TMI Blog2023 (6) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... ing de novo investigation that Baskar and Kesavan against whom he made a specific complaint, are not shown as accused. In fact, the allegation made by Gopi in his petition before the High Court that Devasagayam had been won over by the accused, was not without substance, as can be seen from a few averments made by Devasagayam - It is not known whether Devasagayam was referring to the persons against whom he made a specific complaint as fictitious persons or whether he was calling the Minister and the person alleged to be his Secretary, named as accused in the Final Report as fictitious persons. The fact that Devasagayam s petition was intended to help the accused is also borne out by one more fact. His original complaint dated 29.10.2015 which led to the registration of FIR in Crime No.441 of 2015 was against ten persons and the offences registered therein were only under Sections 406 and 420 read with Section 34 IPC. On this complaint, a Final Report was filed under Section 173(2) of the Code on 13.06.2017 and this resulted in the registration of Calendar Case in CC No.3627 of 2017. Devasagayam was happy with the fact that the Report filed under Section 173(2) did not include t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proceeds of crime and without identifying any process or activity connected to proceeds of crime as required by Section 3, which constitute the foundational/jurisdictional fact, ED can initiate an investigation and issue summons? - HELD THAT:- It is true that there are some offences, which, though scheduled offences, may or may not generate proceeds of crime. For instance, the offence of murder punishable under Section 302 is a scheduled offence. Unless it is a murder for gain or murder by a hired assassin, the same may or may not generate proceeds of crime. It is in respect of such types of offences that one may possibly argue that mere commission of the crime is not sufficient but the generation of proceeds of crime is necessary. In the case of an offence of corruption, the criminal activity and the generation of the proceeds of crime are like Siamese twins. Therefore, even if an intangible property is derived as a result of criminal activity relating to a scheduled offence, it becomes proceeds of crime under Section 2(1)(u). In view of the above, we are not impressed with the contention that the investigation by ED was triggered without any foundational/jurisdictional fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed is not entitled at all either to seek a reference to a larger Bench or to seek to defer the matter till a decision is rendered in the matters involving larger issues - Appeal allowed on this issue. Permission to ED to inspect the records of the Special Court trying the predicate offences - HELD THAT:- The grievance of the appellant in this appeal is that the High Court has overlooked the provisions of Rule 231(3) of the Rules, 2019 and also Section 65B of the Indian Evidence Act, 1872 (the Evidence Act). But both the above contentions are without substance. Rule 231 primarily deals with the grant of certified copies of certain other documents to the accused, before filing of the Final Report. Rule 231(3) states that certified copies of unmarked documents shall not be given. The High Court has not passed any order directing the grant of certified copies of unmarked documents. All that the High Court has done is permitting the ED to have an inspection of the documents under Rule 237 and thereafter to file a proper copy application. This is not contrary to Rule 231(3). It is not understood how an argument revolving around Section 65B of the Evidence Act is raised. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghu, Adv. Ms. Aakriti Priya, Adv. Mr. K.kathiresan, Adv. Mr. Scv Vimal Pani, Adv. Mr. A. Lakshminarayanan, AOR Mr. C. A Sundaram, Sr. Adv. Ms. Misha Rohatgi, AOR Mr. Nakul Mohta, Adv. Ms. Riya Dhingra, Adv. Mr. Devansh Srivastava, Adv. Mr. Bharat Monga, Adv. Ms. Rohini, Adv. Mr. Zafar, Adv. Mr. Gopalshankarnayanan, Sr. Adv. Mr. Balaji Srinivasan, AOR Ms. Aakriti Priya, Adv. Ms. Gauri Pasricha, Adv. Mr. Rohan Dewan, Adv. Mr. Shiva Krishnamurthi, Adv. Mr. Devamshu Behl, Adv. Mr. Venugopala Gowda, Sr. Adv. Mr. K. Balambihai, Adv. Mr. Nar Hari Singh, AOR Mr. Balaji Srinivasan, Adv. Ms. Garima Jain, AOR Ms. Lakshmi Rao, Adv. Ms. Pallavi Sengupta, Adv. Ms. Jhanvi Dubey, Adv. Mr. Gopal Sankaranarayanan, Sr. Adv. Mr. N Subramaniyan, Adv. Mr. Pranav Sachdeva, AOR Ms. Jatin Bhardwaj, Adv. Ms. Jhanvi Dubey, Adv. Mr. Prashant Bhushan, Adv. Mr. N Subramaniyan, Adv. Mr. Pranav Sachdeva, AOR Mr. Jatin Bhardwaj, Adv. Ms. Neha Rathi, Adv. Mr. Tushar Mehta, Ld. S.G. Ms. Aishwarya Bhati, ASG Ms. Poornima Singh, Adv. Mr. Pratham Sagar, Adv. Mr. Abhijeet Singh, Adv. Mr. Aman Sharma, Adv. Mr. Mukesh Kumar Maroria, AOR Mr. Senthil Jagadeesan, AOR Mr. Kapil Sibal, Sr. Adv. Dr. Ram Sankar, Adv. Mr. N. Bhar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties (accused), Ms. V. Mohana and Shri Siddharth Agrawal, learned senior counsel appearing for the de facto complainants and Shri Ranjit Kumar, learned senior counsel appearing for the State of Tamil Nadu. Background Facts 6. The background facts necessary to understand the complexities of the batch of cases on hand are as follows: (i) In November 2014, the Metropolitan Transport Corporation, wholly owned by the State of Tamil Nadu issued five Advertisements, in Advertisement Nos.1/2014 to 5/2014, calling for applications for appointment to various posts such as Drivers (746 posts), Conductors (610 posts), Junior Tradesman (Trainee) (261 posts), Junior Engineer (Trainee) (13 posts) and Assistant Engineer (Trainee) (40 posts); (ii) After interviews were held on 24.12.2014 and the Select List got published, one Devasagayam lodged a complaint on 29.10.2015 with the Chennai PS CCB against 10 individuals, alleging that he paid a sum of Rs.2,60,000/- to a Conductor by name Palani for getting the job of Conductor in the Transport Corporation for his son. However, his son did not get a job and when he confronted Palani, he was directed to several persons. When he demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Crl. OP No.7503 of 2016 filed by Gopi, holding that the Police is duty bound to probe beyond the lower level minions to find out where the money had gone. After so holding, the Court directed the Assistant Commissioner of Police, Central Crime Branch (Job Racketing) to take over the investigation in FIR No.441 of 2015 and also directing the Deputy Commissioner of Police to monitor the same. The Court also held that since a FIR has already been registered at the behest of Devasagayam, it is not necessary to have another FIR registered on the complaint/representation made by Gopi. (vi) Despite the direction issued by the High Court on 20.06.2016 to the Police to go beyond lower level officers and find out where the money trail ends (more than about 2 crores allegedly given to the Minister during January and March, 2015) and despite Gopi making specific averments against the brother and brother-in-law of the Minister, the Police filed a Final Report on 13.06.2017 under Section 173(2) of the Code, only against 12 individuals including those 10 persons named by Devasagayam. Upon the filing of the Final Report, the case got numbered as Calendar Case No.3627 of 2017 in FIR No.441 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nister assured to get appointment orders issued. This complaint was registered by Chennai CCB PS as FIR No.344 of 2018, again for offences only under Section 406, 420 and 506(1) IPC. We do not know why the State Police were averse to the idea of including the offences punishable under the PC Act, in any of the three FIRs. While one may be averse to corruption, one cannot be averse to the PC Act. (ix) As had happened in respect of the other two complaints, the complaint in FIR No.344 of 2018 was also investigated (or not investigated) and a Final Report was filed on 12.04.2019. Even this Final Report, taken on record in Calendar Case No.25 of 2021 did not include the offences under the PC Act. (x) At this juncture, a person by name R.B. Arun Kumar, working as a Driver in the Metropolitan Transport Corporation and who was cited as witness LW 47 in the Final Report in CC No.3627 of 2017 arising out of FIR No.441 of 2015 (Devasagayam s complaint) moved the Madras High Court by way of a petition under Section 482 of the Code in Crl. O.P No.32067 of 2019, seeking further investigation in the case, on the ground that the State Police have not acted as per the directions issued by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as Accused No.3 in CC No.25 of 2021 arising out of FIR No.344 of 2018 lodged by Arulmani, filed a petition in Crl.O.P No.13374 of 2021 on the file of the High Court seeking to quash CC No.25 of 2021. He claimed in the said petition that a compromise had been reached between the victims (Arulmani and others and the accused) and that, therefore, the complaint may be quashed. Following suit, R. Sahayarajan who was Accused No.3 in CC No.19 of 2020 also filed a quash petition in Crl.O.P No.13914 of 2021, enclosing a joint compromise memo seeking to quash CC No.19 of 2020. Similarly, one Vetrichelvan (Accused No.10) filed Crl. O.P No.6621 of 2021 for quashing the proceedings in CC No.24 of 2021. (xvi) By an order dated 30.07.2021, the High Court quashed CC No.25 of 2021 on the basis of the Joint Compromise Memo. This order was passed completely overlooking the nature of the allegations, the offences for which the accused ought to have been charged as well as the previous orders passed by the High Court itself. (xvii) Just a day before the High Court passed orders quashing CC No.25 of 2021, the ED registered an Information Report on 29.07.2021 in ECIR/MDSZO/21/2021 and issued summ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be recalled that he was one of the unsuccessful candidates and he had filed a writ petition seeking to quash the entire selection. (xxii) An NGO by name Anti-Corruption Movement also filed a special leave petition against the order of the High Court quashing CC No.25 of 2021. (xxiii) Aggrieved by one portion of the order of the Trial Court refusing to grant certified copies of unmarked documents, the ED filed petitions before the High Court. By an order dated 30.03.2022 the High Court permitted ED to conduct an inspection under Rule 237 of the Criminal Rules of Practice, 2019 For short Rules, 2019 and thereafter to make third party copy applications for supply of copies of documents. The High Court also noted that under Rule 238, ED was entitled even to take extracts and thereafter file a fresh third party copy application before the Special Court. Challenging the limited relief granted by the High Court to ED in its order dated 30.03.2022, a person who is Accused No.3 in CC No.3627 of 2017 (CC No.24/2021) has come up with a special leave petition which forms part of the present batch of cases. (xxiv) Thereafter, three writ petitions came to be filed, one by Minister ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for extension of time to complete investigation. (xxxi) Thus, we have on hand 12 appeals, four of them challenging the quashing of summons issued by ED, six of them challenging the order for de novo investigation, one of them challenging an order permitting ED to have inspection of documents and the last arising out of the order refusing to grant further time for completion of investigation. (xxxii) Other than the appeals, we also have two contempt petitions filed by the Anti-Corruption Movement, complaining willful disobedience by the State of the directions issued by this Court in the order dated 08.09.2022 in Criminal Appeal Nos.1515-1516 of 2022. (xxxiii) We also have an application in IA No.26527 of 2023 filed by the appellant in one of these appeals, who is an unsuccessful candidate. The prayer in this application is for the constitution of a Special Investigation Team to undertake a comprehensive investigation into the entire scam and for the appointment of a senior lawyer of repute as the Special Public Prosecutor to prosecute the accused. This application is taken out on the ground that a similar prayer made in Criminal Appeal Nos.1514-1516 of 2022 was turned d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27 of 2017. Even in this Final Report, the offences under the PC Act were not included. Devasagayam did not bother to question the Police or move the Court as to why the offences under the PC Act were not included. 11. But fortunately, pursuant to the order passed by the High Court in the petition filed by Gopi, another Calendar Case came to be registered in CC No.24 of 2021, on a further Report submitted by the Police under Section 173(8) of the Code. In this CC No.24 of 2021, the Minister and his accomplices were included as accused and the offences under the PC Act were included. 12. This further Report under Section 173(8) of the Code which culminated in the registration of CC No.24 of 2021 was filed on 08.03.2021. 13. The inclusion of the name of the Minister and his accomplices in the Final Report submitted under Section 173(8) and the inclusion of the offences under the PC Act seems to have bothered Devasagayam more than the Minister himself. Therefore, Devasagayam filed a petition in Criminal O.P. No.15122 of 2021 in CC No.24 of 2021 seeking a direction to the Investigating Officer to conduct a de novo investigation. 14. The grounds on which Devasagayam sought d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd for proceeding against the accused, but may escape from the clutches of law. 30. The present criminal proceeding is manifestly attended with mala fide and/or the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. 17. It appears that Devasagayam, originally seems to have had a genuine grievance against the culprits at the bottom of the layer, but he later turned out to be a Trojan horse, willing to sabotage the investigation against influential persons. This fact is borne out more by his pleadings in paragraph 31 of the petition in Criminal O.P. No.15122 of 2021. The relevant portion of paragraph 31 reads as follows: 31. Where criminal proceedings are initiated based on illicit material collected on search and arrest which are per se illegal and vitiate not only a conviction and sentence based on such material but also the trial itself, the proceedings cannot be allowed to go on as it cannot but amount to abuse of the process of the court; in such a case not quashing the proceedings would perpetuate abuse of the process of the court resulting in great h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that Devasagayam s petition was intended to help the accused is also borne out by one more fact. His original complaint dated 29.10.2015 which led to the registration of FIR in Crime No.441 of 2015 was against ten persons and the offences registered therein were only under Sections 406 and 420 read with Section 34 IPC. On this complaint, a Final Report was filed under Section 173(2) of the Code on 13.06.2017 and this resulted in the registration of Calendar Case in CC No.3627 of 2017. Devasagayam was happy with the fact that the Report filed under Section 173(2) did not include the offences under the PC Act. Devasagayam was not bothered at that time about the fact that the register for entering the interview marks, sent to the Forensic Department had not been received. Suddenly, he became worked up after the filing of the Report under Section 173(8) leading to the registration of Calendar Case No.24 of 2021 including the offences under the PC Act. 21. What is shocking is that the High Court directed reinvestigation to be started ab initio, wiping out the earlier investigation altogether. One saving grace in this case is that even the learned senior counsel appearing for Devasa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on so far made and the materials so far collected can never be thrown into the dustbin but that the conclusions reached by the Investigating Officer on the basis of those materials alone required to be wiped out. 24. It is true that English is not our mother tongue. It is also true that some allowance (or discount ranging from 0 to 90%) can be given at times to the use of certain loose expressions. But the expressions used in paragraphs 79 to 81 of the impugned order do not reflect a mere deficiency in language or law, but something more. As rightly pointed out by Shri Gopal Sankaranarayanan, learned senior counsel, the High Court has used in the impugned order, several words and expressions such as, (i) reinvestigation to be started ab initio, (ii) wiping out the earlier investigation altogether; (iii) collect fresh evidence and material; and (iv) without reference to the earlier investigation on record. 25. Apart from the usage of the above words and phrases, which in our opinion, not merely opened up a small loophole in the law but opened up a huge black hole in the galaxy, the High Court issued one more direction in paragraph 80. This direction is to the investigating age ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation was needed. Thereafter, CBI filed a closure report. On the basis of the same, the accused sought discharge. Since discharge was not ordered, they approached the High Court, but the High Court remanded the matter back to the Sessions Court. It is the said order of remand that was challenged by the Investigating Officer before this Court. This Court framed two questions as arising for consideration in Vinay Tyagi. They read as follows:- Question 1 1.1. Whether in exercise of its powers under Section 173 of the Code of Criminal Procedure, 1973 (for short the Code ), the trial court has the jurisdiction to ignore any one of the reports, where there are two reports by the same or different investigating agencies in furtherance of the orders of a court? If so, to what effect? Question 2 1.2. Whether the Central Bureau of Investigation (for short CBI ) is empowered to conduct fresh / reinvestigation when the cognizance has already been taken by the court of competent jurisdiction on the basis of a police report under Section 173 of the Code? 28. While dealing with the First Question, this Court pointed out that investigation can be of three kinds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aph 46, this Court pointed out that while ordering de novo investigation, there are two options open to the superior court namely, (i) to direct the report already prepared or the investigation so far conducted, not to form part of the records of the case; or (ii) to direct the report already prepared or the investigation so far conducted to form part of the record. If the superior court is silent on this aspect, the report already prepared or the investigation so far conducted will form part of the record. In other words, if the superior court intended that the investigation so far conducted and the report already filed should not form part of the record, it should specifically say so. 30. In the order impugned in these appeals, the High Court has indicated by using four different expressions and phrases that the investigation so far conducted shall not form part of the record. But even according to the learned senior counsel for Devasagayam and learned senior counsel for the accused, the operative portion of the impugned order of the High Court need not be understood in such a manner. If that is so, all those phrases and expressions deserve to be removed. If they are removed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against (i) Minister Senthil Balaji; (ii) Prabhu; (iii) Sahayarajan; and (iv) Annaraj, for offences under Sections 406, 420 and 506(1) IPC. Interestingly, he entered into a compromise with the accused and supported them in their petition for quashing of the FIR. Now he is aggrieved by the order for de novo investigation for obvious reasons. SLP(Crl.)D.No. 10186 of 2023 R.Sahayarajan He is one of the accused in the complaint given by V. Ganesh Kumar and he filed a petition before the High Court seeking to quash the FIR and the charge-sheet on the ground of a compromise. 32. Shri Mukul Rohatgi, Shri Kapil Sibal, Shri Sidharth Luthra, and Shri C.A. Sundaram, learned senior counsel appearing for different accused, uniformly raised a chorus, vociferously objecting to the maintainability of the appeals by each of those appellants, against the order of de novo investigation. Their contention is that investigation of a criminal offence cannot be a free-for-all exercise and that one must have locus to challenge the proceedings. According to the learned counsel, some of the appellants who are strangers, have not o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se appeals, on the ground that he had already filed a writ petition in WP No.24275 of 2021 on the file of the High Court seeking further investigation and that, therefore, he must pursue his remedies only in that writ petition. But this argument seeks to sweep under the carpet, the actual reality that by virtue of the impugned order dated 31.10.2022 directing de novo investigation, the writ petition filed by Y. Balaji for further investigation has been rendered infructuous. Therefore, if such a person who participated in the selection but who did not get appointment due to the corrupt practices adopted by the concerned persons and who had already filed a writ petition seeking further investigation, does not have locus standi, we do not know who else will have. 36. The investigation and trial of a criminal case cannot be converted by the complainant and the accused into a friendly match. If they are allowed to do so, it is the Umpire who will lose his wicket. 37. Much ado was made about some of the appellants filing copies of the confession statements under Section 164 of the Code, as part of the paper book in the appeals. It was contended by the learned senior counsel that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money. 41. As a matter of fact, right from the time when Gopi approached the High Court with a petition in Crl. O. P. No. 7503 of 2016, there have been several proceedings before the High Court where the parties have filed copies of several documents. There were also writ petitions filed by unsuccessful candidates challenging the selection. The counter filed by the Investigating Officer in those cases have been extracted by this Court in the Judgment dated 08.09.2022 in Dharmaraj vs. Shanmugam Criminal Appeal Nos.1514-1516 of 2022 . Therefore, many of the documents have started appearing in the public domain at the instance of several persons. Hence, it is futile to contend that the appeals are liable to be thrown out on the ground that the appellants have come up with documents to which they could not have had any access. 42. Though Shri Gopal Sankaranarayanan, learned senior counsel appearing for the appellant in one of these appeals refrained from giving any political colour to the case on hand, it was contended by Shri Kapil Sibal, learned senior counsel that the appellant had been obviously set up by a rival political party. In support of his contention, he relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2021 arising out of FIR No.344 of 2018. 26.08.2020 The petition filed by Senthil Balaji for discharge is dismissed. 26.02.2021 General Elections to the State Assembly are announced. 08.03.2021 A final report under Section 173(8) of the Code is filed against the Minister and others, not only for the offences under the IPC but also for offences under the PC Act. 01.04.2021 Cognizance is taken in CC No.24 of 2021 02.05.2021 Results of the general election to the State Assembly are declared, the party in power is voted out, a new dispensation forms the Government and he becomes a Minister in the new regime. July, 2021 A quash petition is filed and a compromise is reached. 30.07.2021 The High Court quashes CC No.25 of 2021 on the basis of the Joint Compromise Memo. 43. On the basis of the above timeline of events, it is contended by Shri Kapil Sibal that the Minister was impli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who was arrayed as Accused No.3 in the complaint of the V. Ganesh Kumar. Both of them entered into a compromise and successfully trapped the High Court to quash the proceedings on the basis of the compromise. Fortunately, the order quashing the complaint was reversed by this Court. Yet both of them have the audacity to come before this Court attacking the order of de novo investigation. 47. What is worrisome is the fact that V. Ganesh Kumar is an employee of the Transport Corporation. In the charge-sheet filed on his complaint, which has been taken on file as CC No.19 of 2020, this V. Ganesh Kumar is stated to have collected amounts ranging from Rs.2,00,000/- to Rs.4,50,000/- for every post of Driver, Conductor or Mechanic, as the case may be. We do not know whether the Transport Corporation has at least placed him under suspension and initiated departmental proceedings. If they have not done so far, the Corporation should initiate disciplinary action against this V. Ganesh Kumar not only for being party to a job-for-cash scam but also for turning turtle and supporting the accused and thereafter coming to this Court to assail the order of de novo investigation, despite being an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled petitions before the Special Court (in seisin of the predicate offences) seeking copies of documents. These petitions were partly allowed by the Trial Court by an order dated 09.11.2021. As against the portion of the order of the Trial Court disentitling ED to certified copies of the unmarked documents, ED filed petitions under Section 482 of the Code before the High Court. The petitions were partly allowed by the High Court by an order dated 30.03.2022 permitting the ED to follow the procedure of conducting inspection under Rule 237 of Rules, 2019 and thereafter by filing a fresh third-party copy application before the Special Court. 52. Thereafter, ED sent fresh summons to the Minister and others in April, 2022. Immediately, the Minister and two others filed three separate writ petitions seeking the quashing of the summons issued by ED. 53. In the writ petition filed by the Minister in W.P. No.18213 of 2022 for quashing the summons issued by the ED, he contended inter-alia: - (i) that he was falsely implicated in FIR Nos.441 of 2015, 15 of 2016, 298 of 2017 and 344 of 2018; (ii) that FIR No.15 of 2016 had already been quashed; (iii) that FIR Nos.441 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer assumes jurisdiction; (iii) the absence of a combination of criminal activity amounting to a scheduled offence, the generation of proceeds of crime therefrom and the act of money-laundering, which form the jurisdictional fact for ED to step in; and (iv) the danger of allowing the ED to go on a fishing expedition without any material. 56. It is of interest to note that the accused argued before the High Court that their case was squarely covered by the decision in Vijay Madanlal Choudhary (supra) . It will be worthwhile to extract the relevant portions of the order of the High Court dated 01.09.2022, in which the counsel for each of the accused is stated to have relied upon the decision in Vijay Madanlal Choudhary. 57. The argument of the counsel for R.V. Ashok Kumar, brother of the Minister is extracted by the High Court in paragraph 3 as follows:- 3. Mr.Aryama Sundaram, learned Senior Counsel appearing for the petitioner in Writ Petition No.l8209 of 2022 pleaded at the outset that his client's case is squarely covered by the judgment of the Hon'ble Supreme Court in Vijay Madanlal Choudhury and others case (supra) in his favour, again proceeding further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relating to the non-existence of jurisdictional facts and referred to the decision in Arun Kumar vs. Union of India (2007) 1 SCC 732 in paragraph 19. Thereafter, the High Court came to the conclusion in paragraph 20 that the quashing of the complaint in one criminal case and the stay of proceedings in other two Calendar Cases, showed that there was no jurisdictional fact or cause of action for the ED to initiate proceedings. 61. Since lot of arguments were advanced before us as though the ED proceeded without the existence of jurisdictional facts, it is necessary to extract paragraph 20 of the impugned order to show what the High Court thought to be a jurisdictional fact. Hence, paragraph 20 of the impugned order is extracted as follows: 20. A mere perusal of the above judgment clearly shows that the existence of jurisdictional fact is a condition precedent for the exercise of power by a Court of limited jurisdiction. Therefore, in the cases on hand, when there is no cause of action, since the proceeding in one of the calendar cases was quashed by the order dated 30.07.2021 in Criminal Original Petition No.13374 of 2021 and the proceedings in two other calendar cases ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Balaji against the order of the Trial Court refusing to discharge him; and (ii) Criminal O.P. No.15122 of 2021, filed by Devasagayam seeking de novo investigation. 65. Therefore, it is as clear as crystal, that the High Court, in the impugned order dated 01.09.2022 has given only a temporary reprieve to the accused against the summons issued by the ED. Today, Criminal Revision Case No.224 of 2021 filed by the Minister against the dismissal of his discharge petition, has been rejected by the High Court by its order dated 31.10.2022. Though Criminal O.P. No.15122 of 2021, filed by Devasagayam has been allowed by the High Court, by the very same order dated 31.10.2022, the said order has been set aside by us in Part-I of this judgment. 66. Insofar as the SLP (Crl.) No.3941 of 2022 @ Diary No.9957 of 2022 is concerned, it arises out of the order of the High Court dated 30.03.2022, which again is the subject matter of the present appeals. 67. In other words, the High Court has not quashed the summons issued by ED. The High Court had merely injuncted ED from proceeding further till the clog on the cases relating to the predicate offences is removed. 68. Interestingly, none of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, it is not even necessary for us to deal with the contentions raised on behalf of the accused for the purpose of getting larger reliefs. But we do not wish to adopt this route. Therefore, we shall address the contentions raised. 72. The contentions of Shri Kapil Sibal, learned senior counsel are: (i) that to constitute the offence of money-laundering, one must have involved in any process or activity connected to the proceeds of crime; (ii) that none of the three FIRs which formed the basis for the registration of an Information Report contained any allegation of generation of proceeds of crime or the offence of money-laundering; (iii) that the ED was never in possession of any material to suspect that the accused did any activity connected with the proceeds of crime; (iv) that this is why the ED filed applications before the Special Court seeking copies of documents to find out if something could be found; (v) that under Section 66(2) of PMLA, the flow of information can be only from the ED to the other authorities about the contravention of the provisions of any other law and not the other way about; (vi) that there are lot of inherent contradictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passages such as paragraphs 159, 163, 168 and 172 in the decision in Vijay Madanlal Choudhary and it was contended that it was wrongly decided. 73. According to Shri Kapil Sibal, learned senior counsel, certain fundamental questions arise in the present proceedings. They are:- ❖ What are the jurisdictional prerequisites for the ED to initiate investigation under the PMLA? ❖ Does the ED have the power to seek information from authorities investigating the predicate offence merely on the basis that investigation of a predicate offence is ongoing, even without receiving any information that a cognizable offence under the PMLA has occurred and being in possession of material that indicates the offence of money-laundering has taken place? ❖ Can the mere existence of proceeds of crime confer jurisdiction upon the ED to initiate investigation? ❖ What are the elements of money-laundering ? ❖ What conditions need to be satisfied before the ED is empowered to issue summons under Section 50 of the PMLA? ❖ Can a summons under Section 50 PMLA be issued to a person who is in the nature of an accused under the PMLA or in the predica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on the part of the ED for such a delay; (v) that to make out an offence of money-laundering even prima facie, three things are essential, namely (i) the commission of a crime, which is a scheduled offence, (ii) generation of proceeds of crime; and (iii) the laundering of those proceeds, and that none of these three foundational facts are present in this case. 77. The arguments of Shri Sidharth Luthra, learned senior counsel is actually two-fold, namely, (i) that in the absence of a jurisdictional fact, which is a sine qua non or condition precedent for the exercise of power by ED, the summons issued by ED should go; or alternatively (ii) that in view of inherent contradictions contained in the decision in Vijay Madanlal Choudhary and in view of this Court having ordered notice in the review petition, the appeals on hand should also be referred to a larger Bench. 78. In support of his contention that the existence of a jurisdictional fact is a condition precedent for the exercise of power by ED, the learned senior counsel relies upon the decisions in Shauqin Singh vs. Desa Singh (1970) 3 SCC 881 and Arun Kumar vs. Union of India (2007) 1 SCC 732 . 79. To demonstrate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeds of crime; (iii) that ED can assume jurisdiction only after identification of the proceeds of crime; (iv) that the mandate of ED does not extend to the prosecution of any one for offences other than money-laundering; (v) that this is why Section 66(2) obliges the Director to share the information available with him with other authorities, whenever such information discloses the contravention of the provisions of any other law; (vi) that without the identification of a property which represents the proceeds of crime, a jurisdictional fact for the initiation of proceedings does not get triggered; (vii) that no summons can be issued under Section 50 without registering an information report; (viii) that the power to issue summons under Section 50(2) can be exercised only during the course of any investigation or proceeding under the Act; (ix) that in the case on hand, no property representing the proceeds of crime has been identified; (x) that this is why the High Court questioned the ED as to how Section 3 got invoked; and (xi) that therefore the initiation of proceedings by the ED cannot be sustained even within the contours of law interpreted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xii) that as laid down by this Court in Sakshi vs. Union of India (2004) 5 SCC 518 , the doctrine of stare decisis gives certainty to law and guides people to mould their affairs in the future; (xiii) that as held by this Court in Central Board of Dawoodi Bohra Community vs. State of Maharashtra (2005) 2 SCC 673 , a Bench of lesser coram cannot express disagreement with or question the correctness of the view taken by a Bench of larger coram; (xiv) that as opined by Chief Justice John Roberts of the Supreme Court of the United States, it is a jolt to the legal system when you overrule a precedent ; (xv) that the ratio laid down by a larger Bench should not become suspect merely because another view is possible; (xvi) that in any case, Vijay Madanlal Choudhary has taken note of different views of several High Courts including the High Courts of Bombay, Delhi, Jharkhand and Punjab and Haryana, etc.; and (xvii) that unsettling the law laid down in Vijay Madanlal Choudhary at a time when the ranking of the country in curbing the menace of money-laundering has improved, will derail the whole process. 86. We have carefully considered the rival contentions. A careful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Company by name Indiaforensic way back in the year 2011 on Ascertaining size of Corruption in India with respect to money laundering , the Economic Times reported in its Edition dated 17.07.2011 that money laundered out of India in the decade 2001-2010 could be pegged at Rs.18,86,000 crores. This is why in May 2011, India became party to the United Nations Convention against Corruption (UNCAC) joining over 160 other countries who were party to this UN Convention. 89. The history of the legislation on money-laundering is almost six decades old. In brief, this history can be traced as follows: (i) In 1961, United Nations Convention on Narcotic Drugs was adopted and it was amended by the protocol of the year 1972. (ii) In 1971, United Nations Convention on Psychotropic Substances was made. (iii) In 1974, a bank known as Herstatt Bank in Germany was forced into liquidation by the Regulators. On the day on which it happened, a number of banks had released payments to Herstatt in exchange for US dollars to be delivered in New York. But due to the time zone differences, Herstatt ceased operations between the times of the respective payments. As a result, payments were n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in December 2000 (now known as Palermo Convention). (ix) On October 31, 2003, the United Nations General Assembly adopted the UN Convention against corruption and the Convention came into force in 2005. (x) Pursuant to the political Declaration adopted by the special session of the United Nations General Assembly held between 8th to 10th June 1998 (of which India is one of the signatories) calling upon member States to adopt Anti Money Laundering Legislation Programme, the Parliament has enacted a special law called the Prevention of Money Laundering Act, 2002 (PMLA 2002). The Act has come into force with effect from 1st July 2005. It has been substantially amended, by way of enlarging its scope, in 2009 (w.e.f. 01.06.2009), by enactment of Prevention of Money Laundering (Amendment) Act, 2009. The Act was further amended by Prevention of Money-Laundering (Amendment) Act, 2012 (w.e.f. 15-02-2013). (xi) As part of the effort to assist jurisdictions prepare or upgrade their legislative framework to conform with international standards and best practices to implement anti-money laundering measures and combating the financing of terrorism, UNODC issued in 2003, Model Mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Legislative Guide for the Implementation of the United Nations Convention Against Corruption make clear, there are four general kinds of conduct that should be criminalized. The minimum requirements for each are: 1. Conversion or transfer of proceeds of crime. This includes instances in which financial assets are converted from one form or type to another, for example, by using illicitly generated cash to purchase precious metals or real estate or the sale of illicitly acquired real estate, as well as instances in which the same assets are moved from one place or jurisdiction to another or from one bank account to another. (See, e.g., paragraph 231, in Legislative Guide for the implementation of the UN Corruption Convention). Regarding mental elements, the conversion or transfer must be intentional, the accused must have knowledge at the time of conversion or transfer that the assets are criminal proceeds, and the act must be done for either one of the two purposes stated concealing or disguising criminal origin or helping any person (whether one s self or another) to evade criminal liability for the crime that generated the proceeds. 2. Concealment or disguise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch for an answer to the two questions. Question 1: Whether without identifying the proceeds of crime or a property representing the proceeds of crime and without identifying any process or activity connected to proceeds of crime as required by Section 3, which constitute the foundational/jurisdictional fact, ED can initiate an investigation and issue summons? 93. The common theme of the song of the learned counsel for the accused is that the mere registration of a FIR for a predicate offence, even if it is a scheduled offence, is not sufficient for the ED to register an Information Report and summon anyone. According to the learned counsel, the commission of the scheduled offence should have generated proceeds of crime and those proceeds of crime should have been laundered by someone, for the ED to step in. Going a step further, it was contended by the learned senior counsel that the ED should first identify some property as representing the proceeds of crime, before an Information Report is registered and a summon issued under Section 50(2). 94. These contentions, in our opinion, if accepted, would amount to putting the cart before the horse. Unfortunately for the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 3 addresses, namely (i) person; (ii) process; and (iii) product, the first two do not require any interpretation or definition. The third aspect namely product , which Section 3 refers to as proceeds of crime requires a definition and hence it is defined in Section 2(1)(u) as follows:- 2. Definitions. (1) In this Act, unless the context otherwise requires, xxx xxx xxx (u) proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad; Explanation. For the removal of doubts, it is hereby clarified that 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 any criminal activity relatable to the scheduled offence; 98. Keeping in mind these essential elements that make up the molecular structure of Section 3, if we go back to the case on hand, we will find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the offence of murder punishable under Section 302 is a scheduled offence. Unless it is a murder for gain or murder by a hired assassin, the same may or may not generate proceeds of crime. It is in respect of such types of offences that one may possibly argue that mere commission of the crime is not sufficient but the generation of proceeds of crime is necessary. In the case of an offence of corruption, the criminal activity and the generation of the proceeds of crime are like Siamese twins. 103. In fact, PMLA defines the word property in Section 2(1)(v) as follows: 2. Definitions. (1) In this Act, unless the context otherwise requires, xxx xxx xxx (v) property means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located; Explanation. For the removal of doubts, it is hereby clarified that the term property includes property of any kind used in the commission of an offence under this Act or any of the scheduled offences; 104. Therefore, even if an intangible prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, a Final Report was filed under Section 173(8) in one of those cases. 108. Around the same time, writ petitions were filed pointing out that there was a huge jobs-for-cash scam. In those writ petitions, the Assistant Commissioner of Police filed counter affidavits. 109. Thus, the information about all complaints, the nature of the complaints, the amount of money allegedly collected towards illegal gratification had all come into public domain. To say that the ED should have adopted an Ostrich like approach, without trying to find out where and to whom the huge money generated in the scam had gone, is something unheard of. 110. In fact, ED was not trying to access any document which was inaccessible. In several proceedings before the High Court, such as (i) petitions for further investigation; (ii) writ petitions; and (iii) quash petitions, some of the documents whose certified copies were sought by the ED were already annexed. All that the ED wanted was authenticated copies of those documents and nothing more. 111. In fact, the FIRs as well as Final Reports are now uploaded in the websites of the Police Department in some of the States. In the State of Tamil Nadu, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not only destroy the principles of judicial discipline and the doctrine of stare decisis, but also bring to a grinding halt, all pending investigation in the country. In fact, the order dated 25.08.2022 passed in Review Petition (Crl.) No.219 of 2022 discloses that prima facie the Court was of the view that at least two of the issues raised in the review petition require consideration. Though it is not precisely spelt out in the order, those two issues relate to (i) not providing the accused with a copy of the ECIR; and (ii) reversal of the burden of proof and presumption of innocence. The points that the respondents are canvasing in this case, have nothing to do with those two issues. Therefore, the accused cannot have a piggyback ride on the review petition. 117. In fact, as we have pointed out elsewhere, the accused have not come up with any appeal challenging the order of the High Court dated 01.09.2022. Therefore, they are entitled at the maximum, to argue only for the dismissal of the appeals filed by ED and others against the said decision. Suppose we agree with the learned counsel for the accused and dismiss the appeals filed by ED, even then they cannot have an escape r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n inspection of the documents under Rule 237 and thereafter to file a proper copy application. This is not contrary to Rule 231(3). 123. We do not know how an argument revolving around Section 65B of the Evidence Act is raised. Section 65B concerns the admissibility of electronic records. Without certification, ED may not be able to use those electronic records in evidence, in the prosecution under PMLA. But it does not mean that they cannot even have a look at the electronic record. 124. Therefore, we find no merits in the appeal. Hence, the appeal challenging the order of the High Court dated 30.03.2022 passed in Criminal O.P. No.5726 of 2022 is dismissed. PART IV (Extension of time to complete further investigation) 125. There is one appeal filed by Y. Balaji, whose status is indicated by us in a tabular column elsewhere. His appeal challenges an order passed by the High Court originally on 27.11.2019 directing the prosecution to complete further investigation in CC No.3627 of 2017 within six months. When a petition for extension of time was moved, the Court rejected it by an order dated 01.11.2021 on the ground that the prayer had become infructuous. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of investigation shows any disobedience of the orders of this Court, it will always be open to the petitioner to come up again. With this observation, the contempt petitions are dismissed. I.A.No. 26257 of 2023 130. This is an application taken out by Y. Balaji, appellant in some of these appeals, seeking the constitution of a Special Investigation Team and the appointment of a Special Public Prosecutor. This application is filed on the ground that the hope expressed by this Court in its order dated 08.09.2022 that the State Police would do a proper job, has been belied by subsequent events. Therefore, the applicant prays that time is now ripe for the constitution of a Special Investigation Team. 131. The application is opposed on the ground, (i) that a prayer of this nature cannot be made by way of an interlocutory application; and (ii) that the allegation of the prosecution being influenced by the Minister does not stand substantiated. 132. As we have pointed out while dealing with the contempt petitions, the entire blame for this fiasco cannot be laid at the doorstep of the Police alone. We find several coparceners. Hence, we reject this I.A. at this stage with ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
