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TMI Blog2019 (9) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... C as well as in Show Cause Notice. The Adjudicating Authority cannot disbelieve the statements of the investors or to interpret them its own matter. The same is not permissible in law - the Adjudicating Authority has gone beyond the material before it to arrive at the finding that the Appellant and/or the other Defendants in the said OC invited investors/public to invest in the Appellant company using the allurement of the allocation of the coal block or its possible allocation, and that therefore, derivation of benefit from such investment would constitute proceeds of crime. The finding in the impugned order was based on materials beyond the record of the present case because there is nothing on record to show that the investors invested in the shares of the Appellant company on being invited by it or by any of the officers of the Appellant company and the allocation or the possibility of allocation of coal block was used as allurement to such investors. There is no conduct, act or omission on the part of the Appellant that has been shown which would lead the ED to believe that the alleged proceeds of crime are likely to be concealed, transferred or dealt with in any manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted pursuant to the said FIR, the CBI filed a Final Report under section 173, Cr.P.C., bearing number 06/2014 dated 12.11.2014 under section 120B read with sections 420, 467, 468 471 of the Indian Penal Code before the Ld. Special Judge (PC Act) (CBI)- 7, New Delhi District, Patiala House Courts, New Delhi (hereinafter referred to as the said Charge-sheet ), arraigning (i) M/s Jharkhand IspatPvt. Ltd., (ii) Shri R.S. Rungta (iii) Sri R.C. Rungta, (iv) ShriRamabatarKedia and (v) ShriNareshMahto as Accused. The appeal against the said order is pending in the High Court. 3.1 It was alleged in the said Charge-sheet that a company under the name and style of M/s Rewa Retreads Pvt. Ltd. was incorporated under the Companies Act, 1956 on 12.03.1991, with the Registrar of Companies, Kanpur, engaged in the business of, inter alia, manufacturing and selling of spare parts and other commodities. That, on 29.04.2003 the name of the said company was changed to M/s JharkandIspat Pvt. Ltd. , (i.e., the Appellant herein). 3.2 It was further alleged in the said Charge-sheet that the Ministry of Coal (hereinafter referred to as the MoC ) had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge (PC Act) (CBI)-7, New Delhi District, Patiala House Courts, New Delhi, vide Final Order and Judgment dated 28.03.2016, the Appellant along with Shri R.C. Rungta and Shri R.S. Rungta were held guilty of the offences under sections 120B read with 420, IPC; and were acquitted in respect of charges under section 467, 468 and 471, IPC. 5. The above Judgment dated 28.03.2016 has been challenged by the Appellant before the Hon ble Delhi High Court, being Criminal Appeal No. 714/2016. The said Appeal has been admitted vide Order dated 01.08.2016 passed by the Hon ble Delhi High Court. 6. It appears that during the pendency of the aforesaid proceedings by the CBI, the Complainant, i.e., the Respondent No. 1 registered the ECIR bearing number ECIR/02/RSZO/2014 dated 29.04.2014 (hereinafter referred to as the said ECIR ) in the present case alleging the commission of the offence of Money Laundering under Section-3, PMLA. The said ECIR under Column 2 Act Scheduled to PML Act states Indian Penal Code, 1860 and Scheduled Offences under the PML Act states Section(s) under 120B r/w 420 . 7. The said ECIR under Column 7, alleges as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 1 s Relied Upon Documents. 9. Thereafter on, 23.09.2016, the Appellant received the Provisional Attachment Order No. 01/2016 dated 15.09.2016 (hereinafter referred to as the said PAO ) whereby the Complainant/Respondent No. 1 herein attached various immovable properties of the Appellants herein, as detailed in Annexure A to the said PAO. 10. In the PAO, the Respondent has categorized the Share Application money ( SAM ) received by the Appellant herein from various individuals/companies/entities as the Proceeds of Crime generated from the Scheduled Offence of Sections 420 and 120B, IPC. It has been alleged that the Appellant herein received the SAM amounting to ₹ 25,00,00,000/- (Rupees Twenty Five Crores Only), from the period 2004-05 to 2008-09, and that this has been received due to the coal block allotted to the Appellant herein and that such allotment was a result of the criminal activity relating to the Scheduled Offence. 11. Thereafter, on 29.10.2016, the Appellant received a Notice to Show Cause dated 20.10.2016 (hereinafter referred to as the said Show Cause Notice ) issued by the Registrar of the Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osal. 16. We do not wish to express any opinion on finding arrived with regard to schedule offence, if committed by the appellant. The said issue is sub-judice before the High Court, the same was passed on different issuesand the same has to be decided as per its own merit.Our only concern in these appeals is as to whether attachment order passed is sustainable in law or not and/or as to whether the investment is made from the public money or not. Further, as to whether merely investment in the company is proceed of crime or not, or it amounts to money laundering. PMLA proceedings 17. ECIR bearing number ECIR/02/RSZO/2014 registered by the ED on 29.04.2014 on the basis of registration of FIR on 8.3.2013. It is admitted position that the coal allocations including the allocation to the appellant cancelled by the Hon ble Supreme Court in W.P(C) No. 120/2012 passed on 25.08.2014. Charge-sheet qua the Scheduled Offences filed by CBI on 12.11.2014. 18. After registering ECIR, the statement of various witnesses were recorded and thereafter, the respondent issued Provisional Attachment Order No. 01/2016 for provisiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the ED refused to accept the same by hand. The appellants were directed to file an affidavit, which was filed by the appellants before this Tribunal on 9.1.2018. The ED returned the Bank Guarantee under cover of letter dated 15.01.2018, on the ground that the main appeal is coming up for hearing on 17.01.2018. By order dated 17.01.2018, this Tribunal directed as under:- Parties to maintain status quo as on the last date of hearing i.e. 21.12.2017. Liberty was granted to ED to move Application in case it was agreeable to receive FDR of ₹ 2 Crores, without prejudice. Interim Order was directed to continue 25. The main case of the respondent is that the appellants have received huge money on the basis of allocation of coal linkage. Since the allocation was obtained from Government by making misrepresentation, therefore, any investment made on the basis of impugned coal linkage amounts to proceed of crime. Therefore, the impugned order is sustainable in law. 26. It is the ED s case that Appellant received SAM of ₹ 25 cr. (which it has categorized as Proceeds of Crime ) due t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and give their name and address. Ans. Myself and AshishRungta are directors in the company having same address. iii) When did you induct in Board of directors of M/s LupinCommodealPvt. Ltd. as a director. Ans. I was inducted director in M/s LupinCommodealPvt. Ltd. on dated 03.04.2010. iv) Who are chairperson and Managing Director of M/s LupinCommodealPvt. Ltd please give their name and address? Ans. LupinCommodeal Pvt Ltd does not have a chair person nor a Managing Director. v) You have shareholding/ directorship in other companies of RC Rungta group of associates companies of JIPL? Ans. I am shareholder and director of Sri Durga Cement Co. Ltd. in which R.C Rungta is the director. vi) Please give details of source of fund used for purchase of shares of JIPL in the Feb 2009-2010 and provide the statement of accounts from which the payment were use to JIPL for purchase of shares? Ans. The above details has already been submitted to you through letter dated 21.3.2011. vii) Please state the reason of purchase of Jip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany registered with RBI. This being an investment company people subscribe to share capital for increase in intend value of shares. As I have already written that JIPL was a continuous growing company showing profit in all yours. The book value of shares as of today is around 300 Rs. per share. Apart from this the value of land and building has been increased manifold. Hence, keeping in view the above points our shareholders has invested in our company for better future management. xvi) As per your letter dated 21.3.2016 [ illegible] 48 shares in your company as on [ illegible] 2005 which is twelve more than share has been of last year i.e. 36 shareholders 2007-2008. Please give details of directorate of companies and there address? Ans. Right now I don t have the ans. I will provide details later on. xvii) As per your letter dated 21.3.2012 M/s Escort Trademark Pvt. Ltd. is one of the shareholders of your company and it has also been taken from your letters that M/s Escort Trademark Pvt. Ltd. is constantly increased of your company since 2007/08. Please give details address of the company, name of the directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. VikashFastern Pvt. Ltd. 8. Rimzim Merchants Pvt. Ltd 9. M/s Chamastika Cement of Ispat Pvt. Ltd. 10. Araanye Mines pvt. Ltd. xxii) As per your reply of question No.11, you have told that the reason for investment by M/s LupinCommodealPvt. Ltd. in JIPL during 2008/09 is that JIPL was growing company at that time. Please elaborately explain the meaning of growing company in the context of JIPL . Ans. Growing means increase in production capacity, increase in revenue or income in profits in the context of a corporate entity. In the context of JIPL as revealed through its balance sheet till date of investment all the three parameters were positive hence, we invested in JIPL. xxiii) Please tell what is the profit for shares of JIPL during 2006/07, 2007/08, 2008/09? Ans. This being a question related to figures, I don t remember right now. This will be submitted later on. Above statement is true and correct and given voluntarily without any pressure. I shall appear again on 13th April 2016 to continue my statement. Sd/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment in LupinCommondealPvt. Ltd. by Escorts Trade link Pvt. Ltd. Please give the details. Ans. As lot of details want to be given to you as my summon on 12.4.2016 has left after 8 pm and today I appear at 10.10 am. So whatever details was possible in such short span we provide to you however, I will be submitted in a week. The following direction is being submitted to you as asked in my previous statement. 1. mode of payment for Escort TradelinkPvt. Ltd to LupinCommodealPvt. Ltd., from 1.4.2007 to 31.3.2016. 2. Company name, Address, director, directors address in which I am director. 3. Production sales revenue, and PBT of JIPL from 20.3.2004 to 20140-15. 4. Details of change in shareholder of LupinCommodealPvt. Ltd. From 2007-08 to 2008-09 with name, address, name of director and address of director. Q.4. As per your letter dated 21.3.2016 there were 48 shareholder in your company as on 31.3.2009 and 23 shareholders as on 31 March 2008 i.e. 12 more shareholders. However, cross click of the list of shareholder reveals that some old shareholder has not reflected in the list of sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the comparative chart of sales/profit before tax production of JIPL, going through the chart it shows that profit before tax of the company has increased in 2008-09 and thereafter it has decreased. Whereas you have replied in question No. 7 that the profit of JIPL has not affected due to allocation of coal block. Please explain. Ans. A company can ultilise its resources for production. The production of the company has increased. Regarding profit, the sale value of any product depends upon market forces, we have to sell the product as per the market which can be up and down. Q.9. When had M/s LupinCommodeal applied for share of JIPL and when were the shares of JIPL allotted to M/s Lupin? Ans.The company had invested the money in 2008-09, the shares were allotted in April 2009. Q.10. Please give the details of investment made by your company from 2005- 06 to 2009-10. Ans. The details are not with me right now. I will submit it in a week. The above statement is true and correct and given voluntarily without any pressure. I shall appear again as on call for. Sd/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year by year. The further prospect was good in terms of experienced promoters. The market value of land of the company also appreciated 3-4 times in year 2009-10. h. Please furnish the name and address of the bankers of the company. Ans. The company is having banking with Kotak Mahindra Bank, Shyam Bank Kolkata HDFC Bank Ltd. Shree Arcade Kolkata. i. Please give details of other investment made by you and your family members either in individual company or as a director/ partner/ proprietor of such company in immovable or movable assets on or after 1.1.2006. Sources of fund for the said investment may also be elaborated. Ans. I have no details of the investment made by myself or my wife at present. I can submit the balance sheet and source of income done by myself and my wife as on 31.5.2015. j. Please give the copy of the above by today. Ans. OK, I will submit the same by today. k. Why you have chosen JIPL to invest. Ans. In Jharkhand at the time of our investment it was a growing company among private sector ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease elaborately explain the meaning of growing company in the context of JIPL. Ans. Growing means increase in production capacity, income in revenue as income profits in the context of a corporate entity. In the context of JIPL as revealed through its balance sheet till the date of allotment all the three parameter were positive hence, we invested in JIPL. r. Please tell what is the profit per shares of JIPL during 2006/07, 2007/08, 2008/09? Ans. This being a question related to figures, I do not remember right now. This will be submit later on. Above statement is true and correct and given voluntarily without any pressure. I shall appear again as on called for. Sd/- A.K. Rungta 12.4.2016 32. Statement dated 23.05.2016 under Section 50, PMLA of AlokRungta, Director of M/s ToalasariyaViniyogPvt. Ltd. I, AlokRungta, S/o Shri Ram ChanderRungta aged 33 years, director of M/s ToalasariyaVinyogPvt. Ltd . Kolkata presently myself before Assistant Director Enforcement Directorate Ranchi, Jharkhand for recording my statement in respons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pation and PAN details? Ans I am businessman and Director of Companies and I look after their working. My wife ShobhaRungta and son DarshRungta 1.5 years old my wife is a house wife. PAN of my wife is AGPPA8129F. ii. Who are directors in M/s Nagina Exports and FinvestmentsPvt. Ltd. and give this name and address? Ans. Myself and AshishRungta are directors in the company having same address. iii. When did you induct in Board of directors of M/s Nagina Exports and Finvest Ltd. As a director? Ans. I was inducted director in M/s Nagina Exports and FinvestmentsPvt. Ltd. dated 3.4.2010. iv. Who are chairperson and Managing Director of M/s Nagina Exports and FinvestLtd. Please give their name and residential address? Ans. M/s Nagina Exports and Finvest Ltd. do not have a chairperson and nor Managing Director. v. You have shareholding/ directorship in other companies of RC Rungta and associates companies of JIPL? Ans. I am shareholder and director of Sri Durga Cement Co. Ltd. In which R.C Rungta is the director. vi. Please ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Co. more than the amount invested in JIPL or whether you have taken loan to invest in JIPL. Ans. The network of our company is more than the amount invested in JIPL. We have not taken any loan to invest in JIPL. xv. On what basis your shareholders have invested in your company at the time of your investment in JIPL. Ans. Our is a NBFC company registered with RBI. This being an investment company people subscribe to share capital for increase in intend value of shares. As I have already written that JIPL was a continuous growing company showing profit in all yours. The book value of shares as of today is around 300 Rs. per shares. Apart from this the value of land and building has been increased manifold. Hence keeping in view the above points our shareholders has invested in our company for better fund management. xvi. In how many companies are / were you directors please also state the name, address of directors of those companies? Ans. I am director at present are as below: 1. Sri Purge Cement Company Ltd. 2. Palace Projects Pvt. Ltd. 3. Escort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k. Q.2. Had M/s Nagina Exports FinvestmentsPvt. Ltd. taken consideration of allotment of North Dhadhu Coal block to Jipl before investment in JIPL? Ans. We have not considered the allotment coal block before investment in JIPL. Q.3 When had M/s Nagina Export and FinvestPvt. applied for shares of JIPL and when where the shares of Jipl allotted to Nagina Export and Finvest. Ans. Our company had applied Shares from the period May 2007- July 2008 and the shares we allotted to us in April 2009. Q.4. What were the authorized Capital, reserves, net worth, NAV of M/s Nagina Exports FinvestmentsPvt. Ltd. for the financial year 2008- 09? Ans. Authorized capital was 2.3 crore, reserve 17.18 Cr Network 19.45 and NAV ₹ 85 per shares as on 31st March 2009. Q.5. Please give details of investment made by M/s Nagina Exports FinvestmentsPvt. Ltd. since 2008? Ans. The relevant balance sheet for the period has already been given, continuing details of investment. Above statement is true and correct and given voluntarily without any pressure. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creasing year by year. The further prospect was good in terms of expenses promoters. The market value of land was appreciated 3-4 times in year 2009-10. h. Please furnish the name and address of the bankers of the company? Ans. The company is having banking with Kotak Mahindra Bank, Shyam Bank Kolkata HDFC Bank Ltd. Shree Arcade Kolkata. i. Please give details of other investment made by you and your family members either in individual capacity or as a director/ partner/ proprietor of such companies in immovable and movable assets on or after 1.1.2001. Sources of fund for the said investment may also be elaborated. Ans. I have no details of the investment made by myself or my wife at present. I can submit you the balance sheet and source of income done by myself and my wife as on 31.5.2015. j. Please give the copy of the above by today. Ans. OK, I will submit the same by today. k. Why you have chosen JIPL to invest? Ans. In Jharkahnd at the time of our investment it was a growing company among private sector enterprises. So we have invested in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing company in the context of JIPL. Ans. Growing means increase in production capacity, increase in revenue as income profits in the context of a corporate entity. In the context of JIPL as revealed through its balance sheet till the date of allotment all the three parameter were positive hence, we invested in JIPL. r. Please tell what is the profit for shares of JIPL during 2006/07, 2007/08, 2008/09? Ans.This being a question related to figures, I cant remember right now. This will be submitted later on. Above statement is true and correct and given voluntarily without any pressure. I shall appear again as and when called for. Sd/- A.K. Rungta 12.4.2016 36. Statement dated 23.05.2016 under Section of AlokRungta, Director of M/s Escorts TradelinkPvt. Ltd. I, AlokRungta, S/o Shri Ram ChanderRungta aged 33 years, director of M/s Escort TradelinkPvt. Ltd., Kolkata presently myself before Assistant Director Enforcement Directorate Ranchi, Jharkhand for recording my statement in response to summon issued to me for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails? Ans I do business and I am director of 8-9 companies and look after the workings of some of these companies. My family includes my wife and my daughter. My wife NehaRungta is a house wife PAN of NehaRungta is AGN PR01434. My daughter is about 3 years. b. Who are directors in M/s Mohanka Exports Pvt. Ltd. and give their name and address? Ans. Apart from myself my younger brother AshishRungta is also a director in the company having same address. c. When did you induct in Board of directors of M/s Mohanka Exports Pvt. Ltd. as a director? Ans. I was inducted director in M/s Mohanka Exports Pvt. Ltd. on dated 24.4.2009. d. Who are chairperson and Managing Director of M/s Mohanka Exports Pvt. Ltd please give their name and address? Ans. Mohanka Exports Pvt. Ltd does not have a chair person and nor Managing Director. e. Do you have shareholding/ directorship in other companies of RC Rungta and associates companies of JIPL? Ans. I am shareholder as well as director of Sri Durga Cement Co. Ltd., in which R.C Rungta is the director. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he net worth of our company is more than the amount invested in JIPL. We have not taken any loan to invest in JIPL. n. In how many companies are you a director? Ans. I am submitting the list of companies in which I am a director. 1. Sri Purge Cement Company Ltd. 2. MR Casting Pvt. Ltd. 3. MR Sponge Pvt. Ltd. 4. Alok Steel Industries pvt. Ltd. 5. VikashFestners Private Ltd. 6. Rim Zim Merchants Pvt. Ltd. 7. Bhutania Electrical Pvt. Ltd. 8. MR Intradev Private Ltd. 9. Ananaya Mines Pvt. Lt. 10. M R Realcon Pvt. Ltd 11. Rungta Enterprises Pvt. Ltd. 12. Mr. International Pvt. Ltd. o. Did your company M/s Mohanka Exports Pvt Ltd. know that M/s JIPL had been allotted North Dhadhu Coal block before investment in JIPL? Ans. I was aware that company was allotted a coal mine, however the name of the mine was not known to me. p. Has M/s Mohanka Exports Pvt. Ltd. taken into consideration of allotment of north ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lock as Shri R.C. Rungta and Sri R.C. Rungta looking after the matter of coal block. However, this coal Block was allotted to JIPL in 2006 and later on in 2012 it was cancelled. Q.7. Was there any production of coal from the mines? Ans. We have not extracted any coal from the mines. Q8. Has your company benefited from allotment of north Dhadhu coal block? Ans. We have not at all benefitted from coal mines. Actually we have incurred heavy expenditure of 3-4 crores as development of this mines and got nothing. Q.9. M/s JIPL has allotted 10 lakhs shares of ₹ 100 each as on a premium of ₹ 150/- per shares. Do you know about this allotment? Ans. Yes the above shares were issued in April 2009 to various companies apart from this I do not know any thing about this allotment. Q.10. What basis the companies paid a premium of ₹ 150 per share for investment in JIPL? Ans: M/s JIPL was running from the year 2003. Every year the Co. was making profit and growing by production, sales etc. The book value of shares was ₹ 200 at that time. Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 193 and Section 298 of the IPC. The aforesaid Statements have not been disputed by the ED who even has relied upon documents in support of the said OC as well as in Show Cause Notice. The Adjudicating Authority cannot disbelieve the statements of the investors or to interpret them its own matter. The same is not permissible in law. Overall view of all the statements are to be read together and then one has to come to the conclusion the finding. Therefore, the Adjudicating Authority has gone beyond the material before it to arrive at the finding that the Appellant and/or the other Defendants in the said OC invited investors/public to invest in the Appellant company using the allurement of the allocation of the coal block or its possible allocation, and that therefore, derivation of benefit from such investment would constitute proceeds of crime. At the same, even otherwise, it is a matter of fact, no investment was made by public which is not denied on behalf of respondent. In commercial, business allurement cannot be treated as money laundering unless money laundering actual happens. 41. The findingin the impugned order was based on materials beyond the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pen market.The above shows that the coal allocation had no relevance for Appellant/Defendant No. 1 and even without the same it continued to run its business and make profits.The Appellant applied for coal linkage on 27.05.2003 and was granted the same on 19.09.2006. The Letter of Assurance from Central Coalfields Limited was issued on 15.09.2008. In case the respondent is to be believed, then Appellant should have collapsed after the de-allocation. However, even after de-allocation, Appellant continued to make profits and carry out its manufacturing activities. 45. Public investment is not involved in the matter. We have been informed that no investor has protested or has filed the civil suit for recovery of investment amount after cancelling the block by the Supreme Court. Even, no contrary evidence is available on record to show that the investment money was/is the tainted money. All have invested the money as per its own for many years also.There is no complaint of any nature against the appellants for allotment in order to receive the investment amount. Therefore, there is no force in the argument on behalf of the respondent that the excess amount of coal allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f. 13.01.2006 Letter of Allocation of coal block to the Appellant issued by the Ministry of Coal jointly in favour of four g. 19.09.2006 Order of Ministry of Coal, Government of India granting coal linkage to the Appellants 47. The Scheduled Offence in this case, i.e., Section 420/120B IPC, was made Scheduled Offences on 01.06.2009.In the instant case, the alleged offence of Section 420/120B IPC stood concluded on 13.01.2006 i.e. on the date of allocation of coal block.Even the acts set out hereunder, which allegedly form part of the offence of money laundering, stood completed before 01.06.2009. Share Application Money ( SAM ) was received by Defendant No. 1 from 2004-05 to 2008-09 i.e. by 31.03.2009. Shares in lieu of SAM stood allotted on 29.04.2009. Even the act of creation of assets stood completed by 02.05.2006. 48. It is submitted on behalf of appellants that prior to the amendment to S. 3 in 2013 vide Amendment Act dated 03.01.2013, the words concealment, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirements of Section 8(1), PMLA. The said Show Cause Notice states As the Adjudicating Authority has reason to believe that you have committed an offence under section 3 of the PMLA or are in possession of proceeds of crime, [ ] 53. Use of or in the Show-Cause Notice shows that the neither the Adjudicating Authority nor the ED had formed a definitive opinion/belief as to whether the Appellant had committed an offence under section 3, PMLA or whether the Appellant was in possession of the proceeds of crime or whether the Appellant was being prosecuted for both the aforesaid acts. The Show- Cause Notice is a mere reproduction of the text of Section 8, PMLA. It shows non-application of judicial mind. 54. There is no conduct, act or omission on the part of the Appellant that has been shown which would lead the ED to believe that the alleged proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceeding under Chapter 2 of PMLA.On the contrary, the following facts would show that the Appellant has been a running concern since the year 2003 and has paid taxes amounting to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly attached could be transferred or dealt in any manner which could result in frustrating any proceedings under the PMLA, and hence, the requirements under S. 5(1)(b), PMLA are not satisfied. 59. At time of issuance of the said PAO, the said OC and the said Show Cause Notice, as recorded therein, the ED s case against the Appellant, was that various, different investor companies, having no relation to the Appellant were allured to invest in the shares of the Appellant Company on the basis of the coal allocation. 60. It is stated on behalf of appellants that at the stage of rebuttal arguments, for the first time, it was orally argued by the ED that the aforesaid investor companies are actually group companies of the Appellant and the persons who had given statements under Section 50, PMLA, on behalf of such investor companies were related/interested persons and therefore, their statements recorded under Section 50 PMLA are not reliable and liable to be disbelieved. Though ED submitted and not in writing, it was argued by taking new stand just opposite to that put up by it in the said PAO and said OC. It is stated on behalf of appellant that the ED n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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