FPA-PMLA-1767/MUM/2017 of United Breweries (Holdings) Ltd. v/s The Deputy Director, Directorate of Enforcement, Mumbai

ATFP2 Jul 2018FPA-PMLA-1767/MUM/2017

Case brief

AI extract

What is this about?

The Appellate Tribunal listed applications regarding the sale of equity shares by the appellant and seeking impleadment of creditor banks under the Prevention of Money Laundering Act. The tribunal directed parties to file replies on the next date.

What the court decided

AI extract

FPA-PMLA-1767/MUM/2017 of United Breweries (Holdings) Ltd. v/s… — Money Laundering | ATFP (2018)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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MP-PMLA-4614/MUM/2018 (Misc.) MP-PMLA-4307/MUM/2018 (Stay) FPA-PMLA-1767/MUM/2017

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United Breweries (Holdings) Ltd. … Appellant

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Versus

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The Deputy Director, Directorate of Enforcement, Mumbai … Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellant	: Mr. Amti Desai, Sr. Advocate Mr. Sajan Poovagya, Sr. Advocate Mr.Jai Munim, Advocate Mr. Tanvi Manchanda, Advocate Mr. Shubham Kulshreshtha, Advocate
For the Respondent	: Mr. Rajeev Awasthi, Advocate
CORAM
JUSTICE MANMOHAN SINGH	: CHAIRMAN

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ORDER 02.07.2018

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FPA-PMLA-1767/MUM/2017

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List on 23^rd July, 2018.

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MP-PMLA-4307/MUM/2018 (Stay)

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The abovementioned interim application has been filed by the appellant seeking permission to sell 33.17,165 equity shares held it in United Spirits Limited and to preserve value for benefit of creditors and deposit the proceeds in the Hon’ble Karnataka High Court.

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The written submission has been filed on behalf of the ED, who is opposing the prayer.

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FPA-PMLA-1767/MUM/2017

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Page 1 of 4

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Mr. Amit Desai, Ld. Senior Advocate appearing on behalf of the appellant submits that no prejudice would be caused if the said equity shares are allowed to be sold and the total sale proceeds should be deposited before the Hon’ble Karnataka High Court for the benefit of creditors. He submits that presently the value of the said equity shares at peak in the market and the appellant of is likely to fetch very handsome amount, in case any delay is occurred, the value may be decreased and the creditors would suffer under these circumstances.

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The counsel further submits that the appropriate order can only be passed by this tribunal (in the present appeal) which is filed against the order of attachment. It is stated by him that the appellant intents to pay entire amount to the creditors by disposing of large number of movable and immovable assets and incase the sale proceeds is more than amount due(towards creditors) remaining sum be deposited with Hon’ble Karnataka High Court until final directions are passed by the court.

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It is also submitted by him that even the appellant has no objection if the Official Liquidator (appointed by the hon’ble Karnataka High Court) or an expert be appointed to sell the said equity shares and Enforcement Directorate also be allowed to participate in the said process. It is stated by him that any reasonable conditions of any risk be imposed. It is alleged by him that the prayer is made with bona fide and in any case by this sale the appellant is not getting any amount out of the said sale proceed and the application is filed merely in order to clear the liabilities of the creditors.

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It is suggested by him that as far as criminal liabilities is concerned, the proceedings wherever those are pending be continued in respected courts and same be decided as per its own merits.

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FPA-PMLA-1767/MUM/2017

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Page 2 of 4

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In the reply to the application by the respondent, it has been stated in para 5 that till conclusion of trial of the offence under the act, the ED cannot agree for such sell and as all said properties are in possession with the ED till the completion of the trial u/s 5 (5) of the Act. In case the prayer is granted, the harm and injury would be caused to the Enforcement Directorate.

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Mr. Rajeev Awasthi, Advocate counsel for the respondent (Enforcement Directorate) is strongly opposing the prayer of the application. He states that this Tribunal should not deal with the present application as the similar prayer is sub-judice before the Hon’ble Karnataka High Court who is only empowered to pass such order if so required. Secondly, it is stated by him that there is an interim order passed by the Hon’ble High Court not to disturb any assets of the companies owned by Mr. Vijay Mallya, therefore in order to avoid any violation of order, further hearing of present application should be postponed unless clarification is sought.

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In the meanwhile the SBI and other consortium banks are financial institution (who are moved the separate application for their impleadment) are allowed to file the reply by the next date.

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List on 23^rd July, 2018 as agreed by the parties.

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MP-PMLA-4614/MUM/2018 (Misc.)

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The State Bank of India and other 10 consortium Banks and financial institutions and JM Financial Asset Reconstruction Co. Pvt. Ltd. have filed the application u/s 35 of the PMLA. The Para 9 & 10 of the application the following statement was made:-

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FPA-PMLA-1767/MUM/2017

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Page 3 of 4

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“9. The DRT vide its final order dated January 19,2017 (hereinafter “Final Order”) was pleased to allow O.A. 766/2013 inter alia holding that KAL, the appellant, Dr. Vijay Mallya and KFIL and jointly and severally liable to pay a sum of Rs. 6203,35,03,879.42/(Rupees Six Thousand Two Hundred and Three Crores Thirty Five Lakhs Three Thousand Eight Hundred and Seventy Nine and Paise Forty Two Only) to the Consortium of Banks together with interest @ 11.50% p.a. with annual rest from the date of the Original Application till the date of recovery (hereinafter “ OA Amount” ). Certificate dated February 21, 2017 (hereinafter “ Recovery Certificate ”) in favour of the Consortium of Banks. Copies of the Final Order dated January 19,2017 passed by the DRT in O.A. No. 766/2013 and the Amended Recovery Certificate dated April 0,2017 are herewith produced as Annexure Nos. 3 and 4 respectively.

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10. In view of the final order of the DRT in O.A. 766/2013 abd tge Recovery Certificate being issued, the Applicant Banks are entitled to recover the amounts due to them from the aforementioned persons/entities either from their person or by effecting sale of their assets. Therefore, the applicant banks have commenced the process of recovery of the OA Amount before the Recovery Officer attached to DRT (hereinafter “ Recovery Officers” )..

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The counsel appearing on behalf of the all the applicants submits that in view of the final decree has been passed by DRT, the applicant Banks are entitled to recover the decretal amount even by selling the assets including mortgaged properties which are already attached, therefore, their impleadment in the present appeal is necessary.

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Issue notice. The appellant and respondent are allowed to file the reply to the said application on or before the next date.

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List on 23^rd July, 2018.

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Copy of the order be given dasti to the parties in the appeal.

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(Justice Manmohan Singh) Chairman

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New Delhi, 2^nd July, 2018

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‘S’

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FPA-PMLA-1767/MUM/2017

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Page 4 of 4

FPA-PMLA-1767/MUM/2017 of United Breweries (Holdings) Ltd. v/s The Deputy Director, Directorate of Enforcement, Mumbai

Case brief

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FPA-PMLA-1767/MUM/2017 of United Breweries (Holdings) Ltd. v/s The Deputy Director, Directorate of Enforcement, Mumbai

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