The Tax Publishers 2019 TaxPub(CL) 0283 (ATPMLA)

 

Shapoorji Pallonji & Co. (P) Ltd. v. Dy Director, Directorate of Enforcement, Mumbai & Ors

 

PREVENTION OF MONEY LAUNDERING ACT, 2002,

--Appeals to Appellate Tribunal--Provisional attachment of propertiesNo involvement of monies/properties in proceeds of crime--Whether provisional attachment order sustainable--Where there was no evidence to prove that the monies advanced by appellant to respondent or properties acquired out of said monies was a part of proceeds of crime, the provisional attachment of said monies/properties was illegal and beyond the jurisdiction of the Enforcement Directorate.--SPCL advanced monies to Nilesh Thakur Group between the period 26-9-2007 to 1-6-2009. Anti-Corruption Bureau (ACB) registered FIR against Nilesh Thakur Group on the ground that the advances/payment made by SPCL to Nilesh Thakur Group constituted an offence committed under the provisions of section 13(1)(e) of the POC Act, which was scheduled offence under provisions of PMLA. The Enforcement Directorate (ED) treating said monies or the properties acquired out of the same as a part of proceeds of crime, passed provisional order for attachment of said properties, which was subsequently confirmed by the Adjudicating Authority under section 8. Aggrieved by the order, SPCL filed an appeal. Held: It was observed that the purported offence under section 13 of the POC Act was not a predicated/scheduled offence under the PMLA prior to 1-6-2009. SPCL advanced monies to Nilesh Thakur Group prior to 1-6-2009, thus, the provisions of PMLA could not have been applied to the said monies or the properties acquired out of the same and the said monies/properties could not be treated as proceeds of crime for the purposes of the PMLA. There was no connection between the monies paid by SPCL to Nilesh Thakur Group. Thus, issuance of provisional attachment order in respect of said monies/properties was beyond the power of ED and the same was null and void. Hence, appeal was allowed and the provisional attachment order was quashed.

Prevention of Money Laundering Act, 2002, Sections 26, 8, 3 & 4

Prevention of Corruption Act, 1988, Section 13

REFERRED :

FAVOUR : In favour of appellant

A.Y. :



IN THE ATPMLA

MANMOHAN SINGH CHAIRMAN, J.

Shapoorji Pallonji & Co. (P) Ltd. v. Dy Director Directorate of Enforcement, MUMBAI & Ors.

MP-PMLA-3081/MUM/2017 (Misc), MP-PMLA-2639/MUM/2016 (Stay), FPA-PMLA-1407/MUM/2016, MP-PMLA-3046/MUM/2016 (Misc.), MP-PMLA-2344/MUM/2015 (Stay), FPA-PMLA-1104/MUM/2015

MP-PMLA-3047/MUM/2016 (Misc.), MP-PMLA-2345/MUM/2015 (Stay), FPA-PMLA-1105/MUM/2015, MP-PMLA-3080/MUM/2017 (Misc), MP-PMLA-2638/MUM/2016 (Stay), FPA-PMLA-1406/MUM/2016, MP-PMLA-3082/MUM/2017 (Misc), MP-PMLA-2640/MUM/2016 (Stay), FPA-PMLA-1408/MUM/2016, MP-PMLA-3083/MUM/2017 (Misc), MP-PMLA-2641/MUM/2016 (Stay), FPA-PMLA-1409/MUM/2016, MP-PMLA-3084/MUM/2017 (Misc), MP-PMLA-2642/MUM/2016 (Stay), FPA-PMLA-1410/MUM/2016, MP-PMLA-3085/MUM/2017 (Misc), FPA-PMLA-1479/MUM/2016, MP-PMLA-3079/MUM/2017 (Misc), FPA-PMLA-1211/MUM/2016, MP-PMLA-2813/MUM/2016(Stay), FPA-PMLA-1491/MUM/2016

17 January, 2019

Appellant by: Gaurav Agarwal, Advocate, Gurmehar S. Sistani, Advocate

Respondent by: Neeraj Atri, Advocate, Rahul Narayan, Advocate and Shashwat Goel, Advocate

JUDGMENT

FPA-PMLA-1104-1105, 1406-1410, 1479/MUM/2016, FPA-PMLA-1211 & 1491/MUM/2016

1. By this common order, I propose to decide all pending appeals and crossappeals filed by the above-mentioned parties. The details of parties/titles are mentioned in FPA-PMLA No. 1407 of 2016 printed above for noticing the array of parties before this Appellate Tribunal as also before the Adjudicating Authority PMLA.

2. The Respondents nos. 2, 3, 4 & 5 are the accused in the proceedings adopted by the Anti Corruption Bureau under section 13(1)(e) of the Prevention of Corruption Act, 1988.

3. Respondent No. 3 (Nilesh J. Thakur) is the Promoter/Director of the Firms/Companies which are arrayed to the Appeal bearing No. FPA-PMLA 1407 of 2016 as Respondent Nos. 6 to 25 above.

4. The array of parties of FPA-PMLA No. 1407 of 2016 is shown above Includes all the Firms/Companies/entities comprising the Nilesh Thakur Group mentioned hereinafter of which Respondent No. 3 is the Promoter/Director.

5. The Annexures and page numbers of Annexures and Exhibits who would be referred in the later part of my order are referred to the Annexures and Exhibits of FPA-PMLA No. 1104 of 2015 (hereinafter for convenience sake referred to as 'the 1104 Appeal') and reference to the Annexures and page nos. at serial Nos. 23 to 27 below is of Appeal No. FPA-PMLA 1407 of 2016 the title whereof has been reproduced above.

6. The brief facts as per appellant in appeal No. 1104/2016 and 1107/2016 are:--

(a) The Appellant Company [hereinafter referred to as 'SPCL'], was incorporated on 23-1-1943 under the Companies Act 1913.

(b) SPCL is a part of the well known Shapoorji Pallonji Group of Companies which is a well known and reputed corporate group of India.

(c) One of the specific objects of SPCL is to purchase, for investment or resale and to trade in land and to do various activities in relation to land.

(d) SPCL is a profit making Company and its turnover and profits have been increasing every year. For F.Y. 2008-09, SPCL's turnover was Rs. 3197.10 Crores, the Profit Before Tax was Rs. 183 Crores and Tax paid was Rs. 75 Crores. All the receipts, revenue/income of SPCL are purely from legitimate sources. The Annual Accounts of SPCL for F.Y. 2006-2007, 2007-08, 2008-09, 2009-10 and 2010-11 are filed in the above appeal.

(e) SPCL and Respondent No. 3 [Nilesh Thakur] entered into an agreement which is recorded in SPCL's letter, dated 16-7-2007 addressed to Respondent No. 6 [M/s. PRS Enterprises] which is a proprietary concern of Nilesh Thakur. By the said letter, dated 16-7-2007, SPCL awarded to Nilesh Thakur/M/s. PRS Enterprises the task of acquisition of 900 acres of land at the maximum price of Rs. 30 lacs per acre within a period not exceeding five years.

(f) By his Letter, dated 19-7-2007, Respondent No. 3 duly accepted the agreement recorded in SPCL's Letter, dated 16-7-2007 mentioned above.

Thus the Letters, dated 16-7-2007 and 19-7-2007 together constitute the agreement/contract between SPCL and Respondent No. 3 and is hereinafter called 'the subject Agreement'. The said Letters, dated 16-7-2007 and 19-7-2007 are filed in the appeal.

(g) During the years 2007 and 2008, pursuant to the subject agreement mentioned above, SPCL advanced amounts aggregating to Rs. 84.50 Crores to M/s. PRS Enterprises by way of cheques drawn on Standard Chartered Bank and Deutsche Bank. The details of the payments made by SPCL to PRS Enterprises given in paragraph No. 3.8 of the 1104 Appeal along with copies of Bank Statements of SPCL's Accounts with Standard Chartered Bank and Deutsche Bank are filed respectively in appeal.

(h) The payment of Rs. 84.50 Crores as aforesaid were deposited by Respondent No. 3 (Nilesh Thakur) into the Bank Account of M/s. PRS Enterprises (Respondent No. 6) with the Greater Bombay Co-operative Bank, Andheri, Mumbai ('GBCB')

(i) Pursuant to the subject Agreement, as per the instructions of the Respondent No. 3, SPCL also made payments aggregating to Rs. 57 Crores to Respondent No. 9 (i.e. M/s. AcecardInfrasolPvt. Ltd.) [hereinafter referred to as 'AIPL'] by way of cheques drawn by SPCL on Standard Chartered Bank and Deutsche Bank.The details of the payments made by SPCL to AIPL have been mentioned in paragraph 3.10 of the above Appeal. The same is also reflected in the Bank Statements of the Appellant's Bank Accounts.

(j) The payments of Rs. 57 Crores as aforesaid were deposited into the Bank Account of AIPL (Respondent No. 9) in its Bank Account with the GBCB.

(k) The aforesaid monies paid by SPCL to M/s. PRS Enterprises [Proprietor Nilesh Thakur] (Rs. 84.50 Crores) and to AIPL [Rs. 57 Crores] were paid for the specific purpose of purchase of properties for SPCL, under the subject Agreement. These monies which had been paid as aforesaid had been earned by SPCL from legitimate business activities.

(l) All the payments made by the Appellant to M/s. PRS Enterprises and to AIPL have been duly reflected in the Annual Accounts of the Appellant [which have been duly audited and filed before the Registrar of Companies] under the sub-head 'Loan and Advances' appearing under the Head of Current Assets, Loans and Advances. The Appellants' Annual Accounts for F.Y. 2006-07, 2008-09, 2009-10 and 2010-11 are produced along with the 1104 Appeal and referred to above.

(m) In the year 2008-2010, Respondent No. 3 [Nilesh Thakur] used and utilized the aforesaid sum of Rs. 141.50 Crores:

(i) For purchase of various immovable properties including landed propertiesat Panvel, Raigad District and also ownership Flats at Mumbai,

(ii) Some amounts were used for purchase of vehicles,

(iii) Some monies were invested in Fixed Deposits in the names of various entities/Companies of the Nilesh Thakur Group mentioned hereinafter,

(iv) Some monies were retained in the Bank Accounts of the various entities/Companies of the Nilesh Thakur Group mentioned hereinafter.

It became known to the Appellant during the course of various Original Complaint proceedings filed by Respondent No. 1 with the Adjudicating Authority that some part of the monies advanced by SPCL were also utilized by Respondent No. 3 to make advances to Kalyani Group (Rs. 61.42 crores) as a loan and to M/s. SRB Enterprises (Rs. 1.15 Crores) towards advance for purchase of a ownership Flat

(n) Respondent No. 3 [Nilesh Thakur] is the Sole Proprietor of Respondent No. 6 [M/s. PRS Enterprises], Respondent No. 7 [M/s. PRS Developers], Respondent No. 25 [M/s. Siddhivinayak Enterprises]. Respondent No. 3 is also the Promoter/Director of Respondent Nos. 6 to 19, 21 to 25 Companies and is also Trustee of Respondent No. 20 Trust [Thakur Family Trust] and all the said entities/Firms/Companies/Trust were/are in the control of Respondent No. 3. The said entities/Firms/Companies/Trust controlled by Respondent No. 3 [Nilesh Thakur] are hereinafter collectively called 'Nilesh Thakur Group'.

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