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TMI Blog2019 (9) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the appellant was not arrayed in the FIR nor any charges are frame. She is also not accused in the prosecution complaint. She, in the present appeal, is seeking relief to release only the property which is acquired by her by virtue of divorced decree passed in her favour. By the said decree by mutual consent, the said House No. M-4/9, DLF Phase-II Gurgaon has come to her. She is not involved in money laundering. 3. S/Shri Shivraj Puri, RaghurajPuri, Rajender Chand, Sanjay Gupta, Gaurav Jain and Smt. DeekshaPuri had committed various offences punishable under various provisions of the Indian Penal Code, 1860 (IPC) pursuant to which FIR No. 341.2010, was registered at PS: DLF Phase-II, Gurgaon under Section 420/467/471 and 120B IPC,[which are scheduled offences under the Prevention of Money Laundering Act, 2002]. During the course of police investigations, S/Shri Shivraj Puri, RaghurajPuri, Rajender Chand, Sanjay Gupta and Gaurav Jain were arrested by the officers of the Haryana Police, Gurgaon, but Smt. DeekshiPuri could not be arrested by Haryana Police and was declared a Proclaimed Offender. The accused persons entered into a criminal conspiracy amongst themselves & oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son to believe, to be forged documents or electronic records, (vi) During the year 2009-2010 Shri Shivraj Puri was entrusted with funds amounting to Rs. 405,51,41594.91 in his capacity as the then Relationship Manager, CITI Bank, DLF Phase II, Gurgaon, and he had committed breach of trust in respect of the said property/amount so entrusted to him, and (vii) During the year 2009-2010 ShivrajPuri, knowingly or having reason to believe that the offence of cheating and forgery have been committed, caused certain evidence connected with the said offence, namely, I-Phone, to disappear with the intention to save the offenders from legal punishment. Police investigations further revealed that ShivrajPuri, in criminal conspiracy with Shri Sanjay Gupta, and the others solicited and obtained investments from various Citi Bank customers and also non-Citi Bank customers mainly Hero Corporate and others. The investment, thus mobilized was deposited in * PremNath's Custodian Account No. 5011666247, * Other family linked accounts, * Accounts of 2 other firms namely M/s. B.G. Financial Services and M/s. G2S Management Consultants, etc., which were used for inflow/outflow of funds, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id Scheme was floated by the Citi Bank. iv) The said Custodian Account was fraudulently used as a conduit to subsequently transfer funds to various Accounts of the accused/suspect persons or their relatives maintained with various Brokerage Companies, viz. Religare Securities Ltd, Bonanza Portfolio Ltd, India Infoline, etc, and that the said investors were kept in dark that their funds were being invested in such a manner. v) As per prosecution case, the internal investigations got made by CITI Bank inter-alia disclosed that it was as early as March, 2009, that Shri Shivraj Puri had been convincing CITI Gold customers, whose accounts were managed by him, to invest in the "exclusive" high return (rate of return of at least 1.5% per month), capita guaranteed financial products, supposedly authorized by CITI Bank and managed by Brokerage Houses. These representations by Shri Shivraj Puri were bogus and no such product was actually offered by CITI Bank. Funds were drawn from customers' accounts either by way of Demand Drafts the Brokerage Houses or routed through the account of ShriPremNath. The payments were deposited into a group of Brokerage accounts held by Shri Shivraj Puri, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sh. PremNath& Others and opened & operated by Shri Shiv Raj Puri. vii) The Investigation Audit of the aforementioned CITI Bank Scam was conducted by M/s. Lalit Jain & Co., a Chartered Accountant Firm which examined the transactions in Custodian account No. 5011666247 and other accounts of the family members/relatives of Shri Shivraj Puri& also the account of Religare Securities Ltd & Bonanza Portfolio Ltd and analysed the inflow and outflow of funds in the said Custodian account and other accounts by making flow charts. The flow chart No. 2 showing the Commissions given to the parties from the Custodian account mentioning names of G2S Management Consultants, BG Financial Services, Archana Gupta (w/o Sanjay Gupta) etc. It also reflects the amounts received from parties including G2S Management Consultants & BG Financial Services. 6. The Crime Branch of Haryana Police filed an application before the court seeking attachment of the following immovable properties alongwith the immovable properties comprising of bank accounts, insurance Policy and Mutual fund, u/s 102 Cr.P.C., purchased by Shri Shivraj Puri, out of the illgotten funds earned by him:- Name of Property Deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 22.03.2011 registered in Directorate of Enforcement, New Delhi. 8. It is in the case of respondent - ED that during the course of instant investigations conducted so far under PMLA, statements of various persons, connected with this case, including the accused/suspect persons have been recorded in Directorate of Enforcement. 9. The relevant evidence, collected, is mentioned as below:- (i) Statement of Shri Shivraj Puri, was recorded u/s 50 of PMLA, 2002 on 16/08/2012, 14.09.2012 wherein he inter-alia stated, that there was an alert in May 2008, identified by Citi India FRMU through the banking early alerts tracing system, regarding unusual activity in his and his ex-wife Smt. NidhiUppal's staff accounts; on 27-10-2009, he as Relationship Manager of Citi Bank, DLF Phase-II, Gurgaon opened a Custodian Account No. 5011666247 in the names of ShriPremNath, Smt. Sheila PremNath, and SmtDeekshaPuri; that the funds were sent by RTGS mode by the investors into account No. 5011666247 and from this account funds were transferred to brokerage houses and accounts of Smt. DeekshaPuri and Sh. RaghurajPuri for further investments into the Stock market; that Shri Sanjay Gupta was also a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was closed and a fresh Account was opened, in which context Shri Shivraj Puri made them signed some blank Accounts Forms; however, subsequently when the cheque book of the new account was received, he was surprised to see that Smt. DeekshaPuri was named as a Joint Account Holder, instead of being made a nominee, as was agreed to by them; they both, therefore told Shri Shivraj Puri that they did not want SmtDeekshaPuri to be a Joint Account Holder and ask him to immediately close the above Account. 12. The details of the respondent's investigation as well as recording of the statement of the witnesses are mentioned at page nos. 9 to 29 of the impugned order. 13. The Relevant Part of Investigation done by ED has been reproduced hereunder:- 2.10. That, the aforementioned fraud was got inquired into by Citi Bank as per Case No. 2010034666 dated 18-05-2011, with regard to the high inflows into the CITI Bank from other Banks on the basis of a supposedly guaranteed, high return investment product allegedly offered by CITI Bank as CITI bank did not offer any such product. The internal review disclosed high inflows of Rs. 405 Crores and outflows of Rs. 401 Crores in an individual CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; C-4 Haridwar Green, Vill- Aneki, Hatampur 3850 Sqft (Shiv Raj Puri) SCB 53110532540 DD003037 dt 3.9.10 5,00,000/- Arrow infra Ltd 335885 dt 1.9.10 5,00,000/- 335888 dt 20.9.10 13,29,250/- 391902 dt 1.11.10 87,05,295/- Total Amount 1,10,34,545/- EMAAR MGF Emerald Hills-Emerald Plaza-2, Office Space-027 Gurggaon, 637 Sqft (Shiv Raj Puri) HDFC 00441930004342 DD 666115 dt 4.12.09 5,00,000/- Emerald Plaza, Gurgaon SCB 53110532540 808306 dt 10.03.10 2,86,952/- 808332 dt 20.3.10 2,86,952/- 746836 dt 25.1.10 73,903/- 261489 dt 17.10.10 18,13,533.48/- Total Amount 29,61,340.48/- EMAAR MGF Emerald Hills-Emerald Plaza-2, Office Space-027 Gurgaon, 637 Sqft (Shiv Raj Puri) HDFC 00441930004342 DD 666116 dt 4.12.09 5,00,000/- Emerald Plaza, Gurgaon SCB 53110532540 808307 dt 10.03.10 2,86,952/- 808333 dt 20.3.10 2,86,952/- 746837 dt 25.1.10 73,903/- 261488 dt 17.10.10 18,13,533.48/- Total Amount 29,61,340.48/- Plot of lant al No. C-2/1056, Palam Vihar, Gurgaon Smt. Archana Gupta, W/o Sanjay Gupta ICICI 035801500543 DD 035220 dt 21.5.10 DD 035221 dt 24.5.10 45 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1188658 5,74,024.26 8. PankajPremNath/RamalPremnath (RBS) 1048314 (INR) 5,391.33 9. RaghurajPrui (Citibank) 5755573247 10. RaghurajPuri (HFL) RRAJPURI 55,310 11. RaghurajPuri (HDFC) 00441600003335 7,946.66 12. RaghurajPuri (Axis) 131010100380546 72,805.60 13. ShivrajPuri (HFL) RAJSHIV 34,66,407 14. ShivrajPuri (Citibank) 5700178244 21,63,194.47 15. S P Puri (HUF) (HDFC) 987483245 1,543.49 16. ShivrajPuri (HDFC) 00441930004342 1,27,172.10 17. ShivrajPuri (SCB) 53110532540 15,22,702.97 18. DeekshaPouri (Citibank) 5201116246 49,163.88 19. DeekshaPuri (HFL) DEEKPURI 6,000.00 20. DeekshaPuri (Citibank) 5202814249 2,307.26 21. Gaurav Jain (RSB) 985794(INR) 23,568.00 22. Metcam Holding Pvt Ltd. 111154200 50,411.91 23. Normans Martin Brokers Pvt Ltd. 0004083245 44,58,670.97 24. Normans Mertin Brokers Pvt Ltd (Citibank) 0004132246 1,79,795.11 25. Normans Martin Brok PG (Citibank) 0004223241 1,03,723.28 26. Normans Martins Brokers PL-MUM A/c (Citibank) 0004133242 4,70,067.55 27. Normans Martins Brokers PL A/c(Citibank) 000413 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80510252 -do- -do- 31.8.10 35.1591 241758.179 5011666247 3680510252 -do- FQ OW Pay Out 31.8.10 21.91 456412.597 5011666247 3680510252 -do- CICI PDPD Pay Out 31.8.10 18.1489 550997.581 5011666247 3680510252 -do- HOHIEQUITY FUND DIV 29.7.10 21.669 481488.763 5011666247 3680510252 -do- CICI PDPD Pay Out 29.7.10 19.1246 522886.753 5011666247 3680510252 -do- CICI PDPD Pay Out 29.9.10 12.411 1611473.693 5011666247 3680510252 -do- FrandandiaD ynpocada Fund of Funds DIV 29.9.10 35.5867 1093293.465 5011666247 3680510252 -do- CICI PDPD Pay Out 29.10.10 19.5781 510774.794 5011666247 3680510252 -do- CICI PDPD CHIP 29.10.10 17.22 580720.093 5011666247 3680510252 -do- MiralAssat India Opportunity Fund REG Div REIN 30.11.10 15.712 1018329.939 5011666247 3680510252 -do- -do- 10.12.10 13.978 109248.503 57001784244 3680510252 ShivrajPuri FTAF Growth 9.1.09 9.945 10055.304 57001784244 1700178217 -do- -do- 5.1.10 18.463 5416.238 987483245 1700178217 SP Puri (HUF) CICI PDPD INVI 13.2.09 10.8435 11.356 98748324 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Interest Deposit (VFIID): the Bank doesn't have any investment scheme by name "VFIID", that as per the disclosure made by Shri Shiv Raj Puri during Bank's internal instigation, Shri Sanjay Gupta, CFO; Hero Corporate, used to get investors in the "VFIID" scheme and Shri Gupta was paid certain percentage of the amount invested as commission; that Shri Shiv Raj Puri forged a SEBI circular which confirms PremNath Account No. 5011666247 as Custodian Account authorized to accept investment; that, that circular was made to convince the customers on the authenticity of the investment scheme; that he was also part of the CSIS investigation team. 5.2(i) That, ShriPremNath in his statement recorded on 1610.2012 inter-alia stated that Shri Shiv Raj Puri is related to him, as his mother SmtDeekshaPuri is the daughter of his (PremNath's) wife's brother, as regards his & his wife's Account No. 501166247 with CITI Bank, DLF-II, Gurgaon, Shri Shiv Raj Puri suggested to them that in view of their old age they should nominate someone to take care of the affairs of this Account, and in this context, he suggested that his mother SmtDeekshaPuri could be a nominee in the said account, which was acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s has been done after this case; that Rs. 4.45 crore was received as commission in the bank account of G2S Management Consultant. 6.7 That, SmtKiran Jain W/oShriGaurav Jain, in her statement recorded on 18.10.2012 inter-alia stated that plot No. C-1/627 PalamVihar was purchased for total consideration of 50 lakh and registered in her name on 20.09.2010 by executing sale deed in the office of Joint Sub-Registrar Gurgaon, excluding stamp duty fee and registration charges of Rs. 2.65 lakh, which was paid in cash; that the payment of Rs. 50 lakh was made through Cheque No. 003210 dated 15.09.2010 from the Account of M/s G2S Management Consultants payable to ShriPankajDhawan, from whom the aforesaid plot was purchased. Documents procured from various authorities 8.2 Copy of Forged letter No. SEBI.IMD/MC No. 1/189241/2010 dated 01.01.2010 That, this letter was addressed to Citi bank N.A. Investment management Department and was marked as "PRIVATE AND CONFIDENTIAL". It was further advised in this letter that "as agreed upon, the custodian in your bank will be as follows till further notified/cancelled/amended/replaced". Produce code bank Custodian Account No. IILDO Citibak NA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is disposal to force portfolio statements, bank statements of his clients. Shivraj also utilized the Citibank stationery to forge networth certificates that were issued to stock brokers and fixed deposit receipt which were issued to Citi bank clients. It was the responsibility of Citibank to perform necessary due diligence with regard to the conduct of its relationship manager. In this context, it may be pertinent to note that SanjeevAggarwal in its FIR has informed that Citibank has developed a practice of getting blank demand drafts requisition forms signed from the customers on the pretext that people being busy would not be available for signing these papers. It was also observed that these demand draft were issued to the clients not-in person i.e. these clients were not present in the bank when the demand drafts were issued, neither there was a call made to these clients for verification. Such, operation which continued for more than 2 years could not have been possible without the implicit knowledge of more employees of Citi bank. Shivraj managed the funds and securities of the clients. In view of the above, Citibank acted as a portfolio manager without being registered as su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .F.MC No. 68/23.04.074/2010-11 dated 04.07.2011, after examining the Citibank's written and oral submission to the Multi Crore Fraud by Shri Shivraj Puri, Global Wealth Manager of Gurgaon Branch of Citibank NA, concluded that the said Citibank had failed in adhering to the extant guidelines/instructions issued by the Reserve bank of India on KYC/AML. The failure in adhering to the KYC.AML guidelines led to the perpetration of the captioned fraud for which the Reserve Bank of India imposed a penalty of Rs. 25.00 lakh upon the Citi bank, which was paid vide Citibank Cheque 325985 dated 13.07.2011. 7.5 That, the Hon'ble Judicial Magistrate, 1st Class, Gurgaon Shri Ashok Mann, in his order dated 25.02.2014, in the criminal case under FIR No. 341 dated 27.12.2010, registered u/s 420, 467, 468, 471, 409, 120-B and 201 IPC, held the following accused guilty of the offences and awarded the sentences vide order dated 28.02.2014, as mentioned against each:- (i) Shiv Raj Puri - Guilty under Section 409,420, and 120-B r/w 420 of IPC and awarded rigorous imprisonment for 2 years and six months and a fine of Rs. 10,000/- for each offence' (ii) Sanjay Gupta - Guilty under Section 420 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19164197 M/s N/G/ Financial Services 5,23,08,849.67 6. A/c No. 910020021019874 with Axis Bank, New Delhi M/s G2S Management Consultants 1,23,55,150.10 7. Plot of land at No. C1/627, PalamVihar, Gurgaon SmtKiran Jain W/o ShriGauravjain 50 lakh (+Rs. 2.65 lakh towards registration and stamp duty Total Rs. 18,70,14,593/- Attachment of all these aforementioned properties has been confirmed by the Adjudication Authority, PMLA vide its order dated 20.03.2013. (B) PROVISIONAL ATTTACHMENT ORDER No. 07/2013 DATED 31.12.2013 (FOR ATTACHMENT OF THE FOLLOWING SEVEN PROPERTIES OF SHRI SHIV RAJ PURI, 425A, Hamilton Court, DLF Phase-II, Gurgaon):- S. No. Details/particulars Recorded Value/ in Rs. 1. House No. M-4/9, DLF Phase II, Gurgaon 1,25,00,000/- 2. Amount paid to M/s Tata Housing Development company Ltd, 3, Ground Floor, Naurang House, 21, Kasturba Gandhi Marg, New Delhi for purchase of GF-A, Raisina Residency, Sector59, Gurgaon (4413 Sqft) against total consideration of Rs. 3,82,39,549/- 91,94,858/- (Deposited in the company's A/c No. 004103000026211 in IDBI Bank) 3. Amount paid to M/s Pioneer Urban Land & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 540 060661 dt 29.10.09 93,00,000/- GurmeetKaur 344416 dt 25.09.09 32,00,000/- Total Amount 1,25,00,000/- GF-A Raisina Residency, Sec 59, Gurgaon 5513 Sqft SCB 53110535240 261486 dt 01.07.10 55,76,538/- Raisina Residency Total Amount 91,94,858/- Commercial site, A-511 Urban Square Golf Course Road, Sec. 62 Gurgaon, 1240 Sqft SCB 5311053240 261482 dt 31.07.10 16,66,560/- Urban Square Sec-62 Gurgaon 103296 dt 01.06.10 9,52,320/- Commercial site, A-511 Urban Square Golf Course Road, Sec. 62 Gurgaon, 1240 Sqft SCB 5311053240 261481 dt 31.07.10 16,39680/- Urban Square Sec-62 Gurgaon 103292dt 01.06.10 9,36,960/- Total amount 25,76,640/- C-4 Haridwar Green, Vill-Aneki, Hatampur 3850 Sqft DCB 53110532540 DD 003037 dt 3.9.10 5,00,000/- Arrow Infra Ltd 335885 dt 1.9.10 5.00.000/- 335888 dt 20.9.10 13,29,250/- 391902 dt 1.11.10 87,05,295/- Total Amount 1,10,34,545/- EMAA MGF Emerald HillsEmerald Plaza 2, Office Space027 Gurggaon 637- Sqft HDFC 00441930004342 DD666115 dt 4.12.09 5,00,000/- Emerald Plaza SCB 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olid proof including Statements from VandanaMandhana to Citibank confirming their love affair since Feb 2008 and their illicit relationship leading their families to meet and legalize their getting married in 2009 has been submitted before the Hon'blecourt .Further copies of LIC Insurance Polices dated May 2009 with her name updated as wife of ShivrajPuri and Copy of Statements given by ShivrajPuri to the Police during investigation have been filed. 21. It is also stated by her that ShivrajPuri had also forged the Appellant's Signatures and had filed a Divorce application in the Gurgaon Court in July 2009. However, in the same year, Mr. ShivrajPuri promised the Appellant to put an end to all such illicit relationship and start afresh in a new house and during the hunt for a new house, the couple came across with house no. M-4/9 Phase-2 Gurgaon which was found suitable in terms of location and affordability. Finally, the said house was purchased by Mr. ShivrajPuri for and in trust for his wife Ms.NidhiUppal, the Appellant herein. The said house was funded with borrowings from his father/friends, redemption of his investments, personal savings and the gifts received by the couple f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een admitted in their findings to be dated 01st January, 2010. 26. It is submitted by the appellant that from August 2009 to June 2011, she invested huge amount of personal savings to renovate the said house. She even took up the loan of Rs. 17 Lacs to furnish and renovate the house and invested a total sum of Rs. 38 Lacs + Interest on Loan to furnish and renovate the house. The Appellant has filed the details of the lawful borrowings / spending made by her in relation to the said property. 27. When she came to know about disgraceful act of ShivrajPuri was shared with her by Citibank Team on 9th December 2010, she had no option but to put an end to the marriage at that time she was residing in House M-4/9 DLF Phase - 2 Gurgaon. She got right to the title of the property through the gift deed dated 22nd December, 2010. 28. The Appellant initiated her divorce application on 23rd December, 2010 which was submitted to the Family Court and the 1st Motion was filed on 06th January 2011. It is the admitted position that none of her savings accounts were attached during their investigation in December 2010. It is alleged by her that prior to December, 2010, she was unaware about the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain, we have requested the respondent counsel to produce any evidence which would show prima facie that any investor has deposited the any amount prior to the final payment. However, nothing was produced. 32. On 27.10.2009, a Bank Account viz Custodian Account bearing No. 5011666247 was fraudulently opened with Citi Bank, Gurgaon in the joint names of ShriPremNath, Smt. ShielaPremNath& Smt. DeekshaPuri, all of whom are close relations of Shri Shiv Raj Puri, who was working as Relationship Manager, in Citi Bank, Gurgaon. A large number of investors were lured to deposit funds in the said Custodian Account and fraudulently prepared hand written deposit receipts which were issued to the investors on printed Citi Bank stationery, with the intention to show that the said Scheme was floated by the Citi Bank. The said Custodian Account was fraudulently used as a conduit to subsequently transfer funds to various accounts of the accused/suspect persons or their relatives maintained with various Brokerage Companies, viz. Religare Securities Ltd, Bonanza Portfolio Ltd, India Infoline, etc. and that the said investors were kept in dark that their funds were being invested in such a manner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blished by law and had locked all her precious belongings including her Education & Experience Certificates, Clothes and her personal belongings inside the house. The appellant has tried to initiate the remedy before Punjab and Chandigarh High Court also requesting that her plea should be heard at the earliest as she has been running from pillar to post since June 2011. The said proceedings before Chandigarh High Court have no bearing on the present case as the impugned order has been challenged before us by filing of an appeal under Section 26 of the Act. 37. The Respondent has failed to submit any copy of the bank statement of Standard Chartered Bank for the period 2005 to 2011 or the Complaint / FIR against the accused prior to September 2009 to prove that the appellant's property - M-4/9 DLF Phase -2 Gurgaon was directly bought through the proceeds of crime, rather the documents submitted by the respondent themselves confirm that their case involves proceeds of crime that came in Citibank Custodian Account that was opened by the accused in the case on 27th Oct 2009 bearing Account Number 5011666247. 38. From the investigation conducted so far, it has inter-alia emerged that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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