Paragraph numbers below are the court’s original numbering, recovered from the source text.
24. In the instant case, it has been found during the course of investigation from the statements of witnesses recorded under Section 50 that the appellant Satyendar Jain and his family directly or indirectly were owning/controlling the companies – M/s. Akinchan Developers Pvt. Ltd., M/s. Paryas Infosolution Pvt. Ltd., M/s. Indo Metalimpex Pvt. Ltd. and M/s. Mangalayatan Projects Pvt. Ltd. He was the conceptualizer, initiator and supervisor of the accommodation entries totalling to Rs.4.81 Crores approximately, which were received from the Kolkata based entry operators in the Bank accounts of the said four companies. Shri J.P. Mohta in his statement had stated inter alia that Mr. Satyendar Jain had informed him in June/July, 2010 that he wanted to get investment/ accommodation entries in his companies against cash payment and therefore he introduced Mr. Jain with his friend Mr. Rajendra Bansal who was in the business of providing accommodation entries against cash. Mr. Rajendra Bansal in his statement under Section 50 had stated in detail as to how his companies provided accommodation entries to the four companies owned/controlled by Satyendar Jain from 2010-11 to 2015-16 against cash. Mr. Rajender Bansal had also stated that the cash was being received from Satyendar Kumar Jain/Jagdish Prasad Mohta at Kolkata through Hawala operators, and he used to pass on the address of Hawala operators to the other entry operators namely Jivendra Mishra and Abhishek Chokhani for collecting cash after taking token from them. He used to arrange entries for the companies of Satyendar Kumar Jain as per the details provided by Jagdish Prasad Mohta through his companies and other entry operators. He (Mr. Bansal) used to issue cheque/RTGS to subscribe the shares of the four companies of Satyendar Kumar Jain receiving the amounts in cash. He had further stated that the accommodation entries were reflected in the books of accounts of his companies as investments in shares. He used to give signed share applications along with signed blank transfer deeds to Jagdish Prasad Mohta. He had further stated that he had received cash through Hawala operators of Kolkata 40-50 times during 2010-2016 totaling to approximately 17 crores on the instructions of Satyendar Jain/Jagdish Prasad Mohta and he had provided accommodation entries for Satyendar Jain’s Companies of about 17 crores, for which he had earned commission of Rs 12,40,000/- for providing/arranging such accommodation entries to the companies of Satyendar Jain. [2024] 3 S.C.R. Satyendar Kumar Jain v. Directorate of Enforcement
25. Mr. Pankul Agarwal had stated in his statement that though he was appointed as a Director in M/s. J.J. Ideal Estate Pvt. Ltd., he did nothing except signing of the documents and that the said company was controlled by Satyendar Kumar Jain and Poonam Jain, and that he was never informed about any business activity of the said company by them. The appellant-Vaibhav Jain himself in his statement recorded on 27.02.2018, had stated that the cash amount of Rs.16.50 crores (approx.) was paid by him, Sunil Kumar Jain, Ankush Jain and Satyendar Kumar Jain for taking accommodation entries in M/s. Akinchan Developers Pvt. Ltd., Paryas Infosolution Pvt. Ltd., Indo Metalimpex Pvt. Ltd. and Mangalayatan Projects Pvt. Ltd. through Kolkata based entry operators, and that the entire idea was mooted by Satyendar Kumar Jain to use it for purchasing agricultural lands and to develop the township. The said witnesses had clearly stated that Satyendar Kumar Jain was the conceptualizer, initiator, fund provider and supervisor for the entire operation to procure the accommodation, share capital/premium entries. Though, the shareholding patterns of the said four companies are quite intricate, they do show that Mr. Satyendar Kumar Jain through his family was controlling the said companies directly or indirectly and that Mr. Satyendar Kumar Jain was the “beneficial owner” within the definition of Section 2(1) (fa) of PMLA.
26. At this juncture, it is extremely pertinent to note that the appellants- Vaibhav Jain and Ankush Jain had sought to avail of the Income Declaration Scheme, 2016 (IDS) by filing separate declarations under Section 183 of the Finance Act, 2016 in Form-I on 27.09.2016, in which both of the said appellants had individually declared an income of Rs.8,26,91,750/- as investments in shares of various companies in the assessment years 2011-12, 2012-13 and 2016-17. The Principal Commissioner, Income Tax (IV), New Delhi vide the order dated 09.06.2017 passed under Section 183 of the Finance Act, 2016 held that the said declaration of income of Rs.8,26,91,750/- by each of the appellants- Vaibhav Jain and Ankush Jain was made “by suppression and misrepresentation of facts”, and therefore they were “void”. It is further pertinent to note that the said order of PCIT was based on the report submitted by the ACIT, Special Range (IV) dated 07.06.2017 with regard to the assessment proceedings in case of M/s. Akinchan Developers Pvt. Ltd., M/s. Indo Metalimpex Pvt. Ltd., M/s. Paryas Infosolution Pvt. Ltd. ,and Mr. Satyendar Kumar 808 Jain. It was noted in the said report inter alia that the said companies had taken accommodation entries in the form of share capital from Kolkata based shell companies. On the basis of the said report, the notices under Section 148 of the Income Tax Act for the year 2011-12 an 2012-13 were issued to Mr. Satyendar Kumar Jain. The information regarding accommodation entries was also received by the Initiating officer for further examination and necessary action under the Prohibition of Benami Property Transactions Act, 1988 (for short “the PBPT Act). The Initiating officer had issued provisional attachment orders under Section 24(4) of the PBPT Act on 24.05.2017 holding that Mr. Satyendar Kumar Jain was the beneficial owner of the bogus share capital introduced in the companies. The said order of PCIT dated 09.06.2017 passed under Section 183 of the FA, 2016 was challenged before the High Court of Delhi at New Delhi by the appellants-Ankush Jain and Vaibhav Jain by filing Writ Petition (C) Nos. 6541 of 2017 and 6543 of 2017 which came to be dismissed by the High Court vide the order dated 21.08.2019. The High Court in the said judgment had elaborately dealt with all these issues and while dismissing the said writ petitions held as under: “30. There are eight companies whose shares were purchased by the two petitioners, whose names have been included in the list. Admittedly, in respect of the shares in ADPL, proceedings under section 24(4) of the Prohibition of Benami Property Transaction Act, 1988 have been initiated. The petitioners have themselves enclosed a copy of the order dated May 24, 2017 passed in respect of the “Benamidar”, i.e., ADPL, which inter-alia notes that the cash that was routed through accommodation entries in the garb of share capital/premium in fact belonged to Mr. Satyender Kumar Jain and that it was at his direction that the entire transaction was orchestrated. It was noted that neither of these two petitioners was either a director or shareholder in the said company. It was noted that the declarants had not provided the name of the “Benamidar” through whom the investment had been routed and that these facts were all completely within the knowledge of the two petitioners. These conclusions of the Principal Commissioner of Income-tax have not been convincingly countered by either of the petitioners. In the circumstances, [2024] 3 S.C.R. Satyendar Kumar Jain v. Directorate of Enforcement the Principal Commissioner of Income-tax was right in concluding that neither of the petitioners had made a full and true disclosure of all material facts.”
27. The said order of the High Court was challenged by the appellants- Ankush Jain and Vaibhav Jain before the Supreme Court by filing Special Leave Petitions being SLP(C)Nos. 27522 of 2019 and 27610 of 2019, however they came to be dismissed vide the order dated 29.11.2019.
28. From the above stated facts there remains no shadow of doubt that the appellant- Satyendar Kumar Jain had conceptualized idea of accommodation entries against cash and was responsible for the accommodation entries totalling to Rs. 4.81 crores (approx.) received through the Kolkata based entry operators in the bank accounts of the four companies i.e. M/s. Akinchan Developers Pvt. Ltd., M/s. Paryas Infosolution Pvt. Ltd., M/s. Indo Metalimpex Pvt. Ltd. and M/s. Mangalayatan Projects Pvt. Ltd., by paying cash and the said companies were controlled and owned by him and his family. Though it is true that a company is a separate legal entity from its shareholders and directors, the lifting of corporate veil is permissible when such corporate structures have been used for committing fraud or economic offences or have been used as a facade or a sham for carrying out illegal activities.
29. It has also been found that the appellants – Ankush Jain and Vaibhav Jain had assisted the appellant-Satyendar Kumar Jain by making false declarations under the IDS each of them declaring alleged undisclosed income of Rs.8.26 crores in order to protect Satyendar Kumar Jain. Though it was sought to be submitted by the learned counsel for the appellants that the said declarations under IDS having been held to be “void” in terms of Section 193 of FA, 2016 by the income tax authorities, the same could not be looked into in the present proceedings, the said submission cannot be accepted. The declarations made by the appellants-Ankush Jain and Vaibhav Jain under IDS have not been accepted by the Income Tax authorities on the ground that they had misrepresented the fact that the investments in the said companies belonged to the said appellants, which in fact belonged to Mr. Satyendar Kumar Jain. The appellants could not be permitted to take advantage of their own wrongdoing of filing the false declarations to mislead the Income Tax authorities, and 810 now to submit in the present proceedings under PMLA that the said declarations under the IDS were void. The declarations made by them under the IDS though were held to be void, the observations and proceedings recorded in the said orders passed by the Authorities and by the High Court cannot be brushed aside merely because the said declarations were deemed to be void under Section 193 of the Finance Act, 2016. The said proceedings clearly substantiates the case of the respondent ED as alleged in the Prosecution Complaint under the PMLA.
30. Having regard to the totality of the facts and circumstances of the case, we are of the opinion that the appellants have miserably failed to satisfy us that there are reasonable grounds for believing that they are not guilty of the alleged offences. On the contrary, there is sufficient material collected by the respondent-ED to show that they are prima facie guilty of the alleged offences.
31. Though Ms. Arora had faintly sought to submit that the so-called inadvertent mistake committed by the ED with regard to the figures mentioned in the Prosecution Complaint in respect of the role of the appellants Ankush Jain and Vaibhav Jain should not be permitted to be corrected, which otherwise show that the allegations against the appellants were vague in nature, we are not impressed by the said submission. We are satisfied from the explanation put forth in the affidavit filed on behalf of the respondent-ED that it was only an inadvertent mistake in mentioning the figure Rs.1,53,61,166/- in the bracketed portion, which figure was shown by the CBI in its chargesheet. The said inadvertent mistake has no significance in the case alleged against the appellants in the proceedings under the PMLA.
32. From the totality of facts and circumstances of the case, it is not possible to hold that appellants had complied with the twin mandatory conditions laid down in Section 45 of PMLA. The High Court also in the impugned judgment after discussing the material on record had prima facie found the appellants guilty of the alleged offences under the PMLA, which judgment does not suffer from any illegality or infirmity.
33. The appellants were released on bail for temporary period after their arrest and the appellant-Satyendar Kumar Jain was released on bail on medical ground on 30.05.2022, which has continued till this [2024] 3 S.C.R. Satyendar Kumar Jain v. Directorate of Enforcement day. He shall now surrender forthwith before the Special Court. It is needless to say that right to speedy trial and access to justice is a valuable right enshrined in the Constitution of India, and provisions of Section 436A of the Cr.P.C. would apply with full force to the cases of money laundering falling under Section 3 of the PMLA, subject to the Provisos and the Explanation contained therein.
34. In that view of the matter, all the appeals are dismissed. Headnotes prepared by: Nidhi Jain Result of the case: Appeals dismissed.