his grandfather. He submitted that the appellant, from the remaining sale proceeds of land bearing Survey No. 82/2, has purchased a property bearing survey No. 50/8A measuring 10 guntas through a registered sale deed dated 27-10-2005 situated at Kothnur Taluk, KR Puram Hobli, Bangalore East Taluk for a sum of ₹ 3,50,000/-. After purchase of the land, some part of it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eques drawn from the account of the trust with M/s. ICICI Bank and from the same account one amount was transferred also. 16. The counsel submitted that the statement of appellant was recorded by the respondent under Section 50 of PMLA dated 1st August, 2013 wherein all the above facts were stated before the respondent which are recorded in the statement. He drew our attention to the copy of relevant part of the statement which is reproduced below :- . During the last week of August 2010, Smt. Regina Seelan came to my house and requested me to cancel the agreement and requested me to return the amount as she has to show accounts to the Trust and she cannot show the said purchase to the Trust. I requested her for some time to organize funds. In the first week of September I returned ₹ 33,00,000/- in two instalments to Smt. Regina Seelan. 17. The counsel submitted that the appellant was an innocent intending seller of property to Shri J. Jayaseelan, husband of accused Smt. Regina Seelan and entire advance amount of ₹ 33 lakhs was returned in cash to Smt. Regina Seelan in the first week of September, 2010 which fact is duly confirmed by Smt. Regina Seelan in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of advance of ₹ 33 lakhs is without merit. 20. He submitted that Smt. Regina Seelan in her statement dated 17th March, 2011 though stated that she had received amount given as advance to Shri Ganesh and the present appellant Shri Ramachandra, however, in her subsequent statement dated 20th March, 2012 she has stated that both Shri Ganesh and present appellant have not returned the advance amount paid to them. He submitted that the statement of Smt. Regina Seelan dated 20th March, 2012 is not a retraction of her earlier statement. He drew our attention to the statement u/s 50 of PMLA of Shri Ganesh dated 3rd April, 2012 wherein he confirmed that he had not returned the advance amount to Smt. Regina Seelan though she has stated in her statement dated 17-3-2011 that she has received back advance from Shri Ganesh. This shows that statement of Smt. Regina Seelan dated 17-3-2011 to the extent of return of advance by Shri Ganesh and Shri Ramachandra is not correct and her subsequent statement dated 20-3-2012 is correct which is corroborated by statement u/s 50 of PMLA dated 2-9-2013 of Shri Victor D Souza, trustee of the Trust. 21. The counsel vehemently argued that thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale consideration of ₹ 43,20,000/- and ₹ 25 lakhs is shown as received in cash by the appellant and balance of ₹ 18,20,000/- was to be paid within two months. The attachment of subject property has been made on account of above agreement to sell and payment of ₹ 33 lakhs out of proceeds of crime to the appellant. 24. Perusal of documents filed in appeal reveals that ₹ 33 lakhs was paid to appellant out of proceeds of crime by four cheques and RTGS from the bank account held with ICICI Bank held in the name of M/s. Salve Regina Charitable Trust and receipt of same is admitted by the appellant in his statement u/s 50 of PMLA dated 1-8-2013 as follows : Salve Regina Charitable Trust was running a home for the aged for the last three years or so. Initially the Ashram was in Kothanoor. At that time I used to donate rice or some other ration to the Trust. Later the Ashram was shifted to Hanumanthanagara near Bileshivale Village. Smt. Regina Seelan was the in-charge for the Trust. Sometime during July, 2010 Smt. Regina Seelan approached me with an offer to purchase three sites measuring 1200 sft. each at survey No. 16/1, Byrathi Village. I had entere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Seelan cannot be accepted in view of the discussion in following paragraphs. 26. Mrs. Regina Seelan in her statement u/s 50 of PMLA dated 17-3-2011 before respondent stated that she has received back advance paid for purchase of property to Sri Ramchandra and Mr. Ganesh in cash as the deal never materialized. However, in her another statement u/s 50 of PMLA recorded on 20-3-2012 she stated that she has not received back the amount of advance paid to Sri Ramchandra as well as to Mr. Ganesh which is adverted to as follows : Today, you have asked me, whether the cash payments made by me to various persons for purchase of properties mentioned in my statements dated 15-3-2011 17-3-2011 are all correct. I state that though I have mentioned I paid ₹ 80 lakhs in cash to B. Narayanaswamy for purchase of building at No. 9, Hanumanthanagar, Bileshivale, K.R. Puram, Hobli, Bangalore East Taluk-562149, I have not actually paid him that amount. That is why we mutually agreed and cancelled the sale agreement dated 10-8-2010. We have also entered into a Cancellation of Sale Agreement dated 2-9-2010. I am furnishing you copies of the Cancelled Sale Agreement and Cancellation of Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in your statements dated 15-3-2011 17-3-2011 are all correct, you stated that prior to entering into agreement with Shri B. Narayanaswamy, you had entered into Purchase Agreement with the following persons for purchasing properties and paid the following amounts : S. No. Name of the Person Address of the Property Purchase Value Amount Paid 1 M. Ganesh, S/o Krishnappa, Gundur Village, Bidarhalli Hobli, Bangalore 2 acres at Survey No. 61/P 11 61/P 13, New No. 81, 82. Registration No. 13/05-06, Gundur Village, Bidarhalli Hobli, Bangalore 2,67,50,000/- ₹ 45 lakhs (Rs. 30 lakhs by cheque (Axis Bank) ₹ 15 lakhs by cash) 2 Shri Ramachandra, S/o Munishivappa, 155, Byrathi Village, Kothanur Post, Bangalore 1 acre land at Survey No. 67, Hancharahalli Village, Bidarhalli Village, Bangalore 1 acre 27 guntas at Survey No. 15/1A, Hancharahalli Village, Bidarhalli Village, Bangalore Total value of two properties ₹ 75 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid amounts totalling to ₹ 33,00,000/ by way of 4 cheques and one RTGS. Are these payments to Ramachandra connected to the agreement of sale between him and Jayseelan? Ans: Yes, these payments are given towards the consideration for the aforesaid plots and as explained above the transaction was not completed. 29. The appellant, except making oral claim of having returned the entire advance of ₹ 33 lakhs in cash during the first week of September, 2010 has not produced any documentary evidence showing return of money in cash. The appellant in his statement u/s 50 of PMLA recorded on 1-8-2013 admitted that he does not have any receipts signed by Smt. Regina Seelan as evidence for having returned the advance amounts which is adverted to as follows : 5. Today you have asked me whether I have any receipts signed by Smt. Regina Seelan as evidence for having returned the amounts. I state that I did not take any receipt... 30. Further, Sh. M. Ganesh in his statement u/s 50 of PMLA recorded on dated 3-4-2012 stated that he has not returned the advance amount to Smt. Regina Seelan though Smt. Regina Seelan in her statement u/s 50 of PMLA recorded on 17-3-2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scussed above, we are of the considered view that the appellant has failed to show that advance payment of ₹ 33 lakhs received from M/s. Salve Regina Charitable Trust was returned by appellant in cash to Smt. Regina Seelan in first week of September, 2010 in two instalments. 33. The plea of the appellant that the subject property was acquired prior to period of scheduled offence out of the sale proceeds of property inherited from his grandfather and sale consideration of other properties sold by him and therefore the subject property is not proceeds of crime and not liable to attachment is also rejected. The appellant though claimed that the construction of subject property took place in the year 2008-09 but he has not produced any material to show that the construction took place in that year out of the sale consideration of properties inherited from grandfather as well as out of sale proceeds of land bearing Sy. No. 50/8A. Mere filing of copies of some of the sale deeds showing sale of properties will not prove that the sale proceeds have been used for construction of subject property in the year 2008-09. It will be necessary to show how the sale consideration was kept b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43,20,000/-. Regina Seelan gave me two cheques totalling to ₹ 13,00,000/- with different dates. She asked me to prepare an Agreement of Sale in favour of her husband Shri J. Jayaseelan for sale of aforesaid three plots and she told me to write in agreement as if I received ₹ 25,00,000/- in cash as advance and the balance was to be paid by her in about two months time. Before preparing agreement of sale I deposited two cheques for amounts totalling to ₹ 13,00,000/- in my SB a/c with Vijaya Bank and they got cleared. Hence, I prepared an Agreement dated 16-7-2013 and went to her Ashram at Hunumanthanagara. Apart from Smt. Regina Seelan, her husband Shri Jayseelan and one Mr. Victor D Souza was present there. Shri Jayaseelan signed as purchaser and Shri Victor signed as witness. I am furnishing you a copy of the said agreement. 34. In view of these facts and circumstances, we are of the view that the appellant has failed to show that the advance of ₹ 33 lakhs received by him from Salve Regina Charitable Trust out of proceeds of crime was returned by him to Smt. Regina Seelan and failed to show that the subject property do not confirm to the definition of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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