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TMI Blog2018 (2) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... lace prior to 2009. The penal provisions, which are sought to be pressed against the accused, were not included in the Schedule to the PMLA during the relevant time. They were only included in the Schedule only by way of amendment to PMLA vide Act No. 21 of 2009 w.e.f. 01.06.2009. Here is not a case where it could be said that the investors have taken any advantage from the Government of Andhra Pradesh. The respondent has not denied the said aspect. Nothing has been discussed in the provisional attachment order about the factual position of the matter as well as by the Adjudicating Authority while issuing the notice under section 8 of the Act. If the contentions of the respondent is accepted in the case like this, there would be flood of litigations under this Act which is not permissible in law. Even otherwise, the attachments of M/s Jagati Publications seem to be wholly unnecessary as the High Court passed Orders dated 23.05.2012 restraining the alienation of any assets of the company while taking into account that M/s Jagati Publications is a media house and many employees are dependent on the functioning of the company. The said interim order is still continuing. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of soliciting huge investments, and thereby caused wrongful gain ₹ 34,65,99,830/- to appellant for the use into the business. It was deposed that the appellant has not fixed any equity base received investments from the individuals with a premium amount of ₹ 350/- per share, though there was no rationale, and no shareholder agreement detailing standard safeguard rights of the investors like anti-dilution protection and pre-emptive rights, dividend policy, exit policy, buy-back or third-party sale. The main intention of appellant was to cheat innocent investors to buy shares at a high premium by concealing material facts and not to pay any dividends or returns on such investments. 4. It is admitted by the respondent that all investments were made during the period 2006- March, 09. It is submitted by the appellant that the general provisions of IPC were applicable and not under the PML Act, 2002 as the schedule offence was incorporated in the act, on 1st June, 2009. 5. In nut-shell the main allegations in the present case by the CBI/ ED is that 3 private investors namely T.R Kannan, A.K Dandamudi and Madhav Ramchandran were induced or threatened to make investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 962774 9627740 336970900 3465998640 9. The present appeal has been filed by the appellant raising many objections with regard to attachment as well as merits of the case. We have heard both parties. In the present appeal already mentioned, we have to examine as to whether the impugned order and the order of PAO is sustainable under any provision of PML Act, 2002 and whether confirmation order has been passed as per law. 10. In the present case, admittedly there is no allegation of Quid Pro Quo against the investors or the appellant. No complaints or suit instituted by the three investors. It was simple case where the allegations interalia against the appellant are that it had induced three investors by way threat or had made mis-representation in the prospects while projecting rosy picture of the company. For the said allegations, the appellant is facing trial under provisions of IPC and we should not express any opinion on merit of the case of trial of the matter. 11. It is also the admitted position in the matter that the investors are not accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions by the investors and they hold all rights in such investments being held in form of share. 16. The valuation of Jagati Publications shares were arrived after taking the entire enterprise valuation of Sakshi News Paper Project with size and circulation into effect. Sakshi regional newspaper was launched with a circulation of about 12 lakh copies with 23 printing centers simultaneously in States of Andhra Pradesh, Telangana, New Delhi, Karnataka, Tamil Nadu and Maharashtra. 17. The valuation of Jagati Publications shares is based on Discounted Cash Flow Method (DCF, which has been approved by the Reserve Bank of India under Foreign Exchange Management Act Notification number FEMA 205/2010 issued on 07.04.2010) which is a futuristic valuation technique for valuing a company even before the commencement of its operations. 18. It was argued that on behalf of the appellant that as the money invested by the investors into M/s Jagati Publications were been utilized by the company itself; provisions of the Prevention of Money Laundering Act, 2002 could not have been invoked in the facts of present case as there was no laundering of the money invested. The issue of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by ED in the same lines of additional facts by the CBI investigation in the PAO. The said order of PAO was confirmed by the Adjudicating Authority. 23. Nothing has been discussed in the provisional attachment order about the factual position of the matter as well as by the Adjudicating Authority while issuing the notice under section 8 of the Act. If the contentions of the respondent is accepted in the case like this, there would be flood of litigations under this Act which is not permissible in law. It was a case of either recovery of amount on civil-side and on the allegation of cheating and misrepresentation and criminal complaint on the ground of cheating etc. which is already pending. As far as civil remedy is concerned, no action for recovery of the said amount has been filed. 24. Even otherwise, the attachments of M/s Jagati Publications seem to be wholly unnecessary as the High Court passed Orders dated 23.05.2012 restraining the alienation of any assets of the company while taking into account that M/s Jagati Publications is a media house and many employees are dependent on the functioning of the company. The said interim order is still continuing. Therefore, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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