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TMI Blog2018 (5) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same be renewed by S.V. Srinivas until the final order is passed in the prosecution complaint in the name of respondent. As far as the other allegation of the amount spent by him to purchase the property of ₹ 7,00,000/- is concerned, the same is not correct as entire payment was paid by his father, who is the husband of Saraswati ( one of the appellants) . The appellant shall also file an Undertaking by way of affidavit that in case the appellant is finally held guilty in the prosecution complaint, he shall deposit a sum of ₹ 10.0 lac (ten lac only ) with the respondent as the said amount was spent by him for renovation of his father’s property as per alleged allegation made in the prosecution complaint. Once the Fixed Deposit Receipt and Undertaking are filed by the appellant with the respondent within the time granted, the above named two properties shall stand released. The said directions are passed without prejudice and I may also clarify that in case the prosecution complaint is decided in favour of S.V. Srinivas and his wife Reshma, the said amount shall be released to them by the respondent immediately. - MP-PMLA-3146/BNG/2017 (Misc) MP-PMLA-1595/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. As far as the details of properties of item nos. iii) and iv) are concerned, I have passed the separate orders in those appeal nos. 448 and 449/2013. The appellant in both appeals are not the accused in the schedule offences nor in the prosecution complaint filed u/s 45 of PMLA Act, 2002. Their appeals are decided by separate orders. 4. The Appellant in appeal No. 446/2013 is Mr. S.V Srinivas, he was arrayed as accused No. 3 in the schedule offence which was numbered as SPL CC 135/2011 and the proceedings (charge-sheet) against him has also been quashed by the Hon ble High Court of Karnataka in CrlP 5102/2015. He was also arrayed as an accused in in the section 45 compliant filed by the Respondent herein numbered as SPL CC 124/2014 and is arrayed as accused No.3. The said SPL CC124/2014 was instituted on 24/03/2014 after the impugned order dt: 21/02/2013 passed by the Adjudicating authority in OC 158/2012. The said proceedings are stayed by the Hon ble High Court of Karnataka upon challenged made by few alleged accused parties on filing of writ petition. 5. The appellant in appeal No. 447/2013 is Smt Reshma Srinivas. She is the wife of SV Srinivas. She is not accused i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers and Developers. Further as per the requirement for land acquisition, the land owners consent is mandatory. Hence in the guise of obtaining consent letters from the land owners Mr. Katta Subramanya Naidu, Mr. K.S. Jagadish, Mr. S.V. Srinivas Mr. Basavapoornaiah, Chairman UTL had got transferred illegal gratification amount of ₹ 87 crores to the account of INDU Builders from the company ITASCA and United Telecom Ltd. (UTL). (v) Mr. Basavapoornaiah, Chairman UTL with an intention to make illegal profit joined in the conspiracy with Mr. Katta Subramanya Naidu, Mr. K.S. Jagdish, Mr. S.V. Srinivas, Mr. Jagaiah Mr. Venkaiah in the land acquisition process for ITASCA Company. Mr. Basavapoornaiah joined as one of the Director of ITASCA Company. Accordingly Mr. Basavpoornaiah and Mr. S.V. Srinivas had paid to Mr. Katta Subramanya Naidu Mr. K.S. Jagdish a consideration of ₹ 87 crores as illegal gratification by transferring funds into the account of INDU Builders. In addition Mr. S.V. Srinivas had also directly issued cheques of ITASCA Company to Mr. K.S. Jagadish as illegal gratification. (vi) M/s. UTL Company had transferred an amount of ₹ 280,19,66,525 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious land lards and other witnesses i.e. Mr. Sandeep and Notary Mr. Jayanna. (viii) In the name of land lords who had given consent for acquisition and also in the name of landlords who had not given consent, the accused persons (as named in the charge sheet filed by Lokayukta) in the guise of disbursing more amount to landlords, had issued bearer cheques from the bank account of INDU Builders held at Karnataka Bank, Indiranagar branch, in the name of land lords and had forged the signatures of the land lords at the back of the said bearer cheques. Mr. K.S. Jagadish, Mr. Jagaiah Mr Venkaiah had drawn ₹ 37,23,29,000/- for themselves from the said bank account and thereby received the illegal gratification. In view of this, the real landlords who were supposed to get the compensation were cheated. (ix) Similarly money was also withdrawn from the two bank accounts of ITASCA in the guise of disbursing money to the land lords, who had given consent and also in the name of landlords who had not given consent. Mr. K.S. Jagadish, Mr. S.V. Srinivas, Mr. B.K. Manju Mr. M. Gopi had totally drawn ₹ 47,07,68,000/- for themselves and thereby had received illegal grati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order dt. 21.02.2013 passed by the Adjudicating Authority in OC 158/2012. 9. Similarly Accused No. 1 and Accused No. 8 in FIR 57/2010 resulting in charge sheet numbered as SPL CC 135/2011, i.e. Mr. Katta Subramnaya Naidu and M. Gopi respectively challenged FIR 57/2010resulting in charge sheet numbered as SPL CC 135/2011 before the Hon ble High Court of Karnataka in Criminal RP 432/2013 and CrIP 2313/2016 respectively. The Hon ble High Court of Karnataka by a common order dt. 03.11.2016 allowed Criminal RP 432/2013 and CrlP 2313/2016 and quashed FIR 57/2010 resulting in charge sheet numbered as SPL CC 135/2011, as against Mr. Katta Subramnaya Naidu and M. Gopi. The prosecution has challenged the order of the Hon ble Court of Karnataka in Criminal RP 432/2013 and CrlP 2313/2016 before the Hon ble Supreme Court in SLP (Crl) 1192- 1193/2017. Notice is ordered in the said matters. 10. The appellant in Appeal No. 447/2013 is Smt. Reshma Srinivas. She is the wife of SV Srinivas and his mother are not the accused in the schedule offence. Mother is also not an accused in the section 45 compliant filed by the respondent herein numbered as SPL CC 124/2014 and is arrayed as acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo properties (Declared value of ₹ 9,30,000/-) and how can he purchased these two properties above. It is also mentioned that the period 2010-11 was only ₹ 43,18,104/- whereas the property (Stated value of ₹ 70,00,000/-) as mentioned were purchased during the same period in the name of his mother, the details of which are mentioned as iii) of para 2 of my earlier part of order. As far as property no. iii) is concerned, the same is subject matter of appeal no. 448/2013 filed by his mother and the said appeal is allowed as it was held that not a single paisa was paid by him in purchasing the said property. The entire payment was made by the father of Srinivas and husband of Sarawati by was cheques. It was admitted by the respondent that except remaining payment of about twenty lacs unpaid at the time of passing the attachment order, however, the same was also paid. After filing the appeal cogent evidence in this regard was furnished. 17. Before passing the order of provisional attachment, the respondent herein had not asked the Appellants Saraswathi and Reshma Srinivas for questioning as to how the above said properties were purchased; nor did the respondent issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty mentioned at Sl. NO. 30 of Para-2 above has already been admitted by Mr. S.V. Srinivas in his statement dated 12.06.2012 having renovated the house out of the money received from ITASCA account. 19.4 Mr. S.V. Srinivas was the person involved in the entire conspiracy of defrauding the money as discussed in the chargesheet filed by Lokayukta and also as discussed in above paras. Further, as discussed in the paras above, there were large number of withdrawal in cash from the account of ITASKA as well as Indu Builders Developers accounts. Further scrutiny of one bank account held at Axis Bank A/c No.227010100090322 for the period from 08-07-2007 to 03-09-2011 of Mr. S.V. Srinivas revealed corresponding unexplained cash deposit amounting to a sum of ₹ 55 Lakhs approximately. Scrutiny of the said account also revealed he has received large number of transfer from the account of M/s. Itasca as well as M/s. Indu builders to his account. Few illustrations are also given below. Mr. Venkaiah and Mr. Jaggaiah, both in their statement dated 09.06.2012 have admitted and confirmed that all the accounts were being opened, managed and operated by Mr. K.S. Jagadish and Mr. S.V. Srin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2600000 It is thus evident that the Construction/Purchase of Properties mentioned at Sl. No.29 to 32 of Para 2 have been undertaken out of the proceeds of crime withdrawn/transferred/payment made on behalf of Mr. S.V. Srinivas from the account of M/s. Indu Builders Developers Karnataka Bank Account, Indiranagar Bangalore as per the facts revealed in the statements recorded under Section 50 of PMLA and also the corroborative evidences supported by the bank statements depicting transfer of funds, huge cash withdrawal and payment made for purchase of aforementioned properties. Therefore, the said properties are involved in money laundering. 19. It is matter of fact that the proceedings of schedule offence have been quashed against S.V. Srinivas and others have also been acquitted from all charges. Counsel has argued that since the prosecution has failed to establish any case against him, he was merely the director of the said company. No illegal cash was ever transferred in his account. 20. It is stated by the counsel appearing on behalf of appellants that the entire amount received by Itasca is the clean amount. No action is taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Remuneration from M/s. Chalapathy Srinivas 1,38,664 2,72,735 4,67,482 5,47,855 9,47,640 5,73,553 29,47,929 3 Other Income 0 4 Rental Income 36,000 36,000 72,000 1,08,000 1,08,000 3,60,000 5 Professional Income 99,208 11,99,064 36,67,309 49,65,581 6 Salary from M/s ITASCA 20,00,000 20,00,000 7 Agri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said crops from the year 1997 onwards till date. The agricultural income earned for the period 1997-2012 from the cultivation of the above said crops amounts to ₹ 34,54,018 /-. The said income from the cultivation of the above said crops has been confirmed by Mr. M.R. Dalvi, retd. Deputy Director of Agriculture, Government of Karnataka, Bangalore, vide his certificate. The copy of the same is filed as ANNEXURE A-9 in the appeal. 26. It is stated that the Appellant started practicing as an advocate from the year 2004 onwards with M/s. Chalapathy Srinivas. From the year 2007-08 onwards the Appellant started developing his own clientele and the Appellant s professional practice. The annual receipts in the nature of professional fee that the Appellant earned out of his own sources ranged from around ₹ 8-9 lakhs in 2007-08 and went upto around ₹ 40 lakhs by 2009-10. Most of the income that the Appellant has earned is in the form of cash as his clients were businessmen running small businesses and the same has been deposited in his bank accounts and declared all the said income in his income tax returns. 27. Therefore, it was alleged that the total income ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge 325 of the appeal . 30. The properties described at (Sl.No.30 and 31 in para 2 of the complaint) were the properties that were gifted by the S.V. Srivinivas Appellant to his wife, Smt. Reshma Srinivas, i.e. 10th Defendant and his mother, Smt. V. Saraswathi, the 12th Defendant. The said properties were purchased for ₹ 4,80,000 and ₹ 4,50,000 i.e., for a total amount of ₹ 9,30,000/-. The said properties were registered in favour of Smt. Reshma Srinivas and Smt. V. Saraswathi in the month of November 2007. As per the Appellant, he intended to purchase these properties as a gift to his wife and mother. The funds for acquisition were provided by the sources of income of the Appellant. The copy of the said sale deeds are filed as ANNEXURE A-11 A-12 available in the appeal filed by S.V. Srinivas. Therefore, it is alleged by the appellants that S.V. Srinivas has utilized amounts from his own sources of income to fund the purchase of the properties morefully described at Sl.No.30 and 31 in para 2 of the complaint. The provisional attachment on the said property wrongly passed. 31. On merit in order to justify his stand before the Adjudicating Authority, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said payments as proceeds of crime. 36. As far as the statement given by Mr. S. Jaggaiah is concerned, even the said statement does not say that the Appellant received any amounts drawn from the account of M/s. Indu Builders. As per the case of the appellant, the statement given by Mr. S. Jaggaiah, is a tutored one with the sole purpose of roping in the Appellant. 37. The submission is made that the answer of Mr. S. Jaggaiah does not anywhere say that he was acquainted with the Appellant, and he claims payment of salary of ₹ 10,000/- which is not borne out by any record, whatsoever, available on file. It is stated by the appellant that Mr. S. Jaggaiah was associated with only Defendant Nos. 1 and 3, is further evident from the Current account opening form of J.S. Software India Pvt. Ltd., whereunder, Defendant No. 3 has introduced the said Mr. S. Jaggaiah for opening the account, which is part of the charge sheet of the Lokayuktha Police Wing in Special CC No. 135/2011 vide Vol No.16, page Nos. 50, 51, and 52. The extract of the said charge-sheet and the copy of the statement given by Mr. S. Jaggaiah to the Respondent is filed as ANNEXURE A-13 A-14 available at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s evident from the account statements filed along with the complaint. The respondent proceeds on the basis that wherever the name Srinivas occurs, it must be S.V. Srinivas i.e., the Appellant. There is absolutely no basis for such assumption. Further the allegation that the Appellant has received a large number of transfers from the account of M/s. ITASCA and M/s. Indu Builders is not even prima facie established. 41. The allegations of the respondent of the complaint that the construction/purchase of properties described as (i) and (ii) of the complaint are out of proceeds of crime withdrawn/transferred/payment made on behalf of the Appellant from the account of M/s. Indu Builders. The allegations of the respondent that these properties are involved in money laundering are not supported by facts. In fact the said statement of the respondent is inconsistent with its own statements with respect to the reasons for provisional attachment of each of the properties. 42. It is stated that even in the charge-sheet, it was admitted that the following amounts are proceeds of crime in terms of Section 2(u) of PMLA. The details of the same which are mentioned in Para-8 of the complaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm. I have also agricultural income declared to income tax authorities Q. 12. Furnish details of moveable and immovable properties held in your name and the name of your family members? Ans. (i) One farm land situated at Honnasandra village, kasabahobli, held in my name measuring 10 acres bought during Nov, 1995 for a sum of ₹ 5,00,000/- . 45. In fact the Appellant has also produced the sale deed pertaining to the agricultural land before the Respondent. It is evident that respondent had prior knowledge of the Appellant s agricultural income and ownership of agricultural land and in spite of the same the respondent has chosen to ignore it and pass the provisional order attaching the above said properties. The Adjudicating Authority has passed the above said remark confirming the provisional order which is perverse and contrary to the material available on record. None of said aspect has either discussed or dealt with the impugned order. 46. Smt. Saraswathi and Smt. Reshma Srinivas were not issued any notice by the respondent nor was any statement recorded by the respondent before passing the order of attaching the property owned by the Appellant. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 135/2011 as against Defendant No. 9 in Complaint bearing No. 158/2012 instituted by the Respondent herein. The State has filed the appeal before the Hon ble Supreme. The said appeal is pending. I do not wish to express any opinion in relation to the quashing of the said proceedings. Rather I am of the view if the said appeal against the S.A. Srinivas is allowed before the Supreme Court, he must face the trial as per law. In the impugned order, the Adjudicating Authority has not dealt with all the plea raised by the appellants, the documents filed by the appellants have not been discussed and considered in the impugned order. 52. The order in the matter after hearing both the parties were reserved on 3.1.2013. At that time, under section 8(3) (unamended provision), it was mandated that the attachment shall continue during the pendency of the proceedings relating to any schedule offence before a court and become final after the guilt of the person is proved in the trial court and under sub-section (5) of Section-8, but where on conclusion of trial for any schedule offence the person is acquitted, the attachment of properties shall cease to have effect. Admittedly as the proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Adjudicating Authority confirm the attachment order, it was record a finding to the effect that the party is involved in money laundering and the said attachment will continue during the proceedings relating to any offence under this Act. 57. At the time of confirmation order, no proceedings under this Act was pending. It is also not the case of the respondent that some investigation was on therefore the proceedings could be filed. The charge sheet was filed in the year 2011-12. It is true that no time limit is provided to file the prosecution complaint under Section 45 of the Act. But merely readings Section 8(3)(a) amended, an inference can be drawn very easily that the attachment shall continue during the proceedings relating to any offence under this Act. Under the unamended act the attachment comes to end once the accused is acquitted in the schedule offence. I am of clear in mind that the said provision of section 8(3) (a) was incorporated on 15.02.2013 with the intention that at the time of confirmation order of attachment, the prosecution complaint along with evidence collected after independent investigation must be pending so that the Adjudicating Authority shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how that he has the sufficient amount at the time of purchasing the above mentioned two properties. Taking the face value of the allegation of the respondent without expressing anything, as alleged, he was only having ₹ 5,17,888/- whereas the value of two properties are ₹ 9,30,000/-, in order to strike balance, the difference of the same i.e ₹ 4,12,112/- is directed to be deposited by S.V. Srinivas with the respondent by way of Fixed Deposit Receipt for initial period of two years within four weeks and the same be renewed by S.V. Srinivas until the final order is passed in the prosecution complaint in the name of respondent. 63. As far as the other allegation of the amount spent by him to purchase the property of ₹ 7,00,000/- is concerned, the same is not correct as entire payment was paid by his father, who is the husband of Saraswati ( one of the appellants) . 64. The appellant shall also file an Undertaking by way of affidavit that in case the appellant is finally held guilty in the prosecution complaint, he shall deposit a sum of ₹ 10.0 lac (ten lac only ) with the respondent as the said amount was spent by him for renovation of his father s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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