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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 ..... before the Special Judge for CBI Cases, Hyderabad (CBI Case). 2. The charge sheet alleges criminal conspiracy between Shri Y.S. Jagan Mohan Reddy and Shri Vijay Reddy in luring investors by making falso promises used forged ante dated valuation report of M/s Deloitte Tourche Tohmatsu and trapped the three investors, who finally lost their investment. Charges Sec. 120-B r/w Sec. 420 of IPC are invoked for the said offences. 3. During the investigation under PMLA, the statement of three investors were recorded whereby they deposed that they invested the amount of face value of Rs. 10 at premium of Rs. 350 per share as the father of Shri Jagan Mohan Reddy who was Chief Minister in 2006-08 asked them to invest the same as his son who wanted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in M/s Jagati Publications Ltd on false projection of the company's prospects. 6. Attachments effected in the O.C. for a sum of Rs. 34.64 Crs in the hands of M/s Jagati Publications Pvt Ltd. 7. It is contended by the respondent that M/s Jagati Publications Pvt. Ltd. and Y.S Jagan Mohan Reddy have thereby committed the schedule offence of cheating and the Proceeds of Crime are liable to be proceeded against under PMLA. As far as allegation of CBI with regard to offence under IPC is concerned, we do not wish to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tful whether suit after the trial for recovery would now be maintainable or barred by time under the Limitation Act as the period of last investment was 11th March, 2009. 14. The schedule offence was added in PML Act, 2002 on 1st June, 2009. There is no evidence and cogent reasons prima facie available on record that value of shares at the time of investment was less than as purchased. There were many other investors, who had purchased the shares for the same value but no action was taken against them except the statement made by the respondent that the ED may take action against few investors where investigation is on. 15. On behalf of M/s. Jagati Publications Ltd., it was submitted that M/s. Jagati Publications was incorporated on 14.11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investors, they had made investments into M/s Jagati Publications on their own sweet-will. Under these facts of the matter, it is difficult to conclude finally in these proceedings that the ingredients of cheating are made out or not. It is the case of appellant that the valuation was based on projected calculations of circulation which was achieved and the aspect of cheating and other offence have to be determined by the Court under the IPC. The investor's grievance that the company did not perform as well as they anticipated may or may not constitute 'cheating' and the investment cannot be termed as Proceeds of Crime by any standards. If the answer is yes then the said aspect has to be considered by the Court where the appellant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation done 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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