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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
V.M. VELUMANI, J.
C. Chellamuthu - Appellant
Vs.
The Deputy Director, Prevention of Money Laundering act, Directorate of Enforcement, Mumbai, Ministry of Finance, Department of Revenue, Government of India – Respondent
C.M.A.(MD) No. 104 of 2015 to C.M.A.(MD) No.110 of 2015
Decided on : 14.10.2015
Indian Penal Code, 1860 - Sections 120-B r/w. Sections 420, 467 and 471 - Prevention of Corruption Act, 1988 - Section 13(1)(d) – Prevention of Money Laundering Act, 2002 - Sections 50(2) and 50 (3) - Criminal Conspiracy and Cheating - Bogus and fabricated document - Attachment order of adjudicating authority – Dismissal of Appeals – Challenged - Money-laundering - In investigation, one G. Srinivasan was found to be main accused and he only availed loan projecting R. Manoharan as Proprietor of M/s. Bhagavathi Textiles Mills Limited - After availing loan, he purchased about 165 acres of land in Village from One K.Gunasekaran, G.Selvarani, R.Sivkumar, Shri Chinnakkannu in names of his Benamies - Sale deeds were registered as Documents - These three persons, as per instructions of G.Srinivasan appointed one P.Ayyappan, as their power of attorney, registered as Documents - All the four power of attorneys were registered in the office of Sub Registrar of Assurances, Chathirapatti - Held, No material was produced to show that appellants are close relatives of person, who involved in criminal activities and person, who sent monies to purchase property did not possess financial capacity to provide such huge amounts and that they are not genuine purchasers of agricultural products of appellants. - Respondent has not made any such investigation and has not produced any such material - Further, Appellate Authority in fact considered additional documents produced before it, but rejected same on ground that Appellants have not given any valid reasons for not filing same before Adjudicating Authority - Having considered Additional documents, appellate authority failed to give any finding on merits after verifying with concerned Bank - Judgment in Radha Mohan lakhotias case is in favour of appellants as they have rebutted presumption that property in question is proceeds of crime - Appeals are allowed.
These appeals are filed challenging the order dated 05.09.2014, passed by Appellate Authority dismissing the appeals filed by appellants and confirming the provisional attachment order of adjudicating authority, dated 07.09.2012, made in complaint No.144/2012.
2. The appeals are against the common order, dated 05.09.2014 passed in FPA-PMLA-Nos.399 to 402, 406 to 408/MUM/2012 and the issue involved is one and the same. Hence, all the appeals are heard together and disposed of, by this common order.
3. Relevant Facts:
(i) One Mr.R. Manoharan projected himself as proprietor of M/s. Bhagavathi Textiles Mills. He produced bogus and fabricated documents in connivance of one S. Arivarasu, the then Business Development Manager of M/s. Global Trade Finance Limited, Coimbatore, availed loan facilities to the tune of Rupees Fifteen Crores. On coming to know of this fraud, one B. Surendran, Vice President and Branch Head of M/s. SBI Global Factors Limited, Coimbatore lodged a complaint against the said R. Manoharan, Proprietor of M/s. Bhagavathi Textiles Mills, G.Srinivasan, S.Arivarasu and others. The said complaint was registered on 07.10.2010 in FIR No.RC.09(E)2010-BS& FC/BLR under Sections 120-B r/w. Sections 420, 467 and 471 of IPC and Section 13(2) r/w. Section 13(1)(d) of the Prevention of Corruption Act, 1988. After investigation by concerned Police, CBI, BS & FC Bangalore, filed charge sheet in C.S.No.6 of 2011 dated 26.07.2011, before the Court of Special Judge, CBI against R.Manoharan, Proprietor of non-existent M/s. Bhagavathi Textiles Mills, G.Srinivasan, S.Arivarasu, K.Vignesh and others for the offences committed under Sections 120(B) r/w. Sections 420,467,468 and 471 of IPC and Section 13 (2) r/w Section 13(1)(d) of Prevention of Corruption Act, 1988 before the Court of Special Judge, CBI cases, Coimbatore.
(ii) In the investigation, one G. Srinivasan was found to be main accused and he only availed the loan projecting R. Manoharan as Proprietor of M/s. Bhagavathi Textiles Mills Limited. After availing the loan, he purchased about 165 acres of land in Pudukkottai Village from One K.Gunasekaran, G.Selvarani, R.Sivkumar, Shri Chinnakkannu in the names of his Benamies viz., K.Vignesh, P.Venkatachalapathy and P. Rajendran. The sale deeds were registered as Document Nos.853 to 855 of 2008, dated 12.06.2008 and Document No.1344 of 2008, dated 02.09.2008 and Document No.1559 of 2009 dated 09.09.2009. These three persons, as per instructions of G.Srinivasan appointed one P.Ayyappan, as their power of attorney, registered as Document Nos.137 and 138 of 2009, dated 07.09.2009 and Document No.807/2009, dated 12.09.2009 and Document No.186 of 2009, dated 22.09.2009. All the four power of attorneys were registered in the office of Sub Registrar of Assurances, Chathirapatti.
(iii) The said P.Ayyappan, Power of Attorney of these persons sold this 165 acres to one Gunaseelan, S/o. Kuppusami Gounder, by four sale deeds registered as Document Nos. 187 to 190 of 2010. The said Gunaseelan sold the entire 165 acres to the appellants, by four sale deeds and registered as Document Nos.379 to 382 of 2010. The said 165 acres was purchased by G. Srinivasan in Benami names from and out of monies obtained by fraud. Hence, the said property is proceeds of crime.
(iv) The Directorate of Enforcement initiated proceedings, on the basis of FIR dated 07.10.2010 and CBI letter dated 19.11.2010. An Enforcement case Information Report (ECIR) Vide F.No.ECIR/06/CZ/PMLA/2011 was registered on 03.01.2011, by Directorate of Enforcement, Chennai. The statements of G. Srinivasan, P.Manoharan, K.Vignesh, P.Venkatachalapathy, P.Rajendiran, R.Ayyappan, K.Gunaseelan, the appellants and others were recorded under Sections 50(2) and 50 (3) of Prevention of Money Laundering Act, 2002 (herein after referred as PMLA, 2002).
(v) During investigation G.Srinivasan admitted on 29.09.2011 that R.Manoharan is looking after his all financial transaction and other activiti
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