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TMI Blog2020 (11) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... oster and non-urgent matters shall be taken up by the Roster Benches on resumption of regular hearings. It was also argued as to why these petitions be given preference in hearing over the appeals in which accused persons are in jails. The leave petition was set down for day to day hearing from 5th October, 2020, while the orders in these applications stood reserved. It goes without saying that Coordinate Bench of this Court after preliminary hearing and being satisfied, had passed ex parte ad interim order dated 21st March, 2018 directing the parties to maintain status quo in respect of the attached properties. Perusal of instant applications and replies reveals that disputed and complicated issues have been raised which require analysis of evidence and judgment of learned trial court which is voluminous in nature and is, no doubt, subject matter of leave to appeal also which this Court intended to decide at the earliest and had even directed listing of the same for hearing on day to day basis from 5th October, 2020 onwards. Since the subject matter of present applications required thorough examination of the impugned judgment, this Court had, therefore, made an earnest effo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modification of the ex parte ad interim order dated 21st March, 2018, vide which status quo in respect of the attached properties was directed to be maintained, which were directed to be released upon acquittal of the present applicants vide order dated 21st December, 2017 passed by the learned Special Judge, CBI, New Delhi. 2. The pleas raised in these applications are almost similar and therefore, these applications are being disposed of by this common order. 3. At the hearing, while addressing his submissions in Crl.M.A. 10885/2020, Mr. Vijay Aggarwal, learned counsel appearing for the applicants submitted, that in FIR bearing No. RC DAI 2009 A 0045, registered on 21st October, 2009, by the Central Bureau of Investigation for the offences under Sections 120-B of IPC and Section 13(2) r/w Section 13(1)(d) of the Prevention of Corruption Act, 1988 ( PC Act ), the present applicants i.e. respondent No.17- M/s Conwood Construction Developers (P) Ltd. and respondent No.15/ M/s Dynamix Realty were not named. However, based on the allegations of CBI, the Enforcement Directorate (henceforth referred to as the ED ) registered a case No. ECIR/31/DZ/2010 under the provisions of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction in dispute and applicants were arrayed only on the basis of civil liability and a bare perusal of the complaint under Section 45 PMLA confirms that no money originated from Eversmile Construction Co. Pvt. Ltd and Conwood Construction Developers (P) Ltd. during the flow of funds of ₹ 200 crore from Dynamix Realty to Kusegaon Fruits and Vegetables (P) Limited. 6. Learned counsel submitted that the present case is contradictory to the complaint filed by the ED under Section 5 (5) of the PMLA before the learned adjudicating authority, wherein the applicant/Company has been arrayed as respondent only on the concept of civil liability, being partners of Dynamix Realty and the fact that the companies were roped in on the concept of civil liability was known to the complainant, however, the complainant arrayed the applicant/company in the present case on the allegation that the applicant/company had knowledge of the alleged transactions. 7. Learned counsel for the applicants submitted that the ED had taken actual physical possession of the properties since September, 2014, which are various shops/offices and were stock in trade and situated in Building Shagun Arcade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Learned counsel submitted that similarly Shagun Arcade Premises Co-Operative Society Ltd. has initiated proceedings under Section 101 of Maharashtra Co-Operative Societies Act for order of auction for recovery of outstanding maintenance and other charges/funds, to the tune of ₹ 53,89,762/-. The attached property could be subjected to auction without there being any fault on the part of the present applicant. 12. It was submitted by learned counsel that the properties have been attached by the ED as a bailee , who is bound to take all the necessary steps and actions to ensure that the value of the property attached is not reduced. Learned counsel strenuously submitted that the present situation is also affecting the rights of the applicant/company, as the assets/properties of the applicant cannot be developed and put to use for business and also that applicant/company is apprehensive of any coercive action under the Insolvency and Bankruptcy Code, 2016 and applicant s properties will become subject of auction causing irreparable damage and loss, despite the fact that the present applicant has been acquitted of all the charges by the learned Special Court. 13. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt indeed has the power to set aside a judgment of acquittal. The leading case of Sbeo.Swarup.v.Emperor was looked with approval, which provided the following guidelines: Section 417, 418 and 423 of the Code, give to the High Court full power to review at large the evidence upon which the order of acquittal was founded, and to reach the conclusion that upon that evidence the order of acquittal should be reversed. No limitation should be placed upon that power, unless It be found expressly stated in the Code. Put in exercising the power conferred by the Code and before reaching its conclusions upon fact, the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial Judge as to the credibility of the witnesses, (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial, (3) the right of the accused to the benefit of any doubt, and (4) the slowness of an appellate Court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses. To state this, however, is only to say that the High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai FPAPIV1LA; order dated 26th July, 2019 in FPA-PMLA-503/DLI/20, titles as Jagat Publications Pvt. Ltd. Vs. The Joint Director, Director of Enforcement. 19. Learned counsel Mr. Vijay Aggarwal on behalf of applicant- M/s Dynamic Realty submitted that ED had attached the sundry debtors of the applicant and one of the debtors -M/s Graceworks Realty and Leisure Pvt. Ltd., had deposited a sum of ₹ 34,51,20,750/- on 1st October, 2014 with the department and on vide communication of 12th May, 2015, it had requested the ED to invest the said amount into Fixed Deposit Receipts . However, no reply to the said communication was received by the applicant from the ED. Learned counsel submitted that the following accounts of applicant- M/s Dynamic Realty have been attached:- S.No. Account Number / Description of the Sundry Debtors Name Address of the bank / Sundry Debtors Balance as on 24.08.2011/ Amount with the Sundry Debtors as on 22.08.2011 in Rupees 1. 05211011000957 OBC, Rajnigandha Shopping Centre, Gokuldham, Goregaon, Mukund L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a surety and if the appeal filed by ED is allowed in its favour and if the impugned order acquitting the applicant is set aside by this Court, the applicant shall deposit the said amount with the ED as equivalent to value thereof. 22. Lastly, it was submitted by learned counsel for the applicants that the instant applications have been filed without prejudice to all the rights and contentions raised in Crl.M.A. 9402 of 2018 as well as Stay Application and Leave to Appeal in the instant case, and so, in the interest of justice, impugned order of 21st March, 2018 be set aside and the attached properties/accounts/amounts of applicants be released on furnishing of indemnity equivalent to the value thereof. 23. On the other hand, learned Additional Solicitor General (ASG) appearing for petitioner-Directorate of Enforcement (ED) at the outset sought dismissal of these applications and submitted that though in this case leave to appeal has not yet been granted, yet while passing ex parte ad interim order dated 21st March, 2018, this Court had applied its mind to prima facie inference that the matter requires consideration and therefore, until the present appeal under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding adjudication before the Appellate Tribunal and that there is no contradiction between the complaint filed by the appellant under Section 5(5) of PMLA before the adjudicating authority and the present leave to appeal. 28. Learned ASG drew the attention of this Court to the provisions of sub Sections (4) and (5) of Section 5 of The Prevention Of Money-Laundering (Taking Possession Of Attached Or Frozen Properties Confirmed By The Adjudicating Authority) Rules, 2013, which reads as under:- 5. Manner of taking possession of immovable property.- (4) Where the immovable property confirmed by the Adjudicating Authority is in the form of a land, building, house, flat, etc., and is given on lease or rent to any third party where the registration is optional in accordance with the provision of section 18 of the Registration Act, 1908, the authorized officer shall proceed to get the premises vacated and the possession shall be taken by seeking the assistance of local Authorities in terms of section 54 of the Act; (5) Where the immovable property confirmed by the Adjudicating Authority is in the form of a land, building, house, flat, etc., and is under joint ownership, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducted for the recovery of outstanding amount. Learned counsel submitted that applicant- M/s Dynamix Realty has been forced to approach this Court owing to COVID-19 pandemic, as the applicant is facing acute financial distress and difficulty in managing day to day expenses of the firm and due to reduction of cash flows, the situation has become worse and so, the applicant had to lay off some employees being unable to pay their salaries and expenses. 33. Learned counsel for the applicants submitted that the properties attached are under the control of ED, who is liable to maintain them but it has failed to reply as to what steps have been taken to prevent the depletion in the value of the attached properties on account of non maintenance. 34. Learned counsel for the applicants further submitted that stand of petitioner-ED that the facts of the present matter are intrinsically connected to that of CRL. L.P.No. 185/2018 (CBI vs. A Raja Ors), as both matters arise out of a common judgment, is grossly misplaced as two separate orders have been passed by the learned Special Court and the said separate orders are assailed separately by the ED and the CBI respectively. Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal because they have already been acquitted by the learned Special Court, whereas in those cases investigation was in progress. 38. Learned counsel for the applicants further submitted that after applicant/respondent No.17- M/s Cornwood moved the instant application, the petitioner with the mala fide intention to avoid answering the relief claimed by the applicants, have filed Crl.M.A. 11890/2020 seeking early hearing of this case as well as other cases [Crl.L.P.185/2018 and 257/2018] but has not informed this Court that such similar application Crl.M.A. 12246/2020, filed by the petitioner in Crl.L.P.185/2018, was rejected by a Coordinate Bench of this Court and, therefore, in the garb of seeking early hearing of the main case itself, the instant application cannot be ignored and has to be decided. No other submission was made on behalf of the applicants. 39. I have heard the learned counsels for the parties and given my thought to the matter. 40. The stand taken by the prosecution in reply to the applications filed is that M/s Conwood Constructions Developers Pvt. Ltd. is a DB Group i.e. company under the control of Mr. Shahid Usman Balwa, respondent No. 2 and Mr. Vino ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar amounts at much higher rate of interest, cannot be said to be a genuine business transaction. 43. It is also the case of the prosecution that none of the transactions among these four companies/firms were secured by way of any collateral/guarantee/ mortgage when these transactions were made and if the plea of applicants is taken into consideration that the payment of funds was in the nature of loan, there exists incontrovertible material to establish the fact of inadequate consideration by the applicants/ respondents in as much as these socalled loans were obtained by M/s Kalaignar TV Pvt. Ltd. at 10% per annum, whereas those giving the so-called loans themselves took loans from IL FS at the rate of 13.5% to 16% per annum. M/s Kalaignar TV Pvt. Ltd. itself took credit limit from Indian Bank at the rate of 13.25% to 14.5% per annum. 44. It is also the case of prosecution that in furtherance of the investigation, proceeds of crime to the tune of ₹ 13.76 crore approx. have been attached under Section 5 (1) of PMLA from the respondent No. 16 being the partner of respondent No. 15 and proceeds of crime to the tune of ₹ 52.16 crore approx. have been attached unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matters through video conferencing as per the Roster and non-urgent matters shall be taken up by the Roster Benches on resumption of regular hearings. It was also argued as to why these petitions be given preference in hearing over the appeals in which accused persons are in jails. It was further submitted that the other matters [Crl.Rev.P.381/2017; Crl.Rev. P.370/2017 and Crl.Rev.P.57/ 2017] arising out of 2 G Spectrum case are pending before different Benches of this Court and why only these petitions should be heard on priority. It was next submitted that amendment in Section 13 of The Prevention of Corruption Act, 1988 is directly relevant for the adjudication of the present leave to appeal and since this Court has to demit office on 30th November, 2020, respondents will not get ample time to argue their case, especially when record is voluminous in nature. 48. Vide detailed order of 29th September, 2020, this Court allowed the applications for early hearing while observing as under:- 45. This Court is of the opinion that with the assistance and cooperation of learned counsels, all endeavours should be made to hear the matter as early as possible. Though this Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, on 5th October, 2020 itself, an application Crl.M.A. 13703/2020 was filed on behalf of respondent No.13- Asif Yusuf Balwa and Mr. Vijay Aggarwal, learned counsel appearing on his behalf, had sought issuance of directions to petitioner/CBI to furnish copy of mandatory approval obtained under Section 378(2) Cr.P.C. with concerned note sheets, reports, drafts, letters and correspondence to file the present leave to appeal. Proceedings and hearing qua this application continued from 5th October, 2020 till 12th October, 2020. On 12th October, 2020, another application [Crl.M.A.14091/2020] was filed by respondent No.13 and was listed before this Court and Mr. Vijay Aggarwal, learned counsel appearing for the respondent No.13 conceded that almost similar relief is sought in this application and, therefore, on the said date i.e. 12th October, 2020, orders in Crl.M.A.13703/2020 and Crl.M.A.14091/2020 were reserved after hearing arguments. 51. Thereafter, on 12th October, 2020, learned counsel appearing for applicants and other respondents insisted that this Court should first hear the question of applicability of Prevention of Corruption (Amendment) Act, 2018 to the case in hand and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval/sanction to file the leave to appeal were sought from Central Government. 55. Since the subject matter of present applications required thorough examination of the impugned judgment, this Court had, therefore, made an earnest effort to hear and decide the leave to appeal as expeditiously as possible. However, this Court has to say with a heavy heart that limited time available at its disposal was consumed in hearing and disposal of miscellaneous applications and writ petitions filed one after another on behalf of the respondents, which have been dismissed vide detailed orders/judgments on merits. Had the leave to appeal been heard on merits, a clear picture would have emerged and this Court could have arrived at a conclusion whether the properties at all are required by the prosecution or these should be released to the applicants. In the absence of any arguments on merits, this Court is of the opinion that the order dated 21st March, 2018 vide which status quo in respect of attached properties was directed to be maintained, need not be interfered with at this stage. 56. In view of the above discussion, this Court is of the opinion that it will be in the interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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