FINAL ORDER

15.07.2024 FPA-PMLA-3918/SRT/2021

1. The appeal has been preferred under Section 26 of the Prevention of Money Laundering Act, 2002 (in short ‘the Act of 2002‟) to challenge the order dated 03.11.2020 passed by the Adjudicating Authority confirming the provisional attachment order under Section 5 (1) of the Act of 2002.

2. The brief facts of the case are as under:

a) An FIR No. RC.0682016E0015 was registered for the offence under section 120-B, 420, 467, 468 and 471 of the Indian Penal Code, 1860 against M/s Nakoda Ltd., Babulal Gumanmal Jain, Shri Devendra Babulal Jain and many others.The FIR was registered on the basis of a complaint of Shri B.G.Kamath, Assistant General Manager, Canara Bank, Specialized Prime Corporate Branch on behalf of consortium bank led by Canara Bank. The FIR reveals that M/s Nakoda Limitedavailed several Term Loans and Working Capital Loans from a group of Banks, under Consortium arrangement of 13 Banks led by Canara Bank.

b) On the basis of the FIR, an ECIR/STSZO/04/2017 was recorded by the Enforcement Directorate, Surat on 16.08.2017 against M/s Nakoda Ltd., Babulal Gumanmal Jain, Shri Devendra Babulal Jain and othersfor investigation under the provisions of the Act of 2002.

c) During the course of investigation, it was revealed that M/s Nakoda Limited represented by Shri Babulal G. Jain and Shri DevendraBabulal Jain dishonestly got opened Inland Letter of Credit (LC’s) in Canara Bank infavour of M/s Sujata Synthetics limited, M/s Damodar Silk Mills Pvt Limited, M/s Swagat Fashion Private Limited, M/s Simran Silk Mills Pvt Limited and M/s Nutan Fashion Pvt Limited against false sales invoicesprovided by these companies. These companies created false and fabricated invoices showing as if they had supplied fancy shirting/knitted fabrics to M/s Nakoda Limited. Subsequently, these companies submitted those false invoices to the Bank as genuine and induced the Bank to discount thebills/invoices against the LC’s already issued by M/s Nakoda Ltd in their favour and to deliver the bill/invoice amount. The false invoices submitted by these companies were processed by Canara Bank, Surat and the proceeds were remitted to the bank accounts of those companies. M/s Nakoda Ltd, made payments to the vendors through domestic LC’s opened with Canara Bank. The amount credited to the bank account of those companies in fraudulent manner and was transferred back to the bank account of M/s Nakoda Limited through circular rotation of money. Finally, the amount that tracked back to the account of M/s Nakoda Limited by way of dishonest and fraudulent manner used by Shri Babulal G Jain and Shri Devendra Babulal Jain.

d) It was revealed that M/s Nakoda Limited did not make payment to Banks for retiring 202 LCs, thereby causing corresponding wrongful loss to the tune of Rs.827.98 crores to Banks. It was out of the 1212 LC‟s amounting to Rs.4207.25 Crores of LC funds fraudulently obtained by M/s Nakoda Ltd, as a result of criminal activity relating to a scheduled offence,involving proceeds of crime amounting to Rs.827.98 Crores. It is relating to 202 devolved LC’s, remained unpaid by M/s Nakoda Ltd.

e) In the instant case, vide OC no. 974/2018 dated 07.05.2018 the properties of M/s Nakoda Limited comprising its plant and machinery, land and building, valued at Rs. 375.71 Crores were provisionally attached earlier and has already been confirmed by the Adjudicating Authority vide its order dated 01.10.2018.

f) M/s Nakoda Limited had acquired 9 wind turbines generator and land at Dist. Tiruneveli (Tamil Nadu) from Global Wind Power Limited and Global Wind Infra services P Power Ltd. by making payment of Rs. 40,40,03,664/- from its cash credit bank accounts held with Corporation Bank and State Bank of Patiala.

g) It is stated that the attachment earlier made before the impugned attachment under the instant OC did not coverthe entire amount of the proceeds of crime and hence, the respondent further attached 9 wind turbinesamoun