2015 (11) TMI 192 - HC - Money Laundering

Offences under the Prevention of Money-Laundering Act 2002 corresponding to Sections 420/467/ 120B of the Indian Penal Code - Held that - Case has been registered in the Court of the Chief Judicial Magistrate South and West at Namchi against 11 (eleven) persons connected with the Petitioner-University in various capacities based on a charge-sheet submitted by the Sikkim Police for offences under Sections 420/467/471/ 201/120B IPC. - On a careful examination of the charge-sheet filed by the Sikkim Police in the Court of the Chief Judicial Magistrate South & West Sikkim at Namchi and the ECIR which is being sought to be quashed I have no hesitation to hold that this is not a case where on a bare perusal of the ECIR no offence has been made out. To the contrary from what have been alluded to earlier prima facie there are sufficient materials to constitute offences under the PMLA. Undeniably the persons named were associated with the Petitioner-University in various capacities and concededly the charges against them in the criminal trial fall within the scheduled offences under the PMLA. Thus reference to the case of State of Haryana and Others vs. Ch. Bhajan Lal and Others AIR 1992 SC 604 exhorting this Court to exercise its powers under Section 482 Cr.P.C. to quash the ECIR and the cognate action of attachment under Sub-Section (1) of Section 5 of the PMLA in my considered opinion is mis-directed and unsustainable. - there is also an effective alternative remedy provided under Section 8 of the PMLA followed by the provision of appeal under Section 26 thereof. - No reason to interfere with the proceedings instituted by the Respondents - Decided against the appellant.

Summary

Issues:
Challenge of Enforcement Case Information Report (ECIR) under PMLA by a State Private University.

Analysis:
1. The Petitioner, a State Private University, sought to quash ECIR No. KLZO/01/2014/825-827 dated 19-02-2014, registered under the Prevention of Money-Laundering Act, 2002 (PMLA) for offences under IPC Sections 420/467/120B. Grounds raised included lack of cognizable case, absence of proceeds of crime, and premature action under PMLA.

2. The Respondents countered, stating the actions were lawful, as the offences under IPC were scheduled offences under PMLA, making the Petitioner-University liable. The charge-sheet detailed a conspiracy to cheat students, misuse of funds, and laundering activities involving the University's officials.

3. The Court acknowledged a criminal case against 11 individuals connected to the University, charged with IPC offences. The Respondents justified the ECIR based on the scheduled offences and money laundering activities identified during investigations.

4. The Court found sufficient evidence in the charge-sheet and ECIR to establish offences under PMLA, rejecting the Petitioner's argument that lack of IPC offence conviction precludes proceeds of crime determination under PMLA.

5. Referring to precedents, the Court dismissed the plea to quash the ECIR and attachment orders, citing the availability of remedies under PMLA and the appellate process.

6. Consequently, the Court dismissed the Writ Petition, upholding the legality of the proceedings by the Respondents.