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TMI Blog2024 (6) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... MP-PMLA-4819/DLI/2018 (Stay) MP-PMLA-4820/DLI/2018 (Exem.) FPA-PMLA-2477/DLI/2018 MP-PMLA-4821/DLI/2018 (Stay) MP-PMLA-4822/DLI/2018 (Exem.) FPA-PMLA-2478/DLI/2018 MP-PMLA-4823/DLI/2018 (Stay) MP-PMLA-4824/DLI/2018 (Exem.) FPA-PMLA-2479/DLI/2018 MP-PMLA-4830/DLI/2018 (Stay) MP-PMLA-4831/DLI/2018 (Exem.) FPA-PMLA-2483/DLI/2018 MP-PMLA-4832/DLI/2018 (Stay) MP-PMLA-4833/DLI/2018 (Exem.) FPA-PMLA-2484/DLI/2018 MP-PMLA-4834/DLI/2018 (Stay) MP-PMLA-4835/DLI/2018 (Exem.) FPA-PMLA-2485/DLI/2018 MP-PMLA-4838/DLI/2018 (Stay) MP-PMLA-4839/DLI/2018 (Exem.) FPA-PMLA-2487/DLI/2018 MP-PMLA-4840/DLI/2018 (Stay) MP-PMLA-4841/DLI/2018 (Exem.) FPA-PMLA-2488/DLI/2018 MP-PMLA-4881/DLI/2018 (Stay) FPA-PMLA-2512/DLI/2018 MP-PMLA-4883/DLI/2018 (Stay) FPA-PMLA-2513/DLI/2018 MP-PMLA-4885/DLI/2018 (Stay) FPA-PMLA-2514/DLI/2018 MP-PMLA-4887/DLI/2018 (Stay) FPA-PMLA-2515/DLI/2018 JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN And SHRI V. ANANDARAJAN : MEMBER For the Appellants : Mr. Mehendra Pratap , Advocate For the Respondent : Mr. Priyank Khattar , Advocate JUDGEMENT This set of 13 appeals arises out of the order of the learned Adjudicating Authority ( AA ) under the Prevention of Money Laundering Act, 2002 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of various persons connected with the case, including the accused, other suspects and witnesses, were recorded under the PMLA, 2002 and relevant evidence was gathered from various sources, including banks, Sub-Registrars Offices, Transport Offices, the Income Tax Department etc. 6. From the records received from the DRI, it was seen that Shri Manish Kumar Jain, during his statements before the DRI under the Customs Act, 1962, had inter-alia admitted that he had remitted the foreign exchange acquired on the strength of bogus documents and remitted the same outside India with the connivance of forex dealers/agents such as Duggal Forex, P.R. Forex and M/s Kamakhya Forex Pvt. Ltd., all based in Delhi. For the said purpose, Shri Manish Jain had also set up his own concern, namely, M/s Pacific Technology in Hong Kong in 2004. Foreign exchange remittances were made into the HSBC account of the said entity. The foreign exchange remitted to the said HSBC account was further transferred to firms based in China/ Hong Kong/ USA/ India etc. He also admitted that the remittances were made on account of under-valuation made by Indian importers who imported mainly from Chinese firms and over-invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is further contended that payments for the properties have been made through cheque/cash and are duly recorded in the sale deeds which are in the possession of the complainant Department. 11. In light of the above, it is prayed by the appellant that the impugned order dated 09.07.2018 passed by the Ld. AA in O.C. No.891/2018 be set aside. 12. The respondent, on the other hand, submits that the argument of the appellant that she was not in possession of proceeds of crime is far from the truth because appellant in connivance with accused Manish Jain has acquired proceeds of crime in the form of foreign exchange against fake import documents and remitted the same outside India to launder the said money in the garb of remittance against advance import in order to conceal fraudulent exports/imports. It is also contended that the aforementioned proceeds of crime have been used in acquiring properties which fall within the definition of proceeds of crime‟ and have been attached following due process of law. 13. We have considered the submissions made from both sides and perused the material on record. One of the main contentions raised on behalf of the appellant is that she had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the appellant as evidence of having legitimate income for acquisition of the assets in question. 14. The appellant has repeatedly asserted that no link or nexus has been established by the respondents to connect the proceeds of crime with the appellant or the assets acquired by her. It is not necessary for the respondents to establish the existence of any such direct nexus or link between the proceeds of crime and the property sought to be attached. Under section 8 of the PMLA, 2002 once a notice has validly been served upon a person under section 8(1), it is for that person to indicate the sources of his/her income, earning or assets out of which or by means of which he/she has acquired the property. The presumptions mandated under section 23 and 24 of the Act are also against the appellant. Having given careful consideration to materials on re cord and the arguments presented before us on behalf of the appellant, we do not find that the appellant in the present case had presented any such proof either before the Ld. AA or even during the proceedings before this Appellate Tribunal to establish the legitimate sources of acquisition of the properties attached by the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents. Accordingly, the attachment of the said amount standing to the credit in the bank account of the appellant is hereby set aside. 20. Consequently, this appeal is allowed and the order of the Ld. AA, insofar as it relates to the present appellant is set aside. FPA-PMLA-2478/DLI/2018 21. Mrs. Bhawna Wadhwa, the appellant in this appeal, is the wife of Shri Sanjeev Wadhwa, brother of Rajeev Wadhwa who is one of the accused in the supplementary prosecution complaint filed on 06.10.2018. Two amounts, namely, Rs. 1,81,556/- and Rs. 7,60,099/- standing to her credit in the accounts maintained with the South Indian Bank, Rajouri Garden and the ICICI Bank, Patel Nagar respectively, have been attached. 22. It is contended on behalf of the appellant that the amounts attached represent her legitimate income from her profession, income from short-term capital gain and commission income. The bank accounts were duly disclosed in the ITRs. Copies of ITRs for the period 2014-18 have been filed to substantiate the contention. 23. It is further submitted that the complaint is completely silent on the money trail of the alleged proceeds of crime. There is nothing in the entire complaint to show t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant was one of the directors of M/s Kamakhya Forex Pvt. Ltd. which is one of the entities, apart from M/s P.R. Forex Pvt. Ltd. through which the accused persons in the case had conducted their illicit operations. The respondents have pointed out that there are huge outward and inward remittances involving the present appellants and other individuals and entities which are suspicious in nature. The appellant has not presented any specific evidence with regard to the sources of acquisition of property which has been attached. The onus of proving the legitimacy of the transactions through which the balances in the bank account were acquired and the sources thereof was upon the appellant. However, we find that the submissions made by the appellant are of a broader nature, including existence or otherwise of reason to believe, absence of any allegations or charges personally against the appellant, absence of money trail etc. No specific evidence to substantiate the legitimacy of the sources of the funds in the individual bank accounts of the appellant have been presented before us, nor have the transactions therein been explained. Accordingly, we are of the view that the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. AA failed to establish any money trail of the proceeds of crime and, as such, the PAO and the impugned order are liable to be set aside. 32. The respondents have submitted that the appellant was initially one of the directors in P.R. Forex, and used to deliver the cash which was to be remitted outside to Manish Jain and his brothers. Further, he also controlled the business of M/s Kamakhya Forex, in which his wife was one of the directors. Cash used to be deposited in the accounts of Kamakhya Forex on his directions. 33. We have carefully considered the material on record and the arguments presented before us. The appellant Shri Sanjeev Wadhwa had incorporated the company M/s P R Forex Pvt. Ltd. which is one of the concerns through which the illegitimate foreign currency transactions were carried out by the principal accused. Further, as per the statement of Shri Rajeev Wadhwa, brother of the appellant and one of the accused persons in this group of cases, Shri Sanjeev Wadhwa was running the business of M/s Kamakhya Forex Pvt. Ltd. in which his wife Bhawna Wadhwa is a director. The above facts indicate that the appellant was very much a part of the operations carried out by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim. It is contended that the appellant had made the same submissions before the Ld. AA vide reply dated 04.04.2018. Even so, the Ld. AA proceeded to confirm the PAO mechanically and without application of mind. There are no allegations of any nature against the appellant in the OC filed by the ED. The authority failed to establish any money trail of the proceeds of crime and as such the PAO as well as the impugned order are liable to be set aside. The sources of income by means of which the appellant had acquired the properties attached were duly explained and there is nothing in the complaint to show any nexus between any proceeds of crime and the provisionally attached property. The appellant is not named in the FIR, the ECIR or the prosecution complaint. 38. According to the respondents, the accounts in the name of Gurdeep Kumar Gujral Sons are likely to have been operated by Shri Gurdeep Kumar Gujral himself, who was one of the accused in the 2nd supplementary prosecution complaint filed on 06.10.2018. 39. We have considered the contentions from both sides and perused the material on record. At the outset, we note that the appellant is an HUF of which the Karta is Shri G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant at any stage and, arbitrarily, without any lawful cause, they proceeded it to freeze the bank balance and fixed deposits. There is neither any statement nor any document which speaks against the appellant and the appellant has been unnecessarily dragged into the matter. It is also submitted that the FDRs were seized from the residence of the appellant. On 12.08.2015, the appellant s son, vide letter dated 18.09.2015 had explained the source of the said FDRs. There is not even a whisper in the complaint about the explanations offered in respect of the seized FDRs. There is no justification to retain the seized FDRs beyond 180 days. There are no allegations against the appellant in the original complaint or the FIR or ECIR or the complaint filed under PMLA, 2002. It is further contended the appellant had made the above submissions before the Ld. AA vide her reply dated 04.04.2018. The order has been passed mechanically, without any application of mind and the submissions made by the appellant have been ignored by the Ld. AA which has not given any findings on the same. There is absolutely no basis or material to even remotely infer that the appellant has derived any property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajouri Garden have been attached. 48. It is contended on behalf of the appellant that there are no allegations made against the appellant in the OC and except for her name being mentioned at Sl. No. 19 of the lists of defendants, it does not figure anywhere in the OC. The amounts attached by the respondent directorate represent the legitimate income of the defendant from her business and profession. The appellant is engaged in lawful business and is an income-tax assessee. The sources of the bank balance were legitimate income of the appellant which was duly reflected in the ITRs. Copies of ITRs for the period 2014-2018 have been filed by the appellant to substantiate the claim. It is contended that the complaint is totally silent on the money trail of the alleged proceeds of crime. The complaint nowhere shows any link of the subject bank balances and the alleged proceeds of crime. No enquiries were made by the complainant department with the defendant at any stage, and arbitrarily, and without any lawful cause, the respondent proceeded to freeze the aforesaid bank balances without any intimation to the appellant. There is neither any statement nor any document which speaks again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t aside. With this, the present appeal is disposed of along with pending applications, if any. FPA-PMLA-2487/DLI/2018 51. Mrs. Kajal Arora, the appellant in this appeal is the wife of Shri Subhash Arora, who is one of the accused in the 2nd supplementary prosecution complaint filed on 06.10.2018. Four amounts, namely, Rs. 50,00,000/-, Rs. 30,00,000/-, Rs. 10,08,852/- and Rs. 8,58,979/- standing to her credit in the accounts maintained with the South Indian Bank, Rajouri Garden have been attached. 52. It is contended on behalf of the appellant that the appellant was not implicated in the statements of the main accused Shri Manish Jain recorded on 17.04.2014, 07.08.2014, 13.10.2014 15.10.2014. Similarly, statements of a large number of witnesses, including the employees of Shri Manish Jain, bank employees and others, were recorded and none of them made any allegation against the appellant. It is also contended that no investigation was made against Shri Ravinder Jolly and his 25 associates whose names and contact numbers were mentioned by Shri Manish Jain who stated that he had carried out transactions under the directions of these persons. The appellant is not a noticee in the Show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the appeal and, dismiss the same. FPA-PMLA-2488/DLI/2018 57. In this appeal, the attachment of an FD to the tune of Rs. 7,84,337 and the balance of Rs.5,14,048/- standing in the account of Parvesh Kumar Gujral Sons in South Indian Bank, Rajouri Garden has been assailed. 58. It is contended on behalf of the appellant that the appellant was never asked to furnish details of the source of the bank balances provisionally attached either through any written communication or when they attended the office of the complainant department. The Chartered Accountant of the appellant was called a number of times by the complainant department and he fully cooperated and furnished voluminous documents called by the department. The balance of Rs. 5,14,048/- available in the bank account of the company maintained with the South Indian Bank, New Delhi and FD of Rs. 7,84,337 /- with the same bank have been attached by the complainant department. There is nothing in the complaint to show as to how the complainant has come to the conclusion that the amounts represent proceeds of crime. There are no allegations regarding the defendant having obtained or received any proceeds of crime. There is nothi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en under Section 24. Accordingly, appeal is dismissed. FPA-PMLA-2512/DLI/2018 61. Ms. Soumya Jain, who is the appellant in this appeal, is the daughter of Rakesh Jain, who is one of the accused in the 2nd supplementary prosecution complaint filed on 06.10.2018. An amount of Rs. 34,823/- standing to her credit in the form of an FD in UP Co- operative Bank, Ghaziabad has been attached. The respondents have pointed out that Shri Rakesh Jain, the appellant s father and Shri Manish Jain, the main accused in these cases, purchased some properties (both movable and immovable) in their own names as well in the names of their family members. 62. It is contended on behalf of the appellant that the FDR of Rs. 34,823/- was in no way connected with the alleged proceeds of crime which are to the tune of Rs. 600 crores. It is contended that the appellant s mother, Mrs. Vinita Jain deposited a sum of Rs. 30,000/- in her name which was out of small savings, cash gifts on the occasion of festivals etc. There is no nexus between the amount and the alleged proceeds of crime. The respondent Directorate has also not disputed the source of the money. Furthermore, she was a minor, aged about 13 years at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been an income -tax assesse for the last 30 years. 66. It has also been pointed out that two other FDRs, bearing numbers 2300450008408 of an amount of Rs. 81,896/- dated 10.03.2014 and 2300450008409 also of Rs. 81,896/- dated 10.03.2014, both issued by the UP Cooperative Bank, Ghaziabad branch were attached by the respondents showing them to be the property of Mr. Rakesh Jain whereas the said FDRs were in fact the property of the appellant and not her son, Shri Rakesh Jain. The appellant has nothing to do with the alleged crime and has been unnecessarily dragged into the matter because of complete non application of mind on the part of the respondent directorate as well as the Ld. AA. It is pointed out that the respondent filed a combined rejoinder to the replies filed by Defendants No. 3, 4, 5, 7 and 8 in the complaint. In the said rejoinder, the respondent has not disputed the contentions raised by the appellant and has merely reiterated the facts of the complaint with which the present appellant is in no way associated. Even so, the learned AA has confirmed the order. The said order of the Ld. AA is perverse in nature and has been passed in a stereotyped manner without app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the business of sale and purchase of foreign exchange, and also sells travel cards to persons travelling aboard. The appellant has been doing its business since its inception in 1994 and has nothing to do with the alleged offence. The travel cards are issued by the bank. In the present case, they were issued by the ICICI Bank for which the appellant has opened a current account with the said bank. For the purpose of issue of travelling cards, the bank kept FDR with it from the appellant as a pledge/security. The said account was opened was 25.06.2013 and since the beginning, such FDR was kept with the bank as security and was renewed from time to time. The attached FDR of Rs. 6,00,000/- is nothing but the FDR kept with the bank as security in the normal course of business. The appellant has been filing its ITRs since the start of operation and has been assessed to tax. There is no nexus between the alleged offence and the property of the appellant provisionally attached and it is nowhere mentioned in the complaint or even the Show Cause Notice dated 21.02.2018 that the properties of the appellant provisionally attached are related to the alleged offence or proceeds of crime. Eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous occasions like birth of two children and festivals etc. It was stated in the reply affidavit that the appellant used to deposit the said gift amounts in FDRs and when the FDRs matured, the amount was invested in fresh FDRs along with the interest. The appellant has nothing to do with the alleged crime, and has been unnecessarily dragged into the subject matter. It is also pointed out that the directorate had filed a common rejoinder before the Ld. AA to the replies file by Defendants No. 3, 4, 5, 7 8. In the said rejoinder the respondent did not dispute the contentions raised by the appellant except repeating the facts of the complaint to which the appellant is in no way associated. Neither in the PAO nor in the complaint or the said rejoinder is it mentioned anywhere how the amount of the appellant sought to be attached is related to or has any nexus with the alleged proceeds of crime. However, the Ld. AA confirmed the PAO without considering the submissions made by the appellant. It is contended that the impugned order is perverse in nature and has been passed in stereotyped manner without application of mind. The source of income explained by the appellant in her reply affid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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