PRILIMNARY OBJECTIONS:-

PAR PARTICULARS PAGE

A NO
(ii) Prayers sought have become infructuous since the summons 2
which are sought to be quashed have already been complied
under the directions of this Hon'ble Court. Petitioner has
already joined investigation pursuant to the summons.
(iii) The present Petition is in the humble submission of the 2
answering Respondent premature and has been filed to
thwart the on-going investigation under the Prevention of
Money Launder Act. It is submitted that the mere issuance of
the summons for the purpose of investigation does not give
any rise to cause of action to the present petition.

3 Petitioner also has one of the residence in Delhi will not make 3
this Hon'ble Court a forum of convenience to adjudicate the
disputes raised in the present Petition. That,a minor part of
cause of action has arisen in Delhi .

4 The Charge-sheet by the CBI, Bangalore has also been filed. 3

Any action under Section 17 of the Act if taken by the
answering Respondent would be subject to the ultimate
appellate jurisdiction of the High Court in Chennai under
Section 42 of the Act.

5 The investigation is ongoing, wherein statements of several 3

persons have been recorded in Chennai and Hyderabad. The
impugned summons requires the presence of petitioner in
Chennai.

6 Cause of action in the present case has arisen in 4

Chennai , the jurisdiction of High Court of Madras.

7 The averments of the Petitioner on territorial jurisdiction is 4

misconceived and contrary to the law laid down by the
Hon'ble Supreme Court from time to time.summons dated
24.11.2018 and 27.11.2018 issued under 50(2) and (3) of the
PMLA to the Petitioners residence in Hyderabad.
BRIEF FACTS OF THE CASE :-

FIRST INFORMATION REPORT BY CBI,BS&FC, BANGALORE:-

PA PARTICULARS PAGE
RA NO
8 M/s Best & Crompton Engineering Project Ltd. was 4
incorporated on 21.10.1999. Demerging its Engineering
Projects Division.

9 The management of BCEPL was taken over by Shri Meka 5

Ramakrishna Varma and Shri B. Narayanaswamy since
29.03.2010 by acquiring 100% shares of the company. BCEPL
represented by its Managing Director Shri K. Kalyan Srinivasa
Rao and other Directors.

10 Criminal cases in No. RC No. 4(E)/2016/CBI/BS&FC/BLR 5

dated 01.02.2016, RC No.04/2017/CBU/BS&FC/BLR dated
03.02.2017 and RC No.14/2018/CBIBS&FC/BLR dated
16.07.2018 were registered by CBL, BS & FC, Bangalore,
under Section 120-B r/w 420, 468 & 471 of IPC against Shri
Kalyan Srinivasa Rao(A-1), Managing Director.others who
entered into a criminal conspiracy hatched amongst themselves
at Chennai and Hyderabad and other places during the period
from 2010 to 2013 for defrauding/ cheating a Consortium of
Banks led by the Central Bank of India. Central Bank of India,
Corporate finance Branch, Chennai by submitting fraudulent
LC(Letter of Credit) documents, without any physical movement
of goods and unlawfully failed the credit facilities/enhancement
for which they were otherwise not eligible and then diverted the
said loan amount for purposes other than for which it was
sanctioned and caused a wrongful unlawful loss to the extent of
Rs.364 Cr. as on 19.11.2013 and corresponding unlawful
wrongful gain to themselves at the expense of public
exchequer.

ENFORCEMENT CASE INFORMATION REPORT:

12 funds borrowed from various banks were siphoned away 6
through different accounts of Middleman. Shri Srinivasa Kalyan
Rao, Managing Director of BCEPL, is also a Director in various
 companies.

13 In the past, Shri Srinivasa Kalyan Rao has associated with the 7
following companies belonging to sujana group:
M/s Sujana Capital Services Limited
Ms Sujana Power(Gangaikondan) Limited
M's Sujana Power(Tuticorin) Limited
M's Sujana Power(India) Limited
M's Sujana Holdings Limited.
common Directorship with BCEPL and other listed
Companies of Sujana Group as well as the companies
managed by Sujana Group, as there are more than 100
companies floated by the management of Sujana Group.

14 Investigation disclosed that there is conflict of interest since the 7

Directors of BCEPL are closely associated with the other real
estate and resorts, Securities and Trading, speculative
investments, companies floated by Sujana Group, where they
become the directors. The funds from banks and other sources
were paid off to group/other companies.
The lion share of turnover of the BCEPL is by way of trading
with their valued customers and unfortunately those are
accumulated as Sundry Debtors(Rs.684 Crores Approx.) and
the Sundry Debtors are nothing but the group compunies
Sujana Group and other companies managed by them.
The following are the names of the companies, which engaged
in circular trading in connection with invoices under devolved
LCs of Central Bank of India and all the companies are either
listed or managed companies of Sujana Group, which were
promoted by Shri Y.S. Chowdary, presently Member of
Parliament- Rajya Sabha.He became of Member of Parliament
in the year 2010, but was holding Directorship in few of the
companies even after that up to 15.10.2014.

15 Searches conducted by ED on 08.10.2018 resulted in recovery 9

and seizure of 124 Rubber Stamps of different
companies/entities from the business premises of Sujana
Group at Hyderabad, 32 blank letter heads of different supplier
for which no proper explanation was given by the management
and employees of BCEPL.
During the investigation, it was established that many of the
above supplier companies having NPA account with different
 banks, totalling to the tune of Rs. 2200 crores.

16 All the Directors of BCEPL stated initially inter alia vide their 13
respective statements given under the provisions of Section
50(2) & (3) of the PMLA, 2002 that either they were not aware
of the affairs of the company or they are not incharge of the day
to day affairs of BCEPL.

17 Examination of documents and records seized from various 14

business/residential premises revealed that there are more
than 100 companies registered with ROC, managed by
Sujana Group promoted under the Chairmanship of Shri
Y.S. Chowdary along with his Engineering College mates,
namely, Shri P.V. Ramana Reddy, Shri G. Srinivasa Raju, Shri
Ch. Jawahar Babu, Shri Meka Ramakrishna Varma,(who is
also the brother-in-law of Shri Y.S. Chowdary), etc., along with
their respective relatives and friends and also the employees of
listed companies of sujana group.

18 While examining the documents,an incriminating 15

email correspondence was noticed, which was addressed to
Shri Y.S. Chowdary directly by Shri Narayana Swamy, Director
of BCEPL with CC made to others, wherein “he had reported
that BCEPL had been classified as a Defaulter by to
Corporation Bank” and requested the advice of Shri Y.S.
Chowdary.

19 The seized records were inclusive of the email correspondence 15

of the Directors of BCEPL with Shri Y.S. Chowdary. Shri Kalyan
Srinivasa Rao, in his voluntary statement dated 13.11.2018 had
inter alia stated that during the year 2004, he was asked by Y.
S. Chowdary to become director in some of his companies; that
he joined as a Director in certain of Shri Y.S. Chowdary's
Sujana Group companies; that there was no consideration in
terms of remuneration for being director in these companies
though there were certain payments made towards expenses.
That the investments made by him in the capacity of Director of
Velugu Power Solutions Pvt. Ltd.(another group company) into
BCEPL,were the funds pumped into Velugu Power Solutions
Pvt. Ltd., ( VPSPL) from various Sujana Group of Companies;
that the said investment was done at his(Srinivas) insistence to
clear and regularize the Bank accounts of BCEPL; that the
amount involved Rs. 32,33,00,000/-
20 Shri Bellari Murali, Director of BCEPL, in his voluntary 16
statement dated 12.11.2018, stated that the entire amount of
Rs 684 Crores due to BCEPL from their Sundry Debtors were
diverted by Ch. Jawahar Babu of Sujana Group companies,
among all the paper companies floated by Shri G. Srinivasa
Raju and Ch. Jawahar Babu on the instructions of Y. S.
Chowdhary.

21 Shri Meka Ramakrishna Varma, promoter/director of BCEPL 16

vide his statement dated 19.11.2018, stated that he has lent his
name to be the director of BCEPL on the instructions of Shri
Y.S. Chowdary.
22 Shri B, Narayanaswamy, CEO of BCEPL, in his voluntary 17
statement dated 19.11.2018 given under the provisions of
Section 50 of the PMLA, 2002, wherein he had inter alia stated
that he reported the affairs of the BCEPL to Shri Y.S, Chowdary
because BCEPL is one of the group companies which is
managed by Shri P.V Ramana Reddy, who has become the
chairman of the sujana group after Shri Y.S Chowdary became
the member of Parliament in Rajya Sabha.
23 During the course of examination, all the above persons had 17
inter alia stated/admitted that Shri Y.S. Chowdary is the key
person responsible for the entire activities of Sujana Group of
Companies and that they all have acted/rendered their
signatures on the insistence of Shri Y.S Chowdary, either
directly or through one Shri Jawahar Babu, CFO of Sujana
Group of Companies and Shri Apsar Hussain, Company
Secretary of Sujana Group.
24 Searches were authorized and conducted at the below 18
mentioned premises under the provisions of Section 17(1)
PMLA, 2002, in order to get the evidences related to the
proceeds of crime,
25 During the searches conducted on 23.11.2018 as above, many 19
incriminating documents were recovered and seized from the
residential premises of Shri Y.S. Chowdary at Hyderabad and
at New Delhi. Examination of documents seized revealed that
the 3 Sujana Group companies, namely M/s Sujana Universal
Industries Ltd., M/s Neueon Towers Ltd.(earlier known Sujana
Towers Ltd.) and M/s Splendid Metal Products Ltd.(earlier
known as Sujana Metal Products), have defrauded various
nationalized and private banks to the tune of Rs.5700
Crores.The same was confirmed by Shri G. Srinivasa Raju,
Director in many of the Sujana Group Companies, vide his
voluntary statements given under the provisions of PMLA,
2002, “where he had stated that the loan amounts were
declared NPA from the year 2015 onwards by various banks”.
 Documents recovered and seized as above indicated that
BCEPL along. with other 120 Sujana group companies are
functioning under Shri Y.S Chowdary Y. Satyanarayana
Chowdary @ Sujana Chowdary and that all the Directors of
various Sujana Group Companies are acting under the
instructions of Shri Y.S. Chowdary. seizure of 6 high end cars
(Ferrari, Range Rover, Benz etc.) and the vehicles were
bearing registration certificates in the name of various
companies.
26 Subsequent to searches and the seizures made as above, Shri 20
Y.S.Chowdary was issued Summons dated 24.11.2018 and
27.11.2018 under the provisions of Sub-Section (2) and (3) of
the Section 50 of the PMLA,2002 .

This Hon'ble Court had directed the Petitioner herein vide

Order dated 30.11.2018, to appear before the Respondent
No.1 herein, in terms of Summons issued, on 03.02.2018 in
forenoon and on all such dates when he is required to do so.
27 Shri Y.S. appeared on 03.12.2018, 04.12.2018 and 05.12.2018 20
as per the Order dated 30.11.2018 and his voluntary
statements were recorded on the above stated dates, further
Shri Y.S chowdary was shown the documents/ records, Q.He
was asked to discuss and explain the same. Sri. Y.S. chowdary
has responded to various question, that he had no idea about
any documents and that he was not aware who had kept the
documents in the vehicle parked in his residential
premises,since the vehicle is used by many .That the Range
Rover Vehicle bearing No. TS 09 EJ 9699, being used by
him with the name sign 'Member of Parliament' displayed on
the vehicle, is registered in the name of M/s Icon Steels &
Commodities Pvt. Ltd. and vehicle is parked in his residential
premises at Hyderabad. When Shri Y.S. Chowdary was asked
to explain, Q.why the said vehicle is in his possession, he had
stated inter alia that he had heard about the company name
M/s Icon Steels & Commoditites Pvt. Ltd., for the first time now;
that he was neither aware of M/s Ganga Exim Pvt. Ltd; that the
vehicle, he was 100 % sure that a vehicle of an unknown
company could not have been in his premises, which needs to
be investigated by him.
28 Q. The details Indicate the money paid by 142 individuals and 22
pending to be returned along with interest payable therein
involving around Rs.162 Crores. Shri Y.S. Chowdary
responded to the same by stating that the said papers must
have been recovered from one of the guest rooms, which I
addressed to anyone nor sender's name is mentioned, more
so, no where his name is mentioned, hence he could not
comment any more on the same.
 Q.when he was asked whether anyone could come and stay in
his residence at New Delhi and keep their papers in their official
residence belonging to them ?
“he responded that it was difficult for him to track all the political
guests who stay temporarily and go, hence he would not be in a
position to comment any further”

29 Q.When Shi Y.S Chowdary was referred to papers relating to 22

Babi Realtors ? He had stated that all such papers are related
to various proposals of various brokers and he has no personal
interest in Babji Realtors.
30 Shri Ch. Jawahar Babu, a key person in his voluntary 23
statements dated 26.11.2018 and 27.11.2018 inter alia stated
that the Borrowing Companies of the Group do business at
arm's length, to support the top-line of the borrowing
companies by circular trading without material and out of which
Rs.125 Crores was paid to M/s Viceroy Hotels and Rs.15
Crores was paid to their group companies.
31 Shri Ch. Jawahar Babu further stated their group companies 24
have a total outstanding of USD 29,32,32,353 as Export
Receivables pending from the year 2010, which amounts to
contraventions of provisions of FEMA, 1999 by the respective
companies.
32 It has also been seen that Sujana Group promoted several 26
companies abroad as their subsidiaries namely M/s Alpha
Ventures.M/s Sujana Universal Industries Limited issued GDRs
on 3 occasions worth US$ 42.99 Million.From 2005 to 2007, all
the GDRs were transferred to WOSs abroad and only an
amount USD 11.65 Million was repatriated, M/s Sujana Towers
Limited have issued GDRs for USS 30 Million each. Most of the
WOSs which are incorporated abroad by Sujana Group
companies are engaged in trading .Activities for which such
huge investments made and they are not performing well which
leads to the suspicion that these WOSs were used nsinhon of
GDR funds.
33 It is humbly submitted that the Petitioner filed this Writ Petition 27
raising the following legal issues.

33.1 Issuance of summons under Section 50(2) & (3) of the PMLA, 27
2002 is bad in law on the ground the Petitioner is neither
named in the FIR or charge sheet filed by the Scheduled
Agency (CBI).
-Mr.Radha Mohan Lakhotia V/s. The Deputy Director,
PMLA.
-The first category is any person who is in possession of any
 proceeds of crime. A person falling in this category need not be
a person, charged of having committed a scheduled offence.
The second category is of a person who has been charged of
having committed a scheduled offence.
33.3 M. Shobana Vs. The Assistant Director, Directorate 30
of Enforcement .That it is permissible and within a
competence of investigating officer under Act, 2002 to issue
summons in exercise of powers under section 50(2) and (3) of
the Act, 2002 and the Writ Petition is not maintainable against
the issuance of such summons.
G. Radhakrishnana Vs. The Assistant Director, Directorate
of Enforcement, dismissed the Writ petition filed by the
petitioner challenging the issuance of summons by the ED after
considering the submissions of the ED referring the relevant
provision .
33.4 The fourth issue raised in the W.P ,Q.whether it is mandatory 31
for the respondent to inform the petitioner whether he has been
summoned as a witness, since the statements recorded under
Section 50(2) & 3 are deemed to be judicial proceedings within
the meaning of Sections 193 and 228 of IPC by virtue of
Sub-Section (4) of Section 50.
A.In reply,it is submitted that the persons who were summoned
under Section 50,is only for the purpose of collection of
evidence and to know the complicity of the persons so
summoned to crime. Till filing of the prosecution complaint no
person shall be treated as accused of the offence of Money
Laundering. Hence the question of Article 20(3) will not come
into the picture.
33.5 The 5th issue raised by the Petitioner is that the search under 31
Section 17 of the Act would not have been conducted unless a
final report has been forwarded to the Magistrate under
Section 173 of Cr. P.C. or a complaint has been filed under the
Act or a report has been forwarded under Section 157 of
Cr.P.C. The same is against to the Proviso to Rule (2) of
Section 17 of PMLA.As per Section 71 of the PMLA it has
overriding effect over other laws. The code of Cr. P.C. will
apply, in so far they are not inconsistent with the provisions of
the PMLA.

PARA WISE REPLY

38 The investigation in relation to Money Laundering is conducted 35

by following due process of law. It is submitted that the key
 officials of BCEPL happened to be the employees of Sujana
Group, who had followed the instructions of the Petitioner .
39 Section 17(1) of PMLA, 2002 on 23.11.2018, which was 35
continued in the early hours of 24.11.2018, in the residential
premises of the Petitioner herein as well as his father.Certain
documents were recovered and seized from the vehicle with
the n board 'Member of Parliament' parked and secured inside
the petitioner's residential premises at Hyderabad.
42 The Summons were issued to the petitioner herein,requiring his 36
attendance to give evidence and to produce records. Every
proceeding under sub-sections (2) and (3) of Section 50 of
PMLA, 2002 shall be deemed to be a judicial proceeding within
the meaning of Section 193 and section 228 of the Indian Penal
Code, 1860. All the persons so summoned shall be bound to
attend in person.
44 The Summons have been issued to the petitioner herein 37
for the purpose of further investigation since all the key officials
of BCEPL have named him as the person.
49 There are incriminating documents/records to evidence that 38
BCEPL is a company managed by Sujana. The petitioner is
claiming that after becoming Member of Parliament he had not
participated in the in the affairs of Sujana group companies,
how then he could say that BCEPL is not related to Sujana.
51 There is no requirement of order of the magistrate for 39
conducting investigation under PMLA, 2002.

REPLY TO GROUNDS
56 The searches have been conducted under the provisions of 40
Section 17 of PMLA, 2002 only after following due process of
law and there is no illegality in conducting the searches as
averred by the petitioner herein.
57 There is no requirement under the provisions of PMLA, 2002 to 41
communicate the Reasons to believe to the petitioner herein.
59 key officials of BCEPL had inter alia stated that Shri Y.S. 41
Chowdary is the key person responsible for the entire activities
of Sujana Group of Companies ,either directly or through one
Shri Jawahar Babu, CFO of Sujana Group of Companies and
Shri Apsar Hussain, Company Secretary of Sujana Group. All
the above persons had further stated vide their voluntary
statements that they are namesake Directors and as such they
had no idea as to how the funds of BCEPL were utilized and
that the entire operations/transactions of Sujana Group of
Companies are known only to Shri Y.S. Chowdary, Shri
 Jawahar Babu, CFO and Shri Apsar Hussain.

PRAYER:-

To dismiss the Writ Petition No. (CRL) 3639/2018- Crl. M.A. No. 48408/2018.