Dear Fellow Victim, Please find attached copy of our letter to Dr. Sadanand Date, Joint Commissioner of Police, EOW, Mumbai Police. This is for your information. Regards,
89
• i • c _.- . - " \;1 BEFORE THE ADJUDICATING AUTHORITY (UNDER PREVENTION .. 10NEY LAUNDERiNG ACT , 2002) -939e / Original Comp laints ', os . 233,234,235 & 239 of 2013 · in Provisional Attachment Orders No. 17/2013, 18/2013 & 19/2013 'fen./ I & . . . No.21/13 ' In Original Complaint No. 233/20 J 3 lainant hri.Nilkahth Shelke, eputy Director, Directorate of Enforcement, Prevention of Money Laundering Act, 2092, 23-24, Mittal Chambers, 2nd Floor, Nariman Point, Mumbai-400 021. i.- . Defendants qy;} •J b 1 ) 2) 3) M/s. Mohan !ndia Pvj. 354, Tarun Enclave, 'i ., '!=".7,.. Pitampura, New IDeiH - 110034. " .. ,, -' Shri 81, VaishdiLtno f ave, . .," . ,. Pitamp r<il, !'New Delhi- 110 034. iL# f . r ("""'" Shanker Shrivastav, 1\.. ' ,· .. : \: ._,, .. " !4 >" 6 ' ..... , .?.: , Pinnacle, DLF Phase-V, ''- G $> elf Cours_e Road, Gurgaon, Haryana. In Original Complaint No. 234/2013 1) M/s. Mohan India Pvt. Ltd, 354, Tarun Enclave, · Pitampura, New Delhi- 1. 10034. M/s. Brinda Commodity Pvt. Ltd, . ,
Transcript
• i • .~ c _.- '~ l~of . - " \;1 BEFORE THE ADJUDICATING AUTHORITY
Villa No. 45 in NSEL~ Mohan India Pvt Ltd ~~!llem~~t ale T atvam Villas No. 91202005917 6811 ~ Mot1'ar} India Pvt
1 Ltd Capital ale No. 912ID2'®o60S81129~ DD No. 6423 dtd 20.02.2of3,?:f-tlvs. Vipul Ltd.on account of Maint~nce Deposit for the villa i""(• ~ V . · NSEL~ Mohan frtdfa' Pvt Ltd Settlement ale . ~ . . ,, "' No. 91202.0~.39J 76B 11 ~ Mohan India Pvt Ltd caJ2itoho,l <l No. 912020060581129~ DD No. 64'~1 dtd 20.02.2013 ~ ~s.Tatvam Villa~ ~dintenance on account of <:iOV~A€e charges for the villa
l""h:JSE!i-'-+ Mohan India Pvt Ltd Settlement ale Flat No. 3~QJ, ff.f. 912020059176811~ Mohan India Pvt Gomti En<;lq'v~ ~td Capital ale No. 912020060581129 ~DD Lucknow·.· }~\,;,; No. 6437 dated · 21 .02.2013 ~ Drosia
.'f :r-t>. .f!r--
. i1 ·"'··· Construction .
105000
1572923
1000000
if"' ~ .,, NSEL~ Mohan India Pvt Ltd Settlement ale !lal~",!jO. 3402, No. 91202005917 6811 ~ Mohan India Pvt
5 (Oqrgti Enclave, Ltd Capital ole ~o. 912020060581129 ~DD 1000000 ;-o:l,.~.teknow · No. 6438 dated 21-.02.2013 ~ Drosia
Renovation charges for . Fiat Nos.3401 & 3402, Gomti Enclave, Lucknow
Construction NSEL~ Mohan India Pvt Ltd Settlement ale . No. 912020059176811~ Mohan India Pvt Ltd Capital ale No. 912020060581129 ~ Jaishankar Shrivasta . Ale No. 15000000 912010063747514 ~ DD No. 115528 dated 22.02.2013 ~ Drosia Construction . on account renovation of the flats
/
Page 5 of 89
NSEL~ Mohan India Pvt Ltd Settlement a/c No. 912020059176811 ~ Mohan India Pvt Ltd Capital · a/c No. 912020060581129 ~ RTGS dated 19.06.20123 ~ Skyhigh lnfraland Pvt Ltd ~ Prime Zone Developers Pvt. Ltd NSEL~ Brinda ·Commodity Pvt. Ltd. a/c No. 913020026991581 ~ Brinda Commodity Pvt.
' 15000000
Ltd. capital a/c No. 913020p14029443 ~ ~
61 8 plots at Prime Ram Awadh . Sharma a/c No. 5000Q~-...00·
City, Karnal 913010006474818 ~ RTGS dated 18.06.2013 ~~
2.2. PROPERTIES IN RESPECT OF ORIGINAL COMPLAINT No. 234/2013
On the basis of the materials plated before him and on the reasonable belief'Os
recorded in the Provisional Attachment order No. 18/2013, the Complainant has
attached the following properties· provisionally and also indicated the money
trail:-
Sr. No
Description of property
/
Money Trail ~Q~~nt
~~id(in ( , ~~upees)
NSEL-+ Mohan India Pvt Ltd Settlement ale No:. 91202005917 6811 -+ Mohan India Pvt Ltp ~~itdl 2500000 a/e No. 912020060581129--:- DD No.,JJ't4. d€lted 28.05.2013 -+ Timber Trail Travel Todo-1\I:~ ~fd. NSEL-+ Mohan India Pvt Ltd Seitlem~of'ate No. 91202005917 6811 -+ Mohan lnd~ Pvt~ltd Capital ale No. 912020060581129 -+ D.p~; o.
1 1470 dated 2500000
28.?5.2013 -+ Nainee 9 .~~ Director of Timber Trail Travel Today Pvt. ~tdJ .. ~) NSEL-+ Mohan India 4'f>\t Lta Settlement ale No. 91202005917681 L,~ Mo~n India Pvt Ltd Capital
~. ,, '~
ale No. 912020060_58~1-129-+ DD No. 1471 dated 2500000 28.05.2013-+ : warri"·'Garg, Director of Timber Trail Travel Toqd\{!&~t.ltd. NSEL-+ Mo"ar:~ '. lndia Pvt Ltd Settlement ale No.
50% share in 91202~Q59l~ 811 -+"Mohan India Pvt Ltd Capital Hotel a/¢~N& !Yl2020060581129 -+ DD No. 1472 dated 2500000 Camphor, ~&~o5]013 -+ R.K. Garg, Director of Timber Trail Panaji. Goc;.••: Tra1t.,el Today Pvt. Ltd. ~ ''N~L-+ Mohan India Pvt Ltd Settlement ale No.
~t"''\_ .,. ) '91202005917 6811 -+ Mohan India Pvt Ltd Capital ~. < a/ e No. 912020060581129 -+ DD No. 1473 dated 2500000
t'· C., v· 28.05.2013 -+ Akash Garg, Director of Timber Trail <... i; Travel Today Pvt. Ltd.·
~:· "':; : · * NSEL -+ Mohan India Pvt Ltd Settlement a/c No. ··:. .,,f 91202005917 6811 -+ Mohan India Pvt Ltd Capital 1 000000·
ale No. 912020060581129 -+ RTGS dated 0 05.06.2013-+ timber Trail Travel Today Pvt. Ltd. NSEL-+ Mohan India Pvt Ltd Settlement ale No. 91202005917 6811 -+ Mohan India Pvt Ltd Capital ale No. 912020060581129 -+ Jaishankar Shrivasta
14-61450 Ale No. 912010063747514 -+ RTGS dated
28.06.2013 -+ Nainee Garg, Director of Timber Trail Travel Today Pvt. Ltd.
/
._ ' . )
/
2
3
Flat No. 11 B, Florence, Gurgaon
Page 7 of 89
NSEL~ Mohan India Pvt Ltd Settlement ale No. 91202005917 6811 ~ Mohan India Pvt Ltd Capital ale No. 912020060581129 ~ Jaishankar Shrivasta
"'""'~ Ale No. 912010063747514 ~ Grecque No. 50706 dated 5.2.2013 ~ Kunal M~~h·a~- Goklani (seller) NSEL~ Mohan India Pvlp.~ ,..,settlement ale No. 912020059176811 ~ ~rar:r India Pvt Ltd Capital ale No. 91202009,0~~11~Jl -:-+ Jaishankar Shrivasta 11976856 Ale No. 91201 006.3'147514 ~ DD No. 6860 dated 9.4.2013 ~ Jy(ti.<.Q~'KI~mi {seller} NSEL~ Moh9n~ l.rn11dia Pvt Ltd Settlement ale No. 9120200 9 768:11 ~Mohan India Pvt Ltd Capital ale N~. 91~ef20060581129 ~ Jaishankar Shrivasta AI~ ~. , '"91':2010063747514 ~ DD No. 6861 dated 4976856
95\20JB ~ Kunal Goklani (seller) · ':a:l
House -o . .i"'~§EL~ Mohan India Pvt Ltd Settlement ale No. B-6141t"':!;~ J) ''912020059176811 ~Mohan India Pvt Ltd Capital Vineet li ale No. 912020060581129 ~ Jaishankar Shrivasta 10000000 Kj rai(Ef Ale No. 912010063747514 ~ DD No. 52952 dated LD~k@OW 14.02.2013 ~Lalita Rai (seller)
{'- '"k!ouse No. NSEL~ Mohan India Pvt Ltd Settlement ale No. · '~,B'-6142, 912020059176811 ~Mohan India Pvt Ltd Capital
4 Vineet ale No. 912020060581129 ~ Jaishankar Shrivasta 10000000 Khand Ale No. 912010063747514 ~ DD No. 52951 dated \ Lucknow 14.02.2013 ~Lalita Rai (seller)
/
-..
' ' . Page 8 of 89
/ / 7000000
NSEL~ Mohan India Pvt Ltd Settlement a/e No. House No. 912020059176811 ~Mohan India Pvt Ltd Capital · B- a/ e No. 912020060581129 ~ Jaishankar Shrivasta
5 6/43Vineet Ale No. 912010063747514 ~ DD No. 52953 dated Khand 14.02.2013 ~ Avanish Rai (seller) Lueknow I
~~~ Total
~ • f
~- · - :·:.~ .. ~ ..... ~-- .......
. ( ..,·,. ,,
''i>. J:> ; 2.3. IN RESPECT OF PROPERTIES IN ORIGINAL COMPLAINA1i: ~~0'.235/2013
('~ "'-' . <.' iJ ·~:r·
On the basis of the materials placed before him qn _ . n the reasonable belief as
recorded in the Provisional Attachment oide ' ~'l~/2013, the Complainant has ;~-1-,~.
attached the following properties prov4sl®nQIIy and also indicated the money
trail:- . 'i,J;~.J,F " · fl 1~ .
~ """'~ ... J <!::' ·~?i-. Amount
Sr. Description of ~:1''], ·~ t! t -,-#' Money Trail Paid (in
No property ~ .. Rupees} ~+:'9 ~~-
·;~}!... 0.
N~,n~M'brtan India Pvt Ltd S~ttlement ale ~o. 9i12Q2Q05917 6811 ~ Mohan India Pvt Ltd Cap1tal
500000 . r ~a/dNo. 912020060581129~ Chq. dtd 29.01.2013
-· ~ t~ Anjana V. Agarwal (seller) ~ f\JSEL~ Mohan India Pvt Ltd Settlement a/e No. ff' '"'-
•, -~ -912020059176811~ Mohan India Pvt Ltd Capital - 11' 500000
~~ ~ ale No. 912020060581129~ Chq. dtd 29.01.2013 Flat~~·~o~ 1202 ~ Vinod M. AQarwal (seller) ''{<\;, -~ ....
NSEL~ Mohan India Pvt Ltd Settlement ale No. 1
(Sdtp®rpan 'R0yale 91202005917 6811 ~ Mohan India Pvt Ltd Capital
500000 Borivali (East) ale No. 912020060581129~ Chq. dtd 29.01.2013
~ Munnalal Babula! Agarwal (seller} . NSEL~ Mohan India Pvt Ltd Settlement ale No .
912020059176811~ Mohan India Pvt Ltd Capital 500000 ale No. 912020060581129~ Chq. dtd 29.01 .20'13
~ Shyamlata M. Agarwal (sellerl NSEL~ Mohan India Pvt Ltd Settlement ale No.
7500000 91202005917 6811 ~ Mohan India Pvt Ltd Capital
I.
. '
..
/
2 Range Rover
Page 9 of 89
ale No. 912020060581129---* Chq. dtd 7.2.2013---* Anjana V Agarwal (seller) NSEL---* Mohan India Pvt Ltd Settlement ale No. 91202005917 6811---* Mohan India Pvt Ltd Capital
3500000 ale No. 912020060581129---* Chq. dtd 7.2.2013---* Vinod Agarwal (seller) NSEL---* Mohan India Pvt Ltd Settlement ale No. 912020059176811---* Mohan India Pvt Ltd Capital ale No. 912020060581129---* Chq. dtd 7.2.2013-Muhnalal Babulal Agarwal (seller)
11500000
<--/ ~i~)· ',y
NSEL- Mohan India Pvt Ltd Settlement ale No. · ~; 91202005917 6811---* Mohan India Pvt Ltd Capital Ssoaooo ale No. 912020060581129- Chq. dtd 7.2.2013~ ·~ Shyamlata M. Agarwal_{seller} ...... . " NSEL- Mohan India Pvt Ltd Settlement. di~~o> 91202005917 6811---* Mohan India Pvt (fd, €.£;!¢ital
Ct:No. NSEL- Mohan India Pvt Ltd Settlement ale No. 91202005917 6811 - Mohan India ·Pvt Ltd Capital a/c No. 912020060581129- Whiz Kid Promoters Pvt. Ltd. Ale No. 049010200022400 W-5120,
Western Avenue, Sainik Farm, New Delhi
• -Cheque No. 018372 dated02.03.2013-Vivek Nanda NSEL~ Mohan India Pvt. Ltd Settlement ale No. 912020059176811- Mohan India Pvt Ltd Capital ale No. 912020060581129 - Whiz Kid Promoters Pvt. Ltd. Ale No. 049010200022400
18000000
4300000
4300000
/
/
Page 12 of 89
-Ch-eque No. 018371 dated 02.03.2013-Bhuvan Nanda NSEL- Mohan India Pvt Ltd Settlement ale No. 91202005917 6811 S Mohan India Pvt Ltd Capital ale No. ?12020060581129- Whiz Kid
7450000 Promoters Pvt. Ltd. Ale No. 049010200022400 -Cheque No. 108570 dated 15.03.2013-Vivek Nanda NSEL- Mohan India Pvt Ltd Settlement a/c No. 91202005917 681 1 - Mohan lridia Pvt Ltd Capital ale No. 912020060581129- Whiz Kid ~->
a) t~~aknduced into making investments by false representations and
~ a~tJrances g1ven by the promoters and semor management of
'-J~ational Stock Exchange Limited (NSEL} with a deliberate intention to
dishonestly misappropriate his funds and with practically little scope
for recovery of the amounts on the c'ontracts, ·
b) he was cheated by the NSEL by creating a false impression of being a
proper Spot Exchange with correct risk management systems in order
/
j
Page 15 of 89
to induce him to trade and deliberately mislead that their trades were
backed by genuine ware house receipts, . / / .
. e) the seliers desirous to sell/buy through NSEL have to compulsorily deliver
the commodity in . the NSEL designated warehouse of a particular
·location specified in the Exchange Circular. However, . it was
ascertained that the c.ertified warehouses of NSEL lacked <3apacit,y ' ·-. 'J;)....
and some of them had no stocks, and . . 'g:~ ~-d) Thus, the genuine investors were defrauded of their inv,~sfrlj~pts by way
. . ··~--- j ·!;;)
of serious misappropriation from the fact that NSE;L~911o\:ved trading on •. ~o;. '
commodi~ies by selle~s, without ensuring goodf··~~~propriate quan~ity
and quality stored 1n the exchange ~orzrl,ll~d . warehouses wh1ch
resulted in thousands of investors trading in{~[lOA-texistent goods. . ~"~,
. /{''c .\ '-.1 . 3.2. As Sections 120(8), 467 and 471 of th,, IPO; 1860 are Scheduled Offences
~ ,::J,' .,~.r..r: .. .
under the PML Act, 2002,the Co'mplaina~t "tegstered ECIR No.MZO/ECIR/14/2013
dated 14.10.2013 and the case. ~s to~~n up for investigation under the $,*' -
provisions of the Act. On enqui~'~)NSEL, it was gathered that
a) NSEL was incorporatecfin~2Gf)5, b) the controlling sh.El[~~0J~r of NSEL is Financial Techndogies (India}' Ltd.
~.,, ..... ., .
(FTIL) holding 9<9.9t1uf the share holding of NSEL, .
e) the exchon1~®.fters an electronic platform for compulsory delivery based . ·~J ·. . . . spot con ~acls in various agricultural and non agricultural commodities,
d) th(b~3~ ~eo was to provide a place where farmers, traders, corporate,
~¥ssors, p lanters, manufacturers and importers can sell and but their
c ommodities at the best possible and competitive rates,
e) NSEL undertook to provide services like quality certification, storage of . goods and other customized value added service,
f) NSEL a llowed trades on various contracts with settlement cycle ronging
from T +0 to T +36 days. Contracts were settled by delivery and payment
after trade date referred herein above as "T",
.r
Page 16 of 89
g) there were some contracts of the same commodity wherein members
enter into a buy contract in T + l, T +2, T +3 and simultaneously enter into / .
/ . reverse contract 1n T +25 or T +34 or T +36,
h) the Plant owners, who needed funds against their stock inventory used to
sell . it on exchange platform on short duration contracts. Simultaneously,
they bought same qyantity of commodity under a long duration ~pptract
on the sa~e day, thereby ensuring that the stock remaine.~ d"lh\t~~·~ by
way of repurchase, ·"'· . . ~ j .
i) simultaneously, the buyer of the short duration C9JltracL sold in long . . _, ... :"''" ' .
duration contract at a higher price thereby getti~ .. ~~~~if on its investment
for a period of 30 -35 days, and \;;;,,)
j) since, the purchase & sale of goods wJ~. ~e through transfer of
warehouse receipts, investor did noJ· . .,i1J:HQ";~, any botheration to take ·:., ) ''· .
delivery of the commodity or w7-c~jb6ut the quality/quantity of the
commodities, and V k) the rate of retur~ for th~ SyJr member of T +2 contract was the
difference between th s ·'·.-;;act value which used to vary between 14 -
15% p.a. was the ~G>~ ~~;de after deducting the transaction costs .
.AW·... -
3.3. It was further ga~~re~d that the Income Tax Authorities, had conducted ~ v .
preliminary enqujL~~~ with regard to warehousing facilities of the Defaulting
Members of,. Slib};. request ~as, therefore, ~ode to them to provide the details
of such ~~ation. Vide their l~tter dated 18.10.2013, they p~ovided findings of
preliTfrt~ry enquiries conducted by them against the defaulters of NSEL. It goes
to sh~fhat · . . .
a) there were six go downs shown to have been holding stock for M/s Mohan . . .
India Pvt. Ltd. and M/s Tavishi Enterprises Pvt. Ltd,
b) out of them, one go down could not be located as the address was
incomplete, two go downs were found empty and other three go downs
were found locked, and
! .
Page 17 of 89
c) from the local enquiry, it was ascertained that not more than 1000 MT of
stock could be stored in each of those go downs. / /
3.4. Shri Anjani Sinha, the former MD & CEO of NSEL had vide his letter dated
12.09.2013 forwarded a copy of his affidavit dated 11 .09 .2013 regarding · matters
concerning NSEL. He has stated in his affidavit that ·
. a) he and his ma~aging staff were solely responsible for the crisi~ atN~ '"·''·•. ,')-
b) t~e Defaulting Members h~d in connivance with the e~.~~~ .es;;,of NSEL
siphoned off the funds rece1ved from NSEL, and ·< c) such funds were diverted to acquire real esta~:~~~jiY \,xisting loans,
plant expansion, etc. . "., '11, ")9
3.4.2.Accordingly, the Statement of Shri Anjani Sinbp~ ~~aging Director & CEO z~~\
of NSEL was recorded under the provisions of ~e ion 50 of the Prevention pf . I f'
Money Laundering Act, 2002, on 16.1 0.2~·~l>~Bh.¢rein, he admitted the contents
of his affidavit dated 11 .09 .2013 and stated~ tpat
a) NSEL is a spot exchange orga ·izi.~ delivery based transactions between
various buyers and selle~~<:~c ~ gh electronic network, which is spre~d in
17 states ac:~oss the co~\?'~~~ . -~ b) It has appointed!~ . t )ers, who execute transactions on behalf of their
. clients; that NS~d)ect .was launched on 1 Qth February, 2005, and later
on, the c9']", ?JlY; was incorporated in May 2005, and ·
c) in JunJ" 007, it got exemption from Department of Consumer Affairs,
G .~f!~~ment of India under Section 27 of Forward Contracts Regulation .-~
(J .. t,, 952, for conducting trading in one day duration forward contracts.
"f'Hereafter, NSEL commenced membership drive in June, 2008, and in
October, 2008, it started actual trading.
3.4.3. On being asked to furnish the details of the clearing I settlement
procedure and what are the company's guidelines to the brokers for dealing
with the clients, Shri Anjani Sinha stated that
Page 18 of 89
a) all members were required to open designated bank accounts with one
of the designated banks listed by the Exchange, / / b) the members had to open two accounts - ( 1) Settlement account, & (2)
Client account,
c) the clearing and settlement .system gen·erates bank files for debiting or
creditina the Settlement Accounts of respective members and s, ch files "j ' I
are sent to the bank electronically; that based on such inst~~~JEI S, the
banks debit I credit respective members Settlement Accq_un ·s, {Jnd . . ,,_,' .
d) in · the settlement account, members do not have c~.)~u~,book facilities
and so Settlement Account can be used only fort~~.~aj1sfer or receipt of
funds to I from NSEL Settlement Account; (2) tr~- st~f,i;of funds to members' L· .
Client account and receipt of funds from an~i~ac ount; that the operation
of client account ~s totally in the hands C){ he member; that; he can
accept funds from his clients in thi~~j:'ht and con issue cheques to his
clients from this account. ., . ., . · ~ " . ~~.:,__r:~-., .
3.4.4. On being asked to expla~~.~tion of Business Development Section and
Warehou~ing Section of NSEL~e);~~~ted that. · .
a) busu:).ess develop~~~~Jin 1s responsible for deveJopment of the market,
introduction of f{~:~mbers, identifying new commodities, carrying out
ground le~-~"du~Jfdiligence of the parties and if found fit, t_o introduce
them to tna. ~~ange system, and · . • j . .
b) the ~pre .®using Department is responsible for identifying and approving
~.,,.'::~·bses, maintaining stock in the warehouses, keeping control and .
\ vlgil ·~on actual commodity inward and outward along with current stock '-:-~-:,·'".:!·~~·
level and to upload actual stock statement on the website.
3.4.5. On being ask~d to explain the reasons for the crisis in NS~L, Shri Anjani
Sinha stated that
a) the Defaulting Members were in collusion with the Warehousing Staff of
NSEL,
/
Page 19 of 89
b) they manipulated the stock and duped the entire exchange mechanism,
c) the members submitted false and fabricated stock offer letters, /
d) the members submitted false sale bills without actually offering the
physical stock in connivance with the NSEL warehousing team, and
e) the offer letters -submitted by the defaulting parties to the Exchange at the
ti~e of sale of stock were ~ot backed by p.h.ysicpl stock. .. ~ _
M/s Brinda Commodity Pvt. Ltd., and M/s Tavishi Enterprises, on~o t e major .. '
defaulters of NSEL Shri Anjani Sinha stated that , '·" ' a) Shri Jai Shankar Srivastava of Mohan India Gro , -~ h.€ld promised · the
. (', ~ company that they would develop delivery- ~:e$-eg;.; sugar- contracts and
will buy sugar from UP Sugar mills and sJi1; o~elhi- based contracts
through NSEL1 and ()~"· I
b) later on Shri Jai Shrivastava admitte.d;t nqt hey had siphoned off the funds
received from the Exchange S~ttlem~nt Account for the purchase of real . ~~;:!'.~J;r;,~f~;;;;.
estate. land around Delh~kifs at Karnal (Haryana}.
3.5. In order to ascertain the~/'~ity of the claim made by Shri Anjani Sinha in ~ . ~
his statement with regqrQ : . '''onipulation of the stock by Defaulting Members, - ~..n~~ •
statement o'f Shri Bihc!rl' ~h.P,Assistant Manager, Warehousing Department of NSEL
was recorded y~~!) Section 50 of PM LA, 2002 on 26.10.2013. Explaining the
activities of wG~h0using Department he , inter alia, stated that · ~ .
a) thEt'sEtllimg members used to send stock offer letters on daily basis by e-. \.. ;,''' .
( m,£?it·'to NSEL stating that the total quantity of goods traded on that day
""'!idd been delivered to the designated warehouses, and
b) he submitted a copy of Stock Offer Letter dated 02.07.2013, issued by M/s . Mohan India Pvt. Ltd. os a sample. On scrutiny of the said letter, it was
noticed that M/s Mohan India Pvt. Ltd. had declared handing over of
12900 M.T. of sugar to NSEL requesting to accept the said stock in their
l . ..
/
Page 20 of 89
wareh9use situated at Khasro No. 106/319, Khera Kalan, New Delhi, and
consider the same for commodity pay-in against their obligations. /
3.6. In view of the findings of the Income Tax Authorities as detailed above,
depositions of Shri Anjani Sinha in his statement dated 16.10.2013 and scrutiny of
Stock -offer Letter furnished by Shri Bihari Lal, it is evident that the clairy1 of M/s
Mohan India Pvt. Ltd., confirming the delivery ~f 12900 M.T. of sugar'l¥id s1ock . . ~~.)
,, "' offer letter dated 02.07.2013 to NSEL was bogus. ''
3.7. The Complainant conducted enquiries with Axis Banl<~~ ~_td. ,,~ith regard to
Settlement and Client Accounts maintained by M/s M~<§l·· ~;;fndia Group. The
respective statement of accounts were obtained l}n~Jction 50 of the PMLA.
2002 and scrutinized in detail. ~~ . . ·o ~
3.7.2. Scrutin) of the account statements r~¥{d)dl1hat · 1
a) M/s Mohan India Group com~,;Eis had received funds in their
Settlement Accounts from NS~Jjj ~,urportedly on account of sale of sugar """~:t·tH=_t';l'~
through T +2 contracts, r'1tb l:'l,J
b) the said funds were ,tf'€lrisf§3rred to their respective Capital Accounts
maintained with ~~ .. r~eepali En<:lave Branch, New Delhi.
c) M/s Mohan lnqi~ f>'~!Jtate Limited and its . group co'~panies had received
Rs. 427 6.48 rf!( from NSEL in their respective Settlement Accounts ~-{'1~~ 't;
mainta~fl1d':;il Axis Bank Ltd, l ,-t"l-
d) whtr~, 'Tnese entities had paid Rs. 3432.96 .crores to NSEL against the
.,,.?,<(11~ '-ond buy of sugar in T +2 and T +25 contracts executed through NSEL, a '" -:~, .
eJtr;~s~ per NSEL records, the total liability of Mohan India group was to the
tune of Rs. 922 crores towards NSEL on account of settlement of their said
contracts, and
f) M/s J_'Aohan India had acquired the amount of Rs. 922 crores as a result of
the criminal activity for which police authorities have registered FIR No.
Thus, it was revealed that the said amounts were proceeds of crime and hence;
further investigations under PMLA, 2002, were carried out.
3.7.3. On further S<?rutiny of the bank statements, it was noticed that / ' .
a) the funds received from the Settlemen~ Accounts with NSEL by tt)e \ C5han
India Group were transferred to various individuals and entilie;~~·a . . t")
b) payments were made to the car dealers, developers, corjstr ction firms
etc. by way of transfers, NEFT/RTGS payments/pay ora~rs; ' -~)/'
3.8. In view of the preliminary findings, Search an<'l'~ey Operations under
Sections 16 and 17 of the PMLA,. 2002, werei c ~ ~ried out at business and
residential premises related to Mohan lndiaj)~ • p""o:n 131.10.2013 and 01 .11 .20 13.
:;":·"':-,~1(.~
During the course of the said operatiQru~gJements of Shri Jag Mohan Garg
and Shri Jai Shankar Srivastav, both O~f:.!ors of M/s Mohan India Pvt. Ltd., were
recorded under Section 50 of t~~(pv L~~~~002 as under: \1 ~~
. . ,.,. ,;.') ' . ' "" :~::· Shri Jag Mohon ~~~n\ ,is statement dated 31.10.2013 inter alia staled
a) in Septemb,y,r: g -~~J he got acquainted ~ith Shri Jai Shankar Shrivastav, ·r /•r.::t~~ l~~.
who w~ .. ~ ~9·a~e'd in the real estate business, t-"·\ ] '
b) in Nov€m1_t,;>er, 2012, Shri Jai Shankar Shrivastav proposed a business of
inv~~t~ ~oney in real estate and making profits, .~~v~ ~~~.-:r.:-
C}. he: ~J ai Shankar) suggested to set up a company, which will . become a '··~),. . .,.; ·: . ' - -member of NSEL and will generate finances to be invested in real estate
projects,
d) he (Jagmohan) agreed to Jai Shankar's proposal and accordingly, they
became Directors of M/s Mohan India Pvt. Ltd. in November, 2012,
/
..
/
Page 22 of 89
e) Shri Jai Shankar Shrivastav started handling the company affairs by
· making the company a member of the National Spot Exchange Ltd, / /
f) funds were generated without any transfer of commodities,
g) he was told that the funds could be used for investments in real estate
projects, and even after returning. the funds, there would be enough
surplus generated as profits, 1
. . • ~ 1
h) they started receiving funds from NSEL accounts from Decem~er~~,f~12, ... .,. ..
i) the said amounts were diverted mainly to their gr~.~~~o~panies engqged in real estate business and invested in d.e:elofment of real
estate, ~:~'\,. *') .
j) they had received an approx. Rs.8QO Crores frqR\ • e s~id activity,
k) as per his role, he invested the money in ret: estate projects and Shri Jai .~#'":'~~'
Shankar Shrivastav's role was to run t 1daily activities of the company ·
and generate the funds, and
I) the said funds were invested by\ him i ~urchase and investment of various ~~-\-·~ i}i?
projects such as agricult"~'~a1a:d''" in villages near Delhi, at Bakkargarh,
lssapur. villas I houses ~~fm Villasand Raisina Residency, etc. '
3.8.3. Shri Jag Mohan Qq~\his statement dated 01.11.2013 inter alia stated .~'!£.-...
)':i:t-':o;;.;;t:. t 1 th.at · •,, ··'
~;~~L ~~f'
a) as ~er t~,~~~·pf<ds, the difference between the total.am~unt re~ceived by
their compQAies from NSEL and the total amount pa1d to NSEL 1s approx. I!' '";,.;f'
Rs.&80~(Srores, ··~. ~ -'
b)'·~th~ JJtllance Rs. 122 Crores is on account of various charges levied by ~ t . 'f\IS'EL over and above the outstanding amount,
c) after their reconciliation, the total default on their part comes to Rs. 771
.Crores,
d) Shri Jai Shankar Shrivastav used to operate the said trading account of
M/s Mohan India Pvt. Ltd,
Page 23 of 89
e) admitted that there was no physical stock of sugar against the trades
effected by Mls Mohan India Pvt. Ltd . through the NSEL platform, / , /
f) they had invested approx an amount of Rs. 250 Crores in real estate
projects I properties, .an amount of approx. Rs. 3 Crores was used to
. purchase 'vehicles and that the . balance . amounts were invested in
~xovid.ing unsecured lo9~s I advances to various companies a,nel.·~ities
Including group compan1es. '\. "S' -~~~:.:-·~r
3.9. Shri Jaishankar Srivastav, in his statement dated 01.11.2013 r- er alia stated
that ~'4~},~ -~. a) he met one Shri Kalpesh Shah, Assistan~.~~~}President (Business
Development) of NSEL through an acquai : and~~> in October, 2012, who ,..
explained the formalities of tradin~ in com.C)pdities through NS~L and its
enrolment as members and was tpl ,,.,., · , go to NSEL Delhi office and
complete the formalities, _,.,, _"\:.) .
b) initially only Mls. Mohan India 'P~v,f~ltd. became NSEL member and later,
Mls Tavishi Enterprises Pyt~ &:J.~''Mis Brinda Commodities Pvt. Ltd. also
became members of ~ L~:~ "" ~. ~
c) they were not ~?~g;~j ri';, any commodities; however, for name sake they
had mentioned i~ t~eir documents submitted to NSEL that they would be ~.'.R.-_ f-+!"
trading in -Jg'br,, , .
. d) operati·h'Q,. Q~' the office of Mls Mohan India Pvt. Ltd. situated at 354, l·~· .
Ta~~'n(~!)cl~ve, Pitampura, New Delhi, he used to personally make trades '!~~- -~
( blil ~SEL on daily basis,
e)\os'~d to make the deals in paired contracts of NSEL, vii; selling of sugar in
T+2 contracts and re-purchasing the same in corresponding T+25
·contracts,
f) in these trades, the buying rates used to be higher than the selling rates by
one to one and half percent,
Page 24 of 89
g) after completion of the trades for a day, he used to send an email to the
effect that M/s Mohan India Pvt. Ltd., had delivered the quantity of sugar / /
sold in the warehouses declared to NSEL
h) actually there was no delivery of sugar and it was just a paper transaction;
that at the end ofT +2 cyCle, NSEL used to credit their settlement account
to the tune of the sugar sold by them, /
i) thereafter, he used to transfer the said amounts to their Clien~ · ccount; . ., \,"":..,\,_
·. that at the end ofT +25 cycle, he used to transfer the amaH~f.tiGjBie to pay
to NSEL on account of purchase of sugar in their Se ~e~t,~ccount at
the designated rate, :·,....,., ")
3.9.2. When Shri Jaishankar Srivastav was asked to giye~~d~tails of utilization of
the money received from NSEL on account of sal of Jugar in T +2 contracts; he
stated that, as soon as, they used1 to get cr,'ai~Jheir Client Account through,
Settlement Account of NSE~, he used to ;,fn~Je.P the funds, to various entities of ·
Mohan India group and that the m9Qey fb€lnsferred was used for purchase of ·~tr,i~--:~~~'"·
properties at Lucknow 50% shar: ~hofel at Goa etc. in his name.
~{~'t~. ,.;. ':, I
3.1 0. Further statement of '' Sl1rJ'·'""Jai Shankar Srivastava, was recorded on ..... f~~4:.J t_f ' t
07.11 .20 13, wherein, he ,stat~d lhat
a) they were hdid'~n?' ~~tally five number . of rented NSEL designated . J~ v . .
warehouste,.~ sft9"dted at Hamid pur and Khera Kalan in Delhi, .
b) they w~~~ ~wpposed to pay the rent in respect of the said warehouses;
butw~re ~~t allowed to retain their employees, ... . .., .
~ . .
c)("'tll!)t%Ef.warehouses were. managed by the representatives of NSEL. '1:.- ;+ -
3.11. "'"ixl\egards the details of commodities in which their companies were
trading on the platform of NSEL, he stated that their companies were dealing . only in one commodity i.e. sugar, however, no sugar was ever purchased or sold
physically as there have been only paper transactions. On being asked to
explain as to how the commodity, i.e. sugar was brought in their NSEL
designated warehouses and how the dispatches were made to the purchasers
l .
Page 25 of 89
of the said commodity, he confirmed that no commodity was ever brought in
their NSEL designated warehouses nor any physical dispatch was made to the / /
purchasers of the said commodity.
3.11.2. On being questioned that who all knew that no stock of. the commodity
was maintained in their NSEL designated warehouses, he stated that the senior I . / ~~.:r::~~:
officials and staff of NSEL like S/Shri Anjani Sinha, Amit Mu~-~rje,~: Jai '7-'..:'~
Bahukhandi, Kalpesh Shah, Santosh Mansingh etc., were aware th.otlio stock of
the commodity was maintained at their NSEL designated wareh~~~' 3.11.3. On being asked about the understanding between Q e·r 2'ompanies and
:; ~~~c
NSEL, Shri Jaishankar Srivastav stated that he and S?~i ,~rh'ohan Garg, initially
. appeared before the Committee constituted , th'¥~ NSEL to approve the
membership of their companies and they were (~asked by the members of the I """'": I
said committee about the utilization of i~-e;. l ds financed by the NSEL. They
had clearly informed them that they we"d~~'hg to utilize the finances given by (~ >
the NSEL towards real estate purcha·~e~ .. and development of various projects; ,. . ~;,~¥·
that they had requested to rele,asEf!pe finance for a period of five years but the
committee curtailed the limift~~;ee years. Shri Jai Shankar Srivastava further •.• •',;,.. '·i!J{i -~
clarified that the real in)' ~~~n,of NSEL and their company was that NSEL would
be financing them fr~'}rp .. ·trlne to time and they would be investing the funds l:"""("t.-~ ~;./:?-
received from ~S l:'7i"i;)t~ real estate projects. It was agreed that their company . ... . . .
1tih
had to pay idte~e?- @ 1 to 1 .5% on monthly basis to the NSEL and in this way the '!/'
funds wqpl~~e available at a lower rate of interest as compared to the loan ~~-..l!
obtairie<;;l t,ro'm the banks. 1.~ ;~ .
-.. ; , ... ,;;,~ ·-·
3.11.4. It was clear understanding between their companies and NSEL that ·.
though the formalities regarding provision of warehouses and relea~e of offer
letters from the said warehouses would be followed, no commodity was
required to be physically procured or stored in the said warehouses. On being
pointed out that they had furnished scanned copies of stock offer letters, in the
Page 26 of 89
name of M/s Mohan India Pvt. Ltd. which indicated that the stock were handed
over to NSEL vide such letters, he clarified that handing over of stocks vide such / . /
letters was only a paper transaction and there was no physical handover of any
stock.
Thus, it was revealed that ·funds obtained from NSEL were diverted for the . . ~·
/ / ·:, ·- .. ,
purposes other than th: purpose for which they were obtained~:-~~r the
suspicion that the said amounts were laundered by M/s Mohan lndiq'gFoup. . . <('~),~::'"···
4. Let us now see the property- wise analysis made by th~,,:;~plainant
4.1. ANALYSIS IN RESPECT OF PROPERTIES IN O.C 233 OF.~--,, . -~
The evidences gathered during the investigati<~;s rk~ealed that the funds ;j '"' '·
received from the SeM!ement Account wit ~SE:Lby the Mohan lrndia Group, ..:. .. i*·
were utilized for procurement of high en9_5teh!GFes, real estate, plots. The details
Muazamarhi Marhi Madar ur w.d·~·~wikramadit a · Lucknow: for.~..... ~~·
The said flats were purcHas;ed on 24.02.2013 for Rs. 1,00,00,000/- each ~ . v ~ '
respectively from M/s qr s : , on.struction, Lucknow in the name of M/s Mohan
India Pvt Ltd. The pdyT~ . ts of Rs. 1 ,00,00,000/- each for the said transaction ;;~~ lf~
were effected t~r. f J~r he Capital Account no. 912020060581129 of M/s Mohan ' d . ' '
India Pvt Ltd rYlqir}t~e~ined with Axis Bank, Deepali Enclave branch, New Delhi, by ~~ . ·;.·
way of ~TI (R's ~'6437 & 6438, both dated 21.02.2013. Further, payment of Rs.
1 ,SO,@ffl • 0 . 7! was made to M/s Drosia Construction, Lucknow on account of ·
reno~tfb~ of the said two flats. The funds for the said payments were transferred
from the Capital Account · no. 912020060581129 of M/s Mohan India Pvt ltd . maintained with Axis Bank; Deepali Enclave branch, New Delhi to the account
no. 912010063747514 of Shri Jai Shankar Shrivastav maintained with the same
branch, which was thereafter paid to M/s Drosia Construction, Lucknow by way
of DD No. 115528 dated 22.02.2013.
l • •.
/
Page 28 of 89
(v) 8 plots bearing Nos. A-06. A-12, A-14, A-16, A-17, A-19, A-20 & A-21 at Prime
City, Sector 10. Asandh, Dist. Karrral, Haryana: /
The said plots were purchased on 20.06.2013 for Rs. 10,00,00,000/- from M/s
Primezone Developers Pvt Ltd; in the name of M/s Mohan India Pvt Ltd. A part
payment of Rs. 1 ,50,00,000/- for the said transaction was effected through the I !t r
/ Capital Account no. 912020060581129 of M/s Mohan India Pvt Ltd1~!6ined
with Axis Bank, Deepali Enclave branch, New Delhi, by wayi,¢P}R'fGS on
19.06.2013, to M/s Skyhigtol lnfraland Pvt Ltd, a sister concern ~~JtPrimezone · Developers Pvt Ltd. Another part payment of Rs. 5,00,00,qpo -..) as paid through
' +.
RTGS dated 18.06.2013 to M/s Skyhigh lnfraland ~~~~'~from the a/c No.
913010006474818 of Shri Ram Awadh Sharma, maintained with the Axis Bank, (.~1.. ··.:..;..(
Deepali Erclave branch. The funds to the -~~~- ac'toynt of Shri Ram Awadh
Sharma in turn were received from the catyi 'ar~9/c No. 913020014029443 of M/s .:;~·-,·;,. __
Brinda Commodity Pvt. Ltd. maintained, with the same branch. A further (,\ . ~;ll
payment of Rs. 3,50,00,000/- was par®- · rough RTGS dated 20.06.2013 to M/s l' ~-
Primezone Developers Pvt Ltd j r-0rfr 'the a/c No. 913010006474818 of Shri Ram
, Awadh Sharma, maintain~:J1Yr~e Ax~s Bank, Deepali Enclave branch. The , I
funds to the said accou - ~J,SJ'lri Ram Awadh Sharma in turn were received from ·'<''t,
the capital a/c Nd. 91j3()20014029443 of M/s Brinda Commodity Pvt. Ltd . ...;~,.. 't_:t•
a) The house nos. B-6/41 & B-6/42 were purchased on 18.02.2013 for Rs.
1,00,00,000/- each from Ms Lalita Rai and the house no. B-6/43 was /
purchased on 18.02.2013 for Rs . 70,00,000/- from Shri Avanish Rai in the
name of Sri Jai Shankar Shrivastav,
. b) The payments toMs Lalita Rai were made vide DD Nos. 52951 and 52952,
both dated 14.02.2013, I
c) The payment to Shri A vanish Rai was made vide DD No. 529"' 3 'd~ted . ;. ~
-;,.,
14.02.2013, ~~: ~l~-;~ .<;.. •• ~
!,.. ·a. ~\. }:i
d) The funds for the said payments were transferred from the capital . . .. , .. '
account no. 912020060581129 of M/s Mohan lndi;'"'- ·:~1~ maintained with
Axis Bank, Deepali Enclave branch, New Qelhi. "!fo the account no. .. ... ....
9120100637 47514 of Shri Jai Shankar Shrivastb\1 aintained with the same
branch. . 1 .~.,~,, C)''\
4.2.2. In view of the facts discussed abov0~~ident thai M/s Mohan India ~~Ev'
Pvt. Ltd., M/s Brinda Commodity Pv ~\9 and Shri Jai Shankar Srivastav have .l'
indulged in fraudulently acquir~i g1 l t;mds from NSEL. Thereafter, the said funds 17 _, ••
were utilized to acquire prcfp"~rties in the name of Shri Jai Shankar Srivastav. . ~ ~· .
Funds were also transfe,rr,e 'o\ the accounts of the Directors of the company, ~ }:-~~.
associates and to th i group companies from where funds were placed into ~ .
properties. This I.ElP rt g·\ and integration was done with an intention to disguise ' . ~'Cit · · .
the criminal ri ' i ~ "df the funds and to project the properties as untainted. Thus, ~ .
Shri Jai ·hfu~,kar Srivastav have knowingly and intentionally dealt in and
acq -~ !fi{ proceeds of crime and projected them as untainted properties.
There ore, the properties worth Rs. 22,19,26,612/- provisionally attached in the
· Provisional Attachment Order No. 18/2013 dated 29.11.2013, are involved in . .
laundering and hence, liable for confiscation under PMLA, 2002.
Pa ge 32 of 89
4.3. ANAL YSISN IN RESPECT OF PROPERTIES IN O.C 235/2013
On the basis of his investigation, the bank stateme'nts and the Section 50
statements, the Complainant has come . to the prima facie belief that the
following. properties have been purchased out of the amounts released by NSEL
into the Settlement Account:-/ I
. -~- '"";)~
(i) Flat No. 1202. 12th Floor, Samaroan Royale CHS. Village Ma~fi"ane. Off
Western Exoress Highway. Borivali (East), Mumbai -66: <. ·~ .:_;,-·
' .. , ~)'-_1 ' - '""•· .
The said flat was purchased on 08.02.2013 for an amour:ft of ,l~:s.4,00,00,000/- in .~;..:j.·,(~
the joint names of Shri Amit Mukherjee and Srllt \~'Qn i Mukherjee. Four . •·
payments of Rs. 5,00,000/- each were made to 'tMs. njana V. Agarwal, Shri
Vinod M Agarwal; Shri Munnalol Babula! AgQrwa(.}~d Ms Shamlata M AgarWal ,!. l'·
vide cheques dated 29.01.2013 . . Furth~£~;;;¥rhents of Rs. 75,00,000/- to Ms i \ .;
Anjana V Agarwal, of Rs. 35,00,000/- t - Shri \Yinod Agarwal, of Rs. 1,15,00,000/- to
Shri Munnalal Babulol Agarwal, apd o . -s. 55,00,000/- to Ms Shamlata M Agarwal .. ~~:~~ '
were made vide cheques doe ,.62.2013. A payment of Rs. 1,00,00,000/- was
made to Shri Muqnalal ~,~,~~ 1c~~arwal vid~ cheque dated 26-;t()3.2013. All these
payments were effect~df,t[l~ugh the Cqp1tal Account no. 912020060581129 of ii'
""" M/s Mohan India vt L ar maintained with Axis Bank, Deepali Enclave branch,
lh. ·~···· New De 1. ,. J .. , . . . ' ~ '\.)'
(ii) Rang<!"R~ver- bearing Regn No. HR-26 BW .9013: ~- .
The sQv~hicle was purchased on 29.01.2013 for Rs. 63,73,035/- from M/s Amp
Motors Pvt Ltd, Gurgaon, Haryana in the name of Smt. Bonhi Mukherjee. A
payment of Rs. 59,22,387 /! for the said transaction was effected through the
capital account no. 912020060581129 of M/s Mohan India Pvt Ltd maintained
with Axis Bank, Deepali Enclave branch, New Delhi, by way of RTGS on
07.12.2012.
.. . . '
Page 33 of 89 ·
4.4; On being asked regarding allegation made in his affidavit dated 11.09.2013,
that Shri Jai Srivastava, a director of Mohan India had given Rs. 35 crore to Shri
Amit Mukharjee, AVP, of NSEL, Shri Anjani Sinha stated that the above figures
were revealed by Shri Jai Shankar Srivastav during a meeting held on 07.09.2013 ·
to discuss the liabilities of their group companies amounting to Rs. 922 crores.
While arriving/ at the correct amount of liability, Jai ShankC:r Srivastav d~d0sed that they had paid Rs. 35 crores to Shri Amit Mukherjee and the scsL't .B6uld be
adjusted against their liability. Shri Jai Shankar Srivastav had gift~d~ew Range
Rover SUV to Shri Amit Mukherjee costing in excess of Rs.rV, ~ro~es, which was
registered in the name of Smt .Bonhie Mukherjee, wife of ShJi ~it Mukherjee. Shri
Amit Mukherjee had also purchased a flat at Borivii~)Q;tai. i.""C;~~.,
4.5.While recording his Stbtement on 04.12.2QJ3rSFin Jag Mohan Garg 1furnished
a list detailing all the payments made O'h%b~half of Mr. Amit Mukherjee by . I ~ .
Mohan India group, involving total a~t~f Rs. 4,56,22,387 /-.
4.5.2. On being questioned ~~ all knew that no stock of the commodity
. was maint-oined in their N" EL designated warehouses, he stated that the senior ;.
officials and staff of r~S..~l like S/Shri Anjani Sinha, Amit Mukherjee, Jai
. Bahukhandi, Kalp - h ~9h:,;J Santosh Mansingh etc., were aware that no stock of -e .
. the commodity~os .r.Adintained at their NSEL designated warehouses. . . .. 'J q;.:C'
1"
4.5;3. Sta(8 .. r m~rt of Smt. Bon hi Mukherjee, _was recorded on 31.10.2013, wherein,
she ie> ~ stated that the immovable property situated at Flat No. 1202,
·samarpan- Royale, 12th Floor, village Magathane, off Western Express Highway,
Borivali (East), Mumbai - 400066, was jointly owned by her husband Shri Amit . . . Mukherjee and herself. The said property was purchased in their joint name in
2013 and payment for the said property was made by Mr. Jai Shankar Srivastav.
Page 34 of 89
4.5.4. As regards the Range Rover vehicle, she stated that though the same was
purchased in her name, the payment for the said vehicle was made by Shri Jai / / /
Shankar Srivastav. On being asked to furnish the details of funds received from
Mohan India Group and its Directors, she stated that sh~ had no knowledge;
but Shri Amit Mukherjee had told her that Shri Jai Shankar Srivastav had paid for
the flat situated at 1202 in Samarpan Royale and the Range Rover. · I I
4.5.5. In view of the subject FIR registered by EOW, Mumbal P~li®e~ ~rrfication
report of the ·Income Tax authorities and depositions mad~' .. PY Mr. Anjani
Sinha,MD, NSEL and Directors of M/s Mohan India, under Sef'flon SO of the PMLA,
2002, that Shri Amit Mukherjee, A VP of NSEL had facilitoled ~ohan India Group
to trade on NSEL platform without having any PQYQ~~-~tock of sugar in their · -~'4!
godowns and that jn turn, Mohan India grou~"·~a~ 'ode paymert for purchase
of a Range Rover car and a flat in the na111-e$'· of :,~hri A mit Mukherjee and his wife
. Smt. Bonhi Mukherjee. It is evident that Q ~~unt of Rs 922 crores is acquired .,._
as the result of the criminal activity r~tclt~.€i to scheduled offence and hence, it is
proceeds of crime under PMLA/~.~®~ ~."J . ~~, ...
ji ~~-
4.5.6: 41t is evident that fu t~ ~> "tained from NSEL-were siphoned, diverted and t'' . •: . .
placed into properti~t~lfh intention to . laun~er the ~ame. ~he above details
reveal the placefr .~nt.s and the money tra1l established 1n respect of the . ·, ;.,C'"t ·,
properties ob!,~ne"SJ 1n the homes of Shri Amit Mukherjee and his wife Smt. Bonhi .
Mukherjee ~~)o'tf~dering the funds received irom NSEL. These properties totally
worth,Rs. ~;,~;19 ,22,3871- are attached in PAO No. 19/2013 dated 29.11 .2013 under i'~ . .
the reQ~onable belief that the same are. involved in money laundering.
4.5.7. In view of the facts discussed above, it is evident that . M/s Mohan India . . .
Pvt. Ltd. and its Directors Shri Jag Mohan Garg and Shri Jai Shankar Srivastav
have indulged in fraudulently acquiring funds from NSEL. Thereafter, the said
funds were utilized to acquire properties in the name of Shri Amit Mukherjee and
/
Page 35 of 89
his wife Smt. Bonhi Mukherjee. Funds were also transferred to t~e accounts of the·
Directors of the company, associates and to their group companies from where / /
funds were placed into properties. This layering and integration was done with
an intention to disguise the criminal origin of the funds and to project the
properties as untainted. Thus, Shri Amit Mukherjee and his wife Smt. Bonhi
Mukherjee have knowingly and intentionally dealt in and acqui ed the / . I .
proceeds of crime and projected them as untainted properties. T . .'"re.Jolie, the ~:!: ,fl
properties worth Rs. 4,59,22,3871- (detailed in Para 6.13), provistep II attached ·~~_, . .f
in the Provisional Attachment Order No. 19/2013 dated 29 .11.20f3, are involved . ,:,. '
in lau~dering and hence, liable for confiscation under Pi~\2002.
4.5.8. The above properties procured in the . nom~~ ~SM~i A mit Mukherjee and ~'.:ir
Smt. ~onhi ~ukherjee have been attached u~r- PA01
No. 19/2013 dated
29.11.2013 under the reasonable belief thC1J~ same are involved in money -~
- tj;.J·
.,-4·~
laundering.
?4.-:k;k.r~ L. {., 3'
4.5.9. For t~e reasons detaileg~~ve, it is prima fac~e indicated th~t th~
abovementioned defendanjs, namely M/s Mohan India Pvt. Ltd., Shn Am1t ·;i'
-:., Mukherjee and his wife ~m. o ,, -~ Mukherjee~hav~ committed an offence under f \ . ; . . .
Section 3 of PMLA~200;?, and that the properties totally valued at Rs.
4.59,22.387 /' dft~·~" Para 6.13. presently under order of Provisional
Attachment qf~ if\yolved in money laundering and thereby, the same are liable
to confirn;:~qtiQn ltf attachment under Section 8 (3) of the Act ibid. The present !1 -.*~]: .
comg1girll )\.,js' :"filed without prejudice to the provisional attachment of other . ¥! '''·· ., proper.tt~s earlier made and likely to be made as outcome of ongoing
investigations.
4.6. ANALYSIS IN RESPECT OF PROPERTIES IN O.C. 239/2013
In view of the preliminary findings, search and Survey operations under Sections
16 and 17 of the PMLA, 2002, were carried out at business and residential
t, .•
~.
Page 36 of 89
premises related to Mohan In did Group on 31.10.2013 and 01.1 1.2013 including
the declared premises of M/s. Whiz Kid Promoters Pvt. Ltd . During the course of / /
the said operations, statements of Shri Jag Mohan Garg and S_hri Jai Shankar ·
Srivastav, both Directors of M/s Mohan India Pvt. Ltd., were recorded under
Section 50 of the PMLA, 2002 as under- :
/ 4.6.2. Statement of Shri Jogendra Kumar Rai resident of the declared Pz;~ses of
. M/s .. Whiz Kid Promoters Pvt. Ltd. situat~d at SST, Sector-8, J~~~~Jil6r, New
. Delhi- 110025 was recorded under Sect1on 50 of the PMLA, 2002~pn 31.10.2013. ''':. ~
He stated inter alia that he is a Chartered Accountant nd::tt)a he is using his
said premises as residence cum office. One Shri t0aQoJ' Kumar Singh, an
Advocate is his· client. . . "~ ""'\;"" 4.6.3. S!i-1ri Manoj Kumar Singh had formed Mff:t, ~~:i ~Kid .Promoters Pvt. Ltd. in the
year 2006 when its name was · GeniusfP.(~~o ers Pvt. Ltd and i,t . was initially
engaged in share trading. After the{[~<;,ession in stock market in the year 2008 ""•!''·''"'~'· 'f •. ·j .
the company started investing f , Eis irt''.real estate and its name was changed
to M/s. Whiz Kid Promoters P;-t ~~·~T~.-?n 2010. The Directors of the said company
Process Outsourcing Pvt. Ltd ., M/s. Sita lnfotech Pvt. Ltd . and M/s. Success
Realcon Pvt. Ltd. were the other/ comp~nies formed and controii~~~Y" Shri /
Manoj Kumar Singh in the riames of his employees. All the docum · t elbting to . ,.:t,'{ .. \
the said companies were kept at the office of Shri Manoj Kumdr{Singh situated "ft,~t
at 30, Malviya Nagar, New Delhi -110 017. ~-~ '\
.:r:· 4.6.6. Properties worth more than Rs. 70 crores shown1n t · e ledger account of
;.· .-.~ -~-y
M/s. Whiz Kid Promoters Pvt. Ltd. were purchase?~ •. ijh the funds received from
W..ts. Mohan India Pvt. Ltd. On being askf ·;,, )h .. 'a( is the nexus between M/s.
Mohan India Pvt. Ltd. and . Shri Man~j t<t:t~·gr· Singh, Shri Jogendra Kumar Rai
stated that the Directors of M/s. Mohgb·tndJa Pvt. Ltd. were the regular clients of -~_-\?::J::~;;rt '
Shri Manoj _Kumar Singh and th~r~~"'~jM6noj) was managing investments of M/s.
Mohan India Pvt. Ltd. " ~ · ~-~
4.6.7 . . 1n view of the ~P~r'l's made by Shri Jogendra Kumar Rai thatall t~e documents in resr(.ect ~fhe companies named by him would be available at
• ~.+:in c-a
the office preg:ns¥:)S of1Shri Manoj Kumar Sigh situated at 30, Malviya Nagar, New <f '\
Delhi 110 017: ab.earch of the said premises was carried out under Section 17 of , ~ ~ . .
the PML~,~ 2002 on the same day i.e. 31.10.2013. During the course of search, -~ifo;:rn. ~,;;~:-:1
state~ergt~ of Shri Dilip Kumar Niranjan was recorded under Section 50 of the ~-~~-~liT • •
PMLA, 2002. He interalia stated that he was a company secretary and a lawyer
working with M/s. Singh & Associates. He. was also a Director of M/s. Whiz Kid
Promoters Pvt. Ltd. having office address as 55-T, SFS Flats, Sector-8, Jasola Vihar,
New Delhi - 110 025 and the said company was incorporated in 2006-07. The
other Director was Shri Bipendra Kumar Shahi and that the said company was a
Page 38 of 89
shell company being used by Shri Jai Shankar Shrivastav on the basis of
engagement letter dated 5.2.2013 handed over to Shri Jai Shankar Singh. He / /
was just a nominee Director of the said company.
4.6.8. In view of the depositions of Shri Jogendra Kumar Rai, and Shri Dilip Kumar
Niranjan, Shri Manoj Kumar Singh was called and his statement was recorded
under Section 50 of the PMLA, 2002 on 31.10.2013. He inter alia state~? \i1~lt he ~1~ AJ'
was the proprietor of M/s. Singh & Associates, a legal . firm and~ . '·fs firm is
engaged in incorporating shell companies for his clients. The dttfce address of
his firm is declared as registered address of such companir~{~:;P fhat he used to . ·~"'
form such companies making his employees as directcJ s ~ f tne said companies. . r'"t
His clients may at their convenience become th~~e'Gftors of such companies
at some time or allow his employees to remain th:e··:l9i'tectors of such companies.
The beneficial interest in such comp~ni{9~s~)t~,~~n by his clients. Whiz Kid
Promoters Pvt. Ltd. was one of such ':~n(p'~Js and that his employees Shri Dilip
Niranjan and Shri Bhupendra Shahi d·r~~~tt<~ e Directors of M/s. Whiz Kid Promoter~
Pvt. Ltd. By way of an engagerp~~fret~;~ dated 5..2.2013 M)s. Whiz Kid Promoters '"''"· .,
Pvt. ltd. was transferred to s~JatlShankar Shrivastav and that Shri Jai Shankar . ' ""t' ~ Shrivastav was introduc~9 · .·ilill;'li'r;n by Shri Jag Mohan Garg .
. C¢1
·····~~ ·.· .j\ . ~ ~t ;-·~
4.6.9. On being dS'~~,~~about the payments made from the bank account of
M/s. Whiz Kiqr~,~'Sters Pvt. Ltd., Shri Manoj Kumar Singh stated that such
payment?,,. were\ hlade for purchase of properties in the name of M/s Whiz Kid
Pvt. Ljs;;t Jhd~at documents related to such properties would be available with ·!' \. • . .
Shri J~ i ~~.Mankar. Shrivastav.
4.6.10. Further statement of Shri Maf)oj Kumar Singh was recorded under Section
50 of the PM LA, 2002 on 8.11.20 13. During the course of recording his statement,
Shri Manoj Kumar Singh furnished a detailed statement indicating details of
properties obtained in the name of M/s. Whiz Kid Promoters Pvt. Ltd., details of
..
Page 39 of 89
sellers of such properties and details of payments made to the sellers. The said
statement indicates that properties situated in Delhi at Mehrauli, Hauz Khas ,
Najafgarh, j(jebsarai and Sainik Farm were purchased in the name of M/s. Whiz
Kid Promoters Pvt. Ltd.
4.6.11. In the view of the evidences gathered during the investigations,. i / . / .
revealed that the funds received from the settlement accounts with~SELby the
Mohan India Group, were utilized for procurement of real es a~E';!~·ri~ultural land, flats etc. The details of such procurements in O.C 239/2013 ~.re as below:
. . --.~ .. -, ' . , .. .,~ J
. (i) Rectangle No. 31, Khasra No. 12, Village-Devali, M~ fcfuli, New Delhi - The . . .:?'-~rl
said property was purchased on 02.04.2013 for R:. 2,2~.,00,000/- from Ms Leena
Trehan, in the name of M/s Whiz 1Kid Promoters )~~}.- Ltd. Two payments of Rs.
1 ' . ·'
20,00;000/- and 2,07,00,000/- were mad~~fEf s. Leena Trehan by way of . .f'~ -·:;.._
10(4-16)~11 min (1-0) situated ip ,0~~ Yilage- lssapur, Tehsil- Najafgarh, New
Delhi: The said property waf~~~~~ased on 31.05.2013 for Rs. 21,00,00,000/- from .... , . lE'.!-~-~ il' . ....., .
Shri Banarsidas Chandi'V'Gli~)S.e~va Smarak Trust Society in the name of M/s Whiz • • c~l\•'{L. ~ •
Kid Promoters Pvt. Ltd:t. Tf1ree Payments of Rs. 2,00,00,000/-, 2,50,00,000/- and ri~ ~;.. lr:;-/'
16,50,00,000/- 'I' < r~:p1~de to the said Trust by way of cheque No. 108572
dated 19.03.2b.J3, cheque No. 142941 dated 31.05.2013 and cheque No . . ~" ,. 1lf '
142940 qp'tec::Jj31.05.2013 respectively drawn on Account No. 049010200022400
of M4S": ~.~~t'"bd Promoters Pvt. Ltd. maintained with Axis Bank Ground Floor, .Eros ~ i . .
Cdrpordte Tower, Nehru Place, New Delhi, Pin 110019. Payments of Rs.
1,26,00,000/- and Rs. 21,00,000/- were also made from the said account towards . Stamp duty and Registration fee respectively vide RTGS dated 28.05.20 13,. The
funds for the said payments were transferred to the said account of M/s. Whiz
Kid Promoters Pvt. Ltd. from the capital account no. 912020060581129 of M/s
' '
Page 41 of 89
Mohan India Pvt Ltd maintained with Axis Bank, Deepali Enclave branch, New ·
Commercial Pvt. Ltd.maintained with Axis Bank, Lajpat Nagar Branch, New / /
Delhi, and Shri Manoj Kumar Singh maintained with Axis Bank, Nehru Place, New
Delhi. Further two payments of Rs. 1,00,00,000/- each were rnade to Shri Bhuvan
Nanda and Shri Yiv~k Nanda by way of cheque Nos. 164802 and 164801 both
dated 15.07.2013 drawn from the same account of M/s. Whiz Kid Promoters Pvt. I . I \ J _
Ltd. The funds for the aforesaid two payments were transferred '~: te said ""-.. 'll· '~
account of M/s. Whiz Kid Promoters Pvt. Ltd. from the <.,..'·''"ttm( "a/c No. "" ..
913020014029443 of M/s Mohan India Pvt. Ltd. maintained with .he Axis bank
Deepali Enclave Branch, New Delhi by channelizing the sa~e h;bugh the bank .... _ .. account of Shri Manoj Singh maintained with Axis Bank.. u t~~r two payments of
Rs. 1 ,90,00,000/- each were made to Shri Bhuvan f. an~·6 and Shri Vivek Nanda . C\ .
by way of cheque Nos. 164837 and 164836 pqth•~., datep 31 .07 .2013 drawn from .... :'-....
n.~· the· same account of M/s. Whiz Kid f£?o;:~,tJrs Pvt. Ltd. The funds for the
aforesaid two payments were trans . rredl to the said account of M/s. Whiz Kid
Promoters Pvt. Ltd. from the cqJ:>ital ~' c No. 913020014029443 of M/s Brinda .,.,:.lj._.~t~.
Commodity Pvt. Ltd. maintaJ~t~ · ith the Axis bank Deepali Enclave Branch, .. ~ :f
New Delhi "'· ~r1··.~"' ~.~"~.'~ r '· ~·~· ' 1,1«-·t . '
28.05.20 1~" fu.~_;o 142938 dated 29.05.2013 respectively. The funds for the said
payr{8:~~ere also transfe.rred to the said account of ~/s. Whiz Kid Promoters
Pvt. LM rom the same caprtal account of M/s Mohan lndra Pvt. Ltd .
· (ix) First Floor of property No. 202, block No. '172, Jorbagh, New Delhi along
with 1 car parking - The said property was purchased on 28.03.2013 for Rs.
5,40,00,000/- from M/s Central India Hitech Printers Pvt. Ltd., in the name of M/s
Whiz Kid Promoters Pvt. Ltd. A payment of Rs. 5,40,00,000/- was ~ode to M/s.
I
. I
Page 45 of 89
Central India Hitech Printers Pvt. Ltd. by way of DD No. 18073 dated 28.03.2013
along with payments of Rs . 32,40,000/- and Rs~ 5,40,000/- datec 05 .06 ~2013 / /
respectively drawn on ~ccount No. 049010200022400 of M/s. Whiz Kid Promoters
Pvt. Ltd . maintained with Axis Bank Ground Floor, Eros Corporate Tower, Nehru . .
Place, New DeihL Pin 11 0019. The funds for the said · payments were transferred
to the said account of M/s. Whiz Kid Promoters Pvt. Ltd. from the ,~capital . / ~~·:.-7·~'-· /
account no. 912020060581129 of M/s Mohan India Pvt Ltd maintain~~~th Axis "i~~ .. , ' -;:, ·:tt .. ,
Bank, Deepali Enclave branch, New Delhi. Further payments t ~§:q;QT,OO,OOO/-. . ·~
and Rs. 3,50,000/- were also made in respect of the said pr~gerty.~n account of
stamp duty and registration value from the said accou.nb of ·M/s. Whiz Kid 4::~:. ~~
• ~ <J"{f'• ~{'
Promoters Pvt. Ltd. vide cheque No. 142929 dated 2 ~ - , 5~·2,91'3 and 142938 dated
29.05.2013 respectively. The funds for the said pay~'~ntVwere also transferred to ' " "';' 1 the said account of M/s. Whiz Kid Promot~rs .P~i~, "Ltd. from the same capital
account of M/s Mohan India Pvt. Ltd. f]'l't,ri::_·•) ~~ "\ VJ
'L;«-. . ~
4.6.12. Section 23 of the PMLA prescrh·~ that where money laundering involves .~' v
fwo or more interconnected !~"~9tions and one or more such transactions is
or are proved to be involv""':~ i~ ~!lloney laundering, then for the purposes -?f the ' "-··C '
adjudication or confis,®~Pt.J ' (under Section 8 for the trial of the money
laundering offence, l"f'\h·~~l~ unless otherwise proved to the satisfaction of the
Adjudicating Ayt@ r.!)'' ;; the Special Court), be presumed that the remaining v t
transactions forf\\1 part of such interconnected transactions . .. v . . .· 4.6.1~ ~:;;of the facts discussed above, it is evident that M/s Mohan India
Pvt. ~tq)and M/s. Brinda Commodity Pvt. Ltd. have indulged in fraudulently
acquiring funds from NSEL. Thereafter, the said funds were utilized to acquire
properties in the name of M/s Whiz ·Kid Promoters Pvt. Ltd. Funds were also .
transferred to the accounts of the Directors of the company, associates and to
their group companies from where funds were p laced into properties. This
layering and integration was done with an intention to disguise the criminal
Page 46 of 89
origin of the funds and to project the properties as untainted. Thus, the said
companies viz. M/s. Mohan India Pvt. Ltd ., M/s. Brinda Commodity Pvt. Ltd. and / / .
M/s. Whiz Kid Promoters Pvt. Ltd. along with Shri Manoj Kumar Singh and Shri Dilip
Kumar Niranjan, Director of M/s. Whiz Kid Promoter~ Pvt. Ltd. have knowingly
and intentionally dealt in and acquired the proceeds of crime and projected
the properties such obtained SJS untainted properties. Therefore, the prQpe.rties . . 1, :Z''··,,,
worth Rs. 73,71,10,000/- (detailed in Para 6.11 ) , provisionally attaq~,~~-in the ., .. •;-
. Provisional Attachment Order No. 21/2013 dated 12.12.2013,<..ie~·}'m~olved in
laundering and hence, liable for confiscation under PMLA, 2Q02. ' . .r- .... ~·~. . ~':; .t ·:
5. Ld Advocate Shri.Manoj Kumar Singh in his "sui"> ~~<n behalf of the
admitted that the Mohan Group received qiJ 4~h gmounts in question from the . ~·~~~~ ..
NSEL with which they purchased the PJP;, ej ie's that have been provisionally
· attached. Further, 'it is also admitted at trfe'~'money so received from the NSEL is
the money received from the inv~storS~. ~~.,..;:~.!~
5.2. It is submitted that the m0n~~eived from the NSEL was a loan adv?nced
to them. In turn it was use~~~Y~~e Mohan Group to purchase properties i~ their ·
name. Therefore, the~ ~~ot be any question of morey laundering as the trail
does not esta~}j~~:l'-4;m prima facie, the ingredients of offence of money
laundering. ~"0\~~ver, the entire money received was transferred . through
proper se9 &,annel.
5.3. ~f~ from the fact that ·the money is derived or obtqined, directly or
indirectly by any person, as result of criminal activity, the Enforcement
Directorate has to convince satisfy the Adjudicating Authority that the ·
purported "proceeds" receipts monies arising out of "criminal profits" and not
merely criminal receipts. · This aspect has been specifically held by the United
States Court of Appeals for the Seventh Circuit, in the matter United States v.
=
Page 47 of 89
Santos Et AI, No. 06-1005 (decided on 2 June 2008), that the term "proceeds" in
case of money laundering means "profits, " and not "receipts" . /
. /
5.4. As none of the ingredients of money laundering exists, the P AOs ought to be
. dismissed by the Adjudicating Authority.
· 5.5. After registration IQf · FIR, Mohan Group realized the probf~t'r)s,. and ' '"'' · immediately entered into a Settlement Agreement on 30.1 0.13 u't~ ~" -r~)bf the
~~.':'1-~ ', ',k ~-
Arbitration and Conciliation Act, 1.996. In order to honour the Pa~'fri~tit Schedule ., ~vt -
of the Settlement Agreemen!, Mohan Group till date has P9JP ~\um of Rs. 27 'f. " · Crores into the Escrow Account opened by the NSE,.,_ ord· payment to the
'f-... ··1t
investors. It is also pertinent to mention that Mohan Gr , 0"·· :has every intention to , "Jl
::--·7-q. o~-. . . ~\~:+~,~ .t1
5;6. In the meantime, due to the invo) ..,'\ i~) -of the MPID Act in the FIR, the
Defendant Group approached the Ld. ~MPID Court on two occasions the
honour the Settlement.
Hon'ble Court in MA No. 98/201~1 hel .l::i hat the Settlement Agreement is valid ~ - '
~"")."""'l'"(~.
and has an effect of Arbitr~~:)'.;t.ard u/s 73 and 7 4 . of the Arbitration and
Conciliation Act, 1996.. Th Ld ~~\PID Court after hearing the submissions. of the
parties' Counsels was~i\i.feti \ o pass the following Order: .
"1] M.A. No. ~8f2,01~\.~~artly made absolute in terms of prayer clause (a} to (e) on .the follovy1q9. 'S'j>ndlt1ons ·
· 1] R.espof1aent nos. 1 to 4 shall proceed to act according to . ;etf~ment bonafide.
ii] C 'i.R~spondent no. 4 shall deposit the same amount received from "-~r~spondent nos: 1 to 3 in Escrow account for the benefit of ~ '' depositors. . . - . .
iii] Respondent nos. 1 to 4 shall made periodical report of the developments made in each month ori or before the 3rd Day . of succeeding month lo
a} This Court. b) EOW, Unit-V Mumbai.
= ' "'
iv]
/
V]
Page 48 of 89
EOW, Unit-5 Mumbai is at liberty to move before this Court for further order in case transactions are fishy and not bonafide and not projecting [proper value of the property. /
Respondent no. 4 shall not utilize said amount received from the respondent nos. 1 to 3 for any other purpose without permission of court.
2] Relief claimed in prayer clause (f) is rejected at this stage. I I ~:·~.-
3] M.A. No. 98/13 is disposed off accordingly." ""+,. "\ .
5.6. II is also pertinent to mention that Mohan Group was co~~= move . . '•&
M.A. No. 107/2013, upon receiving information about ~ <f~isien\ 1 Attachment
Order by the Enforcement Directorate. The main argyn1,o,e&T-t~of Mohan Group '"-', " ~ . .l '9.:~-,,,jii
before the Ld. MPID Court was the precedence ot,MPl _.. Act over the PMLA on
<''· the basis of K.K. Bhaskaran c9se, which has <;.l~o se fled the issue of prevaiEjnce
of law enumerated in Article 254(2) of th ';:.,. ~l})ution of India.
' \ J 5.7. The Full Bench of the Hon'ble B · ay*~igb Court in Vijay C. Puljal & Others
vs State of Maharastra & Others w.Qjl~ ealing with the provisions of the MPID Act
and particularly section 58A,~~d~d 58AAA of the Companies Act, 1956 was
pleased to deClare tha_t ~~MffD Act as "unconstitutional" as the provisions of
section 58A, 58AA j!lrAAA of the Companies Act, 1956 was Central
legislation and lot . in tJ~e. . • 011<. ..
( "1:~ ~ .i!
f" ·~!· J .
5.7.2. However, ,6 Hon'ble Supreme Court of India in K. K. Baskaran vs State of
Tamil Na~:Others reported in (2011 )3 SCC 793, while setting aside the lav:v laid
dow 1:5~ the Hon' ble Bombay High Court was pleased to hold that "while the
judgment of the Full bench of the Bombay High Court in Vijaya's case (supra) is
not correct." In this regard, it is pertinent to quote the following paragraph of the
judgment, which is as follows:
. "21. The Bombay high Court has taken the view that the Maharashtra Act
transgressed into the field reserved for Parliament. We do not agree .. . "
..
Page 49 of 89
5.8. The MPID Act is a benevolent legislation and this beneficiary Act is
Q"onstitutionally valid as held by the Hon'ble Slfpreme Court in K. K. Bhaskaran's
case. Furthermore, in view of Article 254 (2) of the Constitution of India, as the
MPID Act has received the assent of the President, the MPID Act will prevail over . .
the other laws in case of any repugnancy within the State of Maharashtra. In the I
present case, as the FIR is registered at Maharashtra and the ECIR ha . een
registered by Enforcement Directorate, Mumbai, the MPID Act,'::"~~~~il over
the PMLA. · :. !"'···· ' . ti· I
•. J. 5. 9. Furthermore, the MPID Act also provides for pe~El .\ayion in the case of
non-payment of investors' depositary money. As per ,~~c.tion 2(d) of the MPID ~·.~· v .
Act, 'Financial Establishment' means any person,: ~hc;::epting deposit under any
scheme or arrangem~nt or in any other b)~enner; but does not 1 include a
~-i . corporation or a co-operative societ'{""Vw : ed or controlled by any State
. L* Government or the Central Govern -: ' t o ( a banking company defined under
clause (c) of section 5 of the B~_nz, .• 5 R gulation Act, 1949 (10 of 1949).
r"\ ~ l: ' ~ l;· . ~
5.10. The MPID Act al~~ ~vlfies for attachment of any property purcbased
from the money so re~cel~ed from the investors. The attachment provided in ~ .
Section 4 of the M·· " ct is having non obstante clause which mandates that f~t::.. -~~
the attachmfS=~ ·tfi) er . the MPID Act will prevail over any other law. This non
obstantefl~~:en considered in Section 14 of the MPID Act, which provides
that ~ ~~~~~tH will per se prevail.over any other law in force. Further, section 9 of
the N\·I?JJ?) Act provides that at any point of time anybody Whose property is
going to be attached can approach to the MPID Court and can provide the
security in lieu of the attachment.
5.11. It is also pertinent to mention here that in the Settlement Agreement, two
properties (one is Delhi property and the other is Bikaner property) have· been
/
Page 50 of 89
provided as security, which can be sold by the NSEL to secure the settlement
amount for the benefit of the investors. Furthermore, Mohan Group to secure the /
further interest of the investor and to honour its Settlement dues u/s 9 of the MPID
. Act has submitted all the other properties bought from the money received from ·
the NSEL before the Ld. MPID CoUrt vide M.A. No. 107 of 2013.
5.11. 1When the Enforcement Directorate pro'visionally attach~~~fMose
··c,.# properties, the Defendants were compelled to approach the L.. , I;ID Court ,., .... ~"· and the Ld. Court was pleased to direct the Enforcement Directe.tate to release
and return the original title deeds and documents of in;;nqv~ble properties
taken from the custody of Mohan Group to EOW, u nlt~'0ttr~mbai and EOW,
Unit~V, Mumbai. · · ·~):.r\:>;.' · . ·~
..J. ,.."" c ~- I 5.12. The Ld MPILJ Court further directed thdlJ1e amount obtained by way of
lransaclion of lran~fer shall be direcll~ d~~('l in Escrow Account of NSEL and
NSEL shall not ut1hze the sa1d ampl'JrqJ rc>r any other purpose Without the , 'f"'<1t'' .
permission of the Court. The Ld. . D"i!Court has also directed the Income Tax ~""· .
Department to return the rfl~ntY which was provisionally attached by the
5.13. Aggrieved '~/'~~~ ..; rder dated 0~.01.2014 passed by the L.d MP_I~ Court in
MA No. 1 07/20 l3t ~th.e Enforcement Directorate preferred a Wnt Pet1t1on under
Art~cle 227 9-f ~~nstitution of India before the Hon'ble Court at Mumbai and
!he ~~Mumbai High Court vide order doled 20.02.2014 was pleased lo
stay dhff~ operation of the Order of the Ld. MPID Court with respect to the 'i;~~s-J . .
provisional attachment .and it has been clearly indicated by the Court that the
order is to this effect only. Furthermore, Order dated 20-02-2014 has not stayed
the finding of the Ld. MPID Court's Order dated 08-01-2014 that the provisions of
the MPID Act have overriding effect over the provisions of other Acts including
PM LA.
~-
/
Page 51 of 89
5.14. It is humbly submitted that the question which this Hon' ble Adjudicating
Authority ought to adjudicate is thdt when the sources of money from which the /
properties were bought by the Mohan Group [as mentioned in the PAOs] has ·
clearly been recognized by the Enforcement Directorate itself (apart from the
Income Tax) that the investors paid amount to the NSEL and the NSEL in turn . /
/paid the same to Mohan India, then why that property should be ~vi· :cnally . . -~J
attached and confirmed by the Hon' ble Authority. The purpose 0f , flrmation
of the provisional attachment is that if in the Predicate Off~~~:'; there is a
conviction then the property ·SO attached may be vest d i fl··.th~i Government. :£~
However, proviso to the section 8 of the PMLA also p[dVi e~ that this Hon'ble '~>,._;
Authority can also consider the other right holders~on t e property. The possible ~·~
. k
interpretation of such provision of the PMLA o g · f ' to he that if the Hon'ble I ~- T
Adjudicating Authority finds that the prop!3rfV~Ij actually belongs to some third
party . and there is no involvement .. c;.f ~~e~d of crime at the source, then
Provisional Attachment may not bei e9 r-tfirmed. As stated earlier, there is no
quarrel or any doubt and it is q~~i'f'tf.: d"'position by the Enforcement Directorate . " ".> that all the properties as enum~·t~d in th~ PAOs have been bought by Mohan
" Group (either in its nam~ .. ~trfJhe name of its group companies or associates) . ~"'\, .• ~~~i,,
from the money received,,from NSEL and the NSEL has received all such money v . . . from investors. T,h.et;)f'®fE?, in the light of the provisions as mentioned in the MPID . ·~ J . . Act and es~~~IY under section 3, 4 and 9 of . the MPID Act, the investors
. (whose niib~·ey has to be returned) become the first right holder of the property. ~ .. . .
It is also~ q:cfrhitted position that the Mohan Group has also surrendered all the ;1~~7~ } .
property mentioned in the PAOs before the Ld. MPID Court for the purpose of
selling the same and the sale consideration should be paid to the investors
through NSEL. Therefore, this is the fittest case, where the Provisional Attachment
should not be confirmed as was submitted before the Hon'ble ~djudicating
Authority that as per the provisions of the MPID Act, the properties belong to
investors.
~ ·
/
Page 52 of 89
5.15. The Hon'ble Supreme Court and various Hon'ble High Courts in umpteen
numbers of cases have qumhed the FIR even in cases of non-compoundable
offences on the basis of compromise/settlement. The Hon'ble Supreme Court, in
Nikhil Merchant vs. Central Bureau of Investigation and Another, reported in AIR
2009 SC 428 [Paragraph No.2, 4, 5, 8, 19, 22- 25 of the Judgment] wherein CBI
filed a charge sheet against five accus~d persons under Section 1208./~ with ' . . --~+l.t;.f.~
Sections 420, 467, 468, 471 A Indian Penal Code read with Seo i.Q , (2) and ,i"'\.
5( 1) (d) of the Prevention of Corruption Act, 1947 and Section'tey,,k~(21 read with
Section 13( 1 )(d) of the Prevention of Corruption Act, 198 - {S?;qti~ 468 and 471 '7
of the IPC is also involved in the present FIR, which a~~P ' ~~ompoundable in I -.~1;-«{..
nature) has categorically held that the Hon'ble CE§vrts ~.ei'Zte power to quash FIR ,.r,:t~
on the ground of settlement/compromises eVe'fl if the offences are not I ~# .
compoundable under section 320 of th~), .. jle of Criminal Procedure. It is
humbly submitted that the Hon·~~ -~},ai High Court in Criminal Bail
Application No. 2124 of 2013 has alreq<t.fy~ held that in any case the disputes are
of civil in nature. . f'>:::;) ""' 5.16.1n JayrajsinhDigvij~~ ~:C: vS. Slate of Gujarat and Another [2012Cri L J .,
@Pappu and 0),1:'')\~~dhika and another [Criminal Appeal No.2094 of 2011]
similar positiorr h)a~')een reiterated by the Hon'ble Supreme Court. Therefore, no ' \ c+ 0
useful pu~p~ wm be served by confirming attachment of these properties.
''" -1 ""'~ ~ ... "# '
5.17. fit is1 tlumbly submitted before this Hon' ble Authority that the Enforcement ~:·%_J . . .
Directorate . has failed to show a single instance . of existence of any
c_ircumstances enumerated in the second proviso to the section 5( 1) of the
PMLA apart from making some rhetoric averment in the Original Complaints or
the PAOs.
=
/
Page 53 of 89
5. 18. The Mohan Group have not been provided any 'reason to believe' as
contemplated under section 5( 1) and second proviso to Section 5( 1) by the / /
. Enforcement Directorate despite its request to the Enforcement Directorate to
provide the some. (Please refer to Exhibit-1 0 request for reason to bE:;Iieve and
Exhibit-11 .reminder for the same).
5.19. During lhe course of proce~dings before theLd. Adjudicatin ' 4~ty, ~ is established that no 'reason to believe' has separately been .re .. <Jreted by the .. ,. ): ' .
Enforcement Directorate prior to issuance of the PAOs as,~er ·1he mandatory . . jf<•· '
requirement of section 5 of the PMLA and therefore, no sw h separate reason to
. belief was ever forwarded to the Hon' ble Adjudicatin u hority for forming its
·"
reasoh to belief under section 8 of the PMLA. .~ ~/ ("\. ~'"' 5.19 .2. The Enforcement Directorate's res~~ ·• received on 03.03.2014 @6: 15
(Exhibit-.12} confirms that no prior . rea~;6 believe · was recorded by the .f"'1 \,
Enforcement Directorate and that the"enly "reasons to believe" are stated in
Para 6 of the PAOs ( 17, 18, 1 <f'·~~ilJ1
of 20 13). Reason to believe are to be
recorded prior io the issuan~~he Provisional Attachment Order and nQ,t in
the provisional attachr.ne . f o\ der. PMLA and the Rules 2005 recognize, two . ? k
distinct events i.e.,~r#~cOfl?on to believe recorded in writing and (b) Provisional
Order of Attac~~rll!; '1i~ · . . · .
f'\ ? I . ~ 1-f
5.19.3. P~l'a-~pn 6 of the Provisional Attachment Orders ( 1~, 18, 19 and 21 of
2013l~~·Q!l~"'~s·fates that the Enforcement Directorate has (purported) reason to
belie · e) b:t what those reasons are and whether they have been recorded
prior to the passing of the provisional attachment oraer are not mentioned. ,
5.19.4. In any case, averments in PAOs (17/18/19/ and 21 of 2013) do not state
any reasons per se especially in regard to the peculiar circumstances of this
case, namely that the Enforcement Directorate had triple assuranc~ by way of
Page 54 of 89
(i) Section 50 undertaking of the Director of Mohan Group; (ii) Enforcement
Directorate was in receipt of the original titles of the assets and; (iii) that the / /
Enforcement Directorate had the knowledge that the Mohan Group had
submitted its assets to the MPID Court' s jurisdiction.
5.19.5. At the time of issuance of the PAOs there was not any likely-hood / .
whatsoever of the Mohan Group selling, transferring or disposing the ~r0f~rties
to frustrate further proceedings under Chapter Ill of the PMLA ' ®rcement •. ::.. • .-:-::t·,,
Directorate has failed to place on record any single instance orl event forming
basis of the Enforcement · Directorate's such alleged ~~to~ .ye t that it has
(purported) reason to believe. ' ·- f'.. ~r r~\'J
5.19 .6. The statute only per~ its the Enforcemef!~· irYctorate to proceed for I \ j .
provisional · attachment after recording anq2) _o.J irtg reasonable belief and not
on the basis. of .so.me apprehension ~:. d({)'~e"}oncerning general tendencies of
defendants 1n s1m1lar matters. · ~~~Jt.. . ~,,.,i
5.19.7. Thus, the Er)forcemen~lte,~t.e>rate did not record its 'reason to believe' , • ~ Ji
prior to passing of Provisio~~tt®~hment Orders (17/18/f9/ and 21 of~013) and
failed to provide sucp<{~~p~which had to be recorded prior to the P AOs to
the Adjudicating fo~thdlity and also to Mohan. Group and furthermore, in any
case, in the ~c·1-;;~f~cts of this case, had no reason to provisionally attach
under second ptfJviso of 5( 1). ,. c., .,. . ~ ? .
5.19.f.l'h~:rttm'ble Bombay High Court in a recent Judgment [Lalit Kumar Modi
vs Sp~~l Director, Directorate of Enforcement, Mumbai; W.P N<?. 1703 of 2013] . ·relying on the judgment of the Hon' ble Bombay High Court in Shashank .
Vyankatesh Manohar vs Union of India and the Directorate of Enforcement
reported in 2013(5) ALL MR 551 was pleased to hold that " ... This formation of
opinion must be on record of the Adjudicating Authority, in this case the Special
Director, Directorate of Enforcement. Keeping this recording of reasons dn the
Pa ge 55 of 89
file would ensure that there has been a due application of mind to the
objections raised by the notice. This would be a necessary safeguard against / /
forming arbitrary opinions ... " In this case so such reasons to believe is available
with the Ld. Adjudicating Authority, as was established at the hearing on 21-2-
2014.
I I
5.19.9. It is humbly submitted that the Hon'ble Adjudicating Authority -t;;)o ··omple "'=':.. .Rf
power to look at existence of all such circumstances which form~~ e~basis of
the Enforcement Directorate to issue the Provisional Attachm-Q t Order in as
much ~s section 8(l} provides that prior to sending Sh~{lc;,au"se Notice, the
Hon'ble Adjudicating Authorityhas to form its own rea~ t()1 belief based on all (' >'•
those documents including the materials and ~e ·t eason to belief of the
Enforcement Directorate. It is cle1ar from the factsf.~~merated hereinabove thpt
the property enumerated in PAOs have ~~~ubmitted before the Ld. MPID
Court. which is having jurisdiction of t.he.~ated offences and has to be sold
under the supervision of Economic d *f\&;es Wing, Unit-Y, Mumbai and Ld. MPID
Court itself. Further, the titles ,.e.~tl) ,~roperty are under the possession and r~ .
·control of the Enf<?_rcementDire~etate there!ore, by no stretchQf imagination, it
can be believed that gl -u'~'Gtf@r invocation of the second proviso under section
5 was in existence tS~fm the issuance of the PAOs. The Complaints merits t"l!· 1J1 .
dismissal on thi~ 4@-J)O~~;:J\alone apart from other grounds. P-'J-.-,
. . " ' ~,#' .
5.20. Furtll'e~ ; ection 11 of the PMLA provides ample power to the Hon'ble
Auth~1it~ \a( summons, production of documents and evidence etc. Therefore, ~\--. ~ . . .
the coflfoint reading of section 11 with section 8 of the PMLA, it is clear that
section 11 has been provided in PMLA to discover the actual facts including the
reason to belief before confirming .the provisional attachment order. The word
'etc.' has to be interpreted on the basis of the principles of ejusdem generis.
Therefore, it is clear that Hon' ble Authority is empowered to enter into the
inquisitive enquiry before confirming the provisional attachment and forming the
~.-
· Page 56 of 89
opinion of reason to belief under section 8(1) of the PMLA to unearth the true
facts . / /
5.21. It is settled proposition of law that while construing a statute purposive
interpretation has to be considered, as the same would · be helpful in gathering
the intention of the legislators. It is obvious thaf the purpose of the PMLA is to
eradicate the/ mischief of the money laundering but in the' form of~ ~ i 1so to
section 8(2) of the PMLA, it is also provides for protecting the {i~~ls", of other . -"\f,,"<!e,,~
persons in the property. A statute ought not to be interpreted ins · ch' manner by
which particular provision of the statute became redunc;l n ·. he only purpose F~ ·'i.:t\~r
of incorporating the proviso to the section 8(2) of the ~it:9\ is to protect the :~1:
innocent third parties. As stated earlier, . in thst~pre~ent case, due to the
the secured creditors over all these prope11<tie "' r~d therefore there ought not to " . r''t .,
be any reason that these propertiesr~hour~t5e vested into the Government. If
this is the case, then these provisior-fe},,, iht.tachments for these properties should
not be confirmed. A(-. , ;; . ~ ·~:.)
,•rr<;;j, ;...,~ { :r~ ct~--f
5.22. It is a~o humbly su6~~~t(cl that in view of the set~tlement between the
parties, there is hardly~'~chance that prosecution in the FIR will succeed and
therefore, in wantt9.~p-~\f conviction in the Predicate Offence FIR it would be a
travesty of lqw~tfdvel beyond the FIR. If ·settlement has been arrived no
property sh<t1uld ~~l5e attached or why . Enforcement Directorate should keep the
doors"of l·l4.e~vestigation opened. Furthermore, it ought not to be the intention f '<;:1.. •
of the>,i,e@islature to vest the property of the public at large into the Government
where the source has been identified as general public at large. On the other
hand, if these properties can be sold under the supervision and control of the
Economic Offence Wing and the Ld. MPID Court, the poor investors could be
remedied. It is humbly submitted thaf it cannot be the intent of the legislators
while enacting the PMLA that honest or persons should suffer. This Hon'ble
..
Page 57 of 89
· Adjudicating Authority in ECIR No. JPZ0/1 /2013 has held similarly. Therefore, in
light of the above, it is humbly submitted that there ought not to be any reason / /
to belief for the Hon' ble Adjudicating Authority to confirm the provisional
attachment orders. Therefore, it is humbly prayed that the Provisional
Attachment Orders in t~e OC No. 233, 234, 235 and 239 of the 2013 may not be
confirmed. / /
5.23. In view of the above, the Ld. Adv. Shri Manoj Kumar Singh )?.f.~)t"'.~~not to . ·:;::: q~~t
confirm the provisional attachment orders (17 /18/19/21 of 2 )";;against the
. present Defendants in the OC No. 233 of 2013, OC No. 2f~:- ~O'l3, OC No. 235
of 2013 and OC No. 239 of 2013. . . l"'\~·).-
6. As regards providing 'reasons to believe', the d~.m~letinant submitted that at . !'"·\~
para 8 of the PAq No. 17 of 2013 dated~.;lJ)2013, specific1 reference to
'reasons to believe that properties are r~~lUIIJ2d to be attached' has been
mentioned. There is no statutory prov~~io~f~e PMLA, 2002 to serve a copy of {J \,
reasons to be believe to the defe2,~.~ i11~j'· ' "'l!if_~.;.;, .. ~t~. .
6.2. It is submitted that thef"S;~iEf~t material has been brought out in the . ' ~ .,
com~aint indicating sub~{;~\\11!y probable cause . that the defendants had
indulged in the actiyit.fl)of . money laundering by involving themselves in a
process or activito/":Jf,~~n'~cted with . proceeds of crime provisionally attached .
6.3. It is stfb~jt~d that the defendants are silent as to how they have incurred ' . . .
the l~i~towards NSEL In the compl~int it is clearly brought out on record
that the defendants had Incurred a hab1hty of Rs. 921 crores towards NSEL on . account of trading of sugar . without having any physical stock, thereby
committing scheduled offences under the Prevention of Money Laundering Act,
2002.
-- ~ =-
/
Page 58 of 89
6.4. It is submitted that the provisional attachments orders were issued under the
provisions of PMLA, 2002. and the order dated 2.12.2013 issued by the Hon'ble /
MPID Court under MPID, Act, 1999 were altogether different proceedings under
two different Acts. Issue of Provisional Attachment orders was a result of the
investigations conducted under the provisions of PMLA, 2002. It is submitted that
the complainant was not a party to the proceedings before the Hon' Ql.e. MPID / • / ~~~- •l~,:,c-.ol
Court with respect to its order doted 2.1 2.2013. ~~~ -
"' 6.5. Defendant had not · specified any of the properties cove y the P AOs
before the Hon'ble MPID Court. It was observed that tw<f'\ tli? Defendant's . . ~
properties, one at Civil Lines, Delhi and the other at B1 a-~er were offered as · . ,Pill
collateral in respect of the said Agreement. Both these1~ operties are not part of
the proceedings under the PMLA, 2002. . (~ 'W"?
I · ".,.. I
6.6. It is submitted that having been aggriev~ • · y the order dated 8.1 .20 14, the ·""''"- ' '>)
!or .\! ~"'
Complainant filed a Writ Petition No 345 ~f 2014 before the Hon'ble Bombay
High Court . for quashing of the .sai ar<Jer along with immediate stay. It is ~~:~~~ ...
submitted that the Hon'ble ~o1ll.~uY.I High Court was pleased to grant stay on
,f0.2 .2014 to the order dgt~~~~U .2014 pass~d by the Hon'ble MPID Court,
Mumbai so as to allot'; c.s:S~,)ation of the proceedings under the provisions of
.the PMLA, 2002. · ~" Ll' . . · if .,. i!f
"~) ' . .
6.7~ It is submitt~ nat a proper reply has been given to the Defendant No. 1 . \ .
vide this ~Jr"5ot5te's letter dated 28.02.2014 with regard to providing a copy of ·
'reas~~ ~-~o,ibelieve'. It is submitted that the PAO Nos. 17/18/19 all dated
29.11 ~.9)3 and 21 dated 12.12.201.3 have been passed under the reasonable ·
belief and substantially probable cause that the properties att'ached there
under are· the proceeds of crime. It may also be noted that the said PAOs have
been issued under the present statutory scheme und~r PMLA, 2002. They are,
therefore, confirming to the relevant provisions under the Act. Since the
complaint has been filed before the Adjudicating Authority under the PMLA, he
.t
/
/
Page 59 of 89
was advised to raise these issues before the said statutory authority, if they liked.
Further, it is also apparent from Para 8 of the said orders, specific reference to / /
'reasons to believe that properties ore required to be attached' has been
mentioned.
6.8. The offences being investigated by EOW, Mumboi Police and the
complainant ore separate and distinct. Wis the Defendant who had trd~:ed on
the platform provided by NSEL without having physical stock of sv"g,~triereby, . ~~·:i,;·, "7 ~
~ "i• • .,.,fl.
committing scheduled offences and duping the investors who <t ;d \ traded with
the Defendant through NSEL portal. Mere providing of col.ifl'.l, rp<:lrty guarantee t<>. ...
by NSEL does not absolve the Defendants from their cri ,. ·~dt~responsibility. f""''4 ,,.
6.9. It is submitted that it was the Defendant ~ho ~d v' efe T+2 contracts offered ·
""''~ sugar fqr sale through NSEL portal viz-a-viz th~.JrveS.tors had purchased the said ~ J.~ •
sugar through NSEL portal without havingr"~~,~~dge that the defendant had no
physical sock of sugar in their possession. ~SEL paid the money collected from
the purchasers of sugar to the ~efe , , ~ nt who had sold the sugar. However,
investigations revealed that t~~~ehdant did not possess the quantity of sugar
traded by him on the NSEL polJEll. It ~as the defendant who failed to honour i'i/'~.. !;:t
their liability to pay unde b7£~'c'orresponding T +25 contract. f'"\ ... )
. ·~ ~
6.10. It is submit't~Q \ l hat the claims made by the defendant are not
maintainable€· ~~fendant hod become a member of NSEL to deal in . a
commodjiYC5· §tfgar. They were to sell certain quantity of sugar in T +2 contracts
and r --p~liQPlase the same quantity of sugar in corresponding T +25 contracts
from \Q$1~ investor through NSEL portal. The said investor may oe another
member of NSEL or client of member of NSEL. The price of'sugar re-purchased
frorn investor in T +25 contract of the . defendant used to be higher than the
price of sugar sold to the investor in corresponding T +2 contract of the
defendant, thereby, ensuring a certain profit to the investor on his investments
made in such contracts with the defendant through NSEL. Whenever the
. ·~
t .
/ .
/
Page 60 of 89
defendant had sold a certain quantity of sugar on a trading day, they used to
send a written confirmation by mail to the warehousing department of NSEL to / /
the effect that they had delivered the said sugar in the designated warehouse
of NSEL and should be considered for payment to be made to them against
such sale. On the basis of this confirmation, NSEL used to collect funds from the
investors and pay it to the defend9nt. The quantity of sugar purporte,P.to be /
delivered in the designated godown of NSEL was a confirmation of ~ .,e~lon of
T+2 contract from defendant's side. Similarly, at the time of qfi'(o'tity of T+25 .,,,
contract, the defendant was required to deposit the funds equ1ydent to price . '
· of re-purchased . quantity of sugar with NSEL and NSEL WQS i · turn required to ·t; •• ·<
make the said payment to investor. Thus, it may be n~t:, ·h6t payment of funds
for repurchased . quantity of sugar was confirrfi·a{ ok "' of execution of T +25
defendant had never delivered the said ... ~~~-~(i~ the designated warehouses of . '! \ ..,1
NSEL. Delivery of sugar in NSEL desi$~dl"9odowns was the basis of counter
guarantee given by NSEL to the .J flve tg s. In fact the, the defendants did not •·qt~.,.,
physically possess any sugar It,~~ .tf1ey had projected to be sold though NSEL
portal in T +2 contracts to 1the 't~JWestors and were required to re-purchase the
same in T +25 contr~~ ~efendants had conspired with NSEL staff with
regard to the deiJ~E(ry @.f sugar to the .designated warehouses of NSEL. During
the course of in .~ . ~tl~~tions Defendant No.3, the director of Defendant No.1
namely Shri · ~~tankar Shrivastava had in his statement recorded under ,.~
Section ~f. the PMLA, 2002 on 7.11.2013 admitted to have executed T+2
cont~ 'through NSEL portal without having any physical stock in _connivance
with the. staff of NSEL. He had stated that the sale-purchase of sugar in T +2 and
T +25 contracts were just paper transactions. The defendant No.2, another
director of Defendant No.1 namely, Shri Jagmohan . Garg had in his statement
dated 1.11.2013 recorded under Section 50 of the PMLA, 2002 confessed that
there was no physical stock of sugar against the trades effected in the name of
. a.
Page 61 of 89
M/s. Mohan India Pvt. Ltd. (Defendant No.1 ) and their other companies namely
M/s. Tavishi Enterprises Pvt. Ltd. and M/s. Brinda Commodity Pvt. Ltd . Their / . /
understanding to invest the funds in real estate is the conspiracy they had
entered into w ith the NSEL staff. The money which was earned illegally by
committing the scheduled offences like criminal conspiracy, using as genuine
a forged document or electronic record etc. under the PMLA, 2002 on occpunt / ~~
of sale of sugar which was not in existence, was diverted to invest .1 th e real If"~
estate. . <:i~,'>
6.11. It is submitted that Anjani Sinha's depositions vide <f1 1s statement dated :tF,F;.
16.10.2013 do not absolve NSEL. He has admitted the ~oi~··~Jayed by him in the . '!~>-"" ""J; ,,. .
entire NSEL scam as well as the role played . by thEt~ e tptjants along with other
defaulting membe~s of NSEL and the other e~~ocys of NSEL as well. . 1_
6.12. Investigations under the PMLA haveli"~~~led that the defendants were :f'~~ 4 J .
dealin in sale and re- urchase of su or ~ithout havin an h sical stock of
sugar. They had received funds from ~--61:L on account of sale of sugar which ':-;~)~f..{~.q~ -- .
they had not delivered to NSB nt .d ll. There was no question of NSEL allowing . i'Xtd~ :;;: .}
them to invest these funds .M:J ~e~J?estate. ~ ""'·m. ' .
6.13 . . It is submittedr tQri:here is no basis in defendant's claim that their ,. ~ -~
obligations were lrca_refurn the funds and not stock. Defendant had obtained . ,,~.,..., "')' . ' ' . funds fraudulce~tly~bn account . of sale of sugar which was not in existence
thou h he tWas~;· uired to kee · stock of su or e uivalent to his moneta ""'}
Q( er the undertakin of the ·$
stock a he NSEL godown was the basis of the counter guarantee given by the
NSEL to the investors.
6.14.. It is submitted that defendant cannot escape their criminal responsibility by
trying to shift the same on NSEL management's awareness about their real
estate investments.
, .
Page 62 of 89
6.15. It is submitted that defendant 's contention is not correct. The contents of
the complaint has clearly brought out that there was a conspiracy of the / / _
defendant with NSEL employees to obtain the funds fraudulently and divert the
same for the purpose of money laundering. In the process they had used the
·_documents (emails, sale invoices) which they knew were false.
6.16. It is submitted that there is no basis in their claim. The defend~f)t ... had f':' \-,~
received huge funds from NSEL which had origin to the inve~tors~w-fio had ' . -,~~«;,,~~"'
purchased sugar from the defendant in T +2 contracts which · ®s~'-sold by the
defendant without having any physical stock. The funds :''sh,received illegally
were then invested in real estate projecting the same Q$'€~ - n;,~unds. .
6.17. II is submitted that the settlement ogre~~ ~ntered into by the l.l::..
defendant is not the subject matter of the inye~ti~G ion being conducted under t
the provisions of the PMLA. 2002. The A~~ent Agreement relates to the
settlement of their dues with NSEL. T~ff!;Jnces under PMLA, 2002 are distinct
and separate. . . # . "'
6.18.1t is submitted that the d.Bf~t are trying to play o double game. At one . ~ r .
side they say that they ha~8..,,no1~ dealt with investors and have not" received any
funds from the inve? \ he other hand when the question of money
laundering com;;.,,~y't a~e. c~ntending t~at the ~unds rec~iv~d by them from
NSEL were cl~j~' q~ 1ts ong1n 1s known. It 1s subm1tted that 1t 1s a fact that the
source o~e:;e'f'i;identifiable but for the criminal activities of the defendant as
deta~\...tne complaint. the said money had become ill gotten money. The
prope~s ~purchased by using the said ill gotten money has become tainted
property and hence liable to be termed as proceeds of crime. Just because the
source of money is identifiable, the defendant cannot claim that there is no
money laundering in the case.
--
Page 63 of 89
6.19. It is submitted that Money laundering is defined under Section 2( 1) (p) of
PMLA 2002 as meaning assigned to it in section 3 of the Act, ibid. As per Section /
3 of the Act, money laundering is 'Whosoever directly or indirectly attempts to .
indulge or knowingly assists or knowingly is a party or is actually involved in any
process or actively connected with the proceeds of crime and projecting
proceeds of crime including its concealment, possession, acqu)sition or ,use and I . ~·~
projecting or claiming it as untainted property · shall be guilty of.~~-tijl'~~ of
money laundering'. Further proceeds of crime is defined unde~4s~~G!Ibrt 2 (1) (u) '~ .. .:.' ~-
of the Act, ibid as any property derived or obtained directl't:,pr inoirectly, by any ;; .. '\\ . ' . b~.
person as a result of criminal activity relating to a sch~ul~~ offence or the . . . .£f'-"k'1,A.
. value of any such property.' The investigations ~n~t\i) epositions including
statements of the defendant No.2 & 3 described Tri dJfan in the complaint has
clearly brought out on . record that the defeq<ctc;~m\}~d earned huge funds I from
NSEL on account of purported sale oftS.:~,:~ithout actually possessing the
same; that by indulging in sale o~dywhich was not in existence, the
defendants had earned criminal,l!tproms y committing the scheduled offences . ...~,-.~~!.~-
under the P~LA, 2002; that j!Je ' Gflts so received by way of criminal activity
were. invested in real esta~~iable to be considered as proceeds of crime. A
detailed money tra1l ln~sr~ec) of each of the proceeds of cnme proposed to
be attached · is M~~/ in the complaint. The defendants had become
member of NSED;,.,t~i6de in commodities viz. sugar. The detailed accounts
statements ~~~s'E?d to the complaint clearly show that the defendants were
regularly~i{;ing funds in their respective settlement accounts maintained with
NSEL~ funds were received on account of purported trades of sale of sugar
on NSEL platform. Investigations rev~aled that there was no sugar in the hands .
of the defendant equivalent to trades executed by them on NSEL plat-form. The
; funds so received were then transferred to the respective capital accounts of
the defendants. Defendant No. 2 & 3 have in their statements recorded under
Section 50 of the PMLA, 2002 disclosed not having any stock of sugar equivalent
t
Page 64 of 89
to trades of sale of sugar executed by them on NSEL platform. Investigations
have further revealed that defendants had executed such trades without any /
~tock with the connivance of NSEL employees. By indulging jn such activities the
defendants have committed the offences . of criminal conspiracy, use of
fabricated documents under IPC, 1860 which are scheduled offences. Thus, the
funds so received fraudulently in their settlement accour)t for acquisitioo-of real / . ~-~ ..
estate, projecting the same as untainted property, the defen~aa,!J' have
committed money laundering in terms of provisions 3 of the PMLA, ~, · E)Q. t~ i
"r/ h:
6.20. It is submitted that generally layering is the process'] hro 'gh which the
laundered money is channelized for its ultimate integ(at~p . i~to the system. In
this case, it is evident from the evidence gather~'::~ ~Jcrf that the defendants
have attem ted to Ia er the roceeds of cEi'rm.e , enerated throu h their I ~~ .
criminal activities in various manner e. . .• i:Jr:chase of hi h end vehicles like ,:?.1'
Range Rovers, luxurious villa for their t6se Which have no relation with their
legitimate business activities. The .~e~ i,~Jht~reof have already been submitted .
before the Adjudicating Autho~Ayugh complaint filed in this case
6.21. It ~ submitted that ~~ations under PMLA,, 2002 _as detailed in the
complaint has clea~~~~fit out ·that the defendant IS 1n possess1on of
proceeds of crime wH .fi are being projected as untainted properties. The
properties gen~~ ' out of proceeds of crime are likely to be further
concealed J£1 ~'bnner to frustrate proceedings under chapter Ill. The funds so
receive~O:t:count of sale of sugar in T +2 contracts launched on NSEL portal
wereQjttJally shown as loans in the b~oks of accounts. ·This act of the
defendants clearly indicate !hat they were in the course of layering the. said
funds in order to claim the same as untainted. The defendants had not
submitted the properties under consideration for attachment before the
Hon'ble MPID Court, Mumbai.
= · =--
/
Page 65 of ~9
6.22. · It is submitted that the complainant has challenged the order dated
08.1 .2014 passed by the Hon ' ble MPID Court before the Hon' ble Bombay High /
Court vide W .P. No. 345 of 2014 praying for quashing of the said order and
immediate stay. The complainant has challenged the jurisdiction of the MPID
Court in the matter vide the said Writ Petition before the Hon'ble High Court . .
Cons~dering the proceedings before the Adjudicpting Authority, PM
Delhi, scheduled on 21.2.2014 & 25.2.2014 in respect of O.C. Nos. 2 · ';23 _ & 235 ~..f?
of 2013 and O.C. No. 239 of 2013, vide order dated 20.2.2014, the '®JI'ble High ..... -;,_,
. -;:-l~
Court has stayed the subject order dated 8.1.2014 to the extenh-of provisional . ·. . r' . '
attachment proceedings under the provisions of PMLA, 1002) o as to allow the
proceedings to take its own c~urse as per the prq-v·r;n?cf PMLA, 2002. The
Hon'ble Bombay High Court have not passed dm,y efcjer nor expressed · any
opinion with reg<tlrd to any other aspect of thei\~tlon. The petition is awaiting
disposal by the Hon'ble High Court. f~\~1>') ~\ <r.J v .
6.23. As regards the judgment of HQ ble Supreme Court in the case of K.K.
Bhaskaran vs. Secretary, Govt. t)~.~ilnadu, it is submitted that a precedence
~n-~he facts of any giv~n casef'G¢Jutes .~ithin .th~ facts of the said case only. This
1s the settled Law. SI'}S~:_~e,i authont1es c1ted by the defendants had no t<11-··.,;~;. .
occasion to considerft~J~MLA, the same cannot be made applicable to the
facts of this casj?.\1~}k"t 1s a different Act. The Hon'nble Bombay High Court has
allowed the Gff~~~ment proceedings under the provisions of PMLA, 2002 by its
order dajed~9·~1.2o 14 itself .indicates that the Hon' ble Court has not agreed to
the v(5 ~~n by. the Hon'ble MPID Court vide its order doled 08.1.2014,
6.24. It is submitted that the defendant was required to keep stock . of sugar in .
their god owns equivalent to their monetary obligations i.e .. Rs. 921 crores. in T +25
contracts executed on NSEL platform. Both the defendant No. 2 arid defendant
No. 3 had in their statements dated 31.10.2013 and 1.11.2013 .respectively
/
/
Page 66 of 89
admitted that they had traded in T +2 and corresponding T +25 contracts on NSEL
platform without having any physical stock of sugar. / /
6.25. It is submitted that the liability of Rs. 921 crores has been worked out as per
the details provided by NSEL. The investigation under PMLA in this regard is still in
infancy at this stage. /
6.26. It is submitted that defendant had diverted the illegally earne rom
NSEL for the purchase of plots at Karnal. This investment is a ~L -laundering the illegally gotten money from NSEL. , ··,: {
;{~"'}<, ' .lr
6.27. It is submitted that the investigations being con<;;it:~<;: e , "1by the predicate ~·- '·~
agency have so far brought o~t that there was q, c~ ii1·di conspiracy hatched ''@i'
by the defendant with the staff of NSEL. The go . ®:f.(ls which were declared to.
NSEL as d~signated warehouse had no c~q~i~y fO sto~e the quantity of sugar
traded by them on the NSEL Platform. 'ff\wg.s '~scertained ·by the income tax
department during their verification ·€t~J .. ~e \6odowns of the defendant that not
more than l 000 MT of stock co':;!,L<f~.e i f6red in each of those godowns whereas f L,. )
their avera_ge daily traded st~D"~ g:t sugar_ was to t~e tune of l 0000 M.T. Though
no stock of sugar was ~~~~r1C:J to the NSEL designated godowns, they were
fraudulently sending ~-. c~~:offer ·letters to NSEL by email confirming the delivery
of the stock to ~~'"'~&t· ~e funds~ Both the · defendant No.2 and 3 ha~e in their
· statements r~~ra~cf under Sect1on 50 of the PM LA, 2002 have adm1tted that ·
they did p qt.J?o'fsess any stock of sugar in respect of T +2 and T +25 contracts
laun1,n"J:b..vthem on NSEL portal. The said statements are voluntary statements
. and Ol\~4fn confirmation with the findings arrived at by Income Tax Authorities.· .
6.28. It is reiterated that the defendant had fraudulently received huge funds
from NSEL, the said funds were then diverted in real estate. The receipt of funds
illegally is a criminal activity and its layering and further integration is laundering
of money in terms of Section 3 of the PMLA, 2002. The assets so procured by way
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Page 67 of 89
of funds earned illegally are proceeds of crime . In terms of Section 2 ( 1) (u) of
the Act, the detailed money trail given in the PAO and the complaint prove that / /
the said assets were procured by the defendant with the ill gotten money.
Further there was likelihood of immediate sale/disposal of,such high end vehicles
and luxurious properties. The non attachment of the same would have frustrated
the proceedings under the Act. /
.. ,.-1i'l.
6.29. tis submitted that the judgment of the Hon'ble Madras High C6>~ ·lq l'las laid
down the correct legal proposition which fully supports the act~ ken by the
. ' complainant. There . was a possibility ·of disposal of the ~qen"'~ive properties Ji
procured by the defendant ·but for the attachment qt~t~ .'aid properties the
proceedings under the PMLA, 2002 would have b~en~~'tbted. • '.t\_
6.301 It is submitted that the PAO has been :- oss\;' ·'~n the basis of reasonable
belief that if the said assets are not attach~)j.,pr;ovisionally under Section 5( 1) of
the PM LA, 2002 in:' mediately, the no,p.,,_ aM ent of the said properties would f~' i: '\•.
frustrate the proceedings unde~o t~Ac .• } ihe complainant has not only followed
the statutory mandate under mle...,. aMLA but has also been governed by the
-~ . cannons of natural justic~T~:lQtention therefore, is wrong and contrary to --..
the legal position . r·~~~'
6.31. The main )?1~): of the Defeni::tants was that the Hon'ble Supreme
Court had i~ ~vdse of K.K. Bhaskaran held that MPID Act will prevail upon the . r < ... ~,,_
PMLA, tlipugh~ the earlier Act was passed prior to the later Act. The said ~~ ~~· ( ~ ... _.
·argum.§_,.~t was countered on the following grounds: .
a) The PMLA, 2002 was not . the . subject matter of the aforesaid
judgment and not referred to by the Hon ' ble Supreme Court at all in
the said judgment,
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Page 68 of 89
b) The enactment of PMLA 2002 by the Government of India is a
culmination / of initiatives taken by the international community to
obviate threats posed by money-laundering not only to the financia l
. systems of the countries but also to their integrity and sovereignty. The
objective of PMLA ~s ta prevent .money-laundering and to ~ro;*<SJe f6r
confiscation of property derived from, or involve " · "''""""~tY money ,,,
~~ ··t.
laundering and for matters connected therewith ~\in~i'bJental thereto . .';«>, '
Owing to the object specified. the ratio of the"'j~w~ent in the case of ""-?:;.., '···· #" ~ ,.,..# .
K. K. · Bhaskaran vs. Secretary. Qovt o!f _Tamil Nadu & Ors. is not "'
.f''\r, applicable to the PMLA. 2002. t -~~)
c) The Misc. Application filed .:J~ ... said companies before the
t~· . ~ Hon'ble MPID Court vJ~·~-,, an attempt to escape their liabilities
~- ~ .. jl' .
·i}~~,~~ under the P~,)r,3PGf2 . The claims made by them that ac~ions
initiated ,t~<f'Directorate of Enforcement under the PM LA.
2002 -G6"~etrimental to the interest of the poor investors were
~~~;;ect inasmuch as the Directorate has never stopped the r~· ,. } . . \ .* .
,;1ll-' L &pplicants from settling their dues to the NSEL. It was an ' ~ . .
('' ~J ·admitted fact that Mohan India entities have defaulted t~ the •::. . }j ~~~
tune of Rs. 922 crores on account _of their transactions through
NSEL p latform without having any physical stock of sugar. An FIR
has been registered against them under Sections 120(B), 467 and
471 of Indian Penal Code, 1860 which are Scheduled Offences
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Page 69 of 89
under Paragraph 1 of Part A of the Schedule to the PMLA, 2002.
In the guise of the Settlement Agreement, th~ applicants were / .
attempting to obstruct the investigations being carried out under ·
the PMLA.
d) The Directorate has provisionally attached only those pr<0~.~rties .. , ,, '('
which hove been identified to be proceeds of cri~;'~'ibble to
confiscation under the provisions of PMLA, 2002. IJA _ _yvas'4F1ot a claim of . {f ·;~~. ' .
the applicants that the provisionally attache . ~-~efties are their only tr~ ... ~· -~;..,
. · properties. They were free to enfor - d~d could enforce the
I . r~"<
Settlement Agreement entered int~.. y:..t t?iem with NSEL by using their 1~
other properties which were:~")u jecl molter of the action token
by this Directorate. '1'~~~~ · . ~ '»rr;;l
e) Instead of selti~ foJ o fulfill their obligations under the said
Settlement Agre en.( the applicants were making a hu-e and cry ~ ' . . ' ~ '1.,.., '
about th;,,_a9~ltaken by Enforcement Directorate under PMLA, 2002 . ~ <. ~· .
which .. ~~~t~eir malafide intention. ·. . · ~ J . . e, ,II\~ case ofT. Boroi vs. Henry Ah Hoe and Anr. -AIR 1983 SC { 150),
(""~\ t[l"E! Hon ' ble Supreme Court has held that · ·~;;,"<e.# .
'The Proviso to Article 254(2} empowers the Union Parliament to repeal
or amend a repugnant State law even though it has become valid by
virtue of the President's assent. Parliament may repeal or amend the
repugnant State law, either directly, or by itself enacting a law
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Page 70 of 89
repugnant to the State law with respect to the 'same matter'. Even
tpough the subsequent law made by . Parliarpent does not expressly
repeal a State law, even then, the State law wilt become void as soon
as the subsequent law of Parliament creating repugnancy is made. A
State law would be repugnant to the Union law when there '·~h
. conflict between the two laws.' ·("; ~'' Thus in the light of the above observations of the Hon'b~e~~me Court. the
PMLA, 2002 shall prevail over the MPID, 1999. t~~
·~ ~.l' .
On 8/1/2014, the Special Judge under the MP,I ,, ct, Mumbai, illegally and . $.
· · I ~ . · I without jurisdiction passed the Order allo~i~~" JII.A. No. 107/2013 preferred by
the said companies. Vide the said <;>rd~;) orders of provisional attachment
(passed under the PML Act -~j' act is a special and central act) were
effectively set asi~e by the H~l~ MPID Court, which clearly h-9d no jurisdiction
to deeide any issues jr.Jr9~~"'ttion with the said provisional orders which had f 'II . !? \ ,,>T
been lawfully pass~q~~~'d'er the provisions of the PML Act . . "'4
W'~\ \i
6.32. Bein ~gtlgved by the Order dated 8/1/2014 passed by the Hon'ble MPID
IJ CourJ;'"~tQ D, MZO preferred Criminal Writ Petition No. 355 of 2014 on the
·~\~. "rf ·t,~.!l';.".i/1
following grounds:
· a. The PML Act is a central and special statue, under which there is exclusive
jurisdiction to deal with cases of proceeds of crime and money laundering.
Proceedings were . lawfully initiated under the PML Act and are pending.
Page 71 of 89
However, the Qrder passed by th(3 Hon'ble MPib Court was ex facie passed
wit9out jurisdiction - illegally usurps the powel/ vested exclusively under the
provisions of the PML Act, and sets aside orders of provisional attachment, which
have been passed in accordance with law. The MPID Court had no jurisdiction
to set aside ; the orders of provisional attachment and1 had no p® ··e.J or
. '~ jurisdiction to interfere with the proceeds of crime. In any view oh~~ . , otter the
PML Act has overriding effect over the provisions of the MPID Ac~ \
b. · The procedure for attachment provided under t ct is as follows:. ~r~i?:,
{i} A provisional order of attachment for a peribd of 180 days can be issued ,. I'"'•\\
under Section 5{1} of the PML Act. .(~":,5J)·':,,,} I
{ii} As per Section 5{5} of the PML Actft~P,irector or offic~r who provisionally
attaches the property under Section ~"i~)rof the Act must file a complaint stating
the fact of such atlachme: t ~~~Adjudicating Au:hority appointed under
the Act, wilh1n 30 days frorQ~tbe Ciate of such attachment.
(iii) Upon receipt 61\~:~plaint under Section 5(5) of the PML Act, the ~·~~ ~:..'"'';"
.b ~~ . ..
Adjudicating A ~td:ty~ if the said authority has reason to believe that any '\ ) .
person h~s ~nf~itted an offence under Section 3 of the. Act, or is in possession
of thlf'Pip~eds of crime, may serve a show-cause notice under Section 8 of the \ "' ~~
Act, on the person calling upor) her/him to indicate sources of her/his income,
earning or assets out of which the property has been acquired,· and to show
cause as to why the said property should not be declared to be the property
involved in money-laundering and forfeited to the Central Government.
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Page 72 of 89
(iv) As per Section 8(2) of the PML Act, the Adjudicating Authority shall after
considering the repiy, if any to the notice, hearing the parties, and taking into / . /
account all the relevant materials, record a finding as whether all or any of the
properties specified in the notice are involved in money-laundering.
(v) The Adjudicating Authority shalL if he comes to finding that the properties
are involved in money laundering, then confirm the attachment of the property
by order in writing, as per section 8(3) of the PML Act.
(vi) As per Section 8(4), where a provisional order 9f attachment has been.
confirmed, the Director or any other person autqorized by him shall forthwith
take possession of the1 property.
(vii) If on conclusion on the trial under the PML Act, the court finds that the
offence of money-laundering has takem place, it shall order that the property
shall stand confiscated to the c 'E}.Rt,ral Government. (Section 8(5))
(viii) If- on conclusion on the trial under the PML At:t, the court finds that the
offence of money-laundering has not taken place, it shall order release of the
property to the person entitled to receive it. (Section 8(6)) . .
(ix) As per ~ection 26 of the PML Act, any person aggrieved by the order of
the Adjvdicating Authority can appeal to the Appellate Tribunal. An order of
the Adjudicating Authority, which confirms an order of provisional attachment, . . . may be challenged before the Appellate Tribunal.
(x) As per Section 42 of the PML Act, any person aggrieved by the order of
the Appellate Tribunal can appeal to the High Court.
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Page 73 of 89 (
(c) . The PML Act lays down the procedure for attachment of property under
the PML Act. Once the provisional order of attachment is issued by a Director or . . /
other officer of the Directorate of Enforcement, the said Director or officer is
required to file a complaint before the Adjudicating Authority appointed under
the,Act. The order of the Adjudicating Authority <Zan be challenged before the
Appellate Tribunal constituted under the Act. The order of the Appellate Tribunal
can be challenged by way of appeal to the High Court.
(d) From the provisions of the PML Act, it was amp-ly dear that the Special
Court constituted under the MPID hod no jurisdicth)n to interfere either with an
order of attacHment, or with the investigation/inquiry by the Petitioner in a case
under the PML Act. The Special Judge appointed under the MPID Act had
~.
absolutely no role to ploy in the proceedings of any authority under the PML
Act.
(e) However, the Learned Special Judge not only restrained the Ed, MZO from ;.
taking any coer.c;ive action including attachment against the said companies
but also directed to return the original title documents of the immovable
properties of the said companies and permitted them to sell the said properties
and deposit all the moneys obtained therefrom in the escrow account of the
NSEL. In doing so, the Special Judge in effect set aside the provisional orders of
attachment, and prevented the ED, MZO from inter alia issuing any further
orders of attachment in respect of properties which Ed, MZO may in the course
. -:;:--:--
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Page 74 of 89
of further investigation into the offence find to be involved in money-laundering .
As such, the Order passed by MPID Court frustrated and circumvented the / /
proceedings under the PML Act- which have already been set in motion·, and
the object of the Act, which is to prevent money-laundering. The Special Judge,
/ whilst passing the illegally usurps to itself juris0iction under the PML Act~ which the
Special Judge did not possess.
(f) The order of the Learned Special MPID Judge in effect· permitted the said
companies to dispose off the properties, which were the. proceeds of crime, and
as such were involved in money-laundering or usep in the commission of money
launderirlg.
(g) The ·Learned .Special Judge ought to have appreciated that the said '•··~ ': . ~., ..
companies had the statutory remedy under the PML Act of making their
submissions before the Adjudicating Authority.
' •
7. AFFIDAVITS FILED
On behalf of NSEL Investors Associations (NIA)
7. i. Shri. .Rakesh' Bhartia, claiming himself as the Chairperson of NSEL Investors
AssociaJion (NIA), in his Affidavit filed before this Authority on 26/3/14 submitted
that the investors are the victims of NSEL scam and that they shall have to jointly
recover approximately Rs.5600 cores invested with and through NSEL.
7.1. 2. Their only hope is that they will get money only from the assets/properties,
which have been acquired/ purchased by Mohan Group and similarly placed
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defaulters/borrowers. He submitted that the properties sought to b.e attached .: i
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Page 75 of 89 .
should be given back to NSEL with a direction to ma ke the payment ·to the
investors ? fter selling/liquidating the properties under the supervision of the
Designated Judge, constituted under Moharashtra Protection of lnt~re st of
Depositors (In Financial Establishments) Act, 1999 {hereinafter referred to as MPID . . .
Act}.
/
7.1.3. Since the properties acquired by the Defaulting Member Mohan India
Group have been identified and established, they should be disposed off and
the investors paid. It would be highly improper and prejudicial td the interest of
depositors/investors, in case such properties are vested with the Central
Government in due course. Such properties should be made part of the
Settlement between Mohan Group and NSEL and th,ese ·parties may be directed <
to ,sign an Addendum to the Settlement Agreement dated 30-10-2013 for the
benefit of Investors.
7. 2. Affidavit filed by Prakash Aggarwbl ·'
7.2.1. Shri. Anand Prakash Aggact~al, resident of 702 KJ city Tower e-2 Ashok.
Marg C-Scheme Jaipur 3'0200 1 in his· Affidavit filed before this Authority on behalf
of his Companies and five of his family members submitted that they are one of
. the traders, who purchased sugar on spot delivery basis form the Jagmohon
Garg owned Co.rnpanies like Mohan India Pvt. Ltd., Tavishi Enterprises Pvt. Ltd
and Brind.9 Commodities Pvt. Ltd on the platform of NSEL by paying Rs . 3.47
crore to 'Mohan India/ Tavishi Enterprises/ Brinda Commodity through the brokers ~·· ·'· .. ~ - - .
7.2.2. NSEL through had taken huge amount of money through NSEL clearing
system from purchasers of sugar like him since inception on the false assurance
of supplying sugar. But the warehouse receipts/ tax invoices of sugar which
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Page 76 of 89
were provided by Mohan India Group to vmious buyers were found false
without underlying sugar. These invoices were fabricated by Mohan India Group / /
in connivance with NSEL owners/ Directors. Forged letters of sugar supply to
_NSEL go downs were prepared by Mohan India Group in connivance with NSEL
to cheot the buyers.
/
7.2.3. These ill.gotten monies were then laundered by Mohan India Grol)P and
hence they are liable for conviction under the Prevention of Mqney Laundering
Act, 2002. Therefore, Jagmohan Garg, along with all its associates ,; NSEL and FTIL
are liable for conviction for the offence of money laundering.
7.2.4. The mcmies given to Mohan India Group througn'~NSEL clearing system by ·
various buyers of sugar were misappropriq:lted for purchasing property and for
other purposes. Now that Mohan India · Gro~:Jp and NSEL have entered into an
agreement for returning the money t.o the buyers instead of delivering sugar. As
per the Settlement Agreement entere,Gf into Mohan India has agreed to pay
Rs.77l crores as against the defrauc)ed money of Rs.929 crores.
-. -. 7.2.5. Whereas, the EO ha.s indentified assets only to the tune of Rs. 125 crore
approximately. It is obvious that the accused Mohan India Group and its
associates have hidden the balance amount. Therefore, the ED officers should
be directed to djg out the balance amount or the properties illegally acquired.
7.2.6." The properties attached belong to the persons, who paid money for
buying sugar through NSEL clearing system an~ therefore it is requested that
they are not assigned to Government I Mohan India Group; but to issue
appropriate direction to release this property In favor of various buyers of sugar
who paid their hard earned legal money to NSEL/ Mohan India Group.lt they are
not handed over to the persons who have paid such money for purchase of
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Page 77 of 89
sugar great injustice will be done thern . The duty of the state is to protect the
interes t of its ci tizens a nd low is framed for their protection. / /
7.3. Affi,davit filed by Ajay Kumar.
7.3. I. Ajoy Ku mar, r/o 1 0/C-1 /2 , Model Town Delhi in his Affidavit filed .submitted · / /
that his company M/s Clossone Exports Pvt . Ltd is one of the trod.ers, who ..
purchased sugar (on spot delivery basis from and Brindo Commodities Pvt. Ltd
on the platform of NSEL) by paying Rs. 22.64 crore to Mohon India/ Brindo
Commodity.
7.3.2. Then. they realized that Mohan Indio Group companies along with NSEL . '•
had played a fraud on him and the~efore on FIR No.242/13 was lodged against
the Jogmohon Garg and the Group Companies of along with National Spot
Exchange Ltd. before Police station Bani Park Joipur .Similarly another person FIR .,
No. 480/13 at Police Station Ashok Ndg.®r Jaipur for cheating, misappropriation
of funds and criminal breach df trust u/s 420, 120-B, 406, 407,409, 465,468,471 IPC
.An FIR was also filed _Qefo.r.e the EOW, Mumboi by Police by some...other victim
of Mumboi.
7.3.4. Mohon Indio Group ond NSEL hod taken huge money through NSEL
clearing system from various purchasers of sugar like him on false assurance of
supplying of sugar. But the warehouse receipts/ tax invoices of sugar provided
by Moh.tm India Group to various buyers were found false without underlying
sugar These · receipts/invoices were fabricated by Mohan · India Group in . .
connivance with NSEL owners/ directors. Fake letters of sugar deposit with NSEL
Go downs at Delhi were prepared by Mohan India Group. However, no sugar
was ever deposited.
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Page 78 of 89
7.3.5. The money given to Mohan india Group through NS EL clearing system w as
misopproprioted 'for purchasing property and for other purp oses w hich is subject ./ /
matter 1n the present case. Hence, bogus sole of sugar was booked by Mohon
Indio Group to illegally acquire the money. · It is undisputed fact the money
indentified by ED belongs to the persons who gave such money (for purchasing
sugar through NSEL clearing system) to Jogmohon owned Companies. / /
7. 3.6. Later on, Mohon Indio Group and NSEL entered into an qgreement for
returning the money to the buyers instead of delivery of sugar to the buyers,
which also substantiates the allegation of misopproprj9tion of funds. These
properties belong to the persons, who hod paid money for buying sugar through
NSEL clearing system and therefore, this Authority may not assign this property to
Government I Mohon Indio Group; but issue appropriate direction to release this I I
property In favor of the various buyers of su~??: · who hod paid their hard earned
legal money to NSEL/ Mohon India Group.
7.3.7. His company had paid Mohan India Rs .. 22.62 crores though its banks for
purchase of 66900 Bags of Sugar on spot basis delivery. This was never supplied
by Mohan India. Jagmohan Garg/Mohan India Group had played conspired ....... ··, ......
and connived with NSEL. N$"EL has taken Rs.930 crores by making false promise
to supply sugar on spof delivery basis.
7.3.8. The Intention of Jagmohan Garg and its associates were malafide and .
fraudulent since inception with no intention to supply sugar to the buyers from
whom they . were collecting money in connivance with National Spot
Exchbnge Ltd . Rather Jagmohan/Mohan Indio fraudulently and illegally
misappropriated such money for hi~ personal luxuries , for buying expensive
cars and properties and benami payment to his benami different persons as is
proved from the enquiry of Enforcement Directorate.
7.3.9. The Settlement Agreement entered into between the NSEL and Mohon
Indio Group for paying money of Rs.771 crore is a collusive agreement
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Page 79 of 89
between the two accused persons. Actua ll y Moho n Indio Group c ollected
Rs.930 crore by issuing fa lse Letter of Deposit of sugar, false Sole Invoices a nd
false warehouse receipts to the persons who bbught such sugar. This become
possible on ly w ith the connivance of NSEL. This shows that the balance amount
of Rs.l 60 c rore had been laundered by Mohon India Ltd/National Spot
Exchange Ltd. For this crime of money laundering, Mohon India Group and the / / .
Directors of National Spot Exchange Ltd are responsible. They are ·;gyilty and
hence should be sent behind bars.
7.3.1 0. It is also submitted that the so called Settlement Agreement is subject
to the approval of the Forward Market Commission, Hon,~Jule Mumboi High
Court and the Economic offence Wing of Mumbai P6lic3e. ·.·='
· · 7.3.11. It may also be r,nentioned that Forward .r};:arket Commission1 has not
·approved this Settlement till date; rather if Dos conveyed its discomfort to the
National Spot Exchange Ltd for apprgving th·~ same. Mumbai High Court had
not · approved this Settle till date '~ttJ)'(3r. The Economic Offence Wing of ·,t,
Mumbai Police has also rejected this Settlement Agreement by calling it as a . ,J"·,
·:, ..
conspiracy between two occused persons. --. . '
7.3.12. In order to better appreciate the case, a notice under Section ll of the
PML Act was issued to Shri. Saji Cherian, M.D and CEO of the National Spot
Exchange Limited for personal appearance before this Authority with necessary
ewcords and eMdence and to swear on oath. Accordingly he appeared and
swore the· following on oath:-
a. The NSEL is a Public Limited Company incorporated under the provisions
of the Companies Act; 1956. As a Spot Exchange, it provides for· an
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electronic trading platform for spot contracts in commodities on a , . ,
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compulsory delivery basis since October, 2008.
Appointed by the Board of Directors of NSEL, ·he took charge of the
exchange as its MD and CEO on 16.09 .2013.and reports to the Boord. He
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represents the sa id Company at various authorities such as the Forward
Market Commission (FMC), Ec onomic Offences Win g of Mumbai Polic e,
Enforcement Directorate andin liti~tions .
He took charge at the time when the NSEL settlement payment crisis had
already erupted during July 2013. The crisis arose when 24 of its Me.mber
brokers defaulted to the tune of Rs . 5647 crores to the Exchange / /
Settlement system.
d. Pursuant to the instructions of the Government of India in :July 2013, the
e.
company suspended its operations as an Exchange on July 31, 2013,
conducted an exhaustive enquiry and terminated the services of the
erstwhile Managing Director and senior executives, who had connived
with .the defaulting members. T
The Defendpnts, in the cases before the Adjudicating Atuthority (Mohan
India Group) are one of the 24 defoulti.Ag members .They have defaulted
in delivering the commodities and making the payment in the Exchange
settlement system. They were declared as defaulters under the Rules and .
Byelaws of the NSEL. After various rounds of negotiations, they and the
-.. company agreed for conciliation under ·tqe Arbitration and ·Conciliation
Act, 1996 and a Con.~friation Agreement was signed.
f. As per the a.greement, it was agreed that M/s Mohan India Pvt. Ltd. would
g.
transfer certain properties as security for the due performance of its
obligations under the Conciliation Agreement. The agreement was also
file-d before the Special Court under MPID Act, Bombay, which directed
them to comply with the _ Conciliation Agreement on the terms and
conditions mentioned in its Order dated 2/12/2013.
Settlement Agreement binds the Mohan India Group to settle the total
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' outstanding settlement dues · of Rs. 922 crores by paying Rs. 771 crores -:'
over a period of one year through clear "payment schedule" specified in :·i . the Conciliatory Agreement.
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By virtue of the agreement, Mohon Indio Group has surrendered the titles
of the properties, wh ich ore mode part of the Conci liatory Agreement. / /
The a bove said title deeds of properties were to ken as collateral so tha t in
c ase of d efault o f payment, the properties c o n be sOld to recover the
outstanding payment and clear the dues to Members and investors .
The properties were got valued by the reputed valuer M/s Knight- & Fronk /
at Rs.279 .1 Cr . only as on Oct 2013.
The schedule of payment is specified in the Conciliatory Agreement on
page no. 212 to 214 of the exhibit D of the Affidavit.
I. ·As informed by the Mohon . Indio Group, they could not abide by the
payment schedule as their properties and qeposits were attached by
Enforcement Directorate.
m. Mohqn India Group (3 Member brokers) was the1 first set of defaulting
Brokers of NSEL to execute the Conci li~-tery Agreement for repayment of ·
outstanding dues.
n. As on date, out of the 24,. defaulters, two Member Brokers have settled
their dues and four Me,rnbers have signed settlement agreement to the
tune of Rs. 908.5. The oLHstanding bplance receivable by NSEL now is Rs .
5303.58 crores .
o. As the Mohan Indio Group 's Settlement Agreement reached a stalemate
due to ED's attachment of assets and the consequent default in payment
schedule,Jhe other Defaulter Members are reluctant to come forward for
execution of conciliatory agreement/settling dues.
p. Subsequent to the agreement, ED has identified and attached the
properties of Mohqn India Group, which are not part of the conciliatory
agreement.
q. If this Authority permits E.D. to release the ·properties attached by ED and
hand over the same to NSEL we would be able to sell them in a
tronsparenfmanner under the supervision of the 'Monitoring and the and
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Auction Committee' (MAC) constituted by FMC. Sale and settlement of
such properties w ill be monitored by FMC.
By this, NSEL will be ob(e to recover the agreed amount of Rs. 771 ciores
as per the conciliatory agreement with Mohan India Group and hence .
. sizable number o f the 13000 aggrieved investors would be getting back
their invested amount. Further, this will encourage the ·other defaulter / .
· Members to come forward to settle their dues thereby, h.elping the
Exchange to recover the balance outstanding amount bf ·'Rs. 5303.58
crores, that shall be brought back to the Financial Market for the
development of the economy. -Our submission is that, the parties to the agreem.ent i.e. , NSEL and Mohan
India Group may be permitted to make an agdendum to the conciliatory
1agreement which would enable us to proceEtd with the sale of properties
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confiscated by E.D in addition the 'properties mentioned in the : '· ;
agreement. If properties are given tb NSEL for sale and recovery, we shall
be able to dispose the same during this calendar year and distribute to
the investors through the Exchange Members Brokers.
8. REASONS
On a perusal of the facts and circumstances of the cases dealt with herein, the
statements of accounts held . with the Axis Bank, the. Section 50 Statements
recorded by the Complainant, the investigations conducted by the Income Tax
Dept and the .ED, and the affidavits filed by the interested parties , the following
facts emerge:-
a) Shri Anjani Sinha, the former MD & CEO of NSEL has' admitted that he and
his managing staff were solely responsible for the crisis at NSEL and that
the Defaulting Members had in connivance with the employees of NSEL
siphoned off the funds received from NSEL and then diverted them to
acquire real estate, repay existing loans, plant expansion, etc.
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b) Shri Anjani Sinha has further stated that Shri Joi Shankar Srivastava of
Mohan India Group hod promised the NSEL that they would develop / /
delivery- based sugar- contracts and buy sugar from UP Sugar mills and
sell on Delhi- based contracts through NSEL. Later on he (Shri Jai Shankar
Srivastava) admitted that they hod siphoned of.f the funds received from
the Exchange Settlement Account for the purchase of real estate, land . / . /
around Delhi and plots at Karnal (Haryana).
c) The NSEL team of officials had told Mr.Garg and Jai Shan~or~ Srivastava
that the funds to be made available through their platform could be
used for investments in real estate projects, and even after returning the :/ ''- ',:.\
funds, there· would be enough surplus generated,qs:~profits.
d) As per NSEL records, the total liability of Mdhah India group was to the
tune of Rs. 922 crores towards NSEL ontaccount of settlement of their said
contracts.
e) They received Rs.800 crores funds from NSEL accounts from December,
2012. These funds were diverted mainly to their group companies
engaged in real estate business and invested in development of real
estate .
f) On scrutiny of the bcink statements, ED noticed that the funds received
from the Settlement Accounts with NSEL by the Mohan India Group were
transferred: tp various individuals and entities, and payments were made
to the car dealers, developers, construction firms etc. by way of transfers,
NEFT !R-TGS payments/pay orders.
g) Shri'Jag Mohan Garg, in his statement dated 01.11.2013 stated that they
were not dealing in any commodities; howe_ver, for name sake they had
mentioned. in their documents submitted to NSEL that they would be
trading in sugar.
h) Jai Shankar Srivastava 1n his statement dt 7.11.13 stated that their
companies were dealing only in one commodity i.e. sugar, however, no
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Page 84 of 89
sugar w as ever purc hased or soid physical ly as there . have been only
paper transactions . On being asked to explain os to how the commodity, . /
i.e. sugar was brought in their NSEL designated warehouses and how the
dispatches were mode to the purchasers of . the said commodity, he
confirmed that no commodity was ever brought in their NSEL designated
warehouses nor any physical dispatch was made to the pUrchasers of / / .
the said commodity .
i) Shri Jai Shankar Srivastava clarified that the. real intention · of' NSEL and
their company was that NSEL would be financing them from time to time
and they would be investing the funds received from NSEL into real
estate projects. It was agreed that their company had to pay interest@ 1 ·;::
to 1.5% on monthly basis to the NSEL and in :this way the funds would be ;:;;
available at a lower rate of intEfrest a&-. compared to the loan obtained
from the bonks.
j) it is evident that M/s Mohan India PvJ. Ltd., M/s Brinda Commodity Pvt Ltd
and Shri Jai Shankar Srivastav have indulged in fraudulently acquiring
funds from NSEL. Ther~after, the said funds were utilized to acquire
properties in the, .. nome:, of Shri Jai Shankar Srivastav. Funds ~ere also
transferred to the accounts of the Directors of the company, associates
and to their group companies from where funds were placed into
properties. This layering and integration was done with an intention to
disguise the criminal origin of the funds and to project the properties as
untainted. Thus, Shri Jai Shankar Srivastav have knowingly and
. intentionally dealt in and acquired the proceeds of crime and projected
them as untainted properties.
k) While recording his Statement on 04.12.2013,Shri Jag Mohan Garg_
furnished a list detailing all the payments made on or behalf of Mr. Amit
Mukherjee by Mohan India group, involving total amount of Rs.
4,56,22,387 / -.
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I) On being questioned as to who a ll knew tha t no stock of the c ommodity
w as maintained in their NSEL designated warehouses, he stated that the ' . /
seniSr officials and staff of NSEL like S/Shri Anjani Sinhci Amit Mukherjee,
Jai BahukhandL Kalpesh Shah, Santosh Mansingh etc ., were aware that
no stock of the commodity was maintained at their NSEL designated
warehouses. / /
m) Ld Advocate Shri .Manoj Kumar Singh in his submission on b.ehalf of the
Defendants (barring Defendants Amit Mukherjee and Ms.Bonhi
Mukherjee) admitted that the Mohan Group hqp reoeived all the
amounts in question from the NSEL with which they purchased the
properties that have been provisionally attached. Further, it is also
admitted that the money so received frGm the NSEL is the money
received from the investor~. ':"'
n) It is the Defendant ~ho had traded on' the platform provided by N$EL
without having physical stock of sugar, thereby, committing scheduled
offences and duping the investors who had traded with the Defendant
through NSEL portal.
o) Investigations had revealed that the defendant had never delivered the
said sugar in the designated warehouses of NSEL. Delivery of sugar in
NSEL designated godowns was the basis of counter guarantee given by
NSEL to the investors. In fact the, the defendants did not physically
possess any sugar which they had projected to be sold though NSEL
polital in T +2 contracts to the investors and were required to re-purchase
the same in T +25 contracts. The defendants had conspired with NSEL staff
with regard to the delivery of sugar to the designated warehouses of
NSEL.
p) Their understanding to invest the funds in real estate is the conspiracy
they had entered into with the NSEL staff. The money which was earned
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illegally by committi ng the scheduled offences like criminal consp iracy,
using as genuine a forged document or electronic record etc. under / /
the PMLA 2002 on account of sale of sugar which was not in existence,
was diverted to invest in the real estate .
q) The defendants were dealing in sale and re-purchase of sugar without
·having any physical stock bf sugar. They had received funds from · NSEL
on account of sale of sugar which they had not delivered to NS&L at oil.
There was no question of NSEL allowing them to invest these funds in real
estate. .
r) It is clear that the defendants cannot escape t~eir criminal responsibility
by trying to shift the same on NSEL managerpent's awareness about their
real estate investmerts.
s) The · contents of the complaint has clearly brought out that there was a
conspiracy of the defendant with i\iSEL employees to obtain the funds
fraudulently and divert the·,sqme for the purpose of money laundering. In
the process they had used the documents (emoils, sale invoices) which
they knew were false.
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t) The properties purchased by using the ill gotten money are tainted i •
property .-and hence liable to be termed as proceeds of crime. Just _,
because the source of money is identifiable, the defendant cannot claim
that there is no money launde'ring in the case.
u) Thus, the funds so received fraudulently in their settlement account for
acquisition of real estate, projecting the same as untainted property, th~
defendants have committed money laundering in terms of provisions 3 of
the PMLA, 2002.
v) The defendants are in possession of proceeds of crime which are being
projected as . untainted properties. The properties generated out of
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Pa ge 87 of 89
proceeds of cnme are likely to be further concealed 1n a manner to
frustrate proceedings under chapter Ill. The funds so received on /
account of sale of sugar in T +2 contracts launched on NSEL portal were
actually shown as loans in the books of accounts. This act of the
defendants clearly indicate that they were in the course of layering the
said funds in order to claim the same as untainted. The defendants had / /
not submitted the properties under consideration for attachmeQt before
the Hon'ble MPID Court, Mumbai.
w) The investigations conducted by ED have so far brought out that there
was a criminal conspiracy hatched by the def.eAdants with the staff of
NSEL. The godowns which . were declared to · 'NSEL as designated
warehouse had no capacity to store the qllantity of sugar traded by
them on th~ NSEL Platform. It was · ascertained by thJ income tax
department during their verificati'OQ of the godowns of the defendant
that not more than 1000 MT of stock could be stored in each of those
godowns, whereas their overage daily traded stock of sugar was to the
tune of 10000 M.T.
x) Though no stock of sugar was delivered to the NSEL designated godowns,
they were fraudulently sending stock offer letters to NSEL by email
confirming the delivery of the stock to receive the funds.· Both the
defendant No.2 and 3 have in th~ir statements recorded under Section
50 of tbe PM LA, 2002 have admitted that they did not possess any stock
of sugar in respect ofT +2 and T +25 contracts launched by them on NSEL
portal. The said statements are voluntary statements and are in
confirmation with the findings arrived at by Income Tax Authorities
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9. ORDER
. / The matenals placed before me have, prima facie, established that the
Defaulting Member Mohan India Group had misused the platform of the
National Spot Exchange Ltd, meant for genuine farmers, manufacturers and
traders to buy /sell their produce (without any aid or exploitation by middle I I
men) and realize a realistic market prize without facing the challenges of
storage, finding a buyer and liquidity crunch .
9.2. It is unfortunate that the NSEL's top executives and oWcials of its Ware
Housing and Business Development Divisions had aid~d and abetted the
·Defaulting Members in general.ond the Mohan In dig Group in particular for their
own personal 1ends. They all should be prGceeded agair)st and meted out
maximum punishment as per law. Moreover, the properties acquired by them
out of the investors' monies/"proceeds of crime" should be attached and
disposed off so that the investors are pa.id back their investments.
-?.3. ED shall have to locate the "proceeds_,of crime" in the hands of other
defaulters or their associates and entities and attach them.
9.4. This Authorrty. is not competent to order for "Restitution'. All that can be .
done now is to leave the matter to the , Enforcement Director with an
observation that the matter of "Restitution" may be examined in consultation
with the .concerned Department/Ministry and see how fast and how best the
investors could be paid their investments. Of course, the Defaulting Members will . . have to be prosecuted for the scheduled offences committed without any
delay.
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9.5. I am convinced, prima facie, that all the properties provisionally attached
by the Com plainant in the above four Original Complaints (O.Cs 233,234,235 &
239 of 2013) totaling upto ·Rs. rf6 crores or so are involved in money launder(ng
and therefore their provisional attachments are hereby confirmed.
9.6. It is also ordered that this order shall / /
(a) continue during the pendency of the proceedings relating to any
offences under this Act before a court or under the c:;orresponding law of
any other country, before the competent court of ~r.iminal jurisdiction . , •'
outside India, as the case may be, and
(b) become final after an order of confiscation is passed under sub- section
(5)or sub-section (7) of section 8 QL; section S8B or sub section (2A)of
section 60 by the Adjudicating AUthority.:
9.1 0. Pronounced on this day, the Fifteenth Of April, 2014 in the open court of this
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