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TMI Blog2015 (6) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the appellant and the stand taken before the Adjudicating Authority, it appears that the appellant is not claiming any right in the properties which have been attached. The appellant has admitted that none of the properties of the said appellant has been attached nor he has any interest in any of the properties which have been provisionally attached and in respect of which the attachment order has been confirmed. On the allegation and the pleas of the appellant that he acted bona fide and in the interest of the bank, the alleged offences of opening the bogus accounts and purchasing the properties from the money of the bank in the name of one of the customers, appellant cannot be absolved of by this Tribunal of his acts. The prima facie observations made by the Adjudicating Authority cannot be challenged successfully by the appellant under Section 26 of the PMLA, 2002. The prima facie observations made by the Adjudicating Authority will not impact the criminal trial in the criminal cases. In the circumstances, even prima facie no inference can be drawn in favour of the appellant on the allegations made by him. In any case in the present proceedings, this Tribunal is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or canvassed successfully before this Tribunal. There are no grounds to set aside the order of confirmation of the properties which were acquired from the funds of the bank by opening the bogus bank accounts and drawing the money from the same and purchasing the properties in the name of a customer and not in the name of the bank. The properties involved are the proceeds of crime as contemplated under the Act. - FPA-PMLA No. 762/MUM/2014 - - - Dated:- 5-6-2015 - Anil Kumar, Chairperson, Shri Arun Kumar Agarwal and Dr. Rabi Narayan Dash, Members Shri Vivek Sandhu, Advocate, for the Appellant. Shri S.A. Saud, Advocate, for the Respondent. JUDGMENT The appellant has preferred this Appeal under Section 26 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as Act) against the order dated 9-10-2014 passed by the Adjudicating Authority under the said Act in the Original Complaint No. 333 of 2014 confirming the provisional attachment order of the respondent no. 1 bearing no. 10/2014, dated 26-5-2014 in ECIR/13/MZO/2013. The Original Complaint bearing no. 333 of 2014 was filed by the respondent no. 1 on 23rd June, 2014. The learned counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 and ₹ 651.35 crores as on 31st March, 2010. They, Shri Shishir Dharker, Chairman, Pen Bank, Shri Prem Kumar Sharma, Ex-Expert Director, Pen Bank entered into criminal conspiracy with Shri Purshottam V. Joshi, Chief Executive Officer, Pen Bank and Shri Ajay Shivaji Mokal, Computer in charge of Pen Bank and accessed the Pen Bank s computer data base. On basis of documents of genuine customers fraudulently opened bogus cash credit/loan accounts in name of various individuals and entities at various branches of Pen Bank in violation of RBI s KYC norms and diverted the funds of investors of Pen Bank to said forged/fake bank accounts. The proceeds generated out of crime of forgery and cheating was further diverted and routed through several bogus loan accounts and utilized for acquiring immovable properties admeasuring 131.6 acres (5265.5 gunthas) at villages Nere, Akurli, Vichumbe at Panvel and Roha, Roha-Killa, Sudhagad-Asare, Siddheshwar - Budruk, Ghera in name of Shri Shailesh Chandrakant Deshpande, Shri Pradnya Deshpande and Shri Ashok H. Shah. Shri Shishir Dharker, Shri Prem Kumar Sharma; Shri Purshottam V. Joshi, and concurrent Auditors namely Shri Sunil Dutt Sharma; Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also partly utilized for closing various existing NPA accounts of Pen Bank. 2.5 Based on these allegations the respondent no. 1 registered an ECIR bearing No. 13/MZO/2013, dated 30-9-2013 for investigation into the offence of money laundering in terms of the PMLA. The offence under Section 120(B) r/w Section 418, 420, 467, 471 of IPC, 1860 falls under scheduled offences covered by Paragraph 1 of Part - A of Schedule to the PML Act 2002. 2.6 The statement of appellant was recorded under Section 50 of PMLA, 2002 during investigation. The appellant in his statement recorded on 5-2-2014 stated that he became a Junior clerk in the Bank in the year 1991. He produced photocopy of Income Tax return filed by him for the assessment year 2004-05 till 2010-11 and also submitted bank statements in respect of his bank accounts with ICICI Bank, Axis Bank, IDBI Bank under his signature. He stated that he was empowered as CEO to supervise all the activities connected to the banking functions; that cheque clearing functions of entire Pen Co-op Urban Bank Ltd. was carried out by Girgaum branch relating to Mumbai clearing only; that all co-operative banks are affiliated under Maharashtra St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued from Dadar and Vileparle branch of Pen Co-op Urban Bank Ltd.; that some amount was also paid by cash; that the cash amount was withdrawn from the fake loan accounts opened in Pen Co-op Urban Bank Ltd.; that subsequently in the financial accounts the said loan accounts were shown as NPA s; that Shailesh Deshpande was a client of Pen Co-op Urban Bank Ltd. and was personally known to Shri Girish Gupte, DGM and through Shri Girish Gupte he came to know Shri Shailesh Deshpande; that in December 2007, he called Shailesh Deshpande to H.O. at Pen and informed him that bank wanted to invest in agriculture land, however the regulation did not permit the bank to purchase land and therefore wanted to purchase agriculture land in name of Shailesh C. Deshpande and asked him whether he had any objection to which Shailesh C. Deshpande gave his consent; that, as per instructions of Shri Prem Kumar Sharma, it was decided to invest in agricultural land and Prem Kumar Sharma suggested name of one broker by name Shri Mohan Shetty; that he introduced Shri Shailesh Deshpande to Shri Mohan Shetty, a hotelier from Panvel, who was also engaged in agricultural land dealings in Raigad district; that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts were opened; that the statutory audit/RBI audit was in progress and the bank wanted to close the existing old NPA accounts and against the same, new loan accounts were opened; that he (himself) and respective branch manager of Pen Bank were required to check and examine the loan proposal; that since the bank s NPA was very high and therefore, in view of ongoing audits it was necessary that old NPA accounts were required to be closed and against the same, new loan accounts were opened; that he signed the loan application forms as a matter of practice followed by Pen Bank; that the said practice/modus operandi was being carried out within knowledge of Chairman, Shri Shishir Dharker, and Expert Director, Shri Prem Kumar Sharma; that CC account means cash credit account; that the cash credit accounts are usually opened for giving loans upto specific limit; that the limits have to be approved by the High Power Committee or Credit Committee as per by laws of the bank. However, in case of the loans sanctioned by Pen Urban Co-op Bank at time of opening the loan accounts instead of debiting to cash credit (CC) account it was debited to current account; that therefore it was a wrong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant, had introduced him to Shri Ganesh Kanade at Pali, Dist-Raigad and Girish Gupte whose contact address is village Karsundhe, Tal-Pali Suddhagad, Dist-Raigad; that he was never in possession of deeds of land purchased by Pen Co-op Urban Bank Ltd.; that he only presented at Registration office as and when called by Shri Mohan Shetty and Shri Ganesh Kanade; that agricultural lands purchased at village Nere, Vichumbe and Akurli at Panvel taluka were brokered through Mohan Shetty and the registration was done at Panvel Registrar office. The agricultural lands purchased at village Koshombe, Taluka-Pali Suddhagad were brokered through Ganesh Kanade and the registration was done at Pali and the agricultural lands purchased at village Vave, Tarfe, Asre, Siddheshwar and Gherasuddhagad Taluka- Roha were brokered through Ganesh Kanade and the registration was done at Roha Registrar office.; that the original land documents were handed over to Purshottam Joshi, Appellant and were in possession of Pen Urban Co-op Bank Ltd.; that he stated he was not aware of the exact land details neither he was aware how much amount was paid through Pen Urban Co-op Bank Ltd. towards purchase of said a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the agricultural land purchased by Pen Urban Co-op Bank Ltd. was given as collateral to MSTC on behalf of M/s. Space Mercantile Co. Pvt. Ltd. and M/s. Ushma Jewellery Packaging Exports Pvt. Ltd.; that he was not aware as to why the said agricultural land purchased by Pen Urban Co-op Bank Ltd. was given as collateral to MSTC on behalf of said two parties; that he signed the collateral papers as per instructions of Shri Purshottam Joshi, the then CEO of Pen Urban Co-op Bank Ltd. 2.10 Statements of Shri Shishir P. Dharker, Ex-Chairman dated 6-2-2014; Shri Prem Kumar, Ex Expert Director; dated 7-2-2014; Shri Vivek C. Vaidya, Director, M/s. Ushma Jewellery Packing Exports Pvt. Ltd. dated 6-3-2014 were also recorded. During the investigation the Pen Bank was requested vide letter dated 1-1-2014 to forward the bank statements pertaining to bogus cash credit/loan accounts in Pen Banks opened by diverting the fund of Pen Bank and thereafter utilized for acquiring the immovable properties in name of Shri Shailesh Deshpande at taluka Panvel, Dist-Raigad. Accordingly, Pen Bank vide their letter dated 24-1-2014, forwarded the bank transaction statements in respect of bogus cash credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand drafts were issued from the bogus cash credit loan accounts detailed above and payments were made towards purchase of immovable properties from the aforementioned bogus loan accounts opened at Dadar and Vileparle branches of Pen Bank as per instructions of Shri Shishir Dharker, Shri Prem Kumar Sharma and Shri Purshottam Joshi. 2.11 The scrutiny of the sale/purchase agreement and bogus cash credit/loan account statements etc. revealed that a total of ₹ 24,44,77,711/- being legitimate funds of Depositors of Pen Bank was diverted and utilized for acquiring the immovable properties in name of Shri Shailesh Deshpande. The investigations revealed that Shri Purshottam Joshi, CEO, Pen Bank identified the bogus loan accounts opened during the period 2004 to 2008. He stated that he was CEO of Pen Bank with effect from 27-3-2004 till 2010; that the said accounts were opened for routing the funds of Pen Bank for its day to day operations as during the said period Pen Bank was ever greening of the books of accounts in case of existing NPA loan accounts of the bank. He admitted that the bogus loan accounts were opened during his period. He further stated that the bogus loan accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of said conspiracy, Shri Purshotam Joshi, appellant, utilized the services of local estate broker namely, Shri Mohan Shetty and Shri Ganesh Kanade for identifying agricultural land at Panvel and Pali/Roha/Suddhagad, respectively. 2.13 Investigations have also revealed that, Shri Prem Kumar Sharma, who was advisor to Pen Co-op Urban Bank Ltd. at relevant time called Shri Vivek Vaidya of Ushma Packaging Exports Pvt. Ltd. to Shri Shishir Dharker s office at Janki Centre, Andheri (W) and was suggested business proposal for export of gold jewellery to UAE which would help him in reviving NPA account of Ushma Packaging Exports Pvt. Ltd. in Pen Bank and also give him some profit out of the said business. Shri Prem Kumar Sharma informed him that since Pen Co-op Urban Bank Ltd. had contacts and expertise in handling the business of export jewellery, but according to banking regulations, the bank cannot enter into the business of export of Gold Jewellery. Shri Prem Kumar Sharma advised Vivek Vaidya, that the business was to be carried out from M/s. Ushma Packaging Exports Pvt. Ltd. Shri Prem Kumar Sharma thereafter, gave him no dues certificate in respect of account of M/s. Ushma Packagi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shma Jewellery Export Packaging Pvt. Ltd. with MSTC. Thereafter, Shri Prem Kumar Sharma and Shri Shishir Dharker suggested to Shri Vivek Vaidya to provide MSTC collateral security in form of land purchased in name of Shri Shailesh C. Deshpande, Smt. Pradnya S. Deshpande and Shri Ashok H. Shah, as the said land was purchased by Pen Bank in their respective names by giving them loans. Accordingly, Shri Prem Kumar Sharma obtained consent letters dated 2-3-2010 and 3-3-2010 from Shri Shailesh C. Deshpande, Smt. Pradnya S. Deshpande and Shri Ashok H. Shah. Thereafter, a Memorandum of Agreement (MOA) dated 4th March, 2010), was entered between MSTC and M/s. Ushma Jewellery Export Packaging Pvt. Ltd. wherein it was agreed that land in the name of Shri Shailesh C. Deshpande, Smt. Pradnya S. Deshpande and Shri Ashok H. Shah at Panvel Roha talukas of Raigad District to be given as collateral security and by creating mortgage in favour of MSTC; that another mortgage agreement dated 12th April, 2010 was entered between MSTC and land held in name of Shailesh C. Deshpande, Pradnya S. Deshpande and Ashok H. Shah. The mortgaged deed/related agreement entered between MSTC and M/s. Ushma Jewel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund of Pen Bank. 4. It was prima facie inferred that Shri Shishir Dharker, Shri Prem Kumar Sharma and Shri Purshottam Joshi in connivance with each other have willfully and intentionally systematically diverted the proceeds of cheating and forgery into bogus loan accounts opened in Pen Bank in name of customers of Pen Urban Co-op Bank Ltd. without their knowledge and consent. The proceeds of crime were than layered and integrated by issuing demand drafts for purchasing land in name of Shailesh C. Deshpande. The proceeds of crime were layered and integrated for acquiring immovable properties in name of Shri Shailesh C. Deshpande which was further pledged as collateral security in favor of MSTC on behalf of M/s. Ushma Jewellery Exports Packaging Pvt. Ltd. through its Director, Shri Vivek Vaidya and thereby laundered the proceeds of crime and projected as untainted property acquired in name of Shailesh C. Deshpande. Prima facie it was inferred that Shri Shishir Dharker, Ex-Chairman, Pen Urban Co-op Bank Ltd., Shri Prem Kumar Sharma, Ex-Expert Director, Pen Co-op Urban Bank Ltd., Shri Purshottam V. Joshi, appellant, CEO, Pen Urban Co-op Bank Ltd., Shri Vivek Vaidya, Director, M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharge of his official duties and responsibilities of the post he was working at in the said Bank. All his acts were bona fide and in good faith with the sole intention of protecting the interest of the said Bank. He is the son of the soil where the Bank is established and he always acted in its interest. The properties were purchased in the name of Shri Shilesh C. Deshpande in the interest of the Bank exclusively and that the appellant had no mala fide to make any personal profit in the said transactions. The properties were purchased using the Bank funds and the properties had always belonged to the Bank. Appellant stated that he was always interested in getting the properties transferred in the name of Bank, so that, the depositors can be repaid at the earliest as the properties were purchased out of said Bank s funds and have to be brought back to the books of accounts of the Bank. Appellant also referred to the orders of the Hon ble High Court at Bombay dated 1st August, 2012 holding that the said properties are to be utilized only for the purpose of repaying depositors of the Bank and therefore, the properties have been placed under the charge of the Hon ble High Court Bom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the properties cannot be accepted and has been made only with a view to mitigate the seriousness of the offence committed by him. It has also been stated that Hon ble Bombay High Court has not restrained the respondent no. 1 from carrying out any attachment of the properties in any manner. 10. Before confirming the attachment of the properties made by Provisional Attachment Order that though the appellant has claimed that he is not the beneficiary in entire episode, however, the demand drafts for purchase of land were made from the money of the bank in the name of Shailesh C. Deshpande. The appellant had admitted his role before the Adjudicating Authority. He rather stated that he did not act on the direction of other persons. It has also been accepted that properties have been given as security against dues of M/s. Space Mercantile and M/s. Ushma Jewellery Packaging Pvt. Ltd. 11. In the circumstances it has been prima facie observed that the scheduled offences have been committed and the appellant has connived with others in opening various loans and bank accounts using forged papers and documents and in the process the bank has been defrauded of considerable amount. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of the bank and this will establish bona fide of the appellant. The plea of the appellant is also that the bogus accounts were opened only for the purpose of ever greening and partly for the purchase of the properties which were mortgaged with the bank with the approval of the High Powered Committee. His grievance is that facts disclosed by him in his affidavit to the Commissioner are not being depicted. He has alleged that the mortgage of these properties to MSTC is void. In these circumstances the appellant has sought setting aside the order of confirmation of attachment of the properties. 14. The Tribunal has heard the pleas and contentions of the parties. From the pleas taken before the Adjudicating Authority as has been detailed hereinbefore and in the appeal, it is apparent that the appellant has admitted that none of the properties of the said appellant has been attached nor he has any interest in any of the properties which have been provisionally attached and in respect of which the attachment order has been confirmed. On the allegation and the pleas of the appellant that he acted bona fide and in the interest of the bank, the alleged offences of opening the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. The provisional attachment is an emergent measure to be taken by the Authorized Officer upon being satisfied and having reason to believe that the 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. On the basis of material in his possession, the Authorized Officer upon identifying the property derived from the proceeds of crime is competent to order provisional attachment of such property. That power flows from Section 5 of the Act. At the same time, until, the proceeds of crime are finally confiscated under Section 8(3), the same have to be protected and preserved. 17. Considering the expression proceeds of crime would show that to come within the definition of the said expression, the following prerequisites are to be satisfied :- (i) that the same should be any property or the value of any such property; (ii) that it should have been derived or obtained directly or indirectly; (iii) that it should have been obtained or derived by any person as a result of criminal activity relating to a Scheduled Offence. Applying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on an interlocutory application is really not an adjudication but a mere expression of opinion not necessary for the disposal of criminal complaint under Section 3 of the Act. Such an observation will not be res judicata at a subsequent stage in the criminal complaint of money laundering or in the criminal case pending against the accused. In this connection reliance is placed on the judgment of the Hon ble Allahabad High Court in the case of Indra Pal Pandey Ors. v. Union of India Ors. in Misc. Single No. 2038 of 2015 where similar question came for consideration, it was held that the findings arrived at by the Adjudicating Authority that defendants committed a scheduled offence shall not have any binding force in any proceeding or the trial pending before the Competent Court and the Court dealing with the trial of the accused either under Section 3 of PMLA or any scheduled offence shall decide the matter without being influenced with the aforesaid findings recorded by the Adjudicating Authority during the proceedings under Section 8 of PMLA. In the circumstances, any observation made by the Adjudicating Authority in the order impugned by the appellant before this Tribunal wil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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