Dismissed

FPA-PMLA-393/LKW/2012 of Smt. Nandini Ram Chandani v. The Deputy Director, Directorate of Enforcement, Lucknow

ATFP7 Jun 2024FPA-PMLA-393/LKW/2012

Case brief

AI extract

What is this about?

Appeals filed against an order confirming attachment of properties acquired through proceeds of crime under the PMLA. The tribunal dismissed the appeals, holding it lacks jurisdiction to evaluate CBI evidence and that mortgages do not prevent temporary attachment.

What did the court decide?

The pending appeals were dismissed, and the attached properties remain attached.

FPA-PMLA-393/LKW/2012 of Smt. Nandini Ram Chandani Vs. The Deputy… — Money Laundering | ATFP (2024)

¶1

APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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(1)FPA-PMLA-392/LKW/2012 Hinish Ram Chandani

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(2)FPA-PMLA-393/LKW/2012 Smt. Nandini Ram Chandani

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(3)FPA-PMLA-394/LKW/2012 M/s SRS Developers

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(4)FPA-PMLA-395/LKW/2012 Shri Ashish Sewani

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(5)FPA-PMLA-396/LKW/2012 Smt. Preeti Sewani

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(6)FPA-PMLA-397/LKW/2012 M/s SRS Laminators

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(7)FPA-PMLA-404/LKW/2012 M/s SRS Investment Co. … Appellants

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Versus

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The Deputy Director, Directorate of Enforcement, Lucknow

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Respondent

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Advocates/Authorized Representatives who Argued

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For Appellants : Shri Anuuj Tandon, Advocate,

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For Respondent: Shri Arjun Sawhney, Advocate,along with

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Ms. MansiSrivastava, Advocate.

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CORAM

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SHRI G.C. MISHRA : MEMBER SHRI RAJESH MALHOTRA : MEMBER

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FINAL ORDER

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07.06.2024

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Dictated By Rajesh Malhotra:

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Present appeals are filed against the impugned order dated 08.08.2012 passed by the Adjudicating Authority in Original Complaint No. 136 of 2012. As per the facts of the case, M/s. S.R.S Investment Co. having its office at 7/92, Tilak Nagar, Kanpur

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Rajesh Malhotra Member

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G.C. Mishra

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Member

¶25

FPA-PMLA-392/LKW/2012 Hinish Ram Chandani v. ED, Lucknow Alongwithsix connected appeals No. 393 to 397 & 404 of 2012.

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¶27

through its partner Hinish Ram Chandani committed fraud with State Bank of India, Main Branch, Kanpur to the extent of Rs.46.42 crores during the period from June, 2008 to July, 2009 in collusion with certain officers of the bank the abusing its overdraft facilities in two Current A/Cs No. 30415528914 & 30660528479. They indulged in the kite flying transactions to commit the fraud. On the basis of complaint CBI, Banks Securities & FraudCell, New Delhi, conducted investigation in case FIR No. RC.BD1/2009/F/0014 dated 20.08.2009, and thereafter, filed charge-sheet on 25.03.2011 before learned Special Judge, CBI Court, Lucknow against M/s. S.R.S Investment Co., its partner Hinish Ram Chandani certain officers of State Bank of India, Main Branch, Kanpur, for commission of offences under Section 120B IPC r/w 420 IPC and also r/w Section 7,11,12 & 13(2) r/w 13(1) (d) of Prevention of Corruption Act, 1988 and substantive offences thereunder.

¶28

Respondent-ED registered ECIR/01/PMLA/LZO/2009/AD(NKD)/EO(SK) and conducted investigation with respect to commission of offence under PMLA, 2002. Respondent-ED attached the properties of the defendants (herein appellants) vide Provisional Attachment Order No. 01/2012 dated 31.03.2012 and thereafter, filed Original Complaint No.136/2012 before the Adjudicating Authority for confirmation of the properties. The details of said properties is mentioned as under:

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Table ‘A’

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DETAILS OF THE PROPERTIES IN WHICH THE PROCEEDS OF CRIME HAS BEEN FOUND TO BE INVESTED BY M/s. SRS INVESTMENT CO.

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S.N .	Details of properties	Name of the purchaser	Date of purchase	Amount involved	Stamp duty paid(in Rs.)	Total amount involved(in Rs.)
1.	113/24, Ambe Bhawan Swaroop Nagar,Kanpur	M/s. SRS Developers	29.05.09	Rs. 2.40 Crores	20,65,000/-	2,60,65,000/-

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Rajesh Malhotra Member

¶33

G.C. Mishra Member

¶34

FPA-PMLA-392/LKW/2012 Hinish Ram Chandani v. ED, Lucknow Alongwithsix connected appeals No. 393 to 397 & 404 of 2012.

¶35

¶36

2.	112/354, Swaroop Nagar,Kanpur	-do-	28.05.09	Rs. 1.30 Crores	9,10,000/-	1,39,10,000/-
3.	7/182(2), Swaroop Nagar, Kanpur, Builtover free hold plot No. 39-A in block B Scheme No. VII,Gutaiya,Kanpur	Sh. Hinish Ram Chandani	14.07.09	Rs. 70/- Lacs	5,91,500/-	75,91,500/-
4.	Arazi No. 305, Khata No. 0022 satiated at Vill. Bhelamau, Tehsil, Pargana & Distt. Kanpur City	-do-	02.03.09	Rs. 16 Lacs	1,18,500/-	17,18,500/-
5.	Bunglow No. 18,7/33, Tilak Nagar,Kanpur	M/s SRS Developers	23.09.09	Rs. 80/- Lacs Tota	5,97,000/- l Rs. 5,78,8	85,97,000/- 2,000/-

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Table ‘B’

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DETAILS OF DIFFERENT STOCKS/FUNDS, IN WHICH PROCEEDS OF CRIME INVESTED

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S.N .	Details of Funds	Name of the Investor	Date of Investment/period of trading as shown in Ledger A/c	Amount Invested
1.	M/s. India Inforline Ltd., Kanpur	i)M/s. SRS Investment Co. ii) Smt. Nandini Ram Chandani	03.10.2008 to 02.09.2009 01.02.2008 to 27.08.2009	Rs. 46 lacs were invested whose value as on 02.09.2009 is Rs. 42,24,148.82 Rs. 110 lacs were invested whose value as on 27.08.2000 Rs. 94,64,560.93
2.	M/s. Milestone Real Estate Fund, Mumbai	M/s. SRS Investment Co.	15.07.2008 14.01.2009 22.03.2010	Rs. 2.00 Lacs Rs. 3.00 Lacs Rs. 4.00 Lacs Rs. 9.00 Lacs
3.	M/s Cinema Capital Venture Fund, Mumbai	Sh. Hinish Ram Chandani	30.04.2009	Rs. 6.25 Lacs
			Total Rs.1	,52,13,709.75

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TABLE ‘C’

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DETAILS OF THE BANK ACCOUNTS WITH BALANCE IN WHICH THE PROCEEDS OF CRIME HAS BEEN PARKED

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S.N.	Account No.	Name of the A/c holder	Name & the Bank	address of	Closing Balance
1.	0041-A07320-050	M/s SRS Investment Co. Kanpur	Induslnd Swaroop Kanpur	Bank, Nagar,	Rs.19,19,500.80 As on 07.07.2011
2.	0041-A07389-001	Sh. Hinish Ram Chandani	Induslnd Swaroop Kanpur	Bank, Nagar,	Rs. 5,47,185.40 As on 07.07.2011
3.	0041-A07390-001	Smt. Nandini Ram Chandani	Induslnd Swaroop Kanpur	Bank Nagar,	Rs. 94,793.06 As on 07.07.2011
4.	0041-A07965-060	M/s SRS Developers, Kanpur	Induslnd Swaroop Kanpur	Bank Nagar,	Rs.12,756.00 As on 07.07.2011
5.	3094801010120851	M/s SRS Investment Co.	Union India,	Bank of Swaroop	Rs. 22,570.94 As on 08.07.2011

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Rajesh Malhotra Member

¶44

G.C. Mishra Member

¶45

FPA-PMLA-392/LKW/2012 Hinish Ram Chandani v. ED, Lucknow Alongwithsix connected appeals No. 393 to 397 & 404 of 2012.

¶46

¶47

			Nagar,Ka	npur
6.	008005000339	-do-	ICICI Nakodar B	Bank, ranch	Rs. 6,08,670.96 As on 06.08.2009
7.	008005000336	Sh. Hinish RamChandani	-do-		Rs. 23,096.28 As on07.08.2009
8.	00OD00008201	M/s SRS Developers, Kanpur	Developm operative Ltd. Swaroop Kanpur	ent Co- Bank 113/167, Nagar,	Rs. 1,972.00 As on 03.05.2010
9.	007390100001240	Sh. Hinish Ram Chandani	Yes Bank,	Kanpur	Rs. 60,719.46 As on 18.07.2011
10.	007340400002854	-do-	-do-		Rs. 5,02,396.00 As on 18.07.2011
11.	133010100143387	Smt. Nandini Ram Chandani	Axis Bank	, Kanpur	Rs. 32,735.84 As on 04.06.2011
12.	0041-A07782-001	Smt. Preeti Sewani	Induslnd Swaroop Kanpur	Bank, Nagar,	Rs. 50,394.94 As on 07.07.2011
13.	099801503024	-do-	ICICI Swaroop Kanpur	Bank, Nagar,	Rs. 18,157.00 As on 18.07.2011
14.	099801503025	Smt. Nandini Ram Chandani	-do-		Rs. 5,775.00 As on 11.07.2011
15.	099801501520	Sh. Hinish Ram Chandani	-do-		Rs. 6,374.99 As on21.07.2011

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Total Rs. 39,07,098.67

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TABLE ‘D’

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DETAILS OF THE PROCEEDS OF CRIME INVESTED IN THE M/s. SRS LAMINATORS, 101-A, DADA NAGAR, KANPUR

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S.N.	Property Details	Proceeds of Crime Invested
1.	Fixed Assets of M/s. SRS Laminators, 101-A, Dada Nagar, Kanpur	Fixed assets amounting to Rs. 2,01,98,916.04 pertaining to M/s SRS Laminators, Kanpur have been attached, as the same were acquired out of proceeds of crime amounting to Rs. 2,18,81,844.45, invested by Smt. Preeti Sewani and Sh.
		Hinish Ramchandani as partner’s capital in this company
		during the Financial Year 2009-10 as reflected in the
		balance sheet for the A.Y. 2010-11.

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TABLE ‘E’

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DETAILS OF PROCEEDS OF CRIME INVESTED IN THE IMMOVABLE PROPERTIES BY M/s. SRS INVESTMENT COMPANY, KANPUR AND ITS PARTNER SH. HINISH RAMCHANDANI

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S.N.	Details of Properties/Builder	Date of Booking/A llotment	Proceeds of crime invested	Name of the Allottee/Purc haser
1.	Flat No. N-17/1804, Jaypee Aman, Sector 151, Noida	20.03.10	Rs. 5.54 Lacs	Sh. Hinish Ramchandan
	Builder-M/s Jaypee Infra Tech			i
	Ltd.,, Sector-128, Noida-201304

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Rajesh Malhotra Member

¶56

G.C. Mishra

¶57

Member

¶58

FPA-PMLA-392/LKW/2012 Hinish Ram Chandani v. ED, Lucknow Alongwithsix connected appeals No. 393 to 397 & 404 of 2012.

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2.	(UP). Plot No. 142, Sector-5, Mega Polish Project. Builder-Ansal Hi-tech Township, Greater Noida M/s Ansal Hi-Tech Township Ltd. Head Office at 115, Ansal Bhavan, 16-Kasturba Gandhi Marg, New Delhi-110001	17.07.08	Rs. 14.68 Lacs	M/s. SRS Investment Company, Kanpur
3.	Plot No. 271, Sector-5, Mega Polish Project, Ansal Hi-tech Township, Greater Noida Builder-Ansal Hi-Tech Township, Greater Nodida M/s. Ansal Hi Tech Township Ltd., Head Office at 115, Ansal Bhavan, 16-Kasturba Gandhi Marg, New Delhi-110001	17.07.08	Rs. 11.52 Lacs	-do-
4.	Plot No. 272, Sector-5, Mega Polish Project, Ansal Hi-Tech Township, Greater Noida Builder-Ansal Hi Tech Township, Greater Noida M/s Ansal Hi-Tech Township Ltd. Head Office at 115, Ansal Bahavan, 16-Kasturba Gandhi Marg, New Delhi-110001	17.07.08	Rs. 11.52 Lacs	-do-
5.	Plot No. 43, Sector 3-C, Mega Polish Project, Ansal Hi-Tech Township, Greater Noida Builder-Ansal Hi-Tech Township Greater Noida M/s. Ansal Hi-Tech Township Ltd. Head Office at 115, Ansal Bhavan, 16-Kasturba Gandhi Marg, New Delhi-110001	12.07.08	Rs. 14.46 Lacs	-do-
Total			Rs. 57.72 Lacs

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Table ‘F’

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DETAILS OF THE PROCEEDS OF CRIME INVESTED WITH M/S TASTY DAIRY SPECIAL TILES LTD., KANPUR AND ITS MANAGING DIRECTOR SHRI ATUL MEHRA

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S.N.	Details of property	Amount of Proceeds of Crime invested therein
1.	Three Confirmation of Deposits Receipts (FDRs) for a) Rs. 2.60 Crores dated 27.06.2011 (A/c No. 074600GM00000023)	Rs. 4,52,11,000/-
	b) For Rs. 1.91 Crores dt. 29.06.2011 (A/c No. 074600GM00000032) &
	c) For Rs. 1.11 lacs dt. 29.06.2011 (A/c No. 074600GM00000037) being the interest amount earned out of the funds received from M/s SRS Investments.
	All issued by Punjab National Bank, Pandu Nagar Branch, Kanpur favoring Tasty Dairy Specialties
	Ltd., C-1 to C-5, Udyog Kunj, Panki Site-V, Kanpur, Uttar Pradesh.

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Rajesh Malhotra Member

¶65

G.C. Mishra Member

¶66

FPA-PMLA-392/LKW/2012 Hinish Ram Chandani v. ED, Lucknow Alongwithsix connected appeals No. 393 to 397 & 404 of 2012.

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Table ‘G’

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DETAILS OF THE PROCEEDS OF CRIME IN POSSESSION OF M/s. GOVERDHAN HOMEBUILDER PVT. LTD. 55/63, KAHOOD KOTHI, KANPUR & OTHERS

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S.N.	Details of property	Amount of proceeds of crime invested therin
1.	Two Term Deposit Receipt Nos. 31854477005 & 31854478270 both dated 26.07.2011 for Rs. 90/- Lacs & Rs. 60/- Lacs issued from State Bank of India, Halsey Road Branch, Kanpur, favoring M/s. Goverdhan Homebuilder Pvt. Ltd.,Kanpur, at 55/63,KahooKothi,Kanpur respectively.	Rs. 1.50 Crores
2.	TDR No. 31854476114 dated 26.07.2011 for Rs. 65/- Lacs & TDR No.31856095705 dated 27.07.2011 for Rs. 55/- Lacs, both issued from State Bank of India, Halsey Road Branch, Kanpur favoring M/s. Goverdhan Home Property Pvt. Ltd. havingat 55/63,Kahoo Kothi,Kanpur.	Rs. 1.20 Crores
3.	TDR Nos. 31858138068 & 31858139764 both dated 28.07.2011 Rs. 65/- Lacs & Rs. 35/- Lacs, both issued from State Bank of India, Halsey Road Branch, Kanpur favoring Shri Goverdhan Khatri,55/63,Kahoo Kothi,Kanpur.	Rs. 1.00 Crore
4.	TDR No. 31854474729 for Rs. 4/- Lacs favoring Smt. Simi Khatri, TDR No. 31854471003 for Rs. 4/- Lacs favoring Smt. Maya devi, TDR No. 31854475371 for Rs. 4/- Lacs favoring Smt. Milli Khatri, TDR No. 31854471897 for Rs. 15/- Lacs favoring Smt. Rashmi Khatri & TDR No. 31854480198 for Rs. 11/- Lacs favoring Smt. Mohini Devi all dated 26.07.2011 and issued from State Bank of India, HalseyRoad Branch,Kanpur	Rs. 38/- Lacs

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Total. 4.08 Crores

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After receiving the complaint Adjudicating Authority issued the notice to all the persons and after going through the material on record it confirmed the attachment of the properties referred therein, (reproduced in the above tables) except the followingproperty:-

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Investment of Rs. 6.25 lacs in M/s. Cinema Capital Venture Fund (Item No.3 of Table B of the Complaint) (in respect of Defendant No. 21, i.e. M/s. Cinema Capital Advisory Pvt. Ltd.)

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The Adjudicating Authority also restricted the attachment to

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the extent of Rs.554500/- with respect of following property:-

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Rajesh Malhotra Member

¶77

G.C. Mishra Member

¶78

FPA-PMLA-392/LKW/2012 Hinish Ram Chandani v. ED, Lucknow Alongwithsix connected appeals No. 393 to 397 & 404 of 2012.

¶79

¶80

Flat No. 17/1804, Jaypee Aman, Sector-151, Noida (Item No. 1 of Table E of the Complaint) in respect of Defendant No. 22 i.e. M/s Jaypee Infratech.

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Whereas, all other properties were confirmed for attachment.

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Aggrieved by the said order dated 08.08.2012,the

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appellantshave filed the present appeals.

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During the arguments Ld. Counsel for the appellants pointed out that the ECIR was registered on the basis of letter dated 18.11.2009 from Deputy General Manager (Vigilance), State Bank of India. He pointed out that CBI has not filed charge-sheet against M/s. SRS Developers/Defendant No.2, M/s. SRS Laminators/Defendant No.3, Smt. Preeti Sewani/Defendant No.5, Smt. Nandini Ram Chandani, Partner of M/s. SRS Investment Co./Defendant No.6 and Shri Ashish Sewani, Partner of M/s. SRS Developers/Defendant No.7 (herein appellant) before Trial Court of Ld. Special Judge, CBI, Court, Lucknow, and accordingly, they are not liable for commission of offence for money laundering under PMLA, 2002, in absence of any charge for commission of any predicate/schedule offence. He further argued that the attachment was confirmed by the Adjudicating Authority only on the basis of statements recorded under Section 50 of the PMLA without any corroborative evidence.

¶85

He further argued that Section 420 IPC was added for the first time in the schedule to the PMLA Act with effect from 01.06.2009 and Section 13 of PC Act was added by way of amendment in the schedule with effect from 15.02.2013, whereas,

¶86

Rajesh Malhotra Member

¶87

G.C. Mishra Member

¶88

FPA-PMLA-392/LKW/2012 Hinish Ram Chandani v. ED, Lucknow Alongwithsix connected appeals No. 393 to 397 & 404 of 2012.

¶89

¶90

in the present case the alleged offences were committed before the said amendments, and hence, appellant cannot be prosecuted under Section3 r/w 4 of PMLA, 2002, as appellants cannot be made liable for the acts committed prior to amendments. The said amendment cannot be made applicable retrospectively.

¶91

He further argued that CBI failed to appreciate the facts that the present case is not a case punishable under Section 420 of IPC, but it is a case of availing the genuine loan facility for the purpose of business, which unfortunately resulted in the business losses. The appellants have not committed the offence of fraud at any stage while availing loan facilities.

¶92

He further pointed out that all the properties of the appellants furnished to the bank for availing credit facilities are already taken over by the concerned banks. Many RecoveryCertificates are already issued by Debt Recovery Tribunal at Allahabad against the appellants and the Recovery Officers of DRT are unable to auction the properties,as the same are already attachedby respondent ED in the present case. He submitted that appellants have no objection if the said properties are taken over by the bank for auction of the same, as appellants are incurring losses on account of accumulating interest on the decretal amount,as mentioned in the Recovery Certificates issued by DRT. He argued that the excess amount after auction be ordered to be returned to the respective appellants, as there is no other claimant for the same, except the bank.Prayer is accordingly made to allow the present appeals and thereby, set aside the impugned order so that properties can be auctioned by the bank for realizing its debts.

¶93

Rajesh Malhotra Member

¶94

G.C. Mishra Member

¶95

FPA-PMLA-392/LKW/2012 Hinish Ram Chandani v. ED, Lucknow Alongwithsix connected appeals No. 393 to 397 & 404 of 2012.

¶96

¶97

On the other hand, learned counsel for the respondent-ED strongly opposed the submissions on the ground that commission of offence under PMLA is a continuing offence and the property generated out of proceeds of crime and/or in absence of same the other properties of the appellants can also be attached as value thereof. He further argued that issue of retrospective application of the amended provisions of Schedule is already settled by Hon’ble Supreme Court of India in catena of the judgments.

¶98

He contended that even the mortgage property with the banks cannot be released at this stage as provisions of PMLA will prevail over the DRT Act and SARFAESI Act. He submitted that after the conclusion of criminal trial, only Ld. Special Judge, PMLA Court, is empowered to deal with the property as per Section 8(5) to 8(8) of PMLA, 2002. Accordingly, he prayed that present appeals be dismissed, being devoid of any merits.

¶99

After hearing the rival submissions, we have given our thoughtful consideration to the same. Admittedly, the most of the properties of present appellants are already mortgaged with the bank. The value of the attached properties is quite less than the quantum of fraud committed by the appellants for availing the credit facilities and then siphoning of the funds. This Appellate Tribunal has no inherent jurisdiction to scrutinize and evaluate the quality of evidence collected by the Central Bureau of Investigation and to verify the prima facie case for commission of schedule offences by the appellants.

¶100

Rajesh Malhotra Member

¶101

G.C. Mishra Member

¶102

FPA-PMLA-392/LKW/2012 Hinish Ram Chandani v. ED, Lucknow Alongwithsix connected appeals No. 393 to 397 & 404 of 2012.

¶103

¶104

The fact that some of the appellants are not charge sheeted

¶105

by CBI is no ground to release the attached properties in their favor, as respondent-ED during investigation has to see whether the proceeds of crime were layered among different persons by diverting the credit facilities. The person whosoever is found in possession of the proceeds of crime whether directly or indirectly and whether intentionally or unintentionally, he is liable for confiscation of his properties as direct proceeds of crime, or value thereof, in absence of proceeds of crime. The fact that most of the properties are mortgaged with the bank and Recovery Certificates are already issued in favor of the banks is no ground to release the said mortgaged properties, as the said bank is at liberty to stake its claim before learned Special Judge, PMLA Court, appropriate stage, as per the provisions of Section 8 of PMLA.

¶106

The fact that Section 420 IPC was inserted in the schedule of PMLA with effect from 01.06.2009 and provisions of Section 13 of Provision of Corruption Act, 1988 was also inserted with effect from 01.06.2009 and the properties are acquired or offence is committed prior to the said amendments in the Schedule, the same is alsono ground to release the properties. The said amendmentsempower respondent-ED to attach the properties, even if the said properties are acquired prior to the said amendment, irrespective of the period of offence.

¶107

In sequel to our above discussion, the present appeals are hereby dismissed being devoid of any merits. The pending applications, if any are also stands disposed of.

¶108

APPEALS DISMISSED .

¶109

Rajesh Malhotra Member

¶110

G.C. Mishra Member

¶111

FPA-PMLA-392/LKW/2012 Hinish Ram Chandani v. ED, Lucknow Alongwithsix connected appeals No. 393 to 397 & 404 of 2012.

¶112

¶113

Pronounced on this 07^th Dayof June, 2024.

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Rajesh Malhotra Member

¶115

G.C. Mishra Member

¶116

‘PS’

¶117

Rajesh Malhotra Member

¶118

G.C. Mishra Member

FPA-PMLA-393/LKW/2012 of Smt. Nandini Ram Chandani v. The Deputy Director, Directorate of Enforcement, Lucknow

Case brief

What is this about?

What did the court decide?

FPA-PMLA-393/LKW/2012 of Smt. Nandini Ram Chandani v. The Deputy Director, Directorate of Enforcement, Lucknow

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

All orders in this case

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