Dr. Mansukhbhai Kanjibhai Shah Vs Deputy Director (Appellate Tribunal under SAFEMA, New Delhi)
Penny-Stock LTCG Cannot Disguise Alleged Bribe Money—PMLA Attachment Upheld Where Dummy Buyers Were Funded to Purchase Shares at Inflated Prices: SAFEMA Tribunal
The Appellate Tribunal under SAFEMA has upheld the attachment of assets allegedly generated by converting cash bribes received from medical students into exempt long-term capital gains through manipulated transactions in shares of non-functional companies. The Tribunal held that the extraordinary appreciation in the shares of companies without any corresponding business activity, coupled with evidence that the purchasers were dummy persons funded by third parties, constituted sufficient material to continue the attachment until completion of the scheduled-offence and money-laundering trials.
Background
Dr. Mansukhbhai Shah was the President of the Sumandeep Vidyapeeth Trust, which operated Sumandeep Vidyapeeth University. The Enforcement Directorate alleged that he collected substantial cash amounts from students and their parents for admission to medical courses and for permitting students to appear in examinations.
According to the ED, this cash was routed through cheque discounters, middlemen and several bank accounts. The funds were ultimately transferred to the accounts of dummy purchasers, who used them to purchase shares held by the appellant and his family members at artificially inflated prices.
The resulting sale proceeds were shown as legitimate and tax-exempt long-term capital gains.
The ED passed a provisional attachment order on September 13, 2017, which was confirmed by the Adjudicating Authority on March 1, 2018. The appellant challenged the confirmation before the Tribunal.
Appellant’s Contentions
The appellant argued that the amounts attached represented legitimate capital gains arising from investments in listed shares and not proceeds of bribery.
The shares had been acquired between 2010 and 2013 and sold between 2015 and 2016. It was, therefore, highly improbable that the appellant could have predicted several years earlier that he would subsequently receive bribe money and would require a mechanism to launder it.
He contended that the entire theory of converting bribe money into long-term capital gains was hypothetical and had been constructed as an afterthought. The matters relating to share-price manipulation were within the regulatory jurisdiction of SEBI, and no violation of the SEBI Act had been established against him.
The appellant also claimed that the allegations of collecting donations were principally based upon the statement of one parent, Dr. Jasminaben Devda. On the other hand, approximately 115 students had allegedly stated that the undated cheques collected by the University were given as security in place of bank guarantees.
It was argued that the ED had improperly attempted to connect an alleged bribe demand of ₹20 lakh with capital gains running into several crores. The appellant’s family had reportedly earned capital appreciation of approximately ₹2.64 crore in the shares of Citizen Yarns Ltd. and ₹7.44 crore in Dhyana Finstock Ltd.
ED’s Case
The ED contended that the appellant had systematically collected cash from medical students and their parents.
Dr. Jasminaben Devda stated that despite paying the prescribed tuition and hostel fees for her daughter, the appellant demanded an additional ₹20 lakh and threatened to prevent her daughter from appearing in the final examination. She also alleged that she had paid ₹35 lakh as donation at the time of admission.
Another person stated that ₹28 lakh had been paid as donation through an intermediary.
More importantly, two persons allegedly involved in collecting money stated that they had collected substantial amounts from students on behalf of the appellant. One intermediary reportedly admitted collecting approximately ₹30 crore to ₹40 crore between 2012 and 2017, while his assistant stated that collections ranged between ₹60 lakh and ₹80 lakh per month.
The ED traced the movement of money through cheque discounters and middlemen into the accounts of dummy share purchasers. These purchasers then acquired shares from the appellant and his family members at substantially inflated prices.
Transactions in Non-Functional Companies
The investigation covered shares of five companies, including Citizen Yarns Ltd., Transglobe Foods Ltd., Dhyana Finstock Ltd., Parikh Herbal Ltd. and Emed.com Technologies Ltd.
The Managing Director of Citizen Yarns reportedly stated that the company had not carried on manufacturing activity since December 1997 following a fire accident. Nevertheless, its share price recorded a sudden and unexplained increase in 2015, without any change in its underlying business.
The BSE trade logs allegedly showed that the appellant and his family sold shares when prices were at their peak, after which the prices declined.
The investigation also identified persons of limited financial means whose demat and bank accounts were allegedly opened and operated at the instance of intermediaries. One such person was a mason whose account, along with the accounts of several others, was used to purchase shares sold by the appellant’s family.
Funds received from unrelated business entities were transferred to these dummy purchasers, routed to the share broker and then used to purchase the shares.
Tribunal’s Findings
The Tribunal held that the ED’s case was supported by both oral and documentary evidence.
The statements of students, parents, money collectors, intermediaries and dummy purchasers indicated the collection and subsequent routing of cash. Bank statements and trade logs demonstrated that the persons who purchased the shares did not use their own funds.
The Tribunal found it inexplicable that the appellant had invested in shares of non-functional companies and that those shares had appreciated substantially despite the absence of any commercial reason for such appreciation.
It also rejected the contention that the appellant, despite being President of the Trust, exercised no influence over the University.
The Gujarat High Court had earlier discharged the appellant in the scheduled offence. However, the Supreme Court reversed that order, and the trial for the scheduled offence was continuing. The prosecution complaint under the PMLA was also pending before the Special Court.
Since the purpose of attachment under the PMLA was to preserve the alleged proceeds of crime until completion of the trial, the Tribunal refused to release the attached properties and dismissed the appeal.
Author’s Comments
The decision shows that merely presenting an amount as tax-exempt LTCG through stock-exchange transactions does not conclusively establish that the funds are untainted. The ED may examine the source of the purchaser’s funds, the commercial fundamentals of the company, the pattern of price movement and the connection between buyers, brokers and intermediaries.
The decisive feature was not merely the abnormal rise in share prices. It was the alleged evidence that the buyers lacked independent funds and were financed through a chain of unrelated entities to purchase the appellant’s shares at inflated values.
At the same time, the order concerns continuation of a provisional attachment and not a final finding of guilt. The ED must ultimately establish the generation of proceeds from the scheduled offence and trace their movement into the alleged accommodation-entry structure before the Special Court.
The case is nevertheless a warning that completion of transactions through recognised stock exchanges, receipt through banking channels and disclosure as LTCG in income-tax returns do not, by themselves, protect a transaction from scrutiny under the PMLA where the surrounding evidence suggests layering and projection of illicit cash as legitimate investment gains.
The order concerns attachment under the Prevention of Money Laundering Act, 2002 (PMLA), including the statutory framework governing attachment and adjudication.
Cases Discussed
- Gujarat High Court — earlier discharge of the Appellant in the scheduled offence, as recorded in the Tribunal’s order.
- Hon’ble Supreme Court — reversal of the Gujarat High Court order in the scheduled offence, as recorded in the Tribunal’s order.
FULL TEXT OF THE JUDGMENT/ORDER OF APPELLATE TRIBUNAL UNDER SAFEMA
This Order disposes of the Appeal No. FPA-PMLA-2247/ AHD/2018 filed by Dr. Mansukhbhai Kanjibhai Shah, against the Order dated 01.03.2018 (Impugned Order) passed by the Ld. Adjudicating Authority (AA) under the Prevention of Money Laundering Act, 2002 (PMLA) in the Original Complaint No. 819/2017 (OC). The Provisional Attachment Order No. 03/2017 dated 13.09.2017 (PAO) was confirmed vide the Impugned Order.
2. Ld. Counsel for the Appellant submitted that the Impugned Order while confirming the PAO dated 13.09.2017 ignored the relevant material and was passed without application of mind. The PAO was issued on the contrived plea of bribe money when in fact what it attached was long term capital gain. Moreover, the so call bribe money was in the form of cheques. It was not inquired as to who collected the two cheques of the Complainant. Ld. Counsel contended that apart from the vague complaint from the Complainant and another baseless statement of one more student there was no allegation whatsoever by any student of the University that any donation amount was paid to the Appellant. On the contrary as many as 115 students of the University examined by the Anti-Corruption Bureau (ACB) had stated giving cheque to the Sumandeep Vidyapeeth deemed to be University as security amount. There was no reason given by the Ld. AA as to dismiss the submissions made by the Appellant before it. It has also been ignored that the Appellant was the President of Sumandeep Vidyapeeth Trust and had nothing to do with it otherwise. The Appellant had no influence or control over the University. All the students and parents had given undertaking and affidavit at the time of admission which though recovered during the raid by the ACB, were never brought on record.
3. Ld. Counsel for the Appellant submitted that the investigations conducted were beyond jurisdiction of PMLA as the alleged misfeasance in share trading was within the domain of SEBI. There was no allegation of any violation of the provisions of SEBI Act, 1992 and thus the instant proceedings have been initiated mala fide and arbitrarily under PMLA. The Complainant had sought to take the lead on letter of Sh. Durgesh Pandey, CA purportedly working for ACB who had accepted the generation of Long-Term Capital Gains but had suggested detailed probe to be carried out. The enclosures of the report of Sh. Durgesh Pandey had not been presented and the ED under PMLA was not competent to investigate such allegations. Ld. Counsel contended that on perusal of the OC and the rejoinder filed by the Respondent Directorate before the Ld. AA, it is clear that the allegations made against the Appellant related to the share market rather than the bribe. In this regard, he cited Paragraph 12 of the said rejoinder:
“12. Para 15: The investigation conducted in the case indicates that Shri Mansukh Shah had pre-planned the entire scheme of money laundering well in advance and in order to evade tax on laundered money, he had utilised the tax exemption available to the Long term Capital Gains on transactions in respect of gains from sale of shares. Accordingly, shares of non-functioning/ non-existing companies were selected and purchased by Shri Mansukh Shah in the names of himself/ his family members and his family’s HUFs, at very low prices. Subsequently by continuous purchases in small quantities by the dummy buyers resulted in escalation of prices of these shares and when these prices reached the desired levels, Shri Mansukh Shah sold off these shares at much higher prices than the purchase price. However, the buyers of these shares did not have money to buy such useless shares at exorbitant prices. As per the scheme, Shri Mansukh Shah, by use of a long and complicated network involving share traders/ cheque discounters/ middlemen, arranged to issue RTGS to the bank accounts of such dummy buyers and these funds were utilised by the middlemen like Sanjay Shah and Jignesh Shah for purchase of shares in consultation with Shri Deepak Shah, brother-in-law of Shri Mansukh Shah. Thus, the shares purchased at very low price were sold off at very high prices and the same was funded by cash of Shri Mansukh Shah himself.”
Ld. Counsel further stated that that the Respondent Directorate regarded the Appellant as a public servant and had made baseless allegation that the long-term capital gains were stage managed. He further stated that the Appellant in his family remained invested in the said shares for long time. This was also not disputed by the Respondent. Ld. Counsel stated that the alleged amount of Rs. 20,00,000/- as bribe money had no correlation with charge of money laundering made against the Appellant. Ld. Counsel further submitted that the Respondent simply relied on the statements of Mrs. Jasminaben Devda, and chose to make the edifice of the allegation on the self-serving statement of Mrs. Jasminaben Devda as pretence for attaching the legitimate gains from the sale of shares of the entire family of Dr. Mansukhbhai Shah. Mrs. Jasminaben Devda had made vague and omnibus allegations that all the students admitted to Sumandeep Vidyapeeth had paid donations ranging from Rs. 15,00,000/- to Rs. 35,00,000/- in cash for MBBS course. However, the said allegations have remained unsubstantiated and the Respondent Directorate could not find any student or parent to support the said allegation of Complainant Mrs. Jasminaben Devda, even though the details of all students admitted to the University were available and thus adverse inference needs to be drawn against the Respondent. Thus, the entire case of the Respondent Directorate is based on assumptions and presumptions.
4. Ld. Counsel for the Appellant submitted that ACB, Gujarat on 27.02.2017, at the time of search, had found 220 undated cheques issued in the name of Sumandeep Vidyapeeth and purpose of receiving the cheques had been explained by one Smt. Purviben Vimalbhai Mahant in her statement under Section 50 of PMLA on 22.05.2017. Smt. Purviben Vimalbhai Mahant in her statement had stated that she was working as Chief Finance Officer in Sumandeep Vidyapeeth University and she provided list of students of MBBS courses admitted in the University. She also gave explanation for receiving the undated cheques. The statements of all the 115 students were taken by the ACB and all have confirmed to have given cheques in lieu of bank guarantee. All the students and parents had given undertaking and affidavit for the same at the time of admission itself which were recovered during raid by the ACB. This fact was concealed by the ACB in the charge sheet. Smt. Purviben Vimalbhai Mahant in her statement had also categorically stated that no payment had been made to Dr. Mansukhbhai Shah either from the Trust or from the University. Ld. Counsel asserted that the shares were purchased in the year from 2010 to 2013 and the sales of the said shares were done in the year from 2015 to
2016. It was alleged that the Companies were identified, the shares were purchased and further the same were sold to gain long term capital gain exemption, for laundering the proceeds of crime. It was too hypothetical and illogical to say that the Companies were identified five years back to plan the money laundering after five years and also people were identified five years back who shall be purchasing the shares in the process of five years. It was further too hypothetical to say that Sh. Mansukhbhai was knowing that he would receive proceeds of crime five years down the line and the price of the shares would also be on higher side or he will be able to manage the rise of price through ladders of people after five years. The whole story of long-term capital gain was just crafted as afterthought to link it with the alleged predicate offence. Ld. Counsel in this regard pointed out the Table given at page 29-30 of the Impugned Order wherein the buy date and the buy value along with sale date and sale value of the shares of M/s Citizen Yarns Ltd. and M/s Dhyana Finstock Ltd. have been summarized, so as to erroneously conclude that the Appellant and the family adopted the said modus operandi to declare long term capital appreciation of Rs. 2,64,11,351/- and Rs. 7,44,36,525/- in the shares of M/s Citizen Yarns Ltd. and M/s Dhyana Finstock Ltd. respectively. Ld. Counsel stated that there is no case of money laundering which has been established against the Appellant and therefore pleaded to allow the Appeal.
5. Ld. Counsel for the Respondent Directorate submitted that the statements recorded under Section 50 of PMLA clearly bring out the offence of money laundering indulged in by the Appellant. The Appellant indulged in the said offence, so as to launder the proceeds of crime (PoC) through his activity of indulging in share market. The PoC had been generated by the Appellant as a result of criminal activity by collecting bribe money from the students and their parents who had sought admission in Sumandeep Vidyapeeth University. Ld. Counsel in this regard cited the statement of Dr. Smt. Jasmina Dilipbhai Devda recorded under Section 50 of PMLA on 06.04.2017 and 07.04.2017. Ld. Counsel submitted that she stated that she had given a complaint dated 23.02.2007 against Shri Mansukh K. Shah as he had asked her for bribe of Rs. 20 Lakhs, even though she had paid the entire fee for the MBBS course as well as Hostel fees. She produced copies of all the fee receipts in respect of her daughter Ms. Maurvi. She stated that Shri Mansukh Shah was threatening them to not to allow Ms. Maurvi to participate in final exams if the said amount was not paid to him. She also stated that Shri Mansukh Shah had taken 2 cheques of Rs. 10 Lakh each as guarantee till the aforesaid amount of Rs. 20 Lakh was paid. She further stated that at the time of admission of Ms. Maurvi in MBBS course in Sumandeep Vidyapeeth, she had paid an amount of Rs. 35,00,000/- to Shri Mansukh Shah as donation and for which no receipt was issued. She further stated that she found that other students had also paid similar amounts as donations to Shri Mansukh Shah. She also provided a copy of certificate which indicated that her daughter Ms. Maurvi was required to pay Rs. 31,59,000/- as her daughter tuition fee for entire period of 4 ½ years and Rs. 3,90,500/- as Hostel fee for the entire period of 5½ years and that as per receipts provided by her, the entire amount was already paid by her to Sumandeep Vidyapeeth and yet Shri Mansukh Shah had forced her to give additional amount of Rs. 20,00,000/-. Ld. Counsel further stated that Shri Parthav B Patel also in his statement under Section 50 of PMLA on 21.04.2017 had said that he had paid an amount of Rs. 28,00,000/- as donation to the Appellant through Shri Bharat Savant. Ld. Counsel drew attention to the statements of Shri Vinod alias Bharat Jadavrao Savant, who admitted having collected approximately Rs. 30-40 Crores in the period 2012-2017 from various students and handed over the same to the Appellant. He corroborated having collected Rs. 20,00,000/- from Smt. Jasmina Devda. Ld. Counsel cited the statement of Shri Ashok Kumar Narsinhbhai Tailor, who worked as Assistant to Shri Vinod, wherein he admitted that he and Shri Vinod collected approximately Rs. 60 Lakhs to Rs. 80 Lakhs per month from various students.
6. Ld. Counsel for the Respondent submitted that the statement of Shri Hari Prasad Khetan, the Managing Director of M/s Citizen Yarns Ltd. was recorded under Section 50 of PMLA. Shri Khetan stated that their factory had a fire accident and as the insurance claim was not passed, they could not sustain the business. Accordingly, M/s. Citizen Yarns Ltd. was not carrying out any manufacturing activities since December, 1997. He stated that since the Company was a listed Company, he could not de-list it and he was required to furnish periodical returns to the various authorities. He also stated that he learnt about the sudden rise in the prices of shares of his Company in June, 2015 and thereafter he had informed the same to Bombay Stock Exchange. He stated that the price of the shares of his Company was going up without any change in the nature of business of the Company. Ld. Counsel stated that during the course of investigation M/s Bombay Stock Exchange (BSE) provided the ‘Trade Logs’ with respect to five Companies viz M/s Citizen Yarns Ltd., M/s Transglobe Foods Ltd., M/s Dhyana Finstock Ltd., M/s Parikh Herbal Ltd. and M/s Emed. Com Technologies Ltd. which clearly indicated that the Appellant and his family members sold the shares of these Companies when the prices were very high and thereafter the prices continued to drop. Ld. Counsel submitted that the statement of Shri Shailesh Pithabhai Chauhan under PMLA revealed that he was a mason, who had opened saving account and demat account on the request of Shri Kamleshbhai Chudasma, who in turn stated that he had so suggested at the request of Shri Sanjay Shah. Shri Sanjay Shah in his statement admitted having utilized the accounts of Shri Shailesh Chauhan, as well as of 17 others for purchasing the shares sold by the Appellant and his family. Ld. Counsel concluded that the bribe in form of cash collected by Shri Vinod Savant from the students of Sumandeep Vidyapeeth on behalf of Shri Mansukh Shah, was routed through Shri Deepak Shah, Shri Nitin Akhani, Shri Prakash Thakkar, Dahyabhai Thakkar to the bank accounts of dummy buyers like Shri Shailesh P. Chauhan. The money so received by these dummy buyers was used for purchase of shares of M/s Citizen Yarns Ltd. and M/s. Dhyana Finstock Ltd. from Shri Mansukh Shah and his family members at high prices. Simultaneously, the instructions for purchase of these shares were channelized from Shri Deepak Shah to Shri Nirav Shah to Shri Jignesh Shah and Shri Sanjay Shah who was making the purchases of shares in the trading accounts of the dummy buyers. The sale proceeds of these shares were received in the bank accounts of Shri Mansukh Shah and his family members. Thus, the bribe in cash received from the students was routed back in the bank accounts of Shri Mansukh Shah and his family members. Using such modus operandi Shri Mansukh Shah had laundered the proceeds of crime generated by taking bribe from various students/their parents over the years for admissions/ appearing in exams of Sumandeep Vidyapeeth. This illegal money then came back to him and his family members as a consideration for sale of shares which they projected as untainted. Ld. Counsel argued that in view of Section 23 of PMLA whereby if money laundering involves two or more interconnected transactions and even if one such transaction is proved to be involved in money laundering then it shall unless otherwise proved to the satisfaction of the Ld. AA, be presumed that the remaining transactions form part of such interconnected transactions. Ld. Counsel contended that the investigation has confirmed that more than one transaction was undertaken to indulge in money laundering. Ld. Counsel clarified that even though the Appellant had been discharged by the Hon’ble High Court of Gujrat in the matter relating to the Scheduled Offence, the same was appealed against in the Hon’ble Supreme Court by the ACB Ahmedabad. The Order of the Hon’ble High Court of Gujrat was reversed by the Hon’ble Supreme Court and the Trial Court has since been seized of the matter against the Appellant. Moreover, a Prosecution Complaint under PMLA is under consideration of the Special Court under PMLA at Ahmedabad. He therefore pleaded to dismiss the Appeal.
7. We have considered the rival submissions and the material on record. The fact that the Appellant had invested in the shares of five Companies viz M/s Citizen Yarns Ltd., M/s Transglobe Foods Ltd., M/s Dhyana Finstock Ltd., M/s Parikh Herbal Ltd. and M/s Emed. Com Technologies Ltd. which were sold off with capital appreciation has not been disputed by either of the two sides. While the Appellant has contended that such transactions were in the nature of investment that culminated in long term capital gains, the Respondent has alleged that the said transactions were means of layering to launder the PoC. Therefore, the moot question is as to what are the evidences to substantiate the respective claims of the two sides.
8. The Respondent has contended that the modus operandi adopted by the Appellant is corroborated by evidences both oral and documentary. The statements of Smt. Jasminaben Devda, of Shri Parthav Patel and of Shri Vishal R Gandhi corroborate that the Appellant had demanded and received bribe amounts from the students of Sumandeep Vidyapeeth. Moreover, the statements of Shri Vinod Savant and Shri Ashok Tailor corroborate that they collected the bribe money on behalf of the Appellant. Their statements have further revealed the quantum of bribe money collected by them and that they handed over the same to Shri Deepak Shah, brother-in-law of the Appellant. Moreover, the ACB trapped the Appellant and his accomplices Shri Vinod Savant and Shri Ashok Tailor accepting bribe of Rs. 20,00,000/- from Smt. Jasminaben Devda to allow her daughter to take final exam. The conversion of such money through RTGS to the bank accounts of a number of persons for purchase of shares of insignificant Companies from the Appellant and his family members is evident from the documentary evidences collected during the investigations. In this regard, the details have been brought out in the reply dated 17.10.2018 of the Respondent which is cited below:
“The money flow from the cash collected by Shri Mansukh Shah from students was pumped into the banking system through various cheque discounters and from them into the bank accounts of Shri Mansukh Shah and his family. During the investigation, the bank account no. 3215941400 in Central Bank of India of Shri Shailesh Chauhan was scrutinized. On scrutiny of this account, it was found that Shri Chauhan had received amounts of Rs. 35,00,000/-, Rs. 4,00,000/-, Rs. 1,00,000/-and Rs. 2,25,000/-, on 11.06.2015, 15.10.2015, 29.10.2015 and 28.12.2015 respectively from M/s. Shaswat Enterprise, M/s. Maruti Corporation and M/s. Purnima Traders and thereafter he sent these amounts to his Share broker M/s. Shah Investors Home Ltd. on 13.06.2015, 17.10.2015, 31.10.2015 and 30.12.2015. These amounts were subsequently used for purchase of shares of M/s. Citizen Yarns Ltd. on 10.06.2015, 12.06.2015, 10.03.2016 and 22.03.2016 from Shri Mansukh Shah and his family members for total Rs. 15,89,638/-. Once the amount reached the trading account of Shri Mansukh Shah and his family members, the same was projected as untainted money. Similarly, the bank account no. 113150050800418 in Tamilnad Merchantile Bank of Shri Chandubhai Vaghela was scrutinised. The scrutiny reveals that the said account of Shri Chandubhai Vaghela had received Rs. 2,80,000/-, Rs. 5,00,000/-, Rs. 10,00,000/- and Rs. 1,10,000/- on 01.06.2015, 11.06.2015, 11.06.2015 and 18.12.2015 respectively from M/s Shaswat Enterprise, M/s. Sapan Traders, and M/s. Maruti Corporation. Subsequently Rs. 2,80,000/-, Rs. 5,00,000/-, Rs. 10,00,000/- and Rs. 2,24,532/- were sent from this account to the share broker M/s. Shah Investors Home Ltd. on 02.06.2015, 12.06.2015, 13.06.2015 and 21.12.2015. Subsequently these amounts were used for purchase of shares of M/s. Citizen Yarns Ltd. on 08.06.2015, 11.06.2015, 12.06.2015, 23.12.2015 and 04.01.2016 from Shri Mansukh Shah and his family members for total Rs. 21,54,901/-. Once the amount reached the trading account of Shri Mansukh Shah and his family members, the same was projected as untainted money. These details clearly bring-out the manner in which Shri Mansukh Shah and Shri Deepak Shah had employed cheque discounters like Shri Nitin Akhani/ Shri Prakash Thakkar/ Shri Dahyalal Thakkar and middlemen like Shri Nirav Shah, Shri Jignesh Shah, Shri Sanjay Shah and Shri Parth Panchal for converting bribe amount into RTGS entries and its infusion into accounts of dummy buyers.”
9. The Appellant has pleaded that the flow of money having arisen from the long-term capital appreciation is obvious. The Respondent has failed to show that how the Appellant could have identified much in advance the Companies for which the prices of the shares would rise, so as to enable the Appellant to sell the shares and receive the alleged bribe money against such sale. Ld. Counsel stated that the circuitous chain contended by the Respondent is far fetched and is not supported by the corroborative evidence. In any case the so-called bribe money could not be proved. Moreover, the cheques which have been alleged to be discounted were in fact given as lieu of bank guarantee by almost 115 students. Except for two cases the Respondent has failed to record statement of others to establish that the Appellant was taking bribe money. Moreover, the statement of Smt. Purviben Vimalbhai Mahant, the CFO of the University, clearly brings out that the Appellant took bribe money from the students.
10. We are not convinced with the contentions made by the Appellant that the allegations against him are entirely misleading informs. It is inexplicable that the Appellant shows to invest in shares of non-functioning Companies and more confoundable that such non-functioning Companies should witness major appreciation in the prices of their shares in spite of no reason for such appreciation. Moreover, it cannot be denied that those who bought the shares from the Appellant and the family members received money from sources other than those of their own. We cannot also accept that in spite of being the President of Sumandeep Vidyapeeth Trust, Shri Mansukhbhai Shah did not wield any influence over the University run by the Trust. It is also on record that in view of the directions of the Hon’ble Supreme Court the trial of the Appellant for the scheduled offence is in progress and so is the trial for the money laundering offence. The objective of the PMLA is to secure the alleged proceeds of crime till the conclusion of the trial. Hence, at this stage the attachment cannot be set aside in view of the discussions afore.
11. In view of the aforementioned discussions and analysis, we dismiss the Appeal No. FPA-PMLA-2247/ AHD/2018 filed by Dr. Mansukhbhai Kanjibhai Shah. Applications pending, if any, are disposed of accordingly.
