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TMI Blog2025 (2) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... es, all of which are predicate offences under the Indian Penal Code, 1860 and the Prevention of Money Laundering Act, 2002 - HELD THAT:- Admittedly, detailed statement of the petitioner came to be recorded by the EOW on 28th October, 2024. Looking to the enormity of the offences and the fact that it involves thousands of crores of rupees, spans multiple jurisdictions and implicate nationalized Banks as well as foreign entities based in Mauritius, USA, Australia and UAE involving substantial financial implications, at both, national and international levels, the D.C.P, EOW, Mumbai requested the aforesaid Authorities for taking appropriate action. Both the EOW as well as the CBI, for the reasons best known to these Agencies, are reluctant to inquire/investigate into the complaints made by the petitioner having such large scale alleged misappropriation of public funds as well as laundering, by Mr. Anand Jaikumar Jain, who is the Promoter and Director of Jai Corp Ltd along with its subsidiary companies and others. There are no words to demonstrate the conduct of the Investigating Agencies viz: EOW as well as CBI. There will be no fair and impartial investigation into the alleged crim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lic Prosecutor a/w Mr. Dhavalsinh Patil, Mr. Ashish Kumar Srivastava and Ms. Sampada S. Patil,. For the Respondent No. 5 - SFIO: Mr. H.S. Venegavkar a/w Mr. Aayush Kedia a/w Ms. Divya Gontia i/b Mr. Pradeep Yadav,. For the Applicants in Interim Application: Mr. Ravi Kadam, Senior Advocate a/w Mr. Vikram Nankani, Senior Advocate a/w Mr. Vineet Naik, Senior Advocate a/w Mr. Ameet Naik, Mr. Abhishek Kale, Ms. Vaibhavi Bhure, Mr. Aditya Ajgaonkar, Mr. Harish Khedkar, Mr. Vivek Dwivedi, Mr. Nevil Chopra, Ms. Antara Kulkarni and Ms. Rebecca Singh i/b M/s. Naik Naik & Co., for Applicants in Interim Application [Stamp] No. 24376 of 2024 and Interim Application [Stamp] No. 24377 of 2024. For the Applicant in Interim Application [Stamp] No. 24444 of 2024: Mr. Pranav Badheka a/w Mr. Rajendra Barot, Mr. Dhirajkumar Totala a/w Ms. Vaibhavi Bhure, Mr. Vivek Shetty, Ms. Harsha Uppal, Mr. Prince Todi, Mr. Harsh Sethi i/b AZB & Partners,. Mr. Nikhit Mishra Joint C.P. a/w Mr. Sangramsinh Nishandar and Mr. Nitin Gije, PI, EOW Unit VII, Mumbai present. JUDGMENT: [PER PRITHVIRAJ K. CHAVAN, J.]: 1. The petitioner, who is a public rights activist and founding member of a Non-Governmental Organiza ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anks have collectively recovered approximately Rs. 14,00,00,000/- (Rs. Fourteen Crores only) from M/s. Autoriders Finance Limited. This Court, by a common order dated 9th July, 2009 disposed of the aforesaid two PILs' by entrusting the investigation of the subject matter therein to the State C.I.D, Pune, Maharashtra State under the overall supervision of Additional Director General of Police, C.I.D, Maharashtra State, Pune. 4. The present petition is filed seeking limited directions, inter alia, issuance of an appropriate writ of mandamus directing the respondent Nos.1 and 2 to jointly act upon the complaint dated 22nd December, 2021 (First EOW complaint) and the complaint dated 3rd April, 2023 (Second EOW complaint) filed by the petitioner wherein he has prayed for conducting preliminary investigation/inquiry into the fraudulent activities undertaken by one Anand Jaikumar Jain-the Director/Promoter of Jai Corporation Ltd (Jai Corp Ltd) which includes; (i) misappropriation of public monies for personal enrichment; (ii) defrauding investors; (iii) round tripping of funds through shell companies based in tax havens; (iv) making unsecured advances to subsidiaries with the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt No. 1 and respondent No. 2 disclosing various offences committed by Jai Corp Ltd and its subsidiary Companies at the behest of Anand Jaikumar Jain which attract the provisions of the PMLA and IPC. The respondent No. 1 vide communication dated 25th January, 2021 replied to the First EOW Complaint stating therein that the contents of the complaint pertain to jurisdiction of SEBI and hence, the complaint was forwarded to SEBI for necessary action. No response was received from SEBI with reference to his first EOW complaint. 7. The petitioner contends that in 31st October, 2022, SEBI passed an order (UIVCF Winding Up Order) in the matter of Urban Infrastructure Venture Capital Fund (UIVCF) (registered with SEBI as a Venture Capital Fund) directing that UIVCF be wound up in the terms, more particularly, contained therein. Admittedly, Jai Corp Ltd, being a company promoted by Anand Jaikumar Jain and his related entities, own a 100% stake in Urban Infrastructure Venture Capital Limited (UIVCL) and Urban Infrastructure Trustees Limited (UITL) i.e the Settlor and Trustee of UIVCF respectively. In essence, the affairs and management of UIVCF were controlled by Anand Jaikumar Jain who was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n books of accounts and writing off projects. As such, the first EOW complaint and the second EOW complaint disclose commission of cognizable offences under the IPC and the PMLA which is within the exclusive jurisdiction of respondent No. 1 and 2 to investigate and take necessary action in pursuance thereof. 11. The petitioner has enclosed the following documents; (a) A list of individuals who are associated with Anand Jaikumar Jain by virtue of being Directors in the sister/subsidiary concerns, annexed as "Exhibit L" to this petition; (b) A list of subsidiary companies of Jai Corp Ltd incorporated in India having played a role in the entire conspiracy to defraud investors and launder public money, annexed as "Exhibit M" to this petition; (c) A list of subsidiary companies of Jai Corp Ltd incorporated abroad having played a role in the entire conspiracy to defraud investors and launder public money, annexed as "Exhibit N" to this petition; 12. The petitioner had given chronological events throwing light on the nature of the fraud committed by Anand Jaikumar Jain which is as under; (i) On 5th April, 2004 and 15th May, 2004, Mumbai SEZ and Navi Mumbai SEZ are respectively i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 4 actively aided and abetted RIL by providing funds to Vinamra, which was ultimately used in providing margin money to stock brokers for taking the short positions by the Agents of RIL in RPL futures for earning illegitimate profits from the said positions." (ix) SEBI has held in Paragraph 82 that Vinamra Traders was incorporated on 11th July 2007 and immediately thereafter, on 4th August, 2007 and 22nd September, 2007, Navi Mumbai SEZ and Mumbai SEZ entered into unsecured facility agreements (ICDRs) with Vinamra Traders for staggering amounts of Rs.2775 Crores and Rs.550 Crores respectively days within it's incorporation. The relevant excerpt of Paragraph 82 is being reproduced hereinbelow; "Therefore, I note that both Noticee No. 3 and Noticee No. 4 have advanced unsecured loans to vinamra at concessional rates of interest, despite their claims that they are not connected with Vinamra. However, I am of the view that placing of ICDs at such a low interest rate with a new company but unrelated entities is not in the normal course of business". (x) Hence, what evolves from the aforesaid is that a total profit of Rs. 513.12 Crores has been generated by Vinamra Traders duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Welldone Real Estate Ltd 21.02.2006 04.72 00.12 04.60 Hind Agri Properties Ltd 04.12.2006 09.44 09.44 Yug Developers Ltd 03.02.2007 11.39 01.07 10.32 Swar Land Developers Ltd 05.03.2007 31.00 00.38 30.62 Swastik Land Developers Ltd 05.03.2007 08.76 08.76 Krupa Land Ltd 06.08.2007 23.60 04.22 19.38 Novelty Realty & Developers Ltd 20.08.2007 12.23 09.53 02.70 Iconic Realtors Ltd 20.08.2007 119.41 30.35 89.06 Krupa Realtors Ltd 21.08.2007 08.26 00.04 08.22 Ekdant Realty & Developers Ltd 21.08.2007 16.80 14.00 02.80 Rainbow Infraprojects Ltd 27.09.2007 15.00 11.50 03.50 Rudradev Developers Ltd 01.10.2007 11.74 10.00 01.74 Jailaxmi Realty & Developers Ltd. 09.01.2008 19.42 17.31 02.11 Ashok Realty & Developers Ltd 09.10.2008 17.36 06.96 10.40 Total 329.02 127.05 203.66 330.71 13. The petitioner, however, contends that Jai Reality advanced a loan of Rs.9.44 crore to Hind Agri Properties Limited and that Hind Agri Properties Ltd utilized the loan amount to purchase agricultural land and carry out construction on the said land. Subsequently, the land and constructions thereon were transferred to Nidhi Kanoj, Neha Baga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.529 19.73 17. The petitioner has contended about fraud through Real Estate Private Funds in India by Jai Corp Ltd being a company promoted by Anand Jaikumar Jain and his related entities who own a 100% stake in UIVCL and UITL. Between May, 2006 and June, 2008, an amount of Rs.2423 Crores was mobilized from the public at large for and on behalf of UIOF. An amount of Rs.555 Crores out of 2423 Crores was diverted to four Real Estate Companies, which are depicted in the chart below; Name of Company Amounts/ Inventories of UIOF diverted to the Company in (Rs. Crore) Amounts spent on purchase of benami land/development rights and construction thereon in (Rs. Crore) Loss to Investors/Contributors of UIOF in (Rs. Crore) Vidhant Reality Pvt Ltd 72.92 +6.85 [A] 47.73 79.77 Urban Reality Pvt Ltd 59.27 65.27 65.27 Urban Kshetra Infrastructure Pvt. Ltd 114.86+259.87 [B] 374.73 Anacron Realtors Pvt Ltd 36.00 30.00 36.00 Total Loss 555.77 18. An amount of Rs. 1995.40 Crores advanced as loans to construction companies by UIOF vide 33 Special Venture Project Agreements in 15 different cities as demonstrated in the table hereinbelow: Company Disbursed Amt in (Rs. Crore) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d - India & Urban Infrastructure Opportunities Fund - India 53.00 +00.10 2011-12 Urban Infrastructure Trustees Ltd - India & Urban Infrastructure Opportunities Fund - India 50.34 + 00.09 2012-13 Urban Infrastructure Trustees Ltd - India & Urban Infrastructure Opportunities Fund - India 51.36+00.085 2013-14 Urban Infrastructure Trustees Ltd - India & Urban Infrastructure Opportunities Fund - India 29.79+00.08 2014-15 Urban Infrastructure Trustees Ltd - India & Urban Infrastructure Opportunities Fund - India 06.28+00.08 2015-16 Urban Infrastructure Capital Advisors - Mauritius 12.15 2016-17 Urban Infrastructure Capital Advisors - Mauritius 11.85 2017-18 Urban Infrastructure Capital Advisors - Mauritius 08.68 2018-19 Urban Infrastructure Capital Advisors - Mauritius 08.18 2019-20 Urban Infrastructure Capital Advisors - Mauritius 04.09 TOTAL 340.035 (a) UIVCL is the Indian Investment Advisor to Urban Infrastructure Capital Advisors - Mauritius ("UICA - Mauritius) which is under the control of Anand Jaikumar Jain. (b) UICA - Mauritius is the Investment Manager to Urban Infrastructure Real Estate Fund LP - Mauritius ("UIREF Mauritius") which is under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere demonstrated. The petitioner craved leave to refer to and rely upon a copy of the Complaint dated 25 March 2023 filed with SEBI. C. FORMATION OF REAL ESTATE FUNDS IN MAURITIUS AND JERSEY - CHANNEL INSLANDS I. Urban Infrastructure Capital Advisors-Mauritius ("UICA Mauritius") is a private equity company registered in Mauritius. UICA Mauritius has made a filing before the competent authorities in the USA on 19 March 2019 which reveals that: (i) UICA Mauritius is a real estate private equity fund and its activities are restricted to investment in the real estate sector in India. (ii) UICA Mauritius is an advisor to Urban Infrastructure Real Estate Fund LP - Mauritius (UIREF Mauritius) and UIREF is the Master Fund. (iii) UICA Mauritius has two "Feeder Funds" namely, (i) Urban Infrastructure Real Estate - Jersey Ltd. and (ii) Urban Infrastructure Real Estate Partnership LP-Jersey, Channel Islands. (iv) Gross Asset Value of UICA Mauritius as on 19 March 2019 is USD 77,322,542 which is equivalent to Rs.541 Crores. (v) UIVCF is the Investment Advisor as well as client of UICA Mauritius. (vi) UICA Mauritius is being controlled by an individual that is not named in the fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-, for purchase of land on a 50 year lease. (v) Upto March 2020, a sum of USD 88,65,335 which is equivalent to approximately Rs. 53,19,20,100/- has been utilised by Searock Sharjah and Oasis Sharjah for construction of labour accommodation camps in Sharjah, UAE and it seems that a total amount of Rs. 90,17,54,629/- has been spent collectively on construction of these camps. (vi) Importantly, neither Searock Sharjah nor Oasis Sharjah are involved in any business activities which require any form of labour. II. According to the petitioner, a collective reading of the information gathered regarding the advances made by Belle Terre Mauritius to Searock Sharjah and Oasis Sharjah, all three of which are 100% subsidiaries of Jai Corp Ltd suggests that (i) fictitious bills and invoices were raised to claim expenses for alleged labour and construction activities undertaken by Searock Sharjah and Oasis Sharjah, and (ii) the sole beneficiaries of these dubious transactions is Anand Jaikumar Jain and his subsidiary companies. E. FICTITIOUS INVOICES RAISED FOR EXPORTS TO NEW SOUTH WALES, AUSTRALIA AND CALIFORNIA, USA 1. SARBAGS, NSW (i) The Petitioner has collated information regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect. 4. Learned Special P.P. and the learned APP seek two weeks time to place on record an inquiry report or investigation, if any, carried out by them. 5. Meanwhile, liberty to the petitioner to implead the SEBI as a party respondent. Necessary amendment shall be carried out within one week. After amending the petition, a notice be issued to the newly added respondent, which shall be made returnable on the next date. 6. List on 7th October, 2024" Order dated 7th October, 2024 reads as under; "1. Pursuant to our order dated 18th September 2024 issuing notice to SEBI, Mr. Daruwala states that he has instructions to appear for SEBI. MR. Daruwala learned Counsel seeks time to file an affidavit-in-reply. Time granted. The same to be filed in the Registry before the next date with an advance copy to the learned Counsel for the petitioner. 2. Mr. Ponda, learned Senior Counsel has tendered an additional affidavit of the petitioner and a copy thereof is served on the learned Counsel for the respective respondents. The same is taken on record. 3. Since no officer from EOW is present, we direct a responsible officer, well versed with the facts to be present on the next date. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue notice to the newly added respondents i.e. the Joint Director, CBI, EOB, Mumbai as well as to the Joint Director, SFIO, Regional Office, Mumbai, returnable on 25th November, 2024. In addition to Court notice, learned Senior Counsel for the petitioner to ensure that the private notice is served on the newly added respondents and affidavit of service is filed in the Registry before the next date. 5. Stand over to 25th November, 2024. To be listed under the caption 'Due Admission'. Order dated 28th November, 2024 reads thus; "1. Considering what transpired during the hearing of the aforesaid petition i.e disclosure made by the learned A.P.P as well as Mr. Patil, learned Special Public Prosecutor appearing for the C.B.I, we deem it appropriate to direct the Joint C.P, EOW, Mumbai to remain present tomorrow i.e on 29th November, 2024. 2. Stand over to 29th November, 2024 at 1.00 p.m". 3. In the meantime, Mr. Ponda, learned Senior Counsel appearing for the petitioner seeks leave to amend the petition to implead State C.I.D as respondent. Leave granted. Amendment to be carried out forthwith. 4. Issue notice to the newly added respondent - State C.I.D. Ms. Shinde, learned A.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of dubious and fictitious invoices. 24. Admittedly, detailed statement of the petitioner came to be recorded by the EOW on 28th October, 2024. Looking to the enormity of the offences and the fact that it involves thousands of crores of rupees, spans multiple jurisdictions and implicate nationalized Banks as well as foreign entities based in Mauritius, USA, Australia and UAE involving substantial financial implications, at both, national and international levels, the D.C.P, EOW, Mumbai requested the aforesaid Authorities for taking appropriate action. Shockingly, Superintendent of Police, CBI, EOW, Mumbai has sent a communication dated 26th November, 2024 to the Deputy Commissioner of Police, EOW, Mumbai which is extracted below; "1. It is observed that complaint pertains to fraudulent trading in futures of stocks and utilization of profit and also violation of Indian Securities Law Matters and SEBI regulations/guidelines which is within the purview of SEBI to take appropriate action; 2. Further, it is observed that the Petitioner has gathered information that Prima Facie suggests a large scale operation has been undertaken by Jai Corp Ltd through Anand Jaikumar Jain and its su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. In the case of State of West Bengal and others Vs. Committee for Protection of Democratic Rights and others (2010) 3 SCC 571, an issue was referred to the opinion of the Constitution Bench as to whether in exercise of jurisdiction under Article 226 of the Constitution of India, the High Court could direct the CBI established under Delhi Special Police Establishment Act, 1946 to investigate into a cognizable offence alleged to have taken place within the territorial jurisdiction of the State, without the consent of the State Government. The Constitution Bench laid down the following legal position. In exercise of its jurisdiction under Article 226 of the Constitution of India has power to direct the CBI to investigate a cognizable offence alleged to have been committed within the territory of a State without the consent of that State and such direction will not entrench upon the federal structure of the Constitution. The direction to transfer the investigation to the CBI also does not violate the doctrine of separation of power. The Superior Courts are the protectors of civil liberties and have not only the power and jurisdiction but also an obligation to protect the fundamental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. There are however certain self-imposed limitations on the exercise of these Constitutional powers, but no inflexible guidelines can be laid down to decide whether to transfer the case or not. The power of transfer should not be exercised as a matter of routine or merely because a party has leveled some allegations against the local police. The power to transfer the investigation can be used when it becomes necessary to provide credibility and instil confidence in the investigation or where the incident may have national and international ramifications or where such an order may be necessary for doing complete justice and enforcing the fundamental rights. 20. The contour of the jurisdiction of the High Court to transfer the investigation to the CBI came up for consideration of the bench of three Judge in the case of Mithilesh Kumar Singh Vs. State of Rajasthan and others (2015) 9 SCC 795. It was a case where a young college student had fallen from the fourth floor of a hostel where she was staying with her sister. Her father had called for a fair and proper investigation as to whether there was a case of ragging by the seniors as alleged by the father or she had committed suic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd relatives have a right to be dealt with fairly in a criminal trial. Denial of fair investigation thereof is as much injustice as to the victim and the society as to the accused. A victim cannot be treated as an alien or a total stranger in the criminal trial. With the passage of time, there is a greater emphasis on victimology, and the crime has to be viewed from the perspective of the criminal as well as the victim when judged in the social context. The justice system will acquire credibility only when the people will be convinced that justice is based on the foundation of truth. The Courts are meant for imparting justice, and if a negligent or biased investigation is not effectively rectified, the faith and confidence of the people in the law enforcing agency and in the institution for the administration of justice would be shaken. The power vested in the Superior Court to transfer the investigation has to be invoked sparingly, cautiously. But when it becomes necessary to provide credibility and to instil confidence in the investigation or where the incident may have national and international ramifications or where such an order may be necessary for doing complete justice. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts that there is an attempt to contest on the plinth of fairness being provoked by some kind of vengeance or singularity of "affected purpose"; but, irrefutably a pronounced and pregnant one, there are occasions when the individual cry is not guided by any kind of revengeful attitude or anger or venom, but by the distressing disappointment faced by the grieved person in getting his voice heard in proper perspective by the authorities who are in charge of conducting investigation and the frustration of a victim gets more aggravated when he is impecunious, and mentally shattered owing to the situation he is in and thereby knows not where to go, the anguish takes the character of collective agony. When the investigation, as perceived by him, is nothing but an apology for the same and mirrors before him the world of disillusionment that gives rise to the scuffle between the majesty and sanctity of law on one hand and its abuses on the other, he is constrained to seek intervention of the superior courts putting forth a case that his cry is not motivated but an expression of collective mortification and the intention is that justice should not be attenuated." 30. Our justice system will ..... X X X X Extracts X X X X X X X X Extracts X X X X
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