Year ending,Amount (Rs.),,
31.03.2007,"105,42,43,343",,
Date,Bank Name,Amount (Rs.),Beneficiary
05.02.2007,"Centurion Bank
(Now HDFC Bank),
A/c No.
100605000000121
HDFC Bank,
Begumpet,
Hyderabad
00040310006816
(New)","5,00,00,000","M/s. Bharathi
Cement
Corporation Ltd.
A/c No.
111010114082
OBC, Jubilee Hills
Hyderabad
23.04.2007,,"5,00,00,000",
09.05.2007,,"5,00,00,000",
11.04.2008,,"2,50,00,000",
15.04.2008,,"2,50,00,000",
16.04.2008,,"2,50,00,000",
17.04.2008,,"2,50,00,000",
21.04.2008,,"3,32,63,855",
28.05.2008,,"3,00,00,000",
02.06.2008,,"3,00,00,000",
04.06.2008,,"3,00,00,000",
18.07.2008,,"2,00,00,000",
21.07.2008,,"2,00,00,000",
23.07.2008,,"2,00,00,000",
25.07.2008,,"2,00,00,000",
27.01.2009,"Bank of India,
Mount Road, Chennai
A/c 8000130110000007","10,00,00,000",
29.01.2009,,"3,50,00,000",
31.01.2009,,"7,50,00,000",
12.01.2009,,"10,00,00,000",
30.01.2009,"SBH, Chennai A/c. No","12,50,00,000",
,52097613611,,
Total Amount,,"95,32,63,855",
Date,Bank Name,Amount (Rs.),Beneficiary
08.08.2007,"Centurion Bank
(Now HDFC Bank),
A/c No.
100605000000121
HDFC Bank,
Begumpet, Hyderabad
00040310006816
(New)","3,00,00,000","M/s. Jagati
Publication Pvt. Ltd.
[A/c No.
1110109000026
Oriental Bank of
Commerce,
Jubilee Hills,
Hyderabad]
09.08.2007,,"4,00,00,000",
10.08.2007,,"3,00,00,000",
08.01.2008,,"3,00,00,000",
11.01.2008,,"2,00,00,000",
29.01.2008,,"2,00,00,000",
30.01.2008,,"1,00,00,000",
31.01.2008,,"2,00,00,000",
05.02.2008,,"1,50,00,000",
06.02.2008,,"1,50,00,000",
07.02.2008,,"2,00,00,000",
14.02.2008,,"2,00,00,000",
15.02.2008,,"2,00,00,000",
18.02.2008,,"1,00,00,000",
05.03.2008,,"1,60,00,000",
07.03.2008,,"1,60,00,000",
10.03.2008,,"1,80,00,000",
19.05.2008,,"1,50,00,000",
21.05.2008,,"1,75,00,000",
23.05.2008,,"1,75,00,000",
Total Amount,,"40,00,00,000",
5. It has been argued by the Appellants that all the investments made into M/s Bharati Cements Corporation Pvt. Ltd., M/s Jagati Publications Ltd and",,,
M/s Carmel Asia Holdings Pvt Ltd are genuine investments made in course of bona fide commercial transactions.,,,
6. With respect to the investment made in M/s Bharati Cements Corporation Pvt Ltd, it has been pleaded by the Appellants that all investors actually",,,
made profits after sale to M/s PARCIFIM; and, therefore, allegations of undervaluation or quid pro quo in this regard are ex facie erroneous. It was",,,
also contended alleged that the allegations as to overvaluation and ante-dating of valuation reports with respect to M/s Jagati Publications Ltd. are,,,
completely baseless and erroneous. The premium fixed for the shares of M/s Jagati Publications Ltd. is based on sound commercial analysis, including",,,
cogent valuation. The premium fixed contemporaneously by other market participants would evince that the premium of M/s Jagati Publications Ltd.,,,
shares is justified. The record circulation achieved by the new paper “sakshi†as soon as it commenced its operations would evidently show the,,,
market capabilities of M/s Jagati Publications Ltd.,,,
7. It was further pleaded by the Appellants that that all the investments/advances by M/s Carmel Asia Holdings Pvt Ltd, into M/s Janani",,,
Infrastructure Pvt Ltd. and M/s Indira Television Pvt Ltd. are genuine investments made in course of bona fide commercial transactions and as on,,,
30.09.2014, M/s Carmel Asia Holdings Pvt Ltd. invested a total amount of Rs.11,54,87,968/- in M/s Janani Infrastructure Pvt Ltd. The said investment",,,
is already in EDâ€s notice and has been accepted in PAO NO.4 of 2015 dated 15.12.2014. In fact, the Respondent already attached several",,,
properties as value of the investments made by M/s P.R. Energy Holdings Ltd. into M/s Carmel Asia Holdings Pvt Ltd.in PAO NO.4 of 2015 dated,,,
15.12.2014. Therefore, attachment at the hands of M/s Janani Infrastructure Pvt Ltd constitutes double attachment.",,,
8. The entirety of share application money (Rs.3,20,00,000/-) initially invested by M/s Carmel Asia Holdings Pvt Ltd into M/s Saraswati Power Pvt",,,
Ltd has been returned even before the impugned attachment. Therefore, the same is factually incorrect.",,,
9. It is submitted by all the appellants that the penal provisions alleged in charge sheet were not included in the Schedule to the PMLA during the,,,
relevant time. They were included in the Schedule only by way of amendment to PMLA vide Act No. 21 of 2009 w.e.f. 01.06.2009. Thus, even",,,
according to the allegations made in the charge sheet, no “scheduled offence†was committed, and no “proceeds of crime†were generated,",,,
for the purposes of PMLA (as defined thereunder).,,,
10. In its appeal filed by “Bharathi Cement Corporation Private Limited†(hereinafter referred to as “Bharathi Cementâ€) formerly known as,,,
Raghuram Cements Limited, there is no denial that company was Accused No. 9 in RC No. 19A/2011-HYD under Sections 120-B r/w 420, 409, 420",,,
& 477-A Indian Penal Code, 1870 and Sections 13(2) r/w 13(1)(c ) & (d), Prevention of Corruption Act, 1988. It was alleged that, during the period",,,
between May 2004 to August 2009, YS Jagan Mohan Reddy, (Accused No. 1 in the CBI case) had along with his deceased father, YS Rajashekhara",,,
Reddy (the then Chief Minister of Andhra Pradesh), entered into a conspiracy to cause benefit to private individuals/companies such as India Cements",,,
and, as quid pro quo, received large tranches of money as investments in entities owned/controlled by him. At that time, Bharathi Cement was",,,
controlled by YS Jagan Mohan Reddy.,,,
11. It was also alleged that between 05.02.2007-30.01.2009, India Cements made investments and acquired shares of Bharathi",,,
Cement at amounts varying from Rs. 110/- to Rs. 1440/-. At the time, the par value of these shares was Rs. 10. After this acquisition, shares of the",,,
company were sold by Jagan Mohan Reddy and his associates at Rs. 671/- per share to a French Corporation called “PARFICIM SASâ€.,,,
12. Admittedly, PARFICIM is neither accused of an offence in the CBI Charge Sheet, nor is it proceeded against under the Prevention of Money",,,
Laundering Act, 2002.",,,
13. It was also alleged that the valuation of shares by PARFICIM at Rs. 671/- per share, the highest price paid (Rs. 1440/-) by India Cements for",,,
shares in Bharathi Cement, as also the fact that Bharathi Cement began commercial operations only on 28.09.2009, became of PMLA.",,,
14. The allegations in the ECIR, PAO, and Complaint are that, the amounts held in Fixed Deposits by Bharathi Cement in Vijaya Bank, Road No. 12,",,,
Banjara Hills, Hyderabad totaling Rs. 95,32,63,855 is bribe money paid by India Cements in the guise of an investment. This amount is sought to be",,,
attached as “Proceeds of Crimeâ€.,,,
15. The amount from India Cements came in three tranches, i.e.;",,,
(i) up till 31.03.2007 - Rs. 5 Crore;,,,
(ii) up till 31.03.2008 â€" Rs. 10 Crore;,,,
(iii) up till 31.03.2009 â€" Rs. 82,32,63,855",,,
16. It is the case of Bharathi Cement that out of the total amount of Rs.95,32,63,855/- lying in fixed deposits in Vijaya Bank, Banjara Hills, Hyderabad,",,,
only a sum of Rs.25 crores has been received from Oriental Bank of Commerce. The source of this 25 crores is operations of the company as the,,,
amount maintained in Vijaya Bank is funds maintained from the operations of the company and not from investment. Yet, the Joint Director,",,,
Enforcement Directorate, has attached the entire sum lying in Vijaya Bank. This attachment was confirmed by the Adjudicating Authority observing",,,
as under:,,,
“Fixed Deposits held in the name of M/s. Bharathi Cement Corporation Private Limited to the tune of Rs.95,32,63,855/- in VIJAYA BANK,",,,
BANJARA HILLS, HYDERABAD, being the “proceeds of crime†with M/s Bharathi Cement Corporation Limitedâ€.",,,
17. It is alleged by Bharathi Cement that admittedly in Para 9.1 of the PAO that the amount in Vijaya Bank was Rs.66 crores only. The other amount,,,
stated to be proceeds of crime was Rs.29.32 crores in Axis Bank, which amount has not been attached Vijaya Bank Fixed Deposits identified and",,,
attached by the Enforcement Directorate and confirmed by the Adjudicating Authority cannot be traced to the alleged “proceeds of crime†and,,,
arise from regular business dealings of the company. It is reflected from the stand taken in the PAO and the complaint by the ED as also from the,,,
relevant documents on record viz.,,,
(a) Balance Sheets of Bharathi Cement for the years 2006-07 to 2010-11 and for the period ending 31.12.2011, 31.12.2012 and 31.12.2013.",,,
(b) Balance Sheet of India Cements for the years 2006-07 to 2013-14.,,,
(c) Bank Statements of (a) India Cements held in HDFC Bank Limited, Bank of India, State Bank of India and State Bank of Hyderabad (b) Bank",,,
statements of Bharathi Cement in the Oriental Bank of Commerce.,,,
18. Thus, the amounts that have been attached have absolutely no connection with the amounts received from India Cements. Since this is a case of",,,
attachment of proceeds of crime and not equivalence, it is pertinent to note that:",,,
(1) Firstly, the money has not flown from the Bharathi Cement account in OBC to the Bharathi Cement account in Vijaya Bank.",,,
(2) Secondly, a bare perusal of the Account Statements reveals that the amounts available with Bharathi Cements at the time the account in Vijaya",,,
Bank was opened was far less than the amounts originally received from India Cements and have been expended in the due course of business and,,,
are not available for attachment.,,,
19. The following main submissions are made by the Senior Counsel appearing on behalf of Bharathi Cement: -,,,
i) SCHEDULED OFFENCES,,,
The offences under Sections 120B r/w Sections 420, 409, 420 & 4772-A of the IPC and Section 13(2) r/w Section 13(1) © & (d) of the PC Act",,,
were listed in the FIR against Bharathi Cement. However at the time of the alleged commission of the office (i.e. from 05.02.2007 to 30.01.2009), the",,,
Sections had not been notified as scheduled offences under the Prevention of Money Laundering Act, 2002 and were only notified vide notification",,,
dated June 1, 2009.",,,
ii) DOUBLE ATTACHMENT,,,
ii) While the sale proceeds of Rs.121,08,26,678/- arising out of shares of Bharathi Cement by India Cements Limited to",,,
PARFICIM have been held to be proceeds of crime received by India Cements and have been attached vide PAO dated 25.02.2015 in OC.,,,
No.424/2015, the amount of Rs.95,32,63,855/- invested by India Cements in Bharathi Cements has also been held to be “proceeds of crime†and",,,
has been attached, which constitutes double attachment.",,,
(iii) Reason to believe,,,
It is contended on behalf of the appellant that the Adjudicating Authority in the impugned order has failed to consider, firstly that the attachment was",,,
without legitimate “Reasons to Believe†and there is no nexus between the “proceeds of crime†and property sought to be attached. [See,,,
Paresha G Shah v. State of Gujarat, 2016 GLH (1) 329 at Para 32-34] The Adjudicating Authority holds at page 114-115 of the impugned order that",,,
the OC/PAO disclose facts justifying a prima facie case and sufficiently convey what the Defendants have to meet. However, the Adjudicating",,,
Authority has not considered whether the parameters for “reasons to believe†under Section 5(1) have been adequately met.,,,
While in para 62 at page 115, the Adjudicating Authority had held that under Section 5 & 8 of the PMLA there is no requirement that reasons be",,,
conveyed to the Defendants.,,,
20. It is also submitted that the Adjudicating Authority fails to note that Section 5(1)(a) & (b) are conjunctive and not disjunctive, being joined by",,,
“and†and therefore have to be read together. The conditions of both 5(1)(a) and (b) have to be satisfied, which is not so in the present case. [See",,,
Maharaja Sir Pateshwari Prasad Singh v. State of UP, (1963) 50 ITR 731 at Para 10 and M. Satyanarayana v. State of Karnataka and Anr. (1986) 2",,,
SCC 512 at para 5].,,,
21. While going through the record, it has come to our notice that CBI Â in the OC 424/2015 has challenged the final judgement and order dated",,,
18.03.2016 in CRLP No. 7584/2015 passed by High Court of Judicature at Hyderabad by filing of Special Leave to appeal (Crl.) no. 7621/2016 in the,,,
Supreme Court of India and the same appeal is still pending. The said proceedings were arisen from the O.C. which is also the subject matter of,,,
present appeals.,,,
22. The Honâ€ble High Court of Hyderabad has passed the judgment on 18th March, 2016 on the following points:",,,
9. Now the points for consideration are:,,,
I. Whether the petitioner/A-3-Srinivasan, being the Vice Chairman and Managing Director of M/s India Cements Limited (A-7), be made personally",,,
liable for any acts of India Cements Ltd. with vicarious liability for the offences punishable under Sections 120-B read with 420 I.P.C. and Section 12,,,
of the Prevention of Corruption Act, by virtue of any statutory liability or legal fiction?",,,
II. If not, whether petitioner/A-3-Srinivasan, other than of his status or position as Vice Chairman and Managing Director of India Cements Limited,",,,
be made personally liable for any acts and if so on what basis for the final report to accuse and for the learned special judge to take cognizance,,,
without specifying as to on vicarious liability or personnel liability?,,,
III. Whether the cognizance taken by the learned special judge without specifying as to on vicarious liability or personnel liability, is outcome of non-",,,
application of judicial mind and same is otherwise unsustainable for not reflecting any reasons or otherwise and is liable to be quashed?,,,
IV. To what result?,,,
All the above said points were decided in favour of the petitioner who filed the Criminal Petition No. 7584 of 2015. The operative part of theÂ,,,
Judgement passed by the Honâ€ble High in said para 53 of the judgement read as under:,,,
53. Point No. IV: In the result the petition is allowed and the proceedings in CC No. 24 of 2013 from the cognizance of the offences under Sections,,,
420 & 120B IPC & Section 12 of PC Act, taken by the Principal Special Judge for C.B.I Cases, Red Hills, Nampally, Hyderabad so far as the",,,
petitioner/A3-Sri N. Srinivasan concerned are quashed for no basis to sustain. The bail bonds of the petitioner/A3-Sri,,,
N. Srinivasan if any shall stand cancelled. The miscellaneous petitions pending if any stand closed.,,,
The India Cements Ltd and their directors were the petitioners in the said matters. The instances of illegal gratification in the guise of investment as,,,
quid-pro-quo by India Cements Ltd. (A-7) into the companies of Sri Y.S. Jagan Mohan Reddy are detailed in para 2(ii) of  the said Judgement. The,,,
allegations inter-alia against India Cements Ltd are referred in para of 2(ii) (j) of the Judgement which are re-produced here below:,,,
“(j) India Cements Limited (A-7) had invested 12,50,000 of preference shares at a premium of Rs. 110/- for a sum of Rs. 15,00,00,000/-.",,,
Thereafter India Cements Limited (A-7) had invested a sum of Rs. 80.31 crores at a premium of Rs. 1440/-. There was no explanation available in,,,
the minutes of the meeting or the statements recorded from the top management of the company with regard to the necessity to increase the premium,,,
from Rs. 110/- to Rs. 1440/- (sudden raise of almost 12 times within a small time span of 9 to 10 months), except a simple statement that it is a",,,
“bouquet of investmentsâ€. The company which is having public funds with it, never bothered to get the “due diligence on the required",,,
premium†neither from their own technical team nor from an outside agency. Thus, it is clearly construed as a quid pro quo transaction between the",,,
India Cements Limited (A-7) and Sri Y.S. Jagan Mohan Reddy (A-1). India Cements Limited (A-7) sold the shares at Rs. 671/- to M/s PARFICIM,",,,
SAS, FRANCE on 14.04.2010 on the directions of Sri Y.S. Jagan Mohan Reddy undergoing a loss of Rs. 26,85,50,489/-. This clearly shows that the",,,
investment into M/s Raghuram Cements Limited, M/s Bharathi Cement Corporation Limited by M/s India Cements Limited (A-7) was nothing but a",,,
quid-pro-quo investment. In April, 2010 M/s. Pani & Associates, Bangalore evaluated the share price of M/s Raghuram Cement Corporation Private",,,
Limited and arrived at the value of share at Rs. 221.17 Ps. That the Board Resolution of India Cements Limited (A-7) dated 14.04.2010 resolved to,,,
invest up to Rs. 125 crores by way of Inter Corporate Loans/Advance/Investment in M/s. Bharathi Cement Group whereas on the same day India,,,
Cements Limited (A-7) had sold their stake 1803973 shares of Rs. 10/- each in M/s Bharathi Cements Corporation Limited at a total price of Rs.,,,
121.00 crores to M/s PARFICIM, SAS, FRANCE.",,,
23. During the course of the hearing, the learned counsel appearing on behalf of the respondent has stated that as far as the calculation of the",,,
Judgement of property is concerned this Appellate Tribunal has to give the final findings and incase the allegations against the appellants are proved in,,,
the complaint under the scheduled offence in Prevention of Money Laundering Act then the movable and immovable property would be vestedÂ,,,
with the state. Incase we go through the Judgement of Hyderabad High Court which is sub-judice before the Honâ€ble Supreme,,,
Court, it would not be appropriate for us to give the final findings about the merits of the case as well as the clarification of the movable and",,,
immovable properties.,,,
24. Under these circumstances, we are of the view that without going into the merit of the appeals and without expressing opinion about the rival",,,
submissions of the parties on merit, it would be appropriate to await the decision of the Supreme Court. After the said decision, an appropriate order",,,
would be passed in the light of the said judgment.,,,
25. The appeal filed by the India Cement Ltd. is already adjourned to 09.07.2018 for awaiting the decision of the Apex Court. List these matters also,,,
on 9th July, 2018 for awaiting the orders of the Honâ€ble Supreme Court.",,,
