Remanded

FPA-PMLA-456/BNG/2013 of Saraswathi v/s The Joint Director Directorate of Enforcement, Bangalore

ATFP11 May 2018FPA-PMLA-456/BNG/2013

Case brief

AI extract

What is this about?

The tribunal held that a confirmation order under the PMLA is invalid if a prosecution complaint under section 45 is not pending. It directed appellants to deposit funds to release attached properties pending the final outcome of the prosecution case.

What did the court decide?

Appellant directed to deposit funds to release properties pending, and to file undertaking to deposit sum on final charge.

FPA-PMLA-456/BNG/2013 of Saraswathi v/s The Joint Director… — Money Laundering | ATFP (2018)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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Date of Decision: 11.05.2018

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MP-PMLA-3146/BNG/2017 (Misc) MP-PMLA-1595/BNG/2015 (u/s 35) FPA-PMLA-446/BNG/2013

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S.V. Srinivas … Appellant FPA-PMLA-447/BNG/2013 Smt. Reshma Srinivas … Appellant FPA-PMLA-456/BNG/2013 Saraswathi … Appellant Versus

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The Joint Director Directorate of Enforcement, Bangalore

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… Respondent

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Advocates/Authorized Representatives who appeared

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For the appellant : Shri Rajswaroop Anand, Advocate For the respondent : Shri Vikas Garg, Advocate

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JUDGMENT

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CORAM JUSTICE MANMOHAN SINGH : CHAIRMAN

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FPA-PMLA-446-447 & 456/BNG/2013

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By this common order, I proposed to decide three above mentioned appeals.

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In the impugned order the following four properties of single family are attached. The subject matter of above-mentioned three appeals are

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about the attachment of properties as item no. i) and ii), as per details

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given below:-

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i) One property held in the name of Smt.	Smt. Saraswati&	Rs. 4,80,000/-
Saraswathi and Smt. Reshma situated at	Smt. Reshma
Site No.1 Kaneshumari No.754/1,
SLVLayout, Basavanahalli Village,
KasabaHobli, Nelmangala measuring
3704.87 sft registered during the year
Nov, 2007 (Regd Deed No.5649 dated
23.11.2007 sub registrar Nelamangala).

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FPA-PMLA-446-447 & 456/BNG/2013

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Page 1 of 29

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ii)	One property held in the name of Smt. Saraswathi and Smt. Reshma situated at Site No.4 Kaneshumari No.754/4, SLV Layout, Basavanahalli Village, KasabaHobli, Nlmangala measuring 3465 sft registered during the year Nov, 2007 (Regd Deed No.5651 dated 23.11.2007 sub registrar Nelamangala).	Smt. Saraswati& Smt. Reshma	Rs. 4,50,000/-
iii)	Property held in the name of Smt. V. Saraswathi, a Flat bearing No.1713, Ist Floor, 17^thWing, Measuring 1639 sft Situated on Corporation No. 59, at Palace Road, Ward No. 78, Vasanthanagar, Bangalore	Smt. Saraswati	Rs. 70,00,000/-
iv)	House situated at No.20, 18^thCross, Malleswaram, Bangalore. (Registered vide Sub registrar No.3861 dated 28.12.1973 (site No.20) and sub registrar No.4266, dated 28.01.1974 (site No.20A). Sub- registrar, Rajajinagar, Bangalore.	S.K.V. Chalapathy (Mr. S.V.Srinivas used the money for renovation of this house0	Rs. 10,44,000/- [Rs.44,000/- (cost of land)+ Rs. 10,00,000/- (cost of construction]

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As far as the details of properties of item nos. iii) and iv) are concerned, I have passed the separate orders in those appeal nos. 448 and 449/2013. The appellant in both appeals are not the accused in the schedule offences nor in the prosecution complaint filed u/s 45 of PMLA Act, 2002. Their appeals are decided by separate orders.

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The Appellant in appeal No. 446/2013 is Mr. S.V Srinivas, he was arrayed as accused No. 3 in the schedule offence which was numbered as SPL CC 135/2011 and the proceedings (charge-sheet) against him has also been quashed by the Hon’ble High Court of Karnataka in CrlP 5102/2015.

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He was also arrayed as an accused in in the section 45 compliant filed by the Respondent herein numbered as SPL CC 124/2014 and is arrayed as accused No.3. The said SPL CC124/2014 was instituted on 24/03/2014 after the impugned order dt: 21/02/2013 passed by the Adjudicating authority in OC 158/2012. The said proceedings are stayed by the Hon’ble High Court of Karnataka upon challenged made by few alleged accused parties on filing of writ petition.

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FPA-PMLA-446-447 & 456/BNG/2013

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Page 2 of 29

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The appellant in appeal No. 447/2013 is Smt Reshma Srinivas. She is the wife of SV Srinivas. She is not accused in the schedule offence, however, she is arrayed as an accused in the section 45 compliant filed by the Respondent herein numbered as SPL CC 124/2014 and is arrayed as accused No.22. The said SPL CC124/2014 was instituted on 24/03/2014 after the impugned order dt: 21/02/2013 passed by the Adjudicating authority in OC 158/2012. Ms. Saraswati is the mother of S.V. Srinivas. She is also not an accused in the schedule offence not arrayed as accused in the prosecution complaint.

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The case against accused parties as per the Charge-sheet No. 04/2011, is that dated 07.07.2011 filed by Karnataka Lokayuktha Authorities under Section 173 of Code of Criminal Procedure (Cr. PC) in the Court of Learned XXII Additional City Civil & Sessions Judge & Special Judge for Lokayukta Cases at Bangalore. The main allegations against the alleged accuse parties are:

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(i) One Mr. Katta Subramanya Naidu S/o Mr. Srinivasalu Naidu, resident of No. 9, 6^th „A‟ Cross, 8^th Main, RMV Extension, Sadashivanagar, Bangalore – 560 080, (2) Mr. K.S. Jagadish @ Katta Jagadish Naidu S/0 Mr. Katta Subramanya Naidu and R/o No. 9, 6^th „A‟ Cross, 8^th Main, RMV Extension, Sadashivanagar, Bangalore – 560 080, and (3) Mr. S.V. Srinivas S/o Mr. S. Venkatachalapathy R/o No. 20, 18^th Cross, 8^th Main Mallewwaram, Bangalore – 560 055, together had entered into criminal conspiracy and that during the year 2004 floated a company by name “M/s Itaska Software Development Pvt Ltd. (ITASKA)”, Mr. S.V. Srinivas, alongwith Mr. Katta Subramanya Naidu and Mr. K.S. Jagadish @ Katta Jagadish Naidu, through ITASKA Software Development Pvt. Ltd. had submitted an application to Karnataka Udyog Mitra for acquisition of 325 acres of land in Bandikodigehally with an intention to get wrongful gain.

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(ii) On 30/11/2006 the ITASCA Company for the process of land acquisition had made an application to KIADB. Mr. K.S. Jagadish had purchased the demand Draft from his Bank Account and had enclosed the same with the said application and thereby proceeded further in the criminal conspiracy.

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FPA-PMLA-446-447 & 456/BNG/2013

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(iii) It is alleged that Mr. Katta Subramanya Naidu has misused his power in the process of land acquisition by doing a lot of irregularities in the acquisition process.

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(iv) Mr. K.S. Jagdish, in furtherance to the said conspiracy joined hands with Mr. Jagaiah and Mr. Venkaiah and floated a bogus partnership firm by name INDU Builders and Developers. Further as per the requirement for land acquisition, the land owners consent is mandatory. Hence in the guise of obtaining consent letters from the land owners Mr. Katta Subramanya Naidu, Mr. K.S. Jagadish, Mr. S.V. Srinivas & Mr. Basavapoornaiah, Chairman UTL had got transferred illegal gratification amount of Rs. 87 crores to the account of INDU Builders from the company ITASCA and United Telecom Ltd. (UTL).

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(v) Mr. Basavapoornaiah, Chairman UTL with an intention to make illegal profit joined in the conspiracy with Mr. Katta Subramanya Naidu, Mr. K.S. Jagdish, Mr. S.V. Srinivas, Mr. Jagaiah & Mr. Venkaiah in the land acquisition process for ITASCA Company. Mr. Basavapoornaiah joined as one of the Director of ITASCA Company. Accordingly Mr. Basavpoornaiah and Mr. S.V. Srinivas had paid to Mr. Katta Subramanya Naidu & Mr. K.S. Jagdish a consideration of Rs. 87 crores as illegal gratification by transferring funds into the account of INDU Builders. In addition Mr. S.V. Srinivas had also directly issued cheques of ITASCA Company to Mr. K.S. Jagadish as illegal gratification.

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(vi) M/s. UTL Company had transferred an amount of Rs. 280,19,66,525/- to M/s. ITASCA company‟s bank account (Axis Bank, Malleshwaram & Axis Bank Basaveshwarnagar) and Rs. 37 crores to M/s. INDU Builders‟s Karnataka bank account from their account. Further from M/s. ITASCA company an amount of Rs. 50 crores was transferred to M/s. INDU builders bank account. Thus Mr. Basavapoornaiah and Mr. S.V. Srinivas had totally transferred an illegal gratification amount of Rs. 87 crores to the bank account of INDU Builders. Out of the said amount of Rs. 87 crores received in the account of M/s. INDU Builders, Mr. Katta Subramanya Naidu received payment of Rs. 5,09,27,700/-. In addition to above, Mr. Katta Subramanya Naidu through his son Mr. K.S. Jagadish had received illegal gratification amount of Rs. 21,95,80,000/-. In this way Mr. Katta Subramanya Naidu & Mr. K.S. Jagadish, directly in his name and through companies and also through other names had received totally a sum of Rs. 27,05,07,700/- as illegal gratification as mentioned in the charge sheet.

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(vii) In order to obtain the consent letters from the land lords by cheating them, Mr. K.S. Jagadish, Mr. S.V. Srinivas, Mr. Jagaiah, Mr. Venkaiah, Mr. B.K. Manju, Mr. M. Gopi all together had enered into a criminal conspiracy. Accordingly in order to fulfill the purpose of getting the land for the SEZ for OTASCA Company, the lands, which were identified for the SEZ purpose of the said company, the above persons had given false promises and assurances of giving more money to the land owners. Land owners were also threatened that if they fail to give the land, a false case will be filed against them and they will neither get money nor compensation. Without explaining the contents of the documents, the signature of the land owners of such land

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FPA-PMLA-446-447 & 456/BNG/2013

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(identified for the SEZ purpose of ITASCA) were obtained as well as thumb impressions from the illiterates land lords on the documents/title, which were prepared to their convenience were obtained. Mr. B.K. Manju & Mr M. Gopi were brining the land lords to the officer of Mr. S.V. Srinivas, Mr. Jagaiah & Mr. Venkaiah were getting the signature on various documents and also a notary by name Mr. Jayanna was called to the office of Mr. S.V. Srinivas and were getting the documents so prepared by them notarized. Such illegal things carried out by the above accused persons were brought to light by the statements given by various land lards and other witnesses i.e. Mr. Sandeep and Notary Mr. Jayanna.

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viii) In the name of land lords who had given consent for acquisition and also in the name of landlords who had not given consent, the accused persons (as named in the charge sheet filed by Lokayukta) in the guise of disbursing more amount to landlords, had issued bearer cheques from the bank account of INDU Builders held at Karnataka Bank, Indiranagar branch, in the name of land lords and had forged the signatures of the land lords at the back of the said bearer cheques. Mr. K.S. Jagadish, Mr. Jagaiah & Mr Venkaiah had drawn Rs. 37,23,29,000/- for themselves from the said bank account and thereby received the illegal gratification. In view of this, the real landlords who were supposed to get the compensation were cheated.

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ix) Similarly money was also withdrawn from the two bank accounts of ITASCA in the guise of disbursing money to the land lords, who had given consent and also in the name of landlords who had not given consent. Mr. K.S. Jagadish, Mr. S.V. Srinivas, Mr. B.K. Manju & Mr. M. Gopi had totally drawn Rs. 47,07,68,000/- for themselves and thereby had received illegal gratification. In view of these acts of the accused person, the real landlords were cheated.

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x) During the period of verification the landlords, who were not available and whose legal heirs were also not traceable cheques were issued in favour of such non traceable legal heirs and amounts totaling to Rs. 83,60,60,178/- were withdrawn by the said accused persons as stated in the charge sheet.

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In view of the above, the charge-sheet filed by Lokayukta alleges that the following accused persons have committed offences as mentioned below:

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SI. No	Details of accused	Sections invoked
1	Mr Katta Subramanya Naidu	7, 13(1)(d)r/w13(2) Prevention of Corruption Act, 1988 (PC Act) and 465, 471 r/w 120(B) of Indian Penal Code(IPC) ;

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FPA-PMLA-446-447 & 456/BNG/2013

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Page 5 of 29

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|2|Mr K.S.Jagadish @ Katta Jagadish
Naidu|8, PC Act, 1988 and
420, 465,468,120(B) of
IPC || |---|---|---| |3|Mr S.V.Srinivas|12 PC Act, 1988, 420, 465, 468,506
r/w 120(B)of IPC,| |4|Mr Jagaiah
( absconding at the time of filing
chargesheet)|420, 465, 468 r/w 120(B) IPC| |5|Mr Venkaiah (absconding at the
time of filing chargesheet)|420, 465,468 r/w 120(B) of IPC| |6|Mr Basavapoornaiah|12PCAct,1988&120(B) of IPC| |7|Mr T.P.Muninarayanappa|13(1)(d) r/w 13(2) P.C. Act, 1988 &
120(B) of IPC| |8|Mr B.K.Manju.|420,506 r/w 120(B)of IPC| |9|Mr M.Gopi|420, 506 r/w 120(B)of IPC|

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Mr. S.V. Srinivas was arrayed as accused No. 3 in the schedule offence which was numbered as SPL CC 135/2011 and the same is quashed against Mr. S.V. Srinivas by the Hon‟ble High Court of Karnataka in CrIP 5102/2015. He is also an accused in the section 45 compliant filed by the Respondent herein numbered as SPL CC 124/2014 and is arrayed as accused No. 3. The said SPL CC 124/2014 was instituted on 24.03.2014 after the impugned order dt. 21.02.2013 passed by the Adjudicating Authority in OC 158/2012.

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Similarly Accused No. 1 and Accused No. 8 in FIR 57/2010 resulting in charge sheet numbered as SPL CC 135/2011, i.e. Mr. Katta Subramnaya Naidu and M. Gopi respectively challenged FIR 57/2010resulting in charge sheet numbered as SPL CC 135/2011 before the Hon‟ble High Court of Karnataka in Criminal RP 432/2013 and CrIP 2313/2016 respectively. The Hon‟ble High Court of Karnataka by a common order dt. 03.11.2016 allowed Criminal RP 432/2013 and CrlP 2313/2016 and quashed FIR 57/2010 resulting in charge sheet numbered as SPL CC 135/2011, as against Mr. Katta Subramnaya Naidu and M. Gopi. The prosecution has challenged the order of the Hon‟ble Court of Karnataka in Criminal RP 432/2013 and CrlP

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FPA-PMLA-446-447 & 456/BNG/2013

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2313/2016 before the Hon‟ble Supreme Court in SLP (Crl) 11921193/2017. Notice is ordered in the said matters.

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The appellant in Appeal No. 447/2013 is Smt. Reshma Srinivas. She is the wife of SV Srinivas and his mother are not the accused in the schedule offence. Mother is also not an accused in the section 45 compliant filed by the respondent herein numbered as SPL CC 124/2014 and is arrayed as accused No. 22. The said SPL CC 124/2014 was instituted on 24.03.2014 after the impugned order dt. 21.02.2013 passed by the Adjudicating Authority in OC 158/2012.

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The appellant in appeal No. 448/2013 and 456/2013 is Smt V. Sarawathi who is the wife of Mr. SKV Chalapathy. She is not accused in the schedule offence nor in the section 45 compliant filed by the Respondent herein numbered as SPL CC 124/2014.

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The Appellant in appeal No. 449/2013 is Mr SKV Chalapathy is not accused either in the schedule offence nor in the section 45 compliant filed by the Respondent herein numbered as SPL CC 124/2014. Both appeals filed by the parents of S.V. Srinivas have been allowed.

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In the present appeals, it is merely to be examined as to whether the provisional attachment order and confirmation order passee thereof is sustainable as per facts and law or not. As per complaint u/s 45 is concerned, the writ petition is pending and proceedings have been stayed.

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The Joint Director of Enforcement Directorate based on the chargesheet dated 25.09.2012 filed by the Karnataka Lokayuktha Police Wing in Spl CC 135/20111 passed a provisional order of attachment bearing No.

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FPA-PMLA-446-447 & 456/BNG/2013

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ECIR/07/BZO/2011 – AD – MNT /1477. Under the said provisional order of attachment, the Joint Director of Enforcement Directorate herein had provisionally attached the properties of the Appellant herein amongst others.

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In view of provisional order of attachment, the Joint Director of Enforcement Directorate, being the Respondent filed a complaint bearing No. 158/2012 under Section 5(5) of the Prevention of Money Laundering Act („Act‟), before the Adjudicating Authority under the Act. The said authority has issued direction to issue notice to all defendants as they have reason to believe that an offence was committed under section 3 of the Act by the defendants. These are the only reason to believe recorded by the Adjudicating Authority.

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After hearing the parties, the order was reserved on 3.1.2013. The Adjudicating Authority, on 21.02.2013 confirmed the provisional order of attachment in respect of many properties, including two properties which are the subject matter of above-mentioned appeal.

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The allegation made against S.V. Srinivas is that he himself has declared in the Income Tax returns by Mr. S.V. Srinivas for the period 2007-08 was only Rs. 5,17,880/- whereas the two properties (Declared value of Rs. 9,30,000/-) and how can he purchased these two properties above. It is also mentioned that the period 2010-11 was only Rs. 43,18,104/- whereas the property (Stated value of Rs. 70,00,000/-) as mentioned were purchased during the same period in the name of his mother, the details of which are mentioned as iii) of para 2 of my earlier part of order. As far as property no. iii) is concerned, the same is subject matter of appeal no. 448/2013 filed by his mother and the said appeal is allowed as it was held that not a single paisa was paid by him in

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FPA-PMLA-446-447 & 456/BNG/2013

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Page 8 of 29

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purchasing the said property. The entire payment was made by the father of Srinivas and husband of Sarawati by was cheques. It was admitted by the respondent that except remaining payment of about twenty lacs unpaid at the time of passing the attachment order, however, the same was also paid. After filing the appeal cogent evidence in this regard was furnished.

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Before passing the order of provisional attachment, the respondent herein had not asked the Appellants Saraswathi and Reshma Srinivas for questioning as to how the above said properties were purchased; nor did the respondent issued any notice to Defendant No. 10 and 12 seeking the source of income for purchase of the above said properties. No notice was served. No opportunity was given to them to place their stand. At the time of confirmation order, the prosecution complaint was not pending. The complaint against S.V. Srinivas, his wife Reshma and others was filed after about a year after passing the impugned order. The said proceedings have also been stayed by the High Court of Karnataka upon challenge made by few parties. No reason to believe under section 5(1) was served upon them.

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The provisional order of attachment in respect of the above properties is passed mainly on the allegations that funds for the purchase of the said properties was provided by S.V. Srinivas. The allegations are mentioned in Para 19.2, 19.3 & 19.4 of the complaint. The same are reproduced hereunder:-

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19.2 In his second statement dated 09.07.2012 recorded under Section 50 of PMLA, Mr. S.V. Srinivas has admitted the following facts:

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FPA-PMLA-446-447 & 456/BNG/2013

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“ (b) Property held in the name of his mother Smt. V. Saraswathi, a Flat bearing No. 1713, 1^st Floor, 17^th Wing, Measuring 1639 sft. Situated on Corporation No. 59, at Palace Road, Ward No. 78, Vasanthanagar Bangalore at Embassy Habitat (Property mentioned at Sl. No. 32 of Para 2 above) was purchased during the year 19.08.2010 for a consideration of Rs. 20,48,750/- (Value of the site comprising of 843.72 sft only). The sale deed for the flat was only for undivided share of land and there is a separate agreement for construction of flat, which is not with them. Approximately the total value of construction cost of flat taken by the builder is Rs. 50 lakhs. The total cost of the flat is Rs. 70 lakhs including the cost of undivided share of land.

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19.3 The Income from all source as declared in the income tax returns for the period 2007-08 was only Rs. 5,17,880/- whereas the two properties (Declared value of Rs. 9,30,000/-) as mentioned at Sl.No. 30 and 31 of Para 2 above and as discussed above were purchased during the same period. It is also observed that the income from all source as declared in the Income tax returns for the period 2010-11 was only Rs. 43, 18,104/- whereas the property (Stated value of Rs. 70,00,000/-) as mentioned at Sl. No. 32 of Para 2 above and as discussed above were purchased during the same period. The property mentioned at Sl. NO. 30 of Para-2 above has already been admitted by Mr. S.V. Srinivas in his statement dated 12.06.2012 having renovated the house out of the money received from ITASCA account.

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19.4 Mr. S.V. Srinivas was the person involved in the entire conspiracy of defrauding the money as discussed in the chargesheet filed by Lokayukta and also as discussed in above paras. Further, as discussed in the paras above, there were large number of withdrawal in cash from the account of ITASKA as well as Indu Builders & Developers accounts. Further scrutiny of one bank account held at Axis Bank A/c No.227010100090322 for the period from 08-07-2007 to 03-09-2011 of Mr. S.V. Srinivas revealed corresponding unexplained cash deposit amounting to a sum of Rs.55 Lakhs approximately. Scrutiny of the said account also revealed he has received large number of transfer from the account of M/s. Itasca as well as M/s. Indu builders to his account. Few illustrations are also given below. Mr. Venkaiah and Mr. Jaggaiah, both in their statement dated 09.06.2012 have admitted and confirmed that all the accounts were being opened, managed and operated by Mr. K.S. Jagadish and Mr. S.V. Srinivas. Thus, Mr. S.V. Srinivas has been one of the beneficiary of entire fraud including cash withdrawn from the bank accounts of ITASCA &Indu Builder through bearer cheques as discussed in above paras. Therefore, it is noticed that said properties were purchased from the amounts withdrawn in cash from the bank accounts of ITASCA &Indu Builder’s.

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FPA-PMLA-446-447 & 456/BNG/2013

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Illustrative details of amount received into his axis bank A./c No.227010100090322 of Mr. S.V. Srinivas from M/s. Itasca & Indu Builder

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Sl. No.	Date	Name of the Recipient	Cheque No.	Amount (Rs)	Sender
1	17-08- 2007	Srinivasa S.V.	171062	750000	ITASCA
2	17-08- 2007	Srinivasa S.V.	171063	650000	ITASCA
3	17-08- 2007	Srinivasa S.V.	171064	600000	ITASCA
			TOTAL	2000000
1	16-05- 2007	Srinivasa S.V.	448975	800000	InduBld
2	23-05- 2007	Srinivasa S.V.	448977	1000000	InduBld
3	11- 082007	Srinivasa S.V.	491194	800000	InduBld
			TOTAL	2600000

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It is thus evident that the Construction/Purchase of Properties mentioned at Sl. No.29 to 32 of Para 2 have been undertaken out of the proceeds of crime withdrawn/transferred/payment made on behalf of Mr. S.V. Srinivas from the account of M/s. Indu Builders & Developers Karnataka Bank Account, Indiranagar Bangalore as per the facts revealed in the statements recorded under Section 50 of PMLA and also the corroborative evidences supported by the bank statements depicting transfer of funds, huge cash withdrawal and payment made for purchase of aforementioned properties. Therefore, the said properties are involved in money laundering.”

¶79

It is matter of fact that the proceedings of schedule offence have been quashed against S.V. Srinivas and others have also been acquitted from all charges. Counsel has argued that since the prosecution has failed to establish any case against him, he was merely the director of the said company. No illegal cash was ever transferred in his account.

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FPA-PMLA-446-447 & 456/BNG/2013

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It is stated by the counsel appearing on behalf of appellants that the entire amount received by Itasca is the clean amount. No action is taken by the respondent against the company from major part of the amount received from Itasca. He says that Indu Builders and Development has received the payment to be payable to the formers only in order to take the consent that the proprietary will not initiate any action and will not claim any right in future. They were doing so the same in order to earn the commission. He has informed that the proceedings against few other accused have been quashed in the schedule offences. Now, the appeals filed by the state are pending before the Hon‟ble Supreme Court.

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It is also the case of the appellant that before the Adjudicating Authority, he has furnished detailed information pertaining to the source of funds from which the above said attached properties had been purchased, but nothing has been dealt with in the impugned order. The Adjudicating Authority in toto accept the findings of the order of provisional attachment order. In the provisional attachment order, the respondent has accepted all the allegations made against his client by the Karnataka Lokayaktha police as gospel truth and passed the order.

¶84

Regarding property referred above (i) and (ii), S.V. Srinivas – the appellant had submitted before the Adjudicating Authority that as per para 19.1 (n) of the complaint that the income as declared to the Income Tax Department of the Appellant is as follows:

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o AY 2006-07 – Rs. 3,08,735 o AY 2007-08 – Rs. 5,17,880 o AY 2008-09 – Rs. 27,22,663

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FPA-PMLA-446-447 & 456/BNG/2013

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It is stated on behalf of S.V. Srinivas that the total income earned

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by the Appellant herein according to the Respondent is Rs. 35,49,278/-.

¶90

However, this is not factually correct. The correct position is as follows:

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Sl. No.	Description	FY 2004-05	FY 2005-06	FY 2006-07	FY 2007-08	FY 2008-09	FY 2009-10	Total
1	Share of Profit from M/s. Chalapathy& Srinivas	3,45,993	7,48,206	13,32,44 7	15,73,565	27,72,921	7,04,738	74,77,870
2	Remuneration from M/s. Chalapathy& Srinivas	1,38,664	2,72,735	4,67,482	5,47,855	9,47,640	5,73,553	29,47,929
3	Other Income							0
4	Rental Income	36,000	36,000	72,000	1,08,000	1,08,000		3,60,000
5	Professional Income				99,208	11,99,064	36,67,309	49,65,581
6	Salary from M/s ITASCA				20,00,000			20,00,000
7	Agricultural Income	2,57,087	2,44,805	2,42,652	2,33,636	1,55,360	1,83,540	13,17,080
	Total	7,77,744	13,01,746	21,14,581	45,62,264	51,82,985	51,29,140	1,90,68,460
	Net Agricultura	l income ea	rned by the	1^stAppella	nt from 199	7-98 to 200	3-04*
	Total Income E	arned by th	is Defendan	t

¶92

It is alleged by S.V. Srinivas that his only source of income during the financial years 1997-98 to 2003-04 corresponding to the assessment years 1998-99 to 2004-05 was agricultural income and hence, the 1^st Appellant has not filed income tax returns during the said years.

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24 It was stated that from Sl. No. 1 in the table above, the share of profit from the firm M/s Chalapathy & Srinivas in which the Appellant is a partner, amounts to Rs 74,77,870/-. This income would be shown as exempt income in the tax returns of the Appellant since, it would be assessed in the hands of the firm i.e., in the hands of M/s. Chalapathy & Srinivas, and is exempt in the hands of the partner i.e., the Appellant. This source of income though exempt is still income nonetheless in the hands of the Appellant. However, the said income and exemption from the said source has been specifically declared in the income tax returns

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of the Appellant which was provided to the Respondent. The Respondent while arriving at the purported total sources of income of the Appellant has maliciously chosen to ignore the same for reasons best known to him.

¶97

It was also stated that the Appellant has been earning agricultural income from the time of attaining majority. The crops grown, cultivated and sold over the years are mango, coconut, arecanut and sapota. The details of the crops cultivated by the Appellant are reflected in the Record of Rights issued by the Revenue Department of Government of Karnataka. The copies filed along with the English translation as ANNEXURE ‘A-7’ & ‘A-8’ available on record . It is stated that the Appellant owns agricultural land to an extent of 10 ares in which he grows the above said crops from the year 1997 onwards till date. The agricultural income earned for the period 1997-2012 from the cultivation of the above said crops amounts to Rs.34,54,018 /-. The said income from the cultivation of the above said crops has been confirmed by Mr. M.R. Dalvi, retd. Deputy Director of Agriculture, Government of Karnataka, Bangalore, vide his certificate. The copy of the same is filed as ANNEXURE ‘A-9’ in the appeal.

¶98

It is stated that the Appellant started practicing as an advocate from the year 2004 onwards with M/s. Chalapathy & Srinivas. From the year 2007-08 onwards the Appellant started developing his own clientele and the Appellant‟s professional practice. The annual receipts in the nature of professional fee that the Appellant earned out of his own sources ranged from around Rs. 8-9 lakhs in 2007-08 and went upto around Rs. 40 lakhs by 2009-10. Most of the income that the Appellant has earned is in the form of cash as his clients were businessmen

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¶101

running small businesses and the same has been deposited in his bank accounts and declared all the said income in his income tax returns.

¶102

Therefore, it was alleged that the total income earned by the Appellant during the financial years 1997-98 to 2009-10 corresponding to the assessment years 1998-99 to 2010-11 is Rs. 2,04,77,081/- . All the cheque and cash deposits in his bank accounts pertain to the above said sources of income only. It is also stated that his client S.V. Srinivas has not paid any amount for purchase of flat bearing no.1713, 17^th Wing, Palace Road, Bangalore.

¶103

It was stated that apart from the Rs. 20 lakhs received as salary from M/s ITASCA and Rs. 8 lakhs as legal remuneration from M/s Indu Builders, who had sufficient income from the above said sources of income to purchase the properties described at Sl. Nos. 30 and 31 in para 2 of the complaint. But, the respondent while passing the order of Provisional Attachment against properties described at Sl.No.30 and 31 in para 2 of the complaint has computed the income of the Appellant only for the period FY: 2005-06 to 2007-08, who has concluded that the Appellant did not have sufficient funds to purchase the above said properties.

¶104

It is alleged that the figure of Rs. 5,17,880 is taken in para 19.3 of the complaint as the return for assessment year 2007-08 showed total gross income as Rs. 5,17,880. However, the respondent did not understand that an assessment year relates to the previous financial year. Therefore, for the financial year 2007-08 (when properties as mentioned in Sl. Nos. 30 and 31 were purchased), the correct assessment year is 2008-09, wherein the Appellant has shown total gross income as Rs. 45,62,264/-, being inclusive of Rs. 15,73,565/- and FPA-PMLA-446-447 & 456/BNG/2013 Page 15 of 29

¶105

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¶106

Rs 2,33,636/- of exempt income as against Rs. 27,22,663/- as stated by the Respondent, which has been conveniently ignored. The total amount of Rs. 9,30,000/- spent for purchasing property Nos. 30 and 31 when was explained as having been purchased out of the Appellant‟s own sources of income i.e., gross income of Rs. 45,62,264/- during the financial year 2007-08.

¶107

Thus the confusion between assessment year and financial year, the Respondent has wrongly concluded that the Appellant could not explain the source of funds for purchasing properties as mentioned in Sl. No. 30 and 31. True copies of the income tax returns of the Appellant for assessment years 2005-06 to 2010-11 (relevant to financial years 200405 to 2009-10) are filed as ANNEXURE ‘A-10’ available at page 325 of the appeal .

¶108

The properties described at (Sl.No.30 and 31 in para 2 of the complaint) were the properties that were gifted by the S.V. Srivinivas Appellant to his wife, Smt. Reshma Srinivas, i.e. 10^th Defendant and his mother, Smt. V. Saraswathi, the 12^th Defendant. The said properties were purchased for Rs. 4,80,000 and Rs. 4,50,000 i.e., for a total amount of Rs. 9,30,000/-. The said properties were registered in favour of Smt. Reshma Srinivas and Smt. V. Saraswathi in the month of November 2007. As per the Appellant, he intended to purchase these properties as a gift to his wife and mother. The funds for acquisition were provided by the sources of income of the Appellant. The copy of the said sale deeds are filed as ANNEXURE ‘A-11’ & ‘A-12’ available in the appeal filed by S.V. Srinivas.

¶109

Therefore, it is alleged by the appellants that S.V. Srinivas has utilized amounts from his own sources of income to fund the purchase of

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¶112

the properties morefully described at Sl.No.30 and 31 in para 2 of the complaint. The provisional attachment on the said property wrongly passed.

¶113

On merit in order to justify his stand before the Adjudicating Authority, the Appellants filed vide their reply by submitting that the charge sheet filed by Lokayuktha Police Wing against the Appellant S. V. Srinivas before the Special Court for Prevention of Corruption Act, Bangalore in Spl CC 135/2011 against his is mainly divided into two categories:

¶114

i) Offences under Sections 12 of Prevention of Corruption Act and

¶115

ii) Offences under Sections 420, 465, 468 and 506 of IPC r/w Sections 120(b) of the IPC.

¶116

It is argued on behalf of appellant Shri S.V. Srinivas that as far as offences under Sections under the Prevention of Corruption Act are concerned, the only section attributed to the S.V. Srinivas - Appellant in the above complaint is under Section 12 of the Act, which is not a scheduled offence under the Prevention of Money Laundering Act.

¶117

It is alleged that there is also no allegation in the charge sheet filed by Lokayuktha Police Wing that the Appellant has received any payments which can be brought within the purview of Prevention of Corruption Act. Against the Appellant, it is mentioned in the charge-sheet filed by Lokayuktha Police Wing in Spl CC 135/2011 is Section120 (b) of the IPC read with various other sections of IPC. There is no allegation in the charge sheet filed by the Lokayuktha Police Wing that the Appellant has received any payments. Therefore the respondent cannot improve upon the charge-sheet filed by the Lokayuktha Police Wing .

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¶120

The properties of all family members of S.V. Srinivas were attached mainly because of the reasons that the Appellant during questioning stated that he received Rs. 25 lacs from M/s Itasca does not imply that he admitted receipt of proceeds of crime. The Appellant received only a sum of Rs. 20 lakhs from M/s ITASCA which was by way of A/c payee cheques, in consideration for his services rendered to M/s ITASCA as an employee in the capacity of a Director.

¶121

It is submitted that there is no allegation in the Charge Sheet submitted before the Prevention of Corruption Act Special Court by the Lokayuktha Police Wing that S.V Srinivas received any amount from ITASCA by way of A/c payee cheques as a part of the alleged scheduled offences under PMLA.

¶122

Once the payment made by ITASCA through A/c payee cheques is not alleged in the Charge Sheet to be related to the alleged offences, the Respondent could not have improved upon the Charge-Sheet and treated the said payments as proceeds of crime.

¶123

As far as the statement given by Mr. S. Jaggaiah is concerned, even the said statement does not say that the Appellant received any amounts drawn from the account of M/s. Indu Builders. As per the case of the appellant, the statement given by Mr. S. Jaggaiah, is a tutored one with the sole purpose of roping in the Appellant.

¶124

The submission is made that the answer of Mr. S. Jaggaiah does not anywhere say that he was acquainted with the Appellant, and he claims payment of salary of Rs. 10,000/- which is not borne out by any record, whatsoever, available on file. It is stated by the appellant that Mr. S. Jaggaiah was associated with only Defendant Nos. 1 and 3, is

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¶127

further evident from the Current account opening form of J.S. Software India Pvt. Ltd., whereunder, Defendant No. 3 has introduced the said Mr. S. Jaggaiah for opening the account, which is part of the charge sheet of the Lokayuktha Police Wing in Special CC No. 135/2011 vide Vol No.16, page Nos. 50, 51, and 52. The extract of the said charge-sheet and the copy of the statement given by Mr. S. Jaggaiah to the Respondent is filed as ANNEXURE ‘A-13’& ‘A-14’ available at page 435 and 437 respectively of the appeal.

¶128

It is stated that S. Jaggaiah has attempted to involve the Appellant with several transactions but statements of various persons, recorded when does not even mention the name of the Appellant. Therefore benefit of doubt goes in favour of the appellant and the reliance, of his statement of Mr. S. Jaggaiah has not much value as admittedly he had mainly acquaintance and relationship of Katta Subramanya Naidu and his son.

¶129

It is stated that even answers to question Nos. 5, 10 and 12 given by Mr. B.L. Venkaiah, to which a reference is made in the complaint, does not even remotely indicate that the Appellant received any payments drawn from the account of M/s. Indu Builders, other than a sum of Rs. 8 lakhs by means of account payee cheque. In so far as this payment of Rs. 8 lakhs is concerned, M/s. Indu Builders who were doing real estate business obtained the services of the Appellant and this payment of Rs. 8 lakhs was towards professional fees. In the Income Tax returns filed by the Appellant, this payment is shown as professional fees received and the Appellant has paid income tax thereon. It is not the case of either the Lokayuktha Police Wing or the Respondent that Rs. 8 lakhs received by the Appellant is proceeds of crime. The copy of the statement given by Mr. B.L Venkaiah to the Respondent has been filed as ANNEXURE ‘A-15’ available at page 448 of the appeal file .

¶130

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¶132

The statements made by Mr. S. Jaggaiah particularly, with respect to Question No. 23 and that of Mr. B.L. Venkaiah particularly, in Question No. 22 are totally negated by the statement of the person to whom the payment was made, which is a part of the charge sheet of the Lokayuktha Police Wing in Special CC No. 135/2011 in Vol No. 2, page No. 123. The copy of the same is filed as along with the English translation as ANNEXURE ‘A-16’ & ‘A-17’ at page 454 and 455 respectively with the appeal .

¶133

It is admitted on behalf of S.V. Srinivas that the three payments totaling to Rs. 20 lakhs under cheques issued by M/s. ITASCA is not in dispute. However, in respect of the purported payments from M/s. Indu Builders, except a sum of Rs. 8 lakhs already referred to, two other cheques, one dated 16/05/2007 for Rs. 8 lakhs, another dated 23/05/2007 for Rs. 10 lakhs are not drawn in favour of the Appellant as it is evident from the account statements filed along with the complaint. The respondent proceeds on the basis that wherever the name Srinivas occurs, it must be S.V. Srinivas i.e., the Appellant. There is absolutely no basis for such assumption. Further the allegation that the Appellant has received a large number of transfers from the account of M/s. ITASCA and M/s. Indu Builders is not even prima facie established.

¶134

The allegations of the respondent of the complaint that the construction/purchase of properties described as (i) and (ii) of the complaint are out of proceeds of crime withdrawn/transferred/payment made on behalf of the Appellant from the account of M/s. Indu Builders. The allegations of the respondent that these properties are involved in money laundering are not supported by facts. In fact the said statement

¶135

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¶137

of the respondent is inconsistent with its own statements with respect to the reasons for provisional attachment of each of the properties.

¶138

It is stated that even in the charge-sheet, it was admitted that the following amounts are proceeds of crime in terms of Section 2(u) of PMLA. The details of the same which are mentioned in Para-8 of the complaint dated 5^th October, 2012 reproduce as under:-

¶139

S. No.	Description	Direct (Rs)	Amounts withdrawn through bearer cheques (In the name of Land lords) (Rs.)	Amount withdrawn through bearer cheques ( in the name of non existing land lords and their legal heirs (Rs.)	Amount (Rs)
1	A/c INDU BUILDERS	16,03,07,700/ -	37,23,29,000/-	32,02,27000/-	85,2863,700/-
2	A/c ITASCA MALLESHWARA M	5,77,00,000/-	33,87,18,000/-	30,90,33,178/-	70,54,51,178/-
3	A/c ITASCA BASAVESHWA RNAGAR	5,25,00,000/-	13,20,50,000/-	20,58,00,000/-	39,03,50,000/-
	Total	27,05,07,700/ -	84,30,97,000/-	83,60,60,178/-	194,86,64,878/-

¶140

With respect to allegations regarding the receipt of any money either from the account of M/s Indu Builders or M/s Itasca by way of bearer cheques, admittedly the appellant has filed an Interlocutory Application in terms of section 35 of PMLA read with Order 16 Rule 1 to the Lokayuktha Police Wing and an Interlocutory Application in terms of section 35 of PMLA read with Order 11 Rule 14 to the respondent to produce the bearer cheques allegedly issued in the name of the Appellant. However neither the said applications are dealt with the impugned order nor any order in this regard was passed.

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¶143

The observation of at Para 132 of the impugned order passed by the Adjudicating Authority that the Appellant did not choose to mention about agricultural income at the time of investigation or about the ownership of the agricultural land to an extent of 10 acres is contrary to the material on record as the answers given by the Appellant when he was summoned for questioning by the Respondent on 12/06/2012 to question No. 10 and 12 at page 193 of the appeal memo reads as follows:

¶144

“ Q. 10. What is your source of income?

¶145

Ans. I have income from profession, i.e. legal firm wherein I am the partner with my father’s legal firm. I have also agricultural income declared to income tax authorities………

¶146

Q. 12. Furnish details of moveable and immovable properties held in your name and the name of your family members?

¶147

Ans. (i) One farm land situated at Honnasandra village, kasabahobli, held in my name measuring 10 acres bought during Nov, 1995 for a sum of Rs. 5,00,000/-………….”

¶148

In fact the Appellant has also produced the sale deed pertaining to the agricultural land before the Respondent. It is evident that respondent had prior knowledge of the Appellant‟s agricultural income and ownership of agricultural land and in spite of the same the respondent has chosen to ignore it and pass the provisional order attaching the above said properties. The Adjudicating Authority has passed the above said remark confirming the provisional order which is perverse and contrary to the material available on record. None of said aspect has either discussed or dealt with the impugned order.

¶149

Smt. Saraswathi and Smt. Reshma Srinivas were not issued any notice by the respondent nor was any statement recorded by the respondent before passing the order of attaching the property owned by FPA-PMLA-446-447 & 456/BNG/2013 Page 22 of 29

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the Appellant. Thus, on the face or record, the provisional attachment order against Saraswati and Reshma passed against the principles of natural justice and violates the rights of this appellant enshrined in Art. 14 and 21 of the Constitution of India.

¶152

It is argued on behalf of the appellant that the said confirmation by the Adjudicating Authority is void as it does not satisfy the requirement of section 8(3) as on 22/02/2013 and for the same, the properties of the appellant cannot be confiscated under section 8(5) of the Act. Counsel argued that since Srinivas was acquitted from the schedule offence, the adjudicating authority ought not to have passed the order under the Amendment Act once the order was reserved in the proceedings under the old Act.

¶153

Learned counsel for the appellant also argued the plain language of the Act, that for the confirmation to continue under the amended Act, it is sine-quo-non that there should exist a proceeding under the Act relating to an offence under this Act, more specifically, a complaint under section 45 of the Act should exist for an offence under section 3 punishable under section 4 of the Act.

¶154

After one year i.e. on 24.03.2014 the Respondent herein filed a complaint under section 45(1) of the Act before the Principal City Civil and Session Judge and Special Court for Prevention of Money Laundering Act, Bangalore on 24.03.2014 in which S.V. Srinivas and his wife are arrayed as a Accused. In the said complaint, the Respondent has prayed for confiscations of all the attached properties vide provisional attachment order No. 7/2012 dt: 25.09.2012 in terms of Section 8(5) of the Act among other things.

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¶157

The Principal City Civil and Sessions Judge and Special Court for Prevention of Money Laundering Act, Bangalore by its order dt: 24.03.2014 registered the complaint filed by the Respondent as Spl CC 124/2014.

¶158

Complaint bearing No. 158/2012 dt: 05/10/2012 has been filed by the Respondent herein before the Adjudicating authority on the basis of FIR 57/2010 which resulted in chargesheet in SPL CC 135/2011 before the Prevention of Corruption Act Special Court Bangalore. The said FIR 57/2010 and the resultant chargesheet have held to be bad in law by the Hon‟ble High Court of Karnataka in Criminal Petition 5102/2015 vide its order dt: 10/03/2016. The Hon‟ble High Court has quashed the chargesheet and FIR in SPL CC 135/2011 as against Defendant No. 9 in Complaint bearing No. 158/2012 instituted by the Respondent herein. The State has filed the appeal before the Hon‟ble Supreme. The said appeal is pending. I do not wish to express any opinion in relation to the quashing of the said proceedings. Rather I am of the view if the said appeal against the S.A. Srinivas is allowed before the Supreme Court, he must face the trial as per law. In the impugned order, the Adjudicating Authority has not dealt with all the plea raised by the appellants, the documents filed by the appellants have not been discussed and considered in the impugned order.

¶159

The order in the matter after hearing both the parties were reserved on 3.1.2013. At that time, under section 8(3) (unamended provision), it was mandated that the attachment shall continue during the pendency of the proceedings relating to any schedule offence before a court and become final after the guilt of the person is proved in the trial

¶160

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court and under sub-section (5) of Section-8, but where on conclusion of trial for any schedule offence the person is acquitted, the attachment of properties shall cease to have effect. Admittedly as the proceedings against him also were quashed by the High Court at Karnataka. The appeal filed by the State is pending before the Hon‟ble Supreme Court.

¶163

It is not denied that when the order was reserved unamended provision of section 8(3) was applicable but the said provision was amended and became operative w.e.f. 15.2.2013. The order was pronounced on 21.2.2013. It is not denied that the hearing was conducted when the unamended provision of section 8(3) (a) of the Act. It is also matter of record, the matter was not re-heard after amendment and after pronouncement. The prosecution complaint was filed after a period of one year from the date of passing the impugned order.

¶164

As mentioned earlier, the Adjudicating Authority has also extracted the language of the amended section 8(3) of the Act in the order confirmation, which highlights the fact that the adjudicating authority was aware that it was confirming the provisional attachment as per section 8(3) of the Act as amended by the Amending Act of 2012 which have come rinto force w.e.f. 15.2.2013. At the time of amendment, the order was already reserved, but it was passed after amendment was incorporated.

¶165

Section 8(3) pursuant to the Amendment Act of 2012 reads as follows:-

¶166

“8(3) Where the Adjoining Authority decides under sub-section (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under subsection (1) of section 5 or retention of property or record seized or frozen under section 17 or section 18 and record a finding to that

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effect, whereupon such attachment or retention or free zing of the seized or frozen property or record shall—

¶170

(a) continue during the pendency of the proceedings relating to any offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case ma be; and

¶171

(b) become final after an order of confiscation is passed under sub-section (5) or sub-section (7) of section 8 or section 58B or subsection (2A) of section 60by the Adjudicating Authority.

¶172

It is a matter of fact that on the date of confirmation i.e. impugned order dt. 21.2.2013. There was no prosecution complaint filed. It was filed on 24.03.2014, the expression in the amended Act, Section 8(3)(a) stipulates that where the Adjudicating Authority confirm the attachment order, it was record a finding to the effect that the party is involved in money laundering and the said attachment will continue during the proceedings relating to any offence under this Act.

¶173

At the time of confirmation order, no proceedings under this Act was pending. It is also not the case of the respondent that some investigation was on therefore the proceedings could be filed. The charge sheet was filed in the year 2011-12. It is true that no time limit is provided to file the prosecution complaint under Section 45 of the Act. But merely readings Section 8(3)(a) amended, an inference can be drawn very easily that the attachment shall continue during the proceedings relating to any offence under this Act. Under the unamended act the attachment comes to end once the accused is acquitted in the schedule offence. I am of clear in mind that the said provision of section 8(3) (a) was incorporated on 15.02.2013 with the intention that at the time of confirmation order of attachment, the prosecution complaint along with evidence collected after independent investigation must be pending so that the Adjudicating Authority should consider the same before passing the confirmation order.

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¶176

Thus, I am of view that prior to confirmation of the provisional attachment under section 8(3) of PMLA, a proceeding for the offence under PMLA in terms of section 45 has to be initiated, failing which, no confirmation can be made and the confirmation may become non est in the eye of law. The expression continue during proceedings to any offences indicates that the prosecution complaint must be pending, otherwise, there were no proceedings left under this Act. There is also a logic behind it that once the confirmation is passed, nothing remains left under this Act after continuation of attachment orders, except the prosecution complaint if filed by the respondent before the Special Court.

¶177

Even very recently the said provision of sub-section (3) of Section 8 has now again been amended by Act 13 of 2018 in the same lines as observed in earlier paras wherein sub-section (3)(a) of section 8 after the words “continue during” the words “investigation for a period not exceeding ninety days” has been inserted. So the intention of the insertion is that within 180 days at the time of passing the confirmation order, the Adjudicating Authority shall also to go through the prosecution complaint and evidence conducted by the respondent and details mentioned therein.

¶178

From the above, prima facie I am of the view that the prosecution complaint must be pending (under section 45 of the PMLA Act) before the Adjudicating Authority at the time of passing the confirmation order. However, I am refrain not to pass the final conclusion in this regard in view of pendency of writ petition where the same issue has been challenged with the prayer of quashing the said proceedings before the

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¶181

Hon‟ble High Court of Karnataka who already stayed the proceedings. It is appropriate if the Hon‟ble High Court may pass the order accordingly.

¶182

From the entire gamut of the above mentioned three appeals with regard to the two properties which were purchased by S.V. Srinivas for a total sum of Rs.9,30,000/- which were given by him to his mother and wife. The allegation made against him is that he has declared in the Income tax Return for the period 2007-08 was only Rs.5,17,888/whereas the two properties, the declared value is Rs.9,30,000/-.

¶183

The appellant has furnished the details in order to show that he has the sufficient amount at the time of purchasing the above mentioned two properties. Taking the face value of the allegation of the respondent without expressing anything, as alleged, he was only having Rs.5,17,888/- whereas the value of two properties are Rs.9,30,000/-, in order to strike balance, the difference of the same i.e Rs. 4,12,112/- is directed to be deposited by S.V. Srinivas with the respondent by way of Fixed Deposit Receipt for initial period of two years within four weeks and the same be renewed by S.V. Srinivas until the final order is passed in the prosecution complaint in the name of respondent.

¶184

As far as the other allegation of the amount spent by him to purchase the property of Rs.7,00,000/- is concerned, the same is not correct as entire payment was paid by his father, who is the husband of Saraswati ( one of the appellants) .

¶185

The appellant shall also file an Undertaking by way of affidavit that in case the appellant is finally held guilty in the prosecution complaint, he shall deposit a sum of Rs.10.0 lac (ten lac only ) with the

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respondent as the said amount was spent by him for renovation of his father‟s property as per alleged allegation made in the prosecution complaint. Once the Fixed Deposit Receipt and Undertaking are filed by the appellant with the respondent within the time granted, the above named two properties shall stand released.

¶189

The said directions are passed without prejudice and I may also clarify that in case the prosecution complaint is decided in favour of S.V. Srinivas and his wife Reshma, the said amount shall be released to them by the respondent immediately.

¶190

All the above appeals and pending MPs/applications are disposed

¶191

of.

¶192

(Justice Manmohan Singh) Chairman

¶193

New Delhi, 11^th May, 2018. „skb‟

¶194

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FPA-PMLA-456/BNG/2013 of Saraswathi v/s The Joint Director Directorate of Enforcement, Bangalore

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FPA-PMLA-456/BNG/2013 of Saraswathi v/s The Joint Director Directorate of Enforcement, Bangalore

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