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2022 (3) TMI 941 - HC - Money LaunderingMoney Laundering - proceeds of crime - predicate/scheduled offence - registration of the subject ECIR, sustainable or not - Criminal liability or not - HELD THAT:- The trial of money laundering offence is independent trial and it is governed by its own provisions and it need not get interfered with the trial of scheduled offence. The PMLA, being a special enactment, contemplates a distinct procedure at the initial stage and thereafter provides for initiation of prosecution, in order to achieve the special purpose envisaged under the Act and as such, it cannot be construed that proceedings under the PMLA are to be equated with prosecution initiated under the criminal proceedings for predicate/scheduled offences. Thus, initiation of action under the PMLA cannot have any implication or impact in respect of registration of other cases, either under the Indian Penal Code or any other penal laws. The offence of money laundering contemplated under Section 3 of the PMLA is an independent offence. A reference to criminal activity relating to offence under PMLA has a wider connotation, and it may extend to a person, who is connected with criminal activity relating to scheduled offence, but may not be the offender of scheduled offence - It is not necessary that a person has to be prosecuted under the PMLA only in the event of such person having committed scheduled offence. Prosecution can be independently initiated under PMLA only for the offence of money laundering. Further, a careful perusal of Section 2(1)(u) of PMLA and the explanation thereof makes it clear that a wider definition is given to ‘proceeds of crime’ including property not only derived or obtained from the scheduled offence, but also any property which may directly or indirectly be derived or obtained as a result of criminal activity relatable to a scheduled offence. Section 3 of PMLA further clarifies that a person shall be guilty of offence of money laundering, if such person is found to have directly or indirectly attempted to indulge or knowingly assists or knowingly is a party or is actually involved in concealment, possession, acquisition, use, projecting as untainted property, claiming as untainted property and the process or activity connected with the proceeds of crime is a continuing activity, which itself shows the offence of money laundering is a continuing offence - a bare reading of Sections 2(1)(u), 3 and 44(1)(d) of PMLA along with explanations thereof makes it clear that the offence of money laundering is a stand-alone offence and the trial proceedings are completely different to that of the scheduled offence. In the instant case, the dispute is not between two private individuals. The petitioner is alleged to have caused wrongful loss to MMTC, a public sector enterprise, to a huge magnitude of ₹ 194 crores. Basing upon the complaint lodged by MMTC, the CBI registered a case against the petitioner and basing upon the case registered by CBI, the Enforcement Directorate registered the subject ECIR basing upon the scheduled offences registered by the predicate agency. In the given facts and circumstances of the case, in the subject dispute, it cannot be said that civil liability is converted into criminal liability. The Enforcement Directorate has issued only summons under Section 50(3) of PMLA to the petitioner. Summons are issued to a person under Section 50(3) of PMLA requiring his attendance to give evidence or to produce any records during the course of investigation or proceedings. Hence, issuance of summons to the petitioner can neither be categorized as an act of prosecuting him, nor would make him an accused under PMLA. As rightly contended by the learned Assistant Solicitor General of India, if the petitioner proves his innocence before the ED authorities, he would not be charged with any offence under PMLA - the adjudicating authority under the PMLA is not trying a criminal case, but only decides the effect of breach of obligations by the concerned. Further, ECIR registered by Enforcement Directorate cannot be equated with an FIR under Section 154 of Cr.P.C. The petitioner, instead of cooperating with the investigation, filed this quash petition, which is nothing but a premature attempt to escape from his criminal liability, if any. This Court is of the considered opinion that continuation of proceedings in the subject ECIR against the petitioner would not amount to abuse of process of law. In the interests of justice also, the proceedings against the petitioner in the subject ECIR cannot be quashed - the Criminal Petition is dismissed.
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